it's interesting that the fed hasn't touched fed funds rates over the past year and since the last fed meeting virtually unchanged. there are almost no changes anywhere. so the market seems to have settled in and is waiting for the cut cutting seek toll begin. >> steve lies mid-cap, thanks, as also, after leaving the room with the fed chief. >> you've been pretty exbliss the for, and the fed conversation as you lewded toe and heics where are, quote, i think they're low. has your own view changed? >> no. i think when we look back at today and it will be history when we look back at it a couple of years from now. i kind of believe that we will say we were in a recession in september of 2024. >> interesting because he still thinks that the economy is obviously doing pretty well. yes, there are some spots of weakness said the fed chair, but overall it's good. you take issue on that, too, based on what? what you're hearing from ceos about the consumer? >> i think it has to do with a lot of anecdotal evidence and if you just don't look at one data point like the establishment unemployment ra

we'll hear what our mock fed says the fed should do and what they would do if they were on the fed'sfore we do

the fed, the fdic, last july. then cut in october, the fed began the collection of data to conduct a connotative impact study on the cost of this proposal. the study which should've been conducted before any proposal was ever issued. we move forward to january this year, committed to a public comment period once the results of the study were published. we are still waiting to view the results. keep in mind, all the while, we are hearing rumors that the fed is working on revising this proposal and moving towards an updated version. please help me understand how the fed revised and reissued the capital proposal before receiving public comments. >> as you know, we have received extensive public comments and we have also evaluated the quantitative impacts survey that you mentioned. the idea would be that when we do reach agreement with the other agencies fully that we would publish the proposed changes and also the quantitative impacts survey. and also the effects that the qis suggest the changes would have. so put th

the fed's next moves are still hanging in the balance. gabriela santos is here to tell us how she's navigating this uncertainly, and the opportunities she sees ahead. we're right back. (grandpa vo) i'm the richest guy in the world. hi baby! (woman 1 vo) i have inherited the best traditions. (woman 2 vo) i have a great boss... it's me. (man 1 vo) i have people, people i can count on. (man 2 vo) i have time to give (grandma vo) and a million stories to share. (grandpa vo) if that's not rich, i don't know what is. (vo) the key to being rich is knowing what counts. >>> we're back. the s&p and nasdaq both hitting all-time highs today, as investors brace for the start of earnings season later in the week. joining mess at post 9 is gabriella santos. good to see you. >> good to see you. >> what is the best strategy right now? >> we've been getting asked i would say, two major types of questions. the first one centered where are we in the here and now? there's a macro ping-pong all year. the other is is ai overhyped? are there difficult ways to pl

the original fed did not have this.ally did not function very well early parts of the depression so in 1933 the current structure was put innt place. that is with the number of governors and the voting arrangements. that arrangement is fine. it works really wellin the 70s the dual mandate was added. but ultimately were not looking for any law changed we think we have the authorities we need we think the law is in a fine place. >> you think the system works reasonably well? >> i do. and today it's the biggest economic challenge facing the country? is it growth, inflation? hard landing potentially what are you most worried about what keeps you up at night if anything in the economy? >> in the short term that is what keeps me up literally the thing i'm thinking about the middle of the night is this balance we have between if we eased too early we could undermine the progress on inflation if we wait too late we could undermine economic activity could undermine the expansion. we went to get this right it's incredibly importa

fed president who said the fed needs to get a move on.t interest rates. what is your stance on that? how are you thinking about the balance of risk around the fed's timing of the next move? gupreet: first of all great to be with you. i would say we agree the fed's data-dependent and if that's the case the data now does seem to be supportive of a rate cut. you have inflation cool down, the disinflation setback early in the year. we are seeing a cool down in the labor market. not necessarily collapsing. you are seeing relatively resilient spending. on the whole the data disappear consistent with normalization and pulling back the restrictive policy. if you look at formulations based on the output gap in inflation, they suggest the fed should have cut by now. this is not a textbook economy. what may make sense in theory may not be delivered in practice. howard simpson is the fed is probably going to wait until the september meeting to deliver the first cut in the cycle. one of the reasons is they want to accumulate more confidence in the dis

the fed meeting next week. when it comes to bloomberg opinion colonists and warmer fed president bill dudley, at his mind is made up. he is calling for a fed cut next week. >> rate cuts are definitely coming. at this point, there is not a strong state -- taste for cutting. if the fed does not cut in july and wait until september, it will not have a huge effect except the fact when unemployment rate start to deteriorate, their sons to be a reinforcing negative feedback loop. jobs are lost, people pullback on funding, that leads to further cuts in employment. sonali: joining us now, ed al-hussainy of columbia threadneedle, and eric nelson of wells fargo. you heard those comments by bill dudley, and a lot of that was anchored in this idea that if the fed were to wait, they would risk a recession. do you believe that to be the case? ed: things are starting to shift in that direction for the fed has been acknowledging we have been a focus on inflation close of the over the past two years, it was an appropriate focus

they need the fed to come to the rescue. why doesn't the fed look at this kind of stuff?we remember, we should remember, it is jerome maden powell, esquire. he is not a phd in economics. he shouldn't been driven by models. he found the industrials group when he was at the carlisle. he should listen to ceos, what they're saying, what they're saying we don't see improvement into the horizon in 2025. here is what we're saying, federal reserve officials, lower interest rates now. charles: i agree. danielle, thank you very much, always a pleasure to have you on. >> thank you, charles. charles: russell 2000, by far outperforming the s&p. even today it is outperforming the counterparts. my next guest says these stocks are already overpriced f that is the case where the heck do you invest? we'll ask mark smith next. ♪ when you're in the military you're really close with your brothers and your sisters that are in the military with you. and when you get out of the military, you kind of lose that until you find a new family. we can talk about our struggles and the things that we did

let's talk about fed days.ent through the data and noticed august and september are seasonably weak for the s&p. jess: october typically has a bad reputation. stock market crash '89. gfc '08. a bear killer, october '22. september is historically the worst month. you can look at the heat map for the s&p on the terminal. the last 30 years, you see it drop. august is the second worst month behind that. we don't always see those trends. major indices can buck the trends but you have the fed, and it is what powell signals, for the rotational trade, especially since july 11 and the flows that have gone into sectors bit from rate cuts. you cannot forget small caps. scarlet: the idea that the market tends to be seasonably weak, that can influence how people trade. what are the reasons? jess: the last few decades, people point to volume being lower. when you come back post labor day, especially with kids going back to school, there is different repositioning. we might see something if powell signals cuts are on the way,

. of the best of both possible worlds for the fed-— for the fed.ed. would you call it a soft landing? i _ for the fed. would you call it a soft landing? i think— for the fed. would you call it a soft landing? i think we - for the fed. would you call it a soft landing? i think we are . for the fed. would you call it a soft landing? i think we are on i soft landing? i think we are on track for that. _ soft landing? i think we are on track for that. i _ soft landing? i think we are on track for that. i wouldn't - soft landing? i think we are on track for that. i wouldn't even | soft landing? i think we are on i track for that. i wouldn't even call it a real slowdown in the sense that some people mean a soft landing. growth was 2.8% in the second quarter, we think it will be 2.5% the second half of the year, solid growth but it has come down from the very strong pace we had seen previously, and more sustainable rate of growth, inflation coming down at the same time. half? rate of growth, inflation coming down at the same time. how do you read this new

as much, but importantly, as the fed starts moving -- this isn't just a fed-cutting cycle. this is a fed cutting cycle off the rates that we haven't seen in a long time. i expect to see capital moving into short duration credit, to lock in higher rates. that's a move especially with a maturity two, three years away that makes sense to me. for investors not as interested in a particular call or duration, i haven't to be in line with that. you can balance short-duration credit exposure with a long end of the municipal curve. but programs just as important. if we're expecting this make fed transition, there's other areas of the market prodeal flow has been completely locked up, as a result of just concerns about where the market is going. when we start to see the fed actually move. we're likely to see deal flow in private equity, even real estate start to unlock over the next six months. i think this is the big move in capital's beginning. >> keith, you expect it to be choppier here, is that based on the seasonal events, pre-election nerves hitting that? >> it's based on part

why are there still holdouts at the fed?now the intellectual case, which is some parts of growth are better than expected, jobless claims are hanging in. there jolts was encouraging, you know, things of that nature. is that the case for holding rate where is they are? >> i think the case for not cutting comes down to inflation ptsd. we've seen some head fakes on inflation. as long as the economy is still fine, why not get more information? the case for cutting is yes, the economy is fine now, but inflation is in the rear view mirror. yes, growth is okay, but it is cooling. the direction of travel is what we have to keep our eye on. so yes, things are still looking fine, but growth is 2% in the first half of the year, down from 4% in the second half of last year. that's a pretty pronounced cooling, coming with slowing job gains, rising unemployment. now is the time to start moving towards neutral. the time is already here, but there's a lot of people that are still sort of burned by having been behind the curb on inflation. >

and friday, the fed's preferred inflation gauge.et's take a look at those pce estimates we are watching a market expecting to come in year-over-year at 2.6%. essentially flat from the prior estimate. direction of travel, economists believe is still lower. that deflator month over month only expected to be about .2% higher. and from new york that, does it from us. same time, same place next week. this was "bloomberg real yield" and this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track. when you're planning for it all... the answer is j.p. morgan wealth management. sonali: welcome to "bloomberg ma

the fed's target is 2%. that might not matter much, yes, prices are stable, but look all the noise they made when we were slightly under 2% pre-covid. made a big deal. kept rates too low. and that really is the issue here. take a step back. look a the size of these refundings. $125 billion for 3s, 10s, and 30s. that is so much larger than it was just several years ago. and why were they allowed to create such huge deficits? because the fed kept rates too low, too long. they can't make the mistake again of being an enabler. we still have an administration that loves to overspend. they need to keep these rates higher for longer. one rate cut won't be a big deal, but they're going to trap themselves, the market says it's up, they're right in tune with the market. i hear people say 50/50. it certainly doesn't look 50/50 to me. but what is going to be a problem is how they set the stage after the fist rate cut, because give an inch, give up to the elbow, they'll want the whole thing. they'll want more rate cuts a

we know the fed have been very data dependent.he market has been incredibly volatile over recent months. particularly looking at last year when the market was pricing in steep cuts. this year, they were pricing in a hike. now i think we have seen a lot more data. the fed has been very patient. with the labor market in a robust place, but softening. cpi and other data is coming down. we think the fed is very well-placed to cut in september. maybe once more again before the end of the year. july may be the point where they indicate that. sonali: what is interesting as you moved your expectation to september after you saw the cpi data. do you still see risks around the september cut at this point? >> it is pretty much priced into the markets at this point. i think headed into this week, we were not expecting such cool inflationary data. we did have a december 25 basis point cut. we have since moved it forward to september. i would agree, i think july this deepens will be dovish and it will be leading into the september rate cut. i wo

it's a wonderful place, and i would recommend the job. >> the fed is also responsible, the way the fed set up, you have a stable currency. global prices. >> inflation. >> yeah. >> and you're worried about unemployment, but you don't make any decisions about what the impact will be on the currency of the dollar. the impact of what you decide to do on the dollar is not something that you are mandated to worry about. is that right? >> that's right. the administration has that portfolio and the management of the dollar for what that is and it used to be something different than what it is now and for us, the effects are just another financial variable like equity prices. >> if you worry about inflation, we have $25 trillion of outstanding government debt and we're adding $1.6 to 2 trillion and don't you worry about that on the impact on inflation? >> so, i am very -- we don't give congressman advice and it doesn't mean the level of debt that we have is sustainable, and the deficits at a time of full employment and healthy growth is not sustainable over time and we really ned to get to work

is it enough to submit september for the fed -- cement september for the fed?he conversation was just on that big drop in temp help. the three month average is just a little bit below that. it is one of the highlights. some other industry highlights there. you have a big offset in government that mike talked about. there are some crosscurrents there. there is a pretty strong construction number that could be seasonal or weather affected. the seasonals that mike mentioned are tricky especially around the government data given that education flows in and out. there are some crosscurrents that make it a little tricky. when you are looking at those details, it is hard to say that that cements it. what will cement it is another round of data and what we see in terms of inflation data next week and next month. i think that will be the case. as long as we will see in trains -- trends toward a slowdown, broader measures of labor markets normalizing, that will be enough. not enough to say that today but when we get to september, that will be there. as jay powell said, a

the fed, the fdic proposed endgame last july.then an october the fed began the collection of data conducted a quantitative impact study on the cost of the proposal a study i will note should have been conducted before any proposal was ever issued. before january of thisbe year ve chair committed to public comment. results of the study were published we are still waiting to view the results. keep in mind all the while we are hearing rumors the fed is working on revising its proposal and moving towards an updated version. help me understand how the fed will revise the reissue of capitol proposal before receiving some public comments? >> as you know we have received extensive public comments. we have also evaluate the quantitative impact server you mention. the idea it would be we do reach agreement with the other agenciesests fully we would pubh the proposed changes in the quantitative impact survey the effects suggest the changes would have will put all of that for comment again for a period of time and then having yet another rou

in your mind, the fed cut, has it been too long?e maybe the fed should just cut now? >> it's very clear the fed has since december of last year talked about rate cuts. that's why the market's narrative for a very long period now has been rate cuts are coming, rate cuts are coming. but to the economic data, it happens to be moving along very nicely. from that perspective if we get down the roadover impulses to inflation going up, for example, you've seen the j.o.l.t.s. datas with better than expected. we've seen across a number of indicators, jobless claims looking okay. if we get an impulse to the upside, we'll see interest rates decline in september. >> it's good to have you bought here. coming up, fed chair jay powell will be holding a news conference later. we'll all be watching. thank you. >>> another busy earnings day. bong includes ei. up almost 3%. we're going to give you keenum biers on them battled air giant when "worldwide exchange" returns. stay with us. >>> welcome back to "worldwide exchange." s&p industrials is up. of

a bloomberg surveillance fed special, bob michele of jp morgan, former fed vice chair.and the former kansas city fed president. we will see you in little bit later this afternoon. this was bloomberg surveillance. ♪ hi. i'm gina. i was really upset at the way i had let myself go. my cravings were out of control. i had to do something. we all know it's important to take care of our health but it seems the trend is looking for a quick fix. and as a nurse it's really important to me what i put in my body. the main difference with golo is the way i felt. i wasn't jittery, my cravings went away. i felt satisfied and healthy and had tons of energy. give golo a shot you won't be sorry. with so much entertainment out there wouldn't it be great... ...if you could find what you want, all in one place? show me paris. xfinity internet customers can enjoy the ultimate entertainment experience and save on some of the biggest names in streaming, all for just $15 a month. get the fastest connection to paris with xfinity. katie: futures flying with 30 minutes to go until the start of tra

avril: keeping an eye in the fed -- keeping an eye on the boj in the fed.a third of the respondents in the japan survey expect the base case to be a hike this week but almost none of them are excluding the possibility we see the risk of one. it's uncertain even as we approach that meeting. we have seen and stocks -- seen the yen and stocks be on a roller coaster ride.let's bring in mark cranfield, something of a boj whisperer something of a boj whisperer. you have made it clear the boj does not want to disappoint this time around. also worth highlighting how this is inherently a cautious central bank and the data recently on the economy hasn't been great. >> the stakes probably have never been higher for the bank of japan meeting than this one. we have seen strengthening of positions. we see a lot of discussion that they need to reduce bond purchases. jp morgan have put out reports saying they expect a 15 basis point rate hike. so that's becoming a bit of a consensus view. and we have not seen any major -- which was unusual. we saw a media report saying --

marvin: the fed still.ertainly if you are trading dollar yen you are going to say that the doj is the most important thing to think about, but really the fed is going to set the tone for everybody else. our view is that while the doj needs to normalize policy, they don't have many levers to work with. i think that is why we keep talking about them in this waiting period because it is hard for them. lisa: jon is going to laugh at me but i have to go here. i think a lot of people think that i am overly obsessed. jonathan: if this treasury refunding? lisa: maybe. marvin: i appreciate that. lisa: this is important, right? this could potentially be market moving, almost more so than a lot of the other potential events. arguably this could be as important as earnings, no? marvin: qra this month" or is not going to be the most important aspect. not going to get a lot of changes but really thinking through how the cycle is going to wind up and who is going to wind up dying all these treasuries is going to be the mo

de— fed might do.at inflation story playing _ fed might do. how is that inflation story playing out — fed might do. how is that inflation story playing out in _ fed might do. how is that inflation story playing out in terms - fed might do. how is that inflation story playing out in terms of - fed might do. how is that inflation story playing out in terms of what | story playing out in terms of what we are seeing right now on the markets? which is this sort of retreat, if you like, in the share price of some of the big tech stocks, the magnificent seven, as people like to call those high performers, this year. how does that tie into what is going on there? yes, so i think we entered the third quarter where tech stocks, the maggie severns stocks, were basically priced to beat perfection. that is almost an impossible standard, so you do see some rotation out of there. where is it going? it is going into some more cyclical areas of the market, so in the us we are talking about the small cost stocks and som

fed chair doesn't meet with the president. that is totally fine. >> sent you made mention of the independence of the fed, i know you pride yourself in that independence, do you acknowledged or two members of the fomc acknowledge. cut in september could be viewed as political just 30 to 60 days before an election? >> our undertaking is to make decisions when and as they need to be made based on the data, the incoming data, evolving outlook and the balance of risks and not in consideration of other factors. that would include political factors. we will make those decisions. we have a long history of doing that, including during election years. that is the undertaking we will make. anything we do will be very well grounded and it is not appropriate for us to get into the business of thinking about election cycles at all one-way or the other. >> inflation year over year, from may 2024, from may 2023 to may 2024 is up 3.3% overall inflation. energy inflation is up 3.7%. food inflation up 2.1%. with inflation continuing to be a chal

that is the one the fed follows the most closely. charles: i pulled the chart up so the audience can see it. we've been instead did i decline. this is sharp today. less than wall street expected. this is the fed's favorite wage gauge. >> you're using the word freefall. in research writing at qi with we've been say be abrupt. things happen abruptly. that speaks to the pace of decline. to your point the private sector is in much worse shape this is being glossed over by government job creation. that is not the the sign of a good economy. it is not. charles: i think a lot of government jobs stuff, was money, state and local governments got money from federal government. that is interesting. that is state and local. they got the cash from the covid money. >> exact exactly. charles: that money will run out real soon. >> it is. charles: wall street, we don't have the chart in here. we'll put another chart here. >> i thought we would talk about the tabasco sauce? charles: that is a surprise for the next guest. wall street is talking up the

so, again, you know, the fed's going to do what the fed's going to do. they're not calling me up asking whether they should ease or not. but if i were jay powell, i would be giving this a lot more thought than i think wall street is giving -- is thinking about it right now. >> jobless claims are better. they're doing that summer seasonal thing again. gentlemen, thank you all today. appreciate it. >>> i want to draw your attention to shares of uber and lyft, which are higher on reports that california's supreme court has upheld prop 22. it's that 2020 ballot measure treating the drivers as independent contractors. we're seeing not much move in the shares, which have already had to contend with this reality. the supreme court upholding that va ballot measure. >>> my next guest says the nasdaq's 3% drop yesterday is a buying opportunity, and he's eyeing one group in particular, aggressive spending plans. let's bring in gene munster. gene, okay, let's rewind. tell me the story of the 24 hours that goes back to alphabet's earnings and what happened to the mar

the rub in that is the fed. the fed is standing in his way.e can say all he wants, but if the fed is standing in his way for a weaker dollar will he hold to that promise? jonathan: what are trumponomics? he said it will be low taxes. adam posen it brought this up. if the former president goes through with these tariffs plans you're talking about an inflationary burst but one the fed might have to respond to and then we will be talking about rate hikes in 2025 and then we revisit that question on chairman powell. coming up, sarah wolfe of morgan stanley on the upside surprise on u.s. retail sales. from new york, this is bloomberg. ♪ (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com the moment i met him i knew he was my soulmate. investme

fed powell -- fed chair jay powell on capitol hill. the nato summit begins on wednesday. big ones, it is jp morgan. citi reporting earnings too. lisa: i wonder how much the banks will lead the charge. whether that could actually get more attention just based on the balance of risk. cpi seems like it's important but less so given what some of the data has been coming out. annmarie: it is a critical week for biden. it is a crisis of their own making. it is a another hurdle he needs to clear when he comes out and speaks to the press that feels gas lid about how this administration and members of his team talk about the president. jonathan: do think there's anything he could do to take away what took place last thursday apco the answer to that question is no. annmarie: it could be worse if he comes out thursday and has a disastrous performance. lisa: some people say it was worse he didn't totally bomb friday night because it leaves the democratic party in limbo. at what point does it become basically you are out of time. there has been a loss of confidence in president biden.

the original fed did not have an fomc.really did not function very well during the early parts of the depression. in 1933, the current structure was put in place, and that is with the fomc, with the number of governors and the voting arrangements. i think that arrangement is fine. it works really well. in the 1970's, the dual mandate was added. ultimately, we're not looking for any law change. we think we have the authorities we need, and we think the law is in a fine place. david: so basically, you think the system works reasonably well as it is today? and, today, what is the biggest economic challenge facing the country? is it growth? is it inflation? a hard landing, potentially? what are you worried about? what keeps you up at night, if anything, in the economy? chair powell: in the short term, that is what keeps me up. literally, the thing i'm thinking about in the middle of the night is always this balance between, if we ease to early, we could undermine the progress on inflation. if we wait too late, we could undermi

adp jobless claims, ism services index, the fed speak at 2:00, john williams of the new york fed. that day is stacked. lisa: i am watching ism services first and foremost and after that the jobs claims given the fact we have seen the slow grind upward in terms of the numbers of people out of work looking to get some benefits. to me the idea of ism services has the same kind of downside surprise manufacturing did, that will move the needle in a more significant way. jonathan: did you think chairman powell was dovish? show me signs of resuming the disinflationary trend. that is an additional quote. lisa: he said significant progress, real progress, and quite a bit of progress. he did say we want to be more confident inflation is moving down. he did not talk about a date when people pressed him on september but clearly you saw the market price and a greater chance of a september rate cut because of a substantial progress type of language from jay powell. jonathan: let's do the politics. the polls, the officials opening up, the leaks, there is a new excuse from mr. biden. "i was not v

there's a fed put.the rates are so high, that could easily cut 150, maybe even 200 very quickly. which could rebolster financial asset prices. but it is unusual when credit spreads are at near all-time lows, equities are at all-time highs. why would the fed be aggressive in cutting rates besides just moderating how tight they are? >> will this be more like 1996 is a moment where we saw policy adjustment -- there are been a few of these mid-cycle moves. >> that's what we're facing. the fed overtightened in 1994, went from 3 to 6, realized they didn't need to cut this high, then cut it 150, and it was clear sailing. >> gentlemen, thank you all. appreciate your time. >>> mortgage rates are on the move following cpi. you can guess how they're following the ten-year lower. diana has more for us. six handle? >> the average rate dropped to 6.85%. that is the lowest level since early march. bond yields fell sharply after the cpi and rates loosely followed the yield on the ten-year treasury. what is 6.85% mean i

maybe if the fed cuts, we'll go down to 22.75% once the fed starts cutting, leslie, do you think?me system, they raise the rates. the fed can drop, like, three or four times, and it's, oh, we're thinking about it. banks, i don't know. they get a bad rap. they're not our friend, i don't think, leslie. >> no, that's absolutely true. if the fed cuts rates, you would expect to see those rates go down as well. >> we've got to go. i'm going to get in more trouble. are they sponsors? >> thanks, leslie. >> final check on the markets. 78 points now on the nasdaq. now the dow looks like it's going to open in positive territory. do you think you could say anything in front of the house that changes things? maybe, right? >> it's possible, but probably not. >> i'll miss you tomorrow, but see you friday. >> see tonight on "fast." >> that's right. join us tomorrow. "squawk on the street" is next. ♪ >>> good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. five record closes in a row for the s&p. f

one voters is always the new york fed.id: when you have a fomc meeting, how many do you have a year? chair powell: eight. david: when you get together, you get together for two days or so? chair powell: we do. generally, it starts at noon or the morning of a tuesday, and we go all day. we generally talk about the economy, the financial stability issues, whatever special topics there may be. at the end of the day, each person speaks on those things and i speak at the end of the day. then there is a brief presentation on monetary policy, then we go upstairs to dinner, and the next morning we come back at 9:00 and talk about monetary policy until we are satisfied with the outcome of monetary policy. that usually takes most of the morning. david: ok. so when you go into fomc meeting, the first day, do you pretty much know where you would like to come out at the end of the second day or do you listen to everybody and then make up your mind? chair powell: the way it works is, you know, i talk to the other 18 participants regular

and a fed meeting. we expect fed rate cuts this fall. during the biden presidency.rse for a policy under either a biden or trump presidency will depend on the data and the evolution of the economy. >> you were vice chair during the trump administration. we saw a lot of pressure coming from the administration on the federal reserve. how much influence does a president have on the fed? >> the influence any president has on the fed is through his ability to nominate individuals to be governors, vice chair and chair. the president can only nominate someone if there is a vacancy. there will be no vacancies on the fed at least none are scheduled to occur until may, 20 26 when jerome powell's term is up here over time a president can nominate individuals. it is not a rubberstamp. the senate takes the advice and consent. seriously. over time the president can put appointees and if they get confirmed but nothing happens on day one. the fed on the first day of the next presidency is going to be the same fed we have right now. >> moving forward because it is not just the rate

the fed has not yet approved this rule. why not and does the fed plan to do so? chair powell: sorry -- sen. warnock: you have not yet approved the rule that was suggested by the cfpb appeared they finalized a deck by the cfpb appeared they finalized a rule. chair powell: i'm not aware it is a rule we have to finalize too. is that the case? sen. warnock: that is my understanding. chair powell: let me follow up with you on that. i'm not aware of that. >> senator daines of montana is recognized. sen. daines: thank you for being here today. it is not lost on anybody here election season is in full swing and from now until election day, democratic colleagues in congress and the bite harrison administration will waste no time attempting to sell a fairytale to the american people that financially and economically they are better off now than they were almost four years ago. when president biden took office inflation was at 1.4%. 's failed policies drove us to the highest inflation have seen in 40 years. the folks back home in montana are not full because in every part o

[laughter] why doesn't the fed leak more? don't you kind of leak a lot more about what you're going to do? you just don't leak all that much. chair powell: i'm kind of proud of that, actually. we do take our obligations to confidentiality very, very seriously. because we know, you know, how consequential it would be for someone at the fed to be leaking. you know, just our whole success depends on having the public's confidence that we're ethical and that we're working on behalf of all americans and not on behalf of ourselves and we're not leaking and that kind of thing. so we do have a culture -- when we're working on a, for example, a regulatory matter or some, you know, matter involving one of the banks, it never leaks out of the fed. so, i am proud of that record. david: some people have suggested that the fed's independence is not as good as people talk about it being, and that maybe we'd better have more white house coordination with the fed. i'm sure you've heard about this. chair powell: i think that -- david: any comm

>> the market is well ahead of the fed. this has propelled small-cap optimism. >> these groups will benefit from interest rates moving lower again and investors will see an opportunity. >> the fed does not have to deliver cuts but has to get the market leaving it is moving in that direction. >> it is not just inflation but the broader economy. >> it gets put to work when the uncertainties at rates, inflation and recession starting to shrink. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. annmarie: do you remember when -- jonathan: do you remember when the summer is to be boring, nothing boring about this. the s&p 500 from her by .1%, coming up the biggest -- firm by .1%, coming off of the biggest loss. a rate decision from the ecb. 15 minutes later, jobless claims, 15 minutes after that a news conference with president lagarde, and later this afternoon from the rnc in milwaukee, wisconsin, donald trump, a former president addressing the republican national convention. we have ja

it is double that for the fed. >> interesting. more maneuver for the fed.et's see where we are in terms of potentially seeing a deal in germany for the budget and throughout this week, though, when you think about france versus germany, the gap between the ten-year yield has narrowed. ult thimately ultimately, what will happen next week with the outcome of the french election? what will we see in terms of the debt picture? >> in terms of the spread, one-third of the spread has gone away. i suspect 15 or 20 basis -- that's off. five to ten. there will be a bit more premium because the political risk. there is additional risk premium that needs to be in french debt. a hung parliament is the least bad outcome. you will see lesnar owing. >> we will see. we are all excited here. we have so many outcomes. thank you, tim. tim graf at state street global advisors. >>> coming up on the show, the polls suggest the far right could come short of the parliamentary elections on sunday. we'll have all the latest after this break. >>> welcome to "street signs." i'm silvia

i don't think it'll be weak enough, cheryl, for the fed to justify a rate cut by september.k rate cuts are coming, you'll get more rate cuts next year as monetary policy will work to bite both the slow inflation and the economy, and probably more than people want. cheryl: joe, you must have talked to joel assumeman before the show started. that's exactly what joel is saying. final word, joel. >> yes, i couldn't agree more with him. we don't have enough to cut the rates. certainly more next year. and, hopefully, we'll end the year on a good, a good rally. cheryl: all right. steve? >> i'm going to say what i said at the beginning of the show. you know, if you're out there on the sidelines maybe thinking about getting a job, i would get them while there are still jobs out there, there's no doubt. more jobs than people looking for jobs. i don't know how much longer that's going to last -- cheryl: words the that ring true for the parents who have their kids living with them. gerri willis. >> get preapproved, and i think they're going to cut rates faster than you think. cheryl: ar

today was fed day.on't know, i guess they're going to cut their interest rate in september or some such thing? only a quarter of a point. i'm not really that excited about it. but we'll have judy shelton. we'll have steve forbes. remember, catch "kudlow" monday through friday 4:00 p.m. every day right here on fabulous fox business. if for some chance you can't catch us at 4:00, please text your favorite nine-year-old and she will show you how to dvr the show and you will never miss a presidential debate or discussion. i'm kudlow. we'll be right back. ♪. (fisher investments) at fisher investments we may look like other money managers, but we're different. (other money manager) how so? (fisher investments) we're a fiduciary, obligated to act in our client'' best interest. (fisher investments) so we don't sell any commission-based products. (other money manager) then how do you make money? (fisher investments) we have a simple management fee, structured so we do better when our clients do better. (other mo

a lot of people thought with the fed cut cutting and mr., if you can bring this full circle for us. how much further should small caps rally, based on the fully priced cuts that we have and the fact that they're not going to cut in two days. >> i don't think the russell was rallying because they expect a fed cut and i think the russell 2000 is rallying because i think the cyclical side of the economy is going to get a lifeline if the fed is committed to cutting rates, once or twice or three times this year. the things like durables and housing and autos, they will inflect and that's why we're seeing strength in regional banks and the cost to capital sectors like biotech, but to me the small techs have quite a lot of room to run because there's been breadth expansion and a lot of sectors are outperforming their large cap years and eight them have broken up to one-year highs on a relative basis and there's a huge expansion of breadth at a time when positioning is really light and you look at russell futures are still there. >> peter? >> i thi

the fed tells you they want to cut rates. you read every number as this will get the fed to move. to move. the fed has repeatedly pushed out the timing of rate cuts and as a result, they have a winning hand. they are getting an interest rate environment that fits their scenario without doing anything. this is the number that will make them cut rates. nobody could short this market. mike: -- yelena: i agree with steve on consumer spending and income. last friday we got numbers that are pointing to a very strong growth in consumer income. we did see some moderation in consumer spending, particularly on discretionary services categories. i think we are fine in terms of deteriorating and growing slower. that is the key point. the numbers i will be watching this week include jolts. are we going to see a slowdown in the decline of openings? that is a key point for me. we are at the point of the beverage curve where further declines in vacancies lead to high unemployment rates. that goes back to the point i made. it is much more important over this period. that will be a warning sign. jo