our guy johnson with charles evans. >> thank you. yes, chicago fed president charles evans.re december is priced. 72% was the number. function. are you comfortable with 72%? submitted a summary of economic projections and the median dot was six rate hikes this year. i am quite comfortable with the expected half embedded. i think my own take on a neutral, longer funds rate is 2.75%, so policy at a slightly 3%, 3.25%e setting at would be consistent with the good economy and inflation. >> you like the idea of a december hike? >> i am quite comfortable, yes. we are not supposed identify which dot is ours. >> a slight softening of inflation data, does that concern you? >> i think the inflation data picked up in a nice fashion, 2%, under, but has improved quite significantly in the last couple of years. we needed to provide enough accommodation so we got to 2%. fine to goetely above 2% for some time. 2% to come average of the above 2% perhaps. so getting inflation to 2% is in this congressman -- is in a congressman. accomplishment. what was your read on amazon's decision to raise

and chicago fed chief charles evans says he agrees >> the u.s.nomy is doing extremely well inflation is up to 2%. i spent a long time indicating that i think inflation needs to get up to 2%, and here we are. i think things are going well this is something that can be continued for a number of years. >>> tesco shares sink after the grocer misses half-year profit expectations thanks to weaker sales in asia and mainland europe. >>> and stock in reverse aston martin slips in its long-awaited debut a share price of 19 pounds values the british carmaker at more than 4 billion pounds >>> to bring you some numbers we're getting. uk september services pmi are out at 53.9. that's against 54.3 last month that is very slightly below the reuters expectation of 54.0. just 0.1% lower than the forecast for uk september services pmi seeming think they'll be overshadowed by a lot of conversations around brexit and theresa may's speech on the subject of theresa may's speech, let's check in on the pound. it's very slightly stronger against the u.s. dollar by a fifth

we sat down with charles evans this morning who became the first fed official to talk about responsepresident's remarks after calling the federal reserve crazy. usually we don't play responses like this, but i thought it was instructive to hear how mr. evans responds when i asked if he thought the president should be commenting on the federal reserve the way he has >> i can't answer that, but i'll say the federal reserve has a large amount of autonomy that is granted us by congress and the president through the federal reserve act. we are supposed to support monetary conditions that promote price stability. >> this is how the fed officials are going to respond, they're not going to engage in a back and forth with president trump but what they're going to do is talk about their policy and charles evans said the economy is very strong, necessitating rate hikes here's what he says about the outlook for interest rates. >> i kind of think neutral, 2.75 to 3%. after many years of accommodative policy which i supported strongly because inflation is now 2%, it is time to readjust the policy

charles evans will be joining "squawk box" live from ann arbor, michigan, at 8:30 eastern time righter we get the important export prices. >> let's talk more about rising bond yields and the volatile week for stocks. joining us is peter fisher he is senior fellow at the tuck school of business at dartmouth college. the u.s. treasury and black rock peter, thanks for being here >> my pleasure. >> we need you to wear all of the hats, fed hat markets hat and help us interpret what we heard from jay powell. jay powell last week spoke he said some things about how we're nowhere near neutral and that we're going to power rirgt through it and keep raising rates well beyond that and that spooked first the bond market and now the stock market. what did he say? what did you interpret and is the market right to react like this? >> i think jay powell has been doing a really good job of trying to walk back the fed's xra extraordinary forward guidance the fed doesn't know where rates will be a year or two from now they've been promising they know how to tell us that. >> as a way to calm markets? >>

we will hear from the chicago fed president, charles evans. reverse, making a false start after the ipo in london. the ceo telling bloomberg that he's not worried. ok, let's talk about the european markets and where

we will hear from the chicago fed president, charles evans. aston martin in reverse, making a false start after the ipo in london. the ceo telling bloomberg that he's not worried. ok, let's talk about the european markets and where we are right now. the ftse 100 is up. remember, the german market is closed, its reunification day, as a result of which, no action there. we are now negative and continuing to really be buffeted by u.s. ada and what is happening out of italy. the italian 10 year, 332, as you can see we are seeing a move in prices and not in yields. 6101, we sawira, some amazing inflation data out of turkey later on. trading aroundis 14. let's get a u.s. market check with abigail doolittle. have: it's a risk on town, -- tone, though it's worth noting that the risk theme has happened on monday and tuesday. take a look at that, of half of 1% for the fifth day in a row. investors are really cheering the deal made on monday, easing trade tensions with strong economic data relative to isn services and jobs data. on all of this, bonds are

we hear from charles evans and patrick harker. jason: the u.s.r has been the international currency for decades. time for a change? carol: this is "bloomberg businessweek." ♪ carol: welcome back to "bloomberg businessweek." jason: you can join us every day for "bloomberg businessweek" on the radio. carol: you can phone -- also find us online at businessweek.com. had a busy week of fed appearances as jay powell spoke in boston and washington and bloomberg sat down with charles evans and philadelphia fed chief patrick harker. carol: they agreed to further rate hikes, but different needs on further rate increases this year. was would you rate hikes this year, and that within the a high likelihood of one more area i am quite comfortable with the expect a path embedded in the median seps. >> my forecast right now, three this year, to next year, two that hereafter. -- the year after. i haven't seen acceleration of inflation. we have seen good job numbers. i don't think we have to rush the normalization process going back to neutral. >> this historicall

. >>> chicago fed president charles evans echoed powell's comments in an interview yesterday with cnbcitseu.s. economy is doin extremely well labor market is doing terrific payroll employment has been over 200,000 per month for many months which is really, really a good showing inflation is up to 2%. i spent quite a long time indicating that i think inflation needs to get up to 2%, here we are. so i think things are going very well this is something that can be continued for a number of years. i think by setting the policy rate just a little bit above neutral that will continue to keep things going for quite some time >>> that was charles evans clevelandal from president loretta mester said the u.s. jumps in bond yields is not immediately concerning she said yesterday's spike was just a one-day move in a volatile market but did acknowledge the risk that the u.s. is diverging from other global economies the yield on the 30-year treasury crossed that pivotal level outlined by jeffrey gundlach last month gundlach warned on twitter that yields were on the march again. he said if the market

we hear from charles evans and also patrick harker. jason: plus, the u.s.been the international currency for decades. time for a change? carol: this is "bloomberg businessweek." ♪ ♪ carol: welcome back to "bloomberg businessweek." i am carol massar. jason: i am jason kelly. you can join us every day for "bloomberg businessweek" on the radio, 2:00 to 5:00 p.m. eastern. carol: you can also find us online at businessweek.com. jason: we had a busy week of fed appearances as jay powell spoke in boston and washington, and bloomberg sat down with chicago fed president charles evans and philadelphia fed chief patrick harker. carol: they agreed a stronger u.s. economy warrants further rate hikes, but different needs -- but differed on the needs on further rate increases this year. >> the median dot was four rate hikes this year and that within a high likelihood of one more. i am quite comfortable with the expected path embedded in the median sep's. >> my forecast right now, three this year, two next year, two the year after. some have accelerated that pace. for me,

that point and then we might have to do more after that >> well that was chicago fed president charles evansn squawk box this morning. defending the fed's rate hike path and earlier on the hochlt report i spoke with larry kudlow, the director of the national economic council here is what he had to say about the economy and the markets. >> we are in a hot economic boom no end in sight in my judgment the u.s. economy and the entrepreneurs and the blue collar workers are killing it. and therefore i think the stock market will get back on track. it's not way to forecast, but corrections come and go. >> so is it time for the fed to keep traumaticing along? or do the wild swings in the market say otherwise tim no end in sight is what mr. kudlow told me earlier today. >> there is a couple of things i want to i think state clearly. first of all in terms of the confidence numbers we got out today, the country has never been more confident in the policies of the government than they have in the last 15 years than they are right now. let's be clear it's actually a good time for that two, i actually thi

charles evans from the feds in chicago did the same thing in an interview. it is almost like they don't care this very morning, jpmorgan jamie diamond warned i know the fed doesn't take me seriously, and we saw that but maybe they will listen to the ceo of the world's largest banks. i am going to be fine with it. i am not going to fight a quarter point. but committing already to three more rate hikes on top of that in 2019, that feels like lunacy to me. wa rather than trying to overshoot, maybe look at the data and get it right there is this person, janet yellen, it worked then, it will work now we got a weaker than expected consumer price index number. the whole point of lock step rate hikes is to fight inflation. here is about what is to happen, three lock step rate hikes next year will slow growth, boost the dollar and make people feel less wealthy. that is a fatal cocktail higher earnings estimates in the future when companies cut their forecast, i expect a ton of guidance cuts like we had today. hey, i thought the tracking industry was supposed to be on

charles: two other people jerome powell and charles evans. the head of the federal reserve and a key voting member of the federal reserve. what chairman powell has said really echoed. he says this is the best economy ever. but powell said this is unprecedented with respect to modern history. we have not seen this in recent years. it is something special. >> it truly is. that's why he has the room to move up the feds fund rate. you go back in history. you usually see the feds fund rate running in line with nominal gdp. the reason we saw the 10-year yield spike up to a seven-year high was because of growth. not because of inflation. charles: the bond yields are going up. investors are leaving bonds. but where does that money go? does it go into the stock market? >> it probably does. that's a challenge. you can't put all your money in the stock market. so we'll have to find what is the asset class that will offset risk in the future. one thing, every time the market gets so exciting. people assume there is a giddiness. bullishness is barely abov

higher >> what does this signal about inflation expectations that's been a missing link we spoke to charles evans the week, ceahe's san we don't have to battle inflation expectations like in the past if you lift you can stay there longer and potentially hold out. in the past when you got into tightened territory you almost had to reverse course because of market expectations on inflation moved into the equation. >> why are inflation expectations anchored? we've had a decade of low expectations if the fed was to back off and let the u.s. economy run hot, i don't think they'll do that, then you would see inflation expectations move higher >> what do you make of the junk territory part of the market the spread was noted yesterday, you saw a fairly tight spread nachlt was happ and that was happening >> why are u.s. equities high? because nominal growth is doing well nominal growth does well, that means earnings do well companies do well. that means high yield is going to do well investment grade corporate will do well. when the market starts to sniff out the negative impact from higher energy prices,

. -- bloombergcome spoke to charles evans who said -- he alson commented on the possibility of a decemberhis year would indicate one more this year. i am comfortable with the expected path embedded in the medium of sep's. i think my own take on a neutral rate is 2.75%. getting policy to a restrictive setting, 3.25% would be consistent with the strong economy and inflation we are looking at. : you like the idea of a december hike? >> i am comfortable with that, yes. guy: it is sometimes nice to play with the rules. in terms of the data, there is a slight softening of late, does that concern you? >> i think that inflation picked up in a nice fashion, we are at 2%, a touch under given monthly data movements, but it has improved significantly in the last couple of years. i have been saying for quite some time we need to provide accommodations, we got to 2%, so it is completely fine. you go above 2% for some time, we ought to average 2% or be above, getting inflation up to 2% is quite an accomplishment. i think we are well-positioned to continue with inflation at our objective, perhaps a littl

something that would resemble the stature of former associate justice charles evans hughes in his years at hughes hubbard. or, the practice like john w davis. for the practice of former presidential candidate wilbur wilkie. in secrecy, just as jackson negotiated with the partners an agreement that would have brought him from the court to new york to lead what was then the simpson stature law firm. it would've been renamed jackson simpson stature. but by early 1944, jackson decided not to pull the trigger. so, a scenario that he did pursue, at least privately, with president roosevelt, as the fourth term question was approaching, was again, the vice presidency. or, should fdr not run, perhaps a presidential candidacy. wallace was not desired. by many democrats and it included fdr. in those months, as part of getting ready, robert jackson drafted an autobiography. it is a candidate book. it was never published. it is a book unlike today's candidate book, actually written by the prospective candidate. setting out his rise from nowhere to his life story. jackson also drafted a private const

. >> ron, charles evans spoke with your colleague and my friend steve liesman this morning a. and he was specifically asked about the president's comments saying that the fed has gone wild. here's what he said. >> we're looking at the economy, looking at a very strong economy. and we're adjusting the policy stance. we've been doing it gstaraduall increasing rates. i kind of think neutral is to 3%. so after many years of accommodative policy which i have supported strongly because inflation is now up at 2%, it is time to readjust the policy stance at least to neutral. let's see how the economy is performing. and then we might have to do a little bit more after that. >> ron, what do you make of that? >> i think that is a perfect explanation. the president and others said that the fed was crazy to bring interest rates down to zero for so long, creating a bubble in the stock market. now the president is complaining that the fed is raising rates and touting a very strong economy at the same time. so there is a lot of cognitive dissonance there. this is what the fed should be doing.

charles evans, president of the federal reserve bank of chicago will be joining the bloomberg team at. london time. later, the president of the federal reserve bank of philadelphia will be joining the team. let's talk about oil markets. oil prices have studied, but at high levels. near the highest level in four gears. lingering fears of global supply outweighed a gain in u.s. stockpiles as president trump slammed opec for ripping off the world. >> we protect saudi arabia. would you say they are rich? and i love the king, but i said king, we are protecting do. you might not be there for two weeks without us. you have to pay for your military. anna: president trump, piling on the pressure. russia energy weak kicks off in moscow today to the great good of the oil industry. annmarie hordern has followed that event. she is there for us this morning. what do you expect this week? it is pretty telling that we have president trump speaking just last night about the saudi king. the oil minister and his russian counterpart met in st. petersburg, they were yet again under pressure from the unite

trump's attack on the fed and its independence steve liesman spoke today with chicago fed president charles evans. what did he tell you about that, steve? >> contessa, not engaging on the political rhetoric we asked charlie evans here at the engage conference for students a couple times whether -- how he would respond to the president saying the fed is crazy and he responded not by going back at the president but by talking about the economy and fed policy >> we're looking at the economy. we're looking at a very strong economy, strong fundamentals and we're adjusting the policy stance we've been doing that gradually. we've been moving up we're targeting 2.25% right now. i think neutral is in the 2.75% to 3%. after many years of accommodative policy that i have looked at strongly, it's time to readjust the policy stance at least to neutral >> so at least to neutral. but then he said, hey, we may have to go a little bit above neutral. i asked him what does that mean. he he was very specific about it >> i kind of think maybe 50 basis points above neutral you have to remember there's a lot of uncerta

. >> look, i think the key take away when you contrast charles evans. >> yeah, just listening to him >> what jamie dimon is saying is good right now but it could get bad. he does not want to say bad. that's my term he's saying that i would say things are good but we could be playing with fire and things won't be good. that's the opposite of what the feds say the fed is saying we don't care what's going to happen this is what we must do. i will take jamie dimon's view about what can go wrong over any one in the fed any day of the week i think the fed is vastly out of touch. charlie feels things are robust. why does he not go to pueblo, that's where they make cars for this country what they're going to see is stacked cars this high >> why are you so against normalization of interest rates? >> because i will take down every single company that i use in 2019 numbers. i am in favor of hikes >> higher wages and increase costs. >> trillion dollars of deficits and cyclical stimulus. >> don't we need a fire power, where are we going to be if we get cut? >> that's outrageous that's outrageous.

. >>> and we will hear from a member of the fed, chicago fed president charles evans will be on "squawk box" tomorrow what does he think of the president's criticism? that interview is at 8:30 a.m. eastern time you have to watch that one >>> melissa, a news aalert in the bond market right now. 30 year bonds up for auction rick santelli tracking the action at the cme group in chicago. what is the demand pick, rick? >> well, i'll tell you what, dom, the stock market had a lot of volatility, interest rates are stubbornly sticky and finally i get to give an auction in a this auction demand, straight up 1:00 eastern an a. 3.344 is the dutch auction yield. that is the highest yield at an auction since july of 2014 and it was 15, 15 billion completing 74 billion in supply. everything about this auction was good below the offer side of the one issue market, lower yield, higher price, 2.42 bid to cover, best since january this year 64.4 indirect, best since january this year. 12.8 on indirect best since april of this year dealers only take 22.8 this is what an auction should look like. and i am

overnight this morning another voting members, charles evans, saying that he says the economy is greatthinks it will last for a few years. >> bill: a few years. that's dow 30,000. >> it is. >> sandra: did you want to keep singing? >> bill: no. >> sandra: this is what federal reserve chairman jerome powell said yesterday about the u.s. economy. it appears to be in the midst of a remarkably positive period that is unprecedented in modern history. that is remarkable in and of itself. >> think of all the smirks every time president trump says it's the best economy ever. people like, yeah, right, you know. here is jerome powell saying it is unprecedented in modern history that we had given up on the idea of 4% growth. we had given you up on that and the idea you can create 400,000 manufacturing jobs. this morning we have adp today, which is a big report on jobs and then friday we get the government number, monster, monster number, goods producing, dirty fingernails 825,000 since president trump has been in office for 21 months. 21 months before that was just 275,000. >> sandra: bottom line

programming note, we should tell you, we're going to have a tease for the show tomorrow reserve fed charles evansat's 8:30 eastern time given all of the conversation we've been having, that's a conversation you want to see >>> meantime, when we return, new comments from president trump this morning on the fed. we'll bring you those comments >>> and then health care is the best performing sector of the s&p. bio-tech telling a different story. the stock is going to get hit the hard we'll go to the break. hold on to your hats, volatility vix jumping 44%. the biggest jump in the global market turmoil when "squawk" returns. 20 million cases a year. chubb has helped us grow for the past 30 years... they helped us prevent equipment problems during harvest and provided guidance when we started exporting internationally. now we're working with them on cybersecurity. my grandfather taught me to make a wine that over delivers. chubb, over delivers. we distributeus, i'm the owner environmentally-friendly packaging for restaurants. and we've grown substantially. so i switched to the spark cash card from capit

charles evans and rafael bostic have events scheduled.dent trump travels to erie, pennsylvania tonight for a rally. let's check on u.s. equity futures. we are seeing a positive open for the dow jones, up by 31, s&p 500 up in the green indicating an open up 2.5%. the nasdaq looks down about 4%. >>> rising interest rates have equities on edge joining us now with his read on the markets and yields is chris zaccarelli from independent adviser alliance you made the point we have seen a tilt away from growth, a tilt towards value in probably most sharply in the past month. over the past few months does that continue >> i think it will continue in the short run, but by the time we get to the midterm elections you will see a reversion back to growth the economy is strong. corporate earnings have been great. we're heading into the new earnings season. on friday the big banks report and we'll get into the belly of earnings if earnings are positive all the positive news should bode well for stocks there's a lot of fears on the table now in terms of

charles will, virginia. the four suspects were members of the white supremacist group in southern california. one of them is 24-year-old cole evan white from clayton. in august of last year, violence broke out at the night the right rally in charlottesville. a woman was killed, and dozens of people were injured, when a speeding car plowed right into all four men are trout -- charged with traveling to the rally to incite a riot. >> while on their way to the rally and emancipation parks, and with their hands taped and ready to do street battle, committed multiple acts of violence. >> the men are facing federal conspiracy charges. if convicted, each will face up to 10 years in prison. >>> first lady milani a tribe has kicked off a five day african tour. it is her first extensive trip without the president. today, mrs. trump and the first lady of ghana visited children in hospitals, and they handed out teddy bears and blankets. w them. >> each of us come from a country with its own unique challenges. i know in my heart, we are united by our commitment to raising the next generation to be happy, healthy, and morally responsible adult