fed chair jay powell tip toeing carefully through the taper mine field, saying he thought the fed wastrack to taper this year, but not saying precisely when. >> my view is that the substantial further progress test has been met for inflation. there has also been clear progress toward maximum employment at the fomc's recent july meeting, i was of the view, as were most participants, that if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year >> powell said the outlook for jobs had indeed brightened and that inflation, the problems we're having right now with high inflation, will likely prove to be transitory, they'll go away soon, he says, and the rate hikes require a higher standard than tapering. that would be further down the road now, in an exclusive cnbc interview, the fed vice chair, richard clarida followed up the speech by saying he expects the economic to meet the fed's condition for tapering >> we have had 800,000 jobs per month for the last three months, and so i expect that those gains will continue in

from the feds standpoint, if you extra months will not hurt them. kaplan pivoting that quickly shows me that he has realized this. they really did want to taper, were on that path, but the world has changed a lot in the last week. lisa: the fact that robert kaplan, the most hawkish of dov fed chair's, highlighting how little it would take to shift the margins. how likely is it that you have some of these hawkish members changing their tone on the reaction function? >>'s voice is one among many. we haven't even heard about them pulling forward. tapering is very much in the cards. it will begin around year-end. it would take a major event to derail it. longer-term, powell wants to get to tapering. i don't think he wants to wait until it is more potentially disruptive, but i don't think it will impact the market all that much. all the short term liquidity is going back to the fed in reverse repo. the long and is a bid for duration but the fed wants treasuries to climb at year-end. it is not that disruptive on that end as well. i think people take advan

. >> it is going to go a long way in encouraging the fed. >> this is time for the fed to start tapering. >> the fed should take some of that froth off the dynamic. >> we have had a lot of negative surprises, you know, focused on the delta variant. >> this report happened before this surge in delta variant cases. the next payrolls report is going to be the decision-making report for the fed. the next 30 days of data is going to be critical to watch. jonathan: let's bring in the paddle -- the panel. joining us is mark givhan up. frances, i want to begin with you. your take on the data we saw this morning? >> let's not read too much into it. still have massive distortions. the nonseasonally adjusted number was down 130,000. like a lot of what you showed on that pretaped, the number is backward-looking. i need to know, is delta really reducing mobility? are disruptions going to reduce demand? now that we have these new macro factors at lake, i don't feel we are very representative of what the next three months are going to look like. this is not the deciding report, from my view. jonathan:

the fed.nk they are doing the right thing. we have 8.5 million jobs left to go to get things back to normal. if we can't get people back to work, it is going to create even bigger problems down the road. i understand it makes everybody nervous when you see the fed buying assets and keeping rates low when the economy is making progress. it is making progress, but we still have a long way to go. how much employment do you need to get to get everybody back to work? jonathan: we've got to run. good to catch up. you know how this works. at 8:30 eastern, the number drops and we go to one man. that man is with us now, bloomberg's michael mckee. let's get to the numbers you are looking for in about six minutes. michael: the consensus is for 858,000, but the dispersion is really wide. stephen stanley at amherst pierpont makes a good point, that our models are basically designed to look at the demand for labor, but this is a supply of labor problem that is really hard to figure out, how many people are

we break down the slew of fed commentary out of jackson hole but former fed economist claudia sahm.n my exclusive conversation with german carmaker audi, about its plans to go public. and pellet gun plunging after reporting earnings. what is behind the disappointing sales outlook. greg: let's check in on the markets. jerome powell is the most anticipated investor event of the week, said all the right things in terms of the investor perspective. look at the rally we have in equities on both sides of the border, touching new highs. i don't think the s&p 500 has ever closed above 4500. we are seeing yields pushed lower. so what were the magic words that we were waiting for all week? we heard chair powell say that the central bank could begin using those asset purchases this year, but he is clear about separating the idea of easing the purchases. there seems to be that delicate spot that investors do not mind being in. earlier, we had a slew of fed presidents on bloomberg discussing their outlook for purchases. >> i would like to start tapering sooner rather than later. i would like to

charles: what do you make of the fed today, you know, if the fed, we're not worried about the fed inll's leg i think charles. the market loves him. that's what's going on really it's a gross kind of image but it's really true. the market loves this guy. so it's like he's leading the market to where it wants to be, and i think that's really the tough position that the fed has, but then there's no adults in the room either. look at the central banks around the world outside of our own. everybody is being pretty grandi ous with the stimulus with the talk of low interest rates, and not tapering, so the market likes what it sees from the fed and i think the fed is going to keep giving the market what it wants to hear which is more stimulus. charles: i've got to say, scott, to that point we have a lot of brilliant people the collective iq for today's show is like 2,500, actually 2,700 if you take my iq out. >> not including mine either. charles: [laughter] and everyone says the academic answers and it sounds great. this is a grand experiment. i really don't know how any of these central ba

it is fed day. good morning. this is "bloomberg surveillance" on bloomberg television and bloomberg radio. jon ferro very much off. taylor riggs very much in. markets are basically meandering. this economy has been so difficult. can we actually learn anything from the chair powell today? tom: what we are going to learn as they are going to extend forward. they are beyond data dependent, and i'm sorry, the most important thing on august 27 is the jobs report. lisa: what data are they looking at? is it all jobs? tom: this is a loaded question. there's the hard data, the soft data, but certainly the labor dynamics of this nation, they've got to be more front and center than they have ever been before. lisa: the one thing people say that they are watching very closely is the stock market. should the stock market disrupted in any material way, any hiccup will make them reverse any potential tapering or tightening in any capacity. is that built into markets at this point, the people who you're speaking to? taylor: you

if the fed -- the fed moved away from that in its strategy statement last year.isk it runs is that shift last year's akin to going off breton woods and gives people the license to think there's a new machine in place. michael: one of the papers presented on friday jackson hole suggested that the rates to be neutral are lower than they have been. can the fed raise rates and cut off inflation without sending the economy into recession? dr. lacker: they very clearly can, and more to the point, they can nudge up the expected policy path, you know, in the coming year. i will expect they will have to do that to keep inflation expectations contained. they have the tools to combat it. they are blunt. we have not used them in a long time but i think the fed has the tools to do it. michael: let me put it this way. can they go back to jaw, jaw? to paraphrase winston churchill. job own the economy into -- jawbone the economy into place? dr. lacker: in the 1970's, the fed loudly proclaimed its opposition to inflation and its desire to have it be lower, it just did not take th

we heard from fed chair powell.d not speak on the thing caroline cares most about, cryptocurrency. the central bank is exploring digital dollar and at some point will release some research. here to talk more about what the future may hold, we want to bring in eswar prasad, new fed chair of trade policy economics at cornell and his new book is aptly titled "the future of money: how the digital revolution is transforming currency and finance." thanks for being here on the program. i do want to start off with the elephant in the room, which a lot of people were not necessarily expecting jay powell to talk about cryptocurrency, but they are awaiting to hear from the fed in this research report, i guess, about what the role, if any, the fed may actually have in the general crypto space. eswar: my understanding is that the fed is going to explore the design options. what they are talking about is retail central bank digital currency that could replace the physical dollar bills you may still have in your wallet, or at leas

waiting on chair powell. >> all eyes will be on fed chair powell's comments. >> chair powell. >> fed >> will be visiting very closely. >> the july fomc minutes stole the thunder. >> the consensus now is jackson hole will be less exciting. >> you have to look beyond jackson hole. >> the fed communicates tapering. >> we look toward the september fed meeting. >>

every day, $1.1 trillion gets returned to the fed and the fed pays interest on it.arly these programs of buying bonds, they are creating more liquidity than the market needs, and that has to be filtering its way into asset prices. tom: this is the first chart i look at every morning, what he is talking about. conrad, we talked to the conservative from richmond, worried about a preemptive fed that could get in there. do you believe the wall of money that is out there is just moved inflation from a price change over to the inflation of assets? conrad: i don't think so. it has not moved over in the sense that if we look at goods and services prices we can clearly see the impact of the feds liquidity as well. i think the focus usually is on the cost side of the economy. we are obviously seeing cost and a broad-based sense push higher. the question of whether those costs get into the inflation process as likes to discuss depends on the monetary policy, how much liquidity the fed is creating, and that is a lot. we sit here is the fed tries to look at these decisions on po

-- the fractious fed development in the early 1950's out to now, where is the fed mandate consider climatee? how did they do that? william: i think they certainly have a mandate for climate change from a financials debility perspective area -- financial stability perspective. it does threaten individual institutions, and the fed has responded to that. they set up to committees -- they set up two committees to address this. they are pushing the individual institutions to develop data and processes to evaluate limit risk -- evaluate climate risk. monetary policy is more difficult because monetary policy is about what happens next year or two, not that i asked -- not the next 20 or 30 years. even if you think climate change is an existential threat, which i thick it is, it is not clear how you would incorporate climate change risk into your near-term monetary policy decisions. that is where the fed is getting criticism from people saying it is not doing enough on climate change. it is difficult to think the monetary policy mandate and say that really expands to climate change. lisa: it also g

if we believe the fed, if the fed funds rate gets to 2%, and we take that back to our fair value models, that will tell us today fair value for the treasury is 1.7%. that is where 10 year yields should be today if you believe the fund rate. the question the market is having is, if the fed starts a tapering process too soon and becomes too aggressive and may be starts to hike rates too much too soon, then the economy will not grow as fast in the fed will not be able to hike rates enough to get to its expected terminal target of 2.5% policy rates in the future by say the end of 2025. that might only get us to a 2% terminal rates. what that tells us is a fair value for the 10 year treasury, if that is the case, if the fed hikes race too soon, is closer to 1.3%. if the fed wades and delays the taper, it allows there to be more stimulus in the economy, then tenured -- 10-year treasury yield could go to 2% by the end of this year. the whole key here is -- and this is what is counterintuitive -- the earlier the fed tapers and more aggressive they are in tapering, 10-year treasury yield's proba

let's stick on that fed story.he latest minutes show that most officials agree that they can start tapering later this year. then there's james bullard of the fed who prefers a faster timeline calling for an end to tapering by the first quarter of 2022. we are joined now by kiran ganesh. you've already watched of interview earlier when he was talking with his guests about bullard's bullishness. i will put that question to you as well. do we listen to bullard, his hockessin if -- hawkish and us? kiran: the fed is clearly a committee. you will have some people be more hawkish, some people at the dovish end. if you look both sides of that, we can see that there's a healthy term for september. others looking for q1 2022. where the consensus is likely to come out is somewhere around november, december. the jackson hole meeting is august, the pregame. then you have the season starting in november or december. we think that's probably the valid one. the important thing to stress that we've heard from those minutes is that

the fed has a u.s. mandate.as a policy mistake if it's bad for the globe but works for the u.s. are you suggesting that it fit doesn't work for the rest of the world, that comes back to hurt the u.s.? peter: it's the latter really. i can understand if you're just looking at the domestic economy and thinking about balance sheet and interest-rate policy, then tightening a point where u.s. growth is this strong and core pce is this high would be a natural conclusion to come to. it is through the strength of the dollar if u.s. rates start marching higher at a time when many economies and the rest of the world which have not had sufficient access to covid vaccines are still really struggling to get anywhere near to a normalization of their own economies. if u.s. real rates start marching higher, then that's going to mean the dollar appreciates. if the dollar appreciates materially, for those weaker economies that still rely on having access to dollars to allow their economies to function, they will start to get choke

markets wagering on the fed paper timeline. >> this is a fed that wants to taper. >> this is a fed that >> i do not think we will see a bombshell taper announcement. >> the fed will take a read from the next jobs number. >> we will get a strong signal for taper at the fomc meeting. >> look at the numbers in september at the numbers in october. >> you probably need another one million jobs. >>

new york fed, john williams.get together frequently and discuss what is the appropriate course of policy , what should the statement look like. so it is not just one person. it is the three people sort of driving things forward, and you have to bring other members along of the fomc with you. jonathan: that was bill dudley, the former new york fed president and bloomberg opinion columnist. as we wait for payrolls 36 minutes away. tom: and again, i'm going to go back to equity dominance. all in all, the tape modestly improves. ellen zentner said you need 500,000 nonfarm payrolls to really shake up the system. that is a little bit low some of the others. jonathan: i am going to go to the get back to work effort, united airlines taking it a step further. they were asking new hires to provide proof for vaccination, and now they want the full workforce to do the same by october 25. get it done. lisa: it is fascinating to see how different the approaches rf different corporations with respect to either mandating it or t

normalization of balance by the fed -- balance sheets by the fed. the possibility for a longer dated yield curve as a result of that? >> much bigger than the consequences of tapering in net. because we know stock effect matters more than flow effects. the portfolio -- matters more for the level of long-term yields. than the simple net purchase. this is the key issue of the normalization of monetary policy. not before 2024 as we got the fed. tom: before we let you go, your views on the data we are getting out of the u.s.? factory orders stalling in july. are you concerned about indications of fragility in terms of the economic recovery we see stateside? >> we see suffering from the virus, and entering -- and intrigue in the third-quarter gdp, more in the u.s. and europe, but so far, the impact of the delta variant is limited. in the second quarter gdp, i think stronger than many expectations. -- were trading good, at an all-time high. so it is recovering much quicker. so there might be some -- to the growth prospect for the u.s. but could be even les

you'll get the fed moving. and i've been -- calling for the earlier move this year of the tapering and the fed has been consistent messaging that. it will be, again, a viable decline in the market when it actually happens yes, i do think the mark set should go higher but it's a time to shig are out what you want to own for the move going forward they go up 90% of the time but declined can be painful so you want to be in quality, not necessarily in value you can be in growth but lower valuation growth and you want to stay away from small cap if you do that you'll make a lot of money and you shouldn't be trading in and out of positions to get in. you should be concentrating your poll portfolio. >> i mentioned mike lee. mike wilson is out again he raises his year-end target to 4,000 from 3900. but the bottom line as i saw it if you're at 4,000, you're still looking for a 10% correction so i've got tom lee out there saying everything is going to be great. none of these bad things happen. consumer confidence, don't

i've almost 10 years at the fed, i've seen people from different walks of life come to the fed and be very effective in understanding and articulating and contributing to the monetary policy discussion. um uh in terms of my own career, i do feel like all of the different parts of my career have have helped inform and uh you know, and helped me in my career, having been in the business world and been at a regulated institution. i i see the other, i can see what it's that informs my understanding of, of regulation to some extent. um i would add, i when i first came here, i spent an outsized amount of time in my early years studying the parts of economics that are most relevant to the fed's role. so i think you have to do that if you want to be if you want to be part of the discussion about monetary policy around here. so, um there's there's just some of the ways i think about that question. and again, we benefit from having many, many great economists and the fed and we couldn't do our work without them, but but a number of other kinds of people who are able to contribute as well. and i

fed officials lining up.e begin with a big issue, no resolution for the big debate. >> used car prices coming down,. >> some of the inflationary pressures are moderating. >> it supports the fed's transitory narrative view. >> there's plenty of 2% plus inflation pressure out there. >> some of this will stick around. >> i just don't think we are quite through this inflation just yet. >> my sphere is on the labor side. >> we are still getting the inflation many people thought we would have to pass through. >> it will ultimately prove transitory. >> i don't think it is transitory. jonathan: i want to begin with you. have we resolved anything with the data this week? toriano: i think we have added -- victoria: i think we have added more uncertainty. there are transitory components and we saw that in the cpi number and some of the clips mentioned it. the car rentals have come down, airfares have come down, that we still have this other component we are not thinking of. that is moving higher. wages continue and you

a change in fed policy.just not seeing the volatility yet. that is the missing link we are likely to look for, changing over the next several months. lisa: you have a nuanced approach. this isn't just all of a sudden we will get a draw down like the one jon ferro is meditating on, but rather, we can see specific factors fall out of bed. does that mean the end of reliable double did earnings -- double digit earnings for the s&p after years of blockbuster returns? gina: most likely, what you see is a slowdown in gains. this has been our base case scenario since the praying -- since the spring. that as we migrate to a recovery, we are no longer in this surge out of recession and we moved to a more normal expansion pace. that becomes the case for earnings as well. you will not see 50%, 60% earnings growth over the course of the next. you will see that normalize and slow down to a 10% to 15% pace, and likely settle into about a 10% pace going forward. that will accompany, along with tightening policy from the and

louis fed president says he wants to get the taper done so the fed can have the flexibility to hike ratesmbat inflation. suggesting he could support earlier increases and asked esther george if she agreed with the end of 2022 for the first increase >> that's in the window of a reasonable outlook again, completely dependent on how the economy unfolds. so looking out to the end of 2022, '23, will mean judging a lot of job reports between now and then and looking at how growth in the economy unfolds and again looking at our mandate for inflation. >> so the immediate question for markets today is if powell sides with hawks or doves on tapering later but likely continue to insist that rate hikes are a different matter for a different day and so far markets seem to be buying that particular line we'll hear from other officials on cnbc. we have pat harker and rich clarida and fed chair powell >> he's going to be dovish the other people good cop, bad cop have come out with, you know, they let us know that we're on notice. but his job is to stay stable and day dovish my question is what do you thi

including the fed's preferred inflation measure. economic updates from canada including the raw materials price index. plenty more on the agenda. let's check in on the markets, a little under an hour away to the open of european markets. in asia, flat essentially across the regional index. the tech shares in terms of china, modest games there. 2/10 of 1%. s&p futures up 2/10 of 1% as well. the tenure real -- that's it from us. play more ahead. this is bloomberg. ♪ introducing xfinity rewards. our very own way of thanking you just for being with us. enjoy rewards like movie night specials. xfinity mobile benefits. ...and exclusive experiences, like the chance to win tickets to see watch what happens live. hey! it's me. the longer you've been with us... the more rewards you can get. like sharpening your cooking skills with a top chef. join for free on the xfinity app and watch all the rewards float in. our thanks. your rewards. it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet

if they're distorted by the fed being in the picture, the fed's about to exit, then we should be starting to see that priced in at higher bond yields. it's going the other way >> well, i think a couple of things are happening, kelly. i think it's like the football with charlie brown this has happened so many times and it gets taken away i think we're finally at the place, we've paid $5 trillion for this recovery. i think we ought to enjoy it and i think it's going to be different. so when the fed leaves, when delta goes away, again, whether that's in two months or six months, we're going to be in a different place. and i'd want to be invested before we get there. but you are in google. you're in facebook you're in amazon i mean, those are plays that should do better i would think in a sort of pandemic light environment? >> it's true it's funny because i i this the economy's going to be roaring ahead but our portfolio would probably be relatively even better if we didn't. but i've got to tell you this internet advertising model is the best thing i've probably seen in my career. people who

we have some breaking news on the fed this morning steve liesman has the news about what the fed might be doing with the asset purchases. steve? >> reporter: good morning, becky. shifting policy views as a result of the unexpected economic data. opened the door for federal reserve to potentially announce in september to taper asset purchases. tapering a month or so after interviews show growing support for faster taper timeline than markets expected than a month ago. the changing views follow the strong jobs data and higher inflation. the potential taper time there isline it looks like this centered around november or december taper beginning in october or november depending on how much advanced notice. last month, consensus was december or january. a taper lasting eight to ten months clearing the way for potential rate hikes no decision has been made pending the meeting and vote the committee could delay the announcement until november especially with data numbers are weak or new lockdowns. fed chair jay powell did not f foresee a large impact from delta variant. at the same time, pow

looks like the fed might be right in seeing the fed may trend down.u and i have been doing this for years, and one of the mysteries is the literalism -- elitism of the cash build intact -- do they need to dive into the patel all-dividend pool? margie: in those cases, it it depends on what they expect from their return in their stock versus other stocks. but it is common to see companies awash with cash. they have more cash now than they probably ever have had across the board. i think they are also holding it for a rainy day. that is good for business. they have the cash reserves if we saw an unexpected slowdown. tom: margie patel, thank you, pricing votes between dividend and coupon -- it is a battle right now, to say the least. lisa, i recall the day when one william gross said to me he preferred procter & gamble dividends over a yield, and basically the bloomberg and finance world stopped. lisa: you are starting to hear this more and more over the years. people owned equities and set of bonds, because you earn more from them, and this has been the

the fed has delivered on communication, markets are prepped and all that's left is for the fed to givenk anything being said right now means at the september meeting they give you the templet and say it's on. could be november. maybe that's the zone of uncertainty in there, in terms of timing. then it becomes about trying to emphasize, constantly that this does not mean higher rates right away after this process works through the taper process. because it would put the market on edge more than the buy in program. 2018 was perceived as a problem and perceived the fed got tight and stayed that way on autopilot because the economy was plateauing and weakening it's about the underlying conditions as well >> given all the commentary we've had, i'm surprised we're not ending it today. >> which is why he'll probably sound dubbish on the net basis >> and wasn't that long ago the phrase not thinking about thinking about was pretty common it's a long way they've had to help us travel >> which speaks to how things got better through the spring and into the summer, because we didn't anticipate tha

the focus is on what we hear from fed officials. not only fed officials.e spoken to a number of executive officials. what will that mean for stocks? maybe they will look at what the fed is looking at. two officials talked about the fed tapering after seeing employment numbers. we will also be looking at cryptocurrency and i will speak with jesse powell. a little lift to the european stocks. we are also expecting futures in the u.s. to trade sideways ahead of the markets understanding what the fed will do. this is bloomberg. ♪ this is bloomberg. ♪ ♪ >> the senate is now finally on the precipice of passing major bipartisan infrastructure legislation. >> investors for a half deck decade were pulling the wool over their own eyes on the policy environment in china. >> don't understand the game plan. >> this is bloomberg "surveillance" early edition with francine lacqua. francine: good morning, everyone. west bounding to bloomberg "surveil

i am told you spoke with a fed member.oe: yeah, on the podcast this week, we spoke with robert kaplan. the full episode is out monday, take a listen to what he said about a taper. >> i would be supportive of digesting these purchases soon, but, the other thing i would say is once we start the adjustment process, i would probably be prefer to have it more gradual. what does gradual mean to me? probably baseline over eight months, let's say. joe: for more, let's bring in matthew klein, the overshoot" and co-author -- "the overshoot" and the co-author of a book on trade wars. let's go over today's report and the fed. do you think the data we got today, strong, also confirming last month revised higher, is enough to make it clear they're going to start setting a day per tapering asset purchases? matthew: it depends on who you ask. there is an interesting speech earlier this week from richard clarida in, the vice chairman of the fed, and one of the architects of the new framework announced last fall, and he explicitly said that

the fed and potential. new taper talk in focus for the markets. the central bank kicks off the ate all virtual jackson hole summit and japan's order of more than one million doses of moderna's vaccine now suspended amid contamination fears and the biden administration getting billions in commitment from the private sector as it looks to ramp up efforts to fight the growing threat of cyber attacks. and shares of salesforce not slacking after the latest quarterly results. get it the company boost the outlook for the rest of the year it is thursday, august 26th, 2021 you're watching "worldwide exchange" right here on cnbc >>> and good morning futures right now basically lower. the dow flat the s&p 500 and nasdaq down fractionally keep in mind the s&p 500 crossed at 4500 level for the first time ever yesterday before pulling back slightly to close at a new record much more on that with craig johnson in just a moment the nasdaq notching a new record close. we're tracking treasuries as we gear up for the jackson hole summit right now sitting at 1.354%.

and we start this hour with all of those fed headlines that sent markets soaring. the s&p and nasdaq closing at new records, jumping more than 200 points as jerome powell seemed to tamp down any expectations for raetz hikes let's get to steve leishman in jackson hole this year. >> fed chair jay powell said out right he expects the fed would start tapering later this year if the economy continues to improve. but he left himself flexibility but not offering a specif month or at the beginning of the taper. he said inflation, it is past the test to start tapering and employment on the way to a passing grade. >> the outlook for the labor market has brightened considerably in months after faltering last winter, job gains have increased over the course of the year and now average 832,000 over the past three months of which almost 800,000 have been in services. >> powell said that the delta variant represented a risk but he still expects good job growth in the months ahead. inflation will likely prove to be transittory and rate hikes require a higher standard than tapering

are we really pushing forward with the fed rate hike expectations. ?ll that to say the s&p is down. yields are down one basis point. money going into tech. but broadly speaking, it is a heavy market. guy: a little bit of context. i used the phrase country the other day. alix: you said crunchy bits. guy: now she thinks it is hilarious. so she will not incorporate it into everything. alix: [laughter] guy: the employment data is worth paying attention to. these are job openings. this is really important data because it is indicative of the forward-looking element of the labor market. it's forward-looking. last month, the main data was a record. -- may data was a record. this data is even stronger, 10 million. the market was looking for 9.2 million. this is an unbelievably strong number, and it really emphasizes the skills gap, the mismatch in the u.s., and the fact that the demand story is there, but the supply side of the u.s. economy is not responding. this is a hugely important number. the previous number was important as well, 9.4, highlighting there

and in the middle is the fed.y cannot ignore the inflation side but want to give more time to the labor market recovery. francine: thank you so much, katharina utermoehl, senior economist for europe, allianz. coming up toy yoda plunges on a chip crunch. -- toyota plunges on a chip crunch. this is bloomberg. ♪ and there you have it- woah. wireless on the most reliable network nationwide. wow. -big deal! ...we get unlimited for just 30 bucks. sweet, i get that too and mine has 5g included. that's cool, but ours save us serious clam-aroonies. relax people, my wireless is crushing it. that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one upping itself. francine: welcome back to the open, we are 30 minutes from the cash equities open, and futures are pointing to a lower start on concerns over the delta variant, growth, supply chain issues including chip shortages. what is on your radar? mark: today is the bellwether of those moves, iron ore today. we are seeing a narrative t

lisa: coming up at 8:30, atlanta fed president raphael bostic, later patrick harker, and dallas fed presidentplan. you said you were interested to hear what raphael bostic had to say. he was interviewed by reuters and actually said he did think it would be appropriate to start tapering in october, should the labor market continued to hold in. so a little bit of a hawkish tilt there. i guess the question is how much does it matter. is it really the big three driving the boat? tom: keep this up. this is really important. on radio, we are showing images of raphael bostic. you've been down to the jp morgan house on madison avenue authority fourth, and in that room, he saved america. out of the outcome of the panic of 2007 is we need to have a central bank, except the other cities don't trust new york. we need fed members spread around the country. that is really what this is about. taylor: to go back on lisa's comments, the note i have in my inbox is now a voting number says let's get started. we are for for for. rafael bostic saying it's do this as quick as possible. you had kaplan, bullard, geo

worry about the fed, but watch price action on monday. said to you the nasdaq 100 broke out of range, when that happens, you are going to get much more upside, you are seeing it right now, i expect a bunch more into year-end as we get past the september where everybody's worried about it. look, what you have is a sea of easy money driving this. no bad news is affecting it right now. absent pullbacks we'll get pullbacks here and there. i expect some fireworks into year's end and usually it is led by nasdaq, nasdaq 100 semiconductors. looks like financials are joining for the ride as interest rates back up as i think the economy may start to accelerate again. charles: i will get back to you on the semis for sure. kim, of course the market also goes through these monster gargantuan droughts. in the 40s, the '70s, and early 2000s. that seem toes put the onus on making hay when the sun is shining. these moments come around almost generationally? >> i think i agree though that market timing is a terrible idea and you don't know you're in the la

. >> the fed has come out about this. the will not be happy to see the tenure approach 1% -- the 10 year approach 1%. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. a simulcast with markets on the move. on radio, on television, jonathan ferro, lisa abramowicz, and we are looking at a set of things. clarida's speech later. the virus. i'm looking at yields in the price of oil moments ago down to new weakness. jonathan: nominal yield right now, 1.1522%. you mentioned the real yield, record lows in today's session once again. crude, keep an eye on the lows yesterday. right now, $69.19. tom: let's go to one narrow. swiss franc speaks volumes, confirming this tentativeness. jonathan: just how live is this jackson hole meeting? how much attention should we be paying to this jackson hole meeting? vice chair rich clarida, if he takes the same line of governor brainard, i think we can look through it all to september. if he takes a similar line to governor walle

is this the fed or something else 12k >> i think it is more than the fed, brian people over the weekendfied by the scenes from afghanistan horrified is never really a good thing in stock market. i think a lot of confidence sort of ebbed in particular, we were thinking, brian, we have that hand in addition to the fed, the hand of perhaps $3.4 trillion in the reconciliation act some of which would be, you know, rebuilding and so forth. you are seeing now things like iron ore prices plummeting china not as nearly as bullish and accumulative of that commodity. i think a lot of this is basically people haircutting that bill and they are saying, if confidence in the president has ebbed, we are not going to see a $3.4 trillion bill we may not even see a $1.5 trillion reconciliation bill because that's such a razor thin margin in the house and senate right now, brian, i think the vix is up another 35% today. that's telling you a lot about how people feel about the market >> i guess you read my mind, jon. i was going to ask about the vix. i know the fed is going to get all of the attention i'm n

a realistic scenario, but the fed has told us as long as it is jay powell's fed as i assume be the cased will continue to look beyond those supply shock disruptions and thinking about price pressures in the economy, and that is the correct approach. if it stretches longer, than transitory becomes a little hotter and longer than they anticipated, but the demand-side inflation rushers really will motivate the fed to say things are getting too hot. lisa: what can the fed do if this is a supply-side constraints? what does easy money policy help with that particular issue? carl: in a longer run, it doesn't fix it in the quarter of two, but holding interest rates lower, that reduces the cost of capital and enables businesses to go out there and make the types of adjustments to expand capacity, invest in equipment and software, and address the higher level of demand. they build the infrastructure to basically address that. lisa: he doesn't think the balance will shrink and will probably grow in line with the gdp. do you think that is a realistic assessment, that we have moved that we need a ce

fed.t is very different here because we are contending with brexit and there's a severe shortage of workers for almost all indiscreet -- almost all industry groups. it is a small open economy, so it kind of comes at the u.k. from all sides. the bank of england is in a tricky situation, a bit like the fed, but even more difficult because it needs to fine-tune its message. tom: we stop the show right now to inform you of news that matters. you mentioned last hour, there's a chicken shortage? francine: there is, there's a chicken shortage because of the lack of drivers. i never get nando's because i know you usually get fancier places, tom, but it is one of the more popular chicken places here in the u.k., and they had to close about 104 stores because there's a shortage of chicken. tom: why did we have francine on today? there you are, chicken updates from the united kingdom. valuable for radio and television, coast-to-coast in america. what we are looking to is the one change this week. the

the fed is underpriced. the market is pricing three fed rate hikes.inst the backdrop of a very powerful recovery. if the market has to price more fed rate hikes, that means higher bond yields. that is the story we have just been discussing. the last three months we have seen terrific loss of growth momentum in the u.s.. growth has gone from 11% quarter on quarter in the middle of the second quarter two around 5% now. part of that is likely to be temporary. part of that is also simply the fading of the reopening boost. the market has to decide how much is temporary? how much is organic slowdown. we think enough is there to keep growth above trend and the fed will have to hike more than is currently priced. mark: some people would argue because there is so much liquidity in the system, it used to be when the u.s. equity market tanked, that drag the world down. when the u.s. catches a cold, the rest of the world gets pneumonia. there is this theory now that for emerging-market equities to gain or any other asian equity markets to gain and get momentum, y

less fed largess is not the same as an end to the fed's largess.l say, there is a distinct and there. jonathan: do you think papering leads to high yields or lower yields? lisa: great question. jonathan: i think the answer to that is obvious. lisa: it is absolutely not because when people were concerned about that a little bit ago, bond yields fell. jonathan: tom is struggling this morning. we will get you through it. tom: i'm looking at 31 billion dollars large from canadian pacific, and i think it speaks volumes about what you will see with corporations and a boom economy. they are going to do things. i got to be optimistic about that. i just don't have the angst on tapering others do. maybe i'm wrong. jonathan: marilyn watson of blackrock -- tom: she's like me. jonathan: i imagine she might want to talk about it. your equity market unchanged on the s&p 500. your bond market unchanged. yields at 1.3237%. it has a summer feel this tuesday morning. tom: it does. i should have worn beige. jonathan: good morning. this bloomberg -- this is bloomberg.

how much hinges on the fed policy? what is your impression of what a tapering would do at a time when the supply of treasury's coming out as declining? all things being equal, could it be a maintaining of the policy if they start to curtail the bond market purchases on the margin? tom: i think people understand i'm in a camp. taylor riggs, what's important is not the tapering but the calculus of the tapering. if they come out and say the first and second derivatives of those flows are going to be gradual and not damaging, that's mission accomplished. taylor: i have increasingly heard that the taper tantrum is behind us. we already had it. you could react a little bit. to lisa's point maybe some complacency in the market. the slow and gradual, dare i say equal as i have been pressing a lot of our guests, equal treasury, equal mortgage backed security. tom: we don't do mortgage backed securities. too early in the morning. lisa, what's important here it's nonlinear from a negative 1.01% 10-year real yield i have to say in

the release of the fed minutes is imminent. will there be more clues about the taper timeline how concerned are officials about inflation? we have team coverage, analysis, and the market impact. also this hour, packaging producers seeing costs spike, but get this, they plan to pass on all of it and maybe even more what are you going to do if you can't get the cans to sell your beans? no questions asked here. our inflation nation series focuses on this key economic sector and the ev revolution will transform the transmission grid. the demand for electricity is going to do nothing but that, go up top analysts will tell us which stocksexposure t the buildout >> thank you very much and as we wait on the fed minutes, here's where things stand. let's get a quick lay of the land the dow down 46 points the s&p down six, and the nasdaq is up six right now. as for the bond market, the yield on the ten-year up just slightly, and home builder stocks, there's the ten-year, 1.295% by the way, the home builders are higher despite a sharp drop

as a professor and now as vice chair of the fed i'm wondering when the fed chair delivers a speech like this and the market goes up 250-plus points, how do you view this do you say, well, we just threw him some candy with a dovish statement by the fed chair, that tells me the market was concerned we were going to be too tight and make a mistake and how much concern do you have given you had at least three hats on in your life that markets are frothy right here and fed policy is adding to it >> well, look, what i would say about markets is that they're difficult to forecast and even after the fact sometimes difficult to diagnose. what i would say about stocks we've seen earnings numbers come in certainly corporate praofits hae more than rebounded. i think that's an important element. look, we have a very powerful set of tools but they're few in number we can adjust rates and our balance sheet. congress has given us a mandate. if we put in place the tools that will help us achieve those goals there will be impact on financial markets and we understand that. in terms of my reaction today,

after the fed chair jay powell stressed that the fed will begin to scale back the bond purchasing laterments are not soon. >> it's not a direct signal of the signal for the timing of interest rate liftoff. >> he also talked a lot about inflation, and why, according to the fed chair, he thinking it would be temporary krishna guha joins us now. should we pencil in tapering guidance at the september meeting and tapering to begin in the november meeting that seems to be where wall street is now. >> i think that's a bit right, where you do expect it in september teeing up in effect a tapering decision and tapering plan in november there was nothing in powell's speech today that suggesting the fed is getting cold feet more broadly he said a dovish framing around inflation and employment and the rest look, what is not to like here from a risk asset perspective? he was optimistic about the outlook, right he was dovish, edefiantly dovish at a point, and while he made clear they moving toward that tapering, nothing hurried, nothing rushed that suggested the fed might be, you know, turning hawkish

the fed may be moving up its taper timeline possibly to next month. can the central bank avoid a taper tantrum? and which stocks could benefit from this major market shift >>> and inflation nation we kick off a week-long series looking at how different sectors are handling rising prices. today consumer staples and the names that can best withstand this growing pressure. >>> and get back to the office that's the advice from former banker bill cohen. he says the future of wall street may depend on it. we'll speak with him later this hour kelly? >> all right, tyler, thanks. let's get right to the markets, though the dow, the s&p and the nasdaq are all seeing small sidelines dow and s&p just a few points from seeing positive territory the nasdaq well off the lows, down 67. and we see the 10-year yield as well, dipping as we talk about the fed maybe moving up its timeline for the taper more on that in just a moment. we're under 1 1/4% right now those concerns about the fed are also sending the price of crude lower. pressuring energy stocks like exxon, chev

kaplan at the dallas fed.t look at the theory or the parlor game, we try to avoid that on surveillance, and just look at what they are doing, what they are saying come and maybe what they will do offer real data. jonathan: coming up on the open, will be catching up with krishna memani as we count you down to payrolls friday on bloomberg tv, on bloomberg radio, for audience worldwide come alongside tom keene at lisa abramowicz, i'm jonathan ferro. your equity market advancing .2%. your bond market unchanged. from new york, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. landlords have gone to court to challenge president biden's extension of the coronavirus eviction moratorium. the alabama association of realtors says the move goes by a ruling by the u.s. supreme court. the president has warned the extension could be challenged and urged lawmakers to come up with their own. new york governor andrew cuomo is struggling to hang onto power. he stayed inside the executive mansion yesterday,

there is a compelling need for the fed to create a digital currency. i am highly skeptical in all the recent exuberance about cbdc's advocates point to many potential benefits of a federal reserve digital currency. but they often fail to ask a simple question -- what problem would a cbd solve ? -- what problem would a cbd solve? alternatively, what market failure or inefficiency demands this specific intervention? after careful consideration, i am not convinced as of yet that a cbdc would solve any existing problem that is not being addressed more promptly and efficiently by other initiatives. let me start by clarifying what i mean by that. put simply, a cbdc is a liability of the central bank that can be used as a digital payment instrument. for purposes of this speech, i will focus on general-purpose cbdc's. that is cbdc's that could be used by the general public, not just by banks or other specific types of institutions. a general-purpose cbdc could potentially take many forms some of which could act as anonymous cash like payments. for this speech,

if in doubt, blame the fed.