"the fed i'm scarlet fu.mc is expected to things unchanged after three straight cuts this year. we await the announcement at the top of the hour in just over 30 minutes. the here with me, jason kelly and carol massar. are we in a good place again question or jason: it feels like it, right? carole coleman and what's the bar to raise rates at this point? no one is expecting movement today, but what happens down the road? scarlet: joining me now, the guggenheim co-founder, as well as the blackrock fixed income senior portfolio manager. jeff, what are you listening for? jeff: the last time that we were are was the big story of symmetry. meaning that this is very much willing to seek inflation rise and will be very quick to act on any signs of inflation falling. i think he is going to reiterate the message. it's an important message for investors, it really underlies the importance of bonds as a motive. in 2018, your question from a second ago, that this would be a very different fed and it will be interesting to

so i permanent thigh the market is in dark about about what fed bam sheet poli-- fed b sheet policy may clarify that at the press conference. >> i hope they do because i think there is a lot of impression on wall street not right now -- that fed is in if dark about its balance sheet policy. >> they are >> i think causing a lot of anxiety among investors. >> thank you so much for your insight we are watching the markets, a news conference minutes from now holding rates steady as we wrap up 09 make sure you stay -- 019 make sure you stay with us. >> ♪ oh, ho! oh, ho, ho, ho! you... you got me. uh, what do you want? i've got uh, ai robots, i've got vr goggles. i want your sled, please. no. [ chuckles ] timmy. it'd be a shame if this went viral. for those who never compromise. the mercedes-benz winter event. whoa. he was pretty good this year. investment opportunities beyfirsthand, like biotech.ne because your investments deserve the full story. t. rowe price invest with confidence. i wanted more from my copd medicine that's why i've got the power of 1, 2, 3 medicines with trelegy. the only

and what the fed is likely to do next year. that really is, guys there's a couple new voting members aselmu wl ch we're back right after this each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. >>> welcome back, no surprise for the federal reserve. everybody expected rates to be left unchanged stocks are mostly higher, that's not all the story. joining us now is former federal reserve board governor >> good to have you back on. >> you're not going to get to say, nothing happened at this fed meeting. there is a lot to discuss. what would be topic number one for you? >> i think the issue is going to be worrying about uncertainty. the second issue is, what's going to happen with inflatio

the fed will stay on hold.h signs of stabilization across the global economy, as well as in the u.s., pickup in inflation expectations, we can get close to 2.25 for the 10 year treasury. taylor: peter? your take on the 10 year in 2020? peter: i think we will see 2.25 as soon as january and february. i think of the status the year rough in treasuries higher , yields, deeper curves as the global growth curve gets priced in, and a bit more fiscal stimulus out of europe. taylor: john, your thoughts. the better growth optimism is an argument for higher yields, but i would highlight two other components. inflation continues to be very subdued. 2019 was supposed to be a year of higher inflation. not only did that not happen but inflation moved lower across a set of measures. the second component is the fed. they have adopted an asymmetric reaction function, unlikely to raise rates given the low inflationary environment. i think there is a chance they cut rates, whether that is in response to a growth downturn, which w

plus former minneapolis fed chair president and former fed governor sarah bloom raskin whether today is the right one for the economy. josh brown of ritz wealth management joins us. >> if i could sum up his press conference, riveting look at my knuckles. at the edge of my seat there's a character in this novel called found ace he goes to the foreign planet, spends the whole week meeting with everybody and they're recording every second of him, cameras and mics and go and decipher what it all means it turns out he had all these conversations with top dignitaries and officials and said absolutely nothing. i think that's actually good we're back in that realm with our fed chair. it's a throwback in some respects there really isn't anything to say. he addressed the plumbing. we heard about the funding markets, short-term markets. great. not much ado about that lately anyway then they put out the 2020 3.7. the market is fine with that, perfectly fine dollar is down 0.4%. paul mccauley, michelle meyer, head of u.s. economics, david ze zervos at jeffries good afternoon to you all. paul, i'l

the second component is the fed. i wanted to talk about the fed. the wirp function on the bloomberg shows no movement in direction in the first half of the year. i know it is far out, but what is your take on fed action, at least in the first half of 2020? collin: we think they will be on hold. we like to say for the foreseeable future. that is what the markets are pricing in, what fed officials are telling us. with the three cuts they did this year, they have theessfully un-inverted yield curve, and now financial conditions remain easy. barring a major change in the economic outlook, there may be a risk off environment where we see stocks fall, we think they will be on hold. taylor: peter, i want to get your take now that phase one of the trade deal has been sort of resolved. what do you need to see in the economic data to get the fed to move in either direction? direction in the first half of the year. in the expansion phase of the cycle. essentially, if i were to look at the curve today, i would say this is classic pre-recessionary behavior. tay

. >> this endorses the fed. >> exactly what the fed is looking for. >> the fed is going nowhere. >> its reasonable to expect the fed to kind of be on hold. >> the front end of the curve is selling off more than the backend. >> the market is saying the fed pause is warranted. >> the fed is doing nothing. >> it is probably going to remain on pause for a good portion of next year. jonathan: joining me around the table in new york, gershon distenfeld, priya misra, and krishna memani. priya, let's begin with you. what a payrolls report. priya: a good report, no way to look around it. when we take out the gm numbers, still a solid number. but i have to highlight caution a little bit. the labor market is a lagging indicator. let's look at the fundamentals. is global growth for sure bottoming? there are some signs that it may be. is it about to surge ahead? i am skeptical. we are not getting stimulus out of china, europe. in our view, global growth probably models along. the trade uncertainty, we are so hung up on this trade deal. know the phase one deal, which is not guaranteed, the fact that

. >> the fed will have to come back and ease again. >> the fed is going nowhere. >> there has been aremendous shift easier across the central bank landscape in 2019. how can that happen in 2020? it probably couldn't. lisa: everyone ganging up on bob michele. we have more perspective. joining me around the table is marilyn watson of blackrock, matt hornbach of morgan stanley and subadra rajappa of societe generale. i want to start with you, marilyn. do you think that now that we have some contours of a trade deal, that we will seek 10 year treasury yields bleed higher into next year? marilyn: we have to see with the details are on the phase one trade deal, how much they will roll back next year, the impact for the rest of this year. it would reduce some of the headwinds if we see more stabilization. but i think going into next year where you had some of the -- we think the fed will probably be on hold until next year. that is the message we are sending out clearly this week, in terms of the data, the u.s. election coming up next year, we think the u.s. economy is moderating but will c

because it suggests that the market doesn't ratify the fed funds rate the fed -- the fed funds rate at a level that really isn't clearing the market in a free market way for overnight money and what they're doing is they're adding reserves to try to counteract that that corroborates my view point which i think is a minority opinion that in the next recession, if the fed doesn't do quantitative easing and jay powell has said he will, and if we believe him and he doesn't have a good track record on believable but the amount of bonds issued at the long end would be to horrifically high that i think interest rate in a normal free market would rise and fairly significant and that is what the repo market is telling us. on september 17th, overnight money was over 2% and the 10-year treasury was over 2% and it is telling that you can't find buyers for overnight money in excess of 2% intellectual property and the 10-year treasury is with inflation at 2% or higher and it tells you the interest levels are not market levels, they are manipulated levels right now in the national debt is growing at

fed cut for inflation? tom: i think the fed can cut and -- can let inflation run a little hot because i don't think expectations around consumer have changed yet. i think the time to worry about inflation is when individual wage expectations start to get inflated because that changes behavior and really anchors inflation bias. if it runs hot one or two months, i don't think it is something the fed needs to react to. guy: given the fact we have this big trade deadline coming up, is this a non-fed meeting? if you knew what the outcome was going to be, more tariffs going on, no tariffs going on, may a phase i trade deal, if you know all of that, presumably the fed could react to it, but it doesn't yet. how can the fed react to an economy that could be about to undergo a fairly significant stock? tom: it's a good question. the fed has had to do with this all year. , in if we went a year ago think the idea that we were close to some sort of trade resolution was at hand area businesses and consumers in the global

bob pisani we'll see you at the fed decision >> the fed call just a few minutes away i'll see you on lunch as well contessa brewer, we have a great pal. a t reo aer this. ♪ ♪ ♪ ♪ have you ever worked with dr. francis? oh yeah, he's ok. just ok? guess who just got reinstated! well, not officially. nervous? yeah. yeah me too. don't worry about it, we'll figure it out. i'll see ya in there! just ok is not ok. at&t has america's best network, now with our best plans, at our best prices, starting at $35 a line for 4 lines. new from at&t. servicenow put our this changes everything. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead. servicenow. works for you. >>> welcome to power lunch, we are minutes away from the federal reserve's decision on interest rates the markets right now are mixed. the dow slightly lower, while the nasdaq and s&p are in the green, but just barely portfolio manager with morgan stanley inv

the fed announced new repo terms, taking place this month and next. a strategist weighed in on this, saying the fed expects take up to be this large and they want to make sure they provide that level, or they just wanted to make sure everyone knew they were not going to undersize it. i would not expect this to be fully subscribed, but it should be fully comforting to participants that it is available. the interesting thing is that we have seen all of the recent repo operations oversubscribed. does this indicate to you there is some concern among market participants? matt: i wouldn't call it stress or concern. i think people were stressed out a couple months back when, in the wake of what happened in september, they thought we need to get our act together for year-end. i think that caused a lot of stress. i don't necessarily think there's going to be a lot of stress over year-end, in part because the fed is sending a significant signal here. you also have to remember the treasury's cash balance is expected to go up, so the fed will have to provide some

then don't get fed up.'m break down the fed reserve's role in the market and a sell off versus a buying opportunity? the key is a little something i like to call systemic risk stay tuned and i'll explain. stick with cramer. apple card. is a new kind of credit card, created by apple, so it's simple and transparent with a new level of privacy and security. it lives here and here. and it will save you 6% on products at apple; like iphone, apple watch, airpods pro and so much more. ♪ apply in as little as a minute, right in the wallet app. apply in as little as a minute, introducing new vicks vapopatch easy to wear, with soothing vicks vapors for her, for you, for the whole family. new vicks vapopatch. breathe easy. because it's tailored to you! take the personal assessment and get matched with a proven weight loss plan. find out which customized plan can make losing weight easier for you! myww. join for free + lose 10 lbs. on us. >>> here we are. back discussing what to do in a sell off. >> sell, sell, sell. >

counting down to a fed rate decision. >> the fed has orchestrated a nice soft landing. >> engineeredsuccessfully on inverted the yield curve. >> trade escalated and they had to come back in. >> the fed is going nowhere. hikee bar for the fed to or cut is high. >> where's the impulse for next

the second component is the fed. they have adopted an asymmetric reaction function, unlikely to raise rates given the low inflationary environment. there is a chance they cut rates, whether in response to a growth downturn, which would be a straightforward reason to cut, or even if inflation is too weak, chance that they cut. against that, subdued inflation and asymmetric and accommodative fed. our view is those things will matter more and keep yields low for the foreseeable future. taylor: i want to talk about the fed. the wirp function on the bloomberg shows no movement in either direction in the first half of the year. i know it is far out, but what is your take on fed action, at least in the first half of 2020? collin: we think they will be on hold. we like to say for the foreseeable future. that is what the markets ar pricing in, and that's what fed officials are telling us. with the three cuts they did this year, they have successfully un-inverted the yield curve, and now financial conditions remain easy. barri

within the existing approach that the fed takes, is there something the fed could do better to avoidch as the ones that it made? >> that is a good question. thanks a lot for having me on. yes, i think that throughout the and even into last fed is think the motivated by trying to normalize interest rates. that has been the third mandate, as it were. i think that desire to normalize interest rates, normalize policy, it lies at the heart of the temper tantrum, the decision to raise rates in the end of 2015, even though inflation remains low, and it really is responsible for a lot of the outcomes we have seen where unemployment remained high for as long as it did and inflation remains above target. if the fed can get away from thinking that we really want interest rates to be "normal," i think that would be very helpful. scarlet: ok. in this obsession to normalize interest rate and monetary policy, does that mean the fed is correct in swimming off the idea of negative interest rates? president trump brought it up several times. he looks at it through the prism of a real estate developer

the fed says the fed did not hike. everyone rbc expected it. fact there is nothing more expected next year is well expected. what about the press conference? theit this rise you -- did dovishness surprise you? seth: the question comes where people's expectations were. the dovishness came through when he started talking about the unemployment rate coming down. good thing to basically see how far he can run. that feels like a dovish side of things. what i thought was interesting was last time in october he said in response to a question, what would it take to hike rates next, he said it would take a really substantial sustained increase. this time they have it leveling out at 2%. nevertheless by 2022, they all think they will hike. that kind of consistency in talking about inflation, that for me is the tough part about following these. romaine: they are basically saying 2.1%, and they would be ready to hike again. they seemed to be some expectation we were going to get more of a rethink by the fed of their mandate, or at least how they would try

fed day.nd any minute at the white house, the commander-in-chief is set to sign an executive order as inspector general michael horowitz testifies on capitol hill over the fbi's investigation into president trump. we have fox business team coverage, edward lawrence is at the federal reserve, gerri willis is on the

balance sheet is going up you've got to buy don't fight the fed right so without a. rule of law by crime. it's going up because we need an e.t.f. . all right well we're going to take a break and when we come back much more coming your way. and we're going to fulfill the repeated purposes ok all of it to the people i promise to be you know we've all but the truth. is. pretty. much. pretty clear bertha now you want to 1st correct that. no. fault. thinking of getting abused probably was me don or she was signaling to use traps in this time you know why are people who use a crate with him he was. freaking out when is pretty much anywhere near and thousands of breeding dogs are caged in the interview lane conditions on puppy farm i mean 67 years you know they've been locked up in cages outside you see no protection from the weather the heat you know the cold air the rain the snow the funder nothing they have no protection. you. know it's a kid. across the u.s. crude puppy mills are supported by dog shows and stores most of the puppies that are coming from these large scal

balance sheet is going up you've got to buy don't fight the fed right so without any. rule of law then by crime. it's going up for us we need an e.t.f. . all right well we're going to take a break and when we come back much more coming your way. tonight. in this community there are people who believe that it's ok to sell practically food on my table it's really hard there are no jobs and you see that i've got kids that ask and as a parent. i can come up with arguments there's a lot of conflict within the game between the 2 most of the conflict i would say over balls around morning and most of them is me. close one of the children's cosimo each other is good business the state of california alone makes $6000000000.00 a year of prison complex just to get some point in your life where. you don't care anymore nobody cares about your so you don't care might anything. welcome back to the kaiser report i'm max kaiser you know back in 2012 a film of paired called the 4 horsemen and it was incredibly popular and it continues to be popular i knew to this day because it outlines

back into play. >> you have the fed. if bad news persist. economic data goes south but if there is good news the market rallies. >> it's been interesting to me this year and maybe going back to maybe march of last year. >> yes. >> is the idea that every day we come on air and talk about the latest trade tweet or headline. >> it's been a week of that too. >> on tuesday, the president president says i don't need to do a deal maybe wait until next year market goes down. >> larry kudlow the market goes up and in part and from the jobs report any given day it's hostage to trade headlines. but when you look at the whole year, there's been trade headlines every day and the market is up 25%. >> right. >> tyler. >> how material is it really >> it's interesting because this week we had a couple of guests i remember joe coming on saying the trade deal means nothing process you look what's priced in and how the market responded. i was listening to clsa saying the same thing today and the trade deal is something seen as incremental d

balance sheet is going up you've got to buy don't fight the fed right so that without any. rule of law then by crime. it's going up we need an e.t.f. . all right well we're going to take a break and when we come back much more are coming your way. facebook and google started with a great idea and great ideals unfortunately there was also a very dark side. they are constructing a profile of you and that profile is real it's detailed and it never goes away turns out that google is manipulating your opinions from. very 1st character that you type into the search bar it will always favor one dog food over another one comparative shopping service over another and one candidate over another they can suppress certain types of results what they think you should be seeing if they have this kind of power then democracy is an illusion the free and fair election doesn't exist the more we give them the sooner we are all. up until recently politics were about policy preferences and ways to implement them that is not the case today your political views are now what define you as a person

balance sheet is going up you've got to buy don't fight the fed right so without any. rule of law by crime. it's going up for us we need an e.t.f. . all right well we're going to take a break and when we come back much more coming your way. thinking of getting a new phone the ones we got in here shows no problem was he didn't know until he was trapped in this tiny little wired bunch we don't need a crate with him he will just start freaking out and she won't want to bring him anywhere near. breeding dogs or caged in in human conditions on puppy farms i mean 67 years you know they've been locked up in a cage outside you see no protection from the weather the heat you know the cold air the rain the snow the founder nothing they have no protection. to take care of you. it's ok. across the us cruel puppy mills are supported by dog shows on pet stores most of the puppies are coming from these large scale factory farming kind of operations are being stolen and it stores even joined a group businesses are involved like agoa mom santa there has been a shocking amount of organi

balance sheet is going up you've got to buy don't fight the fed right so that without any. rule of law by crime. that's going up because we need an e.t.f. . all right well we're going to take a break and when we come back much more coming your way. in this community there are people who believe that it's ok to sell fractional who don't like tables it's really hard there are no jobs and you see that i've got kids and ask and as a parent. i can come up with a logical argument there's a lot of conflict in the good. between the 2 most of the conflicts i would say. they're. close one on each other's each other is good because the state of california alone makes $6000000000.00 a year of the prison complex just to get some $25.00 where. you don't care. welcome back to the kaiser report i'm max kaiser you know back in 2012 a film of paired called the 4 horsemen and it was incredibly popular and it continues to be popular i knew to this day because it outlines the big problems facing the globe both economically and socially the director of that film is with us right now ross asked p

mike, let's talk about the fed. it will change. get new members and some of them are more dovish. presumably that is factored into the thinking. michael: this is the annual rotation. four members go off, four members go on. this year, it is almost an even trade across. you look at oncoming minneapolis fed president neel kashkari, but going off is james bullard. both of those are doves. the hawks are esther george, she is leaving. an investor from cleveland is coming on. that is an even trade. patrick harker is a centrist with hawkish leanings and eric rosengren is a centrist with hawkish leanings. you substitute parker for rosengren and not much changed. we will have to see if there is a real difference between robert kaplan of dallas coming on and charlie evans of chicago, who was more of a dove, going off. robert kaplan has been talking gabashvili, -- has been talking does not lookit like the new members will have any influence in any kind of change of policy. it will be whether we see any kind of change in the economy that will

fed istly what the looking for. >> the fed is going nowhere.e would like to see inflation accelerate. the front end of the curve is selling off more than the back end. >> the market is saying that the fed pauses warranted. it is probably going to remain on pause. jon: joining me around the table christian of invesco. your thoughts? take out the gm itbers, it is this still -- is a solid number. let's look at the fundamentals here -- if global growth was bottoming, there are some signs that it may be bottoming. is it going to surge ahead? i am skeptical. growth probably muddles along. parthas been the weakest of the u.s. economy. they're so hung up on this trade deal. even if we do get they phase i deal, which is not guaranteed, the fact that the president threaded into tariffs on brazil, that was just a few days ago. the uncertainty for businesses is going to remain. the fed is likely to be on hold. i'm not sure we are entirely out of the woods. the labor market may be showing some sides of -- signs of cracking. feels like a long time since we h

that the fed is not going anywhere through 2020? do you have an understanding of the threshold that would bring the fed back to the table? jim: no, and i don't know if any of us really do. remember, they did a fed listens tour in 2019 and they will do it in the first half of next year, roll out a new policy directive. it is expected to be an average inflation targeting policy, which means even if we get the uptick of inflation expectations, the fed will allow it to happen without even considering raising rates. i think that raising rates, unless something dramatic happens, is off the table. lowering rates, there are a lot of things could happen to make rates go lower. the uncertainty around more trade in the phase two talks, the elections, and just correction in the stock market. as much as they want to say it doesn't matter, it does. it does every time it happens. jonathan: how do you push that view through the rest of the yield curve? particularly in the environment you described, what does it mean for further out? jim: i think th

certainly now, what the fed has done is raise the bar, is not going to happen anytime soon.t means the yield curve is directional. when you have u.s. two years trading above the fed funds rate, historically it tells you the market is expecting hikes, which is not likely to happen. there is a massive asymmetry towards the front end and the combination of being long on steepeners, that can profit in a number of different scenarios. one of your guests in your clips was talking about potential inflation risks. even though i am running the steepener, i find that difficult to believe when you just look at the oil price and the base effect, notwithstanding the end of december. it seems like unless we have a massive oil rally, it will struggle to make any headway. for that reason, we are not expecting inflationary steepening of the curve but we've seen recently with bond markets it doesn't take much of a push upwards to see the curve getting dragged steeper in a bearish environment. i lisa: a pretty nuanced take, we are looking at potentially a steeper yield curve but don't get too

if the fed is in fact done at three, we could get a less friendly fed >> thank you for your thoughts chief u.s. strategist. stay with us, we'll be back in a few moments. >>> 5:00 at cnbc global headquarters holding steady, what fed chairman jay powell said to do to the markets on the two-day losing streak. voters head to the polls in the uk pressure from down under feeling the heat from global regulators calling for correction we have an exclusive interview the top business person of the decade the name revealed as "worldwide exchange" begins right now ♪

the fed is on hold.hey make in late 20, but they are going to cut for -- they may cut in 2020, but they are going to cut for bad reasons. it will be because the economy is underperforming. -- whether regrow from there is a different story, but it is a real zombie trade. it doesn't exist. alix: thank you very much. lara rhame of fs investments will be sticking with me. find all the charts we are using throughout the next two hours on gtv on the terminal. check them out. this is bloomberg. ♪ viviana: you're watching "bloomberg daybreak." investors in glencore will sue the world's largest commodity trader over a bribery investigation. the law firm saying the suit is expected to demand billions from share price declines. it is being investigated by the u.k. serious fraud office. glencore falling 9% on the back of other probes in the u.s. and canada. u.s. regulators taking a small etep towards returning th grounded 737 max to service. is finalizing changes to . flight control assembly and some final advi

are set to release the final decision of 2019 former dallas fed chair to layout the fed's big moves's coming up after this. 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! wifi up there? uhh. 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 local xfinity store today. >>> welcome back the headlines you need in 60 seconds. shares of saudi aramco surging past expectations. the stom jumped from the ipo price to 9.39 giving the company a valuation of $1.88 trillion. the world's largest ipo ever netflix is out with figures on how many viewers viewed the film, the irishman more than 26 million accounts watched at least 70% of the film estimating more than 46 million accounts will watch the movie in the first month. >> google has poached the chief medical officer of the medical wearable startup to help the health initiative. helping for tools to help doctors search

shery: is that why the fed is doing so much? the fed injected almost $240 billion into the system, but they actually promised to do half a trillion. why do they need to do so much? >> they want to feel like they are more prepared than underprepared. fed and there is a perception that maybe they don't have this under control, credibility is a serious thing for them. whenw that in september they were trying to get the first operation on the ground, that overnight repo operation, and they had to delay it because of some technical difficulties. that really sticks with investors and participants. if the fed says they are coming in and it feels like they are not doing enough, the market will remember that. the fed does not want to see the rates move too much. if it moves, it has the potential to threaten their benchmark rate, the fed funds rate. if that moves, people are questioning over all the efficacy of monetary policy. do this much right now temporarily, is there also a risk that you could fall off the cliff once that temporary f

time any even a slight i mean when when markets go down 11 points them up but the fed intervenes like so the fact is that. people now are the opposite of what they used to be they used to expect a cycle now they don't expect a cycle every participant in the market does not expect a cycle to ever be able to fulfill itself so that the fed will always tend to be of course i think that makes it probably more dangerous for when they do lose control or when fewer and fewer actual people are participants and so the fact is like we know something like you know 85 percent of all stocks are owned by the top one percent so it's not like everybody is participating and the fact that we keep on pointing to this thing hey look this magical bowl of you know is glowing and this means something to you but it doesn't mean anything to anybody of course donald trump this is what he looks at he's a new yorker this is what is defines his reality and he says down now is that chasm p. $500.00 closed at record high so he was super happy about it well for most of the american history there was always a competit

. >> the fed will have to come back and ease again. >> the fed is going nowhere. >> there has been aift easier across the central bank landscape in 2019. how can that happen in 2020? it probably couldn't. lisa: everyone ganging up on bob michele. we have more perspective. joining me around the table is marilyn watson of blackrock, matt hornbach of morgan stanley and subadra rajappa of societe generale. marilyn, i would love to start with you. do you think that now that we have some contours of a trade deal, that we will seek 10 year treasury yields bleed higher into next year? marilyn: we have to see what the details are on the phase one trade deal, how much they will roll back next year, the impact for the rest of this year. it would reduce some of the headwinds if we see more stabilization. but i think going into next year where you had some of the -- we think the fed will probably be on hold until next year. that is the message we are sending out clearly this week, in terms of the data, the u.s. election coming up next year, we think the u.s. economy is moderating but will continu

if the fed were to do that, if they were able to transition from libor, the fed would have improved monetaryt could that impact the housing market more directly when it felt like conditions were too tight. from the fed perspective that sounds amazing because you strip out the credit component in the base borrowing rate. as a borrower what i rather borrow off something that has bank credit or something that is perceived to be risk-free? in theory i would like to borrow off of something that is risk-free and that should allow for whatever the fed says the rates are too high to lower them more quickly and therefore stimulate the housing market and other parts of the lending market more directly. if only it were that simple and clean. there is a host of issues associated with this transition. lale: i was going to kick it back to you. the libor transition is focused on the fixed income market, but many of the equity guys or the broader market guys think it just happens. the lack of the credit risk component is critical. , i still credit risk do not understand how the market will price the credit

the risk of the fed surprising to the upside are limited, and therefore, the fed will need to step inditional accommodations. when they do, you see as possible that the fed could take rates down to zero. what we need to happen for the fed to cut 20? zero? ed: it will not take much for markets to price the fed going to zero. to zero. if the fed is to restart another easing cycle, it could be another precautionary cycle, not necessarily in response to recession, but the amount of limited, it is likely the markets will reprice us to zero quickly. relative to the rest of the world, real rates in the u.s. remain quite high, so there is still room to cut on the front end. taylor: i know we've been talking a lot about the front end. i want to extend duration and look at what has been a global bonds selloff. a 10-year approaching that key 2% level, today around 1.91%. what do you make about the recent global bonds selloff, at least in the 10-year part of the curve? duration has suffered, particularly in the fourth quarter, as that repaired to the growth story has taken place, and as positive

so you can't blame it all on the market punishing the fed it was fears that the fed was in this modession if they went four more times. so again, don't fight the fed, i slou absolutely believe that. but we can't say the fed changed in january in terms of their entire mode and yet we've rallied since then >> i guess a lot of this also depends on what happens on the trade front. a deal is expected in early january but the chinese really aren't incentivized to get a phase two deal before the 2020 election without knowing if it's going to be president trump or not. >> the question is how many phases are we talking about. could there be phase 20? we think that if you want to call it, the clash or tension between china and the u.s. are not just going to go away because we sign a phase one deal there's a lot more going on in terms of china kind of challenging u.s. and the world, the belt and road project, building a deep sea navy as part of that. so trade is one element. it's not just about trade. >> barbara, do you want to give a comment? >> a quick question on sentiment. you mentioned it'

so far with the information we have from the data and the fed communications, the fed will be low forsage from powell in his press conference was clear on that. somewhat can rejoice in the fact they are getting accommodative policy stance from improvement modest in the trade and manufacturing outlook. , stays stays the course where it is right now for the next few quarters. is a distanceikes away from us. matt: is it only modest improvement, or would you have expected to get usmca phase one china trade deal decisive u.k. elections all at the same time? everything comes with its own risks. the tail risk of brexit has diminished, but with johnson he would like to end everything by next year, you have this hedge coming in as a probability, a low probability. the phase one deal is what we expected, only a partial rollback of tariffs. this is definitely positive. the important thing is investor sentiment will improve. if you are asking if we will see something more of a modest improvement, this is possible is investors sentiment improves. front, itbal trade still remains to some extent. an

the fed will try to keep inflation from going even further down. >> this is a fed that is tilting toward. >> the next move is probably a cut, not a hike, and it is probably a cut because of inflation and because the risks are still out there. >> investment spending is negative. we see factory shipments that are going negative. the biggest part of the economy, consumer spending, is holding up. i think it is consistent. it is a different regime for fed policymaking. even if they start raising rates, they are barely raising rates. it is a far cry from normalization from years ago. consistent,real coherent, tied together message. tom: considering a fed meeting to, i thought it was very , and withr. powell us, steven major, to talk about the path forward in 2020, he is with hsbc. what a bank up here for bonds accommodation, price up camille down? steven: it is a good point. you can pick anything, high-yield, ig, inflation linked bonds, normal linked bonds. all about close to 10%. it is mainly because the fed capitulated pure this time last ,ear, the market expectations based on the fed guidan

those years to stack the fed against him in terms of fed governors and deregulation.e was a giant of a man in many different ways, although a very funny man, as funny as he was ruthless. you have any anecdotes from your time as an up-and-coming economist dealing with paul volcker in various capacities? diane: i got to meet him after he was fed chairman. the first fed chairman i met was alan greenspan. seeing him at meetings and talked during the middle of the financial crisis, just being there and being next to him you feel small because he is so huge and i'm not very big. on the other side, knowing he had change the world and what i had gone through personally in my own life and was the reason i became an economist, because i saw someone could make the world a better place. after watching what i witnessed growing up and seeing my best friend going to poverty, i was lucky it was not me, but at one point in time she had to skip lunch and by mother gave her extra money so i could pay for her lunch. that seems small now, but to me it was a pro flying effect in learning -