the credibility of the fed. create this index. how much credibility does the fed right now -- does the fed have right now in the bonds universe? mohamed: people respect the ability of the fed to influence the yield curve. the mean outage credibility but effectiveness. zero is not just ineffective but counterproductive, and you would put the bank of japan very near that. canis a central bank that deliver macro economic outcomes, and there are very new central banks that can do that. the fed would be around 50 to 60. and the bank of japan would be below 10. doing thehe fed is best out of the major central banks yet kill mohammed: -- central banks? d: absolutely. buy much more on the fed and the jackson hole symposium throughout the day. live from jackson hole next. this is bloomberg. ♪ vonnie: live from london and new york i am vonnie quinn. mark: and i am mark, barton. time -- mark barton. time for the bloomberg business flash. british consumer confidence is bouncing back after the initial shock of the vote to le

fed side. there is a direct commodity link. commodities typically go down when the dollar goes up and currencies also go down that much more. jonathan: september 21, the boj in the morning and later we get a federal reserve decision. what do you want to know the outcome? >> i want to know about the fed who is the biggest driver in the global market. is perennially disappointing. jonathan: how on earth does that play out in the market? >> the market sees them as out of bullets and will weaken the currency. jonathan: how much of a problem does that become for the bank of japan? they've got this aggressive charge actor in bond buying already but they are not generating the traction in the economy they wanted to see. , it's a bit of aba losing wicket. a broader sense, the market loses sight of this and they are at full employment. jonathan: thank you so much. great to have you with us. coming up, four minutes and 20 minutes -- for meds and 20 seconds away from the open and futures are marginally do

the fed under a lot of pressure over monetary policy. >> my own view is the fed has done what it canto generate growth. needeality is, we structural reform and fiscal monetary a company policy. people may be disappointed that monetary policy has not generated more of, but it is designed to be structured with monetary and fiscal policy. we need a full range of tools. >> the fed is honorable to its critics because the policies are not working now. what are your friends telling you about fed credibility? one is critical of the fed because we are talking about raising rate and kevin is critical because we are not raising rate quickly. it comes with the territory. the key thing in our job is to look at the facts, understand ,onditions, do our work communicate what we are seeing an act in a way that faces reality. winning a broad range of tools. many issues we face have to do aging demographics, highased globalization levels of debt to gdp. many of these issues are best thatssed through policies grow the work for us. those policies are needed. to bere does not seem movement from the fiscal

plenty more on the fed. interview is coming up with the fed vice chair, the number two, stanley fischer, cnbc exclusive, sits down with steve liesman in jackson hole right after janet yellen's speech. that's in the next hour. 11:30 a.m. >> when we come back, the behind the scenes story of philippe dauman's ouster from viacom. next on "squawk on the street." b le trading desk you that thinkorswi tradinplatrm wrever i lely scs acros all yo devices, right? , so my cuom studies will go with me? anywhe you wt go!e hot!ncy deviceinm. only at tdmeriade ♪ there'no one out t. ne sno o spe... one way odn andvery road. but there is one c that can conquer em all. merced-benc-class. one way odn andvery road. venshift pointsd suspension customize thstng f the md you' i.. one way odn andvery road. leasthe c300 for369 month al >>> the bond market is it signaling a big flashing sign for the economy? we discuss on tradingnation.cnbc.com. more "squawk on the street" coming up next. there's a lot pces you r want to see 7.95 [ b

our ability to raise the fed rate has passed -- the fed rate past is limited. when she says our ability to predict the fed rate past, it she moving towards bullish? michael: not really. will give you we this view of where the terminal fed funds rate is, we can't guarantee that is going to happen because that is over the longer run, two or three years. a lot has happened to the economy that has changed our forecast. she is not saying she is going to make a forecast, but she is saying we can't have a lot of confidence in the forecast. mark: we had a great story yesterday, and i was titled "masters of the universe." phil was discussion the fed lost a lot of credibility because it is trying to tell markets not to be but actions speak louder than words. are we moving towards a position where actions will speak louder than words? michael: that depends on what the action is. is it defies basis point raise, i don't think that will cure the problem. the problem is deeper than that. the fed is subject to the same uncertainties that wall street is. the fed comes out and s

tomorrow, special fed coverage and we have interviews with fed officials.re is your bloomberg first word news. the death toll is rising from the earthquake that rocked central italy. the government now says at least 241 people were killed. hundreds more were injured and three mountain towns were leveled. rescue crews still digging through the rubble to try to find survivors, many of the buildings were built centuries ago and were not reinforced to withstand an earthquake. a government own nuclear power company in china pressed american to their consultants to hand over secret documents according to fbi files. general power has been charged in the u.s. with trying to steal nuclear technology. the company said it all of the laws. the u.k. delayed approval of a nuclear power plant because of concerns over china general nuclear symbol. in brazil, the senate begins a historic impeachment trial and the outset of the suspended president, accused of illegally financing government spending. she will take the stand, next monday but is not expected to sway enough vote

fed will not hike.s problematic. caroline: we are hearing from other central tank policymakers, governor kuroda among them. -- central-bank policy makers, governor kuroda among them. him talking about further stimulus is not earth shattering news. he has been talking about further stimulus for three years. the fact that it came alongside this dollar bullish move has amplified the impact on dollar-yen. he faces a really difficult task. in a cynical market -- one that is used to under delivery -- he is anticipating that he would cannot do or will not do helicopter money, which is the big story out there. in that kind of environment, the pressure will be for dollar-yen to move lower. if you add to that idea that equities are lower today because the fed is expected to hike, that is another problem for dollar having yen, another reason dollar-yen will go lower. fed timing is not securely great for risk appetites. caroline: we could see on the back of it some heavy lifting being done by a stronger dollar, par

fed in focus. wall street getting ready to par issue every single word out of janet yellen's mouth today. officials look for direction gathering in jackson hole. >>> i spy ha headache. >>> privilege and paranoia. hillary clinton delivers her most scathing critique of donald trump as the fight for the white house gets personal. it's friday, august 26, 2016 and "world wide exchange" begins right now. >> good morning. happy friday. welcome to cnbc. i'm sara eisen with don choo. been in all week. >> it's been great to be here. filling in for wilfred frost. he'll be back next week. >> it is new music friday. kicking your day off with brand new brittany spears. >> sounds the same. >> she can pump me up though. >> more brittany news later in the show. let's check in on global markets. u.s. futures another mini selloff yesterday. importantly, the nasdaq's first back to bake daily decline in two months. we're flat this morning. not a lot of risk taking going on ahead of the big janet yellen speech. nasdaq f

fed talk.hat is the fed trying to tell us. >> i think yesterday left clients wondering is he sending a warning sign? the minute are going to be more hawkish than people expect. by saying, look, you're too complacent on rate hikes. i think he was taking a longer term view and more about the complacency that markets are pricing in. i don't think he was sending a message about near term rate hikes saying we're inching toward possibly maybe raising rates again. doesn't sound like much conviction around september rate hike, but does prep us for the possibility the minutes turn out hawkish. >> just as we're approaching the brexit vote we got the minutes and saw very much focused on that as an event. are we likely to see them focus on the u.s. election of the event or stay clear of mentioning that. >> so the minutes are interesting, right? it's nearly 300 pages of transcripts that have to get paired down to just nine pages. so they can leave a lot out. >> right. >> you will never hear fed officials di

death to the fed.eads with the market to price in at least the possibility of a hike this year. will investors really listen? u.k. job today. a snapshot of the post brexit labor market. u.k. also begs insurance investors for a ride.

doveish fed and became a hawkish fed.bit dated. david: i wonder whether they are reacting to the reaction? everybody is relating to everybody constantly. alix: the idea is dudley is the forward-looking voice versus the backward looking voice. if you have the ,udley-fisher-yellen trifecta you just admit that you are wrong and come forward. alix: we take a step backwards and we will talk to janet yellen next week and see what she has to say. the fascinating debate is getting a little confusing for a lot of people but it continues. we'll bring you the headlines right here on bloomberg. thank you very much. , 26 minutes into the session. equities marginally lower with the dow down by 1/10 of 1%. after four days of losses, european equities could snap back today. it has been a weaker dollar in the last 24 hours. erasing some of that weakness as we look forward to another speech by another federal reserve president. bloomberg markets is up next from new york. this is bloomberg. ♪ is 10:00 a.m. in new york, 3:00 in hong kong. i'

fed staffer breaks down the language of the fomc statement.00 jobs, earnings out in minutes. scarlet: we begin with market minutes. u.s. stocks finished higher. they were bouncing around after the release of the fed minutes. we have overcome earlier

you aboutoing to ask the fed. the fed minister coming out, is argentina and emerging market? that the fed is setting itself up for a surprise? listen, everyone was talking what the fed overall last year and through the beginning of this year. if you've got certain countries with, you know, a 400 basis isnt spread, a tightening not going to make much of a difference. i think any kind of anticipated hikes over the let -- next six to 18 months, are we talking about 50 basis points possible? that would come because of economic strength in the united states. that might be, you know, tied in to the economy cycle. if you start getting a surprise announcement and it shocks the markets, then you've got something. scarlet: if it's rooted in the fundamentals? matt: i would argue that -- hans: i would argue that it's positive. matt: appreciate your time. let's go risk on right now. took me out to the blue sky ranch a couple of weeks ago. i jumped out, strapped to a very strong man, of course. one of the greatest days of my life. thank you very much, hans, for showing me this. this is blo

fed officials are looking at this closely. they're not looking at changing to target, it was so painful create it in the first place. but the world has changed so much, you have had a terrible economic picture with many central banks frozen at zero interest rates for years. we have seen signs of the fed losing its credibility around the target. the world has changed a lot since 2007. when john williams looks to target the fed back then, it was informal back then but they set it in 2007. if that's still appropriate, he's got a logical question -- maybe we should change it. and maybe we shouldn't be so .igid .his story is going to resonate you will hear more about this. brendan: and we will be watching that. thank you for joining us. coming up in the next 20 minutes, the cover story of this week's "bloomberg businessweek," focusing on a problem at walmart that you have probably never heard about. a spike in violent crimes. silver, along with other precious metals, lower today, but have had quite a run so far this year. we will h

is it the fed of the markets -- it is it -- is it the fed or the markets? what will be that what will we be looking at? makene: the data does not it easy. friday we got retail sales, and that was unchanged in july. tomorrow we get cpi numbers, and that is not showing a robust growth in inflation. people are focused on this. the market is focused on this. the fed knows it has a little bit of room because the data is not exactly cooperating. david: thanks so much. barton.susanne alix: we get to see all the big names buying and selling over the last quarter. that leads into our first mover, activision. dan loeb adding position to this stock. activision also added other shops like america prize, citadel. we will get more of these after the bell today. as they trickle out. william hill is looking to be the m&a rejection here. this betting office is rejecting 888 and rank. they had already been four. they had raised the bid 3%, and now william hill is saying they will not accept the second bid, calling it inadequate. analysts state that the bid will not be raised

focus, thehe fed in dollar rallies as u.s. treasury's retreat. , we will speak to him and the next hour. bill running tax into billions of euros as the eu is expected to rule ireland granted it illegal aid. the stock markets jump as dilma impeachmentls her -- i'm looking forward to stanley fischer to see if he can give us any clues on what the next move from the federal reserve is, and we have this huge apple news. .om: i think that is a big deal i like how you had morgan stanley in your opening. the tension just moving from jackson hole is palpable. blogught lawrence summers' in the washington post yesterday was almost on the edge of scathing in his criticism of fed officials. we will full all of that into our interview with the vice-chairman. breaking news, this is euro area confidence for the month of august. it is a little bit more forward-looking and some of the things we have had including gdp. confidence is at 103.5. we look at every single piece of data because it is post-brexit. let's get to the bloomberg first word n

maybe fed minutes. but people are seeing less of a chance for september high right now than this morning. i want to go into what the playing field looks to me. core retail sales. housing starts crack the 1.2 resistance level. core cpi. even the fed is posting 1.46 head cpi going forward which is up .6 from where it is now. basically everything plays into in my opinion, the need for a rate hike sooner rather than later. i understand they take a pass in september. >> now rick, the interesting thing is i guess yesterday and repeatedly over the weeks suggested that the fed won't raise rates in september because of the election that looms just beyond. do you think that's right? >> i do think there is lots of politics involved in the federal reserve unlike the boiler plate many have. but i think if there is no election, i still think i would be hard pressed to say that i truly believe that tightening was coming. i'm not sure what the fed wants to do but i know that if they look to the marketplace, if they loo

louis fed president james bullard.ll be right back. >>> gamestop's second quarter revenue missed forecasts on weak sales of video games. the retailer citing a lack of new titles and the push by gamemakers to buy products directly from their consoles instead of in stores. that stock down 7% in premarket trading, down 34% in the last year. >>> a little other video game news this morning. activision blizzard's "destiny" has grown a huge online community and now the game and its players have done something no other online gaming community have has done. organizers of the destiny conference happening in tampa this weekend ran a 24-hour, 7-day charity stream on twitch, raising $500,000 for st. jude's children's research hospital. the results are the single largest donation st. jude's has ever gotten from gaming based charity event. the funds will be presented to st. jude's this weekend at that conference. >>> when "squawk box" returns, we've got a lot more. st. louis fed james bullard will join us live from jackson hole this

what she wants to do is going to determine what the fed does, when the fed acts so when you read these minutes and you see some of the committee wanted to move, some did not, you really because janet yellen is among the most dubbish, you can assume that all of the views expressed by those who don't really feel an urgency to act, that's probably reflective of where she is. i think that to me i took the minutes as saying, okay, for those that don't want to rush to move, probably including the fed chair, there's really no urgency still. >> does it matter even less than it has in the past now. given where interest rates are around the world. given how flat the curve is. and it sort of continues to flatten the long end coming down. even if we see a quarter point increase on the short end, are we looking at something that's not going to affect stocks at all. >> i agree with you. i mean, i kind of say flippantly from an economist standpoint, if is fed is going to hike once a year or devitwice a year, as los we're not talking about the fed engaging and beginning to start on a more aggressive t

. >> fractured fed. some voting members of the central bank policy committee say a rate hike is needed soon. but others disagree. the result, markets that don't quite know what to make of janet yellin's fed. >>> cautionary tale. the s.e.c. suspends trading in a $35 billion company that swims with the penny stock sharks. it's got no revenue, a really funky name, and an advisory board an so why didn't the s.e.c. act sooner and how can you protect yourself? >>> hot wheels. the unlikely automaker that's growg sales twice as fast as the industry overall. those stories and more tonight for "nightly business report," on wednesday, august 17th. >>> good evening, everyone, and welcome. a house divided. that is the unmistakable conclusion to be drawn from today's release of the minutes of the latest meeting of federal reserve policy makers last month. several members of the interest rate setting open market committee felt an urgent need to raise rates soon. others said, not so fast. let's wait for more data, espec

the fed is divided.e not sure if they should be that concerned about inflation. and concerned about global aspects such as brexit. equity futures are good. the yen is rallying and we have broken 102 the doctor -- the dollar. -- 100 to the dollar. total sales for the second quarter come in at 3 billion pounds. so that is the top headline from kingfisher. sales were up 3%. seems to be a little bit of a trend, no one is moving, no one is buying. there is list of moving and buying and more people doing their home improvements. you also have a red headline coming across the bloomberg terminal. this is standard bank, headline earnings rise 5%. in round terms, 10.9 billion. standard tank sees -- bank sees their earnings rise by 5%, 10 point 9 billion. going back to kingfisher, they have completed the sale of the qmaining 30% of the the and -- b and q. 4%.l sales at eight point the market had estimated 6.4%. those are your breaking news. let's have a look. -- wed is divided, the have not seen this run of losses

and the feds.ould you subscribe to that that we're right for a regime change in markets and that's where we are? scoip i'm sorried that we've gotten to a regime change. the problem is all of central banks are buying each other's bond markets and helping to reinforce it. and until we either get a really big breakout inflation or growth, i think we're in this type of stalemate and financial asset markets largely range bound. alix: bank of america talking about what the equities are positioned are for saying there is an elevated risk of correction because we're hoping for too much for fiscal stimulation. jonathan: the question is we're so used to talking about the -- is there a call on the other side? goldman-sachs has talked about this. markets push up. the fed steps in. markets come down, the fed steps back. do we have a call from the central bank now? sean: in part we do because what's really happened is real rates have come into negative territory in the u.s. and if they start to get a big pickup

fed inig into the september.u see any sort of payroll number, the number coming out on friday that will change your opinion on whether the fed hikes? view is that the labor market is fine. the fed participants believe that. a strong number could increase the market implied probabilities of a rate hike in september. fed is going to look through that and focus on inflation numbers. those have been disappointing. not only in the united states, canalso outside, where you see inflation numbers disappointed in europe and last week they disappointed in japan. there is a global disinflation or a trend we think the fed is not going to be able to ignore in september. caroline: are you looking at the data when you anticipate a fed hike? it is difficult to read the views coming from the different members. they all seem to say something different. at the data.o look this is what we heard from stanley fischer, that the fed is going to be data dependent. we are looking at the data like the federal reserve's. we think the fed wi

is the fed out of the excuses?he longer you wait based on the data you have today doesn't that introduce the risk that there will be another reason to delay a hike? >> well, the fear is that you're going to get behind the curve at some point in time certainly from an inflation expectation but you have the increases putting massive pressure on the middle class in a lot of ways that are giving them comfort that they won't get too far behind the curve. >> some of the data that we're getting, this revised gdp number, every time you want to say that something is running high you get something that pushes you back from that don't you? >> that's part of it. china is going through a lot of pressure in their economy and you have europe going through pressure. we're an island. our economy is doing well but from a global perspective there's still head winds out there that have to be worked through. >> do you see any of the head winds making u. s. stocks look like a less attractive alternative? because all signs appear to be p

fed vicents came from chairman stanley fischer and he said the fed is nearing its goals.t the fed was nearing hiking again. the bloomberg dollar index is showing dollar strength but only marginally, up 2/10 of 1%. the moves are not really that dramatic either. dollar yen is a couple tends of 1%. we saw two-year note yield a little bit higher. now we will raise that move as well. on the long end of the treasury curve, yield coming in almost three basis points at 2.612%. to seeou are continuing that story is the dollar strength feeding to the commodity complex with copper down. i would say that the move in crude is less about the dollar and a lot more about supply stories in the market as well this week, given that we just had the biggest week of gains on wti since march of this year. commodities will be a discussion for us in just a couple minutes time. for us, let's get you up to speed on the headlines after the business world. emma: donald trump's campaign may be wavering on whether he will call for 11 million immigrants in the u.s. to be deported completely. he says his

louis fed and new york fed and the san francisco fed. guys, we love this kind of stuff.s our world more accessible to the general public to a younger audience. >> what's next, like start instagraming pictures of snapchating from inside the meetings? >> that would be awesome, wouldn't it? >> that would be good. >> posts will include press releases, speeches, testimony, frequently asked questions, photos, videos, so they are now on twitter, youtube, flickr, linkedin and now facebook. >> look -- >> i think it's great. especially as the public gets more aware of the fed, you're hearing it on the campaign trail. donald trump has talked about it. and clearly this is a tough economy with a lot of people feeling it and a lot of people point their finger at the fed saying they're not doing enough or creating bubbles or doing this and that. they can defend themselves and become more relatable. >> i want nice selfies from inside the room. janet yellen spin around, throws the thing up during the next meeting. >> dudley in the back photo bombing. people are asking whether facebook li

we'll also talk about jobs and the fed. up next, the correlation between the boj and fed.t would a decline in job growth due to rate hike expectations? we look ahead to the u.s. jobs data next. this is bloomberg. ♪ francine: welcome to "the pulse ." i am francine lacqua. let's get straight to the bloomberg first word news with narrative a hedge. royal bank of scotland has posted a larger loss than estimated in the second quarter. britain's biggest taxpayer owned lender saw net loss of 1.0 8 billion pounds. that compared with a 280 million-pound profit earlier. speaking a bloomberg, the cfo explained the details behind the figure. down the lasteak report, as is typical with us at the moment, while we are in the middle of an intensive restructuring, we saw some pretty substantial if provisions. nejra: the number of people being hired for permanent positions in the u.k. slumped the most in seven years in july. that is according to report by the market and recruitment and implement federation who described the drop as a dramatic freefall. it provides a fresh indication that th

the fed will want to reference it that.he second part of it is do they still believe that those inflation matches are the key once to be concerned about? are they starting to look at a broader basket of metrics around industrial activity numbers? the softening of the dollar? inflation -- later on in the year. francine: we caught up with paul. remember, thisn is what he had to say about the currency policy makes for the central banks. -- monetarymination policy is pretty ineffective for a while we came in thinking monetary policy at zero rates was ineffective. then a cult -- the long can qe and negative rates. i didn't think it was possible. much.not doing very francine: do we need to rethink how central banks operate? do we need to give them a different mandate, because they have done a lot. it is difficult to go back and say what would the world look like have they not done it. it is difficult to argue it that it has worked. >> what you see is where getting into this stage where central banks focus on me knowing their mand

ford is all about the fed. it's closer to -- speaking at the kansas city fed symposium in jackson hole. fed chair janet yellen said the case for an increase is strengthening. an exclusive interview with stanley fisher explains why he believes the rationale for a bank hike was building sniemtd we've had very strong hiring reports in the last three months. on average, as the chair said, 190,000 higher a month. we have another report coming out next friday. that will probably weigh in our decision along with other data that may come in. so i think the evidence is that the economy has strengthened. the problem with this economy, there are so many numbers every day that you can -- >> that would solve our problem. >> you have to try and figure out what is the main thrust of what's going on in the economy. you can always find a set of data that will build a different case. that's the hard part. >> not a small set of data would be the gdp data. it's been fairly lackluster. an economy that is already lackluster. can't e

you began your career at the new york fed in 1980.tell us about the juncture the federal reserve faces. about theo much talk re-think of the framework and a lot of assumptions about what caused inflation itself or the are still relevant. where do you come down in these debates? >> the fed has been rethinking its framework in the last 50 years. it only difference is in recent years, they felt compelled to lay it out in extrusion detail -- excruciating detail. there have been floating estimates of what the long-term fund would be as long as i have been in the business. with -- we would not be paying so much attention to it if they had not insisted on putting that down. matt: to be clear to everyone who is not an economist, there will never be a fixed mutual rate. it is not like anyone could ever point to a number and say that is currently the root -- the mutual rate. i know that to be true. theycept the fact that fell to the trap of pretending that is true during the year when they would rule all monetary policy debates. we knew it was.

will this force the hand of the fed? don't think the story about the dollar is whether it will move to our three months earlier or later. for the dollar to get ,ustainably stronger from here that will shift the entire curve. i'm not convinced that we are going to get that. in other words, you need an aggressive repricing of the rate hike expectations. i think it is largely going to be irrelevant for the dollar. manus: we will spend more time on the fed. signaled, and it is amazing, the use of language, "more innovative monetary policy tools." they are concerned about the reserve requirement. ?hat do you think the equivalent of funding for lending? more liquidity for the banking system? >> i do not think this is going to be the central scenario. if things start getting worse, i think something along the lines of funding for lending. some credit easing could be in the making. let's not forget, these guys have plenty of tools to play with. they have the interest rate, the rrr. they have quite a lot of scope to boost the eco

since the fed stock packaging bank reserves. so the one thing the fed cannot control is inflation. we are going to announce in a minute some guy i'm talking to tomorrow in washington which i'm sure will be interesting but what i want to know, when everything is said to be done, what do is he or she do about inflation? that redline is massive disinflation. how can they raise rates against that? -- : lena: a diverging cycle between the u.s. and the rest of the world. in the u.s., on the positive side you have a boost from the capacity in the labor market, isething which they payroll likely to show even with a number below 200000 and on the other hand, chronic under spending in the global economy increased by the spare capacity in china and the china related global interest rates. there are under bid commodity prices in developing markets as well. and from that perspective, the fed is sensitive as to how conditions are influenced by its actions. hashat sense, the fed resisted a rise in the real interest rate. in other words, they have chosen to fall behind. tom: fall behind is a quest

betss a fed rate hike -- on a fed rate hike are up.b summer, pressure will be priced in? it's the biggest number the fed will hang their hat on. between that an inflation. one of the things about the gdp report -- the number on the wea but real gdp was the price deflator was higher. that will probably increase the probability that market subscribe to a december flight -- december hike. by year-end, after the election, the market might price again. a once a year fed. when we talk about the fed going slow, that's a slow as they can go if they are going to keep on hiking. francine: we are about communication or miscommunication. is there a real concern out there that markets are mispricing a fed move? mr. ,ersey: if there was a concern you'd see more pricing and markets. you would see option markets in particular starting to deep price things, where people will be buying more puts on rate instruments. we're just not seeing that. i think the market doesn't believe the fed speak. that ultimately is the reason why we are priced where we are.

the current fed is still extremely dovish. manus: the current fed is externally dovish. that shifts into 2070? 17?that shifts into 20 williams will become a voting member. >> it is very interesting that he is shifting. bullard has shifted back and forth, very carefully analyzing the economy. williams comes on board on the other hand, is the president of the kansas city fed, who is the hawk of hawks. she is voting this year, which means she will not be voting next year. what is really important is of course, if you look at the permanent vote, janet yellen is very dovish, but on the other hand, dudley, the president of the new york fed, he once had a dovish reputation. but he came out and said -- he did not quite say it is time to hike, but he is making sure that september is in place, as williams put it. manus: i was told it would be folly of the federal reserve to raise rates because inflation is not yet -- they are not yet staring down the barrel of inflation. a great piece was written in terms of how do you battle against this sort of lackluster inflation environment?

a hike for the fed would uncap that.ss three markets in line with what we were looking at as far as futures were concerned. .lat australia, flat kospi japan is bracing for two typhoons. south korea coming off a 13 month high for that market. three stocks we are following, fortescue up 1.4%. sees underlying profits for this current fiscal quarter compared to what they reported, up 50%. this, 2% up. it confirm this potential aschase of a u.s. chipmaker one option it is considering. the nikkei newspaper saying it was going to buy intersil. will goirmed that it through. something to watch for. yvonne: let's get to first word news. >> oil fell after iraq said it plans to raise exports by 5% in the coming days. this follows an agreement to resume shipments from three fields in kirkuk. they are run by the northern oil company, but controlled by the kurdistan regional government. checking crude, reversing seven ,ays of gains to fall today trading around $50.43 a barrel for brent crude oil. india has swapped a financial a .ister

fed. i think the timing and magnitude of the response explains a lot. i think the u.s. in its more typical maverick fashion allows are deleveraging of households. we all remember the foreclosure crisis. foreclosures were ugly they were messy. but they did reduce household debt balance sheet and bank balance sheets a lot faster than what we are seeing in europe. the process of think debt in europe still a little large. i think the monetary policy response speed, and leveraging has a lot to do. i have been a big proponent that the ecb should tackle the deleveraging in europe, to the extent that it can. michael: you use the -- definition of recession and recovery. we are seven years now from the end of the recession. are you optimistic about the future course of the economy? are you optimistic? carmen: are -- if you are asking me if i'm looking for a recession around the corner, i'm not. i think the axis that often characterized the [indiscernible] when you are at low levels of growth, which

the fed still very much in focus but the market is saying, we will fight the fed. david: they keep saying, it is live for september and the market does not like an inch. alix: they were talking about the probability of a rate hike sooner rather than later, but he is much more dovish longer-term. jonathan: i would say that is where there is some consensus, a lower terminal rate. how we get there and the speed and trajectory, that is where the confusion is now. officials are talking about the possibility of a rate hike. richard clarida will be here to help us break it all down. after a dramatic week, the dollar index is still slightly higher but a three-week low. own, and nomc job one knows what they are talking about, futures negative the dax is down 6/10 of 1%. the ftse 100 down one third of 1%. the bloomberg dollar index up about one half of 1%. you are seeing this more acutely against the commodity -- commodities currencies. far, week for crude so potentially on wti the biggest and smart as we reenter a bull market. on the back of dollar strength, some crude weak

anymore to act on what the fed? even though we get a little bit of reaction, we don't get a lot the market saying doesn't believe what it fears from the fed. beene forecasts have consistently to bullish. people are skeptical. it is not clear what the fed's reaction function is. there was a lot of discussion about events over seas and about china. investors are asking the question, if you're worried about china and risk out of europe, is this going to be all that aggressive? in the second longest bull market rally in history. you have a great piece talking about the elusive spark needed for the rally to continue. he talked about nominal gdp and you say a combination of buybacks and elevated margins make it not a gamble that is likely to end well. well, we'res starting to see improvement in the economy and the consumer is in better shape. inflation picks up and you get higher nominal gdp in that supports corporate earnings. if that doesn't happen, if the data weakens too much, you see earnings expectations come down.

fed staffer breaks down the language of the fomc statement.uts up to 14,000 jobs, earnings out in minutes. scarlet: we begin with market minutes. u.s. stocks finished higher. they were bouncing around after the release of the fed minutes. losses,overcome earlier utilities rallying to offset declines. the minutes show to split among officials. earlier,ere down treasuries and stocks, then both snapped back after the minutes indicated a perceived dovishness. the dollars and represented by the bloomberg dollar index on your terminal. the s&p and white was down before the minutes, and the dollar out. after the minutes, the dollar fell and the s&p rose, which would signify that investors considered a rate rise not as imminent as bill dudley made it sound. financials continue to rally. you can see utilities of the biggest gainers because a weak dollar is good for that, but then financials as well. not nearly as big as utilities, but the second biggest industry group. ,f the fed does not raise rates then margins won't have a chance to expand. joe: int

even over the fed inflation target of 2%. was oil states that were driving those wage gains. tanked, and are not just above 1%. those non-oil states drive 87% of national employment is picking up more steam. this shows wage pressures accelerating across the board. it looks at the percentage of states that have year on year wage growth that is greater than 3%. all states have about 40%, and the non-oil states have almost 50%. you are seeing a lot of , retail jobs,obs all that helping to lead the non-oil rhetoric. , iterms of the oil picture might not be so terrible going forward. this is initial jobless claims in terms of oil heavy states. you have seen stabilization, right around 25,000. the idea is as you wind up laying off those workers, if the oil guys want to go back to work , they will need to pay up for those workers. and that leaves us to the last chart. in rig count has picked up the united states, right around here in the last part of 2016. you put more rigs to work, you need your guys to come back to work. reasonabl

price stability is the second thing that the fed will look at.nd by the way, this is 3034 on the bloomberg terminal. the cleveland fed cpi in blue, and we also have the purple line. axes, saytwo separate cannot really see the strength of the white line. 3.6%tlanta line is showing gdp growth on this quarter, so it looks like we have decent growth at least from the atlanta gdp forecast. we have inflation that is going up toward a level that the fed should be happy with. it is 1.6%. and we have a labor picture as joe showed that is fantastic. if the fed is data dependent and it looks at the data with the two mandates, maybe it should be normalizing the interest rates. scarlet: that is what a lot of people say. let's get to breaking news we have been following all day. and matt referenced it earlier. muddy waters taking on st. jude medical. they published a report that says that the pacemakers are exposed to hacking broner abilities. carson block says that changes must be held accountable. >> this appears to be a company that for years has put profit

david: fed up. fed president makes a case for a new approach to central banking. alix: and bank plan of brexit. why lenders won't be waiting around to find out what deal the u.k. can get from europe. jonathan: a warm welcome into "bloomberg ." right here in new york city and the highlights in the fx market, a weaker dollar. david: across the board. and yen as it drops below 100. partly because they anticipate the fed is not going to raise despite what people say. alix: the dollar is at its weakest level to the yen since november of 2013. and we did start to see the dollar roll over once we got back from john williams that saying that the old models are out the window. jonathan: some momentum building. all of this a couple of weeks away from jackson hole. the conversations are really going to build up ahead of that speech for the fed charean net yellen. if she mentions that, we're going to have the same kind of move. david: there's more of a raise than people think. alix: the debate continues and we're going to chris just from energy to opportunity to real esta

the fed remains data dependent. they will take a close look at the next jobs report next week before deciding. i did not find anything really surprising and her speech today. -- in her speech today. for more, we are joined by tad rivelle. he is joining us from los angeles. a bit of market movement in fixed income and then seem to two rivers -- seemed to reverse path. tad: there was very little new. yellen reaffirmed the same old same old. september is theoretically in play. that fed is still data dependent. the case for a rate hike has improved somewhat in recent weeks. let's really look at it in a longer-term concepts that context. -- longer-term context. has been saying for a very protracted. -- protracted period of time that it is data dependent. the idea that we are four weeks out from the next fed meeting and after 90 plus months or so of zero rates, we have not collected enough data to figure out whether we can move one quarter of 1% in terms of rates is ultimately a bit disingenuous. has a very strong bias to

i think the fed needs to change. and i think the first place they need to change is instead of raising their target from 2% to 3% which is truly hysterical, maybe they ought to come up with a true reblending of what an average economy can do coming to prices. okay? if you have a 4% economy, maybe you can target 2%, 3% economy. i don't think you see the price pressures. they're very much core lated with growth and not with the productivity levels we have or i should say productivity down, the pricing pressures go down. i think that they need to recalibrate and extend. never too late because there's nobody there to take their place. i'm kind of surprised steve is kind of a blame it on rio, blame it on washington thing. you know, washington is in ineffectual. if anybody's to be blamed, i agree, washington hasn't done enough. congress hasn't done enough and only because of federal reserve is totally the enabler. >> kimberly, it looks like you think rates stay low. what parts of the market do you recognize for investors?

tce,e a picture of core which is what the fed watches. , which is what the fed watches. came back considerably in december, january, february, we have started to roll over a little bit. that has to be concerning for a dove like janet yellen. scarlet: and this is 2%, this was the fed's target. chair said, the vice in recent days, that we are within hailing distance of 2%. how do you interpret that? that herpretation was was more hawkish and fed is prepared to move perhaps as early as september but more likely in december. matt: don't miss our interview today with the former president of the federal reserve of minneapolis marriott all the cultura. we will take him for a full three blocks in tv parlance. in real time, about 30 minutes. very important ahead of this jackson hole meeting. four :00 eastern, 1:00 on the west coast. scarlet: he has written extensively on what the fed's message should be. fromg up, more coverage the jackson hole economic symposium throughout the day and tomorrow. we will break down janet yellen's much-anticipated speech which begins at 10:00 easte

the fed has been so skittish.ng to get kind of a stretch of time where there are no big shots? tom: you and i talked about this before. the fact is we are massively ultra accommodative, right? alan: it is a two-way street. these are the large central banks. they are asked and the balance sheets -- they are expanding the balance sheet rapidly to the tune of over $2 billion per annum. it means the fed should be doing more heavy lifting at the front end of the curve, but that is not the way the fed sees it at the moment. smartest what is the move on the currency markets right now? alan: we will have to wait for the payroll numbers. the as-expected data is seen as a lowball sort of environment, one in which currencies likely , for example rupee -- will do well as expected. payroll numbers of over 150 k, that will affect the fed far sooner than markets pricing in. i think in the short-term, the markets are going to take 150 k numbers and say we still have to wait for another number before the fed acts. tom: bring up th

and the fed doesn't like to guess. the fed likes to model and to use as ron has suggested old models including the phillip's curve and taylor model which have been proven up until layman to justify higher or lower interest rates. but once you get into subjective territory like demographics or robotization, which we've talked about before on your program, it becomes very difficult for the fed to guess or be subjective. they're not a subjective body. and that's the problem. going forward they have to begin to make some guesses as to what these structural forces and low interest rates are doing to the economy that didn't happen before and they don't do that. >> that solves it, right? we cleared that one up. >> the last time we had a situation like this of the industrial revolution, we really didn't have a functional fed either. we had a decentralized banking system. if you want to use the model of how technological demographicization, you have to go back to the '70s. >> my argument, and got to go, but i'm not one of these

charles: there was a period the fed properly articulated a fed rate hike and the market was comfortableith it. it was telegraphed, felt like it was good, and maybe that's the question here because 25 basis points, i don't see how that changes anything, there's not a mad dash for people to refi their homes or anything like that. >> 25 basis points doesn't change anything. you're absolutely right, charles. that's what's funny about the talk. it's been years of talk of a 25-basis-point increase, but it did have a big impact in january. i think fundamentally, the market's not that -- it's fragile, because recovery or i should say the economy recently has been fragile, world economy fragile. brexit, which has driven the current rally is bad news or certainly isn't good news, it's driven the rally. it's a funny market and fragile than it first might appear, and interest rate increases have impact, even if what you're saying is true, seemed like the market was willing to take it earlier. charles: you know, bob, a lot of people have problem with central banks and people who missed this rally or