what would you tell the fed chair to say?oty: i would urge him to overpromise, that i don't think the fed has additional ammunition, new instruments relative to what it had before. i think the new policy framework is a modest innovation relative to the old policy framework. hopes get the market's high, it ends up being disappointed. he need to provide forward guidance and new policy framework that enables him to change his rhetoric as a way of doing that. vonnie: in terms of the public health aspect, we are getting different forecasts for when a vaccine would be widely available. generally the thinking is it is going to be further away before everybody gets vaccinated rather than closer. what is a longer period of time before vaccination mean for u.s. economic growth? barry: it means that the recovery is going to be very u-shaped at best. people are going to be reluctant to get back on airplanes, reluctant to go to indoor dining establishments until vaccine is widely available. -- importantly until many people have taken it.

we expect the fed to do nothing today. i don't think we'll get a lot of quantifiable color, but i think the message will be they stand at the ready i think that's going to help investors continue to feel very good with the decisions that the fed is making. >> julia, i'll turn to you on that note. you know, as someone who i think is largely supportive of the fed's policies here, do they risk blowback, because people say, wait a minute, there are all these traders making all this money in ipos but this does not translate to main street weav we've heard this over and over and over again how do you expect powell to answer questions like that >> the answers have been from powell and almost a unanimous chorus from all fed speakers has been, we need more fiscal. we can lend, not spend our tools are limited. we're doing everything we can. we are committed to keep doing whatever we can for as long as necessary, but there is only so much the fed can do and the fed has been unusually open and aggressive calling for more fiscal suppor

in the fed's long-run goals. i've been around long enough to remember when asset prices were something somebody else should worry about and alan greenspan once said something about irrational exuberance, the market flinched for a bit, they ignored him, and that was the end of financial stability considerations. ben bernanke he a new division established a new division at the fed, of course. after what we went through in 2008 and 2009. the new statement says that the committee's policy decisions reflect its longer running goals, its medium-term outlook, and assessment of the balance of risks, including risks to the financial system that could impede the attainment of the committee's goals. you referred to that a little in your remarks, but i want to give you a chance to expand on that. two pieces. one is, right now do you think that the macro tools and regulators are doing enough to contain the risks of financial stability, given how low interest rates are and are likely to be? and secondly, are you suggesting tha

the fed was not as dovish as they expected. the fed is not increasing qe. the hefed is not yield curve capping, not buying long range. they think the economy is better, even had one dissent because he thought the economy is better and fed is going too far. the fed has capped pretty much their balance sheet at 7.1 trillion is the high that it got in june and it's done nothing the last 12 weeks. but on the good side of things, the corporate bond market, the new issue market, is on fire. already, one and a half trillion has been issued in new issue ig this year and that is what is promoting and pushing the equities better and today, you set a record globally of 2.61 trillion, all currencies, all things, even high yield has set a record. are there bubbles? liz: i am telling you, i know, i know, but this is what makes me a little bit nervous, andy, and peter talks about, you know, bubbles and the fed doesn't seem to see it, but there have got to be dislocations. i was on a webex call today and i have to tell you, the equity and derivative strategist chief said h

as the fed six about doing a thinksjob -- as the fed about doing a better job in this recovery, what are the indicators, and how is it going to think about the labor market? >> i think, on a week to week basis, there is nothing much better than continuing claims. nobody drops off unemployment until they have a job. i think that is the best short-term indicator that we have. monthly data, i think they will look at how many people don't job a job, have not had a for a long time. based on historical precedents, if you have not had a job for four months or six months, you will not get one soon. caroline: needing to add further? what further bandwidth do they have to ensure that they can fire on all cylinders, encourage the market that we can go past 2% inflation and get employment back to pre-pandemic? stephen: you're right that they don't have lots of bandwidth. they can act on policy rates, they are maxed out. long rates are not really going anywhere. they are trying to get real rates down. i expect that is part of what they are trying to do tomorrow with their production -- with their

we will talk to a former fed governor about t bheig problem he thinking the fed faces right now. >>>. >>> welcome back the fed just left rates unchanged, and indicated rate hikes won't be an issue until 2024 the dow is up 288 points, s&p is up 21, even the nasdaq has turned positive. let's talk about this all with frederick mishkin. great to have you back can you hear me all right? >> i can hear you just fine. we had two dissentence today, one from capellan, the other from neil kashda are cashcari. >> it tells you there's disagreement, they're not absolutely clear on whether they're going, in a sense there has been a shift i very much welcome. it's something i've advocated, and i think they're trying to sort out what that means this is an indicateth haven't quite sorted it out. >> here's the key, one of the big problems you have and of a need for more extensive policy, they've already got the fed race down and basically it's called effective lower value. so the question is how do you make sure you want to be stimulative. one way to do it is indicate when you've inflates lower for a sh

fed policy and the hope in the prayer.he great conundrum to richardmentioned clara, his fear of asset bubbles. -- mike: does not sound particular cheap, does it? tom: i am you seriously. these valuations are extraordinary. to lisa's question, are these asset bubbles? mike: the bubble term is interesting. people talk about it quite a bit. it is hard to define it. what is a bubble? a bubble is something where prices explode outward with no tide of fundamentals and no clear link to policy changes. what we have had in the past six months is different because policy shifts have boosted assets dramatically. it is too soon to tell the federal reserve or the ecb that they have put forward a bubble, but that could happen in six or 12 months. lisa: there is another way of looking at this. we reach a point where low yields are no longer an excuse to going to riskier assets and we got a flavor earlier this week with the threat of no fiscal support from washington, d.c. are we reaching that tipping point of inflation expectations conti

the fed chairman is anticipating questions about why the fed's lending programs haven't seen much take up. onlystreet in particular, 1.5 billion dollars in a $600 billion program. for many companies it may not be the right thing because the loans can be forgiven and if you're a healthy company, you've probably already gotten a loan from your bank. powell suggesting more work needs to be done even though we have seen improvement. alix: thanks a lot. , at whats for more point does the u.s. economy start to feel the lack of stimulus? we thought that would be a few months ago when it went down to $300. we have not yet seen it. >> we can expect it is coming. given where we have come in the second quarter, that huge drop-off in gdp and activity, it was to be expected that we see a quick bounce, a quick rebound. in ae seeing that play out lot of economic indicators. to a recovery that is likely to be long and protracted and guided by the path of the pandemic. we will enter our stage three of this recovery after. byt stage iii can be helped more federal stimulus, but it is going to be a slower

when i read the fed,basically what happened today was there was no new information the fed already said, listen, we're going to shoot for above 2% inflation the market priced that in. today they didn't really give us anything else. and they said you really need fiscal stimulus. fiscal stimulus has been a real problem. i mean, we don't have it yet i don't know if we're going to get it it was not even a fortnight ago that i mentioned that was my biggest concern for the market i think the market has to digest that and we head lower to tim's point, it was interesting to see commodities do well today. to me, that's pricing in the fed is going to do more in the future, but it's not going to be economy supportive, it's going to be commodity supportive >> steve grasso, what was your take >> my take, obviously i've been sort of weighing the options of getting longer on the value proposition and selling my growth i think to tim's point, energy, financials, industrials, materia materials. i'm just reading from chairman powell's statement the central bank is satisfied with the current size and shap

sarah, paul, on a fed day, our special fed panel. thank you. still ahead we have much more on today's fed decision, what it means for your money we'll talk to former fed vice-chairman stanley fischer. fresh comments from bank executives it's only september but owakre making an appearance on wall street. those stories and more when we take you inside the market zone. ♪ ♪ ♪ to deliver your packages. and the peace of mind of knowing that important things like your prescriptions, and ballots, are on their way. every day, all across america, we'll keep delivering for you. every day, all across america, ♪ you can go your own way ♪ go your own way your wireless. your rules. only xfinity mobile lets you choose shared data, unlimited or a mix of each. and switch anytime so you only pay for the data you need. switch and save up to $400 a year on your wireless bill. with the carrier rated #1 in customer satisfaction. call, click, or visit your local xfinity store today. ♪ i keep working my way back to you, babe ♪ ♪ with a burning love inside ♪ yeah i'm wo

and if the fed can't do it and it's not natural for the fed to do that successfully, it's got to come from the government side. alix: here's an unfair question for you. what's the -- >> that's all right. alix: what's the money amount that we need to see from government? >> well, i don't know what the exact numbers are, but it would be significantly above where we are now. alix: i ask you because i feel like there is a point at which we are going to have to pay for it. we see this debate happening in the u.k. as the furlough program is rolled out and there is a question do we raise taxs? do you extend the furlough program? when do you think we should be talking about raising taxes? how does and when does that make sense? >> the raising taxing -- taxes is the -- assuming they are aise taxes in a way that doesn't reduce the wages of poor people and raise the incomes of the rich people as the previous -- as the last major change in wages happenedin , but it would require that taxes are changed in way which raises the amount that is in the hands of poorer people and takes money away from r

got a fed special in london to get to, and the former fed vice chair.et's get you up to speed with the first word news from our london hq. wto has ruled the u.s. violated international rules by imposing tariffs on china. any unlikely to lead to changes in washington. the u.s. is removing the aluminum carrots from canada after being -- aluminum tariffs after being threatened with retaliation. u.s. trade representative robert , his office expects shipments from canada to effectively signal a quota. sources tell bloomberg jp morgan sent stapp home this week after an employee tested positive for covid-19. the infection in the equity trading comes days after jp they'll be traders expected return to the office by september 21. first continue to rage from california to washington state. more than 5 million acres have burned, killing dozens of people. ite of the impact has made to the northeast, skies over new york have been a milky gray due to the jet stream carrying smoke across some of the country. global news, 24 hours a day, on air and on quicktake by bloo

anna: and the fed being called out. to that topic of conversation and get more of cole's strategy. across the bloomberg says the ecbb, this is coming through an e-mail state from the e.c.b. and many have. and says this just fice leverage ratio relief. to some extent a lot has been expected to keep lending, to assist government to keep the money going where it is requested. and a lot of restrictions have been put on banks in terms of the dividends. lots of pay out and seriously. well, here they're getting a little bit of a break allowing temporary refleef banks leverage ratio. banks can benefit from leverage ratio until june the 22nd. i guess of next year. that's another line coming through the usbc >> we take a look at cole smeed's stock picks. and why he's shunning one of this year's stock market challenge. this is bloomberg. ♪ anna: welcome back. this is the european market open. european markets down by just over 1%. u.s. futures point to the down side. let's get back to our conversation with cole smeed at smeed capi

well i think the fed is it is is anticipating because we don't we only saw the core. inflation metric that the fed follows the most closely is only projected to go up to 1.7 percent i'm trying to figure out why we spent the last few weeks talking about inflation running too hot at over 2 percent but the fact of the matter is if we can't find a way to generate true fundamental organic economic growth to where we don't need constant stimulus spending you can flip a switch one day and have a deficit and debt so high that you get inflation overnight that's a big risk that i don't think is being covered well enough in the media right now former fed insider daniel de martino always appreciate it ben swonk co-host of boom bust thank you both for your time. american drug maker eli lilly says its antibody based covert 19 treatment appears to have reduced the hospitalization rate for patients recently diagnosed with moderate symptoms from the virus now the pharmaceutical company says it held trials using 3 different doses of the drug against a placebo on 450 patients now the tr

sword as everyone was trying to fund the fed's massive purchases so the fed accomplishes handywork creating a bond problem bailing out ask the holders are in the worst economy of a lifetime mostly by job owning and actually bought very small amounts of bonds bond e.t.f. during july it really just dabbled in them how do you know the war bonds people made sacrifices not because they were greedy was the opposite they're willing to put their greed aside for the greater good here the fed is gaslighting people by saying your agreed will help you get rich but it's a bait and switch and they're giving them poisoned chalice and they're actually bankrupting individuals who do end up making a sacrifice on the wittingly for the hedge fund managers who like to go out and buy very expensive apartments on park avenue this is to continue in the world war 2 analogy not on like when the doctors decided to counterfeit the english out on the english money right this is money counterfeiting to destroy the money to destroy a country and is anyone talking about on the campaign trail either party absolutely no it'

we have a fed meeting.be fascinating coming off of retail sales and the attendant moves we see in the bond market. it is another curve in the story, isn't it? lisa: the idea is the u.s. economy seems to be doing pretty well. if you want to follow the narrative that wrote the removal of additional fiscal stimulus is causing a decline in the retail space, you can look at the data. i wonder how they will spin it? they will try to create is an area where washington responds, even though things look better than they expected. tom: it will be interesting delicacies of the meeting will be nuanced. be at the fedwill meeting. a wonderful line with varied up eating -- with varied opinions. caroline hyde leading our coverage. looking forward to professor blinder of the original economics of the moment with the paul's of the american common 8 -- with the pulse of the american economy. we finish strong with jeffrey rosenberg who will try to brief lisa abramowicz on bonds for the morning. it is interesting with jeff rose

caroline: the fed's new policy framework will let doves fly. now the question really is how will this play out in the real economy? right now the central bank is committing to keeping rates lower for longer and using a full range of tools to support the economic recovery. poweris more left promises. longer-term there is uncertainty. and how these actions will affect real people and real purchases and real jobs. bornhe new economy is from the crisis but it could leave some markers behind. moreneed to think creatively about inclusion in the workforce. there is a discussion from the decisions made during the crisis and the longer-term ramifications. get a lot of this can theoretical the connection between the fed approach and the framework and what actually happens in the real economy. let's first talk a little bit more about these projections for the federal reserve. i think one of the key things is, you know, look, there is improvement. byy see gdp only shrinking 3.7%, they see unemployment at 7.6 is sent, extremely elevated -- we were at 3.5% g

the fed if the economy turns down, the fed will boost asset prices. what the fed is doing today is allowing you to sell into the money, something with more premium. that is essentially the decline and risk premium. that is going to allow, if there are good things happening in the markets when the economy is growing, they will allow the good times to run, but if things start to turn down, the fed will in policy ineact terms of liquidity. they will try to limit the downside but let upside run. when you look at your distribution of expectations of outcomes for asset prices, it has to be skewed more to the upside. that is why i say the fed is going from allow you to sell [indiscernible] jonathan: what is the difference between what you are describing and an asset bubble? jim: the way we have to think about it today, the fed does not want to cut rates into negative territory. they are right up against the zero lower bound. the only way the fed acts on financial conditions is through the financial asset price. the fed does not hire people, start companies,

understandable pre-fed. we will get volatility as a result of the fed.e not expecting it but keep an eye on those. in the currency market, we are seeing a little but of action, certainly in the pound. orest johnson giving testimony today. tomorrow we have a bank of england rate decision. a focus on whether the bank of england will be forced to cut rates as a result of not only the economic trajectory generated by covid, but also what is happening with the potential for the hard brexit. will be back with peter in just a moment. euro-dollar flat. look at the pound. 1.2995. the pound popping higher. big factor as well with what is happening. the pound is gaining against the euro and against the u.s. dollar. asymmetrical move. in terms of what we are seeing in individual equity markets, you can see the stronger pound generating a lower ftse, down. the dax and the cac 40 relatively flat as we approach the end of the day. in terms of the individual sectors we are deducing from the sector breakdown, let me show you what is happening. everything in positive terr

they are looking for the fed to do more. all the fed can do is pave the way for fiscal stimulus. they are hoping congress chooses that your. long-term elevated interest rates are not the problem. we have negative interest rates at the 10 year point and the lowest levels ever. the door is open for stimulus. the market was looking for the fed, given they were taking historic steps, did not follow it up with action. there were expectations built that there would be something more for feds to do, moving from stabilization to accommodation we believe did fuel expectations for some aspects of the bond market that the fed would do more. they didn't. when powell talked about the balance sheet, he talked about increasing the -- but also decreasing the pace of buying. i don't think the market liked the neutral action from the fed. is: let's pick up on that, their acceptance that may be we are running out of road on policy? that the fed is reaching the end of what they can achieve? there was a definite hand to fiscal policy. he push that button again and again. central banks around the worl

movedially, the fed just the needle.rday, we pondered the potency of central banks to keep delivering upside surprises to support this market. is that essentially what we saw? it was not a watershed moment, and therefore we saw the reaction or lack of reaction in markets? gina: i think that is certainly part of the story. we did see some intrigue and reaction at the sector level. we did see really strong rotation into value plays and particularly, financials and energy and out of technology stocks and this is something we have seen a little rotation beginning in the equity market in the u.s. and globally over the course of the last month, into more inflation plays. financials, energy, industrials, materials. these are all sectors that tend to do a little better in an inflationary environment, in an environment in which you see a cyclical recovery start to emerge, and out of some of the more defensive covid-19 sort of winning sectors like technology and health care, but especially technology. that trade really took off in

we have read today mary writes that while the feds step to make the inflation target more symmetric may benefit the wages of the average american somewhat beyond 2020 it does not really address the deeper problem with the role the fed is play. being in the u.s. economy it could be argued that the faz policies have become part of the problem instead of the solution they go on to say and i'll read this in a bit but they say that the fed is enabling and enriching that one percent that's why jeff bezos was worth $130000000000.00 in january and now he's worth $200000000000.00 and that's after he gave $30000000000.00 to his ex-wife right you mention the late sixty's and early seventy's and the split generationally the boomers were more left then the prevailing democratic party at the time and now we've got the you know caesar the millennial is that are more left than the prevailing democratic party at the time so there's a left wing search happening politically in the $71.00 of course knew us to close the gold window to pay for the vietnam war right so they defaulted on their foreign obli

powell described with the fed it very powerful forward guidance, but markets look at fed did as more or less a nothing burger. inflation expectations did not move, and the fed -- fed's forecast didn't predicted would succeed in the average inflation targeting. nowhere in the forecast is 2% or more inflation. instead, 2% inflation after four years. discussing earlier, some were disappointed, and markets did not move. the immediate response to the fed is what you want to look at. there was disappointment with fedpress conference but the didn't move the needle in the way they hoped. lisa: what was the main disappointment, that they didn't say they would come out and buy an amount of long-term debt? >> average inflation targeting means if you have been below too, you seem to get above two, but nowhere in the forecast is above 2% inflation. it is a pretty long horizon, four years to fully recover is not a lost decade but not a speedy return to full economic health either. it is absolutely ridiculous to be upset in the last 24 hours. meeting 5 is the next for the federal reserve. i underst

do you see fed officials doing the same?: i think if they don't believe it, they at least understand that view. the question is -- what happens if they decide to do something about it? [laughs] [laughs] the fed is not going to do ratesng that will raise significantly or lead to an equity market crash that would lead to reaction from washington. they are caught between the two impulses at this point. they need to keep rates low. they need to keep the economy going to the best of their ability and not -- hope for fiscal help and not try to cause the need for it. i weren: mike, tom and talking yesterday, over the last couple of days, actually, about chairman powell and the evil lucian of chairman powell over the last several years. can you -- the evolution of chairman powell over the last several years. it, thewalk us through economic club of new york talking about financial instability and bubbles? michael: i think a lot of people in the fed have evolved their thinking, and jay powell gets a lot of credit. basically they decid

the fed is set to hold the final meeting before the election. we'll have more after the break. >>> we've had firly muted action on the markets one of the exceptions is crude as hurricane sally prepares to make u.s. land fall. oil output has been disrupted. a warning sally will likely bring historic, life-threatening flooding along the portions of the coast. >>> speaking to geoff, jamie dimon called for further stimulus >> governments around the world took action. i think that is very admirable of course, we'll be finger pointing for years about the part that didn't go well it is a little disappointing we haven't come together in the united states with thele second round here we do need that round. carefully open up and get this economy growing for the sake of everybody. if we have another down turn, okay, you could have serious economic problems, social problems, et cetera. governments should be thoughtful in terms of opening up >> the federal reserve is expected to keep rates on hold the conclusion of the two-day meeting. investors will be keen

the virus was a big unknown, but at least the fed could address that, the fed is not in the positiono address a constitutional issue if that comes to pass. tom: what is your measurement of your wallet worry right now. based off futures up 42 is down a horrific 7%. mark, we are down 7% on spx right now. and my right, there has been a massive swing to a short bet? mark: i think it has been more just taking chips off the table. certain names, there have been some idiosyncratic short bets put on, but steam blowing out of the system is a healthy thing. i think the odds of a major disruption later this year are quite low and that is why valuations are still attractive or so full in many asset classes. my point, though is that later in the year, after investors have done pretty well, particularly since march it is just human nature to take some chips off the table. i think the lesson learned back feel somehen you anxiety, you need some liquidity. that is what investors are doing. it is augmented of the bid by quarter mdm in september. jonathan: mark, great to catch up with you. equity futur

the fed is basically waiting for help from others. if you look at the tenuous position we are in right now, we are literally less than 1% away from the intraday lows and futures we saw in nasdaq on both the eighth and 11th. we are at this point where the fed is saying, if price is truth right now, if it is it really and easily for castable event, then we have to keep financial stability very high. we have to keep liquidity markets open. the signal liquidity is going to be there for a long period of time. the fed is basically saying, we are going to wait and see if we get help and if we don't, we may have to make this nestle builds bigger. we would rather have others contribute. tom: do we have financial instability? i know you have the $900 million check from citigroup, but where is the financial instability right now? jon: i think we have clear distortions. economies, one is doing terribly on the other is doing really well, and you set policy for both, do you not think we will have a distortion on one end? tom: absolutely. i don't se

is a the bond world melding of the fed and the treasury.hinking, this sounds rather derogatory, but the fed is the dog, the treasury is wagging it. if the treasury wants mother -- once money, -- if the treasury wants money, the fed will provided through purchases. do i endorse that? no. is that a constructive thing down the road? probably not. is it inflationary? probably yes. we will see. to the extent we have melted fiscal and monetary rather permanently, deficits can increase but we are at 100% of gdp already and it goes to 120%, if thend at some point fed stays out of it, then inflation is going to come back. in any case we had inflation with financial assets and commodities that have come back in another form. michael: i remember that -- tom: i remember the day when you recommended procter & gamble dividend and the bond world fell off its collective chair. now we have permanent repression. i will give you great credit for coming up with that concept. we have an asset bubble because we have your financial repression? bill: i think so. w

economy is asymmetric impact the fed policies on households and businesses the fed monetary regulatory policies have contributed to a form of capitalism where the rewards are going to the one percent and the risks are borne by the 99 percent the current crisis response has made it painfully clear again that the fed's policies benefit high income individuals and large corporations while small businesses and low income individuals bear the burden. and while the fed likes to see itself as part of the solution to america's economic problems it should ask itself whether it is part of these problems so that's the top right that's what the fed is doing these people down at the bottom in defense of looting that's the same argument that they use where they say that looting provides people with an imaginative sense of freedom and pleasure and help some imagine a world that could be so again just like the fed is doing they're targeting small businesses and small enterprises to take from them to enrich themselves ok use the vietnam war as a great analogy by the mid sixty's 25000 american soldiers

you talk for the last 20 minutes about how the fed allows and how the fed or they do not allow anything. not one man printing $7 trillion out of thin air. remember, that is all debt enabling 260 trillion around the globe of debt that will come home to roost one day. we will let this thing run out. i've been telling you on the show several times we thought we have eight melts up going on right now and we've had a little correction and maybe it is over and maybe there is more to go but when you see it snowflake come out as an 80 billion-dollar market cap even though they have 400 million in sales and lost $300 million on it, that is indicative of what this man is creating. he's telling all the savors of this country to go take a flying leap and we will pay you nothing and keep that money with the lenders and the bank. go ahead and buy snowflake and make money and that is how you do it. i think and the long run we are in big trouble because of that. he's made market addicted to just him. when i say i mean that, just him. when i hear that they are fighting about being dovish it means 0% int

. >>> now, in the second day of testimony before congress on the fed's coronavirus response, fed chair powell saying, "we have done basically all the things that we can think of." he added the economy has made substantial progress but warned there is plenty left to do listen >> a full recovery is likely to come only when people are confident that it's safe to reengage in a broad range of activities the path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government >> here to weigh in on that, and the fed's next move, paul mccully, former chief economist at pimco and currently a senior fellow at cornell university paul, it's great to have you here we spoke with david zervos yesterday who was very disappointed in the fed's communication over the past week and basically said they're the reason for the market selloff ever since what would you say about their communication techniques and style including what we've heard from powell and some of the other fed members today? >> on the other side of that trade, i haven't been dis appoi appoi

of his from the very beginning while the market has gone up and up and more certain about outcomes, fed chair jerome powell and a lot of members stuck to their take on the outlook which is that it is highly uncertain and concerned about a second wave of the virus and how much underlying damage is done to the economy i don't know that it is a specific leaning against the market but maybe they try to provide a bit of a reality check for how the market has sort of priced in different outcomes. >> job voting to combat the nonexistent bubble they say they're not creating steve liesman, thank you and in the testimony he seems to say, we need fiscal. the fed is going to do all that it can and now with all of the rancor surrounding the death of ruth bader ginsburg and whether or not there will be a nominee tried to be pushed through congress, b.k., it looks like the stimulus package might not happen this is the risk in the market when t when the markets were pricing in stimulus. >> right and i think that is a big part of why we had that sell-off today and i know we reversed but i think a lot of

what is the new crystal ball for the fed? i think it is more just looking at the conditions on the ground as they are, and that is partly because we spent so much time five or 10 years ago thinking about what is the natural rate of an employment. is there a way that we can deduce that from what we are seeing in the economy? if we get to a low enough unemployment rate, we know they're getting to where there will be inflationary pressure, and you kind of do the backwards deduction, and you are raising rates as soon as unemployment gets close to that number. the issue with that is although theoretically, the natural rate of unemployment is a great idea, empirically it is hard to identify, so you end up in this strange scenario over the last decade where you are constantly revising downward that natural rate of unemployment, and saying maybe we can go further. there's a bit of recognition at the fed not to play this game this time around, and say that's not respond until we see evidence that inflation is picking up. jonathan: the

we look back, 2016, you surprised, maybe not the people at the fed but the world of fed watchers when started raising rates and you said, wait a minute, you didn't see any rate increases until there was a regime change of some kind to really shift the economy. targeting inflation was meant to prevent inflation from moving too high. now the fed has said we will let it run. are you adopting this at the wrong time just as the fed started targeting inflation when you didn't need to keep it low? we have named the inflation target in 2012. the idea was to get more credibility and maybe move inflation up by naming the inflation target. that is what materialize over this era. viewers thator the i think the main issue is the appreciation of the effect of lower bound on interest rates and the appreciation that is causing a distortion in actual inflation outcomes is pulling inflation down more than we would like and making us miss our inflation target street that is what we want to get rid of here. the whole idea of inflation targeting was developed in a world where people did not think about th

that is what tested the fed in 2018. that is what tested the fed in 2020. right now, even with equities doing what they are doing, spreads have been really stable in and around 500 basis points on high-yield. tom: even with the difficulties of the market, it is true, we have been incredibly range bound. you see that with the moving averages that come down. on radio, it looks great. right, jon? jonathan: it is just fantastic. i will do it as well. tom: you can do it at financial, or you can do it linear. just great. jonathan: brilliant. you nailed it. in new york and london, this is bloomberg. ♪ pres. trump: it will continue to be named tiktok, as it was all along, and that's it. that's it. i can say that i have given the deal my blessing. if they get it done, that's great. if they don't, that's ok, too. but is a great deal for america. very interesting. presidentthe celebrating a deal between oracle and tiktok, a deal we will talk about in just a moment. good morning to you all. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your price action

news cable news fright that was the big place he went for financial news and he was demanding that the fed do something to bail out because all his friends of bear stearns were losing all their money losing all their wealth losing their jobs they have to do something this is no time to be an academic get a bell out well here day fortnight went long very very long on tesla down 30 percent and just a week right well you know we've been talking about tesla for you know a number wix a few months because it is a phenomenon and the point i've been making from day one is that it's a me it's a mean that has a market valuation at one point over $400000000000.00 and it taps into people who trade means and these are generations e.a.a. and the millennial is on the robin of apps and other platforms and means have no fundamental value there's nothing better it's just it's a murmur ation like starlings in the sky they congregate and then they disperse and people congregate around this murmur ation of a stock called tesla and now they're dispersing and there's no fundamental value to be that would suggest