fed staff.oing forward, the fed would be much more mindful about keeping rates high at a longer duration. kriti: at the core of that thesis is the labor market story. at the same time, there is a conversation in the equity market that the federal reserve, even though it has been driving the trade, may not be the driver into the end of the year. in the past couple of moments, we got a headline from meta saying is looking to trim its cost by 10% in the coming month. walmart is pulling back on holiday hiring. how does that matter for the equity markets now? >> it doesn't matter as far as what we pay for earnings. the federal reserve is consequential to set the discount rate that impacts valuations for the equity market. that said, the equity market is a bit nervous that while we are seeing evidence of slowing earnings growth, we are seeing earnings come in slower the next few months. the equity market is nervous that the fed will take the policy rate so high it will squeeze off economic growth. if

jon: we have another fed put now. i think the equity market gets the joke because, earlier this morning, we had what many would call a kind of goldilocks thing. you could dream for a moment, maybe a couple hours, that they can engineer a soft landing, maybe not push rates too far and bring price pressure down, but ultimately, if we are in this world of qt and a fed call not a fed put, that will mean risk for the next couple months at least. george: absolutely, and it is a global phenomenon. both the inflation problem is global and the reaction from central banks is global. the fact we've seen this global rise in rates -- for years, term payments have been compressed in the u.s. and we've benefited tremendously from low european and japanese rates. that's no wonder true. again, we are still early days in that process. jon: i want to talk about qt and maybe get some more details. i tried to press fed officials last week in jackson hole on what qt meant to them and i didn't get a clear picture of what any of it means wha

when does inflation drop fast enough for the fed to turn around? when does the fed change its june?it's tune? probably around the middle of 2023. there is space for them to hike rates. dani: i've got to say, a point we were just discussing, this idea of how will the fed know when they've gone too far? to some degree, they are not really. considering what the dot plot looks like, considering the signals they are sending out, it looks like a forecast they are going to keep going even if economic data starts to deteriorate. >> two things need to happen. core cpi needs to decelerate month to month. last month we sought up 0.6. it needs to be flat or 0.1 or 0.2 for a number of months. the second thing is they want softening in the labor market. the next jobs report, we don't want to see a 300,000 plus jobs report, we want to see a slow and a rise in the employment rate. we want to see softening in labor market conditions. if we still see momentum in inflation and a pretty strong labor market or too tight as the chair said today, then there is stoke for the fed to keep piping -- hiking. d

the fed -- following the fed has left a trail of destruction in its wake.'s be clear about that. it is not timing, and as we saw this year, traditional risk mitigation strategies have not worked. it is a fundamental trap. the fed hurts people in both ways, we know how inflation hurts everybody, to clearly the poor, but now the fed is going to try to back out of inflation. i would be creating inflation and then by getting rid of inflation, i would be driving a car over someone and then proceeding to back over that person, so in both directions, it is going to be really bad. i cannot stress enough how i think how important it is from a risk mitigation strategy to be strategic and not be spooked or squeezed in and out of the market because this is how people get it wrong. alix: so you say, oh, it is a dollar, saying the typical things we expect, that isn't going to work at this time. is it alternative aspects that will help and not stress you? mark: we are seeing some things done ok. some alternative assets. the way i look at risk mitigation is cost-effectiven

lindsey: suggest to the market or the fed? the fed is focused on prices. the fed is not focused on market metrics. the fed has blinders and price stability is the primary focus. despite the apparent inversion of the curve, if the function is not there in terms of market activity and that is not enough to derail the fed focus from insuring price stability. we have inflation at a four decade high. even with the second derivative improvement, the price ascension slowing moderately for two months, that is not enough to have reached that threshold the fed has said is needed to begin the pullback away from the pathways. jonathan: if they do not deliver what is priced, that will result in an of financial conditions. i do not think that is what they want. that is the difficulty. that is why some people still doubt their guidance. they do not think they will say certain things out loud, for instance really unveil what the threshold is to back away from interest rate hikes. can you give us an idea of what you think that threshold is? lindsey: i think we need to see

it's fed decision. an hour from now, we'll decide if the fed goes three-fourths or maybe a full percentage point higher we'll have every angle covered ahead of that decision what means for the economy, for housing, for stocks, for your money. >>> also, vladimir putin's latest threats as president biden speaks at the united nations. a look at the impact that is having on the markets today. let us begin with dom chu and your markets an hour away. i know literally you didn't sleep last night >> i got like three hours in too much excitement about the fed day today, but if you look at the markets overall, this is very much like that wait and see, right we're seeing some fractional gains in the market. generally speaking, though, positive the dow industrials up about 100 points, 30,811 3075 is the last trade for the 9/11 similar percentage move for the nasdaq composite, up 50 points, 11,475 one place that's been a big place for investors, the bullish move we've seen for areas of the defense sector that's spen

still the story here's the way to think about it if you look at the real fed funds rate, fed funds minus the inflation rate, it is still for all practical purposes historically negative. the fed has never been this far behind inflation that argues that we're more at the beginning of the tightening cycle than the end of the tightening cycle so whether they go 50, 75, 100 or 125, i think that's a little bit of forest and trees here the story is going to be the fed is going to be tightening for the foreseeable future let's accept that inflation doesn't end very quickly. >> so that's going to be painful for the economy and the stock market what are you doing, are you in cash >> we do have the highest cash allocation we've had in quite some time. but i think the place to look here is what works during economic slowdowns and profit slowdowns. the answer is boring stuff things we have to have consumer staples, health care, utilities. sexy, like-to-have type things don't work in this environment that's what people are coming to grips with boring becomes very, very attractive in these types of en

the fed would have to respond.re not likely to enter that regime, but it is certainly possible. as we enter a recession, the fed has to backtrack and send rates way back to zero. lisa: this is sort of the big tension right now bond markets. the 10 year yield at the highest level since they have been going back years and years, and yet some people including fixed income earlier saying it is unclear because there could be more. is this the last time we will see real yields of this level because the state is poised to make some sort of turned in the future? michael: that 100% depends on the path of core inflation readings and the labor market. that is why the fed is reacting so hawkish lee here. -- hawkishly here. some parts have begun to slow, but the latest trend was 0.6, and labor markets clearly remained quite robust at 3.7% unemployment rate. the fed really needs to see a slowdown in the monthly pace of inflation, particularly encore, and the beginning of the labor market. the chair talked about inducing pain in

fed fund futures are pricing in the fed to continue to go to 4.5% as the fed funds futures. that's the fed funds rate with the curve. if they did that, no the equities are not priced for that the equity markets are barely priced for 3%. if we remain in the 3% to 4% range well into 2023 and into 2024, the equity markets are not priced for that. >> if they are not priced for that, do you go back in the markets and continue buying equities do you wait? sit with cash on the sidelines or dislocations in the market to find opportunities and what types of opportunities are you looking into >> i would go with capital structure. if you don't believe we are going into a severe recession that will cause a lot of defaults, you should probably be heading into credit right now. there is probably going to be interesting situations this is an area that has been dead for ten years there is probably interesting situations where you get really good yield on companies that are solid that just need some liquidity. there could be some opportunities higher up the capital structure. the equity mark

maria: the fed didn't see it that way. were written by congress to expire so they expired. they were expiring and you chose not to extend them. >> yeah, so treasury gave capital to the federal reserve to allow it to buy, you know, bonds, everything from, you know, asset back securities to municipal bonds or something, right, and so there was the view that the recession was ending on its own because vaccines were going to allow reopening to occur which is what happened and it was time to sort of pull back some of the emergency rooming stances and step back from a crazy emergency loosest policy in history. maria: they saw the emergency ending, the federal reserve did not. the federal reserve kept buying every month in 2021. i think it's important that you did not reup those programs and you -- james: it started booming in the 2020. >> worst possible time to go hit the fiscal accelerator. maria: and that's what they did. steven, great to have your insights. >> pleasure to be here. maria: we will be right back. ♪ ♪ ♪ millions

it sounds >> i think the main reason people don't believe what the fed says is because the fed is notery good at projecting what's going to happen a year out. i think their words are probably pretty good at projecting what they're going to do at the next meeting and maybe the following meeting. but that's about it. because if the data changes, we all know they're going to change their tune the other thing i would say is that fighting inflation is what they need to do. as long as they keep sending that message, there's a chance that we avert recession. because if we didn't fight inflation, if we let inflation go on its own, we would for sure be in a recession. so they do have to do that in order to give us any chance of averting it. it's just a matter of if they can do it without breaking the rest of the economy. >> jim, you've been hanging on this idea that, you know, they're going to go a hundred more basis points, right, 50, 25, 25 and then they're going to stop or they're going to wait and see. and they're not going to either be able to raise as many times as they say or the econom

i think the fed is way too tight. they're making exactly the same mistake on the other side that they made a year ago >> joining us now is former kansas city fed president thomas hoenig it's great to have you to weigh in on this would you agree that it represents an error by the fed in regard to inflation and i guess does it matter how we got here in terms of what they have to do now? >> it's a fair point the fed was behind the curve they should have been at least removing a lot of that accommodation starting in 2021 at the latest, and they delayed throughout the entire year and, therefore, we ended up with the inflationary impulse that we have and it's become more embedded and, yeah, it wasn't all supply side by any means with the fiscal expansions and the monetization, but we are where we are and now that inflation is embedded and the fed knows it and they know they have to get that down from the 8.3 which is actually becoming more and more difficult with time so they are raising rates and i think the 4.6% number th

how do you hedge the fed? joining us to figure out all of this, as i mentioned, a bloomberg intelligence strategist ira jersey and bloomberg's kriti gupta. i'm trying to figure out how the markets are moving this monday. ira, i will start with you. we are trying to figure out how to hedge the fed. what is going on with the bond market? ira: we are seeing more flattening of the yield curve, but that is not a big surprise given that the risk is for the federal reserve to hinder they will go even higher than what the market is pricing in terms of -- remember, with this meeting not only do we get the post meeting press conference, we also get the summary of economic projections. we will see what do the members of the fed think for the economy, inflation, real growth. the single biggest thing at the front end of the curve is starting to price for and why you see two-year notes over 8 basis points of the moment is the federal reserve, you know if they hike to 4.5%, 5%, like bloomberg intelligence think, if they keep

i think the markets are misreading the fed and have misread the fed all along. the fed continues to push back. they are doing it today as well. i think when you have been in this environment where traders and investors in the u.s. have dismissed what the fed has been saying all along, and is finally catching up since jackson hole, i think that is going to continue. i don't see what is happening in the u.k. as something that is a concern here at this point. i think it is early for this global central bank. some are latching onto. i think that is a farce. jonathan: one thing we talked about this year, there is a choice here, recession or high inflation and you have to pick your poison. i wonder, is it a choice between recession and financial instability, or higher inflation for longer? is that the decision the central banks have to make? subadra: absolutely. i think there is a third wheel. it is not just inflation or recession, it is also financial stability. to the discussion earlier, the thing i am concerned about for the fed is the lack of liquidity in the trea

of blink sooner than people think don't think fed is able to get much higher in terms of fed funds rate above 4% without doling real damage to the economy i am probably in that camp fed is in a box because they said inflation was transitory it obviously, was not. now they have to be steadfast, strong and powell has to continue with his -- program that he laid out jackson hole, going 75 basis points, and they will go again, if inflation does not roll over, and then they are going to keep rates according to him, at high level until inflation gets back below 5% i would say the least 5% probably below 4% what we are facing not going to be an easy slog not going to happen quickly going to take time. you know i have never i have been doing this 30 years i have never really seen initial jobless claims go up to 250,000, and then three weeks later back to 215,000, that you know i am -- very into data, and that is a forward-looking piece of data so, that is really weird that would happen usually go up 50,000 don't reverse quickly like that there is odd stuff going on in economy we really don't un

don't fight the fed.e fed is looking at outdated data if you are looking at the number he sees every day as a ceo, that other ceos see every day, his concern is they're reacting to outdate dad at that. as a result it's far more likely they will over shoot and push us into a deeper recession. >> that's a legitimate recession. i thought always my entire career on wall street, i always thought the fed's data was probably as good as anybody's in the planet and it was probably abated that's not the case. looking at outdated data, how outdated can it be a month. still, that could be an issue. i wouldn't worry about that either. >> there's more cash sitting on the sidelines than there has been in a very long time. >> yeah. >> people aren't getting drawn in by any of the drops thinking, okay, there's more room to come down what do you see from the retail investor side, from the day trader side? >> i think people are on the sideline other than the day when the cpi number, market down 4.3% that was the second large

the san francisco fed saying it is mainly supplied in the new york fed says it is labor making demands. we will have little time to figure out how much more the rate needs to go up to get that cooling of the economy that the fed want. >> we are looking at the unemployment rate of three point 57% -- 3.57%. let's look at the average hourly earnings, those came in higher as well. on a real basis people lost money in theory, what is your take? >> that is correct, inflation is 8.5 percent, average allergies -- our lease -- average hourly wage came in lower. it continues to be, will happen to wage inflation? wage inflation has moved a little bit down, relative to levels it has been pre-pandemic. it is a very important question you're asking. will wage inflation come down quickly? will consumer price inflation come down quickly? so far the loan rates is the markets conclusion, certainly a very critical aspect of the discussion we are having, what will come down first. willoughby wage inflation or consumer price inflation -- will it be wage inflation or consumer price inflation? >> at the end

dollar with the fed hangover fenton center.and center paired walmart and bucky that trend -- walmart bucking that trend. then to have got the chip challenge outlined by nvidia today. those which -- those shares up 10.5% him kriti: some major ripple effects in the broader benchmarks. ahead of friday's jobs report, we talked about what the fed is looking for in the data. >> the thing is the labor market. we are seeing supply and demand. the fed does not necessarily want to see the unemployment rate go up. that is not what central banks want, but in this instance, we keep hearing about a type labor market and a market at unhealthy levels. we are trying to figure out how can the fed orchestrate rate hike cycles where there is still positive growth and unemployment goes up but not by much. jon: let's get from more insight from jennifer of the more capital markets. what is the fed to do? how are you thinking about the strategy from here. nvidia the -- jennifer: i bring trust any central banker right now. we are having a strong jobs r

that's what the fed needs to see. as professor siegel pointed out, housing which is a major about one-third of the cpi is a lagging indicator. statistics last week show housing is coming down that's not going to show up in the other equivalent of rent unfortunately, it's a nail-biter here watching what the inflation reports are going to do to see if there's any reason the fed will heed what the professor is saying right now they're not going to heed >> you allude to charlie evans, the chicago fed president was on squawk europe this morning said he's nervous about going too far. we've moved expeditiously and there's two more to get to that 4.25 to 4.75 by the end of the year are we saying that absent a fed pause or some sort of other language that suggests that they've done a lot, now it's time to just wait and see what happens? stocks can't hang with that, can't handle it? >> well, let's talk about what's going on right now in the stock market last week was an adjustment to higher interest rates. this is just the simp

objective, with racial equity, far from the fed's ability to address. in addition, you know, the fed's remit from the banking system to the broader financial system and its regulatory responsibilities were why they expanded in the wake of the financial crisis. how does continually expanding not undermine the focus of monetary stability beyond things such that, you know, the employment element of the mandate? >> so, i think our current mandate is appropriate and i do not-- i would not want to see it narrowed or broadened for that matter. we've got narrow and we've got well defined goals that we're supposed to pursue. what we get with that and what we've gotten is a precious grant to pursue those without direct political control. that's maximum employment price stability and i think that that dual mandate has served the public well, i really don't think that-- it would not be a good idea to broaden it to goals that might be mandates and achieve with our tools. more broadly than that, it's really important to stick to our assigned task and not those of con

the fed is talking the right way. they say that even if there's a recession they have to do what they have to do, but we haven't seen the real pressure yet when people are at odds they can't make the kind of mistakes made in the past, and i think that they -- that they hope they won't, and i don't think they will, but you never know. >> powell did say in jackson hole that households should expect some level of pain as rates move higher. do you think pole will elaborate in the press conference just what that pain would look like for americans as they look at their waltz and 401(k)s and fear of losing money? >> i don't know. because, you know, it's always tough to give people bad news and you don't want to dwell on the bad news it was very good that he said what he said, and i think the reality is that he's -- he's made it clear and other members of participants of the fomc have also made it clear that the fed -- actually its main job right now is to get inflation under control and if it doesn't do that it will be much

a look ahead to the fed chair jay powell. >> u.s. inflation is horrific. >> it's a little warmer than expected and >> the price inflation remains high. very few hotspots. >> is going to not blink. >> 75 basis points. what we saw on tuesday. it puts the fed into overdrive. >> a hundred basis rises on the table. if they're in overdrive, they will make a policy mistake. >> central bankers do not understand money. >> they are feeling their way to how far they have to raise the number. >> tell me the last time the fed got it right. >> now they will have more reasons to go up. >> some of the voices we heard after that stunning inflation, and joining us to talk about that, what to expect, and we can head, the bank of america joins us right now. let's start off with how surprised you were, not only by the inflation, but by the market reaction? >> >>. thank you for having me. we were surprised by the inflation print. we thought inflation and services and goods were going to be on a downward trajectory. what we saw is that they both will remai

that's what the fed wants. they also want the memesters to disappear because they too stand for speculative access gamestop would make them happy i told you not to buy that beth bath & beyond. but you made fun of me to which i say sticks and stones may break my bones but unread twitter posts never hurt me. one more thing nfts, non-fungible tokens but now something i can't say on tv that it stands for, they need to disappear. with anyone who buys them becoming clothesless emperors. unlike a lot of people who run nfts, that dunce mean anything at the same time we need help wanted signs to come down. they're still everywhere we have to see many more lease signs instead. i know these are not nice things i'm saying nobody wants a bad economy i don't want you to get laid off. you don't want me to get laid off. but the fed is going to make sure we have many, many, many more layoffs until they think inflation's under control. eventually people stop paying attention to the portfolios at all. sort of like the five stages

so the question is what do you do from here for when folks here are outhawking the fed and the fed is coming around to our thinking, steve grasso >> steve, when we look at unemployment when you get an idea of where you think unemployment is that it moves the needle for the fed, did you come out of that meeting with any clarity? >> a little bit. i think their number is understated if they really want the kind of slack that's going to be needed in the economy to bring inflation down in a classic tradeoff between unemployment and inflation i don't know if they have that chart in the back, the fed's own unemployment forecast. they have been going up to 4.4%. that's less than a percentage point and i don't know if it's going to be enough to create the kind of slack. the fed essentially by the way is kind of forecasting a soft landing. remember, it sees gdp next year go to 1.2% unemployment,4.4 that's not really too shabby consider i think powell himself said that if that happens, it will be a pretty decent outcome. he's not forecasting a recession per se, but when the fed says 0.2%, you kn

as we are in the blackout window for fed speak as we get into closer to a fed meeting and obviously cpi, hard to overstate the importance of that print on tuesday. have a good weekend, let's get to dom chu in the half >>> all right, thank you very much, carl quintanilla here we are, the "halftime report," i am dominic chu in for scott walker today stocks pushing higher yet again, aiming to break a three-week losing streak but a big warning from a major investor about why stocks could fall below june lows, we will debate that call with our investment committee they are today brenda -- shannon -- john, and jim -- in englewood cliffs, new jersey, checking on the rally at this hour right now, we are up 332 points, north of 1% gains for the dow, 1.25% gains for the s&p 500, solidly above 4,000, 4,059 the last drad there and 1.8% advances for the nasdaq composite. and by the way the russell 2,000 small caps also showing a bit of outperformance as well we will get back to the investment committee in just a moment, but first -- our own steve liesman joins is now with breaking news, and breaking

the fed is sounding very, very hawkish. we do see that the fed may overdo it.hat there is a recession next year. we do see risks that there will be continued headway more broadway. -- more broadly. jonathon: do you have a decent understanding of what the threshold is? >> right now, it seems very, very high. if i had to point to one indicator and only one, i would point to the labor market. it really seems like the fed wants to see material softening in the labor market. they are probably somewhat cautiously optimistic behind closed doors that inflation will be moderating. most economists think that these expectations, they debate this. the market also anticipates this. but the fed probably won't trust that until they see the labor markets softened more meaningfully. it certainly seems like the fed is dead set on ensuring that labor market slowdown. they will keep rates as highs it takes in order to get that. that just increases the risk of a hard landing or a recession in the future. i think they are focused likely right now more singularly on the labor market.

since then, the fed has formally stepped into the digital currency rating. digital currency has been a recurring theme in these conferences. but the fed has stepped in into this arena with a discussion paper on a central bank digital currency and several speeches from fed governors our team has reviewed the more than 2,000 comments that the fed's central bank digital currency paper received, and we find that about two-thirds of them are concerned or outright opposed to the idea. comment ers raise concerns of oppression, the bank system, some of the same concerns that led me to write that letter to the editor seven years ago how can concerns about freedom be reconciled with the digital currency >> let me start by saying we haven't made any decisions at all about whether to issue a cbdc, and we continue to evaluate the pros and cons and look at the technical and policy questions, and we expect that evaluation process will take some time, appropriately second, i'll say we do not intend to proceed without clear support from both the executive branch and from con

haidi: the fed in

the fed is in control. have gone to a fed call. the good news is, this is a leaf.y the end of the day, futures positive .5 percent. catching up with victoria, michael gayton of bank of america, and secretary walsh at the white house, coming up. tom: very good. we will look for that on radio and television. joining us now, jeff rosenberg is still with us. we've got a great team lined up to get you out over the next 17 minutes of this job report. what are you seeing in flows? i do not want to know inside blackrock baseball, are people selling bonds, is money flowing out of debt? >> if you can imagine, the flows are highly reactive to the returns. this has been a historic negative return year for all categories, fixed income, we have seen that in the past week in terms of acceleration, in terms of rates, spreads wider, this is a challenging environment for fixed income. we came into this year pricing the old inflationary regime. the inflationary regime has surprised the fed, the bond market. we continue to see those surprises. until we get a sufficient inflation risk

louis fed president jim bullard.e said i support a significant increase at the next meeting on september 20. think of the policy rate to a setting that is clearly restricting demand. joining us now diana swonk. such a pleasure to have you here. what does that restrictive territory look like to you? diana: the fed things it is about where they are at today. they think we are close to neutral. we can debate that. they want to see more of a slowdown that we are already seeing. it looks like growth in the third quarter is less than 1%. this is the fed trying to engineer potential growth with a rising in the on appointment right. how high for how long? they want to do a mild prolonged slowdown with a rising unemployment rate, a.k.a. ever session and whether -- a recession. the point is to grind inflation down slowly. moving from 6% to 4% inflation, that is not hard to get. 4% inflation to 2% inflation is where the heavy lifting comes. that is hard for the fed. i love mike mckee. i actually think the federal reserve is at

the fed can get lucky.e of risk, and the fed often talks about balance of risk, the balance of risk here is not a recession the balance of risk is the failure of fed to get -- of the fed to get a grip on inflation that's where the biggest risk is and that will be borne out, i believe, if the fed fails to follow through on its aggressive language it's been giving the last few months. if the fed only -- only did 50 this meeting, it would be an unmitigating disaster. it would undermine their credibility and everything they've been saying for the last few months so, my prediction is they'll do 75 basis points. i wouldn't be surprised if they did 100. i would be okay with that. but i don't think that's the most likely outcome. so, i think the risk here is the fed doesn't do enough. that is what's going to create the challenge for even a greater recession if inflation gets out of hand, more out of hand, i should say >> excellent points, charles >> then the pain's going to be really much greater. >> certainly we h

pricing for the fed, markets are now looking at 425.e have been dragging our fists around 350, then we have four. now we are looking at 425. speak of the fed funds rate, it is a long ways away from stopping and it is still holding at 250, so there is a long way to go. that means much higher front and seems on the back of that as well, even though we look at the -- of the 10 year curve at some point. tom: talk to us about the political timing of this market, clearly a bear market, the most significant in two decades. if you are an investor looking to get exposure, how do you time this? ven: it is difficult to time this. you want to price the markets, not time the market, and i would take 2.5% on the longer two year because that is where the fed will look to stop. by that time, the economy will start to lose some points it sees at the moment, so there is a long way to go until a bear market, but we are approaching that threshold not yet. francine: i know that in your live blog, and i urge everyone to go look at it, you talk about the 10 y

next week fed decide state.se eddie of deutsche bank -- matt luzzetti of deutsche bank and richard clarida. at the moment it is our currency, your problem. when does it become our problem? tom: the scale of that is something richard clarida has worked on at columbia university , always affiliated with columbia university and most importantly out of yale university the minister of finance for columbia joins us now. there is so much to talk about, minister, but i have to go to larger and to reach back to stan fischer in 1998 through the prism of columbia economics and foreign-exchange see anything like an international upset that we missed in 1998 and in 1992? >> thank you. i am delighted to be with you. let me say i do not think the same kind of crisis in 1998, it was very much and emerging-market crisis, a global crisis. the slowdown, particularly the inflation and the increasing interest rates, which is very heavily. tom: very importantly, i look at the limitation of price increase. we see it on india and their

the fed raising projections of where we will see rates going from here, but it is not just the fed we are talking about as well. we also have other central banks following through, monetary policy in hong kong following the fed, but take a look at how broader markets are setting up in asia following this hawkish message we did get from fed officials. we are seeing kiwi stocks, they are the only ones trading at the moment, actually higher this morning. very focused on what we see in the bond space as well, keeping a big eye on what we are seeing in the lung maturation section of the market because we see the biggest moves in the kiwi 10-year this morning and the dollar ratcheting stronger, reflecting what we see in the fx space. haidi: for more, let's bring our cross assets reporter and chief asia correspondent as well. is this the point where markets continuously have been over the past two months yearning for upside? >> exactly, don't fight the fed. if we look at what happened with u.s. stocks after the announcement, there was this trying to work out what was going, work things going

therefore, that should make the fed -- the fact that the fed will be above neutral finally which wouldllow the fed to perhaps turn a bit more cautious. manus: do you think there will be a brutal slow down or hard landing? co-joined with a glide in rates, hiking and holding. do you think that's the construct going into 2023? how brutal will the landing be? camille: how brutal? we still think that all the options are still on the table. it could be a soft landing. it could be a nice soft landing. therefore, we have our own outlooks. economy growth going below trend. we are not forecasting a very strong recession or a lasting recession. that's not in our outlook. for us, it's not really a story of a hot landing. the fed will probably need to lift rate expectations higher for a longer time. dani: how much higher? we have a market in the middle of next year that has moved is pricing from 4% to 4.3%. how much higher than that do they need to push? where do they need to set expectations? camille: it's more after that. 30% range perhaps with a hitch around 4%. but the market is still pricing a

some huge part is going in and then fed fund races 14% if we have fed funds at 4, ten-year around there, what are you giving the market? i think your $2 hub in taerns is way too far to go. credit said, okay, we expect 0.2. let's split the difference let's see -- hang on follow my math for a sec i'm comfortbling it's less than what we've been giving it the market 16 1/2 times 230 is on the market that's down a bit. but it's not catastrophic. this is where we need to get away from it. >> unless you have buddy math. >> she's talking about medications. i'm talking about chemo, your hair falling out, vomiting. >> you're being really extreme. >> that's the med sent it's not extreme i let you talk let me talk. you're taking 4. 25 out of the brass if p they're lining up against the comment. they've said that it's not going to hit earnings, but it's going to. >> hey, liesman, do you think that people are finally coming to grips with this hire for longer notion. and, look, other people have made this issue of they've made their own bed with lack of trust and ability, which is why some continue to

the fed is about to jack interest rates.lking about hong kong. >> pretty nervous about it. basically what this means for home price, this is a five-year low. we are thinking 75 basis points to impact mortgage rates here. >> they already increased by 1%. it is going up further. you can see another 1% increase. we can see the mortgage rate this way. we did not see much demand. it makes the situation very challenging. because what happens looking ahead? there doesn much upside. >> exactly. it is already coming down by 10% at the peak level last year. we will see if the mortgage rate keeps going up further. the challenging is going further. the mortgage rate is so high. going up further. you never see that happening. you remember what happened. it is coming down really crazy. would this drive property demand? >> yes. this is another positive thing overall. it is actually very challenging. the event is actually going up. i think this is already a little bit behind the curve. a little bit challenging. >> in terms of the policy sid

not the fed, the fed enabled spending the recovery act there were people already screaming about allchips and then we've done the inflation reduction act which, you know, supposedly is going to actually cut the deficit over ten years. then the student loan. we've been layering on trillions in additional spending but none of it is done yet. does this put us on our back foot for the future? are we actually engendering more in 2023, 2024 and 2025 from what we're spending now because we're dealing with what we spent in 2020 that's the inflation we've got now? are we still manufacturing more? >> i mean, in the short term, joe, when the price level moves from let's say -- let's say the price level was at 100 pre-covid, the real price level today is like 1b340. we all know how much impact the net effect of the impact of that printing has been on our own balance sheets, our own savings. but what the fed has taught politicians is that it's okay to spend and it's okay to spend recklessly and frivolously when was the last time you heard the words tea party used i mean, we just forgot about the

know, the feds in a point to where they're cutting rates. that means that that recession you were just talking about a minute ago has likely materialized in the economy in a way that's now affecting probably credit markets and we're having problems within the credit market refinancing for corporations, et cetera. that's the thing that the markets are really discounting pretty heavily that the feds got this all under control, but there's a real thing they don't. charles: and of course one of the other areas is a consequence of the earnings. you have been warning for a long time they are simply too high but is there a gauge? is there a magical number to know when they come down enough, when they are in line? i mean listen. let's face it. 24 hours ago i don't know anyone would have guessed fedex would have had the kind of hair cut we just saw last night. >> no, and look. i think fedex is a good proxy for where the economy is headed. i mean, you can't really, between them and ups, i mean, that really tells you what people are doing, and yes, the

the fed unanimously implemented third consecutive 75 basis point hike brings the fed funds rate to 3.75% and that's the highest since 2008. financials are extremely sensitive to any kind of rate hike, and i do want you guys to understand that already all different levels of rates are moving up. you had jp morgan and fifth third bank hitting the tape saying they're raising their rate to 6.25% and it's a mixed picture with citi, bank of america and jp morgan and goldman sachs up just a bit here. we have the fed reminding us that rates are a hot air balloon that's climbing in elevation. treasures are reflecting that the 10 year yield with 3.52% had earlier hit another 11.5 year high and bringing back a few basis points and at 3.25% after hitting -- i keep it tick by tick here, 3.6% we were up and as we continue to watch all of this, look at two year, which during this hour yesterday stood at 3.96%. it took off this morning and has stayed relatively high touching 4%. first time since 2007. jerome powell making it extraordinarily clear as we said he is not going to stop along with the federal

fed fallout. reaction to another big rate hike it's going to hit every aspect of the economy from debt to housing and maybe the stock market tech stocks exposed when rates rise and it shows the nasdaq now down 10 percent in just a month. big names all getting hit, but is now the time to buy >> and fedex shocked the world with its dire revenue warning. now the company reports for real will it change the narrative we'll trade that as well as costco ahead of their numbers coming up in earnings, exchange, let us begin now with the markets. dom chu, a very welcome and respected afternoon off. so you got me. let's talk about it. the dow, the s&p, and the nasdaq, they are all in the red. this is coin-based global, by the way. they're down 5.5%. technology, i guess you consider them part of technology, getting hit the hardest. now, within the sector, technology, not crypto, look at that there we go. the chip stocks seeing some of the biggest losses, amd, nvidia, on semi, all down 4 to 5%. the restaurant t

to the fed, it's about inflation.ss of what they see in the jobs report on friday, that doesn't change what they have to do to get inflation down. they have to keep hiking rates. what needs to be done is the inflation target rather than pumping of the jobs market. secondly, i think they're going to see a slowdown in the labor market numbers. it's probably not going to be the same as the slowdown that we saw with the client based. this is no longer a forecast that we report. it is an estimate of private sector payroll based on adp's numbers. what you're going to see in the report is close to consensus or maybe a little lower. i'm looking at 290,000 jobs. the key numbers to watch is the wage rate. that's what's important to the fed. whether or not the tightness of the labor market that is being exemplified in this report is leading to a wage crisis spiral that the fed has to take control of her. >> when it comes to lifting the hood on the jobs numbers, i know you have spoken before about the pressure on smaller companie

fed mistake.nd i look at what happened this morning. you did have rates rise across the spectrum but you had the two-year rise more than the ten-year the concern the fed plunges the economy into recession maybe does more than it has to do because the data and the response in the indices lag what they're looking for. >> plus, mike, a lot of what's happening today is unwinding, as you've argued, a stretch bounce to the upside. there were pieces yesterday about call buying, $80 million trades looking for 4300 by year end. hopes that maybe retail sales could outpace cpi later this week so, a lot of that enthusiasm is being undone. >> well, we're eight months into this whole market retrenchment and it's become very whippy. those extremes have been developing with smaller and smaller incremental moves in the market what i mean by that is, when we pulled back after the mid-august high in the s&p 500 down to 3900, we were, you know, 8% or something above the june lows. you still had the same kind of very

fighting the fed or not fighting the fed. the idea of the fear in the market right now and the fed is going to overdo it and that's why yield curve inn invest and are we doomed to be in recession in the next 6 to 12 months >> i think we are headed in that direction quickly. there is opportunity in the market our bond portfolio is 87% cash that is how negative we are on fixed income the bond market is going lower and it will raise rates if he throws too much at it and too fast, i think we could end up having a good recession in the soft landing that we talk about may be a wishful gift we don't get. he has to be careful here. he is slowing down quite a bit i i go out to restaurants a bit. we ask how business is and it has been negative. people said it is steady and dropping off i think it is impactful. they have a chance to overdo it. >> that's a heck a lot of cash you are basically all cash what will get you to deploy? >> that is our bond portfolio. mutual fund i manage is 87% cash the trend is clearly down. take the emotion o

is too much for the fed. we'll be watching it, diane. we appreciate it. all right, look at dow jones industrials down 1,141 points while that sizzling inflation number crushes the markets. president joe biden is about to take a victory lap, yes, over the passing of the inflation reduction act. what we're going to do is we're watching every tick of the markets and this pretty significant selloff while we had to the white house to hear how the president tries to square billions in government spending with persistently high prices. folks, we've got the closing bell about 44 minutes away. look at dow here. all the dow 30 stocks are in the red. in the tank here. you can see the biggest laggard here, chevron followed by travelers, proctor & gamble, merck, wal-mart and verizon. don't move, we are coming reich back. ♪ pst. girl. you can do better. at least with your big-name wireless carrier. with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you h

the fed's task, when i look at this i think about the fed's task, in some ways isn't it almost impossible and from time to time aren't they going to lose control of the narrative? >> i think they do occasionally, maybe very often lose control of the narrative then they have to catch up which is exactly what they're doing now. certainly with the benefit of hindsight we can say the fed was way behind the inflation curve tightening too little too late. now it is being forced to kind of gun it. as a result we're getting big increases per meeting and now we'll see what powell does or doesn't telegraph at his press conference but he could very well indicate there is another similar increase coming at the next meeting. charles: right. >> so it's a lot of catching up to do. charles: speaking to that point, i know you were in the camp that said the fed should have gone 100 basis points today. >> should have, yeah. charles: we know the terminal rate is, 4 1/2, something like that. by the way i agree with you and it bothers me when i hear market participants folks who know this very well, saying the

all the fed action begins tomorrow, 2 p.m. eastern, with the fed rate decision. at that point. and then, starting at 2:30 p.m. in charles payne's show, fed chair jerome powell begins his news conference. that, of course, carries -- and this is so important -- right into the 3 p.m. final hour of trade. he will answer all the questions from the press. and depending on what he says and depending on the question, the markets may very well spike or drop. you just don't know. we are going to watch every tick of it. we've got with really smart people who are going to give postgame analysis and and reaction right here on "the claman countdown." as i said, set the dvr if you can't watch it live. >>> it is a story beyond real. the beyond meat chief operating officer arrested in a postgame road rage incident in arkansas. yes. after tailgating. but it's what he was arrested for that's got tongues wagging and noses bent out of shape in corporate america. the details straight ahead. 37 minutes before closing bell rings. the dow off the lows of the session but still down 334. s

another head fake and more of it as fed is afraid of the fed. powell and company should not take it as compliment. jawboning is working, working maybe more the wrong reasons. this begs the question is jerome powell really for the common man? how much should we fed is for main street when they were created to serve big banks? ralph bostick says the central bank has not lost credibility with the public. tweet me your thoughts, do you agree or disagree. should the fed be abolished? tweetee @cv page. i will share your replies at the end of the show. oil at nine-month low. tracy shuchart tells us where she sees it next. have you ever want to be a venture capitalist. we have the arc fund on the show to discuss a new venture. all that and more on "making money". ♪. charles: got to tell you asking, the stock market carnage to me is the most underreported story in the nation. i think in part maybe because it is somewhat orderly in nature, but listen, the media is looking the other way. if you think about this americans with without 401(k)s no more about