whether it is powerful and this current fed in the second half of next year or a new chair for the fed in 2026, we think they will have to navigate with the actual policy implementation looks like and how much of that is may be driving some near-term inflationary impulse. for example, higher tariffs across the board versus the more medium-term negative growth impulse that could come from that lower trade environment, may be diminished labor supply because of immigration policy. it will be a pretty complex cocktail for the next fed chair and the current fed in the current half of next year to have to navigate. vonnie: can i briefly ask you both, are you looking at the possibility that the current fed chair will get fired and may be on a whim or premeditated, is that a tale rescue are factoring at all? what would you do if that were to happen? tony: we think that is quite unlikely. if they attempted to fire him it would end up basically in protracted legal scuffle between the fed and the administration. given the chair's tenure is over in 2026, we think the administration will be patient

from the fed administration, and if anything is going wrong with the economy, i expect that the fed is going to blame the fed with it, and that is coming with the job and the federal reserve. >> imj i believe that the fed term continues into 2026, and any possibility that he may not fill out the term, either because he decides to step away or because he is basically pushed? >> well, there is always a possibility, right. i don't see it though. i don't place this as a very, very high component of potentially what president trump's policies would be which is to remove the fed chair. that is not the first stake in the ground that he is going to make. and like i said, it is clearly a possibility, but so far, the fed is doing pretty much what he wants the fed to do, and he wants them to cut the interest rates, and they are in the process of doing that, and that should stabilize and help the economy, and ultimately the fed has a dual mandate of price stability and helpn unemployment. so whether it is chair powell or trump, they have to stabilize, and if not, they have reflex zif ti which i

the fed can ignore criticism. most think the president doesn't have the authority to replace the fed chair, but he was facing plenty of uncertainty. now new issues how the fed respond ts to tariffs. here's the outlook for the fed. 96% say we get a cut in about an hour. 79% say they cut again in december. 3.6 cuts continue into 2025 aboarding to the survey, despite the higher interest rates. this is in line with where the future market is now. so the fed survey shows respondents think the fed sells into lowering rates every other meeting next year starting in march with a big asterisks next to it. kelly, covering the fed just got a lot more interesting. get some sleep. >> i'm watching the reporting on this. people mostly saying that it looks like trump would have powell staid on. his term is not up until the middle of 2026. so not a lot of year term change is likely. i don't think there's a lot of turnover coming up on the board either, is there? >> no, there is not, not until 2026. i did talk to a former trump off

that was fed chair powell down in dallas today. his first remarks since his news conference of one week ago in which today the fed chair said the following largely sticking to the script of last week described the labor market in, quote, solid condition, remarkably good is how he said the performance of the economy is by far, and he underscored those words by far the best of the major economies of the world. sees pce at 2.3% inflation coming down to target with the caveat he said at a bumpy path that's alluding to the stickiness readings we've gotten as of late and careful about their decisions moving forward they're going to be data dependent. we remain resolute in pursuing the dual mandate wouldn't get into politics at all around the election. he did underscore why he thinks the fed needs to be independent, why that is so important he said, quote, credibility is everything he was asked if the results of the election does mitigate any of the downside risk to the economic assumptions of the fed in which he said it was simply too ea

the fed... l expecting? i expect no - surprises. the fed... they are going to cut...ance on what they're going to do in december next year because there are a lot of things for there are a lot of things for the fed to consider right now. here in the us we have a donald trump victory so many economists have warned that his policies could be inflationary so do you think this will change the fed's they won interest rates next year? we are still waiting _ interest rates next year? - are still waiting to see the composition of congress so that is important. they are mapping out all the scenarios and what types of policies will come through congress and through the executive and then making forecasts in terms of inflation and in terms of unemployment and in terms of unemployment and the labour market. they will use those to calibrate what the fed does with interest rates. they need to work around the edges, they need to be away if there is inflationary policy coming down the pipe the fed should hold off with some of the interest rate cuts because monetary policy takes time

the fed's incompetence. david: jay powell talking about fiscal responsibility and of course some people wonder about the responsibility of the fed to inform congress and the white house when they're not being fiscally responsible. let me roll that tape and get your response. >> the u.s. fit fiscal federal government fiscal path, fiscal policy is on an unsustainable path and there's a very large deficit at full employment and that's expected to continue so it's important that we deal with it. it's ultimately a threat to the economy. >> where was he? with a rollout of deficit spending of the biden administration. >> we needed to hear from him in 2021 when the biden administration was rolling out american rescue plan and another $2,000,000,006,789 they provided cover that biden administration needed to keep on spending and now he's talking about unsustainable path and donald trump should ignore him and i think donald trump actually has the legal authority to remove him and i do not believe that executive branch

the fed is late, okay? the fed is -- we hear balance. well, if it's balance, then take your foot off the a brake. if you take your boot off the brake, it's 2.if 75. charles: right. >> if they took it the 2.75 today, you wouldn't feel it until the spring of 2026. i have this thing that i call the effective lag fed funds rate. charles, next year the rate that the real economy -- not the financial assets, the real economy -- is going to be digesting is 5%. those are the interest rate cut hikes that the fed did 18 months ago. so i get that strategists want to talk about the short term, right? we want to position for the long term, and we see an economies that is drastically decelerating. i completely and totally disagree with the fact that a there are folks that say the labor market is strong. the household survey said -386,000. charles: right >> there's a million full-time jobs lost. only thing saving this market, the job market is a half million increase many government jobs. you think that's a sign of a strong private sector? charles: rig

dominique: we think the fed will cut once in december.aybe a close call but that is what we think. next year, two cuts. not so much cutting going forward. a majority of central banks are cutting. that is easing conditions. economists think growth is only slightly lower next year compared to this year. coupons are doing fine in that environment. sonali: do you agree will only see three cuts until the end of next year? why are credit markets holding up so well? you would expect to see more cracks. meghan: our base case is one cut in december. we think it is more of a close call. next year, closer to four cuts. we think the risk is we see fewer than that. right now credit is pricing in strong fundamentals. as long as we get the dovish tendency and continuation of cuts eventually investors will focus on earnings. you look at the past earnings season, our growth has surprised positively. 5% year-over-year growth compared to 1% expected. the fundamental picture is what people focus on. sonali: how much are you seeing companies take on debt to f

the fed follows the two-year. people push back against me, but i can prove it mathematically, and it absolutely follows the two-year, and he's almost exactly in line with it. so, powell is in the right spot where he is. he says the labor market's normalized. i agree with that. inflation rate has been coming down. i think he deserves credit for what he's done once he finally started cutting, and now he's cut 75 with the two-year going up, i'm -- he's right to be in a relaxed frame of mind and his mood and demeanor in the press conference were very good. i thought his answer to, are you going to be demoted or would you step down if trump asked you to, i thought that was a great answer. no hand-waving. just, "no." he's not stepping down. >> i think that's why we played it. it had a bit of -- i don't know, drama to it, but the way that the chair answered that -- i mean, how do you view that -- i don't know if it's a wild card or not. you know, powell obviously thinks he has some room ahead there to continue to cut rat

regardless of the fed's path. whenever we get there, the fed's going to get to probably about 3%. will it take 12 the months or 24 months? we don't know. i don't think that that's that important. the more important is the 10 year's in a reasonable landing spot. liz: i don't know if we can pick up the dow heat map, awe but at the bottom is nike and nvidia. nvidia reports wednesday. could you argue this is the most important earnings report of this entire season because of the power nvidia has a had over the past several quarters to lift entire sectors in the market? if. >> it's a really big one. there must be some curse of getting into the cow. i think one of the historical things that makes nvidia even more important is if you go back to '99 and the beginning of 2000. it's not true that it was eye -- sock puppets and eyeballs. the gap is not as big as it is now, but it was still there, but it's even larger now. the cash flow generation of the a mag 7 -- i'm not saying it necessarily sports the -- supports the prices but, man, it's massive. and to the extent that nvidia can keep pr

the neutral rate for the fed is probably around 3%.comments, it's still restrictive. there is still a little bit of defense from the policies. >> what is your word of the day? >> my word is small-cap. up 6% on the night of the election. a broken clock can be wrong twice a day, or right twice a day i should say. we will take valuation as a res rate cuts and resilient if the tariffs have a bit of a ding on international companies. >> it seems like you are talking out of both sides of your mouth. we got an indication we whill gt more rate cuts. they have been under performing all year although we knew we were going into the rate cutting cycle. the pick is the high etf itwo is the ticker. they just pull back. just give us the case in 30 seconds. >> it will be episodic. you had the 6% the night of the election. they're going to be volatile, but they have been under performing for 15 years and well positioned. we suggest our etf, the itwo which is our pro shares. russell 2000 high income etf to get exposure to small caps and have income that

i think the fed has to be mindful of that.n't want to lose control of the inflation victory if they are only just starting to taste. i think that is going to be a real focus for the fed. obviously, the tariffs are a tough thing to follow. they have to keep a careful eye on that. >> another thing is the rise in bond yields. we don't know if that is transitory. how do they view that? in your mind, do they see it as potentially offsetting some of the cuts they would have potentially made? the cost of capital is still higher right now even before the tariffs? >> market moves are always a complicated one for the fed because they absolutely pay attention to them. i think that is true in the near term, but it is obvious they react to thefact financial conditions tighten. that affects how the economy is growing. it does some of the work for them. the instance like this one, the expectation is event based and unwind as people settle down. i think it's difficult to react to something like that. they don't want to make a big pronouncemen

lisa: this brings us to the fed and how the fed considers markets.en he goes up, they shrug it off. that has been the theme we have seen consistently. it will be an awkward meeting today for fed chair jay powell to not talk about the elephant in the room. does he have to address with the market is saying about the potential path of inflation as well as just this feeling maybe there is going to be stickier growth that will be re-accelerating? dana: chair powell will have to do two things. he will have to talk about what has transpired since september. we did have the odd october employment report. that was affected by strikes and hurricanes. for the most part the u.s. economy has been doing great. a little stickiness and core inflation. that would justify a 25 basis point cut today. potentially also in december. we are not going to see many big policy changes until next year. the second piece of the discussion has to be about the outlook. there is potential that the fed may acknowledge there is going to be potentially more uncertainty, more volatility

turning now to the fed.n his latest bloomberg opinion piece the u.s. federal reserve and its chair jerome powell are rightly choosing not to act on any assumptions about what donald trump might do as president. that said, if he follows through on his more extreme campaign promises, they will struggle to contain the economic consequences, a problem that equity investors ignore at their peril. bill, you've been in the room, you understand what this is like. give us a sense potentially of the tension that might be brewing between the fed and president-elect trump. >> on the short run there's not going to be much attention because they would cut interest rates a bit further. but you look at what president-elect trump is proposing, higher tariffs, deportations and fiscal stimulus, that's going to tend to boost inflation, disrupt economic growth because tariffs will force people to reorient their supply chains, and it's going to make the environment more difficult. but as powell said last week, we don't assume, we

and where is there a surprise for markets that you have not a fed that's ready to hike, but a fed that is not. you alluded to they would rather not do anything in december but they're probably going to. i think projections have changed. what do you think? >> i took out the guidance, you don't take that for nothing, it's basically preparing on what's going to happen next year will change our projections, and i think that you see higher projections of growth, probably some lower unemployment which is what they want, but they cannot reconcile the massive amount of rate cuts against it. i think the fed is looking for the space of cuts probably slower even based on projections. i would think it shows fewer cuts what they projected in september. they do want to get to neutral not too fast. they want to drop rates too fast. that's why it speaks in the projections, going to be a stronger growth outlook. >> ben, great to see you. thank you for coming by. ben emons of fed watch. >> you're only as good as your last trade in the business when you're a trader, and powell will be known whether or no

to give the fed full flexibility. look you're a very astute fed watcher and said chair powell doesn't know where neutral is. he said as we approach where we think it might be, we want to slow down. what steve pointed out with market probability being each meeting after december where the fed wants to be so the data leading up to each the market can say whether it needs to push that probability higher or not. this is what data dependency is. this is more volatility and the fed is guessing, the fed also doesn't know where tariffs are going to land. here, there and everywhere. the world was headed towards recession the fed started cutting. we need to remind ourselves of that playbook. >> we need to remind ourselves, too, i suppose, chris, that we don't need months to happen before you get tariffs in place. the president can do that through executive order by himself. which means that we could be dealing with this 12:01 p.m. literally, literally on january the 20th. is the market prepared for that adequately as steves sug

he would vote for that if he were part of the fed.oronado is the founder and president of macro policy perspectives. great to see you. how do the results and the market reaction with bond yields and stocks doing what they are factor into the decision this week? >> yes, i think in the near term, the fed will be as want to be as steady a hand as possible. they have already snindicated a5 point. they're also going to be working on the timing of the policies, and what can be done through immigration and tariffs can happen well before any fiscal -- so the timing will matter to the fed's decision and the state of the economy. the market reaction has mixed signals, because higher real rates certainly could be a headwind to the economy. on the other hand we could have an additional tailwind from an enthusiastic stock market. the fed, when it comes to financial conditions, they take their time, see what persists, this is a one-day move, what shakes out? >> why are long-term yield rising when the fed's yields are falling? what is that telling y

the fed keeps setting expectations and the market's got the expectation that fed is going to cut, lowerd you're right, today the expectation is pretty much baked in that the fed cuts rate by 25 basis points on half of the half a point or 50 basis points that they cut the last time. so they're getting it wrong again. is that what you're saying, jim? they're blowing it again. >> in my opinion, they are. again, it's the degree of difficulty they have set for themselves is quite high. for example, they must according to their remit supervise the unemployment rate of the country, make it as low as possible. they must at the same time center inflation on like nothing. although they have chosen 2%. they call that price stability. and also they are weary of the treasury market because it is prone to dysfunction, owing to the really, really troubling state of america's public credit. too much debt and the apparatus for funding that debt is crecreaking and sometimes troubling. i'm talking about primary dealers in charge of distributing securities to the public and making the auctions go smoothly

yes, even as we see the fed cutting.re they were versus the early 20 20's and relative to the last cycle. there is still some strain on some businesses in terms of the interest expense where they are having to trim around the edges in terms of employment. will we see layoffs remain low? there's not a lot of hiring going on. you have businesses essentially in a holding pattern. while that points to some stability for now, it keeps us in a precarious position where you don't need to see much of a shock to see further deterioration. those are some of the things we're looking at. annmarie: the lowest estimate comes from bloomberg estimates tha -- at -10,000. they say it could be 50,000 to 90,000. what could be more of a surprise to the market? a negative print or something that comes in closer to that surprise september report? sarah: the risks around the report in terms of interpretation are what we can take away from it. if you get a much stronger than expected payroll print where there is a depressing effect from the stri

the fed announced a quarter point rate cut. and chair jay powell addressed his future in a second trump administration. cnbc's steve liesman has the latest. >> hey, melissa. the fed cut rates by a quarter point, down to 4.63 and suggested more to come gradually. chair jay powell tried to present a status quo policy, as if nothing has changed. he had to respond to the question about whether president-elect trump could fire him. >> do you believe the president has the power to fire or demote you, and has the fed determined the legality of a president demoting at will any of the other governors with leadership positions? >> not permitted under the law. >> not what? >> not permitted under the law. >> thank you. >> all right, for another, a trump presidency promises a vastly different fiscal regime and powell responded that the fed would take it as it comes. >> of course, the real question is not the effect of that law, it's all of the policy changes that are happening, what's the net effect? and, you know, the overall effect on the

you hit one after another. >> there was a fed meeting, too. >> oh, yes, the fed meeting. >> i'm prettyactly. tonight with my son. >> i hope it goes very well. thank you, steve, for joining us. steve liesman and that does it for "power lunch." thank you so much for watching. have a great weekend. "closing bell" starts right now. >>> welcome to "closing bell," i'm mike santoli in for scott wapner. live from post 9 at the new york stock exchange. this make or break hour begins with the bulls stampeding through landmark levels to polish off the index's best week of the year. here is a look score card. further follow through to wednesday's post election bounce has taken the dow industrials past the 44,000 mark, the s&p 500 above 6,000 for the first time, you see the s&p up about half a percent on the day. a decisive election result and expected growth-friendly policy mix under a second trump administration has investors discarding caution, reaching for risk, the volatility index has melted

has the fed changed its tone to a pausing bias?personnel, i say in washington, personnel dictates policy. you can tell what president-elect donald trump is thinking depending who he puts in these positions. we still do not have treasury secretary. manus: we know he is corralling various personnel. at 80%-odd, it is looking toward scott bessey. when looking at there is names for financial positions, the people at state street say these are professional people from wall street who know how to run numbers and know how to think about markets and what they will take away from it. annmarie: the prediction markets got trump 2.0 accurate, said he was going to win. coming up on the program, chris harvey of wells fargo as the s&p 500 hits its 50th record high this year. former obama economic advisor jason furman on the risks with the economy, and charles evans on fed policy. we begin higher. chris harvey of wells fargo saying fed accommodation and tuesday's election results are bullish as republicans likely achieved the red sweep, which is s

the fed has an ally in the senate. number of senators told me that while they may have their frustrations and are open to some reforms, they do not think he should have a say in interest rates. senator thom tillis on the banking committee oversees the fed. he told me the white house having a role in interest rates would be dangerous because u.s. monetary policy could change with each new administration. he also aid it would be a mistake for the united states long-term. other banking committee members including mike rounds, kevin cramer and cynthia loomis said that fed independence is critical here. as you were just talking about he is just one of many questions facing the senate as trump prepares for his second term. he has nominated some controversial pics including matt gaetz for attorney general. senators i have spoken with want to help them but are not ready to give up their power to provide a check on his choices. listen to what senator john cornyn told nbc. >> i do not think we should be circumventing the senate

branch did not create the fed.e executive branch. if you have a problem with the federal reserve and the federal reserve act, it's a problem of congress. this flows from the controls of the purse, which is the prerogative of congress, and then i think the questions judy asked are interesting and worth exploring should there be limits how much debt. those are prerogatives of congress to put on, and there's a reason for that because of some the things andy said, whether or not you want to be paying banks to limit the floor on interest rates, that's an interesting question. you can't say which what senator mike lee did, which i kind of think is a little embarrassing, that the problem is the executive branch. it's not the executive brafrp. it's congress. if congress wants to limit these things, it has every ability to get together and do so, but it hasn't done so. it has given the fed -- what judy points out is an interesting article a triparthide mandate. i would push back on judy in the sense there is oversight in th

can the fed interpret an unconventional fiscal policy through conventional fed policy? >> sure. so i think one thing we know is that the fed is not going to try to forecast or get ahead of what the administration is going to do. chairman powell is very clear about that in november, and i think for political reasons, if for nothing else, they have the kind of play it that way. the fed -- they need to keep their eye on the ball. they're supposed to be focused on inflation and the labor markets. i think they continue to do that and just conduct policy the way they would in any other environment. >> steve liesman, final word to you. want to sum it up for us? >> i think what stephen staley said is what i was going to emphasize. maybe the reason why there is there uncertainty in the march probabilities is because we don't know two things. we don't know exactly what the administration is going to propose, how it's going to affect the economy, and of course the outcome from that, how the fed will react. it may be way down the road, if stephen staley is right in how he's thinking about p

but it really comes down to just putting the fed back into play and the fed was wanting to cut interestl came out and said it's biking. what you are seeing here is this path back to 2%, albeit slower, so we are seeing bonds rallying and the stock market continues to rally as well today. in general, you are seeing there is some kind of relief here but it's not as fast as people want. you mentioned through the election as well when people feel inflation is very high, but i don't think people realise the effects of year—on—year inflation. so usually this is a traumatic event, something that really stands in our mind and this case it was pre—pandemic. irrespective of where inflation is, the consumer feels irrespective of where inflation is, the consumerfeels it irrespective of where inflation is, the consumer feels it when they look at headline prices, and they continue to see prices high. so in general you see the consumer is a little bit frustrated but financial markets realise we are on the right path today.— right path today. sorry to interrupt. _ right path today. sorry to interrupt, i

so that's going to be a huge challenge for the fed, a lot of pressure on the fed to keep rates low, to boost the republicans. that could lead to a lot of inflation, particularly if trump chooses somebody who is willing to be, quote, a low interest rate person. >> of course, powell yesterday pretty unequivocally says obviously he does not believe the president has the authority to fire or demote him so he's going to serve out his term. and that being said, too, even though there is the potential as you suggest for a lot of friction, the fed is already easing, the economy is already strong, it's almost as if there would be nothing really to blame the central bank for at this point. so, you know, why would that come to a head? >> well, because it's two years from now. >> yeah. >> that's a very, very, very different environment. we just don't know. and it might be that the fed is faced with inflationary pressure and has to raise rates and trump would be very upset about that. that could mean that he will pick somebody -- they've talked about what he wants to choose somebody who will agree

after every fed meeting were the brainchild of chair powell.nk the fed is -- is setting itself up in a very unseemly way, as almost being more important than -- than the policies and promises of an elected u.s. president. i felt it was very unseemly that moment, when the head of the federal reserve, said i would refuse to resign and i cannot be fired. by the incoming president, who is elected by resounding majority of the people. maria: right. >> the fed has -- has every time we've had a crisis, they have enlarged their capabilities, there are no limits on how much government debt the federal reserve can buy, there are no limits on amount of base money can create with a computer keystroke no limits on amount of interest payments at taxpayer expense commercial banks, to keep cash sitting dormant in accounts at fed there are no rules, to safeguard the monetary integrity of the u.s. dollar even as the fed has deliberate policy of debasing our money unit, they intend to reduce purchasing power, 2% a year they haven't seen even hit that target i don

former kansas city fed president esther george on defending fed independence.ur all-time highs. s&p 500 approaching 6000, notching its 49th record this year. equities having their best week of 2024 as trump takes back the white house and chairman powell continues cutting interest rates. joining us now, mohamed el-erian . welcome to the program. i know you watched the news conference. what was your take away? mohamed: three takeaways. as expected in terms of the characterization of policy, i desire to maintain optionality, and where i really felt for him was not in his response to the questions vis-a-vis the president-elect where powell the lawyer cannot strongly. it is this muddled view of what is going on and inability to pivot forward. think of his responses to the question of decomposition of the bond yield. think of his characterization of real wages. does he want them higher or lower? think of the characterization of the labor market. the key question by mike mckee when he said you have looked backwards, what about forward? powell ended up talking backward

the fed minutes likely a factor. the fed indicate another cut is likely. 4.21. pce report, economists expect sharper increases year over year after the latest fed minutes show the fed anticipates lowering interest rates gradually. the next decision coming up on february 18th. the majority of traders expecting another quarter cut rate cut. we have to look at bitcoin. trading at 93,450. all right. that is your morning monday set up. let's see how europe is shaping up. sylvia, good morning. >> good morning, frank. so far we are seeing a lot of is she on european equities. trade conflicts and changes to fiscal and monetary policies. this morning we heard from one of the members that say there is limited room for rate cuts. that is a surprising comment. one analyst suggested we could see parity in the trade but that we shouldn't read too much into the comments. we are getting new inflation data from the zone later this week. >> busy day shaping back up on wall street. shares of dell. they are under pressure after the company's fourth quarter sales came in below analy

, the current fed chair, - there. jerome powell, the current fed chair, was - current fed chair, wasirst term. and donald trump has always discussed how he feels he should be able to have more say in whether interest rates should be raised or dropped. that really came up when the pandemic hit and markets were in a bit of turmoil. but the fed of course has always traditionally had independence from any political interference. and while some in donald trump's circles have suggested thatjerome powell suggested that jerome powell should suggested thatjerome powell should step aside if donald trump wants him to, jerome powell making it very clear that he will not do that and also, that the law is on his side, that he doesn't have to resign if the president asks. donald trump has suggested and said for now thatjerome powell, he would like to keep him in his role until the end, in 2026. him in his role untilthe end, in 2026. ., . him in his role untilthe end, in 20263-— in 2026. thanks so much for that, nada _ in 2026. thanks so much for that, nada tawfik _ in 2026. thanks so much for that,

the fed's next move on rates.next guest says powell is on a mission to get back to a terminal rate of 4% sooner than later, and will ease by a quarter point every meeting until we get there. paul mccully is a professor at georgetown. and cnbc's steve liesman is with us, as well. paul, how does the overlay of these markets, the reaction to trump and the election outcome you think affect their decision making? >> i think it makes it more uncertain when we're getting out into '25, because the whole gang out in '25 is figuring out what the terminal rates should be, which is another way of saying, what is our star, where will they finish the easy process? i look at that as a '25 exercise. for the rest of this year, they're still very much in the recalibration mode, which is to get the fed funds rate, the policy rate from the long place to a more sensible place. and i'm of the viewpoint that it will get down to 4 3/8. that takes a big chunk of the recalibration process to the finish line and out next year they would go

election and the fed decision.his is "real yield" on bloomberg. ♪ sonali: i am sonali basak and this is "bloomberg real yield." time for the final spread, the week ahead. monday we have data, durable goods that morning. plus earnings from berkshire hathaway, mariette -- marriott. tuesday, the big election day. earnings from apollo, as well. wednesday, election results continue. thursday, the fed's november decision. friday, consumer sentiment data from the university of michigan. for my final thought let's take a quick look at something interesting from today's jobs report. 47 .7% is the lowest response rate from businesses since 1991. likely a collection from the two hurricanes cutting the collection period short. it could mean some big revisions to data and a lot of confusion about what that means. from new york, that does it for us. awkward question... is there going to be anything... -left over? -yeah. oh, absolutely. (inner monologue) my kids don't know what they want. you know who knows what she wants? me! wi

you said the fed has to go 25. they don't have to do anything. >> they don't have to, but i think based on how they've guided us and the numbers we've had and that we are still, i would say, restrictive. i'm not looking to see them do more than they need to do. but i think the market two weeks ago was concerned that the fed could pause it. it does get back to earnings. and, yes, those are strong numbers by amazon and google and meta. but i do think today was some sense that the economy is okay. >> we've got to move on to big tech. to three of you at the same time, raise your hand if you think the fed will cut 25 basis points next thursday. >> reluctantly. >> completely unhelpful for those on the radio. >> that's why i said, hi, there. >> if you're on the radio, thank you for listening. it was four of four. i abstained. let's dive deeper into big tech. it was a good day today, but an overall rather tough week. here is your random but interesting stat of the day, this week's drop, the nasdaq just broke a seven-week w

whether it is the election or what is happening at the fed? michael: we do not have to worry about them happening on the same day. there is a big question about whether we will get the fed decision before we get a presidential decision. they cannot make any policy based on it because they will not know who won -- even if they know who won, what policies will get through the congress? as this point they sit back and watch and base their decisions on what the economy is doing. at this point it looks like the economy still in very good shape. sonali: we will watch the many moves. michael, thank you so much. for more on the day we are joined by blerina uruci, chief economist and t. rowe price. we were talking to mike earlier about the rounding of the unemployment report. he says you can play that game but it keeps you far away from where the fed would be concerned. do you have any concerns about the data coming out today? blerina: exactly. i would echo this idea that it is hard. the information content in this report is not very large. even if you

that will be one tough job for any fed and any chairman of any fed.onsequence if they don't do that? can you give us a range of potential outcomes if there is a greater willingness to monetize some of the debt? thomas: first of all, people tend to focus on consumer price inflation. what is going to happen is asset inflation is going to reignite beyond what it is today. you think a house is unaffordable today? look what happens when they monetize the debt and asset prices go up. the stock market will go further up. the divide between the haves and have-nots will grow in the united states. the fed has to know that. that is why they have to put the alert out in a prudent way. these things can be highlighted by the fed. that is part of its responsibility. it is limited in terms of what it can do for a full yield curve under the circumstances of debt growing at these kind of rates. jonathan: this was super thoughtful. tom hoenig, former kansas city fed president on the outlook of the reserve. adam posen, chair powell should make it clear the fed's monetary

we talked about the fed. report in 2018, and it was about the role of inflation. it e noted that inflation expectations might run persistently higher than the tariff, when tariffs are around. that would lead to higher pay. we're going to bring up this exact statement for the audience to to see. and i wonder if this is what the fed -- you think the main thing they're talking about right now, that the labor market, a tight labor market would see higher wages because of tariffs. >> well, they could be having that discussion but, of course, the labor market in 2018 was a much different beast, charles. you know, we know from advance auto parts yesterday they're going to be closing 727 stores and 4 distribution centers, announced layoffs are running at 100,000. in november they were 110,000. in october that was double what they were in september, about 50,000. charles: right. >> so it's a different labor market, and the reason you're hearing from some of the doves, austan goolsbee, susan collins, they're both going

that's really important for the fed right now. the meeting by meeting that he stressed, the fed is not on any preset course, we've heard that before. i think that's important. what he's rye thing not to do is let the bond market get too far ahead of the fed as it did in september where hay the thought all of a sudden it'd be half percent, half percent, half part. that is not what the fed was signaling, and i think it's important he saw that little bit, not as the bumpy ride down in inflation. if -- the last numbers on inflation were good but not spectacular, and that is where you saw a little bit of hesitation. and i think that's very important. he also a noted that we're going to get more data. we're data-dependent. it's frustrating because there's not a plot of forward -- not a lot of forward guidance. the fed is easing toward its noninflation narrate, but a lot of things can happen between now and when they actually get there. and he mentioned exogenous shocks as well. liz yeah, he did. there were a lot of questions about the e

the shadow fed policy. jonathan: a new fed chair. a lot of question marks for next year. jonathan: coming up, we catch up with matt miskin, isaac boltansky, michael swanson and the former fed president bill dudley. this is bloomberg. ♪ >> i don't think we can look at the consumer through a monolithic lens. >> really looking for someone who provide the ability to stretch their dollar. >> the consumer is sensitive to price. >> we are in this purgatory, if you will, in terms of consumer balance sheets. they are getting by but living paycheck-to-paycheck. >> the consumer has been softer. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: for many of you closing out the month of november. the s&p 500 up around 5% this month, the best month of gains for the year so far. over the last week we added some way to the rally -- weight to the rally. on the nasdaq 100, down by .3%. tons of economic data. jobless claims, pce at another read on gdp. lisa: you nailed it when they said -- you said th

than the fed is on the wrong side here.reverse the trend set forth and that's where markets are taking this that way. and the change going forward is something you are excited about. neil: the animal spirits are unleashed, with the banda vigilantes, their spirits are unleashed too. you can't have both going on. neil: >> it is more of a testament. as secondly stronger economy and normalized kind of thing everyone is freaking out about because we got so used to rates being solo and money market rates being so low so bond rates are paying for something. and the economy gets stronger. neil: we have kiersten jordan, real estate agent, particularly mortgage rates where it is 6.7%. what does this worry you? >> which part of it? the fact that rates are not coming down. not a lot. a little bit. >> it makes sense, the economy could get better. and if inflation doesn't come down and rates can't come down and honestly the rate drops don't affect the mortgage rate drop over the summer, it doesn't make a dent in it. neil: how is supply a

watch this. >> the fed sets expectation in the market has expectation that the fed will cut global rates the getting it wrong again is that what you're saying there blowing it again. >> in my opinion they are. it's a degree of difficulty with themselves is quite high. for example they must according to the remitted supervisor employment rate of the country make it as low as possible. they must at the same time center inflation like nothing although they chose to present they call that price stability. they are aware of the treasury market because it is prone to dysfunction into the troubling state of america's public credit. too much debt and apparatus for funding that is creaking and sometimes troubling. maria: what is your reaction to the federal reserve lowering interest rates in an amazing, they jay powell made after cutting rates saying they might have to raise rates next year because of incoming policy, that is wild. >> they have to cover their bases. but i'm not sure why they have to fine-tune everything i'm not sure the fine-tuning the fed will do going forward. it's not going to

we agree with the fed's assessment of the current state. " you disagree with the fed on the outlook?o speculate even though chairman powell says they do not. kelsey: the current state is all we can really know. beyond that there is a lot of uncertainty about what comes next and that is why when you look at 10 year yields and a fair value model, the fair value model, just looking at the current inflation data, the current labor market data and the path for the fed funds rate prior to the election would have told you the 10 year yield now is fair, around 3.5% to 4%. that is obviously not the environment we are in. we are dealing with a lot of uncertainty come increase in term premium, a range in that environment where everything is on the table for now until it gets taken off the table. you have to anticipate a much wider range for the 10-year treasury yield. jonathan: what kind of guilt? kelsey: 4% to 5%. we are right in the middle and where you reach resilience is if you get to a certain level on tens and 10 year real yields which i am watching. you get around to percent on those and

it has so much to do with the fed. when i hear the trump trade, all i think is -- or the harris trade -- it is the powell trade we need to be focused on. >> i think i agree with the panel on every regime, political regime, will take credit or assign blame as it services them and the realities really cycles beyond them. i remember many years ago i was at one of these dog and pony shows, i think it was bill -- and he said, i wake up every day, walk my dog on the beach, and we watch the sun rise. i just don't give my dog credit for it. i agree with that. it is more about the -- cycle and the business cycle and the like. >> i guess my point would be, are we at an inflection point that's going to be positive no matter what, right? because the economy's good, the consumer's hanging in, and the fed's cutting interest rates. or are we at a later cycle point of view which matters in the context of this conversation? >> if i use january 1, 2023, you were supposed to cover your nvidia in meta shorts and get long as possible. it's

was gg to cut more than the fed said, now the market thinks it's going to cut less than the fed is sayingthe dot plot, what do you think. >> one thing that is incredible how markets overshoot people talk about the fed cutting interest rates, the barn market rallied, significantly the front end of the yield curve and now 130 basis points in its extraordinary. i think they'll try to go in december, is definitely not certainty. once you get the funds rate down to 4% we will have a whole new set of policies, an economy that is strong and all that's off the table. you get from the fed projections, the dot plot common sap production will be really interesting. my son says you will see the terminal rate higher than they originally anticipated. i still think they like to get a couple of cuts done next year but i think they will be patient about it. jack: people that want to buy a house might not see mortgage rates as low as they would like. >> i think one of the reasons the fed has to get the rate down, you're not seen any velocity of housing and using the housing market existing, housing starts

the fed looks like a damn fool i'm sorry they do. >> they repealed the fed rate cut, basically.y said the market is saying to the fed, you did the wrong thing, and this isn't going to go away, larry. right now, they do think they are going to cut in november, but that december cut is going to come out of the market very soon because people will see the numbers still coming in. larry: if they cut the rate in november i know you want to be a little bit more statesman-like about that because you're advising mr. trump but the fact remains if the fed cuts again in november there's no reason bond rates won't go up more. they are feeding into inflationary expectations. we don't have a collapsing economy. we still have stubborn inflation even though it's at a slower pace the level of prices is still 20% above where it was three and a half years ago, scott. i mean, the fed should acknowledge that, either that or if mr. trump wins jay powell should resign is my view. >> well, larry. if, if -- larry: you don't have to answer the last part. >> no, no, if somehow the next move is a hike, jay

how could you befriend the fed? what does it mean to be the fed's bud? get onboard, find stocks to buy and buy now even if you didn't like them. you have to be thinking of the future. marty, who passed away a long time ago, would tell you near-term gyrations do not count if longer term rates went higher as the fed started cutting rates like this time. he would say, that couldn't last. the fed is too powerful. if you get a chance to do some buying because things seem weaker, you have to hold your nose and pull the trigger! don't be misled by the action, just trust your buddy pal friend, the federal reserve. we've been buying home depot and sellers amass stocks and hitting any bids there was including mine. i didn't care. i was on with the market history. don't fight the tape and don't fight the fed gives you the confidence to buy when everyone else is selling. lower short-term rates, to repair and remodel, cuts in short rates, you will see longer rates coming down, too. so it doesn't matter what home depot says, only what the fed does. today, by the way,

that put the fed on a dovish path.ow we are pricing out rate cuts and a general anticipation that we have a growth driven move higher in yields. >> the trend was in place for employment before the storm adjusted numbers. the reality of it is the labor markets is slowing. we are seeing that. if you look at the small business survey today, components suggest we should be expecting the unemployment rate to move higher the next couple of months. if you talk about the market thinking about higher inflation risk and pricing that in the ten-year note, and the idea that maybe you are going to get some slowing in activity but not enough really to get the fed to move aggressively, the hardest part of the landing is the landing. you tend to bump around a lot. i think we are seeing growth slowing, inflation is going to be somewhat stable. that means kwleelds are overdone. they shouldn't be this high. >> in other words, it's based on a premise of a reacceleration that you are not expecting? >> you will not get it soon. meantime, th

with get to the fed. cutting its benchmark rate by a quarter percentage point in a unanimous decision was not a surprise. but chair jay powell declined to say whether they will cut rates again in december. he says the election outcome will not affect what policymakers do, at least in the near term. >> some of the president-elect's advisors have suggested that you should resign. if he asked you to leave, would you go? >> no. >> can you follow up -- legally, you are not required to leave? >> no. >> does the president have the power to fire or demote you and has the fed determine the legality of the president demoting any governors with leadership positions? tom: let's bring in valerie tytel. that was where the interest lay. the cut was expected. there were nuanced in terms of where they go from here but it was the question about jay powell's role at the fed. >> he appeared to get flustered late in the press conference. just how many times u.s. politics was brought up in the question-and-answer session. he d

my question is, are the fed -- is the fed hiring people from the left in democratic party s -- deliberatelyu know, 5 or 6 years, bingo, something happened here mike faulkender. >> i would say, a couple things, d.e.i. complex infiltrated universities, particularly in graduate programs, unfortunately specifically my area in economics you see hiring pool fed is bringing in people from has moved very much to the left, it used to be a lot of pro-growth economists, that literature has moved toward redistribution. there is another thing which is donald trump has changed the electorate. republican party is now much more of a working class party. and democrats are parties of elite. you look at what is the one year where the fed donate to republicans it was when mitt romney was nominee. i think what is happening is that donald trump has made this a working class party, and fed is a bunch of elites, not works class. larry: look at the charts, this started in 2016. that was mr. trump's first try, when he won, and explodes in 2020, a little bit less in volume in '24, but proportion does not change all b

the fed is doing qt.where they can from buying treasuries. are you concerned about the lack of price insensitive buyers in the bond market? earl: no. i'm concerned about the price. that is why our perspective with regards to doubling down is not a four-year story or two-year story. it's a 2025 story. there's a lot of unknowns out there. the unknowns are all around inflation. you have the impact of tariffs. you have the tax cuts that will come about. how is that going to be funded? we are not expecting less deficit spending. we know for sure there will be more supply coming out. that is one thing in the back of our minds when we look at the risks to outlook. jonathan: that takes us to treasuries. is that contribute to higher yields across the yield curve? you think the move so far is largely off the back of better than affected economic data? -- better-than-expected economic data? earl: your nominal yield is made up of three things. breaking inflation or inflation echo vacations, of your real rate, and ris