louis fed president james bullard spoke with us moments ago.e on insurance cuts. >> this is all about risk management and about the downside risks to the economy. if the economy powers through here as it did in the late '90s, then we can raise the policy rate back up the prudent thing to do right now, especially since inflation is below target, inflation expectation is below target, the prudent thing to do is lower the policy rate now. if all is well next year we can come back and go back to the previous level we were at. >> i don't know than, is he right? is that what's going to happen >> two pieces of information here, economy growing roughly 2% inflation and 2.25% gdp. what's the volatility we're insuring against market volatility is not swinging all over the place. i'm not sure this is something that needs fed action. however what is an issue is the short end of the yield curve is inverted the market is saying the fed needs to fix that or it will create inflationary risk i agree with his conclusion, which is the fed is being forced by the m

bullard is speaking in illinois. he is a voter this year. he dissented at the last meeting where the fed cut by 25 base points, he wanted a cut by 50 base point he does not expect the trade uncertainty to go away in the months or the years ahead. why? because he said it just difficult to reach a stable global trade regime. as to the impact, he says it's small in the united states but it is larger globally. in addition to trade, bullard in his speech highlights several down side risks, among them slowing global growth in the economy, which could feed into the u.s. economy, contraction in global and u.s. manufacturing, as well as slowing u.s. business investment, not to mention the signal from the inverted yield curve, which seems to suggest that policy may be too tight from where the u.s. and global economy is bullard also said monetary policy can't react day to day to the trade war and these insurance cuts may help also recenter inflation let's take a very quick look before this speech at where the federal probabilities were there's a 56% pr

james bullard making headlines finally, we're hearing about why? terse to on the friday or on or thereabouts to explain why they dissented. like the dissenting opinion. bullard gave us three reasons. this is the second time he's dissented. he says the recession risk is rising he says manufacturers are already in recession inflation is too low and then this thing which is the big debate on the fed board, better to act aggressively and early. some say better to hold your fire let's see where the federal reserve funds rate is trading. 43% for the next time in october. that was trading well above 50 ahead of time. rick has this thing which is right. it's kind of like looking through a cloudy window at another window at another window. >> get closer and it becomes more accurate. >> that's the one that's accurate these other ones are indications of what's going to happen. 64% for that same cut in december that is priced in, another cut for the end of the year. you want to talk about a second cut or another cut from here, it's not until april we get above

we'll see if he reiterates bullard's message. there are six fed speakers total on the docket today so we will literally be drowning in fed-speak by the end of the day but it will be interesting to see if there are others on the committee who come out and corroborate bullard's enthusiasm for more optimistic, deeper rate cuts on september 18th. stuart: straighten me out here. it seems to be a consensus emerging that interest rates from the fed are going to fall sharply and soon. the market's looking for a 100 basis point cut by april of next year. other observers say it will be 75 basis points. the bottom line, i want to know if you agree with this, interest rates from the fed are coming down sharply and soon. >> i would certainly agree with that notion. i think the market is rightly pricing in a rate easing cycle as opposed to just a few band-aids that i think chairman powell was hoping he would be able to get away with. but again, we've got so many people to hear from. boston's fed president came out yesterday and basically confl

louis' president bullard repeating his call

louis fed president james bullard today and sarah's been digging into the highlights. >> james bullard was one of the three fed officials to disseptember from last week's fed rate cut decision, but he disagreed bauds he thought the fed should do more today he spoke at a chairman of commerce meeting in illinois and gave more clarity about his view of the state of the u.s. economy and he's worried bullard saying a sharper than expected slow keown may make it more difficult for the fmoc to achieve its 2% inflation target and adding that insurance cuts may help recenter inflation. u.s. and manufacturing and slowing u.s. business investment he's also mentioned tin vot ed e yield curve. because he's worried about the economy and some of the signals, which gives investors kind of a confusing message, about what's going to happen at the next meeting with so many people on so many different sides of the argumented arguments. >> consumer has been the workhorse of this economic expansion. consumption is 70% of our economic growth. a lot of the customer based data seems to be pretty strong. consum

captain james bullard, thanks so much for taking the time. appreciate it. >> thank you so much. >> we'll be checking in with nbc meteorologist bill karins next to get the latest on the path of hurricane dorian. here's a look at the situation in wilmington, north carolina, right now. we'll be right back. went to ancestry, i put in the names of my grandparents first. it gave me a leaf almost right away. within a few days, i went from knowing almost nothing to holy crow, i'm related to george washington. i didn't know that using ancestry would be so easy. - in the last year, of cybercrime every second. when a criminal has your personal information, they can do all sorts of things in your name. criminals can use ransomware, spyware, or malware to gain access to information like your name, your birthday, and even your social security number. - [announcer] that's why norton and lifelock are now part of one company, providing an all in one membership for your cyber safety that gives you identify theft protection, device security, a vpn for online pr

gets that bullard watches the show we know he watches the show.e hears -- i don't think it is all fed speak. rosengren has charts charts we have to move on let me say that rosengren is ill advised here >> to your point, jim, we're watching some consumer products like apple the company's iphone 11 line and the apple watch series 5 going on sale today as many analysts say preorders have been stronger than expected. tim cook greeted customers about an hour ago, in new york city. they reopened the flag ship store, open 24 hours a day, 365 days a year. katy huberty saying the demand trajectory is improving. risk to the upside >> i have to tell you, the crazy thing here, i interviewed david taylor yesterday, ceo of procter & gamble where is the strength? where has it been growing? china. starbucks. spoke to kevin johnson recently, in preparation to go out to the annual meeting, where is the acceleration china. yum china. where is the acceleration? in china but apple, preorders what is this now apple lowered the price, very value conscious in china. >> t

i'd like to thank my friends senator marco rubio and congressman bullard is have a been advocates inthe venezuelan people as we fight for r freedom across the globe. i'm proud to her work with sam rubio along with my colleague à Ãto offer protections for the venezuelan people while making the forms to tps. rathe crisis in venezuela is a defining human rights issue of our time. maduro is starting his own people and innocent children are dying. what's happening in venezuela is pure genocide. we have to act but we also need to be responsible. the courts have basically made a temporary program permit which is not sustainable. my amendment protects a vulnerable venezuelan population while making sure human rights violators are clearly identified as ineligible to come to the u.s.. my bill grants tps from venezuelans right now. the amendment also makes much in reforms to our tps program the amendment grants tps to venezuelans for 18 months. requires congressional approval for tps extensions no more than 18 months at a time. my amendment limits the ability tiof the illegal aliens with no con

>> i think i'm on the ceo side here bullard does bring up good points ed trade war could raise problemsoing forward the inverted yield code, there are others that have consented to the rate cuts retail sales have really been strong job growth has been strong industrial production was something i think helped to lead us into this rate cut campaign if you want to call it that. powell isn't calling it a campaign industrial production isn't calling it off the map the two dissenters of the fed. >> i believe you know consumer discretionary may have gotten ahead of itself as a group there is a difference between the economy and the stock market, as we well know. >> absolutely. when i'm looking at sectors whether i like them or not, i look at the valuation, number one, the visible earnings growth down the road and how does it look technically you kind of hit the nail on the head there, consumer discretionary is a little out of kilter >> you still like growth over value. when you say international, is that asia, europe or emerging markets? >> in answering that question, since the fed is still in

when it comes to the vice chair, he seems not quite in the bullard camp of we need to do more.ms will be speaking next week. he has opened the door to more rate cuts, mary daly, robert kaplan, loretta mester not but there is so much out in terms of what -- there were seven fed officials. least one more rate cuts so i think he is trying to signal it could happen. paul: let's talk about other central banks. three in asia. kathleen: we might get some action. the economics team is looking for that. let's not start with someone expected to do anything, someone who has done a lot, the reserve bank of new zealand. the last move, 50 basis points. before that, 25. they can hold key rates steady. the bank of thailand could cut again to build on the surprise move in august that really did have impact in terms of what investors are expecting. isthe philippines, the rate below the 2% to 4% range. this gets them to move so we could get too out of three who will cut. the global march to lower rates continuing and governor kuroda speaking thursday. after he has hinted he is open to easier poli

at the federal reserve, james bullard says more easing might be needed., president trump will address the u.n. general assembly today as europe joins the united states in blaming iran for last week's attacks on saudi arabia. and awaiting a verdict. the u.k. supreme court will rule ofthe locality -- legality boris johnson's suspension of parliament. nejra: welcome to "daybreak europe we have heard from the pboc governor in terms of not thinking about big stimulus coming from china. also a lot of eyes on the general assembly and the interesting geopolitical comments coming out in terms of iran. matt: it was pretty astounding france, and.k., germany expressed support for the theory iran was behind or explicitly blame iran for the attacks on saudi arabia. i'm also going to be interested to see if we do get any real movement in the pound around the court decision at 10:30. politically, it's going to be fascinating to see the decision. the question is, will it move markets. will it move the needle on brexit? nejra: absolutely. in terms ofying brexit, the suprem

bullard wanted to see a 50 basis point cut. rosengren and george wanted to leave the rates where they were. seven officials see one more rate cut this year. they needed two more to have extra rate cut. five officials believe the federal fun rate should be at same rate. five would like to see the rate at level it was before this meeting today. now the federal reserve raises the gdp forecast to 2.2% this year. also see the unemployment rate nudging up to 3.7% by the end of the year. core inflation they do believe stays the sail at 1.8% by the end. year. in the statement everything was basically the same there except they added the fixed business investment and exports have weakened, changing from soft, federal reserve says they will act as appropriate to stay in expansion. now on the short-term funding costs that you were talking about, charles, the federal reserve lowered interest on excess reserves. lowered interest on excess reserves by 30 basis points. the federal reserve sets it 20 basis point under the top range of the fede

i can't help wonder if bullard is catching the president's attention for the next fed chair appointmenting like that >> i think it caught a lot of people off guard it surprised me. what i think is almost -- what i'm fairly confident of is this former fed official saying the fed should consider politics and not cut rates. we'll have exactly the same influence with president trump telling them cut rate which is is to y zero these folks, i mean they focus only on unemployment and inflation. >> even that the picture has been murkier than normal. that does it for the exchange every one. >>> thank you very much. we'll see you in a moment. welcome to power lunch for a friday here is what's new at 2:00 we're on record on high watch. stocks within striking distance now of record highs as the market looks to close now for a thinker straight week of gains we'll tell you what can keep this rally moving upward basic tech und big tech under fire. a house panel demanding e-mails from four big tech giants as it ramps up its anti-trust investigation. >>> valuation dropping by the mi

. >> i am surprised bullard went as far as to dissent. >> there is a little bit of a split in the dots>> there are honest differences of opinion in how vulnerable the u.s. economy is. >> on one hand, certain parts of growth, especially domestically, that are holding up. >> you can make the argument that the fed should not do anything. >> on the other hand, you have the trade war, geopolitical risks. >> manufacturing is slowing down. >> capex spending lower. >> you will find more and more divisions in the committee. >> they want to see more cuts by the fed. jonathan: joining me here in new york city, priya misra of td securities. diana amoa of jpmorgan, and krishna memani. of invesco. let's begin with you, priya. your thoughts on the potential of another rate cut before year's end? priya: we are looking for another rate cut in october. we have been looking for 75 basis cuts this year. the fed is putting in some insurance cuts. our view is the consumer will show signs of stress, so we see the fed cutting three more times next year. i did not read the fed as being that hawkish. i think, r

james bullard called on the central banks by half a percentage point at this month's meeting.lard said we are too high adding the fed needs to get ahead of market expectations for a rate cut meanwhile, he doesn't see the need for a cut saying as long as it remains healthy i'm not worried. >> let's talk about the ecb. in an interview with a french newspaper, trade tensions created uncertainty about the source of the current slow down adding that the question of beginning asset purchases says this is still needed to be debated. the ecb is widely expected to cut it's debates and announce the restart of the asset program at next week's huge policy meeting. let's bring in the chief global strategist what is an ecb bazooka at this point? what does the market want to see? can you define it? >> the market wants to see a rate cut and more qe there's very clear indications that they're going to do more. that the market would like some sort of whatever it takes message from the ecb the problem is i don't own an bazooka. cut rates by 1%. i'm not sure that it will make much difference at t

that's the bullard view versus the roesengren view where do you fall?ll in the latter camp, i don't think the fed needed to cut rates when they did. i don't think the fundamentals would drive them there yet i think our fed may be clipping more towards trying to be proactive rather than reactive i think that's dangerous, they need to remain data dependent. i think it is more reminiscent of 1999. the diververgence between larged small cap performance, growth and value stocks, between the international markets and u.s. is about as wide as i think it has been since then. and back then, don't forget, as we went into a fairly mild recession, what we saw was the large cap market sell-off dramatically and what is currently overlooked, small cap value names came to the -- delivered positive returns i think the investors need to definitely make sure that their income needs are being met, investment goals are well aligned, the portfolios aren't chasing this relentless momentum into large cap growth stocks there are better values to be had. and they will serve you

now, the trade uncertainty plays heavily for bullard here.trade uncertainty to last quarters and years ahead. he finishes by acknowledging that monetary policy is more accommodative than it was last year. still, more needs to be done in his mind. he's a voting member this time around of the fomc. david? david: good stuff, edward, thank you very much. you heard it first on fox business. apple pledging to make the mac pro in texas. two top tech analysts reacting on fox business earlier. >> i see this as a step in the right direction. i also think this is a bit of a shot across the bow to china from apple just showing look, we can move production into the u.s. although iphone is a whole different animal. >> apple is doing a wonderful job of navigating the political environment better than any other company and separately i think the probability that the iphone is going to have some sort of tariffs has declined measurably. david: to realclear market editor john tamney on whether or not this is the start of a made in america push by apple. what do

bullard is speaking in illinois. he is a voter this year.e dissented at the last meeting where the fed cut by 25 base points, he wanted a cut by 50 base point

bullard wants a 50 basis point cut whereas the two others said leave rates where they are, the economy is not that bad. whether bullard is auditioning for the top job at the fed or not, he sides with president trump and national economic council director kudlow whom you just heard. take a look at u.s. weekly jobless claims rising less than expected remaining near a five month low, and we should also mention this is a 40-year low when we stand at 215,000 jobless claims overall. this doesn't seem to be a flashing warning signal that screams cut rates even further, but with just 27 days now left until the start of the next federal reserve meeting on october 29th, how will the markets react between now and then? should you stay in or take a break and get out of the markets? to our floor show, of t 50 basis point cut camp, at least you were a week ago, where do you stand now on what investors should do? >> all right. well, investors should know that i have gone very recently -- yesterday afternoon into this morning, to much higher cash levels, all right? i didn't do that because of anything

feels like everyone is kind of zeroing in on bullard and clarida because clarida has been more dovishote by the way is fantastic, you talk about the fed sticking to a late 1998 insurance policy thing but wall street want them to be more aggressive. >> right, exactly. so the fed keeps characterizing its actions as insurance and even though we've seen them cut-rate twice, they last cut them obviously last week, they signaled they're not sure the economy is going to need more stimulus because there are a number on the committee looking at an economy that is near full employment. they look at consumer. that is really healthy. and they say that the one area that of concern obviously is trade policy. that uncertainty around the trade outlook is causing businesses to be cautious but the fed says hey, that's not necessarily something we can fix by lowering interest rates. so let's not be so quick to use up all of our ammunition and trying to address a problem we can't solve. so you got people who are happy to take an action to provide some insurance for a slowdown but don't want to get more a

jim bullard last night, again today. john williams, robert kaplan. put them in the category of likely to vote in favor of cutting. eric rosengren last night says he still does not see the case for doing that. board bowman from the fed gave a speech today, avoided the subject -- it was a different topic. still to come, jay powell and neel kashkari. neel kashkari, you can put him into the likely to cut category. six people have spoken today who are basically all saying, we are where we were a couple weeks ago. the big one is jay powell on friday. amanda: it feels like we have come a long way from the days where greenspan used to joke about how he was not allowed to say. to be very quiet, not signaling. this is a very noisy fed. is that helpful to the market? mike: it does not seem to be helping. many people are saying that they wish they would speak left. -- speak less. what we have seen is the fed is divided into two groups, those who are waiting to see what happens, because they don't think -- that the economy has turned down yet, at least in the dat

bullard specifically says the fed can easily justify this by saying very simply they want to get the fed funds rate in line with the rest of the yield curve. three or four months ago, powell said at a monetary policy conference that the interest rates being outside their lower bound was a monetary policy challenge of their time. so if you're going to look specifically at the data, maybe they only cut 25. but if you want to look at them getting in front of a problem and eliminating the dysfunction of the economy of having fed funds rates so far above the rest of the yield curve, i think the odds are increasing significantly, almost by the day, that they're going to cut 50. liz: right now, folks, remember, at this time yesterday, 7% odds in the morning yesterday, we had a 0% chance of 50 basis point cut which would be the more aggressive one, and right now, it's ticked up to 9%. to luke, i know you don't have a minute for these guys. you've had a real issue with the fed overall. what did you glean from any of these three today? >> well, liz, it's kind of like when i got my grades in co

bullard is in that camp. if we're going to do 50, might as well do 50 now in september the lower case now folks are the ones who are 25 basis points the people leaning there, they want to see it in the data and the people who are not there yet are the ones who look at the data, don't see it and don't expect to see it >> the problem is, i almost feel like now you have a debate and you have a silent debate that we haven't heard that much about in the room about the trade war and whether members of the fed should take some of the dudley advice as each doubles down in a sense today and tries to clarify what he meant the last week. as to -- this is a trade war issue. >> yeah. >> everything else seems fine. why should we cut rates? >> i think there's agreement with part one of dudley which is that the fed wants to be careful not to enable or encourage the trade war. and if you look at the tale of the tape, it appears as if they are. let's go back to the first rate cut. the next day, the president raised tariffs let

. >> so, why is bullard the outlier there?> he has always been the -- he has been the president, the member that has been most concerned about inversion in the curve. he has been sitting on that committee for years. he said, you know, back in the crisis they told me inversion didn't matter. back in 2000 they told me inversion didn't matter. full me once full me twice. you wouldn't full me a third tim time. >> jeremy, it's josh brown. >> yeah, josh. >> looking back at these inversions, previous inversions, the average rate on the ten-year as been like 7%. i'm not saying this time it's different, ignore the inversion. i'm saying when you're at zero or close to it and we're this low dploeblly, can't we allow for the fact that there will be several crossovers back and forth before one really matters and maybe there's one nuance to pay attention to >> certainly that's true between six and 18 months later, there's a big slowdown that actually was a recession i don't think there's going to be a recession as a result if the fed doesn'

three voters to send for the first time in three years, bullard who wanted a half-point cut, and georgiagrant who wanted no cut at all. and the newest forecast for rates, shows no cuts, no more reductions through the end of 2020. however seven of the 17 members still think another cut is needed this year while five think no cut should have been made at all. the new

bullard, evans talking about going into wait and see mode. michael: that is a curve flattener. front end, which is still pricing in more cuts, pushes back up. i don't think that means the back end of the curve elevates. the back of the curve will continue to be weighed down by these big global flows. i look at our yields, 10 year treasury at 1.70, and sometimes i wonder why it does not have a zero handle. when you look at the yields in the rest of the world, sometimes you have to look at it twice, it is still in the one's. it feels like global flows will continue to weigh on the back end of our marketing. jonathan: we are going to do the quickest rapidfire round we have ever done. the most rapid rapidfire round we have done, because luke hickmore will not be with us, so it's just the two of you. let me begin with the impeachment inquiry in the u.s. people trying to work out what this means for policy elsewhere. what did it mean for trade -- did the president double down or back off? does the president harden or soften his stance with china going into trade talks next month? har

rosenkranz at the boston fed says he does not see a need for further accommodation, yet we see james bullard from st. louis looking for an immediate 50 basis point cut in rates. how do you square that circle, how do you consider these diametrically opposed views? chairman powell: sometimes, it is easy to get unanimity on something when the path is clear. there will always be questions about how much to do and how fast to move, but sometimes things are relatively clear. other times it is murky out there. there is a range of views. i think this is one of those times. trade policy uncertainty is not something that central banks have a lot of practice in dealing with. , we are trying to look through short run developments, trying to assess what the implications for the outlook in the medium and longer-term will be of those developments. it is challenging and we are clearly at a time where there is a range of views. i do think that is a very healthy thing. we will of course reach a decision, i suspect we will have strong support for the decisions we made, as we did in july. i expect that will con

i think in the content, it is basically a bullard. are you seeing that by the options indication is not a big move that's really what we got here something that is basic am lay fair price. >> mike what do you think of dan's trade, gip what carter said about the charts? >> well, i think there is reasons to use options here. let's just consider if we are bumping up against some form of resistance, getting being to those prior highs, there is some risk that fails, obviously, o owning calls is a case make that a decent way to make a bullish bet. so i think basically when you take a look at the price of option and how the price has performed and where we are relative to the mark this trade makes a lot of sense the other thing, dan said this many times, i support that these are the kind of trades you looking to manage. if the stock does break through that level by some significant amount you roll this into a call spread or up and out ar simply take profits. that's how you'd want to manage this trade if you see that. >> i want to be the last

. >> now names bullard, the the president of the st. louis fed says the manufacturing sector appears to be in recession part of the reason why he w wted a deeper half percent cut at th meeting. >> but the call that caught our attention is not one usually heard from a fed official. in warning had to do with coworking spaces companies like wework and the risk they pose to the economy. steve liesman explains. >> boston fed president eric rosengren explaining his ecision to vgainst the rate cut this week. said the big concern is interest rates too low too rung canoo le to financial instability and bubbles in asset prices created by those low rates. and rosengren signalled out a business model used wy wek as a possible source of future losses and the boston fed president said low rates can encourage excessive risk taking, create too much leverage or debt in the system and causeto inv to reach for yield, one example he said, the real estate model known as coworking space used by we work which rosengren didid n specifically name. >> very aggre

james bullard has come out on the website with a set of headlines.016. here we go from ultra accommodative and we rollover. these are headlines off the fed website, a bigger rate cut would have provided insurance against risk. --sident woolard says, bullard says a 50 basis point cut would have helped faster return to 2% inflation. the nextoking at chairman of the federal reserve system? alan: who knows. wasquestion i have is where he when we needed him? 1.5%,dots are not below so a 50 basis point cut and that is sufficient, that does not seem likely. tom: how alone is he? alan: the more bullish sentiments are something which probably permeates the fed more than you see in the dots. you have a dove, but someone who is not prepared to stick his neck out in terms of longer-term thinking. i would have thought more extreme doves would have had next year, below 1%. it is reasonable to think fed funds may hit zero. there are extreme views, and bullard is not showing he is one of them. francine: what does dollar do from here? is that they only measure of suc

i also think when you hear james bullard, the st. louis fed president talking about how he would cut 50 basis points he is worried about manufacturing being in recession he is also right. i think we're in the situation where manufacturing is seemingly in recession. that is about 11% of the u.s. economy. but the services sector, which is 70% of the u.s. economy is not in recession. so you can look at it through two different lenses. i think it makes some sense to cut rates just based on the idea that weakness in the manufacturing sector could potentially move into the services sector. we're not really seeing it noticeably right now. but that doesn't mean it couldn't happen. if you look at past recessions, if you look at ism manufacturing index which is what james bullard is referring to, when you go below a mark of 50 you're in contraction. above 50 you're in expansion. right now it is at 49.1. neil: he said it is a recession. >> slightly. neil: he opted against this for that reason. two others who dissented did so because they didn't

its hard to see, but you can see the word bullard and rosengren.aggressive rate cut needed. rosengren says no cut is needed. it is just like old times. is it that divided for september 18? >> the majority are definitely in favor of a 25 basis point cut at this point. the dissenters are going to be heard. tom: this is fascinating. theael mckee will raise standing bill. excuse me, chairman powell, about the dudley essays, will probably be shown the door. madame lagarde and really her first public appearance -- in really her first public appearance seeking diplomacy in brussels. >> thank you for your opening comments. i remember back in the crisis times, many central bankers complaining, using the formula, central banks are not the only game in town. i think in many ways, we are still at a time when central bank governors, while using all of the tools in their toolbox, while re-examining monetary framework, while focusing and fine-tuning the tools available, and they should do their job in accordance with their mandate. there is clearly cooperation to

one official james bullard from st. louis wanted to cut rates by a half percentage point.s from kansas and from boston, they opposed the rate cut at all their forecast for the fund rate was seven for the end of the year five didn't want a cut at all. >> it is an unusual situation. the u.s. economy itself, the largest part of it, the consumer part is in strong shape. the difference here is we have significant, really, risks to that outlook to not just the geopolitical events be slowing global growth. we look at all of that financial market conditions and how they are affecting the outlook. >> powell changed his guidance, instead of suggesting the number of cuts, powell left future rate moves open ended saying it will affect aggressively if the economy weakens. >> we'd like you to stick around here let's get more inside the fed decision now andrew is chief market strategist at met live market management your whole goal is the preservation of assets you are not trying to hit a home run. you are trying to make sure you have all you need for your clients out there. is that fair

we also in the last 24 hours, guys, heard from bullard in st. louis, voting members, 50 basis points, responding to market pressures in the environment yield. other side, another fed voting member says the economy is doing just fine. here we are in another big rate debate where the market is pricing at 100% chance of 25 basis point cut in september though 50 might be a surprise. >> josh, do you think this is key to keep the market propped up >> this central bank and others getting that dovishness. >> i don't know what it was for the economy to lower borrowing rates in an environment, you know, corporate cap ex peaked in the third quarter of 2018. if you keep the uncertainty of the trade war, i really don't care what you do with fed funds rates, you're not going to change the picture for corporate spending and investment. you're just not. i think we kind of have two economic situations. i think we have the classical one where we look at things like new truck orders and railroad loads and things that really have not been profitable to look at for

jim bullard once a 50 basis point cut. he could do a dovish dissent. possible decide they have made their point and do not need to dissent and do not want to tell the markets the fed is divided because that hinders the policy transmission and we see no dissent. we know where most of the voters come down. vonnie: i have seen talk about how it is used -- when we used to watch m1 money supply back in the day. is that what it feels like watching these repo operations? michael: it is probably not the same. in those days it was paul volcker using the money supply as the lever to control monetary policy. you did not know what the rate was. you try to figure it out from the movements in the money supply. in this case, the fed has reduced its balance sheet and it needs to have enough reserves available. the markets need enough cash available. they have to figure out what that level is. as they figured out, things smooth out. vonnie: thank you for all of that. michael is in d.c. stay with bloomberg, we will bring you live coverage of the fed policy decision foll

you might have a third to send from jim bullard who wants more easing, but those are -- jay powell stillrm control over the committee, and all of these rumors of hawkish --istant and relegate renegade delegations of the fed -- jay powell is of the view that there is no reason to fight the inflation battle at this point of time when the outlook is getting more shaky. we saw evidence of that. i would hate to see jerome powell echo what we have heard from larry kudlow earlier in terms of the economic cheerleading and the resilience of the u.s. economy. he could signal the economy is doing fine but signaling signs of wear and tear from economic uncertainty more broadly and trade tensions more specifically . for that reason, the fed does have to ease policy. a fine line jay powell has to walk of signaling the u.s. economy is not on the cusp of recession, but also not having a tone deaf cheerleading message. i think jay powell gets that after what we saw in december. vonnie: can he continue to ignore the president trolling him, just earlier the president saying where can i find this guy, jerom

we had a good discussion with bullard on that point.ere higher, would you not be calling for a shortened cover. >> i would put it this way there's concern about global growth outlook i'm going to the root cause of it which is this confidence issue which is the trade policy issue. we're trying to take the call on that at this point in time, we still don't see any sign of a comprehensive deal being done. you can have a temporary pause but unle and until you get that comprehensive deal i don't think corporate sector will come back to doing business investment mind you,you've seen 127 basis points around global growth. demand is weak trade policy issues, concern now demand is not there. so it is a concern >> there's attention in the upturn, some numbers globally coming in better than expected is it because forecast got beaten down? >> also we saw that in europe, for example and then in turned down with one data point so badly we backed away before the surprise started i think, yeah, you'll probably see some stabilization of growth if trade

. >> you are with elcome >> speaking with the fed later today sitting down with jim bullard.senters he wanted to see them go more. he has become one of the president's favorites as well. >> who would you say is more bullish? >> sounds like they are both bullish. with bullard, it is more he's worried about what he is seeing as sources of a potential down side risk. we'll ask him why he feels so differently than some other colleagues inside the fed. >> that's a good one tons of news on boeing today >>> take a look at shares of boeing it has settled the first claims from the lion air crash that happened off the coast of indonesia last october we talked to representatives here saying they have settled 11 of the 17 claims that have been filed by their clients relatives of those victims those filed by boeing. the reports that each victim family would receive $1.2 million each. we have not confirmed that amount this is the beginning of what we should see play out either in terms of settlements or lawsuits and mediations in court between boeing and these families as they try to move

pull back from there i did note that bullard, st.ullard is out there today in the last half hour saying it should be a 50 basis point cut by the fed this month, that's a reiteration for him. he's saying you have to get out in front of the trade issues and all the rest of it i think we're fixated over the next two weeks over what the fed is going to do and say. >> more fed speak throughout the week including if he had chair powell on friday and that key jobs report as well. >> facebook, i think, too. >> that's right. >> we're also awaiting result in parliament any minute. we're out of time here thanks for watching "closing bell." >> "fast money" begins right now. >>> live on the nasdaq market site this is "fast money." i'm melissa lee. tim see more, karen if i hadder man, guy dommy a tuesday tumble stocks kicking off september in the red and one start shows we could be headed for a point of no return. also ahead investors slamming the brakes on uber and lyft, why these two stocks could signal a rough road ahead for ipos. >>> brexit dr

jim bullard aid i would respect the market signal. better to get realigned now. let's look at the probability to see where the market is priced relative to the three outcomes 100% chance of a rate cut in september. that's where we are. some chance of a 50 basis point cut, not a big one october, 77. >> 52.er, i can't read it. >> thank you for the younger eyes more priced in todown the road. they are looking for the fed to provide stimulus to the economy. >> lower rates by a full point. >> regardless of the differences out there. >> the market as a unified theme. stay there we want to talk more about it. joining me now to talk about the inconsistency and mixed messages, neil hennessy, chief investment officer and portfolio manager and joe from nitixis appreciate you joining us. neil, we are obviously focused on the market impact here. when you get so many different voices out of the fed at a time like this, what does it tell you about how to be positioned >> if the fed is going to dictate it, they shouldn't be on the board. look at interest rates, unemployment, loo

for the first time in three years, bullard wanted a half point cut, others want to know -- who wanted no cut at all. the dot plot shows no cuts, no reductions through the end of 2020. however, seven of the 17 members still think another cut is needed this year, while five think no cuts should have been made at all. >> and if the economy does turn down, then a more extensive sequence of rate cuts could be appropriate. >> i am disappointed by what the fed has come out with. >> why? >> well, because the market is priced for substantially more action. >> what a recovery we have made in the last hour of trading. the fact that we were significantly off, this offset of the press conference, now it feels as though the market is not quite so worried about what can be deemed a hawkish cut. >> intensifying trade conflicts have growth momentum tumbling towards lows. governments are not doing enough to prevent long-term damage. that is according to the latest outlook, cutting the global growth forecast. are we heading slowly towards a recession? >> what we are seeing we are heading toward slower g

>> we saw one fed member, james bullard, actually calling for a 50 basis point cut. neil: i saw that. >> there is some folks that did want more and i think we can read into the statement and the.plots carefully, we'll see that there is probably another rate hike coming. there is a lot of talk about a divided fomc but i think the who actually vote will more likely to cut next time. neil: you know there is this also, the federal reserve has been very busy in the markets. it's almost like quantitative easing. i don't want to get too wonky here, but they are doing some interesting things on the side. what do you make of that? >> well they're responding to increased temporary, increase in demand for liquidity. neil: right. >> yeah, and so the fed has been shrinking its balance sheet as you know and they stopped. and there is this kind of perfect storm of events coming together that increases demand for cash. treasury was getting payments. it was issuing debt. it dried up a lot of reserves in the banking system at the very time many firms needed it. so the fed is doing now

for is the number of defense, will they maintain the july defense and more importantly will james bullardut 50 basis point rate cut. i think not only will the statement be key but the press conference will be key as well, for signs of descent on the committee. lauren: we want to talk about brexit like we usually do. >> i thought you might. lauren: makes you want t reach for a glass of something. it's -- >> causing me to drink. lauren: we're hearing great britain is stockpiling booze, alcohol, for christmas in case we get a no deal brexit? >> yeah, i think that was a piece in the guardian. it's nice to know the guardian has its priorities right, stockpiling booze as opposed to other food stuff. personally, i'm skeptical. i'm not stockpiling anything. i think there will be some form of deal come 31st of october. it's more a case of first world problems more than anything else. i think there are more important things to worry about. lauren: d so you think boris johnson gets a deal? you think we'll have a deal? >> i think we'll have a deal or we'll have an extension. i don't think we'll have

the funny thing was that bullard said the market priced in 50 and he said no, just 25 then yesterday he said oh, we should have done 50 >> they did the fed's job for them >> bond markets front run the fed and donald trump has eased more than he could have. it's been a monumental move. the idea of dissent of the fed is interesting the other way saying don't cut at all so you've got the sense on both side of the al, if you will. >> i'm going to be data dependent. >> forget about powell we should just interview the bond market. john and michael, thank you very much we do that almost every day here on cnbc. here's what else is ahead on the exchange >> coming up, hitting the brakes the administration revoking california's emissions waiver. we'll talk to the state's attorney general on how they plan to fight back >>> plus, barclay says one recent ipo could soar 20% despite its already 525% rise and one ceo was proven right in the latest auto safety test. it could be good news for one stock. this is the exchange on cnbc ...all while helping you to and through retirement. can you help with t

bullard wanted to see a 50 basis point cut.e wanted to leave the rates where they were. seven officials see one more rate cut this year. they needed two more to have