let's bring in our global economics and policy editor kathleen hays and mark cranfield to walk us through the price action. let's are with you, kathleen. how part of -- power of a signal is the print for the fed? kathleen: there's no doubt that the economy is disinflation a bit. it's this inflating from high levels. when you look at crude goods prices, cars, trucks, furniture, clothes, all of these things are coming down. the supply chains are getting better. there's more efficiency again. inventories are being cut. a lot of people in stores are cutting prices to get these things sold. that is helping, as well. in services, that is where you see a bit our complication. if you look at core services, take-out food and energy, they are still rising. they are 6.8% year-over-year while crude prices are down. it's not a report that says they have won or that the battle is over. it is a report that you are moving in the right direction. i expect this creates more room for hawks versus doves to debate this or may be to bring them together more in the middle where they can say, yesterday have to k

that is what we have so far for yvonne: let's bring in kathleen hays to walk us through what would be considered a soft print. one that is a bit too strong for the market to deal with. kathleen: for the fed. that is the most important question, what does it mean for the fed? what will be hard for the market to deal with if the fed does not do what they expect. right now it looks like disinflation moving in the right direction, not necessarily rapidly. headline cpi year-over-year comes down to 7.3 from 7.7%. that is the bloomberg consensus forecast. core cpi down to 6.1 year-over-year from 6.3. not as big of an improvement but that is where you find stickier prices. you can see along the bottom the cpi month on month unchanged at 0.3. when you put food and energy back in you get a little bit of an improvement. in terms of what some key things to look at our, rents, shelter cost, rents and implied rent when you look at your mortgage rate. that is supposed to come down a bit and peaked with 0.7% moving onto a year-over-year reading. it looks pretty high but supposedly it is getting bette

global economics and policy editor kathleen hays.'s focus on indonesia and bring in the ase economist. an 25 is not a give me. if it decides to give the fed -- to follow the fed. >> i agree with your team. we see two reasons for another 50 basis point hike. it allows the b.i. to keep the spread over the fed given the fed hike to 50 basis points last week. idr underperformed regional peers in the latest round of dollar weakness. there is some pressure on the currency still. 50 basis points will allow the b.i. to have a better battle to keep the idr's stability in tact . people may start talking about them stopping rate hikes sooner rather than later. they may hike 50 basis points. haslinda: the governor was definitive when he said peak inflation has come and gone. you agree with that view? >> it looks that way. when you look at headline inflation for the last couple of months, this quarter we will see the peak and it should be heading back down. the question is how fast it is going to ease and how quickly it will return to the target.

garfield reynolds and kathleen hays with our top stories around the boj shock.have an alert on the bloomberg, the ukrainian president a lot of mere zelenskyy is planning to address the u.s. congress in person wednesday. we have seen an announcement by speaker pelosi encouraging all members of congress to attend. there will be a special session of congress coming given the end of the year. we are hearing zelenskyy with address commerce. cnn also reporting he will be visiting the white house. let's get over to vonnie quinn. vonnie: sam bankman-fried has signed extradition papers and will return to the u.s. the ftx co-founder may be sent to the u.s. to face charges related to the crypto exchange collapse. behind bars for more than a week was denied they'll in an earlier hearing. u.s. house committee us at the vote on releasing donald trump tax information. it caps a legal saga initiated by democrats to release the former president'documents. the vote comes in the waning days of the house democratic jordanian follows trump's referral for criminal prosecution by anot

thank you both, kathleen hays and aline oyamada. we will continue this conversation with mark dowding, who is still planning to continue shorting. we get his take, next. this is bloomberg. ♪ at cdw, we get if your network power goes down, your business goes with it. recording: thanks for calling, we are unexpectedly closed today due to... cdw experts can keep you up and running with an apc smart-ups lithium-ion ups from schneider electric. it offers cloud-enabled remote monitoring and three times the battery life, so you can get the performance and certainty you need to stay open for business. for resiliency at the edge, trust schneider electric and it orchestration by cdw®. people who get it. guy: let's stick with the boj. asset management sticking to their short jgb positions at the moment due to expected higher bond volatility going forward, with yields expected to rise further. we have been hearing about how far yen trade could go. our russian of the day, boj, shock and yon. could we have had a bigger reaction today? let's go to

. >> with more on what is next for the bank of japan in 2023, kathleen hays joins us now.a great conversation. was this surprising to you that he specifically said we could see another move from the boj? >> i was a little bit surprised. the boj just had a surprising move, big move in the yen. he seems to think it could happen. this could very well be a live meeting in mid-january. let's remember who he is. he got his name because of how artfully he handled the yen during the asian financial crisis when he was the vice minister for international affairs. he got this right in may. he said the yen could go to 150. everybody thought it was extreme, but he was right. she says the boj normalization has begun. she says -- he says kuroda probably wanted to do this on purpose. there was no signaling from the boj eight that this move was going to happen. was it because of the unpopularity of the prime minister? his approval ratings are down to about 25. he said no. he thinks kuroda was aware of this displeasure, but there was no actual political pressure. but it was one of the reaso

kathleen hays, what is the argument for a quarter-point hike? : they certainly have to do something. inflation is still very high. 25 basis points seems to be the putin amount. this would be the third 25 basis point hike they have done after a series of 50 basis point moves. they have already done their downshifting. you are going to see inflation is still very high. yes, it improved some, but guess what? the target range is 2% to 3%. so they still have a ways to go on inflation. their labor market is still hot or strong at the very least. the governor of the rbi has said this on more than one location. and i think that another thing to think about though, if you are thinking, one not to the bigger hike, is this. with the housing market has endured because of these rate hikes is pretty strong. last year, the housing prices were up 25%. now they are falling about 6.9% this year on average, and they are expected to fall nearly 10% next year. because there are so many people with adjustable-rate mortgages, every time they rate hike, some of those mo

kathleen hays is here with the details. comes after a meeting chaired by the pboc governor. >> what a tough couple of years for the property sector, so what a great way to end 2022, with a government letting us know what they are going to be today and yes, this came from an announcement from the pboc, the governor chairing a meeting this afternoon, and here is what they say they would do. they will give support to property sector restructuring. this is so important. there are so many companies in depth on the verge of bankruptcy may be -- dept. and they will help developers improve. they will make sure they help to meet reasonable financing needs. that is too important. you may not get the help, but if you have a chance they will extend you a life raft and implement credential monetary policy, a broader pledge, but significantly they are going to do whatever they can with their monetary policy tools to make sure support is there. this comes after just last week was the vice premier was at a meeting where he talked about the

our global economics analyst kathleen hays and stephen engle. let's start with kathleen.did not get the memo before, they suddenly got it now. the central banks were hawkish. >> hawkish indeed because there was a very simple mission -- message. inflation is high and it is not coming down quickly enough. there tool to deal with that is interest rate hikes. no matter what else you look at, but can do quantitative tightening. compared to 10% inflation rate, whatever it is now, a very low key rate. one way of looking at how to get inflation down is to get your key rate above the rate of inflation. they are a long way from there. but they are moving in that direction, slowly. for the bank, they are closer to london rate hikes, but they got there key rate up at a time when they probably think they are already in a recession. so that is definitely hawkish. this is what they think they need to do until they get a faster decline in inflation. i think it is great that some of the emerging-market countries feel they are closer to the point where they can back out of this, at least r

kathleen hays is here with the latest.fed be emulating mario draghi's spirit of doing whatever it takes now? >> the bazooka. or a better metaphor. paul volcker. do have what it takes? can you stay the course? nobody wants to see people lose their jobs. jay powell started his remarks today after they made this decision at 2:30 eastern time during a press conference, saying that the american people clearly want they will push hard. that is what they have to do to bring down inflation. yes, the 50 basis point hike instead of 75. dated four in a row. 425 rate hikes this year. that's a lot of tightening. it's another reason why people will think, gee, that will come down. it will not be a problem. look at the dots. this was another, not a surprise, a lot of people figured it was possible that the federal reserve would raise the terminal rate for 2023 to 5.1%. a lot were still thinking for .8 percent, especially after cpi, consumer prices, came in lower than expected for the second month in a row. the message was very different.

bloomberg's kathleen hays is here for more on what may come next. u have been speaking with none other than mr. yen the former vice minister of finance long known for his very distinct views on japan's currency. what did he say? >> he sees currency that is going to get stronger. it was very interesting what he thinks about the next meeting and what could happen there. he thinks that governor kuroda rushed to get this done, and he thinks that maybe there is more to come here let's listen to what mr. yen said. >> is now 135 or something right? 132. probably it will slowly appreciate -- depreciate to 120. haslinda: what is going to drive it beyond their are do you think that is a level we will see the yen holding at four sometime? >> it will hold around 124 sometime. kathleen: in terms of the next meeting in january, because the boj and corroded has made this move, widening the band of yield curve control, is it possible that there could be another shift in policy on the table in january? >> it is possible, but i don't see any concrete moved at this mom

we are joined by our global politics editor kathleen hays. kathleen: some of the reporting done here new york suggests that there was a big algorithmic force that got things going in the stock market. and that there were technical aspects. who knows for sure? because, jay powell, saying literally, we are going to do a 50 basis point rate hike instead of 75 in december, it was no surprise. one of the key phrases was what he -- when he made that statement. he -- it is what he said next and how he said it that showed the hawkish tilt to what he was saying today. >> the time for moderating the pace of rate increases may come as soon as the december meeting. given our progress in signing policy, the timing is far less significant than the questions of how much further we will need to raise rates to control inflation. kathleen: the timing is less important than how much we have to raise rates to control inflation. that is the message here. maybe they will do some smaller hikes. it looks like they definitely will. they will keep raising rates until t

haidi: we have more questions and answers from -- kathleen hays is here to break it down with us and rfield reynolds as well. kathleen i will start with you. the question is, what is this? is this a precursor to a risky exit? is it a one-off strategic tweak? kathleen: i'll answer the second question first. yes. this will be the beginning of something that will be the final getting ready. the beginning of the in of extraordinary -- of the end there will be a opening cracked and then we will step through. i spoke with the finance -- former finance minister and he says it was a good time and opportunistic because the bond market has been pushing above the 4.25% ceiling. the yen has not been weak and it is holding steady. and there is confidence that inflation will stay higher year. if inflation stays high, why not open a door to what will be the big step? but some see politics in here with japanese people tired of a week yen and --weak yen and tired of the prime minister's estimates. limiting really so that is why we come up with a question of why now? garfield: it is a lot like what has

kathleen hays has the latest. despite the rise in inflation, no change today is the expectation. >> this was a meeting without a monetary policy report. it is the hens from the press conference after is what we are watching closely. starting with inflation. look at the charge. you can see the top line showing the headline inflation at 3.7% versus the 2% target. a key gauge, core cpi up -- but governor kuroda does not think it is sustainable driven by import prices and we may have a global recession in the background. these are raisins -- these are reasons why he thinks we should wait until -- the other big thing is the prime minister has talked to the boj about having a policy review when they would look at things like the yield curve control. flexibility around the 2% target. the 10 year government bonds -- the swap yield is shooting way above the cash bonds. this is all going to happen after the new governor is in office. all governor kuroda can do is answer the questions of reporters on how he sees things. in t

kathleen hays is here with a look ahead. break it down for us, we have the headline number about at the core cpi number as well? >> on both fronts, that is good for the fed, trying so hard to get inflation down. the second month in a row there was a bigger than expected decline in the headline cpi. very broad measure of prices of goods and services. that is why the fed puts so much emphasis on it. down 7.3% from the estimate, the actual number before was 7.7, seven .1% is great. the month before the core cpi which takes our food and energy was 6.2. facilitating 6.0, on the month for the cpi, 0.1 is a nice, small number. that is how cpi numbers used to look before we had an inflation problem. look at the components. we new energy prices and gasoline prices would look better. that will be a plus, although as heidi just asked in the previous hour, what about china? a lot of juice in demand, pushing the gasoline price back up, that may be one reason why the fed may be cautious, knowing this is a volatile kind of commodity. you s

kathleen hays traveled there to find out. >> legoland korea, 70 miles east of seoul bank, built withent backing. part of a plan to create new businesses and jobs in a region where old industries like mining and farming have disappeared. once saddled with debt from the winter olympics years ago, one of the provinces hardest hit by the pandemic as virus outbreaks cap tourists away. >> legoland is attracting tourists and guests into the city. the noise will go away eventually wants to place attract more people and contributes to the local economy. >> instant timber, the province was thrust into the limelight and it decided not to meet an obligation to repay the loan to finance the construction of a theme park, triggering the most severe credit meltdown since 2009. swift action by the government helped stabilize selloff. officials continue to watch for faultlines, especially in the beleaguered housing market. >> efforts to mitigate the rising of housing price. [indiscernible] we want to stop lending the housing price creeping in the housing market. >> the finance ministry and bank of kor

kathleen hays, bloomberg steel. a look at this indian rate decision that is coming up in less than a minute. what bond market investors will be on the lookout for as the reserve bank there gets set for its policy decision. that's next. haslinda: india stocks trading in about five minutes. looking ahead to he stories investors are watching today. eight monetary policy decision and guidance is expected. revises growth forecasts for india this year to 6.9% from a six and a half percent amid stronger consumption and more robust domestic activity. rishaad: just about 50 minutes away from the monetary decision, we have not world bank revised growth outlook. let's get to rajeev. when are you look for from the reserve bank today? and, will be see perhaps an interest rate hike, but could it be the last one as the central bank now looks to growth as being their primary target? rajeev: in terms of what we look forward to, very clearly at this point, they are likely to downshift. our expectations is that they will be doing a 35

our policy editor kathleen hays here with the latest. are we expecting this to make a difference for the fed? kathleen: at least in terms of messaging. are we going to get a more hawkish of jay powell after the decision, less hawkish, what are the dots going to look like? they probably made up their mind of a versus 75, but at the last minute some could change there. a bit in throw off the medium bit. here's what is expected in the report. cpi year-over-year expected to come down from 7.3% -- to 7.3% from 7.7%, definitely an improvement. energy, 6.1% for november, 6.3% before. an improvement from 0.3% in november to 0.4%. flat on the cpi, 0.3%. let's look at the key factors. we've got a look at rent, mortgage, implied rent, that is expected to be peeking around 0.7%. food at home, 0.4%. 1.5% in gasoline prices gives fuels and utilities and isaac drop. apparel, they are all on sale, inventory is trying to be brought down by special sales used in car, truck prices have been falling down. that will not look good. let's look at the year-over-

kathleen hays joins us. kathleen, first of all, thank you for joining us. has been optimism in the markets, and a rumor as well. is it warranted, this kind of slow trickle of reopening? kathleen: the chinese data set this is going pretty quickly. we've seen so many major cities drastically producing covid restrictions. covid zero, it is pretty clear now that it wasn't working. casas continue to spread but is more transmissible variance, the thing that really tipped the balance for the protest across several major cities the weekend before last. that is to beijing, apparently, that they had to make a shift, people had grown very tired of being locked up. there was a fire, 10 people died, it is partly because of restrictions. the fire trucks could not close enough. that is one reason why it seems like this is here to stay. they know they have to change and they are starting these changes. beijing allowing low risk people to quarantine at home. if you have read about a quarantine camp, you know that is huge. shanghai's graphing their testing requirements, venu

for more on this, let's bring in kathleen hays.is chaired by the pboc governor himself. >> of course. there have been hints the property sector would get more support. no surprise after china pulls off all the stops. this is one more way to get the economy back on track in 2023, which more and more people are betting on. let's look at what came from the announcement on the people's bank of china website. a few paragraphs but very powerful. they are going to support the property sector to restructure. they are going to guide banks toward supporting mergers and acquisitions. no surprise there. there will be a strong one. in addition, they are talking about helping diffuse rifts to help financial conditions. they are going to be lenient with the financing and allow banks to be more lenient as well. they want to make sure that reasonable financial needs are being met. in other words, if you have a chance of surviving, if you need a little more forbearance on your loan, that's the kind of thing they are probably talking about. broadly s

shery: that is john williams with kathleen hays. us stick with the outlook for central banks and bring in annabelle. bank of america is seeing a your dilemmas for policymakers ahead? -- a year of dilemmas for policymakers ahead? annabelle: the mandate was clear and they knew that the work that was in front of them. marcus took it easy because we did see the selloff in risk assets and we did not see any systemic shocks and recovering over the last couple of months. coming into next year, the bank of america said is this is when the hard work will be beginning here. that is because inflation is going to be quite sticky on the way down. there are a lot of issues for central banks are there, bring out the terminal chart, one of the bank of america is watching. this is the asian outlook, lot of them are coming down below the key 50 territory as they are around the world. policymakers are going to be deciding or needing to decide when they do shift their focus from where they are looking in terms of sticking inflation to rising employment

the fed president is juggling that alongside kathleen hays. later in the day, the fed president is at noon, and michael mckee has to fed president at 3:30 p.m.. how much are we pushing back against the optimism and hope that they have been equity markets? we get the s&p global manufacturing services for the month of december. do we get a sixth consecutive withdrawal for some of the basic manufacturing and services sectors in the u.s.. do we have a sense of the soft landing or how people interpret that. have people left for the day? >> if you look at the data, retail sales are the worst in 11 months did they drop the most in 11 months print they dropped industrial production for the first time since june, and jobless claims have ripped up the script to 11. close to 200,000, that is confusing for a lot of people. ask people aren't looking at that and they will watch the world cup at 10 a.m.. france will face off, and basically they are cashing in for the year. >> and tk as well. he is away, and he will come back on monday. he has france's winnin

kathleen hays is with us with a story.ve seen jump in the yen on potential changes in boj policy. really focus on the rise of inflation. guest: inflation is rising in japan will above target, aggressive central bank hiking wherever you look, why would they not considerate when you see the inflation rate year-over-year is well above the 2% target? look at the bloomberg terminal chart. headline inflation of the 3.7% year-over-year. you could say energy prices are rising. but that's one side, takeout food prices. this is the core rate, up 3.6% year-over-year. this is the one you might think might move them. no, the governor has said repeatedly last few months he thinks number one this has to do with. import prices energy prices like i just said, will it be sustainable? possibly not. that is we need to see. even though the economy stronger now, what about the risk of a global recession? another thing they are focused on. another reason why they say no, no, no. we do not want to remove any stimulus right now. finally the spring

wennberg's chief north asian correspondent stephen engle and global economic and policy editor kathleen hays. let's bring in steve jacobson, cio. good to have you with us. we keep saying it was a hawkish fed, but it was a fed that was consistent. powell said what he has said before. we are not done yet. steve: kathleen and others are interpreting, it seems like the market wants whatever the fed says. and that is the big risk in 23, because although the fed projection, which is absolutely the worst. in my book anyway, but let's take it for what it is. right now as we told you, we have full employment in the u.s.. we have financial conditions that are easier than when the fed started increasing in an increment of 75 basis points. we have real rates that are massively negative. we have an inflation rate and a run rate at a minimum in my opinion of five to 6%, because it simply there is a bill among economists at the ceiling of one year forward rates is what wages are tracking at. they are tracking at 627%. so getting below five will be difficult. so the real issue here is recession. recession,

he spoke earlier on to kathleen hays on site at the new york fed. >> my colleagues expect the fed fundsto be around 5.5%. i think that gets us into sufficiently restrictive policy that will bring inflation back to 2%. i am getting increasingly confident we are getting closer to that point, but we have to watch the data. the inflation and other data have surprised us. we need to be on the look out. >> two weeks ago, you said the fed funds rate has to get above the inflation rate to bring down inflation. how far above inflation doesn't have to get? >> that is the question. we talk about this in terms of sufficiently restrictive to bring inflation back to 2%. to me, it is about getting in high enough and keeping it high for a while, enough time, to see clear signs that inflation is moving up -- moving down to 2%. you have to think about real interest rates. if you think about the median dots in the economic projections we put out, you see the real fed funds rate minus core pc inflation around 1.5%. that is a reasonable view. whether it is sufficiently restrictive, we will have to watch and

haslinda: kathleen hays, thank you so much.ng in nicholas smith, a strategist tweaking yield curve control. what is the tipping point? what prompted this? meat loaf. reporter: shirley, the bank of japan gives them freedom from political interference. there is only one point in which the elected people has a chance to influence the bank of japan, that is now. every five-year they change. look at the support for the prime minister, he has been absolute hammered. his support was only 25%. i know you will say and the rest of the world people are frustrated about the same things, but in japan they have done something different. they've got the bank of japan to print money to drive up prices without any plan at all forgetting wages up. over the last 30 years, japan has been the worst place to work , it's had no increase in wages whatsoever. you could look on the dollar basis, wages have gone up. over the last 30 years, flat in japan. that is where the frustration is coming from. every time you see a decline, you should think it is th

we are joined by kathleen hays. >> we did have a number of different reports today.tart on a couple. it is the fed's main inflation gauge. the headline went from 6.3 in october to 6.0. that is good news. we also had the core. it went from 5.2 to 5.0. maybe it will start going lower. it is not for sure yet. even after seeing that, and after seeing the manufacturing data which went below 50 249 -- to 49. >> as we approach a sufficiently restrictive level of the federal funds rate it will become appropriate to slow the pace of rate increases as we determine how high we need to raise the target range. until we see our actions have been some impact that would lower the rate of inflation, i think my expectation would be that we would have a slightly higher rate. >> stronger-than-expected consumer spending. roughly twice what it was expected to be. with this number, consumer spending starting the fourth quarter of figure at a 3.3% annualized rate. -- of thy dear act a 3.3 annualized rate. >> thank you so much. let's get back to the conference underway here in bangkok. take

kathleen hays is here with the latest. cup -- numbers cooled more than expected. kathleen: good news on the producer price index, the price of wholesale index. it's different than consumer. it has more to do with that cost companies paid to manufactured goods and the prices they get when they pass them into the retail market. you can see the producer price index headline is supposed to go down to 7.2% from 7.8%. that has to do with lower oil prices and food prices. taking out food and energy, going to 5.9% from 6.9%, demand is cooling off domestically and globally. supply chains are improving. and a strong dollar. those help. these are the numbers we expect. you can see headline cpi has already cooled off. and that pce deflator is also coming off. so we can take heart. one other thing the fed could be watching friday in asia, university of michigan inflation expectations. this chart indicates four year out inflation expectations are steady around 4.9%. that lower white line, they are not worried about because it bounces around more. if the top line moves up tomorro

kathleen hays is here with more. there was no surprise when it comes to the easing of the pace of rate hikes. >> the boe estimates that there probably already in recession. this was the night rate hike this year, although they move in slower steps than the other central banks. is this the start of the global financial crisis at 3.5%? they do say that inflation may have peaked but that isn't enough. they have to see it coming down as the fed would say sustainably. this is the path now in fact traders are expecting the boe will follow through. if we follow to the ecb, it shifted to a 50 basis point hike. this is something traders are taking them seriously also looking for a higher terminal rate next year. christine lagarde said very clearly don't think that a 50 basis point downshift is a pivot because we are going to do many more in the time ahead. they also announced tightening for next year letting the balance sheet starting to run off. that also adds some tightening on the edge. it seems inevitable central banks ar

it's really reverberating around global markets kathleen hays is our global economics policy editor fort comes next. one foot out the door, kathleen, it's perhaps one of his most surprising moves, which spans from third -- 2013. kathleen: now that he has started the process going for moving away from extraordinary stimulus and towards a policy normalization. this is not going to happen overnight. but the fact that he has started, that is the big part of this. of course he is convinced the markets that is where the boj is heading. i think, one of the questions being raised in -- as people look at this again, is we still can't figure out what caused kuroda to do this now. he only has a few months left as head of the boj but all the messaging from the boj coming to this was, oh no, we don't need to do anything we are uncertain about inflation. now, they decided to say we are going to widen the yield curve control band. at the press conference without there was a big move. it's a technical move. by the way, he says widening the band on yield curve control is not a rate hike. lay the past he

kathleen hays is here with the latest. do any of these numbers change the fed's policy tilt? >> it doesn't look like it because we have better news on inflation. that is also -- always welcome. the headline pce deflator, that was down to 6.0%. the core pce deflator takes out food and energy. it had gone up, but now it's gone from 5.2% to 5%. i'm sure the fed is applauding that. it doesn't stop one governor from saying rates need to go higher than i thought just a while ago. >> as we approach is sufficiently restrictive level, it will be appropriate for us to slow the rate of rate increases as we determine how high we need to raise the target range until i see our actions having some impact that would lower the rate of inflation i think my expectation would be we would have slightly higher than i had anticipated in september. >> fed officials must have watch closely today seeing the consumer spending were up 1.1% in october about double what people are looking for on the month. spending is starting up the fourth quarter 3.3% annualized rate which is not week, that looks fairly