of the fed. >> you think the fed has become politicized? >> it has because of the president's attack on the fed. there was an academic piece that just came out, and they did a of the effect of the president's tweets on the federal funds market. they found the tweets were causing people to reduce expectations about the federal funds market, so the fed is already politicized in the sense that people are not sure now if the fed is easing because that is the appropriate policy path or because of pressure from the president. that politicization is coming from the president. >> but also that politicization and at peace came from you. the i ask you to talk about new york fed, you are keen to say that former new york fed president should not comment on the current new york fed president, but by mentioning 2020, do you appreciate how you have compromised your corner -- former colleagues? >> i think they would do what is appropriate for the economy. if i was in their shoes, i would do the same thing. >> i want to talk about the chairman including pow

joining us to break down the fed. jeffries, double lines, former chief economist, professor jeremy siegel and charles schwab's elizabeth ann sonders. >> josh brown ceo, he will be with us to break down the market action final half hour of trade >> quite a group coming up i'll stick to markets. can he have the job when powell steps down to spend more time with his calculations. >> i think the market reaction, you know, any trader down here will tell you the first move always gets faded. probably happens even more so. i do think there were some people that were set up for either a more dovish statement or 50 basis points when that didn't come through, there was a quick knee jerk sell that's not human behavior. that's computers once that gets washed out and people realize, you know what? probably getting another cut after this at some point no one has turned hawkish. so financials and utilities makes perfect sense to me. you've seen more than half of the sell-off in the dow disappear. >> why does that make sense? they're

that is next. -- fed speak.s is bloomberg "real yield." ♪ jonathan: i'm jonathan ferro this is bloomberg "real yield." on monday, we get u.s. and eurozone emi for the month of -- pmi's for the month of september. fed members speaking throughout the week. tuesday, u.s. consumer confidence numbers and german data. finally on friday, u.s. personal income and spending numbers. with me around the table still is priya misra, diana amoa, and krishna memani. you have been talking about this for 12 months. the issues that we see this week in the repo market, and you are not putting it down to corporate pulling money from market money funds, you have been talking about this for a while. it comes down to reserves. walk me through the dynamic. why is it so important? it is a problem that needs addressing now. priya: it's a question of reserve scarcity. it is really the distribution of reserves. until number of excess reserves in the system is about 1.3 trillion. the fed has been saying perhaps 900 billion to one trillion is

in the next hour, we will discuss the latest fed moves with the former atlanta fed president. still ahead, facebook announces it will resume transcribing user audio clips on his video device, portal. -- shery: saudi arabia claims it has evidence that iran was behind the oil strike. president trump wants tougher sanctions in response. this is bloomberg. ♪ paul: you're watching "daybreak australia." let's quickly check in on wti. it started trading amid rising tensions in the gulf. .2%,ntly at 5823, up about but overall, the trend is for crude to be coming down as saudi arabia makes more assurances on the supply. of course, the fallout on the attack on that aramco plant does continue to unfold. saudi arabia accuses iran of sponsoring last weekend's strike and president trump says the u.s. will be adding very significant sanctions on tehran in the next 48 hours. let's go to washington and congress editor. the u.s. already has a wide range of sanctions on iran. what is left for the administration to target? >> well, there are a few things that are left. the construction sector, co

hooe he's live at the fed. i know you listened to the whole conversation and i'm sure you have thoughts on many different things >> aren't you the a little embarrassed z i've got to get my cake now and if i don't get i, i'm going to throw a tantrum and fit that's going to embarrass you like when your kid did it when you're in line at the air participant. i don't know if that's happened to you, but it's happened to me. that's what it sounds like i need my cake and a promise of more cake to come. >> i don't know, steve blame the fed chair somewhat he told people, he thought we were getting cake and then he change d the menu he chaked the menu on everybody after they started salivating over the cake. >> i think it's going to be a quarter point. and we'll see. that's what i think it's going to be, scott i think he's got, i think his -- look, the market is one of his masters. his committee is also his ma master i don't know that his committee right now given where the data are, is in a place where they can precommit

the fed is putting in some insurance cuts.ur 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, relative to where they were in july -- in july, chair powell said midcycle adjustment. we are cutting down but we may take it back. i think that was a communication mistake. he is facing a divided committee. what i heard this week is we don't know, we are still in the process of running this midcycle adjustment -- and notice he didn't use the word midcycle adjustment. but he has gotten more of the committee into this insurance camp. i am looking at the seven dots that has one more cut penciled in. so i think the fed is trying to retain optionality. i think chair powell and vice chair clarida today essentially said meeting by meeting, but one more cut as part of this midcycle adjustment insurance preemptive risk management -- these are all the terms to be -- to say that look, the data is not bad but the downside risks are high en

the fed lowering the fed funds rate to 2% down 25 basis points. the fed said uncertainties about the outlook remain the vote 7-3 with three defects, but for different reasons. the same two that dissented last time, they didn't want to cut at all. but one jim bullard wanted to cut by 50 basis points the last time we had three dissents was back in 2016 when there was a vote of no change, they wanted to hike. the projections show a very divided federal reserve. seven fomc members forecast a third cut this year. that is one more from where we are now. that would bring the rate down to 1.63% or the average rate. five members see no need for any cuts at all. they didn't even want the one today. if everybody had a vote. not all the members vote it would have been five dissents from today if they voted that way and five more forecast just the one cut this year. put it all together and do all the imagine. the median is at -- this is it in terms of cuts that's the median of the funds rate forecast for the federal reserve. that said, the plurality does see o

happy fed day.rope, a little bit of strength. 0.3%,an automakers are up despite the fact you had auto sales falling the biggest monthly drop since 2018. in other asset classes, it is a story.ds -- a buy bonds percent.wn 0.3 you still have the stronger dollar into the fed. well anything actually mean for the dollar? that is really the question. the fed is readying a rate cut. our cap participants gearing up for that 25 basis point cut. also waiting for clues about the future paths of policy. joining me from boston is jurien timmer, fidelity head of global macro. what is your base case for the rate cut and the dot plot? in all the fed is, likelihood, going to cut rates. the key is, is this another reluctant cut like the one in july, where the kind of framed it like a midcycle adjustment, until a week or two is not where ago, was looking for for more cuts. that is now down to three more cuts. degree, but the market pricing and three more at that went and the fact will do one more if conditions warrant,

listen to the fed chairman. >> trade policy's not the business of the fed. it's the business of congress and the administration. so why are we talking about it. we are talking about it because anything that affects the achievement of our goals can in principle be something that monetary policy should take into consideration and our discussions and the research we have suggests that trade policy is something that's weighing on the outlook. i point it out in recent remarks that the thing we can't address really is what businesses would like, which is a settled road map for international trade. we can't do that. we don't have that tool. reporter: but he says they are trying to work through that. he does also see that the economy is going to continue to grow, the fed forecasting 2.2% by the end of the year. he said already, they are growing gdp at 2.5% over the first half of this year. back to you. liz: good to see you. thank you very much. okay. what we just showed you all was sort of immediate reaction with fox business's edward lawrence, who was in the room t

we expect the fed -- 48 hours or so. we expect the fed to act again.this going to have any impact? >> as long as the fed gets on top of it and start dealing with the day to day issues, it should not have too many repercussions across the markets. it is a major problem for them. the wall street traders have been forced to hold more and more infantry, treasury bonds in particular at the same time that the cash supply in the market has been dwindling. the fed has been reluctant to help them smooth the market because officially, the fed is trying to lower its balance sheet, it's trying to let bonds runoff. they don't want to increase their bond holdings any further. what they did yesterday was to actually buy treasuries for a day and keep cash back to the markets. they need to come up with a system where they can automatically help out the markets smooth these fluctuations. i am sure they are working on such a thing now. it is tricky territory for them because they are trying to lower interest rates. when they don't do anything, it makes it look as if shor

the fed has intervened. we expect to hear more about this from the fed today. the effective rate is above the upper range and this paints the picture of why the fed needed to act. it raises the question of whether they did so quickly enough. >> perhaps they are behind the curve but the fed has a lot on its plate not just the turmoil and money markets but essentially a slowly global economy and trade tensions between the u.s. and china. the fed has no control over that. company that is perhaps reflecting those challenges, fedex just had two/their profit outlook. the stock tumbling the most in four years. down more than 13%. we saw their fiscal year 2020 to $13 earnings of $11 for shares which is well below estimates. let's look at this chart because it has to do with the global economy. and demand for deliveries we are seeing the fedex stock has trailed previous cyclical highs when it comes to those global trade environments. hass interesting that preceded before the stock plunge. that has preceded to past recessions. they are slashing their your today gains. >>

fed. >> the u.s. fed got too tight i get that. credit markets are working. there is no reason for them to make their entire driver of monetary policy what someone is doing in another country. charles: let me ask you, danielle -- hold on one second, hal. i want to get to paul too. in the last 24 hours what happened in the repo market simplistically on the street, our financial system ran out of cash. >> a supply demand mismatch. charles: how does that happen? apparently the fed tried to address that today. many thought the best way for themo address this, get back to quantity kwan. >> or at least quantitative easing light. how can you come in every day with an emergency measure? that is just bad optics. you're the fed. financial stability is one of your mandates. you're supposed to be tamping that down. this introduces the element of uncertainty on a daily basis? this is ridiculous. charles: terrible for credibility, no matter what. experts say it is no big deal. like haley's comet comes around now and then but don't worry about it. >> this triggered financia

the fed continuing to inject money today into markets. the s&p down just a few tenths of 1%, just below 3000. fedex is the worst performer right now. a dire forecast is what analysts are calling it. some are saying it is a series of management missteps catching up to fedex right now. guy: i think the fact that the president is going down the sanctions route rather than taking a route which could become a little more connected is probably why we are seeing oil come off a little bit. doesn't mean saudi won't go down that route, but brent crude, as you've indicated, we'll markets are lower. we are down by 0.8%. a reversal when it comes up to the market from a sector point of view. we are just waiting for the fomc. we are barely budging. euro-dollar just a little lower. will today be dollar positive or negative? saying, it iswere federal reserve decision today. the committee is expected to cut rates 25 points. carl riccadonna is with us now. will be first question to the fed chair today be about repo markets? carl: i think there's a good chan

chinesenteresting the didn't take advantage of the fed, the boj didn't take advantage of the fed to make their policy more dovish. paul: the reason it is under review and moving away from the short term -- it is under review because the next 12 months, it is the fed that will be cutting interest rates if the economy continues to slump. the other central banks are nearly exhausted all her monetary policy firepower. ecb --t see the boj or but that's priced in. if you look at the forward curve and what the market was looking at yesterday, it was looking for further rate cuts. a lot is priced into that just in the, so short-term, the technicals will support the dollar. we need to review that because isr the next 12 months, it the fed that would cut the interest rates in most if the u.s. economy slowed. matt: please got to get more from you today. paul brain, head of fixed income at newton investment management and he is our guest cohost for the hour. let's get the first word news with annabelle droulers in hong kong. president trump says new sanctions against iran are response to an attack o

that is your post fed look. let's take a look at darden, posting sales for the first fiscal quarter that missed sale -- that missed estimates. it did announce a $5 billion share buyback, but nonetheless, that stock is down by over 1.5%. coming up, more on your trade analysis in the markets. this is bloomberg. ♪ ♪ alix: time never bloomberg first take. joining me from -- time now for bloomberg first take. joining me from "bloomberg economics"'s stephanie flanders, and vince's nejra -- and vincent cignarella, and lauren goodwin, new york life insurance economist and portfolio strategist. here's what the fed was talking about yesterday. chair powell: if the economy does turn down, a more extensive sequence of rate cuts could be appropriate. we don't see that. it is not what we expect. but we would certainly follow that path if it became appropriate. alix: vincent, what is the big take away for traders? vincent: the big take away from traders is the confusion as he tried to explain the organic growth of the balance

james: the fed, unquestionably. priya: the fed. gregory: the fed.han: do you stick with quality in credit or do you go down the ladder to the junky stuff? priya: stick with quality. james: neither. you buy treasuries. gregory: stick with quality. jonathan: does anyone think the treasury will issue anything longer than a 30 year anytime soon? gregory: anytime soon, no. 2020, strong possibility. priya: it is a mistake but i think they'll probably do it. james: no, i think t back will say no. jonathan: james athey, great to have you with us, alongside greg staples and priya misra. that does it for us, from new york city as we round out the month of august. i will see you in september. same time, same place. this was bloomberg "real yield." this is bloomberg tv. ♪ at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond te

the fed so far -- it is hard for them, within two days, as the , for theet blew up fed to come out and say we are about to make massive change. there was disappointment there. the fact that breakevens are declining, i would not just look at this week, look at since the first rate cut, inflation expectations have declined. is the market telling the fed that interest rate cuts will not solve this problem? jonathan: we will spend some time focusing exclusively on the repo issue. diana, weigh in on the rates market. this week, pretty much every day this week, yields just grinding a little bit lower. is there an argument to make? keep nibbling away on that backup whenever you get one? diana: that is the argument. i think this buck up in yield is an attractive entry-level for people who want to add duration. ultimately, the gravity from the rest of the world on the back end is too high. you have a huge stock of negative yield and debt elsewhere in the world, and this view is entrenched. europe, the focus for rates to turn negative is not until five years down the road. rates only turn negati

is there much the fed can do to extend the cycle? douglas: the fed can avoid mistakes. question is which is a greater mistake? a miss on inflation, or keeping rates too low. that is the way to think about the fed dilemma. i come down on the side of do not cut. an asset bubble is a bigger danger than a low inflation rate. other people come to different decisions. david: we are watching the stage in zurich as we are waiting for chair powell to give his remarks. hadlas: he had -- david: he some dissents in his last meeting. how troubling should that be? douglas: the dissents reflect the reality on the ground. this is a tale of two economies, one is a household director that keeps dragging along with the sole exception of the august conference numbers. the other random is the business sector, week investment bleeds into poor manufacturing. is, do youe question need to step in and help the business sector or to just wait for to catch up with a household sector. david: we can see chairman powell getting ready to go up to the podium in zurich. one of the issues is the strength

the fed split over rate decision. the fed split over rate decision. world's most important central bank cuts the cost of borrowing but policymakers disagree over future moves. raising to sell off 10,000 tons of pigmeat to help cool soaring prices. it is a thursday. good morning, asia. hello, world. glad you could join us for another action packed edition of asia business report. i'm rico hizon. we started the programme with the global economy because america's central bank has lower the cost of borrowing for a second time since the 2008 financial crisis. the widely anticipated 0.25% cut comes as fears grow about slowing growth and trade wa i’s grow about slowing growth and trade wars around the world. but that wasn't enough for the us president. despite the federal reserve's long held independence from the white house, donald trump yet again attacked chairman jerome house, donald trump yet again attacked chairmanjerome powell, accusing him in the fed of having, quote, no guts, no sense and no vision. the bbc‘s samira hussain has the latest from washin

this, of course, ahead of the fed rate decision, and the fed rate decision coming out a time when we are seeing some turmoil in money markets. take a look at this chart on the bloomberg showing you how the repo rate surged as much as 10% at one point. that took the red funds effective rate to 2.25% -- the fed funds effective rate to 2.25%. this coming at a time when we have seen wall street struggling to absorb that extra treasury debt coming on the market because of this increasing budget deficit here in the u.s., not to mention some seasonality as well as coupon settlements, but all of this really being absorbed into money markets. we are also expecting another on this tuesday and we're respecting another operation to come forth on the session as well. paul: thanks very much. let's bring in our next guest for his take on the fed's intervention. the executive vice chairman of the world largest alternative asset manager, blackstone group, joins us right here in sydney. i want to come straight back to waschart that shery showing. that overnight repo rate spiking, howling at the effect

the fed lowering the fed funds rate to 2% down 25 basis points.t the outlook remain the vote 7-3 with three defects, but for different reasons. the same two that dissented last time, they didn't want to cut at all. but one jim bullard wanted to cut by 50 basis points the last time we had three dissents was back in 2016 when there was

maybe struggling to articulate, even fed chair powell wrestling with this idea, what should the fed dorade war what do you think? >> so bill dudley has come out with a new statement his initial statement was a bit problematic. the initial statement suggested to many that the fed would actually act in a political way. that was how it was interpreted. that was a misinterpretation that was essentially what bill dudley is now trying to reel back why was it a problem, sara part of the rope it was a problem it was interpreted as actually creating the impression the fed does take politics into account, the fed does act politically. this, of course, had all kinds of negative collateral potential damage associated with it, such as a call by some for hearings on the senate banking committee regarding whether there should, in fact, be a fed that is so politicized. that was the furthest thing from what bill dudley, i think intended and certainly what he intended for the feds. he's new come out with a new statement in which he tries to clarify, put into a better context what he meant by his initial

meanwhile 44% say the fed should not do so. and the fed should be on hold. now, why do this in tell us why. 25% of the rationale comes from the trade war. 25% from the weak economy. 24% from low inflation and then coming down, we've left a few out here, pressure from the market not many see it as pressure from the president. economist from oxford writes while the fed does not want to underwrite the ongoing trade war, it has no choice but to buffer the economy they look for four rate cuts and art hoe fan from national securities writes economic data and financial conditions are not exactly streaming for rate cuts, but you someone at 1600 pennsylvania avenue sure is. >> comettey priced in, that is how we'll describe -- >> completely,ly, totally, entirely >> and let's bring in jeff and also greg. let's kick it around a little bit more jeff, what do you make of the rate -- frankly, even though it is wonky, curious for everybody's take on why the spike in repo funding means. if the fed is losing control of short term rates jeff first on how you are positioning am

the fed ammunition is limited, although the fed can also bring in unconventional measures. the question is how effective that could be. i agree, we need to see a fiscal response at some point. measures the fed could invoke could be limited in nature. obviously, monetary policy has played a role in china's easing, but china has already eased dramatically on the fiscal front, and to some extent on the credit front. that is a more recent development. if you look at china policy holistically, they are in a better place than a year ago. theave some stability in data, including the latest round of pmi in august. i would argue the policy in china is already playing his role in stabilizing, putting a floor under activity. if anything, we face more downside here in the u.s. i was curious about your thoughts on what powell had to say about libra, that it could become systemic pretty quickly. anything of interest to you there? mike: nothing new. it is the view of central banks around the world that a digital currency is not really necessary given the way the payment system is evolving

the dow is up 9 in the past ten days fed decision at 2:00 repo squeeze quiets down new york fed operationor a second day today europe is green. uk inflation disappoints oil down as the saudis give more intel on the attacks and the president orders treasury to increase sanctions on iran road map begins with watching the fed. investors expect the second rate cut in a decade. stocks mostly lower ahead of the open. >> fedex is falling this morning. shares down in the premarket over trade worries policy uncertainty, of course, as well continuing to weigh on the delivery giant >> and right idea, wrong approach, house speaker nancy pelosi sitting down with jim you'll hear what she had to say about the president's china trade strategy as we said, a few moments ago, the president tweets, i've just instructed the secretary of the treasury to substantially increase sanctions on the country of iran. so nice that our country is now energy independent the u.s. is in better shape than ever before, strongest military by far, biggest economy, no longer even close, number one in energy, maga equals kag. th

the fed needs to keep the money markets,, keep the repo rate from spiking, and the fed announced latedollar repo operation is coming on thursday. they are using those tools to smooth things out about admitting also longer-term, he said the fed will talk about this organic growth and by more bonds at the next meeting. paul: global economics and policy editor, kathleen hays, thanks so much for joining us. let's get more on the market reaction to the fed decision. mike cranfield is with us in singapore. do you think the rally we have seen in the s&p could be short-lived? mike: yeah, indeed. as kathleen was saying, there's a disconnect between what the market is pricing in terms of lower interest rates then what the fed is implying with its dot plots. that gives plenty of room for traders to see volatility in the short term. what it does is putting the onus back onto fed speakers. we have a lot a fed speakers who will be coming up. jay powell doesn't speak again until early october. in the meantime, there's plenty of room for traders to make their own decision about whether they think thi

the economy and fed policy his last speech before the next fed meetinging what happens if investors don't like what they hear? >>> the big week for the bulls technique up 2%. transports up more than that the semis, soaring the stocks to snap up right now. >>> time to take on. why investors are checking into delta and american airlines. it's our "call of the day. >>> the investment committee is ready to go, "the halftime report" starts right now >>> and it certainly is good to have you with us on this friday. our investment comphoot is steven rice, jon neg jarron, jim lebenthal and megan. >> thank you >> we begin with the markets, all 11 sectors, 100% there in the green for the week four of them including technology up about 2% transports and some of the chip names, guys, soaring and doing very, very well. joe terranova, we talked about it yesterday are you surprised by how strong the market has been this week? where did this market scum after an august to forget? >> i wouldn't characterize it as an incredibly strong market. i think it's a market that finally has broken out of a cons

even when the fed looks divided. james: we are talking about two things, the market and the real economy in the u.s. if you read the statement the fed put out, it sees economic strength as we do, labor market strong, household sector strong, consumption growth, good. a little weakness in investment and exports, but it does not look like we are on the verge of a downturn or recession. we do not buy into those stories. the economy is fundamentally strong. anna: do you think the trade war will catch up with the u.s. economy the way it has caught up to the german economy and others? because the u.s. economy is not as open, not as concentrated in manufacturing. is at thee u.s. center of the uncertainty, the economic impacts china china and u.s. are bigger in the eurozone. u.s. is at the center of the dispute. matt: what do you think about the possibility the tail wags the dog? a lot of people would say the fed was pushed to a rate cut by the market because you are in a situation where 2% growth, 2% inflation, 3.7% unemplo

we started out a little directionless this morning the fed holding power ahead of that fed meeting nowve territory in terms of the outperformance, it is coming from the italian index. just remembering yesterday, that was under. ftse up as well. looking at u.s. futures. a muted open for wall street all eyes on that fed meeting this comes after yesterday when all of those edged in market territory. despite a substantial fall for fedex. we are looking at a fairly muted start to trade on wall street today. >> going back to the middle east israel's election is too close to call. the blue and white party is tied with netanyahu the results show neither would have a point to form a party dan, i looked at the major numbers. it looks like neither one of these has a majority how are these different than the result we got back in april? >> reporter: the situation is still very fluid israel going to the polls a second time and delivering a result that is still too close to call. this is a stunning blow for the long-serving prime minister benjamin netanyahu essential i will asking the people of isra

the fed and the s&b already.t in, we heard that norges bank has raised interest rates the question is if they would hike rates for the third time this year. we are seeing a jump on the back of this decision to raise rates. this is the third time this year that they have the question is will they change but they have gone ahead >> given the fact that they have and bucking the trend, it is worth pointing out the smaller rate hikes in june they have hiked today but revised downward in their future >> very interesting. a real variety of action around the globe. we have the bank of england decision as well again, central bank taking focus. >> let's talk about the biggest central bank decision. the federal reserve has cut interest rates by 25 basis points as expected rates could remain at the same level by the end of 2020 expectations are more hawkish as analysts predicted two more cuts by the end of the year st. louis fed opted for 50 basis point cuts kansas city and boston leaders didn't think the rate cut was warran

what is the fed's reaction function? >> what we are looking for through all of the events around the world with the evolving geopolitical events and the global growth and trade policy uncertainty we are looking what is affecting the outlook as it relates to stable prices so all of that can affect the achievement of our goals it is an unusual situation because the us economy itself the largest part, the consumer part is strong but the manufacturing is less so we see an economy generally forecast show 2 percent which is a good solid year so the difference is our risk to that outlook so we would be looking at all of that and how they affect the outlook. it is a challenging time i admit we have to be open to all those things we are not on a preset course we see this meeting by meeting and we tried to be as transparent as we can as we go. >> so today with a modest adjustment should there be a recession with the rates drifting lower into negative territory are there any other tools before going there? >> in terms of firepower

last week he called fed policymakers "boneheads."y should reduce rates to zero or lower. in israel, and election do over seems to have produced a deadlock between benjamin netanyahu and his opponent. the country's longest-serving ,eader gambled on a revote possibly keeping himself out of jail. neither netanyahu nor benny gantz can form a coalition. official results will not be out tomorrow. in india, the government agreed to ban e-cigarettes. move is aimed at the growing use of e-cigarettes among younger people. the trump administration has scrapped california's authority to set tougher auto admission standards. president trump tweeted the move will route -- will allow the production of cars that are cheaper and safer. revoking the standards will have a major impact. 30 other states follow its lead and represent about a third -- 13 other states follow its lead and represent about a third of u.s. markets. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries

fed day. the question i have for you is, how hawkish will this move be from the fed?d they need to move on this. you have quite a take on it. take it away. >> we think they will move. 25 basis points, as you say. that is noncontentious. i think it will be enough for the market. the market is expecting quite a lot of monetary stimulus. that's ourt, while forecast, we're actually not -- we don't really believe that the only solution to the world's problems are central banks doing further interest rate cuts and quantitative easing programs. i do agree with the last speaker. some kind of fiscal response and easing of uncertainty caused by trade will be essential if we are going to get demand backup. nejra: it's interesting. good morning. you do expect this material downward revision to the dot plot. others say, you are going to get the 25 basis point cut. drop house messaging might come across as neutral to hawkish. that might cause volatility. in your portfolios, in terms of the expectation for high volatility from everything else going on out there, how are you managing

at cnbc the fed divided. it is not just the fed the world awaiting another key rate call in the biggest financial markets. why new worries could spell trouble for the market and your money. t at&t making a dramatic move with direct tv and strong words for boeing as it prepares for first-hand look at the grounded 737 jet. "worldwide exchange" begins right now. ♪ >> good morning, good afternoon, good evening from wherever in the world you are watching i am brian sullivan. thanks for watching. the dow has had a great run. up 10 of the past 11 sessions. up nearly 3% september historically the worst month of the year. not this year. the bond market has come up. we are seeing benchmark yield deals 1.78%. in japan, we saw another rise in the nikkei, hang seng down around 1%. we are seeing green across the screen in european markets the federal reserve, cutting interest rates again by 25 basis points that means a quarter-point rate cut. the fed increasingly divided on what to do with rates. some members want to stop

of the fed. >> you think the fed has already become politicized? >> it has because of the presidents attacks on the fed. those in academic piece that came out of the last 72 hours i saw this morning. ofy lead to the study >> the effect the president. >> the effect of the presidents tweets on the federal funds markets. the tweets were causing people to reduce their expectation about the federal funds market. it is already politicized in the sense that people are not sure now, if the fed is easing because that is the appropriate policy path or because of pressure from the president. station islitical to not coming from the fed it is coming for the president. politicization is not coming from the fed but the president. saying the fedso may need to ease monetary policy further to reduce risk. amid concerns in the manufacturing center with activity jumping to a five-month high in september according to reading from ihs market. running is now the head of global asset allocation, great to have you with us. that ihs data was light in a gloomy day in terms

i wonder if any ideas in the past have changed from what the fed did yesterday. >> everyone is a feder i don't think it is of much value. as it was said, the markets aren't here to, they are here to serve you. everyone is saying, what is the future bringing. the data has not fallen apparar d domestically >> that may be true -- you've liked the banks. bank of america, in particular for a long time. >> yes >> that is had eavily dependent what the fed does. >> the economy is the most important component to the banks. it is interesting people worry about the economy. the economy isn't falling apart. where people should be worried is the stock market. people go back to '08 and '09. we have other periods of the bare market that grows that is the real thing here. the idea the economy and stock market are tight market step that was led by the capitol market and fed market. greenspan cut rates because wall street wanted it, not the economy needed it. >> cole, the flip side of that, when the market takes a meaningful dive, you could make the argument and maybe i'm overstating the case that the

we'll get another fed point of view when fed voice chairman richard clarida comes in. >>> mark zuckerberg oval office on thursday amid the controversy of facebook's marketing practices. the president posted a twitter photo while facebook called the meeting constructive neither side disclosed any of the specifics but we'll have more on the story a little later in the hour. >>> financial technology firm stripe has raised $250 million stripe is now valued at $35 billion. that's up by about 50% from earlier this year. stripe processes billions in payments for consumer apps, websites and business software makers. >>> the u.s. will temporarily free more than 400 products from the $250 billion list of tariffs that president trump imposed last year according to documents set to be published by the u.s. trade representative's office today. the list includes such items as christmas tree lights, retractible dog leashes. the regular dog leashes are still subject to tariffs coffee filters for k-cup machines tiki torches steel wire barbecue grills and certain electric tools the exemption stemts from mo

not only is it fed day.bal news of oil. 63.93.rude right now, that really breaks down the angst of the past three days. we will try to drive forward explainers on this unique fed meeting. again, against a repo market prices. mann. do no better than an update on international economics and the next hour. this is bloomberg. ♪ here, it all starts with a simple... hello! -hi! how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. tom: this morning, this is not a normal fed day. chairman powell must address the tension, the fear is seen in the trust market, the short-term repo market. the trust being tested. michael mckee will be in washington. in saudi arabia, the price of a barrel of oil in the last minutes breaks down. no word o

he is a former fed official. the fed board disavowed, properly so, and i can tell you internally from my conversations, they were horrified. jonathan: you will get zero pushback from me on that point, but where i do see a link is the president himself has linked federal reserve policy to the democratic party that came before him, and suggested that the fed kept policy easy for the democrats. the fed kept policy easy for the democrats. that is making the political link, is it not? mr. kudlow: no. the president has been very consistent, and with my wholehearted support. i talked to him almost every day on this and other matters. we want to remove obstacles to economic growth. we want to remove upper schools -- we want to remove obstacles to economic growth. the premature hiking of interest rates last year and maybe the year before generated an obstacle to economic growth. let's remove that obstacle, and you will see this economy with low taxes, low regulations, free trade reforms. europe, we are making tremendous g

it is a technical problem, very short-term the fed's addressing. the fed wants stability. i am not surprised they stepped in here. shery ahn: is that your take of what is happening in the repo markets as well? definitely ais short-term issue. it started yesterday and continued again today. we will see that fed come in again tomorrow morning or but anytime you see -- that ticking higher, like what we saw yesterday. that's going to worry the fed a little bit. our base case is for a 25 basis point cut, but the risks have increased so we could see a larger reduction in interest reserves. the press conference, following the fed decision, what would you anticipate will be questions on th emuch expected 25 basis point reduction or some more questions on the ioer? veronica: we will definitely get questions on what is happening in repo. if you remember back in july, we classifyingwell that rate cut as an adjustment. that was taken as hawkish. we're not expecting him to repeat that language tomorrow. he will probably sound more like he did a jackson hole. the base case for the econo

what is the fed going to do?hey are going to continue these repo operations they have been doing, overnight repo and injecting 50, 60, -- $50 billion, $60 billion, $70 billion into the banking system. they could eventually begin to expand the balance sheet. we could expect that at the next meeting and it would not be quantitative easing. we have to be clear about that. it is not qe in the sense they are looking to prop up the bank reserves, but they are trying to get to an optimal level of bank reserves and maintain them. right now, they are probably below the level they suggest they should be. shery: but this is not qe, when you are actually buying stuff. you hopefully have people continue to listen to economists like myself and explained that, but you are right. it can be somewhat of a subtle difference. the signs should be a lot less. it is hard to say now what size it would be, but let's put it this way -- we thought they were going to put it back and organically grow the balance sheet in march of next year a

is it the fed itself >> it's the fed itself let me say this.ets appointed by the president of the united states, whomever that may be, and then gets essentially voted positively by the senate, it is very difficult short of major malfeasance to get that person out of that office there has never been anybody in the history riff of t the history of the fed ho has basically been essentially taken out of office for malfeasance. i don't think there ever will be >> so you think the chances of the president somehow replacing fed chair powell are nil >> yes. >> i assume you have read dudley's op-ed from a week or two ago. he has another one out today he reiterates the fed should not enable the white house's trade tariff policy. is he over his skis? could you imagine yourself ever riding something like that >> sorry who are you referring to >> former new york fed president bill dudley. >> well, no, he is a very good economist. you have to understand that people have differing views within the fed but what makes the fed a very effective organization is it

if the fed talks too much, it ends up just looking in the mirror it sees what the market thinks the fednts to do, rather than what the market wants. stepping back a little bit actually turns the market into a bit more of an independent signal about what it's going to do by the way, the fact that we saw bond yields do this gigantic u-turn in the last month with virtually nothing happening in the united states tells you that trying too hard to control where the bond market can go is a fool's game, because you may not fully understand why it's going up or down >> we don't know a lot of things, greg ip. thank you very much. greg ip, chief economics commentator at the "wall street journal. we appreciate your time. >> all right, thank you. >>> all right, well, president trump expected to travel to houston and appear at indian prime minister modi's rally. the messages this could convey both here and around the wld, or especially in places like india, that's coming up right after the break. ing. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me ga

here in the u.s., it a divided fed. eric rosengren sees no need to cut while dallas fed president robert kaplan says waiting for consumer weakness may be too late. to decode what that means ahead of jay powell's remarks tomorrow, let's bring in michael mckee. we continue to see this divergence in fed speak. how should investors take all of this? mike: probably just take a sleeping pill and wait until september 18. we are not seeing anything new out of these officials, giving us what we saw going into jackson hole. it has not changed a whole lot, their outlooks. the data is starting to lean a little bit more negatively. robert kaplan may be leading a bit toward rate cuts, but the positions have not changed among the people who have been talking. take a look at this week's rate cut lineup. a lot of fed speak today. 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. b

my eyes are glazed over from the fed meeting. fed" is the new york fed. where we were over the last number of weeks. says research i have seen there will be a new persistency here to the new york fed coming in. this is something new for all in economics. francine: fed policymakers lowering their main interest rate for the second time this year. jerome powell says moderate policy should be sufficient to sustain the u.s. expansion. the fed chairman touched on a series of issues and concerns in the money markets to negative rates and risks on the horizon. chairman powell: we are not on a preset course. we are making decisions meeting by meeting and we will try to be as transparent as we can as we go. if the economy turns down, a more extensive sequence of rate cuts could be appropriate. we don't see that. it's not what we expect but we would certainly follow that path if it became appropriate. i do not think we will be looking at using negative rates. if we experience another episode of pressures in money markets, we have the tools to address those pleasures

in taste you hadn't heard foam is fed day steve leastman lays out the big picture from the fed survey. >> wall street expects the federal reserve to cut interest rates tomorrow amid growing concern about economic weakness recession fierce and the trade war. 100% of respondents to the cnbc fed survey see the fed cutting rates by afare quarter point after announcing results of the september meeting, nearly all expect another quarter point cut by year end. the problem is that forecast for lower rates come with a reduced outrook for u.s. growth and increased probltd of recession the schans of a recession in the next 12 months soared to 11-year high of 32% of are according to the survey below 20% most of the year forecast growth is forecasted to 2.2% this year and sinks to 1.8 peppers in 2020 an economist joe naro the ff writes a trade war continuing into next spring or summer almost certainly continuing to recession spreading world withheld senior investment strategist at the philadelphia trust company says recession talk is overdone. yes there has been some slowdown in various economic i

so the fed may trim the ioer rate to push down on the fed funds rate tomorrow, but they don't have a to do that. that brings up the question of do they do the standing repo facility earlier than they planned? they had a big briefing on a in june. they've been testing it for -- briefing on it in june. they've been testing it for a while. it does affect the repo market. questions about how ready they are to do this and what impact it will have. vonnie: and it's not like they didn't have enough to speak about already. michael mckee, thank you, our international economics and policy correspondent. gold's recent rally has put a new shine on the gold forum this week. joining us now from denver is newmont goldcorp president and , do to take the reins as ceo on october 1. can i get your stock for the moment on what the gold market is most pricing itself off of? is it interest rates, geopolitical risk, this middle east potential turmoil? tom: good morning. yes, two weeks to go before i am in the ceo role, so very much looking forward to taking that opportunity. in terms of what we are seeing