the fed exacerbated this move, the market did not do the fed's work, the fed exacerbated the supply demand imbalance that existed in the treasury because of unsustainable debts. so i don't really think -- i would frame it as the fed made a blunder here, which they tried to partially reverse this week. sonali: i want to point to another view in the market because formal federal reserve bank st. louis president james bullard on the sidelines of the meetings said the risk underpriced in marsh -- markets is disinflation stalls ourselves altogether and core pce inflation goes up again and if that happens, the kid -- committee will contemplate going to 6% or 6.5%. what is that risk? brian: i think that is an important risk to bear in mind. i would differ a little bit in the interpretation of the bond meal -- bond yield move. partly due to the fact oil prices have come off peak levels midyear. we have been choppy this week up about five dollars per barrel wti but on balance, oil prices moved higher and in a world where the fed needs to bring inflation back to target, any move upward in commodity

on the fed's outlook. it is almost certainly wrong, but it's the benchmark i have to trade against. >> yeah. professor? >> yeah. i mean, most certain. i think what you've said, steve, early on, is that neutral rate, you know, which the fed thinks is a half a percent inflation corrected, i mean, we're seeing real rates, 10-year, 2.5, we haven't seen and the economy is still chugging. what is the neutral rate is going up, we saw that in the dot plot and i think that idea is what's being embedded in the long bonds. it's just not as low as it was for 10 years. the economy is chugging along. in the face of these rates. basic -- take a look at claims and almost everything. we're moving. i think that that is affecting the fed. >> professor, if there's a world of a higher neutral rate that means a world of an economy that runs hotter than we thought, which means a world of better profits? >> yeah. absolutely. let's just -- >> those go together, night. >> we're getting 4.5 to 5%. don't forget, the fed at the beginn

the fed is no longer buying. as a matter of fact, the fed is letting some of its holdings rolloff and therefore that creates more demand for other buyers. do they step up and by and at what price -- buy and at what price? the fed never takes a position on the fiscal policy of the u.s. other than to say we are on an unsustainable path. he does not offer solutions. it is true with all this additional debt that the u.s. has to sell it will be interesting to see what happens to rates, particularly longer rates in the next refunding at the end of the month. the treasury announces how much it has to borrow in december. rates much higher. does that creates distortions in the treasury market that the fed may or may not have to address? how does it affect monetary policy of rates go up even more? does that slow the economy too much? does it give the fed less to do? on the fiscal side it's an unsettled situation for the fed. matt: thank so much for joining us. bloomberg economics and policy editor michael mckee talking to

noticed an explosion in social media of it lies about fed now. it is a precursor so a c bdc is going to allow the federal reserve to steal your money and take things up. when you deal this fake news you're partially tempted to ignore it. then you see it's the number one, two, three trending thing on facebook. getting 17 fact checker calls i want to give you an opportunity, are these narratives true question is fed a precursor that will allow the federal reserve to take group money and stop you from buying guns or have access to medical procedures like abortion or anything like that is this part of a nefarious master plan? >> the fed now is a payments products. currently now you say offers a payment to be made. it gets transferred. if there is some time between when the transaction is initiated it's cleared and settled and the money is done. that could be two days. that could be done in one day. it could be done in two hours or two seconds. that is the only thing you are arguing about on a payment system is how fast the payments clear and settled.

been doing the fed's job.tocks and bonds have been selling off, and at goldman sachs, it was the tightest in a year. that adds another piece to the pie and even though today their reaction is very negative, some of it, is coming down. there are a lot of catalysts that can help us with funding. alix: you heard mary daly talk about that yesterday. mike, if this was my only question, my question would be dude, where is my landing? so where is my landing? guy: that is why we don't know how to set up the question. [laughter] michael: after the show, when we can speak and not get the fcc involved, i will tell you what my question would have been. landing? i don't know. i'm struggling to come up with a good metaphor for what we saw today. job creation was so strong, particularly in the service industries, yet average hourly earnings started to slow down or continued to slow down, especially for service industries, up only 1.7%. no real wage pressure coming from this enormous jobs number. that's good news for the fed.

most of this since the fed has really not been on fed news.s been a reflection of concerns about fiscal, higher term premium and fiscal dysfunction on washington never ceases to disappoint so i think there's a lot going on. alix: does it mean a higher neutral rate and the echoes of that? richard: it could. at pimco we tried to distinguish between a neutral bond yield on the 10 year and the neutral fed funds rate. we will be in a world of steeper yield curves but there's no doubt we really do not have a consistent fiscal policy in the u.s.. we will probably in a world of steeper curves for sure. guy: the neutral rate always interesting to see it with hindsight. what we can observe right now is a very fast move. do you think the fed will be comfortable of the speed of the move we see in the market? richard: so far, fed officials have had a chance and not really taken the opportunity to push back against this. my own sense is to the extent this move does reflect higher bond yields because of so much treasury issuance, it is not something the fed

for the fed, that is ok.he question i get back to an we will have to see, we may not see movement for a while is can the economy withstand it? and if it does, if it slows and does not crash, that is what the fed one. they will not be making -- ed what -- fed wants. they will not be making changes. i do not see them doing anything to change it. alix: is it disorderly or does it look like it will happen? ira: it has been fairly orderly. this is not like the bond market where you get moves and then you fall into a range and then you get used to market not being volatile and then something shifts. there is expectations usually for the economy but does it and you get another 40-50 basis point move. i do not think this is particularly unusual. that being said liquidity has been challenged at different points in time where liquidity seems fine, numbers come out and no one want a trade. and then you have a jump in the market. you see that with the jobless claims numbers. you have a selloff on data that was close to e

but this points to the fact the fed -- maybe the market will do the work of the fed. but the november rate hike is not off the table. matt: the fed is working across purposes. as they try to tighten financial conditions, the u.s. government hands out more money, blowing up bigger deficits. hsbc today said they were wrong on the bond market. i will quote directly from the story. "normally, i do not think deficits matter." do they matter? paul: you have got the fed trying to tighten and pull back demand and you have the fiscal authorities pumping demand into the economy. that makes the fed's job harder. they are trying to slow the economy down and the treasury is doing opposite. it is going to make everything more difficult. but there has been a wake-up call over the last month at the long end. you have a large fiscal deficit. you have investment around energy transition and the renaissance of manufacturing. and you have the fed rolling off its portfolio with qt. you put that together and you are going to get pressure on the long end and i think that is what we are seei

noticed an explosion in social media of it lies about fed now. it is a precursor so a c bdc is going to allow the federal reserve to steal your money and take things up. when you deal this fake news you're partially tempted to ignore it. then you see it's the number one, two, three trending thing on facebook. getting 17 fact checker calls i want to give you an opportunity, are these narratives true question is fed a precursor that will allow the federal reserve to take group money and stop you from buying guns or have access to medical procedures like abortion or anything like that is this part of a nefarious master plan? >> the fed now is a payments products. currently now you say offers a payment to be made. it gets transferred. if there is some time between when the transaction is initiated it's cleared and settled and the money is done. that could be two days. that could be done in one day. it could be done in two hours or two seconds. that is the only thing you are arguing about on a payment system is how fast the payments clear and settled.

. >> the fed will not welcome this report. >> the fed wants the labor market to slow. >> rates will have to stay higher for longer. >> the fe'higher for longer narrative. >> push back on the table for a hike the first of november. >> when you fall behind at the beginning of an inflation cycle, you pay the price we get to the last mile. >> the cost to the paid for a much higher interest rate environment. katie: we have bank of america's -- i will start with you because nerves were frayed in the jobs market and the bond market and we got this job sprint. what stops this celloff? >> i think it is really one of two things, it is either we see more pressure on the equity market, driving more this flow back into the risk-free asset which is treasuries or we need to see a more substantial turn in the data that gives the market more confidence the fed is going to be cut think eventually. it is one of those two things that i think today's they separate really puts us in more squarely in the view that it is probably more upside to come for rates near term. katie: i am taking a look at your nose an

it can't be if the fed is at 4.9% gdp. there's a lot of capex. >> a lot of inflation is built into that. >> it's a real number. >> still. >> about the chinese food, because it's looking good on you. >> thank you, thank you. >> i would say that we're talking with jim and the 4450 or something. we were at 4588 on august 1. not very long -- well, fine, i understand it's come down. but if we think about what's changed in the economy, what has really changed since then? the fed saying we're pausing. we didn't have a rate hike. we have lower inflation. we've had a stronger dollar with oil. but, in fact, there's not a lot of change. we've had change in the market for the ten year. so the ten year move and the fact that the market has come down, frankly, is positive when you think about less jobs. >> regional bank balance sheets being turned upside-down. >> but less jobs. less jobs. >> there's always risk. there's always risk. >> so something has changed. >> it's not -- the market is reflecting that the economy is not as strong, b

fed, the occ. i guess i'm still hopeful there some space for states and state regulation in this debate. >> i think i'm probably a little more optimistic than julie, maybe misguidedly so. i think if the question goes to how do we make sure money is there, i think the fed is actually quite well-positioned to ensure that. we operate under this model today. we have a sponsor banking mouse wheel two nationally chartered banks and our deposits all sit in one of those two and they're all fdic insured. it gives our members compass that the most efficient system but it gives our members any think the broader banking system comfort that the suns will be there when they need to be there. >> yeah, and i kind of want to ask a broad question from your perspectives. when you think about the shortcomings of the payment system to use it as more of a technology problem that needs to be sold with more innovation, or is it more of a policy problem? which a seems to be we're leaning more towards the latter in this con

move or is this the fed move?s this mean the fed has to move? a lot of that comes down to next week, the cpi numbers that we get. if the inflation rate is still going down and we did not see a big wage increase here, that it is okay to have this kind of job growth. lisa: the bond market is speaking and doing work in terms of tightening conditions. i am watching the euro breaking down below 105. jeff rosenberg from blackrock is still with us. is this the one hedge that has worked in this period of turmoil by the dollar? jeffrey: it has pretty much been rate-driven. that rate move is reflective -- they move in dollar is reflective of that rate move. i want to go back to what michael mckee was saying. i think that is what you are seeing in terms of pricing in the last hike. they will recognize that the market is doing a lot of the work for them. we will get the tightening in financial conditions and hoping to avoid an easing of financial conditions. that helps to move us off of the fed tightening path. the real issue

how does the fed look at that? michael: the fed thinks at this point they like to call the neutral rate is then to be higher. we are growing faster and seem to have some productivity increases. that is not around the world before the united states but if we a warm winter which we just gotta forecast from the european meteorological group for europe and parts of the united states, then that helps hold down costs as well. and you also have a gas leak in the baltics that the finnish they was an attack. i don't know how you can take a position. alix: that is why we don't trade. guy was talking about the weather and said it was warm and he never talks about it in a possible way. coming up, more insight into the question of the day -- if the fed is done do you by bonds? we are going to ask stephanie guild. this is bloomberg. ♪ ♪ explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™. >> in terms of the bond market -- verbal

fed governor chris waller saying the fed can watch and see what happens with rates. that follows the dallas fed president lori logan who said rising rates could do some of the work of cooling the economy for us. that same day earlier this week, phillip jefferson warned about balancing the risk of not tightening enough. and last night, san francisco fed president mary daley dismissed the idea of 5% rates being the new normal, saying neutral is between 2.5 and 3. all this while we learned that producer prices did rise more than expected in september. so now what? is there a real chance for a fed pivot? here to discuss are my guests. welcome to everybody. steve, help us sift through all of this, what's the noise, what's the signal here? >> well, it's hard to figure out what's going on when a big shoe company is coming to market, kelly. they are a shoe company, right? i'm having trouble getting excited about a shoe company. in any event, what's happening here is the fed doesn't quite want to pivot yet. it doesn't want to give up the ghost of potentially hiking again. but

the long end isn't continuing to do the work of the fed, it's doing the work the fed did not do. it isn't going to stop. and in my opinion, you're going to see term premiums continue to widen, and those are going to start to be restrictive along with the fact that the duration that is affecting how much it costs to service the debt and steve liesman brought this up and he gets the second trophy, over time that duration is going to change. and other things are going to change for the positive. as bank of america pointed out, all this paper that's under water because of mark-to-market issues, the little loopholes, they're going to slowly continue to see that and hold it to maturity and some of that two and three-year paper is already giving them their full faith and principle, which they're buying t-bills with, which the treasury thought to send them a thank you card because they're gobbling up some of that supply. we can continue to monitor that dynamic by monitoring which side of the $1 trillion the reverse repoe market is. >> do you think they need to try to shrink the balance s

the fed are in a bind. to the guy with -- do they go with one more hike or to the step back and say look at what the markets are saying and allow that to do the tightening for them? the fed are clearly cognizant of this. they keep using the word cautious. i think that is why as we head into the end of the year with the november and december meeting it is going to be a big call for the fed whether they can with one more hike to get inflation back to where it should be or let the markets do the job for them. haidi: what are the applications of global equity because it does not seem what we want most as investors. it is not likely that is going to be the best case 10 >> i think that is very fair. what that inflation has been reflecting is the acceleration of oil prices. that does have implications for global stocks. country rotation within the global equity market. we have seen over the last three months estimate revision favoring the markets that have greater concentrations of energy stocks. segments of the g

we all look at the fed, we know what the fed's been up to and what they've communicated with us, andhat. i think we are in for, like jon's talking about, what really triggered that can did get us to make this move to the upside? i tell you what, nobody can really point to it. so for that reason i think that the fed is still going to be involved in the markets, and until they're doning we're going to have to deal with that each and every time. i look at volatility though, and you look at that over the last, shoot, middle of september, we were down underneath 13. then we skyrocketed just the other day to 21. today alone, from 17.5 up to 20. so that, i think, says a lot about the nervousness and the misunderstood markets that we're in right now and the fact that we turned from being down 200 to now sitting here looking up 400? that's an incredible move on the day without a lot of boost in support. charles: you know what was interesting about the vix, i had some brilliant people on a year a ago saying the vix was going to go to 90. i mean, it's nowhere near where -- okay, they got my ear

the fed speak today includes the cleveland fed president, the richmond fred president -- fed president, mary daly a new with myself. tom: absolutely grilled. lisa: michael bart 12:15 am, which i know you are interested in to understand the banking response and potential stress. european leaders are meeting in granada, spain to discuss ukraine aid and speaking about iation and enlarging the eu. this is their first meeting since they announced the probe into chinese electric vehicles. how much do they build on this in light of a rather fraught tension with the u.s. with respect to aid to ukraine and understanding how they are going to movefoward economically? to: i just wonder if all of the intelligent discussions on ev and the rest completely are overwhelmed by the migration discussion? jonathan: meetings by eu leaders -- tom: you lived at them. i have never been to one of these meetings. it is like watching paint dry, right? jonathan: no thank you. lisa mentioned barclays, only a stock crash can rescue bonds. do you agree? >> we don't. good morning, everyone. the economy is still in a

payrolls and the indications for the fed.he federal reserve bank of san francisco says that the central bank can keep rates steady as indicators from inflation to joblessness continue to cool. speaking at the economic club of new york with our colleague, she weighed in on the recent selloff that we are seeing in the bond market. take a listen. >> the bond market has tightened considerably, 36 basis points since we met in september. that is equivalent to about a rate hike. and then, the need to do tightening additionally is not there. for my own perspective, that is what i look at. my job as i see, our job as i see it, is not to tighten and just do our part, it's to watch financial conditions. we have monitored how policy works, we have raised the funds rate, and it moves through all the other interest rates. if financial conditions are sufficiently tight, our work is not necessary because we need to boost the more. >> and the rising yields actually does the fed's job for it. would you agree with that? would you sympathize wit

the fed is capable of giving -- getting us there. >> i think the fed is on hold until they see whethere economy slows as much as they anticipate. >> powell said he expects growth below trend. >> if you see inflation stagnate at current levels, the committee will conclude to raise rates of bet. >> the market has done well for the fed but are we restrictive enough? >> even if we are on hold on november 1 at the meeting, higher for longer will a name or in part of the narrative. sonali: volatility is alive and well as we inch higher on the tenured. there is a worry about what 5% means for the 10-year yield. now there is a drive to five. 5% is a level where you start to worry more meaningfully about a recession. markets have been with sighing and many investors are wrong the past two years about whether we would hit this mark and whether it was sufficient for returns. we will keep an eye on that level because 20 basis points moves in just the past couple days is par for the course. us talk about the long-term curve. the two-year curve versus the 30 year curve is pretty dramatically changin

to answer on the fed, yeah. that point, christine lagarde yesterday was described as an owl hold. they are watching. do we get a hawkish hold from the fed? a dovish hold from the boe? sabrina: for the boe, it was part of the communication as part of the guidance, it depends on the persistence of inflation. we are not in this camp. look at the latest data. they clearly point to weaker activity and inflation. regarding the fed, if you look at data, q3 gdp yesterday surprised up at 3.9%, the highest point since '21, mainly driven by consumption. we should have reached the peak in u.s. and growth should deteriorate, also the case for the labor market. that's the reason why, we expect the fed to maintain rate where they are in the range of five .25%. guy: there is a danger for the boe and ecb, a risk that type policy in america with a 5% yield on a 10 year is too high for europe. the treasury market has an impact on the guild market, thebund market. this will be a problem for european central bank's. the strong u.s.

the fed, we know, is not just concerned, i mean, the fed is well aware of the resiliency. we've talked about this. every number we get, jobless claims or a more backward looking payroll number tells you there's been zero weakness in this job market. retail stocks, meanwhile, if you look at the xrt, which i don't think is a great barometer. outside walmart, the dollar gen, the dollar tree, look at target, apparel and discretionary, retail's been bombed out. if you think about it, it's not -- look at the markets and markets might even make some new highs between now and year end, but retail sales have been one of the dynamics that have given you some sense that the consumer is in a better place than we think. so, i look at ten-year -- this is a closing high on the ten-year today. so, 4.83, the fact that the ten-year sold off a point and you had equities hold serve tells you there are markets of the market that are way overdone to the downside. >> karen, you are invested in a lot of consumer names. when you look at retail sales, does it give you confidence, do you look at it

a contributor has been the fed. the fed has been unwinding its balance sheet.n one of the largest borrowers over the last few years and decades. they have contributed meaningfully to the decline. now you are seeing them step away from the markets, as well as the fact we are getting a lot more supply of treasury, because of rising deficits. this imbalance is a lot more pronounced than it has ever been, even in my career. we had a budget surplus and the deficit has pretty much gone one way but we have had different people come in to take down the supply. now you are seeing people step away from the market which is a lot more difficult for the supply to get absorbed. jon: let's talk about market pricing when it comes to rate moves. the markets also weighing what the fed governor christopher moeller said -- christopher waller said that they may be restraint with a couple weeks ago, what is the narrative in the market around the next fed meeting? subadra: waller's commas confirmed the fed is not poised to hike again at the november fed meeting. we have heard from fe

important numbers for the fed. it's a blackout period, so no more fed speak. we'll have to interpret the numbers ourselves. >> some people are thrilled. let's get to the judge. >>> carl, thank you very much. welcome to "the halftime report." i'm scott wapner. front and center this hour, the run in rates, the fallout for stocks, the ten-year hovering near 5%. and just as mega cap earnings loom large, the investment committee debating what to do from here. ing me for the hour shannon saccocia, josh brown, steve weiss and capital wealth planning cio kevin simpson. good to have you with us here. let's check the markets. you see we're off the lows of the day. we're still red across the board. we are going for the fourth straight for the s&p 500. the ten year is at 490. we're dropping a little bit below 5%. josh brown, regional banks are week. if rates are rising, you would figure the pressure points will be there. a day after the fed chair, what are you feeling today? >> i think the big thing is rates and really talking about anything else is really an afterthought

. >> we have read too much into recent fed speak. >> the tenor of the coming from the fed has shifted the curve has done a lot of work for the fed. >> the rise in bond yields is doing some of the work for them. >> the rationale for die linke down a touch is the huge backup in long-term yields -- dialing it down a touch is a huge backup in long-term yields. >> i think the fed will try to be patient especially with real yields where they are. >> if they came into the effect of the tightening they have done already -- it is the cumlative e fect of what the tightening they have done already. guy: listen to david westin speaking with the fed chair jay powell. you do not want to miss that. it'll be a fantastic conversation. with the countdown to it over the next hour. we are waiting for the 10 year to hit 5%. much of the rest of the curve has already there. do you buy bonds add 5%? let's put the question to ubs global chief investment officer mark haefele . what do you think? you have a 5% 10 year. the by it -- do you buy it? mark: the big changes the chance that u.s. recession has been pri

trading hours the time goining of the boj is ahead of the fed and if the fed does nothing and that wille boj because it will narrow the interest rate between u.s. rates and japanese rates and support the japanese currency. the other thing we should be on watch for is what happens with that 150 level on the flip side, if there is no intervention and it doesn't get a list from the fed, once the 150 level goes, the anchor goes and it could be in free fall watch what happens with the fed and ministry of finance here in tokyo. back to you. >> martin soong outside the bank of japan thank you. >>> coming up on "worldwide exchange," the one word every investor needs to know and why bob pisani says oversold october and interest rates is setting up for an impressive november >>> if you miss us, check us out on your favorite podcast app more "wex" coming up after this. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr. how's your father doing? t

in other words, is the fed constrained?it could respond without putting upward pressure on interest rates? >> so of those two elements, i think myself that the most consequence shall is the fiscal side, opposed to the fed's interest rate tool for monetary policy. i think that thetreasury's borrowing needs are consequential. i think the system can achieve all of these objectives. you can keep financial stability, address inflation, and the treasury can finance itself. but there has to be a lot of coordination and thought given to that. certainly, heavy understanding in congress and in washington that for the treasury to continue to borrow at this rate is unsustainable. they have to bring the debt under control. >> before we let you go, for some of us that are a little slow in the room, when we talk about providing liquidity to institutions from the fed if they needed it, are these programs that have existed in the past? would you just explain specifically what kind of support that would be? >> well, it certainly is programs

than they are right now. >> what about this notion thomas that fed is going to cut rates next year?me if i am wrong if we see fed cut rates you've got to believe in response to, the deteriorating economic situation a deteriorating macrostory >> absolutely. i think thatodes on a slowdown are pretty high because interest rates, if they move going to increase short end, if not, the fed funding debt going to move up yield curve more, what you have then you are either having a serious recession, or you are going to have a banking crisis as they continue to have rates go up against, their cost of funds and credit quality when ufz thee interest rate increases voum equality deteriorates they react to that what i suggest they will do react to slowing economy recession or banking crisis, almost for certain >> possibly simultaneously >> well reasonably so, yes. maria: yeah kevin, look, i want to get your take on just that, because i am reading the lindsey group the lindsey group writes household income growth was poor, solid consumption he stands only by decline in savings from gdp last week e

fed had been tricking its balance sheet -- in the repo market because the fed had been tricking its sheet. people started to get more jittery and wider spreads. i think you have a recipe for several bouts of rough patches in markets. guy: how are you thinking of pricing, plugging into your model dysfunction in d.c.? how do you think that impact yields? how does that impact the economy? seth: i am lifelong washingtonian. part of it for me is routine. it matters in any number of different ways. we have seen additional term premium in the market, some of which probably reflects people's views of what is going on in washington. for a more sustained impact on markets, it comes down to do we get another government shutdown, do we get continuing resolution? there i am willing to be hopeful and hope as a baseline beget a continuing resolution that the government doesn't shut down. you cannot rule out that risk and that is a risk event that would cause more volatility. if it drags on, it could slow economic growth which would be a negative for risk assets. alix: we were talking about this wi

should be fed sensitive. alix: it raises the question of the structurally higher yield conversation. we have the data yesterday that showed china and japan were not buying treasuries and we note the risk is the market they're going to be selling so research reports i'm getting households will bear the brunt of any issuance which we know will be significant with treasury department. if that is the case, can households absorbed all of this? if not, are we in for higher rates? guy: seems to be the case. we are going to come back to you in a moment because we started to get the details coming through what we expect the venture to say. alix: alix: michael mckee is going to be looking at some of these headlines. >> the fed chairman has just released the text of these remarks. nothing new, but shades of emphasis that may send a message to the markets. the committee repeats is proceeding carefully right now, watching the data to make decisions, but he does adopt some of the argument that those with the committee have

if it stays hot, the fed will do nothing to try to take that fed hike off the table. yvonne: what do you think was behind this selloff in bonds, robert? is it something that is just technical or fundamentally there is reason to warrant such a selloff? are we starting to see cracks in the bond market because it seems like they are no longer seen as safe assets anymore. robert: this is more of a structural issue. the structural issue is that you have had not economic sensitive buyers since 2005, which are global savings, whether central banks around the world, the federal reserve bank itself on quantitative easing, or just large banks in the u.s. is buying up a lot of debt to bolster their balance sheets. they have been non-interest-rate sensitive buyers. the glut of savings had to buy those bonds. now those investors because of inflationary pressures have stopped ng up new bonds. e same time, the fed is undergoing quantitative tening and created a perfect ripe where the only buyer of last resort for the new easury debt, the huge issuance coming out, the only buyer of l

the fed speak lineup includes 11:00 a.m. fed chair jay powell and patrick parker -- harker. then we have john williams reprising his speech last week and then the cleveland fed president. will anyone say anything to give the market conviction where they are looking at uncertainty? tom: you think they compare notes? do think they have a conference call beforehand? jonathan: you have to think williams' views are closely aligned to powell's. it is interesting. williams will give you why they might deliver cuts down the road. lisa: wonder if he feels bad about doing that and having that be the focus are few wants to be the leader having this discussion. they are in a no-win situation and do people listen to the speeches and parse through? jonathan: is this actually the speech from friday? lisa: he is speaking a different speech at 7:30 p.m. he did release a text of that speech. jonathan: i wondered if he was going to turn up in person and just read it. burning us is lori kelby sena -- lori calvasina. >> we took a number of different issues in short-term puff of the table for a m

that's the most watched by the fed. we'll see what that comes in on. >> what you're looking at, to bring up a competing news outlet, "the wall street journal," the unofficial official fed whisperer here steve does a fantastic job taking nothing away, but when the fed wants to make sure there are no surprises it will go to nick. right now the markets are not saying there's going to be a fed rate hike in november. if that changes nick will be the one that brings it. that's unfortunately what we have to do for the next week and a half. i don't think the fed will go in november, but there's not enough in that prepared remarks to make me think we're all clear, not even close. >> we'll talk to steve about the probabilities are in just a second. we'll take a live look at the new york economic club. just a short time ago inside the room where jay powell is going to have his speech there were protesters there. we're a told the protesters have been cleared out. people starting to get settled. jay powell expected to take to the po

that the fed will cut ?to not by in longer duration and yields go up. they need to cut because the economy will be slower. >> we are doing their dirty work. if i go back to 2005 -- you go back to the greenspan conundrum which is i'm racing rate in the long end is anchored. what's going on ? what he did is raise rates a lot higher. this fed doesn't want to do that. they want the long end to go up in using the words to get it up. their tightening financial conditions. >> bill gross said yesterday on bloomberg he thought this was the retail investor jumping on board and selling also. he called them bond vigilantes. they're getting involved. that implies this is a short- lived increase in interest rates. do you agree quick >> no, we see every kind of investor and the one consistent inflow we are seeing is from our wealth management platform. is yields have backed up, we are seeing an escalation in new accounts that are opening. today, i've got three calls lined up with wealth management platforms to get into thi

emerging markets, it's all good value. >> the fed done? >> i would say the fed -- we'll have to wait and see the data. >> i would say one more increase but then we'll have to wait and see. we'll have to wait and see. >> short end versus long end. what do you like better? >> yielding over 7 and long rates, if the fed has to cut sooner, you'll benefit from having duration in the port fold yeoh. dave albrycht. >>> up next, courtney reagan is standing by once again. >>> trading is serious business but watching movers with sun stock sinking. details up next. fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prosp

and, then, two, the fed.wo striking a dovish note suggesting we may be near the end of the fed hiking cycle. we may see them pause by the end of the year. that seems to be enough to get stocks going and the rally in sovereign bonds in the flight to quality trade. breaking it down by markets. this is what the different boards are doing. a widespread rally and broad based gains. ftse 100 is up 1.4%. ftse mib is up 1.5%. the swiss market support .90%. still higher. very strong buy signal coming from the equity market. from the sector perspective, this is the most clear buy signal and this is all about a cyclical narrative. basic resources up 2.8%. autos up more than 2% this morning. real estate and travel on the downside with underperformance in oil and gas after yesterday with the strong outperformance in the energy stocks with the price of oil rallying 4%. let's break it down and look at the sectors that were in focus yesterday on the back of the violence in israel. you see how they are faring. oil majors this

up next, the fed is in focus.powell, as i said, set to speak before the economic club of new york tomorrow just ahead of the flagout period. what is he going to say and how will it impact your money and thmae rkets? we'll ask steve liesman next. >>> welcome back to "closing bell." shares of morgan stanley sinking. a tough day, leslie, one of the worst in years for this stock. >>> a tough day in about three years, on pace for its worst day since june of 2020. shares under pressure amid a clear continued slump in investment banking and decline in net interest income, and net new assets that were about 45% below the same quarter last year. a big culprit spanning most of morgan stanley's businesses is higher for longer rates that is causing clients to punt large transaction, muted activity creates a ceiling to the firm's fees they generate from advising clients on those transactions, and then it's changing the deposit mix for wealth management customers who may offer cash free securities which are yielding much more t

it was about another fed rate hike. are we not expecting the fed to pause? especially given the cpi numbers? >> it does seem increasingly likely they will be pausing at the next meeting. a lot of the fed speeches over the last week have suggested the fact that we have had this urge in the tenure bond yields, that really kind of helps with respect to tightening credit. between the fact that inflation is coming down, it is a choppy process. it is coming down more rapidly. one thing that may actually give a little bit of a positive catalyst in the coming weeks could be the markets gradually price out that likelihood. the markets focus more on anything, when it will do next year. it is one of the things that has been hampering the stock markets and lead into the search in the treasury yield over the last month. the markets gradually coming to terms. that is not to say we don't expect three or four cuts in 2024. maybe one or two is what should be expected. that is the best that could have wanted that a little bit. cross what does that mean for growth stocks? >> w

the fed may be finished hiking the next stage of the fed's getting back to normal is getting its balancenormal. the fed owns multiple trillions of dollars worth of government bonds by sucking all those bonds out of the market has done a few things. stoked economic growth , likely stoked inflation to and pushing on that particular brake pedal is the next thing that i see coming. now, when the fed raises interest rates, it creates a lot of turbulence, in particular for bonds. that's what we experienced in my view last year. in my opinion, when the fed transitions to focusing mostly on its balance sheet, that could push volatility and a lot and a lot of uncertainty into the stock market. instead, before we talk stocks, though, one more question on bonds, which is right now, you mentioned volatility, uncertainty, but i could get 5% in a short term treasury bond in a bank and a cd. so it's really tempting to just sit right there. is that a good idea? so it is really tempting. but like many traps, it is a it is a tempting trap to sit in cash. cash does offer higher yields today, but i think wh

big fed interest rate decision.stern time right here on this show tomorrow now, after the break, court gnu and tyler will break down what to expect for that big fed interest rate meeting. they're getting ready for the show right there as you can see there with the tyler cam, 'lsetney right next to him wel e you tomorrow here on "the exchange. this is american infrastructure. megawatts of power, rails and open road, and essential services of every kind. all running on countless invisible networks, making it a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends the systems running america's infrastructure. for these services. for the 336 million of us living here. ♪ ♪ >>> welcome to "power lunch," everybody. alongside courtney reagan, i'm tyler mathis coming up, 24 hours until the fed decision on interest rates markets expecting no change. but would that just be another pause or a sign that the fed is maybe done for this rate hiking cycle? >>> plus, hitting the brak

they might see a new hybrid before the fed. -- a new high but before the fed.ilson with the latest. here are political headlines we are watching. the white house says president biden and xi jinping will meet in san francisco next month on the sidelines of the aipac summit. the white house confirmed the sit down with reporters who had sought an official announcement. leaders are expected to discuss the economy, technology, and geopolitical issues like taiwan. new zealand's incoming prime minister is optimistic a new government could be formed by next week. he said talks with other parties were advancing and progress has been made. he is believed to be in talks with two of the parties to form a parliamentary majority after his national party won a 9% of the vote last month. final results of the general election are due this friday. paul: let's take a look at what is happening in the bond space at the moment. we are seeing yields on the aussie bonds moving higher, the 10 year now just below the 5% level. modest declines for kiwi bonds as new zealand, getting close

his first reaction of the fed. let's get to the question of the day. where will the s&p 500 end 2023? under 4200, between 4200 and 4400 ore above 4400. head there to vote and we'll share the results later in the hour we're just getting started and sam bankman-fried on the stand for another cross-examination and we'll get another live update after the break and nvidia's key levels and the top technician giant is flagging now says it better hold and it might not and if it doesn't, where it could about. he'll tell us next, we are live from the new york stock exchange you're watching "closing bell" on cnbc. ♪ ♪ it's on us to help care for our clients' well-being; to help them adapt. it's inspiring to work at a place where our patients succeed. and we as therapists do, too. with great benefits from principal, we feel appreciated for the work we do. (♪♪) with your hearing, if you start having a little trouble, you're concerned that it's going to cost you money. to this day i only paid what i had to pay for the device...

fed tighten again.etween the meeting that we get tomorrow and the next one in mid december, we'll have two more jobs reports to give an indication of how the labor market is and sentiment in how consumer spending is in the fourth quarter all of that together will suggest that inflation is slowing towards 2%, that the economy is softening and that that means that the fed does not need to raise rates again. >> gus, nast sort of what i was wondering inflation as you bring that up, obviously, still well higher than the intended target. do we need a recession to get inflation closer to 2% if the fed is done f they don't do anything else, how is it going to get lower >> you know, just a softer labor market than out right contraction. i think there's still about 40% probability that we get a soft landing, where economic growth slows substantially. higher unemployment rate around 4% and that could cool off inflationary pressures enough to bring it down to 2% without a recession. that being said, i think the mor

the first is whether you believe it's fed action or you believe that the fed will let the market do its tightening, this we know, if we're going to see higher yields, then that could cause the equities, as you already pointed out. to a degree that we haven't seen consensus estimates with the harshening environment. i think the estimates for 2024 are significantly too high. that makes me cautious on all equities, not just the ones that anastasia pointed out that are most susceptible to higher yields, but across the board, despite this quarter coming in much more lenient than expected with 40 basis points of growth, as opposed to the projection. so if i am somewhat skeptical on equities and somewhat skeptical on bonds, at least long-term bonds, because at the end of the day i do see yields rising, we're going to get greater compensation on those issues than the issues of today. so i'm still focused on the short end of the curve because i feel like we're staying liquid enough to take advantage of other opportunities when they present themselves. as you said, some things are looking quite c

the fed is succeeding.n on consumption, on corporates and on banks and that's why this will result in most slowing over the coming quarter. lisa: more slowing is not the same. and there's a question of how much slowing is necessary to truly put the horseback in the barn as you said, to use your analogy. and this has been one on the conundrum. do you have a sense of what it requires a greater slowing to get that horseback in the barn than people are currently using as a base case? torston: i do think we need more slowing because pederson today is at 3.9. so we are still running around after the horse out there and trying to get it back into the 2% range and we're not there yet. that's what every member is telling us. with that backdrop given what's happening to the delinquency rates. default rates at the high yield are going up. so the result of that is that we are seeing the effects on the fed tightening every day. there are companies that cannot get financing. there are consumers who cannot by buy a new ca

there is a view that the increase in treasury yields might do the job for the fed and some fed officials have nodded at this point themselves at the fact is the market is already targeting and without the fed doing it further. that is already out there. the other part of the story is the fed knows they have come so far bringing inflation down without crashing the economy and job market so far, but that will get harder to pull off. the minutes they came out yesterday spoke about the need for caution and they want to tread carefully from here. they clearly don't want have to raise interest rates anymore. again, the numbers today, the good side of inflation coming off quite smoothly, but services quite sticky when it comes to where those prices remain high and inflation remains, and that will be tough to unwind and that is why economists reacting resign just come treasury yields are doing with the doing but you can't discount the fed will move again may be november if not december with one more hike to get inflation back to where they wanted. haidi: enda curran with us. bloomberg has learne

you're pricing in a longer fed pause. the fed pivot, quote, unquote is pushed back.en? >> i think the buying opportunity will come. i don't think yet. the price will find a bottom. 4,000, 4100 range we'll see a bottom starting to form. charles: you're bullish on west texas intermediate. >>> i think opec will make it clear this week production cuts are here to stay. charles: talk about bullish treasury yields an bearish own bonds, tlt. i started the show with the tlt meltdown which by the way goes back to 2020. it is not new. it is picking up steam. volume last week was crazy. net sellers first time this year but you still think it will continue? >> the last three or four times on the show we're saying tlt is lower. we lowered our target to 83 last week. now we're at 85. 10 year 4.5. hit 4.75. those are the two targets. we could see 5%. be careful this is becoming a very crowded trade clearly i mean nothing moves in a straight line. charles: i ad alfonso pecatiello on earlier from, really one of the best out there. by the way a global guy, right? he is saying time to