wanted bandage of the fomc's chosen approach to scaling back oklahoma stations is the fomc in the public have decades of experience with adjustment in short-term interest-rate in response to changes in economic conditions. nonetheless the post-crisis environment presented a new test to the fomc's ability to input in short-term interest rates. before the crisis the fomc could raise the federal funds rate, the rate at which banks would exit reserves when the banks would reserve knee but removing a small amount of reserves from the banking system. that would translate into a higher federal funds rate because reserves were relatively scarce to begin with. the intuition was simple, the fomc was signal that it was going to tighten conditions in the reserve market and the cost of obtaining reserves in the market, the federal funds rate would rise. other market interest rates would then increase accordingly. after the crisis however reserves were plentiful because the federal reserve funded its large-scale asset purchases through adding reserve to the system crediting the bank accounts for those

the fomc would gradually and predictably reduce the size of the balance sheet by allowing the reserve security holdings to run off. that is, we would allow the balance sheet to shrink pensively by not reinvesting all the principal payments from our securities. one advantage of this approach to scaling back accommodations is both the fomc and public have decades of experience with adjustment short-term interest rates in response to changes in economic conditions. nonetheless the environment presented a new test to the ability to influence short-term interest rates. before the crisis, the fomc could raise the federal funds rate the rate at which banks went to with the reserve need. but removing a small amount of reserves in the banking system would translate into higher federal funds rate because reserves were relatively scarce to begin with. they would tighten conditions in the reserve market and the cost of obtaining reserves in the market, the federal funds rate, would rise. other market interest rates would increase accordingly. after the crisis however, reserves are plentiful becau

in with the economy now operating near maximum employment, inflation is expected to rise with the fomc 2% over the next couple years it has been scaling back the accommodation provided in response to the great recession. in no small part for the excess reserves the process of removing policy accommodation is working well after discussing a few issues to start reducing the size of the federal reserve i will address the key question what is the future role of those policy tools? e. verify believed interest rates should be their primary policy lever those tools will be likely to be needed again their downturn drive those interest rates indeed empirical analysis suggest that the neutral fed funds rate that is neither expansionary nor a contraction kerry is a much lower than in previous decades and consequently interest rates may need to be reduced to be uncomfortably high in the absence of major financial economic crisis returning to the of question of policy tools but first i would like to review our experience this decade so the substantial body of evidence suggest the u.s. economy is mu

participants support raising rates this year, despite the inflation picture is still troubling some fomc members. steve liesman has the details. >> reporter: fed officials thought in the september meeting that another rate height was warranted this year but had a problem with inflation being too low. the key issue is failure to hit the 2% target. some thought the resent softness of inflation was a decline in telecom prices under this line of thinking inflation would move up towards the target clearing the way for a hike there was also the worry that technology and globalization were behind the inflation miss that led a group of fed officials to be less certain about raising rates in december. the failure of wages to rise along with the declining unemployment rate is another concern. again, most expect them to rise gradually, some are beginning to think maybe there's more to it, more slack in the economy, more slack in the labor market. if so, it would cause them to rethink future hikes the bottom line is the fed clearly indicated it's on track to hike again in december. that's probably a

michael: fomc minutes.ed presidents add inside insight. >> i'm really nervous inflation expectations are low. >> we're not trying to address the relative price changes that occur in the economy, we're trying to get the underlying rate. michael plus, economists : consider the conundrums of tax reform. >> has to be base-broadening as well. growth will pay for part of it but not all of it. >> might as well assume unicorns will come and deliver packages of money. there's no reason to believe this. >> there are miracles and sometimes productivity growth picks up and for reasons we don't always understand it happens. michael all straight ahead on : "bloomberg best." ♪ michael: hello and welcome, i'm michael mckee. this is "bloomberg best" your weekly review of business news , analysis and interviews from bloomberg television around the world. now, president donald trump's legislative agenda was going to be a big story this week no matter what. monday dawned with unexpected political fireworks. >> president trump

we have almost forgotten there is an fomc meeting this week. december. boe, boj out with their monetary policy decision, as well as earnings, starting with hsbc. rishaad: going to be looking at that one. don't forget china as well. pmi numbers come out tomorrow. let's get to the market action. china is showing drag out there. sophie: check out chinese large caps falling 1% as the bonds selloff continues. five-year and 10 year yields at three-year highs. bondholders about to get hit by daggers falling from the sky as deleveraging continues after the party congress. corporate debt in the line of fire as a 30's target higher risk investment. taking a look at shanghai yields, stocks lower by materials falling 2%. consumer stocks under pressure. in the mining space, the top steelmaker in china falling despite a doubling of net income for the third quarter. what is leading the drag in tokyo, health care and consumer staples, down .2% at the morning close. the nikkei two to five has slipped below 22,000, but ubs sees 23000 and site with boj support. w

the fomc minutes strike a dovish tone. is december really a done deal?r here in alongside guy johnson in london. that what is look moving these markets around this morning. at a headline level, not much is going on. below the surface, we do have some movement. banks are off this morning. in terms of the non-cyclical story there. healthcare, a littl ebit off. basic resources, off as well. what's going on with some of the individual names/ -- individual names? nejra: let's have a look at these midcaps then. rising the most in six months. u.k. competition regulator said it was likely to approve a merger. the ceo says the apps, if they merged, are unlikely to raise competition issues through that merger and the u.k. competition regulator will publish a final report in november. in the meantime, there is positive reaction in just eat stock. another one of those best performers so far is tdc, in the telecoms space in denmark. it's hitting a two month high. this, after it was awarded a contract as the main supplier of the danish state. so, that's moving higher.

the fomc was two weeks ago. [no audio] bill. repatriation that is still a lot of uncertainty. bloomberg, you guys put out a good piece discussing this topic that points to the fact that just a single paragraph on the final page, the tax reform bill, that says that perhaps you will tax offshore earnings of u.s. corporate's at a reduced rate. there is no numbers and unfortunately there is no certainty of the territorial nature of the possible repatriation tax. it is still up in the air how that will drive the u.s. dollar. >> we are definitely still waiting for more details on that tax proposal. koon how heng, you are staying with us. we are going to be chatting more with you about the currency outlook. still ahead, we have abu dhabi's debt wish. the emirates wants to raise around $10 billion from bonds. we want to look at whether investors are interested. >> the asian currencies that maybe fueled by stronger oil prices. koon how heng joins us once again next. this is bloomberg. ♪ >> welcome back. this is "bloomber

are a diversity of views at the fomc. you have reported on many of those views.there is tightness when you see prices move in response to the increased production of jobs. will take that as an inference that we are not there yet. rishaad: is participation rate what you look at? >> data can go a a lot of ways and be interpreted a lot of ways. it is why we try to get into the field. is a lot of diversity about what exactly the number should be in terms of full employment. what i would say in my viewpoint is that whatever you think the number is, we are moving close to it, and moving their rapidly. that should translate into upward pressure on wages. ofdi: d you think the danger a dovish fed and how that plays into asset prices, are you concerned about a potential asset bubble building? concerned about whether policies are having have her us a fax. focus on thef my real economy to make sure we are creating policies that allow firms reducing things and hiring wante, and consumers who to make long-term investments, that they are best positioned to do that. has develop

minutes from the fomc september meeting released at 2:00 p.m. new york time. investors will be looking for some clarity on december's rate increase and the balance sheet unwind and the ongoing inflation debate. top investors and economists have been placing their bets on who will be the next fed chair. said kevin warsh has been "wrong about everything." explained why he could still get the job. >> politically correct from the republican point of view, has some family connections with trump. might still be appointed. vonnie: joining us now is chairman andnd, ceo of holland & co. kevin warsh has a chance of getting it and pull krugman is coming from a particular place when he says he's wrong about everything. what would he be like as a fed chair? michael: i think he will be just fine. from whence he speaks because he's been wrong about lots of things, himself. worth has been worried about inflation and overspending on securities. overall, he was the honest fed governor ever appointed -- the youngest fed governor ever appointed. the market will take it all right,

anyway we have a new central bank chairman, we had almost half the fomc changed.te a few of presidents and governors left when greenspan stepped down. we had a whole new team learning the game. we also had quite low inflation at that time. , bill dudley at the new york fed, who worries the fed may have been to benign and moved to slowly and allowed the asset bubble in the u.s. housing market to inflate. as someone who ran around so many different meetings, it is amazing -- i think there were a lot of concerns about complacency, larry and -- mohamed el-erian. who would be the next fed chair? gary coleman was at the group of 30 meeting this morning and he was talking about, we fight the last battle, banks and needing to make sure they are properly balanced. who is the one for you on the short list of candidates? chris: the best for whom? i'm going to say best for the and it for the country, does make sense you want a smooth transition. if it is not yellen, my pick would be powell. i know him, he is incredibly smart and a terrific listener, which i think in a central

minutes show discord within the fomc whether it is temporary or longer lasting. do you think the fed chair can continue to take the same approach >> most members of the fed believe the phillips curve is still a guide. i think people have been expecting wages to continue to go up as unemployment goes down. i think there's a level, inflation has historically gone up i think that's a -- there's a level. we need to know what that level of unemployment is 4%, 3.8, but in every cycle, inflation has gone up. >> isn't it different this time? we have different technological factors impacting the work force? >> some of the arguments, you have less impact from unions if you compare it to the '60s, the amazons of this world they were part of the last cycle, 2000, 2007, '89 to 2000, we had a lot of technology. there are multiple other factors that have been mentioned it wasn't until we hit 5.5% that wages start god ed to go up. 2000, 2007, when we got closer to 5%, wages started to go up. i don't know what that level is that will trigger inflation, but i'm not sure this is di

investors look for hints in to day's fomc minutes.ough day for theresa may as he refuses to say she would vote to leave the eu in another referendum. good morning. this is "bloomberg surveillance" and i'm francine lacqua in london, tom keene in new york. we focus a lot on the dollar, a little on the euro. we focus a lot on the tax overhaul in the u.s. tom: tax overhaul or not, i was surprised at how much of that was in the world economic outlook released yesterday. that will be a discussion point withmetta -- madame lagarde tomorrow. francine: of can stick to the bloomberg first word news. taylor: spain is keeping up the pressure on catalonia's independence movement after the prime and accusing the catalonia president. of irresponsible leadership. he stopped short of declaring independence. meanwhile, rajoy called an emergency meeting of the cabinet and will speak to parliament on the crisis later today. north korea appears to be getting ready to fire a number of scud missiles according to asia business daily. 30 of the missiles have

backdrop is, for the last several years, there have been many unfilled seats on the fomc.f you go back to last 50 years, we have not had as many open seats as over the last decade. seats, the newed chair is going to be powerful, because the new chair would like to have a strong say on who the other three should be. in some meetings, i hear clients and i agree with this sentiment. a tough job we have at the moment. it is of no use. chairs when it gets to the beginning of the year. this seems to be the believe that rates are not going to go up. you could have a whole new committee and a whole new. chart when it comes to the meetings in january and february. julia: the people we talked to our diverse. some said we need a good politician. continuity is important. but ultimately, communication for the fed, not just the united states, but globally. of all the candidates, who do you believe would be the best communicator? that is incredibly technical in the meetings, in the press conferences. apples andally oranges. some people like someone who would communicate, and others like

with the fomc become more hawkish? i suspect not. i expect the fed will remain accommodative, but we shall see. thingsthe near-term, will become less relative as long as the fed ask cautious. and as long as there are no other upsets. even if there was an escalation in north korea, that may be seen as a good thing because it removes geopolitical risk. vonnie: we did see that strong market reaction, remember, when there was a north korean threat most recently? and it was strong and it did not last. this morning, we have the turkish lira weakening against the u.s. dollar. when we see market reaction, it is strong reaction. does that concern you? >> but we saw with the turkish lira this morning was certainly carried out via liquid trading. it is important because a month ago we saw the emerging markets currency index being led by a drop in the lira. one of the things that concerns me about this particular dispute in terms of its impact on turkey, whether it is considerable liabilities, that it could trigger larger containment. dollar-den

who votes in who does not is more of a media issue then within fomc.nomy is going to be stronger next year anyway. from that perspective, wage gains will be stronger. a little stronger in terms of core inflation. but really, wages will be leading the way with that. as a result you are really going to have the opportunity for somebody to be a bit more hawkish, to exercise their viewpoint. put another way, the market is underpricing at the moment. the odds of a move in march and another move in june. kathleen: what is bloomberg intelligence's view on next year? yelena: the hike seems to be well advertised by now. shallow it will be a path next year than it is currently projected. we do not see much of a pickup in inflation. they will need to be more careful. we do see wages picking up, but not as much as would confirm we need three rate hikes next year. kathleen: you have raised the possibility of an inverted yield curve. you are not the only person looking at this, it has already been flattening. thanks won a steep curve, they can make more money that w

our fmo -- fomc statement going back to october 2014.lling out market measures, they are moving down and they continued to be low even though they bounce back a little bit after the election. i think survey measures are also weaker than we talk about. >> is it like waiting for godot currently? you say it is going to be next year. where is it going to come from? >> what we have seen is a lot of tightening of labor markets the last few months and that will put upward pressure on labor -- on wages. we will see prices move across the board. we have done a bunch of research and our analysis suggests labor force participants are usually --partisan -- partition participation rates have really started to pick up and we are at the end of any sign of slack in the marketplace. when you get inflation a few months after the things that cause it take place -- that is what you are suggesting. with that in mind, will the fed go in december? >> i don't know. one of the things we tried to do and i try to do in advising my colleagues, is let the data tell

most of my colleagues on the fomc a great.economic projections, my colleagues and i project inflation to move higher next year and to reach 2%. guy: janet yellen. yellen and ijanet should be getting excited. it is going to be a really strong auction, if i believe it janet yellen. let's find a would peter schaffrick thinks. peter? let me ironpeter: out what the market thinks. the market is not believing her at all. when you look at where the breakevens are in the u.s. and europe, much lower compared to any sort of period where they have been. that is also why the curve is so flat. at the front and rates go up and of backend, doesn't follow because the breakevens are so low. that is not really what is happening in the europe. -- happening in europe. going back to the question, i would be inclined to buy that breakevens to some degree. do i expect them to normalize? no. there is a risk. matt: i wonder what you think is going to bring back inflation, or if there's a possibility that will get the 2% target, will the fed have to scr

side, before the last fomc there was a 45%, 55% chance priced in of a december hike now an 80% chancethe fed seems to want the hike i think the data may or may not be supportive. it will be hard to tell because of the hurricanes. the 80% the market priced in has propelled the dollar but it's too high considering we're months away from the next fomc. >>> we have some information on the tax reform plan, but some skeptics say it won't get passed in 2017. what are your thoughts. >> i think any tax reform is okay for stocks. the political discussion right now is far more important than the actual discussion of the tax reform the question of whether or not the administration will be able to rally enough republican senators or pick up a couple of democrat senators is the key one. if they can get 52 votes or 50 votes, almost any tax reform will be positive for the market and positive for rates the risk of tax reform is not priced in given how little they have beenaccomplish. >> what's your view on the impact the tax cuts can have on the debt national debt and the economy? >> i think it will h

our fomc state back in october 2014, we have regularly been calling out that market measures are moving they continue to be moving low even though they bounced back after the election. survey measures are weaker than we talk about. >> is it like waiting for godot currently? where is it going to come from? >> what we have seen is a lot of tightening of labor markets and that will put upward pressure on labor markets. we have done a bunch of research , and our analysis suggests that our labor force participation rate are usually the last to come back in response to recession. they have started to pick up and we are at the end of any sign of slack in the marketplace. >> when you get inflation a few months after the thing that caused it, that is what you are suggesting? with that in mind, will the fed go in december? >> i don't know. one of the things we tried to do and i try to do, is let the data tell me what the marketplace is doing. because of the storms that have racked a lot of my district, there is a lot of noise in the data coming out. one of the things i'm going to try to do is to

we also have an fomc meeting wednesday.lls, which normally would be to highlight of the week. i know the hurricanes will factor in and make this report more of a throwaway you might say, but what could we learn from the jobs report on friday? >> this is the hard part. assuming we get some feel for how much of what will be a bumper number by definition because of the drag from the hurricanes in the previous month , even if you get hat or above 300,000, and we are thinking 280,000, we need to get a feeling of the underlying strength here it with all these -- strength. with all these distortions that come thatcreated could be something that we will be watching. has you say in general, we will not the caring as much about the payrolls compared to the other news for distortions reasons and the new fed chair and where the terminal fed funds rate goes. this will not change that. been the past, we have writing on these payroll numbers. on this a lot is riding 10 year yield above 2.4%. you have the equity markets up. you have yields

of the fomc, almost like a default position that each of them has.ng the chair did yesterday was try to explain as clearly as she could why she has the predisposition she does. so the real answer to your question, david, is i think in a world in which the models are not reliable enough to tell you on a meeting to meeting basis what to do, you need to be exceedingly clear with how you are thinking about inflation and communicated to the markets. ♪ >> we have heard from bill dudley saying he thinks a recession is not in the media cards. a lot of central bankers, including mario draghi today, say that economies are getting stronger. in 2005, you wrote a famous book talking about things others were not seeing. is there something we are not seeing now? are we overconfident about the economy? >> janet and others have said, do not die of old age, they die because of their fragility, but the question is what are they? one could be insufficient inflation, which of course the tightening is meant to ward off. the second could be in the second sector. the questi

. >>> the fed will be in focus minutes from the fomc meeting last month are due out at 2:00 p.m.e will hear from charles evans, bill dudley and san francisco fed president john williams. blackrock and delta air lines both report results before the open catch an exclusive with the blackrock ceo, larry fink, that's at 6:30 eastern time. later on "squawk box," an interview with the delta air lines ceo, ed bastian at 7:00 eastern. >>> things kick into gear this week when we hear from citi group and jpmorgan tomorrow. goldman sachs next tuesday chris whalen is here with me, chairman of whalen global advisers good morning >> good morning. >> let's talk about the banks. kick off with the juicy trading part of the banks. which always gets focus, much to the disappointment of some ceos. it's been an area of disappointment for some of them. guidance has been tough for some in the quarter >> i think they all guided down. the street estimates are relatively light some are negative for the quarter. the best is bank of america, which doesn't hang its has the on trading so much, though they hav

we will have minutes from the fomc.ings and use economic data, including cpi and retail sales. the president donald trump may give a speech regarding his decision on the iranian nuclear deal. the united states made waves in the bond market when he said puerto rico's -- should be wiped out -- debt should be wiped out. i can put the general obligation bond of puerto rico on the screen and you can see the the damage this comments did to my bond that is an absolutely battered. we dropped into the low 30's. we trade at about $.38 on the dollar. conversationugly with his death, the recovery rate. have you look at a situation in puerto rico and work out the recovery rate of a bond like that? george: we don't really look at the -- that side of things, other is concerns around recoveries. as much as is true for the situation, but in markets you are concerned about potential obligations and long-term liabilities. oksana: you have got people leaving the region now. fact ishink about the usually supported by the taxing power of the

the atlanta fed says he is not sure if the fomc will raise rates in december.pointed to signs of strengthening inflation. i think there is much more to learn about what is happening in terms of inflation dynamics. inflation is starting to pick up. juliette: a category two hurricane could become dishonest tocould become the strongest hit a country since the 1960's. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . what a week for asian equity markets. we are rounding out the session in australia with a gain their of .5% on the eight x x 200. the nikkei up by 1%. that will be the highest close for japanese stocks since november 1996. a good bounce for singapore stocks, although the singapore dollar is lower. stocks inook at detail. fast retailing lifting a lot of momentum in japan. it is up by almost 6%. kobe steel once again under pressure, and moody's saying the outfall good become costlier than the takata recall. manus: thank you much. -- thank you

the market is greatly overestimating the votes and the commitment to hiking at the fomc, and then he turns within his research note and says the next inflation print has to deliver the bounceback to normal inflation. how urgent is it within the fed linkage into the real yield market to finally see actual inflation data, as mark mentions? jim: there was a lot of long-term secular headwinds to sustainable inflation. inflation is definitely picking up and i agree with mark's point. it makes a lot of sense and gives the fed confidence with regards to where we are, the underlying economy, the labor markets, that they can reduce their balance sheet. that being said, there is a lot of aggregate debt in the system that will put long-term headwind on to inflation. i still think they will reduce their balance sheet and hike, but at a moderate pace relative to the underlying economy. tom: this is an important part chart. i am looking at the ferro bloomberg terminal to make us wiser, and i want to go to all three of you. i usually don't do that, but it is so important into the fourth quarter. th

policybout the fomc statements.ave to present the consensus view. , theou have to define it meetings. you have to be able to listen to people, and present the consensus after them. it is a tough job, indeed. i think the chairman did a great job and janet yellen is doing a good job. but it is a tough job. we have seen president trump has been a disruptor when it comes to officials and the white house and the political establishment there. will it be different when it comes to choosing a fed chair? will it be about policy or personalities? bob: that is hard to tell at this juncture. i really think that right now the best thing he could do would be to reappoint janet yellen, for a number of reasons. first of all, there are only two economists on the board. people are younger in the running, so to speak, who are not economists. when you're in that position and being presented with very sophisticated models of economic discussions, you are at the mercy of the staff, if in fact you cannot deal with them on an equal basis.

we will have minutes from the fomc. the imf bank earnings and u.s.ta, including cpi and retail sales. plus, the president donald trump may give a speech regarding his decision on the iranian nuclear deal. the president of the united deal. the president of the united states, of course, made waves in the bond market when he said puerto rico's debt should be wiped out. i can put the general obligation bond of puerto rico on the screen and you can see the the damage those comments did to a bond, that has already been absolutely battered. we dropped into the low 30's, i believe we trade at about $.38 on the dollar. george, we are now having this ugly conversation about this debt for a while, the recovery rate. how do you look at a situation in puerto rico and work out the recovery rate of a bond like that? george: we don't really look at that side of things, other is -- but there is concerns around recoveries. as much as is true for the situation, but in general across the markets people are concerned about potential obligations and long-term liabilities.

we have the fomc meeting. with a rate hike for december over 85% price, how can they possibly surprise obviously? they never want to become it. therefore, they have already got an approach. if it surprises at all, it will be a dovish surprise. overall this week, markets are set up for treasury yields to come lower if anything at all. rishaad: it is definitely a frightening week to take a big bet one way or the other, and i do not want to get carried away by this story. what else is on your radar that you would say watch out for this, this could be in the priced? i think tying into the whole treasury story, we could have reasons to get another bid for treasuries in terms of of what we might get. be creating will more uncertainty in the u.s.. another negative. we have trump traveling to asia again this week and real potential for some tweets to come out on unfair trade or north korea. several events might also lead to treasuries getting a bid this week. news risk catalyst on the side rather than the data site is

see major change coming, we talked about the institutional inertial of the federal reserve and the fomc individuals will be there next year have been there for years and signed onto an inflation target. thank you so much, we will leave it there, michael feroli. this is bloomberg. ♪ ♪ yvonne: a quick check of the latest business headlines, $11 for movieg to ambitions. shares surged. they agree they can attract subscribers while charging more. they say netflix remains a relatively cheap with hulu -- hulu and other competitors charging more. there are hearings november 1 and of called on on leading social media to appear. facebook plans to report third-quarter earnings. mark zuckerberg and sheryl sandberg will handle that presentation. amazon looks to take on ups and fedex in the u.s. with the service they have been trialling in india. this is bloomberg. ♪ yvonne: happy friday, it is 7:30 a.m. in hong kong. a little cloudy out there, felt some rain this morning. should not be anything to ruin our mood is this friday. betty: because it is a friday, right? it is 7:30 p.m. thursday in new yor

fromterest rate prediction the fomc. potentially, charges in the mueller russia probe. york is michael mckee. if i could offer you the outcome of any of those events happening in the next four days, which would you pick. >> i think the one thing we are most focused on is the fed. who leads the fed? what impact will that have on global monetary policy? i would go for the continuity candidate, janet yellen, but that does not look like what is going to happen the next time around. whoever leads the fed, i'm pretty confident they will get the right pick. jonathan: michael , we have these binary outcomestwo -- michael, we have these two binary outcomes. oris either john taylor jerome powell? michael: there are some of the possibilities out there and donald trump is such an unpredictable person that it could be janet yellen at the last minute. it is probably going to be powell. thursday would seem the most logical day because tomorrow and wednesday are fed meeting days. your list i would say is a bit like the college football playoff rankings, which, tomorrow, everybody knows

i want to start with the fomc meeting and decision. no drama here because everyone is priced at 25 basis points. and 2016 they gave very strong signals the meeting before december that they were going to hike. the fence problem or the fomc problem tomorrow is that you have brain heard evans, kaplan and catch kerry saying we are still up in the air. if they don't give that explicit signal that 85% that's priced in will actually fall off. julia: look at the core pce numbers as well. coming in at 0.1% month on month. kind of had justification in some of the inflation data continuing. >> i think their noses will grow longer. i think that's the fence problem. they may have a hard time theing those to sign on to hike in december. if the market sees that they use the same language as last time that was pretty ambivalent. it was kind of data dependent. thing to raisene concerns and not go along with the consensus. it's another thing to actually vote against the decision. >> india. it could be a going away present to fed chair yellen. that's no

this is where people will see if the entire fomc which seem to be looking for a december hike, how far what janet yellen has been saying lately. world interest-rate projections, , that is thet-hand december meeting with chances nearly 77%. the imf isecb, maybe not too concerned about them. a bloomberg story talks about speaking to ecb sources who are talking about how much to cut bond purchases, which bonds, how long to drag it out, but are in agreement they will not raise they are well past the in dove the quantitative easing tapering. the pointords, past where they are still buying bonds. they meet on october 25. that makes it sound like they are ready to come to agreement and give a timetable on what will happen with that qe taper. rishaad: the fund must be happy with what is going on with the boj and their played -- pledged to maintain stimulus. is that likely to be affected by the election? >> another terrific bloomberg story pointing out there could wins,lout if the ldp shinzo abe wins, but the party loses seats. there could be dissatisfactions governor kuroda has achieved so far

it will bring the rest of the fed and fomc with him. potentially a significant shift.nce between the short end and the long end, we have steven major of hsbc as one of the lowest calls on the street. here's what he had to say. >> i am struggling with the idea as to why yields go up and 99 out of 100 people we meet seem to be convinced that is going to happen. to me, the burden of proof goes with that camp who have been saying it all year and in fact the yields have been sliding down. they have been right at the front end, but the reality is the 10 year has fallen. alix: he sees like 2.3% next year. what do you see? david r.: we are looking for rates to be a bit higher. we do think over the longer-term, inflation is what will drive the longer end, and it is certainly worth discussing and thinking about the in full in its that the fed's path online will have to the longer end of the yield curve. this is in the backdrop of still expecting reasonably strong economic conditions, not just in the u.s. but globally. alix: 30 billion, will you be buying that? ed: maybe. alix: w

haidi: this week, we have the fomc decision, potentially a name when it comes to fed leadership.of economic projections that u.s. tax reform relies on, do you think they are realistic, pragmatic, and is that something you think will actually follow through? >> the official forecast that the tax reform relies on will be coming from the congressional budget office. now, there he is members of the administration have been critical of the cbo in terms of its forecast. there will also be some dynamic scoring trying to estimate additional revenue coming from the joint committee of taxation. i think those agencies will be doing the best they can in trying to provide unbiased forecast is. that doesn't mean there won't be other forecasts coming from congress and the white house painting a brighter picture. they will say these are what we want you to focus on. i think the economy is a pretty good shape. we have had 3% growth for the last couple of quarters. monetary policy seems to be in a good position from the suggestions of who will succeed janet yellen. probably will pretty much stay t

willg up, the fomc minutes be released in just under half an hour.investors will be looking for next. this is bloomberg. ♪ david: this is bloomberg markets. i'm david gura. shery: i'm shery ahn. down for a third day in row are the shares of molina healthcare. joining us to talk about this is abigail doolittle. what the story now? today it has to do with a new ceo. they named the president. he has 35 years of experience in the health industry. he was also at etna. he will be named a molina board member in november. it may take away some takeout speculation. says by this weakness. strongy he has a very record with cash management and balance sheet control. -- d co. >> he did indeed. it sounds as though this is almost at least in my opion of many repeal and replace because he is talking about loosening obamacare, moving people away from exchanges. it's not clear what happened. certainly some chaos. kind is really senator rand paul. we have a tweet he sent out saying this will be a great plan for millions of americans. makes it sound as though they had a

three 081, which shows inflation that came in below estimates. .ust .1% it will be hard for the fomco break out of its gradualism, toen that inflation is stuck it regardless of who is being fed chair, it is not that much room to move, is there? shady: inflation has been the hardest number to call on. 3% u.s. economy has seen gdp, on friday. despite the effects of the hurricane, you could to do to u.s. housing and consumer spending our business investment. all of these factors are supporting -- i think you will .ee the uptick in inflation oil prices are holding up at certain levels. yousef: it is a very different stage of its economic cycle. medicatethey do to that kind of impact, given that that kind of world is not ready to hike? shady: this has been the case for the gcc, the monetary policy flexibility was never really there. you will continue to have a position where the gulf policy makers are going to be forced to raise interest rates at the time of the economies are picking up on the back of lower oil prices. sureu look at the economic in the gcc, you are having positive signals

side of thehe other atlantic, investors are looking ahead to the release of minutes from the fomc septembericy meeting. that is when the fed announced the start date for its balance sheet reduction. speculation continues about who will lead the central bank wants chair yellen's term comes to an end -- once chair yellen's term comes to an end. let's bring in our guest. welcome back on the program. is this in terms of what is good happen of what kind of succession plan? the folks in the mora -- let's take a look at my bloomberg. this is an trajectory of -- this is in trajectory of u.s. two-year. your line and green is a more base case, slightly more continued as is and with the fed .hair currently janet yellen what kind of effect is it going to have if somebody else takes over? do you agree with this kind of outlook? guest: definitely. markets won't like the --ointment of war should warsh, given his comments of the past. this agreement with the easing of monetary policy at the time which was required to bring the u.s. economy back on track. i think it is highly concerning that he is the front

we will have minutes from the fomc.ings and use economic data, including cpi and retail sales. the president donald trump may give a speech regarding his decision on the iranian nuclear deal. the united states made waves in the bond market when he said puerto rico's -- should be wiped out -- debt should be wiped out. i can put the general obligation bond of puerto rico on the screen, and you can see the the damage this comments did to my bond that is an absolutely battered. we dropped into the low 30's. we trade at about $.38 on the dollar. george, this ugly conversation with his death, the recovery rate. have you look at a situation in puerto rico and work out the recovery rate of a bond like that? george: we don't really look at the -- that side of things, other is concerns around recoveries. as much as is true for the situation, but in markets you are concerned about potential obligations and long-term liabilities. oksana: you have got people leaving the region now. if you think about the fact is usually supported by

fomc they outnumber the votes of the governors. say you get -- john taylor is perceived as a hawk or jay powell more hawkish or whatever. the new york fed has a permanent vote they rotate the other four votes amongst the remaining federal reserve banks. they have more votes than the governors. that means simply that they are invested in the course that we are on right now bill dudley is a key figure. it will take -- no matter what their orientation is >> i completely agree with the assessment of each of the candidates my problem here begins with what the congressman said that what we are trying to do is legislate monetary policy through personality. if we have a problem with the way the fed operates, we ought to pass legislation that dictates how congress and the president would be happy over how the fed does policy. >> steve, i completely disagree. this isn't what congress should be doing. >> it sounded to me like a congressman that didn't have the support for the independence of the federal reserve. >> right this is a dangerous t

an fomc meeting that may give the all clear for a december rate hike.e are 90 minutes into the u.s. trading session. julie hyman is here. it is about central banks this week. julie: it is. we are not seeing much activity. there is earnings still in a number of various deal agreements happening today .oving the s&p slightly lower. a big finish for the nasdaq on the strength of tech earnings. we mentioned a number of deal targeted companies moving today. let's move them. being targeted by lennar. a 27% premium. gy is selling itself to the largest tech generator in texas. this is a medical deal here, based in france, it trades here in the u.s. for 3.9 billion in cash. radiopharmaceutical company. finally, capello education -- .apella education it has 80,000 students across the united states. we are also watching apple and the usual apple ripple effect. delivery times for the iphone x stretching to six weeks in the united states. that implies there is strong demand for them. we had that big finish for the banks friday. momentum helped by apple is continuing

think the next fed chair requires a phd in economics to really got her the respect of those on the fomcot going to talk about this is a vix of the search that's going on right now i don't think that's appropriate. david: talking back to your tax plan? you say get a 3% sustained growth. could you explain to us exactly what in the tax plan will generate that? economists say growth like that comes from two sources, more people working, demographics, and productivity. taxes, if youe get your plan the way he want it, how would i do generate more people working or increase productivity? >> we couldn't agree more. when you lower the business tax on the pass-through entities incorporates, we make ourselves were competitive. we make it the businesses want to locate in the united states. when a locate in the united states, they have the higher labor. they go out and compete for labor and they hire people. because wes increase hire people. we also see enormous amounts of productivity in these numbers because as we build new factories and new manufacturing, a lot of this sort of a technologically d

a couple of comments we have seen or than once on this show, ward mccarthy says fomc shows befuddlementinflation and that the december rate hike is still on the table. mitsubishi says the minutes are dovish and it may mean that paths get hike shallower over the next few months if there are still members concerned about week inflation. >> what are the implications for ense/ket s peopleink it shows that are saying maybe they are not as hawkish as we thought. i to look at projections because the market it aims to me in terms of fed one future traders, worldwide projections didn't touch. inverted yield curve is becoming more likely. bondding to a long time market bowl, because of the fed keeps raising short-term rates, that is up in light to buy long-term bonds. and an economist in washington making the same argument in a note today. october 30 is the next key inflation gauge. very important. >> all right. watching out for that. how asia is set to react. another was saying, yet horrible governance scandal in japan, but japanese equity markets are just charging it off. >> japan has been the