since the september meeting of the fomc, however, some cross currents have emerged. i'll explain how my colleagues and i are incorporating those cross currents into our judgments about the outlook and the appropriate course of policy. since september, the u.s. economy has continued to perform well, roughly in line with our expectations. the economy has been adding jobs at a pace that will continue bringing the unemployment rate down over time. wages have moved up for workers across a wide range of occupations, a welcome development. inflation has remained low and stable and is ending the year a bit more subdued than most had expected. although some american families and communities continue to struggle and some longer term economic problems remain, the strong economy is benefitting many americans. despite this robust economic backdrop and our expectation for healthy growth, we have seen developments that may signal some softening relative to what we were expecting a few months ago. growth in other economies around the world has moderated somewhat over the course of 2

since the september meeting of the fomc however some crosscurrents have emerged. i will explain how my colleagues and i are incorporating those crosscurrents into our judgments about the outlook and the appropriate course of policy. since september the u.s. economy has continued to perform well, roughly in line with our expectations. the economy has been adding jobs at a pace that will continue bringing the unemployment rate down overtime. wages have moved up for workers across a wide range of occupations, a welcome development. inflation has remained low and stable and is ending the year a bit more subdued than most had expected. although some american families and communities continue to struggle and some longer-term economic problems remain the strong economy is benefiting many americans. despite this robust economic backdrop and our expectation for healthy growth we have seen developments signaling softening relative to what we were expecting a few months ago. growth has moderated somewhat around the world in 2018 albeit at still solid levels. at the same time

fomc participants and other forecasters were predicting that growth in 2018 would be strong. tos growth was predicted push the unemployment rate down near historic lows and the labor , market was expected to push inflation up to 2%. given this outlook, committee members judged that the appropriate way to sustain the expansion with inflation near 2% was to continue gradually withdrawing the extraordinary support for the economy that had been in place for almost 10 years. thus in december 2017, the median projection of fomc participants pointed to three quarter point interest rate increases in 2018 which would have left the target rate for 2.25%,eral funds rate at still below most estimates of the normal rate. early in 2018, it became clear that the economy was likely to be even stronger than we had expected, in part because the fiscal stimulus adopted near the start of the year was larger and more front-end loaded than most anticipated. the signs of a more robust economy proved accurately and the fomc raised rates four times, one more time than anticipated in the median projec

but of course it is a different story from the fomc. worse market decline since 2011 on the fomc announced. not to mention the u.s.-china trade tensions continuing as the doj announced new indictments on chinese internationals over intellectual property. amanda: also, potential for a partial shutdown has the markets will. we heard house speaker paul ryan abrading media. rep. ryan: we had a productive meeting with the president. the president told us he would not sign the bill from the senate us evening because of his legitimate concerns for border security. what we will do is go back to the house and work with our members. we want to keep the government open, but we also want to see an agreement that protects the border. we have serious concerns about securing the border. the president said he would not sign this bill. we will add border security to this and give the government open because we want to see an agreement. deputy joining us is white house editor from washington. in terms of where this goes from here, uncertainty is no frien

and the fomc is listening to the markets.ignaling significant tax cuts and a range of other short-term measures designed to stop the slide in economic activity. higher, michael hintze will be succeeded. the industry looks to bring in fresh blood to

vonnie: i would not like to have jay powell's task and the fomc in general. as i hate not to give the winning shot to taylor riggs. today the winner is michael mckee since that is the vacation we will have. congratulations, michael. taylor, you are amazing. time for the stock of the hour. pg&e headed for the worst day in a month, falling 4% after the company was accused of falsifying safety records for natural gas pipelines. kailey leinz is here with more. the chilly commission announced on friday they are opening up a case for pg&e for pipeline safety. they say they allegedly falsified records from 2012 to 2017. a little disturbing because it comes in the period after the 2010 explosion that killed eight people. also that they haven't followed all the safety of teachers. this would be -- save the their safety procedures. the downside today considering what we have seen over the past several months. all of these deep in the red after the camp fire. pg&e is being probed as to whether there is equipment started the fire. this company facing up to $25 billion of

fomc think that gives the just a little bit more flexibility for next year.not just thee -- fomc policy statement, but some of the things jay powell chose to say? he characterized the economy as still solid in 2019. but that statement he had about the high degree of uncertainty , do youate hike path get the sense that he is maybe just a little more dovish than people realize? out a: i think he carved position in which, as he said over and over again, they can be data dependent. they can basically let the data speak to them next year. they can make their decisions meeting by meeting. there is no preset course. he repeated that a couple of times. take into consideration what seems to be affecting the broader economy in the united states. what is important in these particular cases to understand, the fomc is focused on the real economy. the broad, main street economy. that is what really matters. the financial economy is important only to the extent that there is a risk that it spills over into the broader economy. that point seems to be lost on the markets. cer

scarlet: we have got a lot of anxiety before the fomc begins meeting tomorrow and announces its decision at 2:00 p.m. on wednesday. the s&p at 2.1% at its lowest. let's take a deep dive into the selloff with m a. -- with emma. emma: i want to talk to you about the companies that make all the stuff you buy online. seeing packaging companies as some of the worst performers in the as a be percentage basis. packaging corporation of america and international paper in the red. higher-than-expected inventory and weak demand and what should be a busy season. analysts said the data was curiously weak. if you look at the packaging index, that is down around 20%. they have been hit by a strong dollar slowing the month of the the trade warand between u.s. and china. we will be looking for resolution on that front to next year. taylor: i'm taking a look at the s&p 500. it is often percent and look at some of his technicals that are going on in today's session. we had a redline with our support level going back to february. levelo had a key support come in this morning, 25.80. we crack to do that -- w

and finally, he declined to comment on that policy, citing fomc meeting.y wants to be cautious with that fed meeting having. he also called the yield curve unreliable gauge of economic outlook. thebottom line is he said markets are not always going to be efficient, whether the strong dollar reflects confidence in the u.s. economy. you aboutant to ask that point about the yield curve. has been a lot of back-and-forth about what the fed should do and whether there is pressure from the oval office. is tryinghink mnuchin to say when he says the yield curve is not always a reliable gauge of the economy? kevin: he called the strong u.s. dollar a quote unquote vote of confidence in the u.s. economy and he says part of the reason why the dollar strengthening is a function of people's view on the u.s. economy and u.s. economic growth relative to growth around the world. he went on to say obviously a asker dollar is good for us it relates to trade and opportunities, and that the currency short-term value is quote unquote not a concern of ours at all. amanda: kevin c

interview took place before the fomc rate hike announcement on wednesday.nterviews with former fed officials alan greenspan and bill dudley at the decision came out. bank of america ceo brian moynihan weighs in with his perspective on the fed and the economy. >> we are more worried about the factors outside the system, stock market price and stuff. >> this is bloomberg. ♪ taylor: welcome back. this week marks the one-year peak bitcoin. 172017 the cryptocurrency climbed to its value of just under $20,000. this tuesday it was trading just over $3500. that is when erik schatzker sat down for an exclusive interview. he runs a cryptocurrency bank galaxy digital. they think the worst of the route is over. for the next foreseeable future we are going to be between 3000 and 6000. if we plunged a 3000 they get worried we could go to 2500 or lower but i think we are close to the end of the move on the downside. in the last few days we have seen big capitulation in price and big spokesman. bign kelly u.s. been a advocate of crypto turned bearish on the lows. those are

since the september meeting of the fomc, however, some crosscurrents have urged.se crosscurrents include slower global growth and a downturn in financial markets. as a result, those who set monetary policy are now projecting two rate increases next year, that's fewer than the three they were predicting when they last met in september. and as for the pressure from the fed's loudest critic, president trump, well, jerome powell said political considerations played no part in their decision—making. we're always going to be focused on the mission that congress has given us. the mission that congress has given us. we have the tools to carry it out, we have the independence, which we think is essential to be able to do ourjobs in a nonpolitical way. and, you know, we at the fed are absolutely committed to that mission and nothing will deter us from doing what we think is the right thing to do. so, for now, it appears more rate increases are on the horizon, even if the pace is not predetermined, as the fed tries to ensure the economic expansion continues and that inflatio

a few members of the fomc say we need to throw out it entirely. that doesn't give you guidance on how to do monetary policy. caroline: german powell made clear that he recognized financial conditions are tightening, and said we look at markets but don't pay attention to any single one in particular of the macroeconomy. is there a feedback loop here? the more bearish sentiment becomes the more we see the market fall off and we could end up having policy mistakes? seth: i think that's possible. you bring up an important point. conditions have tightened since last meeting, but said they are not particularly tight. this is one of the big disconnects on how the market thinks and how the fed things. the fed thinks in terms of levels, not are we tighter than we were before. that's true, but the market is seeing the tightening in financial conditions and that is what they react to. romaine: they are in for a shock then. [laughter] caroline: seth carpenter, great to get your perspective. ubs chief u.s. economist there. facebook under fire. washington calls

taylor: that interview took place before the fomc's rate hike announcement on wednesday.up, interviews with former fed officials alan greenspan and bill dudley after the decision came out. plus, bank of america c.e.o. brian moynihan weighs in with his perspective on the fed and the economy. >> we're more worried about the factors outside the system. stock market prices. taylor: this is bloomberg. ♪ >> welcome back to "bloomberg best." i'm taylor riggs. this week marks the one-year anniversary of peak bitcoin. on december 17 of 2017, the cryptocurrency climbed to its all-time high value of just under $20,000. this tuesday, it was trading just over $3500. erik schatzker sat down with an exclusive interview with michael novogratz who runs the cryptocurrency marvin bank galaxy digital. he thinks the worst of the rout is over. >> for the next foreseeable future we will be between $3000 in $6,000. if you plunge through 3000 they worry, but i think we are close to the end of the downside. in the last few days we have seen big capitulation both in price and from take spokesman. b

. >> fomc participant projections are based on our best assessment of the outlook. there is no preset policy path. >> there are a few things i took away from powell's remarks. most strikingly, the idea that rates are not that far from neutral. and then the follow-up, we need to wait and see what the impact of rate hikes is going to be. we only see that impact coming through over a period of a year or more. and the idea there is no preset path for policy could be obvious anticipation. the idea that powell is trying to create a little more wiggle oom for the fed in 2019. as the market interpretation suggests, that wiggle room is most likely to be used to put a shallower path for rate hikes into place. >> federal reserve officials have signaled a more flexible approach in their gradual interest rate increases. that after a likely december ike. >> the fomc signaling that a rate hike is likely december, they will slamdunk that, and then they are going to make meeting by meeting decisions. let's start with one of the key phrases, off the list. almost all persons expressed

to have the reaction that we did from the december fomc meeting was surprising to us.t makes it difficult to figure out where you want to position your portfolio if you have a fed saying maybe they're going to do more hikes which i do not think is completely unreasonable due to the fundamentals that we are seeing and yet you have your tenure go back down to a technical level of 275. it makes it difficult to position yourself properly. taylor: thank you. that was victoria fernandez. adding someesla is new executives to its board of directors and efforts to keep elon musk in check. will it work? we have got the details next. a quick check on the market. all of my eyes are on the consumer discretionary. consumer looks good, mastercard data came in strong. you are seeing a big fall back to below 30. a weaker dollar means stronger oil. general electric, take a look. buyers thought it was too cheap not to buy. this is bloomberg. ♪ ♪ taylor: this is bloomberg markets. tesla possible latest step to please regulators and shares of the electric carmaker is rallying today after a

. >> many fomc participants expected the conditions would call for three more rate increases in 2019. we have brought that down a bit. and now think it's more likely the economy will grow for a rate calling for 2 interest rate increases over the course of the next year. we always emphasize that our policy decisions are not on a preset kour course appear will change if incoming data materially change the outlook. >> so here the story here is what the market probably wanted and here is what they got. one hike or none next year got two. at least that's the forecast wanted flexibility on the $600 billion balance sheet reduction. powell indicated there won't be much on that and they wanted more concern about the economy, that its fears were shared by the fed intsd they got a line of monitoring developments. there was a line from the fed chair that maybe the market overlooked and pretty dovish listen to this. >> i think from this point forward we are going to be letting the data speak to us and inform the outlook and inform our -- our understanding of what the appropriate policy would be. t

final the fomc's releasing of 2019. that's at 7:00 u.k. time.dots and messaging will be the most important for the markets. italy has reached an informal agreement with the elon its budget plans for next year. there's no word on the final deficit target. with 100 days until brexit, theresa may has put the u.k. on high alert over the dangers of a no deal. to put inreed contingency plans on full. -- is thisnow finally the end of the italian budget standoff? >> good morning. we understand there is an informal agreement. it's unclear. we don't know whether the italian government will set for that 2.04 deficit. they were very specific and -- about that number. today, perhaps we get those announcements. that's what we are hearing from rome and brussels. they are keeping quiet about this. it would be good news for investors. italy is a prominent member of your. everyone was prepping for a long fight. to see some of that tension ease off today between the institutions and the government would be good for italian stocks in btp's. we are moving away from

but given that ahead of the fomc meeting, markets were pricing virtually one rate hiking 2019.rehas come hawkish with two rate hikes now signaled by the fed. let's not forget that powell did not -- the forward rate guidance. the fed is signaling further rate hikes and 2019. anna: good morning to you. markets --ean the this was described as the markets looking for the impossible. markets were hoping that all of the dots for 2019 would disappear and that was never going to happen, so markets wake up disappointed? ann-katrin: i think the dovish repricing has been overdone by markets. 2019 has key theme for always been there is going to be a continuous monetary policy normalization and this scenario is one we would stick to after yesterday's meeting. matt: we have a column by john authors saying qt maybe the problem and our last guest agreed this is an issue for the fed. great chart here from john's column showing they want to be on autopilot as far as reducing their balance sheet. everything below 2010 is a balance sheet reduction. they want to keep doing that. it is pretty set in

the federal reserve has hiked for the fourth time this year, the fomc's message was more dovish but maybe not enough for markets judging by the reaction. u.s. stocks were sent tumbling. mike mckee reports. mike: the fed offered a dovish hike as expected but not dovish enough to meet investors' concerns, officials raised the benchmark target rate to a range and 2.5%.25 officials added a word to their forecast saying the committee judges some further gradual increases in the target range will be appropriate. >> policy at this point does not accommodative, and can move to neutral. it seems appropriate that the neutral, we are at the bottom range of estimates so that is the basis of time to make the decision. >> that news sent stocks lower. investors worried about the withdrawal of liquidity from the balance sheet is adding tightening to the economy. >> we are alert to these issues, we are watching them carefully, but we do not see the balance sheet run off as creating significant problems. mike: even though the number of fed rate moves next year dropped the media calls for no more than two h

fomc meeting and deadline on a government hudson shutdown friday december 21st tp. there is a scenario that we we could get a rally np every rally closed closed at a dead low maybe see a reversible i don't see a 10% rally from the lows >> even if you got it it doesn't matter. >> it doesn't. the higher we go until we get to what mel says now and get into january and start releasing q 4 results and giving q 1 guidance, the trade issues there is still unzbleernt when you hope it's hopeless four things have been held out. >> carter always has a great line for everything. >> it's true >> earnings earnings will true it it didn't do it. well the election. the election will do it. no and then there was buybacks they will do it no year end rally. that's like a word salad great phrase i use that's not a thesis premise. >> a word salad. >> it's like maybe it happens maybe it doesn't here is the risk january is rarely benign january this year up huge. january 16 down huge are we coming in with a quiet january or could it be something extraordinary? >> well q 12016 was a disaste

. >> many fomc participants expected that there would be a call for three more rate increases in 2019. we have broughtt down a bit and think it's more likely the economy grows calling for 2 increases over the course of the next year. >> we always emphasized thatpo r cy decisions are not on a pret course and will change if incomill data mater change the outlook. >> here is look at what the market wanted and what it got. the market wanted just one or no rate hikes fecast for next year. instead it got the two hikes down from the previously threest the market wanted flexibility on the plans to reduce the balance sheet by $600 billion next year. fed chairman jay powell we are going aheadith reducing the balance sheet. they seemed more concern about the kmoe. instead they said they are monitoring financial developments but not acting on anything yet as far as the market concern. now there may have been a little bit more dovishness in the federal reserve chairman statement than maybe the market gave it credit for. here is him talking about the t ho data dictates the fed next year. oint forwa

federal reserve chairman jay powell responding to the president during the fomc conference emphasizing political positions plano role whatsoever in our discussions about monetary policy. joining me now is "the wall street journal"'s chief economic correspondent, jon hilsenrath. thanks so much for being here. >> hey, maria. maria: and when we talk about higher interest rates, we also have to talk about where we are in the economy right now. things have been going well, the u.s. economy humming along, but are things slowing down on the horizon, jon? how would you characterize things? >> i think 2018 will go down as one of the best years of this expansion. we had growth near 3%, and that unemployment rate got down to its lowest level in near 50 years. that's great news, it's a lott to celebrate at the holiday season. it does look like things are slowing down on several fronts. global growth has softened. so we started out the year with a synchronized global upturn, now it's an asynchronous upturn. and one of the big questions for 2019 is can the u.s. keep growing so strongly when the rest

optimistic economic outlook for 2019.market participants had and done" statement that would indicate the fomctting policy on hold amid the current turbulence in the stock, credit, and commodity marketsmarkets loser: altria purchases 35% stake in juul in deal worth $12.8 stake in juul in purchases 35% loser: altria purchases 35% stake in juul in deal worth $12.8 billion . . . tobacco giant altria purchased a 35 percent stake in e-cigarette maker juul labs, the company announced thursday. the deal, which is worth $12.8 billion, values juul labs at $38 billion. altria, the maker of the marlboro cigarette, is looking for alternative sources of revenue amid the decline in traditional cigarette use. its investment in juul labs - which currently has over 75 percent of all e-cigarette revenue, excluding online sales and sales at specialty shops, according to a wells fargo analysis of nielsen data - is the largest in the company's history. winner: 'aquaman' has already made more money than its production budget, and is looking at a big opening in the us . .. . "aquaman" has already made over $266 mill

geopolitics but also because investors right now are pricing in a more dovish turn from the fed for the fomc meeting where the fed is expected to raise rates for the fourth time this year. what happens if we do not see that dovish turn? are setting upe for the asian markets. good news to hang your hat on. .ooking at a tepid start japan and sydney, we are seeing a loss of .1%. we do have energy producers among the laggards so far, early .tart of the session oil prices falling the most in weeks.an three crude not -- crude lost nearly 8% overnight. just ticking higher above that level, but crude is on track for the worst quarter since 2014 and that drop in oil has lowered import sales for japan, so this morning on the day's agenda, weeks. crude notthat will likely feed a narrower trade deficit for japan in november, and lower oil keeping price pressures at bay for the likes of malaysia, so inflation will likely looks a .ude -- look subdued of course, we are watching for beijing'sof leadership three-day summit that will set the economic agenda for next year. this after beijing held its ground wh

every business cycle, every fomc cycle, we talk to hundreds of people in all different parts of society, not just business and market people but from community development organizations. we get survey data from thousands of people, so we have a pretty broad exposure to what's going on in different parts of the country and will take all of that information and make the best decisions we can, and nothing will cause us to deviate from that. in terms of the ccyb, it is a capital buffer tool that allows , a us to build capital at a time when vulnerabilities, financial stability vulnerabilities are meaningfully above normal, and so that is a tool i am absolutely willing to use and happy to use as such time as that test is met. we meet and discuss that and evaluate it on roughly an annual basis. we have not done it this year, but i think we will be doing it earlier next year and reaching that judgment then. i recently gave a speech saying that i believe financial stability vulnerabilities were roughly at a moderate level. would want tout i leave open, my mind open on that and have a discussion

vonnie: we typically see movement of 1% on fed day, fomc decision day. 1%, and500 up 9/10 of there are very few stocks in the dow that our loader. general electric which received an upgrade, general mills and some energy companies rebounding. that might be waiting on the dollar, the dollar index is weaker. you don't normally see such dollar trading and of course, brexit. weighing potentially on the dollar with a little bounce in some of those currencies. then there is the rate question. let's get to taylor riggs. taylor: we are prepared to hear from the federal reserve around 2:00 p.m. or so. interesting,ery putting off this support level of about 2.80 we hit in august. really interesting to see what happens here. reports earlier saying that if -- fed cuts its guidance really interesting to see how rate markets will be responding. i want to take a look back at equities and financials because they were getting a downgrade from the analysts over at atlantic securities. higher,ear yields are but they are cutting their forecast on jpmorgan, offering the least upside potential. wells fargo

republican leadership is a spooking markets here. 9/10, the dow jones down of 1%, lingering after the fomcesterday. 2.7% on the 10 year yield. not massive. dollar index, we are back where we were. decline, continues to well below $46 and holding. global macro movers, we see the impact of lower oil price on movers including the russian ruble. down 1.5% today, trading below $70, most of the indices performing among g20 are in europe. the nikkei down to point a percent. -- 2.8%. guy: let's get a take. paul, the managing editor for fx joining us. walk us through your perception of price action today. paul: the crude oil story is on its own. interesting. markets are trying to get a grip on what the fed policy decision and commentary means for everything next year. this is the position squaring. people are thinking -- how does this fit together? what will it mean? the fed is determined to carry the course. it wants to put the brakes on. it is tightening. based onks overvalued what the fed is trying to achieve? probably. are we in a panic setting mode? probably. yields likely to rise next year? c

and the fomc is listening to the markets. chinese signaling significant tax cuts and a range of other short-term measures designed to stop the slide in economic activity. higher, michael hintze will be succeeded. the industry looks to bring in fresh blood to navigate these rapidly changing markets. let's talk about what is happening in europe. volume relatively high when will we get a rebalance. pricel watch the auction as. coming from john williams from the fed early, driving risk assets firmer your europe is still down by .4%. higher and s&p popped and then rolled over a little bit as we climb the wall of worry around the government shutdown. this is how the chinese markets finished up overnight, coming through down through the october 19 low. that seems to be the catalyst for the chinese authorities to talk about more stimulus, currently traded down by 1.24%. let's check in on the u.s. markets. likely to have a massive amount of trading, could be as much as $24 billion. by thelling things up bootstraps. s&p up .3%. the dow

taylor: that interview took place before the fomc's rate hike announcement on wednesday.ing up, interviews with former fed officials alan greenspan and bill dudley after the decision came out. plus, bank of america c.e.o. brian moynihan weighs in with his perspective on the fed and the economy. >> we're more worried about the factors outside the system. stock market prices. taylor: this is bloomberg. ♪ ♪ there's no place like home ♪ argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪ unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. ♪ taylor: welcome back to bloomberg best. this week marks the one-year anniversary of bitcoin. december 17, 2017 the cryptocurrency climbed to an all-time high value of under $20,000. this tuesday, it was trading over $3500. that is when eric check sir -- erik schatzker sat down for an exclusive interview. our guest thinks the worst is

also the fed plays a critical role, so if we start to hear talkingbers of the fomc about becoming more dovish in 2019 and walking back some of the comments from chair powell in the press conference last week, particularly around balance sheet normalization, suggesting more flexibility, any of those could be a catalyst for stocks. you bringinteresting up the fed balance sheet because that seemed to take commentators by surprise. when we had the fed's policy statements, it seemed to be talking about the balance sheet and the continuation of its unwind, but it had not been front and center before that. kristina: it had always been a cause for concern in the background. keep in mind, when chair yellen rolled out the balance sheet -- shezation plan, sete suggested this could occur in the background as the fed utilized rate hikes as its primary monetary policy tool. that was in advance of this actually occurring. now that we have the benefit of hindsight and have seen how balance sheet normalization has become disruptive in a number of ways, it should have been part conversationll's on the b

powellportant thing for and the fomc is to ignore the noise. do with the data suggests them to do.ew 11 is professor of economics at dartmouth -- andrew levin is professor of economics at dartmouth. thank you for joining us. good to have you with us. . you heard what he said. ignore the politics, ignore the president, adhere to the data. basically, the fed fund rates has gone up. this basically shows that one more rate hike will take it up to that level. is that with the fed is looking at? >> i'm sure they are looking at that. but it is worth emphasizing that the range of uncertainty is much broader than that. the truth is the neutral rate could be 2% for the federal funds rate. it could be 3%. it could be above 3%. y way chair wa powell described this is they are in a dark room trying to feel her way -- feel their way. tiny one more time is just a guess. it could be more than that -- tightening one more time is just a guess. it can be more than that. it could be less. gradualportant to go and not locked themselves into any rate cycle. they have been communicating for a while that

about the communications the fomc. i am hoping there will be progress. i hope they get rid of the dots, which is a useless distraction. they outlived their usefulness by a decade. reality, as craig reported last week, including comments from me, the fed, there is a limit to how much the fed can communicate. markets focus on the point estimate of what is happening, on the rate, and the specific number of rate hikes. as with the bank of england, you're trying to convey a range of probabilities. it is hard to do that. guy: one of the things markets would appreciate would be a clearer communication from the fed on key assets that are bumping around more than others. the housing market, case in point. do you think we will get more focus to a nuanced approach on the communication strategy? adam: fair point. not so much specifically about the housing market but should the fed be telling more about what forecast assumptions are? i think there is room for the federal reserve to improve on that. if you compare it to inflation reports of the bank of england, bank o

the generated debate within the fomc.what some had to say. >> for me, this is my forecast, three this year, two the next year, two the next after. some have accelerated that pace. i have not seen an acceleration of inflation. we still see good job numbers. i don't think there is a rush. we do not have to rush normalization back to neutral. i am open-minded. if inflation starts to accelerate, i could support a december increase. >> what are you looking for in a pause? 3.7% unemployment. 200,000 people getting hired. every month. what do you accomplish by waiting? >> what do you accomplish by moving? there is good news in the economy. i think there is some risk. i worry about the inversion of the yield curve. i would like to slow the pace. >> financial conditions loose after the fed tightening. long rates are low. is there any effect raising interest rates, going 0.25% in december, when it matter? -- would it matter? >> i don't know. yes, financial conditions are accommodative. we are moving short end. there are a lot of re

we need a strong statement from them following the fomc what exactly they will do with monetary policywhat we need to get people back into the pool. charles: kevin? >> i think the buy the dip crowd has left because they haven't gotten confirmation from the data. the data is considerably weaker time and time again. david brought that up, pce deflator. true form of inflation. last quarter, last three months it is at 1.2%. that is significantly low. that's a huge selloff on inflation. so what are the you know pinnings? why is it not going up again if we're in such a strong healthy economy? we saw data from china. the second largest economy, right? considerably weak today. so buy the dip crowd is gone especially in a tightening market. we're seeing it. the credit markets are leading the market. that is the is problem. the buy the dip crowd won't come back until they see confirmation on data. charles: robert, part of the buying the dip, whatever was temporarily pushing the market lower would reverse itself. you had to have some sort of belief things would get better and you want to get in a

fomc meetingsee -- came, the market was not happy -- while the fed was more dovish than before, the marketriced in after that new york economic club speech so much or anticipated a meaningfully more dovish statement and tenor from the fed and did not get it. the fed in 2019 is, i think, going to be more sensitive. they drug john williams out to try to alleviate the issues with the chairman's press conference. in 2019, i think you will see the fed take a slightly more dovish tone and they are going to react to this data. for right now, the markets still pretty nervous the fed is going to make a move. david: when we talk about hawks versus doves, we typically talk about interest rate hikes. what about the balance sheet? when you look at what is happening in the equity markets the latter part of 2018, how much of it was rate hikes and how much was taking liquidity out of the marketplace by reducing the balance sheet? scott: the balance sheet reduction was a big part of it, certainly. of that term, that is absolutely what the stock market did not want to hear. once again, john williams tried t

as we mentioned, it is trump versus the fed, president taking to twitter to way and ahead of the fomc decision. he says, with a strong dollar and virtually no inflation, the outside world is growing up around us. paris is burning, and china way down. the fed is considering another interest rate hike. take the victory. we have stanley and cameron weighing in in the wall street journal. let's get john herrmann's opinion. he is securities director of rates strategy. are the voices today right? is the fed about to make a mistake? john: we hope they do not. we had been for several years in what we call the yield curve flattening veal, which means we expected the fed to catch up, hike rates, and so on. about a month ago, we shifted gears and said, we really want the fed to start slowing down. if they could pause now, not after the december 19 meeting, but pause before it, and weight about nine months or so, they may have some evidence that the economy is closer to the equilibrium neutral rate, or whatever they call it, and they may not have to hike much further, even a year from now. we wan

. >> the fomc signaling that a december,is likely they will slamdunk that, and then they are going to make meeting by meeting decisions. let's start with one of the key phrases, off the list. almost all persons expressed a view that an increase in the target for the federal funds rate, now at 2.2%, would likely be warranted soon. ok, december. so if inflation information and incoming information on the labor market and inflation was in line with or stronger than current expectations. some said some upcoming meetings could be appropriate to transition to policy statement language that places greater emphasis on the evaluation of incoming data -- data dependency in assessing the economic and policy outlook. such a change would help make the committee more flexible. the g20 summit in buenos aires, world leaders have touched down. a meeting to be dominated by the escalating trade war. it all comes down to those bilaterals over there. >> the focus is back on the strong man. president trump. president xi. president putin, and of course, mohammad bin salman of saudi arabia. it is all about t