certainly, the fed is still easing. there is no chance of the fed will raise rates. this says the trend in treasuries is down and there is supply scarcity of investment-grade and high-yield bonds with issue would slow compared to previous years. there is still tremendous appetite for your paper. sonali: fascinating that you say that about the supply. our brother, as you know i have been obsessed with this story, about the way treasury issuance has been brought about. concern about activist treasury issuance. do you think there could be issues down the road when it comes to treasury issuance? where could they come from? ira: i am not one that says the treasury is active issuance and all that. because the treasury department's job is to minimize debt payments for the taxpayer in which congress passes massive budget deficits all the time. i think the risk is as interest rates come down, there will be more term issuance. the treasury department, as interest rates fall more, they will increased the amount of 30 year, 10 year, 20 year debt being issued. they will issue les

they get murdered by the fed. so right now, we're in a soft landing scenario, but what does concern me is if you look over the last year, 82% of all jobs growth was government and education and health care. that's not a healthy jobs market. the historically, those are smaller percentages. so i don't know what percent of the jobs growth going forward if we have blless government stimulus, which we all know we need to have to be a responsible country, what's going to happen to the economy? i think to me, one of the most important numbers will be september 6th when the unemploymentment comes out. unemployment comes out the friday after next. that, to me s a sign of do we continue to get a broadening or if jobs come out worse than expected, that's going to call into question the fed was late in cutting rates. >> are you worried they are going to be too late and they should have gone already and by the time they do it's going to be too late? >> i am not passionate about that. i'm just looking at history. historically,

placing bets on what the fed will do next. one trillion bucks for 2024. we begin with the big issue closing out a week of chaos. >> it is a market on edge. >> yes, we have seen volatility. >> more volatility than we expected. >> this is an overreaction, but we don't know when the overreaction stops. >> the u.s. economy is slowing but we are not headed to recession. >> this increase in the unemployment rate has been, in the past, consistent with early recession. >> we are either in a recession or about to confront one. >> the fed needs to regain control of the economy. >> the fed will have to react more aggressively the next couple of quarters. >> 50 basis points in september is just getting started. >> the markets have really jumped on this bandwagon of u.s. recession, does -- dovish fed, it will take a while to unwind. >> we will probably be in a volatility storm for a while. manus: markets are grappling with how does the fed calibrate its response mechanism? it was on monday when they this inverted -- when they dis -inverted. this was a flashing narrati

the fed funds rate swap curve. maximize yields and lock in the income stream for the long-term but avoid the negative carry aspects of the version that george mentioned at the front end of the curve. vonnie: thanks to you both for such wonderful advice. that is robert tipp of pgim and george bory from all spring. jetblue raises money after being downgraded. this is "real yield" on bloomberg. ♪ it will take billions of solar panels to power the world today. aes is making scale like that closer to a reality. introducing maximo, our new ai-enabled solar robot, designed and built in america. with max on the team, aes is transforming how solar farms are constructed. what was once strenuous is now faster. safer. smarter. at aes, we designed max with powerful features that accelerate solar construction. high-speed robotic arms do the heavy lifting and precise installation. while safety sensors keep workers protected. advanced computer vision powered by generative ai delivers exact panel placement. and a mobile microgrid g

fed speak picking up in san francisco fed president mary daly.of jobless claims plus more fed speak from richland fed president tom barkan. mike joins us from more. we are light on data and fed speak but let's talk about the data we do have. ism services at 10:00 eastern. given where the market has been, how important is that data point? michael: it will be important psychologically. if we got a bad number -- the first contraction in month. if we get another contraction people will be opening up the windows and hoping to drive out -- the idea that the labor market is falling apart. and you have to wait for jobless claims. that will be the only other number that will matter this week. they could fall. if they fall, that everyone jumping out their we reaching for a parachute. jonathan: andrew hollenhorst is looking at 50 in september. mike for early of j.p. morgan for 50 in september. i am sure there is another part of this that is bugging you come intermediate calls. you have been around the federal reserve for a long time. when you see those thin

so the fed call for that team has been fantastic, that the fed would cut in september and go steadily through the middle of next year, because the inflation forecasts have been spot-on. >> at this point is your argument that risk assets are still too benign relative to the odds of a recession? >> i think they are. which might sound odd to say, because i'm a big believer of the soft landing. had that soft landing call at morgan stanley since march of 2022. can you believe it? that's a long-standing call. very difficult to keep a call for that long. at the same time, there is a slowing of the economy, a slowing of the labor market a slowing of inflation and the fed has to get this right. so i look at something like equities that seem to be pricing next to zero chance of recession. i look the corporate credit that certainly doesn't seem like spreads are pricing in a real big chance of -- or big a chance of recession as probably should, just to be realistic. i'm a firm believer in the soft are landing call. i think risk assets are probably a brit too benign. >> even peers on the street to

is the fed behind the curve? maybe. solis, we're a hedge fund, we don't put out macro economic for examples. after this morning's conversation, convincingly we don't think there should be an intermeeting cut. to steph's point, the ism number this morning was important and you knew that before hand. if this was weaker than expected it would corroborate some of the worst fears. service jobs, 85%, service sector a larger portion and the number was pretty good across the board. you have to take sol lis from tt important >> ron, you went on a tweet storm, arguing that the fed is behind the curve and that they need to act and act now. >> well, i think they should say something now. i don't think like jeremy siegel suggested, you need a 75 basis points intermeeting cut. the fed should provide reassurance to the market. the nikkei crashed, down 20%, gone from 161 to 142 in matter of a month and that has created this disruption in financial markets that type of which i would analogize to 1997, 1998 where there's a crisis of sort

inflation, as i argued and properly measured, at the fed target or beyond the fed target.rself the question we achieved our goals and why a 5.5% fund rate target? i know there is the equilibrium rate with the strength of growth is higher, but it is not 5.5%. why take the chance? there are signs of stress. the case for rate cuts have been in place for quite some time. i would have been cutting well before the meeting yesterday. having said that, we will make our way through without a problem without something breaking in the economy. having said that, if they don't cut in september, that could be an issue. >> all right. mark zandi, the entire yield curve is moving lower. thank you very much, sir. see you soon. >> sure. >>> coming up on the show, shares of one former cathie wood rdvorite stock are getting hit ha. what is behind teladoc? when we return after this. ng ris knowing what counts. tony, its gone. no. how am i going to do this? welcome to the mdy mid-cap cup, presented by state street global advisors. today's challenge is to play 9 holes without the middle of your b

trump plans the blood the fed's independent -- blunt the fed's independence.former president saying if he comes back at office he will offer an opinion about where policy should be. annmarie: these are the most direct comments we have seen him talk about fed independence. the word he used yesterday was gut. the fed gets it wrong. they tend to be late on things. maybe he gets a little early. there is a gut feeling. i believe i have that gut feeling. jonathan: we will try to have more opinions on this throughout the money. the turning point for soft landing. >> i think we are either in a recession or about to confront one. i am deathly not one of those people that says you it is different this time. jonathan: that conversation is of next. you are watching bloomberg tv. ♪ why do couples choose a sleep number smart bed? i need help with her snoring. sleep number does that. thank you. during our biggest sale of the year, save 50% on the sleep number® limited edition smart bed. shop now at a sleep number store near you. jonathan: i don't want to jinx this. this is w

i think they want a fed that's more forward looking because that makes them comfortable the fed could respond if conditions deterioration. i think that's the kind of language i'd like to see disappear as we're data dependent so that by necessity they'll be very late. so, i'm not -- i think it's encouraging to see the sort of pushback. >> when you say the concerns from mr. seigal are, in your words, valid, you're suggesting you agree that the fed needs to come out and make an emergency cut between now and the september meeting? >> i don't think the fed needs to make the cut. but i do think the fed should, in their playbook, be willing to be forward looking to respond to financial instability. and i think that that's not language that's been evident in the fmoc meetings or the press conferences and in the minutes. so, i think it's -- i think it's in the right direction. >> there's the kind of dislocation, perhaps, you're alluding to, that's part of their job. i mean, wouldn't they be there in an emergency situation anyway? and i don't know that monday rose to the level of an emergency s

over the fed.mp is saying, and j.d. vance doubled down on this, he thinks it should be a fundamental political decision agree or disagree. haven't we seen that in the past under nixon, and it did not exactly work? scott: i think it is all up to the fed chair. again, the president, he or she always has input. we saw from joe biden, state of the union, i expect a fed cut. the inflation numbers got high, expecting a fed cut just a little later. presidents make their wishes known. i want to comment, i think this wall street journal piece that reference the 10-page document, i would challenge them to produce that document. i do not believe it exists. lisa: you think janet yellen has already taken over the fed. i wonder how much this is in reference to the fact the treasury department has been selling at disproportionate amount of t-bills, some say it is offsetting tightening as well as with respect to rate hikes over the past few years. how much do you believe that the fed is way more political than peo

it's ironic on the fed's own website they say the fed can't really do very much about the labor marketodel really relies on just curtailing demand. they can't do anything to improve supply. so i sometimes wonder how is the fed going to explain why inflation came down at all? is it just they made the cost of capital so expensive for private business that they couldn't hire people, they couldn't expand and that's what affected emanned but shouldn't the fed acknowledge that even when they increase interest rates it doesn't do anything to curtail economic activity financed by the government? charles: yeah. >> so it is not clear they're really accomplishing their goal yet they stick with that model and claim that they have responsibility for price stability, no matter what the government does. charles: let me pick up on that, because, this reminds me of a piece in this same article we talked about. an interesting sentence, you said the fed is prepared to passively accomplish such an agenda without passing judgment on the economic merits. you talked about a potential president harris, could

this is the last fed meeting before the general election. while the fed is taking great pains to say we will not be influenced by election calendar or politics, i think they would afford -- prefer to avoid meeting to do 50. a very high bar for anything other than 25. sonali: the market is pricing in 100 basis points through the end of the year. why so much. if you have election uncertainty and both prudential -- potential candidates are putting forward policy that could be inflationary, how does the fed cut that much this year? brian: any policies being put forward that are inflationary are potentially down the road and would require one party control of both sides of congress and the presidency. we are a long way from needing to price in too much of one party or the other winning and putting policies into place. really what we are looking at is we will see a continued slow down into the fall. i think the market is just letting that the slowdown might be bigger in the fed might be behind the curve. and either november or probably december th

the fed could cut rates. nothing bad will happen from that and that is a path that can happen but i always get worried when everybody is in that path because what that means is that's already in markets. that's what we have priced in so if that happens, they don't have to move, because that's what we already expect. charles: jim, i want to ask you about the business news earlier in the week. you had really intriguing comments about the job revision that 818,000, some day it was 915,000. you say hey the whole thing is misleading because it misses folks who are working off the books. with that in mind, how much harder since the fed is focused on the labor market does it make their job? >> it makes it very hard and that was one of the missing things from the speech. jay powell said that, you know, they are focused like a laser on the employment in the labor data but he never addresses whether or not they have any problems or confidence in the labor data. in the last four years depending on who you believe, seven

they want the fed to cut rates a lot, but we don't want the fed to cut rates to quickly that people beoes down. we want bonds up in price, equities up in price and everybody can go home happy. doesn't always work out that way. >> so that's why of whether or not the fed is likely to be coming in september, do they get 25 or 50? if you think we're are closer to risk of recession than the acceleration, does the fed need to go 50 basis points in september? >> i would like them to go 50 basis points but only if they can message this as part of a normalization the is honestly, rates are in the wrong place and they get to get -- need to get the normal at a decently rapid pace. that is what they ought to do. but they have to messages that waiting is the problem, that the thin cuts at 50 basis points because they are scared of the unemployment rate going up too fast, it won't speed up the economy, it will cause people to hold business decisions. it will cause people to wait for lower rates before they borrow money. it will reduce the income for people with the $6 trillion of money market funds

isi writing, we expect fed chair powell will use his jackson hole speech to explain why the fed is now sufficiently confident inflation is heading back durably to 2% to begin dialing back rates soon, and provide a basic framework for the cutting cycle ahead. the philadelphia fed president asserting that here on cnbc. >> it was all inflation, inflation, inflation for awhile. now, we're starting to see things, the balance of risk getting more equalized. so, we do need to take more into account when it comes to the labor market, for sure. >> what does that mean, taking more into account? >> well, i think it means this september, we need to start a process of moving rates down. >> now, i expect powell to leave markets guessing about a 25 or 50 in september. he's going to be held back by the idea there's another inflation and employment repor before that meeting. markets are likely to walk away clear that the fed is entering a new regime with lingering uncertainty about how quickly and how aggressively it adopts those changes. >> there are high hopes that he will signal that the cut is comi

the fed put is back.need to. another thing that's come up repeatedly. there are two different kinds of rate cuts and they are not created equally. you can cut interest rates because you have disinflation and growth is holding up for risk. you can cut interest rates because inflation is no longer a problem ultimately the problem now is the market. do you think we have shifted to the latter and if that is the case, could you make an argument for markets to do well in the face of interest rate cuts into year end? jeffrey: it's what i was highlighting. you are mentioning the russell 2000 performance, there is a shift here. to dana's points you have to be careful if you talk about the first reaction isn't the only reaction. you're introducing into the debate a higher probability mistake into the debate that it's no longer about maintenance cuts, that it is more risk of the hard landing as opposed to the soft landing narrative and calibration cuts, they can cut interest rates and that's a good story for risks.

you did have a fed put. go back to covid, down 34%. you also had a fed put.%. zoom out to the global level the fed is trailing central banks when it comes to deciding to cut. this chart gives you a sense how many rate cuts happened across the globe at different times. ape twine, 76 cuts. may of 2020, 92. no, look at last month, july 2024, you had 35 cuts. so a lot of these other countries come out of the gate aggressively when it comes to cutting rates. there is the triggering of the sahm rule as well which kind of changed everyone's opinion. perhaps that indeed we have waited too long. for context the sahm rule says a recession is likely already underway when the three month moving average for the unemployment rate rises half a percentage point versus its low over the past year. all you need to know we hit that last month with 4.3%. that checked the box and every time on this list that i'm showing you here that the sahm rule was triggered, we were already in a recession. so pretty good track record for the sahm rule. now there is a first time for everything,

the fed still has work to do.uestion about how much they are beginning a destination in terms of what the neutral rate eventually will be. how important is that, given the fact that they are talking about don't focus on the pace, focus on the destination? >> if we look at what the fed is telling us that the fund rate, that is supposed to be the signal the market of where the destination is. i'm not convinced that the fed believes that as strongly as they may have been terms of where the long run rate on the s&p was the pandemic. the markets are taking that, though. if we look at where rates are headed, by the end of next year, the fed funding rate that is priced close to 3%. but it is not really neutral in this courage and violent and i don't think that that is the case. i think the neutral interest rate was probably never as low as the fed was estimating pre-pandemic and now they are not as convinced that they can say that rate with a high degree of confidence. so that is where i think the disconnect is. if we ha

and it's the fed's job to act.nd. i think what you're saying there. is there a chance, austan, you think of an emergency cut between now and september? >> look, like i say, i'm forbidden to talk about what people's opinions are or speak for the committee. you've seen the take. it's a huge table. so everything is always on the take. whether that's increases, cuts, et cetera. but the fed's job is very straightforward. maximize employment, stabilize prices and maintain financial stability. that's what we're going to do. we're forward-looking about it, and so if the conditions collectively start coming in that on the through line there's deterioration on any of those parts, we're going to fix it. that's the chicago model. there's no bad weather. there's only bad clothing. the conditions come in. we're going to respond as appropriate. >> the question is the balance between the two of this dual mandate. a long time didn't have to think about the jobs piece at all. what is the inflection point you say, okay. now we've got

we look at where fed funds rates are. the fed is restrictive.hey have to outline that path at the same time making it clear they are not concerned about the economy. it is a tough message. one that we think they will deliver clearly later this week. >> given that economic outlook, set us up for the trading week ahead as we kickoff monday. >> we think there's volatility in the months ahead mainly because everyone, including the fed, will be data dependent. each data point that comes out will swing wildly one way or the other. with that back drop and that slow economic growth, we like sectors that can control their own destiny mainly through the form of margins. >> given the rally last week, best week for stocks this year, will you be making changes in your immediate investment strategy to account for that? >> not in the immediate future. it's an environment where we think investors have to be somewhat patient. the underlining economy and earnings picture will deliver, but there will be volatility around valuation triggered by the inflatection poi

it sounds like you think fed is behind the _ late.think fed is behind the curve. _ late. it sounds like you think fed is behind the curve. what - late. it sounds like you think fed i is behind the curve. what happens next? does that mean a bigger rate cut in september or what the market seem to be asking for right now, could we see an emergency rate cut on the table? at could we see an emergency rate cut on the table?— on the table? at this point i don't think we will— on the table? at this point i don't think we will an _ on the table? at this point i don't think we will an emergency - on the table? at this point i don't think we will an emergency rate l think we will an emergency rate cut unless they sell of the equity market, which at this point i think is some of their own for exuberance or certain stocks coming back. unless there is some emergency i see a mid cut. the cut again, do they cut 50 basis points in september? if we see another sub—100 thousand job numberfour august, and we we see another sub—100 thousand job number fou

bank of japan was hiking, fed was easing. 2000 was fed holding rates very high and the dot com bubble7 ultimately became the financial crisis but a period where the fed was behind the curve. and during that period, that was the breakout in terms of the dollar. and we saw, as we came out of the summer of all of those years, in fact, we saw the dollar begin to weaken and overall saw the dollar lose about 10% plus over the following four to six months. we seem to be getting set up for something similar again. >> right. i think in the short-term, at least that would be a boost for corporate profits, potentially for stock prices, for commodity prices, for gold. there's a lot of ramifications. but when i look at your long-term chart, i notice that every time we had one of these moves, the next year's long trend is there doesn't seem to follow a pattern. sometimes it was down. sometimes it was up. i don't know if you have a feel for what we might be looking at here at this juncture. >> so, correctly as you point out, you look back over history and obviously the dollar index is an imperfect i

going ahead, the fed will have to think about two things.s the political aspect and the microeconomic aspects. the politic aspect, if they cut interest rates rapidly, i am sure donald trump will howl in protest and make the fed's lives a bit more difficult. on the macroeconomic side, i think they have to think about which of the two parties wins with fiscal policy the more good for expansion. both parties do not seem to have any ideas about bringing the budget deficit under control, but i would see the republicans are in favour of tax cuts and spending, whereas the democrats want more spending, but they are also leaning towards higher taxes on the rich and increasing corporate taxes, letting some corporate taxes expire, so i think from the fed perspective, it would be more useful if the democrats going to power. china's economy has been sluggish. does this have any bearing on how the fed sees it? absolutely. once the chinese economy slowed down drastically and the property bubble burst, china decided to export its way out of trouble, continu

if a country has been served well by the existing statute, the fed has the goals of the fed are set by congress. so price stability and maximum employ employment >> rich, good of you to join us on this friday thank you. >> thank you >>> let's get right to pippa stevens for a look at the biggest names moving into the close. >> intuit is the worst performer today down 7%. the company beat estimates for q4, but weak revenue guidance is hitting the stock. the company also adjusted its long-term growth ranges, including for its consumer unit. noting this puts more pressure on the small business franchise to power growth over the long-term. and shares of war by parker on track for their best day since may after securities upgraded the stock to market out perform. estimates for the glasses maker are too low as it's consistently gained market share. the firm added the stock is underperformed the broader market and the new $20 target is 28% above where the stock currently trades >> thank you we're just getting started here. up next, new data shows a big bounceback in the housing market we'll br

assuming the fed starts.n that agency mortgages will do great? i feel like we've only talked about the fed, and then there is the selection, does that keep interest-rate volume high into the year beyond? ira: i think so, and we have done this a long time, so we understand that liquidity is not exactly what it used to be and you have a lot of product to go through relatively small pipes sometimes, and you don't have the balance sheet capacity that you use to the size of the market, so i think volatility will remain much higher than it had been, and say in the 2007 timeframe, but nevertheless, typically speaking you wind up with interest rates realized and rates starting to go down and you do get sellers of volatility where people take advantage of the carry that some of all structures offer, so i suspect volatility will come down and will go -- and what i say it goes to 2014 or 2015 because we wanted to switch jobs? it will not be that bad, but, nonetheless, i think you'll get a decline in volatility but maybe

three fed meetings.aybe even three, we think it will be up to 1% in 2024. charles: one will be a 50 basis point cut? >> yes. charles: if two, they will both be 50 basis point cuts. >> yes. charles: ralph bostic, bowman, sound like there is not a big deal. are you concerned they could be too late? >> i don't think it is too late. which got the ppi news today, 0.1%. we'll see tomorrow what happens with the cpi, right? that is a big number to watch. last time we were here, when we discussed cpi that was november .1. most of it was because housing came down. charles: right. >> 4%, last reading was a .2%. it is a big decline. now what we've seen is that energy costs are rising sew that's what we want to watch for tomorrow. charles: all right. you do not see a recession? you don't think we're in a recession. could we go into one? >> we don't believe -- we don't know what will happen overseas, or the war. charles: sure. >> as of now, the data that we have, especially when it comes to unemployment ticked up 4.2%

speaking of the fed, what do ou suit. speaking of the fed, what do you think — suit.aking of the fed, what do you think the _ suit. speaking of the fed, what do you think the course - suit. speaking of the fed, what do you think the course of - do you think the course of action will be? there are some thought the volatility we have seen is in some part driven by the fed waiting too long to drop interest rates? i the fed waiting too long to drop interest rates? i think the fed has _ drop interest rates? i think the fed has made - drop interest rates? i think the fed has made a - drop interest rates? i think- the fed has made a reasonably clear it is coming, and i think the 50 basis points in september is a pretty good bet. i think pretty soon they will start to talk more directly leading up to that cat. i think after all with many years of experience of seeing the federal reserve really giving into what the financial markets are looking for, so we are reasonably confident that rate cut is coming. l115 reasonably confident that rate cut is coming.— cut is coming. us ret

one fed officials signaled it may be time to tweak on a terry policy accordingly. have a listen. >> from my perspective, the risk to both sides seem more balanced. according we, a time may be nearing one adjustment to monetary policy may be needed. paul: let's bring in our guest, the head of asia strategy at scv. we now have the market pricing in less than 100 basis points. that is still pretty much a cut at every single meeting between now and year end. is that realistic or is the market getting ahead of itself again? >> clearly considering that inflation remains very favorable for a cut, it is really only a question of if the fed will start at 50 basis points or if they will be happy with 25 basis points in september. our base case for now is there will be a 50-basis-point cut in september. but at the end of the day, it depends on what we will be seeing in employment numbers because from now until the september 18 fed meeting, there would be one whole round of data , and what is really at stake is if there is a sudden deterioration in the labor market. right now,

fed chairman powell recognized it and noted that the fed will move away from thinking about focusingion which has decelerated by 150 basis points since the fed stopped taking a year ago and focusing instead on the labor market. they noted the -- moderation and thought about the labor market going into balance but the markets are freaking out about today is that the labor market is not coming into balance and that it is heading into a recession. sonali: that data that we saw depending on how you talk about it, they are worrying about the triggering of the psalm rule a greater player about the recession ahead. what is that in your rule -- view? steve: we have been pointing it out as a below normal risk but it is not the base case. similarly, our base case is that we grow below trend over the last couple of years. under the surface in the jobs report, as we have had there is a little bit more of mixed conclusions and it was a weak report. the greatest risk has been the concentration and job gains in certain sectors over the last couple of months, so the broadening out of hiring has not

definitely, one of the problems the fed is facing | the problems the fed is facing is that we are stillinflationary environment, monetary policy has been functionary, but physical monetary has been manufacture there is lots of manufacturing policy in the us, as a result, they kept interest rates higher for longer. going ahead, the fed will have to think about two things. one is the political aspect and the microeconomic aspects, the politic as slick, if they cut interest rates rapidly, i am sure donald trump will howl in protest and make the fed lives a bit more difficult. on the micro eminent side, i think they have to think about which of the two parties wins with fiscal policy the more good for expansion. both parties do not seem to have any ideas about bringing the budget deficit under control, but i would see the republicans are in favour of tax cuts in spending, whereas the democrats want more spending, but they are also leaning towards higher taxes on the rich and increasing corporate taxes, that corporate taxes expire, so i think from the fed perspective, it would be more useful

the fed is an independent entity and as president, i would never interfere in the decisions the fed makesrris also said she was preparing to unveil an official economic policy platform in the next few days. as the us election inches closer, harris indicated that her plan will be largely focused on bringing down costs and strenghtening the economy, key issues on the minds of voters. wa lt walt disney experiences division laid out an imposition growth road map over the beacon is a trust to drive customers back to its theme parks. the company announced plans for four new cruise ships in six new theme lands including one dedicated to new disney villains in the magic kingdom in florida. magic kingdom has seen slowed attendance and its domestic theme parks as the customers cut back on spending. the trend is expected to continue up the next few quarters. deadpooland continue up the next few quarters. deadpool and willful remade box office history on sunday becoming the second film this year to grossed over $1 billion the first being inside out to. the massac success will be a boost for disney wh

fed chair powell set to address the kansas city fed's annual summit, and of course we will bring it toou live. good friday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, sara eisen at post nine of the new york stock exchange. cramer has the morning off. stocks do look to recover some of thursday morning's losses. we got bostic in our pocket now. two-year has a 3 handle once again, healthy diet of single-ticker upgrades today as well. we will begin with the fed chair's speech, which comes just days after the fed minutes indicated policymakers do see a september rate cut as likely. we got bostic saying that passive tightening is a thing, and it might make some sense for him to bring his rate cut view forward. >> he wasn't as dovish as he could have been. he also said that inflation is not close to target and we've got more work to do, which doesn't exactly channel where the market is right now. look, as far as jackson hole, it's hard to imagine that the fed chair can go into any kind of specifics as to what the market really wants to know, which is, ho

experts are sure the fed will cut in accept.eptember. >> i think it would be a miss if they don't cut in september. the unemployment rate has moved up by about a point. the payroll gains today were very modest. >> it still feels like risks are pretty balanced on both the inflation and employment mandate. i would say rates at 5.5% is probably 100 basis points above where you should be if you want to be back to neutral to address risks to either inflation or employment. >> we still think they will go 25 in september. we do now expect consecutive cuts in the remainder of 2024. september, november, december. we'll pull forward 125-basis point cut. i think 50 is a possibility if you get further weakness between now and november and another employment report. >> it is a busy week for unemployment and data for the united states. we expect numbers from bayer and uber and the reserve bank of australia rate decision. attention will turn to the united states president race. vice president kamala harris is seeking the democratic nomination

jonathan: we talk about the fed lisa: -- lisa: we talk abut the fed women talk of the belly of the curveg how much the fiscal backdrop weighs on you when you start talking about 10 year treasuries and beyond? jim: the fiscal is my number one worry. people say what keeps you up at night, that's what it is. it doesn't matter what the next administration is, we will have to deal with this fiscal problem. the issue is we have a deficit around 6% of gdp in a time when things are kind of going ok. imagine if we did fall into a harder recession and typically there needs to be fiscal expansion to support the economy. where does that put debt to gdp? where does that put deficit to gdp, doesn't put it around 10%? this becomes a bigger problem for us. what it tells us is the safety net from the federal government to that fiscal expansion to be countercyclical in the weakness is a lot less today, it makes the u.s. economy in a more dangerous or vulnerable place because it does not have the ability to do countercyclical policy as much. lisa: there are two different sides to this. but that might not b

san francisco fed president mary daly emphasizes that the fed does not need to react to one data point. on the ticket, kamala harris formally wins the democratic presidential nomination. we discussed her options for a running mate. the u.k. chancellor declines to rule out increasing capital gains tax. we bring our exclusive interview with rachel reeves to you. ♪ ♪ ♪ ♪ tom: a pause to the selloff after "manic monday," but will that be sustained?, remains the key question. more than $6 trillion wiped off global equities. a breather in the session so far with european futures higher after losses of more than 2% yesterday and for the nasdaq 100 the worst start to the month since 2008. ftse 100 futures pointing to gains of 71 points. s&p also pointing higher after losses of around 3% yesterday. the nasdaq 100 futures looking to add 311 points. let's flip the board and look cross asset because the weakness in the yen is the story of the day after that incredible strength yesterday with gains of more than 2%. some of that being unwound in the session so far. the carry trade was an important p

how much of that just speaks to the idea that the markets are pretty much in tune with the fed, the fedh the markets, and this is pretty much an all-clear stein regardless of the narrative? just a handful of months ago, it talked about political motivations around the fed >> there was some of that, and remember, it was -- i think you had two fed officials today who, in june, were saying one rate cut this year. that was, as you remember, we had been through that bout of inflation, and now raphael bostic from atlanta said my forecast for this year is in play and then others had said just one. and now there are multiple in play here. hopefully, all of this stays together this is the probabilities that we just put up and the way to read that start is just look at the last number in the middle there, the 92% probability, add up the ones on the left that's saying the market is super confident there's going to be 100 basis points of cuts. i will say maybe one of the criticisms i'm hearing in the hallway here is maybe powell precommitted the fed to more than the fed itself is either willing or

the fed. the fed is the biggest thing that we have to focus on. >> although interestingly we seem to all on the same page with what the fed is going to do to cut rates you don't think there will be surprises from the fed. they will not overshoot it. >> oh, i think it will be 25 basis points. i don't think there is a case to be made to make it a half a point. it will be uncharacteristic of powell. i think it will be 25 basis points and two more to follow that. 75 basis points total. >> we have other data coming out next week. all attention paid on the big jobs report that we are expecting next friday. which of these moves the needle? the jobs, the fed, the apple event? >> you are moving the needle with us today. [ laughter ] >> great to be here. i think it is the payroll number. it is not that a weak payroll number will signal the labor market is caving and collapsing i just think the market reaction that we got at the last number and the close scrutiny at least of really, look, the fed is more

the regional fed is starting to revolt.ame out with a fantastic paper that hits on this issue of housing, highlighting the long lead times associated with the housing market suggest that the fed never should have been targeting housing as one of the key components of the inflationary story. the simple reality if you hike interest rates you lower bond prices. that means that those who bought their homes with mortgages at 2.75% are sitting with homes that up a little bit in value but the mortgages they took out are trading at 50 cents on the dollar. for them to turn around give up the mortgages either through refinancing or relocating is an incredibly uneconomic outcome that candidly was created by fed policy targeting something it probably should not have been hitting on at all. charles: mike, great stuff. always appreciate our conversations. thank you, man. >> thank you, charles. charles: all right, folks, now my next guest just published a note this morning the case for 50. i want to bring in smbc, chief economist, former

it is never about what the fed should do, it is what the fed is going to do.ling us is yes, we will cut, but we are being fair enough article. if the data gets us really scared, we will cut more expeditiously that is not the case today. jonathan: there's a lot of people listening to this, just sort of doing this, nodding their head as he speaks. the statement update on stories elsewhere this morning. dani: hamas and israel are still divided over an american proposal to pause if not permanently end the war in gaza. antony blinken met with egyptian and qatari officials yesterday. he reiterated that israel has agreed to what the top u.s. diplomat called a bridging agreement. that would create space for the two sides to hammer at the details of a cease fire introduced by president biden he said it is hamas' turn now, and time is of the essence. uber has hired a former tesla executive to oversee the transition to electric vehicles. rebecca will start next month at the head of sustainability, as uber aims to use zero emission vehicles for all of its rights by 2040.

two senior fed officials look to ease investor nerves and doubts the fed did not act so

the fed is late on this issue. and so the good news is that people are working in the unemployment rate is driven by supply of workers more than job cuts. that can turn on a dime. it is going to be difficult to assess, but if you focus on the high quality companies with the really strong balance sheets, excellent free cash flow and dividend growth which gives you an indication of management optimism you will be relatively safe in the market if it decides to sell off on new data coming out. i am concerned that this felt like a victory lap to me and i do not think that victory has happened. i got the big line on the good ship transitory, and i see a bunch of my shipmates. powell is the captain, so whether they agree with him or not he needs to make the right decisions and i am not convinced this was the speech, certainly not the one i wanted to hear. sonali: all week we had this s&p 500 flirting with record highs and it had not touched that point. it seemed to stop short of it plus a lot of people on this program tel

the fed is an independent entity.nt, i would never interfere in the decisions that the fed makes. harris adding, she is watching to see where the fed moves next on interest rates. joining us now with more on this is ben emons, chief investment officer at fund watch advisers. ben, the establishment and the doctrine, if you will, for decades, has been the independence of the fed. there is a paradigm shift being proposed by the former president in becoming more active with regard to the fed. which is going to be better for markets? >> it depends on the situation, dom. we think of march of 2020 and we had a real problem. at that time, the fed and treasuries coordinated their actions and that's when it worked really well for the markets. remember, we had a turn around. in good times, that may not be the case with the issue of the interference and decisions against the wrong timing to do that. after all, the fed is an independent institution. i would agree with vice president kamala harris that, yes, the fed should make its

inflation above the fed target. the fed has two mandates.p up economic growth and bring down the inflation rate. both of them are in the process of happening. why do you need to change? >> because at this point, we're at 114,000 and suddenly all of the companies that were hiring look around and say it's always a loss of confidence. it is always something psychological. if they decide there may be a slowdown coming, i'm definitely not going to hire now and it becomes self fulfilling. the next job number could be under 100,000. who knows at this point? you see a lot of companies pulling their horns from hiring quickly. >> that is definitely a possibility. let's go back to looking at the numbers and what it may signal. we had 114,000 or 115,000 jobs a few months ago. then it picked up and went up again closer to the 200,000 number. >> we don't know if that will happen again. >> that may help again. >> or it may not. >> or it may not. the thing is why do you need to move before? that shows a panicking fed. what will they do? increase interest ra

i'm not one to second-guess the fed. my question today, i've been asking around, did they have this report on tuesday or wednesday? i i've gotten mixed answers on that. cut intermeeting, the question becomes are they overly concerned the market may take it that way as opposed to being -- >> like a panic, sign of panic. >> exactly. i don't know that -- i don't know that they're going to do it. i don't know that the market reaction would be as positive as we think. >> we heard from austan goolsbee today like he read the hitchhiker's guide to the galaxy that says don't panic. he said this is just normalization and that we won't read into one data point, which just says this doesn't seem like a fed going into this situation room trying to figure out how they can stall the bleeding. i don't think they're looking at the 114,000 saying this is something we need to panic about. if they did, it would probably be a bigger problem, 114 goes to 50 to zero and negative in payrolls a big problem for gdp and growth. >> we're showing al

september 18 the fed decision. so far the rhetoric from the federal reserve officials dani to me has highlighted, even the hawks are becoming doves. >> i think alberta is a good example of this. he was new to the fed of course. he was really hawkish two months ago saying he needed quarters of good data. now with just another month of good data he sounds different. we might be nearing the time to adjust policy. it is not cover thes flying out and we're definitely going to cut but it is notable for him. >> this is maybe when doves fly. ann ma rhode island, you're marie, you're headed to thed.n.. >> the political rhetoric coming out of both camps is drilling on the issues americans care about and have been caring about more month, the economy. you saw that yesterday when trump was trying to stay on message. a lot of people have asked him to on his campaign. he struggled a little bit. he stood in front of groceries. democrats are trying to show, yes, the inflation rate is coming down. the rate of inflation is slowing.

questioning the fed's independence. donald trump says presidents should have some say over interest rates and monetary policy. kamala harris agreed to debate with him in september. oil set to close the week higher as the u.s., qatar and egypt call for a round of cease fire talks. off to a salad day for u.s. equities yesterday, but caution seeping into the space when it comes to europe and the u.s. the nasdaq ending up with its best day since november of 2022. the nasdaq adding around 3%. the s&p having the best day. soft gains coming around, setting up for a masa -- for a modestly positive session. s&p futures pointing lower after the gains yesterday. nasdaq futures looking at maybe a little bit of profit taking after thursday, looking to drop around 66 points. you had a bit of a more muted treasury auction as well in terms of the 30 year and reception investors gave that, but the jobless claims numbers fueled the equity gains and selloff in the bond markets. treasuries more balanced. the jobless claims coming in slight

talking about entertaining a job at the fed though you might entertain a job at the fed. the fed likely reaction to this report especially if we see a signal on the retail front could pave the way for an automatic rate cut next month. that seems to be a given. >> certainly signaled and the last jobs report suggested could be the labor market is sliding close to recession. last time we talked i was skeptical that if it were september i would advocate a rate reduction but the very week labor report on the unemployment rate side is down for the fed to move a little bit. neil: the other issue is how much and last week at this time after the thousand plus point selloff in the dow the fed might call an early meeting to cut rates as much as half of one%. you are not in that camp i take it. >> a pretty negative signal, it is really bad and i don't think the fed would want to signal flat. that. i could see them moving 50 basis points depending how things evolve. the and fid put out a result, no news whatsoever but they have an uncertainty index which is correlated with small busin

number one, we don't expect more fed cuts or emergency cut or think the fed needs to cut 50. you talked about the atlanta downcast which is running over to percent. tactically coming into the data come if we get a strong member in terms of inflation, .3%, the dollar will rally because we will price out a fed cut. we're going to price out the 50 for september. we will be back to something that is probably in-line with expectations which is maybe three cuts. if you get low inflation, lower end of the range, i think the market gets spooked about the uncertainties of global growth, of u.s. growth. are we heading into recession? we titled our weekly narrative "whiplash." the stories keep changing, the vibes keep changing. i would think both of those extreme numbers are good for the dollar. one, it prices out the fed and the delegates a recovery -- and the dollar gets a recovery. the other is we move into the uncertainty around the global recession, the slowdown, and the narrative changes to that. that is where i think the most boring outcome will be on consensus. we probably won't