we have a daily fed show, it consists of the new york fed president and minneapolis fed president, atlantadent. again. how many times do they need to come out and reiterate, we are staying course. if you are pushing back, that is on you. jonathan: what are the vibes? what does that mean? what are vibes? lisa: how are you feeling today? jonathan: the vibes of the economy? that is sensitive. [laughter] talking about the vibes of the bond market from td securities. we keep celebrating your wonderful call on yield curve and version you said negative 40, maybe -50 long before we got those levels. two tens -43, you've got a crystal ball. what is driving this? >> i do not have a crystal ball. there is a lot of uncertainty. the reason for the inversion, our payroll forecast argues for more inversion. is this idea, the economy response to a lag. there is a lead to higher interest rates. the labor market is tight, we are looking for a 300,000 payroll. the report is going to keep the fed on the mission they are going to raise rates. the front end is -- we are looking for 5%, the market is price for 4

see the fed weakening.ow we are having the conversation about this concept -- krishna, you can explain its but i will make it simple. some believe there is a rate the fed can go to before we hit turbulence in financial stability. there is another rich they can go to which might stabilize the economy. they are different points and they run into financial stability concerns before they roll over the economy. can i get your thoughts on that? krishna: the star star concept is an interesting one. there is no position whatsoever. we don't know where the star is or the star star. everyone on twitter was looking for a pivot. the point i'm trying to make is we don't know what the number is, we cannot estimate in real-time. it is a construct. in a policymaking -- it is a meaningless number -- meaningless number. whether that moves around a lot, we don't know. jonathan: you agree with the sequencing? do you bump into financial concerns before they get what they want to bring down inflation? krishna: if the fed had not

hawkish fed speak, more fed officials reinforcing the need to keep hiking rates.he other factor is general anxiety around jobs data due later. in the currency space, we see the yen trading above 145. that is an intervention level we are watching for. in terms of where we go from here, the yen's top forecaster is saying the yen route is over on the debt that the fed will be forced to start cutting rates next year. markets expect 150 basis points of moves priced in over the next six months, compared to 100 basis points for australia, also playing into the bond space. check out the 10 year yield for the aussie. it is very close to the 10 year treasury. compare that to june when the aussie 10 year was about 90 basis points above that. perhaps we are entering a new era. shery: we continue to watch treasury moves closely. we are seeing liquidity worsening and price swings being very pronounced. talking about the 10 year yield, back above 380 and rising for a second session as we continue to see more hawkish rhetoric from the fed. even now, loretta mester is speaking at

i think people forgot what fed officials tend to lead and how the fed watches.n you hear all the fed governors saying the same thing, it makes sense to to say this is what we are going to do. more generally, fed policies usually established with, at any time, a to two and a half year timeline. the fed is saying this is where we are going to go, and we're going to get there consistently, it's not seen as a short-term move. it's a long-term plan. if the economy, when we get to 4.5, i agree that is a reasonable number, i would still be frontloaded, i tend to favor the march timeframe, when we get to 4.5%, if the economy is not showing cracks in it, the fed will sit there and let it grow to 2%, that is their long-term growth outlook for the u.s. economy. thing -- they will be very happy with that number, as the economy has adjusted to it. we will see if there are other things that happen come next spring, that may require -- haidi: a dysfunction and how the market is functioning. shery: especially in the treasury space given what the fed has done with qe, this chart

. >> this is a chance for the fed and broader economy. >> without the fed made a one-off adjustment to get to policy rates of the 4.75%. >> i think we will see another 75 basis point move in december. >> the question we have to ask is, is a 4.7% policy rate enough? jonathan: we will ask that question. a great lineup george bory, , james athey, and priya misra. many people looked at the cpi and change the call for the fed here you didn't why not. priya: we were already looking for 5%. that 75 basis points in september that was baked in the cake for the report is what happens in december. we are calling for 50. at some point the fed has to downshift, even 50 is enough, the going to 75 in december is still a tricky one. the fallout from the u.k., the fact that it is a less liquid treasury market, the fed has to take this into account. and if they get it and we are looking for some downshifting in the next and we have two more before the december meeting that the fed does 50. i think they can signal they have more hikes to go maybe five or higher than five. they don't have to go clips of 7

or is the fed right? >> i think the fed is right at this point.here are a number of reasons to believe that inflation is really a persistent problem that has not been tackled at all. i think next to her the week after when we get the upcoming cpi report, we will see surprising high rates on cpr. the leading indicators for inflation are still pointing up rather than down. when you look at the strength of the labor market, i know that there are a couple of data points that we have gotten that are starting to show the first signs that they will start to weaken a little bit. we are not nearly at a point of the labor market where we are getting persistent down pressure with inflation. it going to take several months. the fed is not capable of stopping the rate hikes in time to anticipate that turnaround. i think that the market puts a lot of credit towards our credibility to do that. alix: to that point though, you mentioned the softening and loosening of the labor market. how quickly can the labor market read rates question mark is a possible one mont

it peaks out before the fed is done often time the fed keeps tightening and the ten year stops. so i think the bond market is close to blinking. and even if the fed continues i think the stocks might be responding to that already >> i don't know, jim, the two year is back to 450 today. >> well, yeah. but i'm talking about the ten year yield that tends to lead the fed. the ten year yield rose at 433 intraday, it might go up a little more, maybe four and a quarter it's going to peak out if it stops there, and i think it will, the fed might continue to lift the rates. in lifting the rates, the fed is lowering inflation fear and lowering recession fear. if inflation fears the dominant force we have more bond sellers than buyers. if recession fear rises we get more bond buyers than sellers and i think we're getting close to that. >> sameer, what's your take? you don't think the fed is going to switch policy paths any time soon >> it just seems premature when you look at longer rates and historical relationship to gdp or inflation, history tolls you higher rates are warranted trying t

>> we should be, and i think the fed is concerned about it. it's just not their primary concern at the moment. their primary concern is they are choosing the lesser of two evils and i do think we're going into a recession and they are choosing what they hope to be a mild recession to get inflation down overtime rather than something that's more severe. it's easier said than done. the worst case scenario is to let inflation persist and have the mistakes of the 1960s and 70 s taunt the fed in october, appropriate they are haunted by it. they don't want to have a more sustained bout of inflation because let's face it the reason that most people feel we're already in a recession is because all that they gained in wages as the economy reopened, they've lost and then some to the rise in inflation so they literally feel like they are losing ground even though we've generated a lot of jobs. charles: but in a way they are. if you consider that real wages have been down every single month since april of last year. i mean, you don't have, you have less p

i cannot begin to make a case here for an easier fed, a pausing fed, a pivoting fed. i've got a fed that's got to keep going straight ahead because the thing they were most focused on, scott, the service sector did accelerate it >> i have it right in front of me quote, evidence of falling inflation is everywhere except in the inflation data. fed choice, wait because the pipeline will work through or keep hiking until inflation starts to fall ignoring lags no support in the economic theory for the latter as well as expectations anchor, they are. how do we take this? >> i will say this for ian he has been more optimistic i mean he's very good, but i think he's been wrong in his optimism i think he believed by the summer inflation would be falling. i don't know whether or not he discounts the ukraine war. he remains optimistic telling you this is going to change and turn the other way i don't think the fed is going to react to the indicators that he and i think the professor we have coming up are going to react to that. if you do not see it in the data and convincingly i

that echoed other fed official statements from last week. we heard from the chicago fed president. he said the fed needs to get to a level policymakers can feel comfortable pausing to reduce the risk of overshooting. it is interesting because a lot of these fed speakers have noted investors are getting confused with a fed pivot they are indicating even if there is a pause in the policy it could stay there for some time. haidi: we were just talking about these warnings from the imf and the world bank. we heard talking about in balancing act. take a listen to the world inc. president and what he has to say about the risks of a global recession. >> the risk and the world -- the real danger of a recession next year. the advanced economies are slowing in europe. the debt levels for the developing countries are getting more burdensome. the rise in interest rates puts added weight on it. the inflation is a major problem for everyone but especially for the poor. haidi: definitely a consistent coherent theme when it comes to these warnings we are hearing from these institutions. >> absolute

. >> it is don't fight the fed it is don't fight the fed.ou know what? going back to what i said if this market will rally when the fed's done that's the question when is the fed done >> not anytime soon. >> i take comfort from what james bullard said on saturday or sunday. he has been thought leadership within the fed >> so, josh, you want to weigh in on this by the way, he says other than twitter which they did purchase in the third quarter, you know, betting that musk was going to have to eventually pay full price, that was a great bet by them we expect one way or another the deal will closeout at the orig originally agreed upon price they believe we're still in that bear market. >> i think the most interesting thing about the letter is that, you know, what they're really doing is doubling down on their belief that they're going to be mispricings and that, you know, a lot of the return is going to come from the type of market environment that you're in so calling it a bear market is important. i know earlier this year there was a lot of d

week we get the fed. there's a lot on the calendar. everything is still running through the bond market. it's starting to get to the point where, as you mentioned, this negative momentum, this negative breadth is looking like an opportunity to start building position and that's what we've been doing. >> clearly, inflation has to moderate to some degree for the fed to consider slowing down at all. clearly it's predicated on that. as you say, a bit of a cushion for value being created in fixed income do you think the fed has potentially gone too far in terms of what the economy can handle going into next year because that's another bull case for treasuries here. obviously, we worry about a recession kicking in >> yeah, no, absolutely. i think your treasuries are a great hedge to that recession risk or the deflationary side of shooting to the other side when you start to think about where the fed's been, we know monetary policy reports in a lag. jay powell admits it this is a good thing when they say, maybe

we are trading the fed as opposed to the economy. it is not growth concerns, there's very little data that would trigger the kind of data that we have seen. the rally we have seen, as we you have indicated his excitement about the idea that the fed is coming to the end of it cycle. it should not be a surprise, ultimately the cycle has to come to a positive not to an end. it is driven more by that than actual growth concerns. while it might seem like the equivalent, does not. this is volatility this is not the start of tightening yields going forward. i think will still see more volatility of the no doubt yields will look attractive and have done now. jonathan: a lot of people would agree with you this market in the last few months have been an absolute mess. coming up in this program, up next the auction block, junk bond issuers sticking to the sidelines, the slowest october in 14 years, that conversation is next. ♪ jonathan: live from new york i'm jonathan ferro this is "bloomberg real yield." is time for the auction block really ki

to 4.5% i don't think the fed wants you to think about i think you can think about does the fed really have to go to 5 remember, scott, didn't we have siegel on i asked him where do you want the fed and he said 75 or 50 and he's not that far from the fed. he's your dovish guy >> he wants them to stop after that >> remember -- after that, yeah. >> 275 to 50 and then take a look around. enough with the powerful rate hikes which have already been powerful let it go through the system we're already seeing inflation in many key areas rollover they need to have a little patience to what they've done and let everything play out. i think that's the point >> right enough with the talking tough, right, bringing out the guns, okay, we get it. >> did you interview rogoff. >> i did not >> well, that was certainly on-air as well who said 5% i just think, look, here's the question i think for the panel, if you don't mind, which is where's the risk on this is the risk that the fed does more than 4.5 or the risk that the fed does less, in other words that would be an opportunity? i still think the risk

i am wondering whether it is the fed. i am wondering whether or not it is going to be the payrolls on friday. you get a strong employment number friday and that could shake things up. as alix says, fmc kicking office meeting in washington tomorrow. markets pricing at a 70 basis point hike. the question from here is what could spook the markets? you look at the dot plot and we are signaled already to go 75, 50, 25. where the terminal rate ends up is a nuanced element, but let's kick it around. what spook the markets? this is rtf -- chief rate strategist. what could spook the markets this week? what could the fed to spook the markets? ira: if chair powell were to say that the terminal rate could be higher than the dot plot and expecting ducks in december, which is a will provide us, but if he starts to hint that it is not so much the pace but the level that could go higher, that could spook risk asset markets. for the treasury market, that means further inversion of the yield curve when we could see two your notes continue

if the market believes that the fed's not, not so great. and if you listen to the local fed speakers, you get the hawkish talk and it doesn't make the market feel all that good, rates go up, stocks go down. pretty simple. >> you got it, scott for us as we looked at the balance september was really rough. and kind of looking at what happened with the b.o.e. and obviously australia showing some restraint from a policy perspective. i think that's what we saw from a bounce perspective and seeing this pivot in a slow down at some point soon. to brin's point you have to really believe not really what they say what what they do from my perspective the fed had been engaged as they had been, if you're looking at pce last week still was above expectations albeit it moderating and we had cpi which was an important number to follow i just don't see an environment here or even in the near future where the fed slows down they're moving to restrictive policy that's what's on the docket, and that's what they're going to do. >> weiss, it sounds like you wro

at the fed. she said policy is not yet restrictive. we are looking at how high we have to push rates, not how soon we will start hiking them yet. jobs this friday, cpi report on friday will shed another light on this. if the fed doesn't do 75 basis points, they revert back to 50 with financial instability in so many parts of the world and may be signaling a softer path but in terms of pivot, stopping rates, no way. not right now. >> will they be taking cues from the dovish pivot or the fed's hawkish talk? kathleen: we know that adrian or said just last week that the policy path now is very mature, well advanced. i think we are going to be looking for any hints he gives about where they are in the cycle and if they are getting closer to being able to start pausing, slowing this down. a 50 basis point hike by the rbnz to 3.5%. it would be the fifth 50 basis point hike in a row. the implied cash rate by next year is around 4.7%. that is where a lot of economists are seeing it as well. inflation, tha

>> i think the fed has more to go but not significantly.t's more in contention if you are in a more positive area. we have more fed hikes behind us and they are pressing and 75 basis point hike in november. there is also the price of 50 in december which would take us for round4 which would be a terminal rate. i think the fed has more hikes behind them. the risk of doing more damage increases incrementally. alix: does the call from you imply that inflation material it comes down to 2% or will the fed have to top out because other risks arise? >> 2% inflation i think that will take years unless something else happens stop i think they are open for a nice slide back, maybe down to five. barring anything catastrophic, that's where we will end up normalized. the fed is not actually allowed the rate hike to be consistent. guy: if the fed can't inflation down because of the financial accident and if inflation settles down and they get tentative 4%, what does that mean for assets and the bond market and what does that mean for equities. i thought

it makes sense the dollar strength has been on the fed and the two-year follows the fed. but as you look at august 1st, pairing the dollars with the tens, you see divergence there the divergence is, the dollar is going down, but ten-year rates are going up many are reading, the dollar is what you're supposed to pay attention to and it will turn the ten-year down. and if that is the case, maybe it really lends some credibility to the three-month versus ten-year three sessions in a row it's been inverted. it's minus 7 now it hasn't closed with this type of inversion since right around march of 2020 for covid. and the t-bills are marching right along every week with their auctions and going higher right with the fed but the ten-year is marching to a lot of different issues, not the least of which potential recession in europe and slowing here does the aversion mean six months to 14 months we'll have a recession? i can't tell you that for sure, but what i can tell you is this spread has a good track record tyler, back to you >> let's talk about that dollar. why does the dolla

you look at the fed.hat they want to have happen, something they are comfortable with, that probably leaves less room for the fed to shock the market, to have to do any of those things. the market at the same time is pricing in that kind of level and rates. that helps the market get going. jack: is the fed seeing something that makes fed officials think we are finally seeing results? ben: there are signs things are slowing down. an interesting earnings report from an employment firm that pointed out that hiring is slowing down among big companies. the fed is aware that is happening. they know they hiked rates very quickly and monetary policy works with the lab. they came to the point they want to see how it is impacting the economy. jack: companies would rather pair back than go forward. what are you watching next week? a lot of earnings. ben: we got apple, facebook, meta, alphabet, i was about to call them google, amazon and microsoft. those are five of the biggest companies in the market. if they do wel

does the fed 75? -- does the fed go 75?g at a short covering here in equities and bond. positions got stretched last week. the bank of england has blinged already. the market is saying we have a weak manufacturing report, the fed will be blinking soon. i don't think that's true. the rally is telling us there are those worried the fed will blink. i don't know if there is a direct correlation yet. we have to wait for the friday labor market report first. lisa: given the volatility we were talking about? tom: we need to have tactical durations. you have to be managing your duration exposure. you cannot be forever shortchanging long-duration. your credit risk exposure on the high-yield side. we are looking at bonds. lisa: what exactly are you buying? i'm looking at a bank of america survey in investors. they were more underweight investing rate credit then yield. basically saying they will not see something it can do what they have in the past. they will be rate-driven and slowing borrowing costs around the world. tom: i think

is this the one where the fed pivots? is this the one where the australians end up looking like they are out of whack with everyone else? it does look inconsistent with the metrics we are getting. >> a lot of the time, maybe tell me later. a lot of the time, they have proven to be quite the bellwether for trends. that is because australia is a small economy. they are close to what's happening in global growth. also with the ion china being a trading partner, it is representative of what's happening globally. as far as being representative of what we are seeing globally, australia is a good represented. i would not be surprised if we see some version of their central bank starting to consider a pivot. alix: to that point, pivoting doesn't necessarily mean stop hiking or cutting. i feel what a pivot represented for the market three months ago, it means longer. we are back to 50. >> i think that is the new thing that is important. they're not topping the hiking cycle. they are thinking about smaller increments going forward.

it turned out they didn't have depository accounts of the fed, so they can counter man what the fed was trying to do by raising the rates they were paying on reserves. then, they had to get these guys into the act. they say, you get the same rate, -10 basis points. that money is or cash, doing nothing -- pure cash, doing nothing, is collecting in a guaranteed -- government guaranteed account. by december 14 if they raise another 150 basis points, getting over 4.5% on that. that is how the fed, for so long, managed to engage in purchasing government debt and mortgage-backed securities which our agency guaranteed government debt and not have inflation. now that was triggered by the fiscal free-for-all. and i noticed this morning cnbc cited a new poll, that americans now have less confidence and less respect for the federal reserve are you -- for the federal reserve. we can see why. look at their mandate, judging by their own standard, stable prices, over 8% inflation were four times. they failed to that. it doesn't matter to me. when i hear chair powell say price stability is the responsi

we don't expect the fed to pivot .course as we've heard fed president bostic speak today, the tone there was still very firm. we believe it's going to be a while before we hear more positive news coming out of the fed. >> when is the point to start buying stocks again? do you have to wait until the fed has made it clear that they are at least going to stop hiking rates? do you make your own forecast on how inflation is going to play out? and be that your guide as to when you are hopping back into the market, or do you stay in cash in definitely? >> we definitely don't want to stay in cash. the reason we are holding is we are looking for opportunities down the road because we do believe the u.s. economy is still on track to grow. but what we are looking at in the near future, i.e., the next two weeks, when reporting season starts in earnest, there a lot of uncertainty for many people, because while we have had the bar set low with revisions we've had so far year to date, you still have expectations for what 12% or so pr

>> yeah, scott, and a very hawkish cleveland fed president fed policy to become restrictive. sheports a funds rate she says about 4.4% this year that's the medium fed rate and about the median for next year she does not anticipate any cuts to the fed's target range next year she says the larger risk comes from tightening too little, not too much she says -- mester says there's been no progress on inflation, quote, cannot even say inflation has peaked yet, and she's worried inflation may move higher this year because of the ukraine war, rising gas and energy prices as well and also says it would take a couple years to hit the fed's 2% inflation target she does see, however, low levels of financial stress but the fed remains attentive to those financial vulnerabilities. here's a quote from her speech saying being cautious means the fomc should persevere and taking policy actions to return the economy to price stability >> i want you to stay with me. i want to show everybody what the markets are doing. we had come off the lows of the session at least for the moment. we're sittin

the fed rate hikes are even more unfair to middle class than fed rate cuts, folks. jay powell and company are destroying the middle class. we'll go into this with smart details with danielle dimartino booth. plus president biden stepping up his war on oil companies and capitalism. tracy shuchart on the cost of this dangerous political move. what would you pay for a twitter check mark? share with mee @cvpayne. i got a whole lot of good once. all that and much more on "making money." ♪. charles: needless to say it has been one heck of a month for the stock market and everyone is wondering if the cyclical trends, by the way they were perfectly aligned. this is market history in this year's session. then all of a sudden came jackson hole. yikes!. okay. powell of course, he blew this whole thing to smithereens. history went this way. the market went that way. we're sort of in the same pattern right now but if powell says the right thing, many people wonder if we could jump back up there to get it all together? mean while many professionals, here is the thing though, many

charles: on the fed, peak hawkishness? >> the fed they are as hawkish as you can see.rgument here. you go back to the september report, what we saw there, you saw on a silver platter the bears, ultimate thing for the bears. 1964 on this day, jim marshall for the vikings, fumble on the ground, picked up the fumble, ran it back, scored a touchdown spiked it, went to the wrong end zone. the bears had this market, and had the ball on a silver platter and the market went the wrong way for them. >> right. >> when you see the market rallying on that bad news it starts to tell you something that maybe the sentiment has gotten a little bit washed out here. charles: nancy, we've got some big earnings after the close. i know, i know microsoft is a name that you like. what are you expecting from them? >> well, i always hate to talk in front of earnings because you never know but they have been pretty reliable. they affirmed guidance for the fiscal year last quarter. i think we'll see tighter control on costs. they have been trimming employees, they have been cutting costs. then i'

will the fed be forced into another jumbo hike? we discuss right here on bloomberg. ♪ >> i think we are headed for a collision of some kind or other, and we have just got to manage that carefully. the sooner we start managing for some slow, the better we're going to do. chairman powell was way late to come to that recognition, but he now has that recognition and should be supported in that. manus: former u.s. treasury secretary larry summers on his outlook for the economy to keep tightening. christian kopf is our guest, head of fixed income at union investment. with the drawdown in the bond market, this collision course is breaking something. we are far from broken in the treasury market, we are just getting started with this drawdown by central banks, is it a fracture or the beginning of a break in bond markets? christian: i think it is neither a fracture nor the beginning of a much bigger selloff, i think we are nearing the end of a selloff. if we look back in 2020 this has been a year of three parts. the first part went from jan

the market is focused on fed pivot.have to wait for it but my fair value is 3650 which is not particular he attractive to bond or credit markets. guy: it is the 19th of october. some of us remember the 19th of october 1987. thank you very much indeed. coming up, we will talk about what is happening with the fx story and the yen is sliding against its lowest level. investors are focused on the policy gap between the fed and the boj and we will talk more about this in a moment. this is bloomberg ♪. >> we will not see weakness in the dollar until the other economies do as well or better than the u.s. in terms of economic activity performance. in the final analysis, rates follow growth. if you are doing well, you are likely to have inflation. let's go back to growth. >> we had about 170 base it's of gross margin so we are dealing like every other industry in every other company with inflationary impact in managing the challenges now. there is a great job and is -- minimizing the impact on gross margins. we think we are well

hawkish fed talks casting doubts on the pause. plus gains in energy trade pumping big profits this week. up 14% as crude has been on a climb. later, a major move in marijuana stocks because of an executive action by the white house. elon musk's new move as he tries to bring the twitter deal to the finish line. twitter says not so fast. this is fast money, we are live for nasdaq market, i have a whole house tonight. karen, dan and guy all with me. we started breaking news out of the fed governor, christopher waller just now starting to speak at the university of kentucky louisville. steve leishman has all the headlines., steve. >> throwing more cold water on the pivot trade, he says he anticipates additional rate hikes into early next year. current policy is slightly restricted though he is starting to see some adjustmen , more on that in just a second, but he says recent inflation reports do not support a slower pace of rate hikes, or a lower terminal policy rate than using vision. policy he says must be used aggressively to bring

louis fed president next.rg. ♪ shery: we are watching asian currencies closely especially as the japanese yen is close to the 150 level. we are hearing from the finance minister in japan that they are watching the forex market with a sense of urgency that they cannot condone excessive moves on speculation, and that will continue to act appropriately on excessive moves. of course we have a speculation about potential intervention again coming from japanese authorities. we are also watching what's happening with the korean won because we are seeing a really significant weakness in that 1430 one level against the u.s. dollar. we are hearing from the korean authorities closely monitoring short-term money markets that they will swiftly resume purchases through the bond stabilization fund. we had speculation from local media this week that korea was considering temporarily banning shortselling of shares. we are now seeing some remarks coming from the financial services commission when it comes to closely monitoring

the fed has been watching the puck go by. they were so late to the game and they are making a bad situation worse because they are chasing inflation down the street and they are slowing the economy and that's what ceo 's are seeing and they are in the trenches, but charles, here is the good news, right? i was very cautious, we were very concerned about some of these and we're still concerned but it's no secret that the fed is leaking out that there could be a pivot on the horizon going into mid-term elections. there's a setup here that's actually pretty optimistic, charles, and that is that whole mid-term concept. charles: let's talk about that then, because there's already a seasonality thing that goes with this. there's already a traditional seasonality associated with mid-terms, but i've noticed even in the last few sessions as the polls point to republican s taking the house and the senate, it seems to have added a little bit more vigor to this market, a little bit more u mph to this market, right? >> charles we're coming

, a more aggressive fed. same story, but if it does feel like stocks are reacting more negatively than maybe they were a few months ago, this link goes to show that. haidi: global economics and policy editor kathleen hays, and cost asset reporter emily graffeo on those market moves. let's get you to vonnie quinn in new york with the first word headlines. vonnie: boj governor kuroda has pledged to maintain monetary easing. he spoke at the annual meeting of the institute of international finance in washington where he defended boj policy, saying japan's inflation is different from the u.s. and europe. he said the central bank need to continue easing to secure its inflation target. he also reiterated his view that japan's recent currency intervention was appropriate. >> we continue our monetary easing in order to achieve 2% inflation target, or price stability target. the economy is still recovering from the pandemic, so we have to continue to hold the economy to recover. vonnie: the bank of england governor and

what does the fed do it? that's the story what does the fed do in >>> in the meantime, president biden says the risk of nuclear armageddon is the highest. he says he knows vladimir putin well and he is not joking about biological or chemical or nuclear weapons. biden said we have not faced the armageddon since the kennedy administration in the '60s another geopolitical risk or more >> gray swan >> the risks >> gray swan not really black it is not unexpected i saw the cover saying we are stockpiling radiation. >>> cannabis stocks. now you don't have to worry about simple possession. surged more than 30% yesterday after president biden pardoned thousands of people convicted of simple marijuana possession. called on the governor nos in te country to follow suit 6,500 people federally a couple thousand in washington, d.c. because that's part of the purview. many more throughout the states. we will see if the governors go along. popular in terms of polling. the president instructed his attorney general and hhs sec

>> i don't think the fed will pivot. fed is determined they are going to make sure they stamp out inflation. we are a long way from there you have headline inflation still at 8.2%. core cpi has been growing well over 6%. i don't think the fed is at the point they will pivot. >> kevin, do you look at the equity market on friday and say this is a head fake? these are folks who are too opti optimistic how do you rationalize >> andrew, you are in the bear market we will have the moments in which we have these in the market go up there are going to be -- you will have these little mini rallies. at the end of the day, with inflation as high as it is, i don't think you will see multiple expansion it has to come through with earnings as you well know, about 40% of the s&p 500 earnings come from -- excuse me, revenue comes from overseas and 27% of the profits come from overseas with a strong dollar, that will impact earnings. i think what you will see going forward is that you will see earnings under pressure. i find it very diff

that is the potential for the fed. they have to tighten. >> it doesn't help that oil is spiking back above $90 a barrel for brent crude. that certainly makes it harder to say that inflation has peaked >> exactly oil prices moving. the fact that rents. the high frequency for rents is slowing. it is a lagging caindicatindica. we know the housing market was very strong last year. that is a big chunk of inflation. we think housing inflation continues to move higher cpi in general is an indicator lagging which the fed is focused on it. we are not seeing signs of slowing down they have to inflict as chair powell said being on the economy and financial conditions before they can control inflation >> like owning bonds for liquidity and 10-year treasury what is the trade? >> i like this approach. i think we are seeing liquidity in the market impaired, i worry about financial accidents. look at the uk we are getting large moves there. i would say having liquid assets so you don't sell assets or have a bit of staying power cash i

have a long ways to go, the fed is going to continue. when the market realizes that, we might see some pullback in the gains we've had the first couple of days this week. kriti: that brings me to the timing of it all. back in 1962, i don't expect you to know what happened then but basically it was the year of the cuban missile crisis but also the year of nine months of declines in the stock arc it only to get turned around by the cuban missile prices -- cuban missile crisis. is that what we need to turn the story around? >> it's not the ukraine issue, it's also the fact we are in a midterm election year. both of these issues are playing into this sentiment. typically in a midterm election year, you are also positive 6, 9, 12 months out. there is support for the market and if we see services continue to come down a little bit, obviously we have the jobs report the jolts number, let's see if we get participation rate going higher, wages level out. these are more data points that i think the fed will take hold of and start to possibly chang

one the fed is not looking at this. what the fed is looking at is inflation.hat is their big thing right now. they want to find inflation. they will keep hiking rates until the inflation number gets more toward the target of that 2% goal. they will hike rates 75 basis points next week. probably 50 basis points. what we're looking for there, more importantly language from the fed they will slow the pace of rate hikes. that should be fairly good for the stock market. but what the yield curves tell you, never in history have we had this many yield curves inverted and not gone into recession. now soft landing that generally suggests weak growth but not a recession. so, what the yield curves are telling you is we're likely going to have recession sometime next year. might be a small recession. it will depend a lot on you know a lot where interest rates are. we have interest rate hikes not in the economy yesterday. charles: i'm hoping the fed, everyone is hoping they don't wait too long. i have less than a minute to go. i have want to ask you about the massive activ

the fed faces a dilemma this week. people are wondering how they can signal a cause and make it hawkish? how can they offset the potential rally with easing of financial conditions? jonathan: you get the sense this is shaped by the politics at the moment and even on wall street, economies are talking about what the fed will do. the fed is doing exactly what senator sanders is worried about, trying to get unemployment up to get inflation down. i think it's something that's very difficult to communicate. lisa: has the possibility of a soft landing going off the table? mohamed el-erian said there is a small chance. can we get a situation where participation rates pick up and suddenly you compensate for the cap and you get some sort of natural easing of the pressures in the labor market? i think people are not willing to say that now. jonathan: we were hoping for a positive supply-side 12 months ago. it never kicked back in. the director of research, we will catch up with her shortly and futures are down about half a perce

maybe now the fed will get fearful and if the fed is more fearful, they do less. stocks will do better. >> i don't know. if you think the fed will stop at this point, it is because they are concerned about market conditions that is not a good scenario. >> not stock market conditions the fed put is gone. >> market stability. >> i was with a hedge fund manager last night 50 basis points to 75. if that is the case, stocks move >> maybe only 50 >> maybe it is only 50 maybe it is 50 next month. whatever it is my point is it is a function of. >> if you are excited about a fed pivot, you shouldn't that is an indication that something is p messed up. >> we sat there and scratched our heads on delivering alpha day. we had a scary situation in the uk look at the stock market that day. i was buying medium hot sauce or extra hot sauce. >> meaning your tacos were good. >> and friday hit us like a sledgehammer new lows were they new lows i see it as testing new lows we have to ask katie stockton the next time she's on >> she said two weeks in a row. >> this is testing those you

fed language, concern from jamie dimon on the economy looks like another down, down.morrow now into overtime with scott wapner >>> all right. sara, thank you very much. welcome to overtime. i'm scott wapner you heard the bells and we're getting started from here at post nine from the no stock exchange in a little bit i will speak to the analyst who sent merck shares surging on why he said it's a stellar stock for your portfolio. our talk of the tape, jamie dimon on the record on the market on the economy and your money and why he says stocks could have a lot more downside to go if things get worse for the economy. if you need money, go out and raise it he said let's bring in asset management dan greenhouse for his reaction to that which we'l

to pivot this is a self-fulfilled prophesy to saying the fed has done too much to the fed has now to we've reached inflation, which we have, but unless the levels of inflation are going to come meaningfully down, this is all sentiment driven as it was in july the only thing lacking is jerome powell tripg over his words. he's become much more careful in how he articulates it, and i thought they were very clear in their message not only out of the last poll but that we should expect another two to three rate hikes likely two this year, and that their ideal weight is 4.5% on fed funds, and we're not there. >> add to that some pretty hawkish fed speakers yesterday the fed president in particular talk about how the people she's hearing from who are hurting are hurting because of inflation, and that's particularly at the moderate and lower end of the income spectrum. they're very focused on inflation. greg, one thing we got yesterday, though, the jolts number did show the job market may be showing some signs of potentially turning over you're still talking about job openings north of 10 mi

the fed used to give you forward guidance, they won't anymore. the fed will react to data. francine: i don't want to push back too much, but if there is this longing in the markets even just looking at the current data, they have to be aggressive if they are going to go from the inflation number now to 2%. niall: 75 and 50 are built in, they are going to keep an eye on what is happening thereafter. they still need to seeping slowing down. my personal view is that are focused on inflation expectations, that will drive everything. it's only when they see that is very anchored, and real evidence of things falling off they will start to cut. we remain in our portfolios position that things that would be doing well if financial conditions in you to tighten will be rewarded. francine: should the markets remain optimistic around their own future? kristine: the price action we saw this week is really that kind of hope. it's hope that the fed is going to be stopping its policy hiking soon, but we're really maybe halfway through it at best. we've seen this before, over the summer the

that labor force participation and i don't think this changes anything for the fed.aria: you're right, we have rescissions as well. more -- revisions as well. more from cheryl. >> yeah, revisions for july and august. with the revisions for those two months, 11,000 more jobs were created. more jobs created and those are the revisions. these are lagging i think i did kay torrs but still, this is what we look at. i want to make a point about the unemployment rate dropping unexpectedly back down to 3.5%. we had that in the month of july, that 3.5%. that's where the unemployment rate in this country was sitting in january and february of 2020 before covid hit the country. so we are back at those levels. i think that's a big piece of why the market is reacting as it is because i guess the fed has not done enough destruction to the economy and they'll have two more. maria: yeah, this is not a report that suggests any kind of pivot and welcome to your thoughts and looking for revisions and you got them in july. >> yeah, one positive is the production increase and again, we'r

it was save the world fed.nancial crisis, a fed chair who happened to be a scholar about financial crises why he won the nobel prize. i got to say i wish jay powell could be more like ben bernanke instead of paul volcker. bernanke said you have to be careful, slowly, scholarly. all powell wants to do is reconstruct some fantasy image of paul volcker 40 years ago, a larger than life superhero, who will cause all kinds of pain in the world for all your good. all it takes is courage. all it takes is courage. be like ben bernanke. it takes brains, sobrietity. good on you, my friend, ben bernanke. charles: wall street certainly loved his reign. wall street breaking down here somewhat, all the technical levels. looks like it will be tough near term. what are your thoughts how people make it through this near-term weakness? >> i think the first by word here is that it is just way too late to sell. by the time you say, right now we have 25% correction in the s&p. so what is your trigger? 26%? i'm sorry, that is not a t

that's not what the fed wants to see.he home prices continue to have a long legged into cpi and it will keep the pressure on. guy: let's fold in the earnings. until now, this earnings season has gone relatively well step does tech change the whole characteristic of how the broader market will perceive what is happening with corporate reporting? >> when you talk about technology stocks, that's a big chunk of the s&p 500. when you see those moves in the stocks especially with companies like microsoft and alphabet reporting after the bill yesterday and microsoft posted its weakest reporting in five years and they already warned about this -- warned about the strength of the u.s. dollar and reiterated that. when it comes to its most important financial engine and search and its related businesses, business fell shy of analyst estimates and that's ahead of facebook earnings after the bell and we will also hear from apple tomorrow as well. it's crucial when you look at technology because even though a lot of that seemed to be p

opec versus the fed.f the fed is contending with higher oil prices, does it change their trajectory, do they need to hike even more? aneeka: for the u.s., they are not that reliant on opec and are not facing an energy crisis like we are. it is the case of domestic fasters -- factors that are fueling the inflation story. things like rent. the fed is on that narrative where they try to team that demand stemming from these factors. for the macro story, yes it is a lot worse, but as far as the fed is concerned, it is still laser focused on factors fueling in the u.s.. dani: do you have any thoughts on the european banking sector? every day we get a credit suisse headline and everyone is panicked. aneeka: if you look at that european banking sector, since the financial crisis, liquidity conditions are in a much better position. over the weekend, it was complete panic. dani: especially on twitter. aneeka: they got out of control. he saw how it turned out. it was the opposite of what we anticipated. i believe th

what will happen withed fed? trying to trade this market unfortunately i think they're probably losing. professionals too. charles: right. >> have a gameplan, stick with it. on major selloffs put money to work, if you believe like i do as we have 100% of the time in the past we'll be back to new highs at some point. charles: ironically, i bet traders, active traders long and short lost money today. >> i would say so. charles: got stomped out at beginning if you were long, stomped out if you were short. it is absolutely amazing. having said that all of this noise out there, hail brainerd can speak it will move the market, john may in order moves market, evans speaks and it moves the market, how frustrating is that for you? we had greenspan indicator, how he is carrying his briefcase? is it a sign the fed has too much power or we give it too much attention? >> i think it's a little bit of both but with social media we get so much information at our fingertips. it doesn't have to be coming from one person who may ha