i think the fed is interesting. the fed has pushback. the question is what does that pushback look like. it's a really interesting challenge for next year. it's got to justify why it is cutting, it will probably tell us it is thinking about cutting. many questions. i don't think we will get all of the answers. alix: jay powell spoke two weeks ago or a week and a half ago and did not pushback as strong as he could have. so why would this time be different. guy: he's got all the data, all that good is waiting for that moment to crystallize everything into this is how we see things. this is the moment you will pushback, he has a pretty good idea of what the whole committee is thinking. this is the moment with that press conference, that he can pushback. last time we had this, of the market was doing the fed's work. now the fed is being fought by the markets. times have changed. things have moved on. tv gold coming up. our question of the day is when and why will the fed and later the ecb cut. joining us to discuss is mike mckee. are we goin

that's like the fed.y promise they will respond to inflation but i think they will mostly be thinking about inflation is getting better but what do we need to move yet? that will tend to delay them a bit. >> my wife and i are those guests. terminally late. i mentioned this every time. when we began this rate hiking cycle you said typically the bed is too slow to move and then they stayed to hide too long and they wait to cut to late. that is really what you're driving at here yet again and correctly, i think. >> yes. the economy is growing more slowly but what this economy has proved in 2023 is you can have strong growth and below 4% unemployment because we've been below for under 4% for two years, you can have that with inflation coming down. why mess with that by keeping rate this high? >> why does joe biden seem to get no credit and only blame for where inflation is and for the fact that inflation is come down? why does the administration seem to get no credit for low unemployment and relatively strong

is the last fed decision. while jay powell acknowledge the fed is at a turning point. of investment strategy in the british isles joins me. welcome. let me ask about the broad-based rally in equities. it looks like disinflation from the cpi report. will there be a soft landing? >> look, the market might have gotten ahead of itself with respect to expectations for the fed. we think the fed will probably push back against this optimist like the september dot plot which contained two great hikes for next year. interest rates will stay where they are. we are mindful that financial conditions have over the past few months and while there are cracks in the labor market it is not enough to make the fed step back from the current level of interest rates so there will be disappointment coming. lizzy: how much can jay powell pushback without credibility? >> can express his message. he was late in starting the interest rate hiking cycle so credibility is not a strong as it could be but some of the variables he's looking at, reiterating the message could help him. lizzy: you recko

fed chair powell: good afternoon.y colleagues and i remain squarely focused on our dual mandate to promote maximum employment and stable prices for the american people. as we approach the end of the year, it is natural to look back on the progress that has been made toward our dual mandate objectives. inflation has eased from its highs. and this has come without the -- without a significant increase in unemployment. that's very good news. but inflation is still too high. ongoing progress in bringing it down is not assured. and the path forward is uncertain. as we look ahead to next year, i want to assure the american people that we are fully committed to returning inflation to our 2% goal. restoring price stability is essential to achieve sustainable -- to achieve a sustained period of sustainable market conditions that benefit all. since early last year, the fomc has significantly tightened the stance of monetary policy. we have raised our policy interest rate by 5.25 percentage points and have continued to reduce ou

a fed pushback?s it equities or the magnificent seven or the front end or the dollar? where can we see the biggest reaction if we see the fed pushback tomorrow? >> we saw the reaction in the bond markets when it comes to the jobs report. i assume there could be a big reaction there. we could hear a big pushback against the 100 point rate cut. stocks have reacted negatively to previous, more hawkish terms from the fed. november was a strong month for the more expensive corridors of the market. if we see a more hawkish turn, those corners -- corridors may be in for some pain this week. kailey: we are getting reaction from markets but also from the treasury secretary. she spoke a moment ago at the wall street journal event from a position of not just being treasury secretary but i former chair of the federal reserve. she says she seasonal reason inflation shouldn't gradually fall to 2% and no good reason to think the last mile on inflation is especially difficult. that's what we're talking about here. g

it's consistent with what the fed expects. >> we have hit peak rates and peak fed. inflation is slowing. >> i don't think we are going all the way back to where we were in 2019. >> as we move the counted page into 2024 we see a little bit of an uptick, that could force the fed's hand to take one final rate increase. >> this is bloomberg surveillance with tom, jonathan ferro, and lisa abramowicz. jonathan: this is bloomberg surveillance on bloomberg tv and radio. i am jonathan ferro. your opening market on the s&p is positive 5.1%. a three-part story this afternoon. statement, projections, news conference with chairman powell. will he rsvp to the fed pivot party? tom: in the last 24 hours people were writing notes, you know they put statement up. then they put up the guesstimate statement. this is what they actually said. i am more focused on the dispersion of the dots. i'm usually wouldn't say that. this time around, i think that everyone has to recalibrate. jonathan: that is refreshing. thank you, t.k.. tom: i was shocked. jonathan: the 2024 dot. lisa: he's wrong.

fed chair powell signaling policy pitted. his definition tone sending 10-year gilts to five year lows and extending the credit rally with spreads at a two month low. the fed igniting the pivot party. >> it is a pivot party and we are all invited. >>. >> a bit of>> a pivot gadget that the fed is done raising rates for now -- >> we can expect rate cuts at some point. >> we were surprised by the dovish tone powell struck. >> powell's dovish comments. >> this is the first time he gave a nod to the trajectory of inflation and it is easing. >> a victory lap because inflation is moving down. >> what chair powell gave us was an early christmas gift. >> we got an early holiday gift. >> that felt like santa claus came to town. >> a rally in the bond market. >> we should be good for the bond market. >> we are entering next year with a growing sense of optimism. vonnie: john williams, the new york fed president did try to pour some cold water on the pivot, but markets are still pressing in next year. market pricing in 5.5 cuts. we will s

is anywhere near the arthur burns fed or the alan greenspan fed or paul volcker fed. they're just not the same people and they don't run it the same way. charles: you know it is interesting, this jobs report what no one really talks about, i think really is key employment to population ratio. we're still significantly below than we were at the beginning of the pandemic. >> exactly. that is exactly right. charles: yeah. so people are not really coming back to the labor force. there is a psychological part to that as well, art. if people don't believe in the labor force, a, how the hell are they living? b, americans pull themselves up by the bootstraps. we want people out there looking for a job, believing they will get one. >> we do. charles: i want to talk to you about the elections next year. there will be a lot of talk about the laffer curve. there is some folks out there not familiar with the laffer curve. talk to the audience a little bit about that. >> well the laffer curve is just what happens when you change tax rates and if you raise tax rates you will clearly

that's where the fed is right now. i don't think there's any reason to be hiking any time soon, not if the data breaks the way it looks like it will. now, the question becomes, i would note that you used the verb "penciled in" recession, she didn't use penned in recession. the question is why does the fed cut rates next year? that will be critical to the magnitude of the cuts that come. if the fed is cutting rates because of the penciled in recession, that's another amount. i think she already said, 150 basis points. if it does so, because it needs to get less restrictive relative to the economy and not do what steve whiting said which is to punish the economy, we'll have a modest set of rate cuts. >> that's the easy call. the downturn, that's an easy script for the fed to kind of use. the much more tricky one is the rate cuts without the downturn. look, we all here have been talking endlessly how inflation rates fall, they can bring down the fed funds rate. is that hard to explain to the broad public? why shouldn't th

fed chair powell: thank you. so, specifically on "any," we do say in determining the extent of any additional policy firming that may be appropriate, we added the word "any" as an acknowledgment that we are likely at or near the peak rate for this cycle. participants did not write down additional hikes that we believe are likely. so, that's why we wrote it down. but participants also didn't want to take the possibility of further hikes off the table, so that's really what we were thinking. >> steve, -- >> chairman powell, steve, cnbc, happy holidays, mr. chairman. the fed governor, chris wilder, -- chris waller said if inflation continues to fall, the fed the next several months could be cutting interest rates. i wonder if you could comment on whether you agree with fed governor waller on that. that the fed would become more restrictive if it wouldn't cut rates if inflation fell. thanks. fed chair powell: i will try to answer your question more broadly. the we we are looking at it is really this. when we started

i think the fed knows it will go this way.you look at the six-month average, it tipped below 3% on the main cpi. they are getting some of what they want and they know it will take time. it's about when. the market is giving up. bloomberg economics is calling for cuts starting in march but the market is under 50% now. they won't give up because they believe there will be a pivot. i wonder if powell can say anything that the market that -- that will make the market wipeout cuts. kailey: it definitely is a question of how powell can credibly message that is staying vigilant in the market is getting it set -- getting ahead of itself. can the market turn out to be self-evident because the more they bet on cuts, the more financial conditions stay looser than the federal reserve would like to see. perhaps that pushes cuts further out on the horizon. >> i wonder if powell will talk to that. financial conditions when they had tightened and the term premium went up, powell and other officials said the market did some of the work for it.

of the fed tightening. now the ten year is at, what, 4.16, 4.12, 4.15. is now the ten year doing some of the fed's easing? you really can't have that both ways. we've totally reverted back on the ten year. i also think that we still have this bias of the last 15 years that all of a sudden we're going to cut rates and go back to these go-go years. but when you go back five decades, the actual average between fed funds and cpi is fed funds has been a solid 240 basis points above cpi with the exception of two years during '01 and '02 and post gfc. if you look where we are today, we're kind of in that area. and so i don't think the fed -- or jay powell -- was even remotely going to say we're going to start cutting rates in march. i think a lot of stocks have priced in, especially like mid cap and small cap growth stocks, have priced into that. what i'm looking forward to is just like not talking about the fed and being excited about the market because earnings are getting better or margins are getting better ve

jay powell and the fed, this is what they said in terms of interest rates and the idea the fed is nowrting to see the market on his own terms and that's a market that wants to see lower rates. >> we did not discuss rate cuts at all. >> clearly a disc -- a topic of discussion the world and a topic of discussion in our meeting today. >> no discussion, no debate on this issue. >> inflation is still too high and bring it down is not assured and the path forward is uncertain. >> should we lower our guard? we ask ourselves that question. no, we should absolutely not lower our guard. >> we still have a ways to go and no one is declaring victory. >> our past interest rate increases continued to be transmitted forcefully to the economy. >> i think you can say that there is little basis for thinking the economy is in a recession now. >> the economy is expected to recover because of rising real income as people benefit from floating inflation -- from falling inflation and great rates and improving foreign demand. >> given how far we have come, the committee is proceeding carefully. romaine: jay

i think the fed pivoted today. i think it went from having this bias to being in neutral, with a forecast to cut rates. i think that's a pretty big deal. and he acknowledged in response to my question, that yeah. they sat around the table today and yesterday. and they talked about rate cuts. here's a quote from the press conference. >> the other question, the question of when will it become appropriate to begin dialing back the amount of policy restraint in place? is that begins to come into view. and is clearly a topic of discussion. and also discussion for us at our meeting today. >> scott, i thought the chair might have tried to hold back the water on the dam one more meeting. i guess the day they -- yesterday and today, especially the ppi and what it said. he mention would this specifically. we talked about it on your show at noon today. what the data today says what is going to happen to the pce numbers next week. made it kind of untenable for him to hold back and enter a position that was too hawkish. and jus

tiffany: the fed's job has been tricky.y wanted to ultimately signal that they will be on hold without the market pulling forward their rate cuts as markets do because they are forward-looking and without significantly easing financial conditions. the communication style they have used the help that is basically to say we think we are done for now but we always have the option. economic data and the economy has been strong. we could have to hike at some point in the future. that kind of communication is what i would continue to expect out of powell. one of the key things he has told us is he does not want to revisit the 1970's under arthur burns where inflation re-accelerates. they will probably be lagging in terms of easing because of that. scarlet: very well said given what george ball was telling us. what is the biggest underestimated risk for the u.s. economy? very quickly here. tiffany: i think there is definitely a scenario where the u.s. economy remains strong. you get tight labor markets are result in inflation that

>> the fed is done. we are moving from a rate hike cycle to a rate cut cycle. >> the fed is going to ease. until we see data that it is not working, it is risk on. >> the more cautious i think they will be on the inflation. >> overall inflation is on the right path. >> this is bloomberg surveillance with tom, jonathan ferro and lisa abramowicz. jonathan: the bullishness is overwhelming. good morning for our audience worldwide, this is bloomberg surveillance on tv and radio. your equity market a little bit softer this morning. the s&p closing yesterday just short of all-time highs. here some of the bullishness for you. mike wilson morgan stanley equities get a green light to ramp higher. citi positive. lisa where did all the bears go? lisa: the latest bank of america fund manage survey showing investors feeling the best they have since january of 22. cash allocations are falling. all of this just shows people are saying let's go. how fragile is this rally? jonathan: this in the wall street journal from th

the fed has been unstable. in july, they went with that story that we could cut as inflation comes down to avoid being too tight. they abandoned that in september. they re-embraced it in december. i would guess, you know, the two out of three, i would go with that. i think the scope will be there for them to cut whether the inflation numbers are cooperative enough for them to deliver 200 basis points, that's what it will take to keep the markets happy. you know, it's an open question. but i would not rule it out. two, the market pricing is not just looking at a base case. it is looking at the fed, you s near the peak, and much lower rates cannot be ruled out if there's a slowdown in the economy. sonali: so there is some nuance in what you and barry are saying. you believe that maybe not hire for longer as much as we had thought before, but somewhat higher for somewhat longer. it begs the question, and your view, then, what are the lag effects still to be felt? barry: i liked robert's characterization of that, p

is different from the fed's. i'm not saying the fed is right here, but you need to take the fed at their word that with inflation as they forecast it, this is what they, on average, plan to do with rates. if you want to bet against the fed and bet on a more dovish fed do it with a dovish view on inflation and not the same view. you have to come to the table with added vue if you're going to take that bet. >> gentlemen, ank you. steve liesman and david zervos, we very much appreciate it today. my next guest says everybody is giving too much credit to the fed for the rally because markets have been resetting since november here is the from professor from the university and david just threw his hands up in disgust. you have to give the fed some credit what do you think is going on here >> no, i give fed the credit for hanging in there, that said, and think about the fed funds rate at the start of the year the ten-year t-bond rate was 3.88% and today it's 3.95% with all of the noise and -- and talk about the fed thro

particularly to talk through on fed deck. -- fed day.the 75 basis points of cuts in christ in for 2024 versus that year ahead dots picture. it is worth mentioning the decision was split among the 19 members as to what happens next year. eight see less than 75 basis points. how much uncertainty is they still in its outlook? does it change how you prioritize the way markets are going to go next year? ben: good morning. there is still a lot of uncertainty but i think chair powell was very clear on a couple points. firstly, it's too early to declare victory in the fight against inflation. clearly there has been a tremendous effort over the last year. and giving up on that too soon and potentially giving inflation more room to recover, if you will, would be a huge mistake. chair powell is acutely aware of that. i think that is why when you look at the 19 dots underpinning the one dot we all focus on, 18 of them are more hawkish. the message today was dovish, but i think the market has probably got a bit carried away in the short-term. the fed

fed to cut-rate.he problem with that narrative is the third quarter was a smoking hot quarter at 5.2% growth. that is huge. the fourth quarter is slowing. okay, no big deal but slowing to still an above average number of 2.7% as projected by the atlanta fed. you're getting numbers like existing home sales today, housing starts yesterday beating the christmas selling season is looking to be a little better than people thought so maybe we're not having a soft landing. maybe what we're having to stick with the met at that for is a no landing. >> right. >> the economy is just growing t continues to grow and my fear is, is if you're hoping that the economy will moderate enough to bring down inflation it is not going to bring down inflation and those numbers, yeah they will not be 9%, or 8% but might still stay at 3 or 3 1/2. that will be a problem for the bond market somewhere in 2024. charles: that is why we played that goolsbee sot, it is rare you hear a fed official, involved in the fomc almost acknowle

look at the fed balance sheet. it's very different from all of the prior cycles. >> much bigger. >> much bigger. >> it sounds like you're thinki it's much different in a worse way. >> yeah. >> private credit is going to be a problem. >> obviously. >> so the transmission mechanisms are different. >> look at what kind of worked its way into it this time. the fed was still involved in quantitative tightening and we had a regional banking crisis and ey pulled off. just think about -- >> we need to do a psa, old school rodney dangerfield, et cetera. but we're at a place where one of your -- i think your strong argument is that old economy stocks are poised for an eaings renaissance based upon productivityains, and that's part of the dynamic. we've had an earngs recession. rget the economy and your peers around the streetwhether th be strategist are saying we see -- in fa, the street has 10.5% earnings growth in024. is it coming from the old economy stocks because i own a few and it hasn't been a good run. >> i think it'

i wouldn't fight the fed. define gravity on us and the consumer stays strg and that keeps me thinking earnings will be positive in 24. >> what if would change the words flowing to normalizing? of course it is slowing but maybe it is just normalizing. >> if we can have an economy that is going to grow one and a half 2% in perpetuity for the might be able to crank out some very low returns i think in equities. >> what if is higher? why ha you gone from -- i'm not saying the atlanta fed gdp now is the gosl because i think we leaed over the course of time, someat consistently, that it has not been. however, how do you go from 27 to 1 1/2? >> economic growth, jobs, number of people in the economy times productivity, productivity , maybe that conties to expand, but --. >> productivity has been expanding. that is part of the bowl thesis. you want to acknowledge that? >> i just acknowledged it. their productivity. i will say, those are the two factors. the job part i addressed, which is that when you are at full emplo

o soon to speculate when the fed will cut rates. headlines.two of the big powell also saying the fed is, quote, prepared to tighten further if appropriate. we'll take you live to the q&a portion of that chat witthe fed chair ent doestart so, sa, we dn'think was going necessarily selout and sait's time to cut res. always preservinsome two-way optionality there. securely positioned.e if we're govern governoraller was saying a good spot. i guess given we have a meeting in a week and a half, they'll come out with a new outlook. it's more about n't get too ahead of yourself. the market has gone on to price of next year. n the first part >> i think it's exactly what you might expect from powell. it's not doing much to move the mark one way or the other because he's saying on one hand, we don't know necessarily we're done, we're stl watching the data and inflation a little higher. on the other, things are looking good and there's progress. that's the message, committed to bringing inflation down to 2% target is all he can say at this point

it starts with the fed move. i think you can argue it has not really changed much with the ecb move. this feels like a fed driven move, but some are down -- some are down. there are a range of provincial banks that are under production. alix: in the equity market, s&p off the high. you are still looking at potential closing high for the nasdaq 100. the semi index still at a record, so we are losing some steam in the broader index, but some of those tech exposed names are holding up well. two year yield down six basis points, but it is the back end getting that huge bid, double-digit declines there. the dollar drops like a stone. that move yesterday was tremendous. that was huge, below that 200 day moving average. it does feel that the fed is in control at this point. guy: how long will the other central banks last in terms of hawkishness? we did get some out of the bank of england and the ecb, talking about not cutting. andrew bailey getting his message across as well. >> our job is to achieve the 2% inflation ta

want to cut. >> the fed is unlikely to start cutting in march. >> the fed will not feel compelled theyeed to embrace early rate cuts. >> the market has to think carefully about the amount cuts it is pricing in. >> markets are overzealous. 65% chance of a march cut seems overdone. >> a pivot that starts in the back half of next year. >> more likely in the second half of the year. >> the fed is months away, if not quarters away from cutting. this report is not going to make them want to do that anytime soon. shery ahn: our next guest is bearish about global fundamentals, despite the beat on u.s. jobs numbers. rebecca joins us now, great to have you. we are not expecting much to come out of the fomc in terms of a change in rates this week but when it comes to clues of what can happen next year, what will you watch out for especially with resilient jobs numbers? rebecca: great question. i agree with sentiment in the open. we've been experiencing all year, the last several years, bad news is good news because one bad economic news comes out, the fed was going to help us by doing something.

paul: the fed, the catalyst.here other factors you are looking at, predicting the strength of the dollar? mahjabeen: the u.s. has been successful in moderating inflation, as opposed to other economies. other economies are catching up. europe, u.k. has seen inflation fall drastically over the last few reports. these economies have now moved into a positive real rate environment. that has been a benefit to these currencies. that's played out well against u.s. the u.s. alone, there are questions around the fiscal sustainability, even the credit agencies are concerned. elections next year plays into policy uncertainty, if anything. these are a couple drivers which would weigh on the u.s. dollar ahead. paul: risk to that outlook? what's the possibility of shock or something going on geopolitically? mahjabeen: interesting this year, the svb situation and the hamas-israel conflict ongoing. the u.s. dollar tends to be a safe haven currency. interesting, we have seen the swiss franc outperform the u.s. in this situation.

. >> the fed showed its cards here. they are excited about the fact inflation has come down. >> that's basically as good as it can get. >> this is a green light for investors. >> the market is taking this to the brink and i would be inclined to go the other way. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. jonathan: good morning, good morning for our audience worldwide this is bloomberg surveillance on tv and radio. your equity market positive again. the bond market is still rallying. we closed north of 4700. that's the year end price targeted goldman sachs for next year, not this year. tom: on dow, 37,000. do we get 38,000. yesterday the arsenal placard behind greg peter's desk has to stop. it was too emotional. what i'm really interested in is how we what do money market funds due over the coming days and weeks. where does the cash go. the other was the massive obvious margin calls. how many people got run over yesterday. the story for end of the year. jonathan: absolutely stea

the fed at home drives healed in and of themselves to continue the tightening that the fed has done and do some of the work for them. it becomes far less favorable as we go into the future months, these are all the things that are worrying the fed, as soon as we start to see that, we start to see the core on a trend line drop below the 20 basis points on a monthly basis, then we can say the data favors them. we can't say that right now, scott. >> tomorrow's gonna be an important task of this debate. and especially when we get to the core cpi, there's an expectation of it rising, that still very much consistent with the growth with that inflation narrative. i think a good surprise would be a print of 0.2% or below. we do think will actually start seeing that more next year because really the remaining inflationary pressures are due to lagged impact on rent and auto prices through auto insurance. as we see that feed into the data, that should continue bringing in better course cpi prints. but certainly, a lot of it hinges on the progress on inflation versus the feds expectation. >> let me

so-called fed put that the fed created. market is up, bias to the upside. we're edging higher.he close. is there anyone where else you're looking? i get the sense when we get the all-clear sign people will hope they were positioned in a lot of places. >> yeah, one place that i would be looking at is the financials. i have had think rates have been going up going up so long, i think the banks figured out how to game it which is frankly why the yield curve is still inverted. i think the banks have figured it out. so they need to keep running higher. that is what i would look like, like the dow jones banking index as an indicater to, rather than let me go find some banks f that continues to move higher that is where i think the market will really get some juice, a combination of semis and banks. charles: i gotcha. to answer your question, i only started a little bit, but i'm a late guy. i'm one of those guys, comes in two days before christmas, what have you got? i will take it. dan, my friend, talk to you soon. >> thanks you too. charles: folks my takeaway own sort of resentment

we're on course for fed easing and lower inflation. >> fed when?ee employment reports between now and then. a march cut very much comes into focus, and that would be consistent with history, when the fed basically waits about eight months from the last height to the first ease. >> are you in line with that thinking? you think the fed could cut as early as march? >>. >> i think anything is possible. that wouldn't be where i would put the balance of my probability, and that's not because i see anything bad in this report. i think inflation is moderating. i think that we're seeing what we want to see. but we know that getting all the way to the fed's target is going -- you know, is a long process. and i think the way they succeeded that long process is they hold. i had wanted them to get to the high rate and hold, hold, hold, for a long time. they have been doing that. and now i'm going to say on the other end they're going to be careful and should be careful when they start to cut. and we do still see some -- it's not concerning trends. it's that we

it fed into the need to revise expectations by the fed. that is what cemented these hopes of a fed pivot if not a pause. we will be watching. because that has increased confidence among a lot of -- we will be watching that because that has increased confidence among a lot of forecasters. in the previous hour we looked at the optimistic caution that we are hearing from fed speakers that they are willing to wait to see if the data continues to trend down in the way that it has been so hard. our next guest things still looks constructive and comes to equities going into the new year. with us now is kyle rodda, senior market analyst at capital.com. have the markets overdone it on the kool-aid in terms of expectations from the fed? kyle: that is the risk in the short term. everyone has gone to one side of the boat. we need to see a justification that the 5-6 rate cuts next year are where the market is heading or where the u.s. economy is heading in terms of the slow down. as far as markets are concerned it seems that they are strong. we confron

richmond fed is saying that the fed will cut interest rates if progress on inflation continues. really putting the brakes on. coming up, the digital bridge and ceo joins us to discuss his investments and the data centers fueling the ai revolution. this is bloomberg. ♪ you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence. jon: this is "bloomberg markets ." i am jon erlichman, with vonnie quinn. time for our stock of the hour segment, but we want to broaden it out to the last year. digital shares have advanced more than 50%. the company's assets include data centers, and in a year when there has been talk about artificial intelligence and computer power, demand for those centers is strong. ceo of digitalbridge -- they manage more than the data centers, $70 billion-plus in assets overall --marc, it is good to have you with us. how would you characterize what this year has been like so far? marc: it can only be characteri

i think the fed is also looking at that.y want to be cognizant that the pipes in the plumbing, how banking funding occurs, that's not stressed and will create a liquidity crunch that transfers into a credit crunch. they are watching the spikes and repo rates and watching the usage of the standing repo assessments. ays.li: i go to next week is a big week again, not just for the u.s. central bank. what are you looking for in the dot plot next week? >> i think the dot plots will be most meaningful. not necessarily that they will have a realization of the rate hike they forecast in september. but what is the median dot and what does that mean to the outlook for rate hikes additionally later next year? in that regard, the fed might hold steady and with the data today, it probably shifts the median from three rate hikes to two. when we look at the two-year note at 4.7%, we still see that equates to about five rate cuts in that regard as opposed to the two rate cuts the dot plots will likely reveal. to be clear, there is still a lo

so i think the fed has to begin a conversation. last time, dom, powell wouldn't entertain the question. he was asked about cuts. powell said we're not talking about that right now. it was kind of of a full stop on the question. i don't know if he gets away with that tomorrow because one of his main governors, the fed governor waller has talked about the idea that if inflation comes down the fed will be cutting. so a conversation has to be started, but you can bet right now that the fed is trying to figure out what that language is going to be in a way to limit how much the market prices in. >> the devil is in the details for sure. michael cardia, steve liesman, thank you both very much for the conversation. we'll see you soon. >> coming up on the show, macy's shares are surging after a group of investors made a $6 billion buyout offer for the retailer. we'll look at what the buyout would mean for the legacy store itself and the rest of the retail landscape, plus fraud in a bottle, exclusive access to one pharmaceutical company's wa

a while of the powell fed.e was critical yesterday. why do you have to tell us? why would you cut at this point if you don't know what the economy will do? >> i think the thing he said was the idea that he thinks the fed is signaling they will cut right rates if there is not a recession. monetary theory ideas are still around. >> right back in it. doesn't matter. >> get pback to really low interest rates. >> you can make the case if the economy is still strong. we can talk with him today. who called him and what is the motivation? austan goolsbee was already out. >> john williams was as well. andrew? >> do you think it is all coordinated? >> yeah. >> unless some people really do -- austan wasn't totally on board at times. >> that may be. i always love listening to kevin, but if you listen to the chairman a week ago, but if you listen to all of the folks in the last couple days, it is almost cold water on that idea. >> logically, it doesn't make sense. we all decided great, back to cutting. it doesn't make sense

if we get core pce data that comes in lower than the fed anticipates, does that put pressure on the fedo lower in march? >> it would definitely add pressure. you will need more than a couple of months of better inflation data. whether or not it will be three or five cuts before we can start penciling in the rate cuts. the discussion was huge and the fact that they admitted and are talking about it. i think it will take a few months before we start officially calling for it but we will be more than just inflation. it will also have to be slower economic growth but not just slamming on the grip -- on the brakes. vonnie: there was a line into the news conference that you can't put the toothpaste back in the tube. why are we seeing such a course of fed speakers coming out and backing off on what powell had to say? >> perhaps they thought that we should have fine tuned some of those comments more, perhaps they are thinking they weren't expecting such a market reaction. fed chair powell didn't say we would officially cut rates but he said the fact that we are discussing it, that was the bigge

obviously, below fed's target.e'll talk to lael brainard later this morning about whether that's celebrating a bit too early, but the expectation is that you would get to target on a full-year basis in the next two months. >> the prior six months, it was about 4.5%, so now to below 2% definitely shows a tale of the bifurcation of this year that we've seen. >> kind of justifies why the market is where it is, right? the whole notion of this rally was based on the fact that the economy was going to hold up, inflation was going to come down, the fed's going to start cutting, and you don't have to, i heard one guest a few moments ago say, the fed wants to slow the economy. no, it doesn't. it actually just wants to bring inflation down and would be really happy if the economy just maintained where it is now. that's the definite of a soft landing. i've also heard some suggest mission accomplished today. is the fed ready to declare that? maybe not. but you can't fault them if they feel close. >> i didn't know that slowing

i don't expect that from fed officials. especially the fed chairman. i don't expect them to say exactly what they're thinking. go back to the greenspan keeping a wrap around things and having to figure out what they mean by how far they raise their eyebrows? >> they say we got policy right. we don't want to get tighter for the sake of getting tighter. the encouraging part is the outlook for the economy is embedded in the fed forecast. it is not wonderful. under 2% gdp growth. they pencil in unemployment rising to 4.1%. it is not about running the economy at stall speed or worse in order to get the job on inflation done. >> he did say very clearly inflation is still too high. andrew, you bring up what jamie dimon worries about. we had ken on yesterday. he is worried about government spending pushing this up. it will be very interesting to watch how this plays out and see what the next numbers show. if you listen to the entirety of powell's speech, he acknowledged all of those things. we all hear what we want to hear. the market, the part of the market,

i am still in shock about the fed, and how far the fed was prepared to go at this point. i get the idea that the u.s. economy is more readable and understandable, that you can cut rates, but the gap between the fed and ecb is galactic now, huge. should i believe the ecb? they didn't even talk about rate cuts. alix: but when you look at the core inflation chart for europe as well as the u.s., europe had a higher peak, but it is coming down hard and fast. the fed has a lower inflation forecast for next year then the ecb. i find that puzzling and do not understand what is going on there. guy: yeah. i think the ecb has the potentials to lean on cuts in a much more significant way. they are looking at wages in the beginning of next year because of the highly structured way the european labor market works. they need to see the data coming in next year before they can make a decision. the bank of england looks like an outlier now. you have members of the mpc voting for rate hikes still, but the bank of england looks very different. let's kick it around and get into this, this wi

guy: who do you think goes for -- first, ecb or the fed? terms of our house view, we have the ecb and the fed cutting at the same time, in september. in fact, we have the boe going first in august. guy: and your degree of confidence in that? andrzej: it can change. guy: everything is changing quickly. andrzej: in terms of the ecb, it depends on wage growth. if all of a sudden we see very weak wage growth data in january and february, that may pose risks. alix: say you see a cut from the ecb and the fed in september and the boe goes in august. what is the why behind that? we have been talking about cutting versus easing that you can cut but do not have to ease until later. where do you think we are when we get those cuts? andrzej: in our view, we are almost describing a scenario of declining rates. essentially, the central banks' jobs are done for inflation. we had a soft landing in the u.k., euro area, and the u.s.. in terms of the u.s., our team is forecasting a recession, but only in the back end of next year if your the question is when

or at least fed policy.net yellen taking several victory happens also. so that played a role. >> yeah. listen, i think being referred to or compared to arthur burns for a fed official is probably not -- charles: it's tough. that's a tough one. >> -- cannot high on the list. and for anyone who's unfamiliar if with him, arthur burns' own diary exists as a book, and they're all a worth reading. i don't think jay powell, the chair of the federal reserve, and the fed in general right now thinks they're doing something that we'll call burnsian. i think they think they've done enough, and they think correctly or incorrectly -- and that's a separate conversation -- that they can take their foot off the brake a little bit here. charles: but do you think they thought the street would react the way it did? i think they had to -- >> they had to. charles: many times when jay powell's done things at these meetings expect street has gone crazy, pop the champagne or he has had to actually come back, i think it was one of th

we get cpi on fed day, the day before fed day, december 12 -- to simmer 13th is the next fed meeting- december 13 is the next fed meeting. the person to pay attention to is the fed chair. alix: yes. and economic data because they are going to keep saying they are data dependent. we get jobs data next week and mixed ism manufacturing. this points to a goldilocks scenario. how do we price out cuts in a goldilocks scenario? michael: it depends on how fast inflation comes down because with the fed would be doing is trying to balance out the rise in real rates if inflation is coming down and maintain the same level of tight policy without having it get tighter, because real rates are going up. it is going to depend on the evolution of inflation. until the fed decides that inflation is whipped and they are probably not going to do that, jay powell makes the point in his speech today they want to see inflation down about 2% level. >> i'm going to ask you the question i am asking every single economist here. if jay powell himself and a lot of central bankers around the world said selloff in

guy: let me come back to the fuzzy fed talk. is it something the fed can't do?e and a lot of cuts and is changing financial conditions for the real economy. does the fed may be have to be less fuzzy and a little clear and may be back on some of that? >> the transmission of the federal funds rate, even the market interest rates to the real economy which involves employment, it has been muted this time. there is reasons why the u.s. economy is more resilient in the interest rate sectors are not passing through to consumers. according to consumers, we are not getting a recession. i think that's where they can let things go a little bit because they understand there is not this precision with what the fed funds rate and what the treasury does and mortgages and with the american consumer does. i think right now they have created -- because of their fuzzy language, it's creating confusion in market. you're seeing the first cut calls throughout the year and that's wild. jay powell said recently i'm not going to tell you all what to do. he had a press conference where h

the fed acknowledged that today. powell could not defend, i believe, a more hawkish position any longer. >> i felt in a funny way that i was listening to either nick saban, the coach of alabama, or brian daboll, the coach of the giants, after a win, where he's saying, hey, we're making good progress, we're doing well, we played a good game here, but we've got more work to do. there's still more work to do. there's some things we need to clean up on inflation. did you hear that? >> well, defends if you think the fed is 5-8 like the new york giants. that's another issue. you know, and maybe it is given its forecasting record. but it's had a couple wins in a row, in fact, we were talking before, tyler, that a lot of what the fed forecast this year in terms of inflation, in terms of growth, in terms of the funds rate actually came to pass, so, it wasn't a bad year for fed for forecasting, and i do think that's right. they have more work to do, they know it, but he couldn't defend the most hawkish position of this idea th

above the fed's target.iven how much the fed has emphasized this idea of data dependency we've had indicators suggesting cooling-off in the economy. inflation expectations lightening up. signs of cooling within the labor market. what we are looking out for is anything the fed will say after the next meeting. we are priced in for a pause but any indications from jay powell on when the fed might cut rates is what everyone will look out for toward the end of the week. lizzy: we will come through everywhere to his speech. thanks to jill for that. the clock is ticking down for cop 28 negotiators examining a deal to cut fossil fuel use and production to get close to net zero by 2050. former vice president on climate out has slammed the text saying it reads as if opec dictated it word for word. let's get analysis from senior executive editor for energy and commodities who is at the conference in dubai on the last day. will, good morning. the statement highlights the divide here. will any deal and up so much of a co

it was a dovish surprise from the fed.of the decision that was held steady, rather in terms of the acknowledgment that the next move is going to be a cut. the fomc sees 75 basis points of cuts in 2024. they also revise the inflation forecast lower across the board. fed pricing for next year now is closer to 150 basis points of cuts in 2024. the two year yield yesterday fell its most since the fpv fallout in march. the two year yield 10 -- down 10 voices points. it means that financial conditions are near the most accommodative level since february 2022. the s&p hitting a new year to date high and futures are pointing to an even higher opening this morning. now we turn attention to all of the many central bank decisions coming up in the european region this morning. this afternoon as well. we have a 12:00 p.m. bank of england on thread needle street. its task is really to balance the worst growth outlook in the u.k. since andrew bailey took over as governor. and then rising even more rapidly and inflation still more than tw

guy: markets pricing takes cuts next year for the fed. let's say that the fed delivers fixed cuts. is the -- if the fed delivers fixed cuts, against what background will it be delivering those cuts? liz: it's interesting, you see both camps -- goldman sachs -- there was a note out over the weekend, disinflation globally. they are looking for five cuts next year. they do see a soft landing. the gdp next year was 2%. they see the fed -- guy: sorry. five cuts is consistent with a soft landing. that is not against the backdrop of recession. liz: i don't want to call it a rorschach test, but coleman says five cuts because inflation comes down and out soft landing. bloomberg economics sees a recession. it seems like people are penciling in that you could possibly get more than the fed three cuts on a few different scenarios. i'm not sure. what if inflation stays sticky. i think it is precarious right now. the pals credit, he did -- two powell's credit come he did the obligatory "we are data dependent." alix: if it looks too good be true, we are looking at all the rsi's and we are overbou

but the fed is not the only game in town.e calling it super thursday, great decisions from four other major central banks. that's tomorrow including the england and european central bank. joining me now is seth carpenter. so great to have you here. >> great to see you. >> you are a fed insider, former deputy director. give us a sense. what are you expecting aftwith press conference and statement? >> you nailed the right issues. at the top of the segment you said investors are looking for clues as to when the fed might cut. that's where fed chair powell and others have to be super careful with what they communicate and how they communicate because the market is looking for any signal that cuts are coming sooner than priced. we don't think there's going to be a policy rate move today. our thought is they won't cut rates until june. to get there, they'll have to reprice them. part of what i think powell's strategy is going to be is to try to say, look, we didn't hike rates today. inflation is coming down, but it's not at our tar