the fomc decision, the fed decides next.

john: people do have the leanings but the fomc is a committee has been fairly impartial over time.now that politics are at work here. and i wouldn't want to suggest they are, but we are having what i would consider to be a triumph of hope over reason on the whole mantra that inflation is transitory. sorry, bostick. i will send you a dollar in the mail to a swear jar. the data at this morning's producer price index, as with the nfib small business, was 53% of small businesses raised prices in october. what we need is some hard talk. it's always easy. politicians at the bank of england, where the policy wasn't independent, it was to keep interest rates low to help the economy, but that isn't always the answer. the german side of you knows that if you let inflation get out of hand, you run into problems in the economy and it's better to head it off early. amanda: you make that great analogy, the fed wants us to reconsider the word transitory, by which you say by that measure the holy roman empire was transitory. in terms of where that leaves us , if there is a change at the fed, a bra

a slightly more hawkish set of commentary out of the fomc minutes. the flattening of the yield curve, stronger u.s. dollar. the markets are now pricing in four rate hikes within the next 24 months. bear in mind we have heard from former fred president william dudley and lacquer, both seeing it between 3% to 4%. that is the cycle within an fomc considering the pace of inflation. data out yesterday pointing to ever higher inflation. a presuming consumer in the u.s.. let's check in on the markets across the asian space. relative optimism, gains of .2%. the future in europe. gains of .5% after ending in the green. looking past the lockdowns and additional measures to curb covid-19 across the euro. the u.s. is closed for trading today. brent, keeping an eye on this. the tussle between biden and the administration and opec-plus. .2%. the u.s. dollar at the highest level since around june of 2020. currently down, but the resilience around the dollar is certainly a consequence globally. sticking to the em space. flexibility was the buzz word at the last fed

the fomc decided to begin scaling back its bond buying program.pec says the coordinated release of oil reserves by top consuming nations could massively slow the surplus in global markets. some opec-plus delegates have indicated they could cancel an output hike scheduled for january if the market is overrun. singapore and malaysia have agreed to open the causeway linking the two countries allowing cross-border travel for the first time since march last year. vaccinated passengers will be able to travel on buses. global news 24 hours a day on air and on bloomberg quicktake powered by 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. yvonne: a lot of things to watch across markets today. my colleague david ingles is here to walk us through all of this. let's start with macau casinos. david: when you measure the move up from nevada, the latest was this note on credit suisse and then pointing to very very cheap valuations. they are upgrading price targets. you can see those on your screen. they're looking a

traders positioned for the fomc as well.n update when it comes to trading here in sydney. almost every sector trading in the green at the moment, up by just about 1%. the dovish tone with deepening trade has given a little more confidence to equity markets to forge ahead with these gains. when it comes to the aussie kiwi, things are getting more interesting. that could have another run at parity after that strong new zealand jobs report which traders have taken as providing more momentum for further rbnz rate hikes as well. the jobless rate falling to a 14 year low as hiring really picks up. the fed is expected to announce a long anticipated tapering of its asset purchases tomorrow while inflationary pressures remain a key risk. they expect inflation to remain elevated but doesn't see it becoming permanent. this is really the crux of every question we ask everyone and that polymer -- policymakers are trying to work out as well. which element of the price pressure story do you think is transient? >> i think what we've seen in

today the fomc kept interest rates near zero. in light of the progress the which he has made toward our goals decided to begin reducing the pace of asset purchases. with these actions, monetary policy will continue to provide strong support to the economic recovery given the unprecedented nature of the disruptions related to the pandemic and the reopening of the economy, we remain attentive to risks and will ensure that our policy is well positioned to address the full range of plausible economic outcomes i will say more about our monetary policy decisions after reviewing recent economic developments economic activity expanded at a 6.5% pace in the first half of the year reflecting progress on vaccinations, the reopening of the economy, and strong policy support. in the third quarter, real gdp growth slowed rapidly. the summer surge in covid cases from the delta variant held back recovery in the sectors most adversely affected by the pandemic, including travel and leisure. activity has also been restrained by supply constraints a

today the fomc kept interest rates near zero, and in light of the progress the economy has made toward our goals, decided to begin reducing the pace of asset purchases. with these actions, monetary policy will continue to provide strong support to the economic recovery. given the unprecedented nature if of the disruptions related to the pandemic and the reopening of the economy, we remain attentive to risks and and will insure that our policy is well optioned to address the full range of. [applause] ifn bl economic outcomes. plausible economic outcomes. i will say more about our monetary decisions after reviewing recent economic developments. economic activity expanded at a 6.5% pace in the first half of the year, reflecting progress on vaccinations, the reopening of the economy and strong policy support. in the third quarter, real gdp growth slowed notably from this rapid pace. the summer surge in covid cases from the delta variant has held back the recovery in the sectors most adversely affected including travel and leisure. activity the has also been restrained by supply constraints

we will have another employment report and cpi report ahead of the december fomc.s will certainly be a live discussion at that meeting. but it still seems a little too early to us to imagine that the fed will announce in december a faster pace of taper. what instead we think is more likely is a truncated or shortened pace of taper. it is quite possible by the time we get to the march meeting next year, assuming that inflation continues to come in quite elevated, that the fed announces that we don't need to finish the taper. we are already borrowing -- already buying such a small amount of treasuries, and we want to provide a signal to the market for a june hike or get they could just stop the last month or two months of taper, and we don't think it would have a material impact on the market because the fed will be buying so little at that point in time anyway. alix: i am curious to get your take on real yields because for whatever move we have seen in rates, whatever we want up expecting from the fed, the theme of there is no alternative still stands pretty firm be

second, going into the december fomc meeting.t's get to the bond purchasing program in more detail and how this may differ at all if we get a change in the fed. jerome powell is seen as the favorite. reynard could be a surprise pick. what could happen? >> there lies the 50-50 investors are facing. reynard is going to represent a dovish shift. if that happens, you could see treasury yields being supported. historically, new fed shares tend to be -- by markets. on the other hand, we discussed the rash of a hawkish -- the risk of a hawkish shift. this is a lot for markets to take right now. rishaad: as it surprised you also given some of these inflation forecasts, which are looking quite scary. jason was suggesting we could get a cpi rate of 7% in december. what is your take on this because it does not seeing the short end was reacting as much as one would have thought? >> seven is a little high versus my estimates but i think over the near term, it is clear. when you break it down and that is key, most of these pressures are linked

tom: it is going to form the view where the fomc and jay powell goes for the taper.ee hikes priced in by the markets and the u.s. pretty decent gains across europe. making up some of the losses we saw yesterday but wrestling with the rapid pace of covid-19 infections. the news out from germany. scholz is going to be the chancellor. taking some of the tot spots within that coalition. they will have to face up to the crisis of koad there. the dax is currently flat. the u.k., india, china and south korea release. basic resources at the top of the list. energy gaining 1%. in the red, travel and leisure. not a big surprise. infections continue to take their toll. also auto parts. that is the shape of play across your sectors. the oil story is still front and center for us as well. the markets looking past this reserve release after posting the biggest gains in two weeks on tuesday. the u.s. decision to release 50 million barrels of crude. japan, india and south korea and the u.k. falling short of expectations. let's get more from our energy team out in asia. what has been

shery: the fomc seems to be emphasizing a more inclusive version of a full employment. the economist calls that that includes black unemployment at 6%? >> there are all sorts of measures that one can use for employment. and unemployment. i would see the real issue is measuring on a plumber right now , measuring the labor force even more critically. in the united states, what is the size of the labor force? who is in fact, are the people who are not looking for work now going to come back in or have they relatively permanently stepped away from the labor force? that has all sorts of consequences for economic growth and wages which we are going to see inflation forecast. shery: always great having your insights. thank you. you can get around up of the stories you need to know to get your day going in this edition of daybreak. you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪ >> janet yellen was due to meet leaders at the cop26 summit. the bank of america ceo was among the leaders expected to attend.

charles: by the way, jay powell has said, might be two or three fomc meetings ago.t frustrated, someone pounding him on unemployment rate. it was a skewed, bogus number and went away from that. he said it again. the maximum employment, he quickly said maximum participation. that is something that the media will never really cover in the last jobs report. oh, the unemployment rate is fantastic. not if millions of people are out of the jobs market though. >> a lot of people don't want to cover because it isn't a economic issue exclusively. it is so cultural that labor participation decline, people over 55 and under 25. that is the problem is that it us structural into the culture. no one talked about disability claims going up 700% after the financial crisis because that was sort of a backdoor way to extend unemployment. i think that him talking about labor participation, danielle talked about that max many employment level, those are things he knows they can't control with monetary policy. they become the cover to what they end up not doing next year which is raise r

of denial about that as a group we stepped in and we took the actions that we took and within one fomc cycle, we announced a new set of rules to try to put us back where we need to be, which is we need to have the complete trust of the american people that we're working in their interest all the time absolutely critical to our work as it is for any government agency and i feel like this called that into question, so we reacted, i would characterize it, strongly and forcefully if there were other things we could do that were reasonable, we would certainly do them, so you asked about blind trusts you know, the overall authority for ethics around these issues in the federal government is the office of government ethics, oge. and they have a long-held position which is not favorable to blind trusts. they do not encourage them they don't think they're effective. they think they're cumbersome and they think there are better ways to get at the things that need to be done, and those are the things we're actually doing. i don't know there are any blind trusts for that reason, because they are t

it is interesting to see what the markets have priced and, whether it is the fomc minutes. you hear from some fed presidents, the dove that has turned more hawkish saying a taper could happen. you have at least 45 hikes before 2024 being priced into this market. -- four or five hikes before 2024 being priced into this market. there is talk that china could be the upper former when it comes to -- the outperformer when it comes to e.m. china could top as the keystone margaret -- the key stock market in 2022 given the underperformance we have seen in china. people are saying it is time for a catch-up. let's talk more about the virus situation. the u.k. has added six applicant countries to a travel red list amid worries about its dramatically different covid-19 variant recently identified. let's get details from our editor. talk us through this new variant, how concerning is it, and is this the next delta? >> sure, thanks. it is important to say first that this is very new. this strain was only identified two days ago. i does not even have one of the greek names yet like delta,

tom: the fomc laid it out wednesday. what is going to be the difference in a brainard chairmanship? i mentioned larry meyer years ago saying the chairman matters. what you discern to be the difference in process under chair brainard? philip: let's make the heroic assumption that brainard becomes the chair and we have three other more dovish members of the board of governors that replace the folks coming off. will that more dovish board of governors follow through over the course of the next two years in terms of completing the taper and starting to hike interest rates? will we have interest rates 150 basis points higher but the end of calendar 2023 with the taper completed? if the answer is no, and we believe the fed is already behind the curve in times of the -- in terms of this issue, does that raise the prospect of a potential need for policy response down the road? the market is going to have to come to grips with that question once we know who the players are. lisa: do you end up saying for now buy equities and if you get a progressive and dove us -- dovish federal reserve that

various fomc members relative to march.hat is when we begin to see the dollar rally. the dollar has really been on the front foot, rallying since june. it has gained ground. i think at this point in time, there's a lot of good news in the price. when you have a lot of good news in the price, how much more can the dollar go? you also look at a situation where we see risk appetite for u.s. stocks. you got the dollar gaining and risk appetite for stocks gaining, too. that is not a natural dynamic, and perhaps that is something which has maybe forced some of the bullishness out of the u.s. dollar as well. jonathan: what a fascinating moment that is. great to explore it with you. jane foley of rabobank. the height of the year on euro-dollar, january 6, and than the story just faded. it is worth reflecting on this stuff. people were bullish, sure. they were right to be. we have talked about perhaps they weren't bullish enough, and that has been proved how this equity market has evolved through the years of our. the cyclical synch

fomc meeting this week. listen, tapering, no one is really worried about that. a lot of talk about the fed hiking rates next year. is it time to start making adjustments in your portfolio for something like that? >> i don't think yet, charles. the market seems to be baking all of the talk of tapering. we know it is probably going to happen this month, if it doesn't, it will happen next month. we know looking like $15 billion a month will start to taper. eventually stop buying anything at end of the month. they may extend it. we'll not see interest rates rise meaningfully. not in any way that will interrupt the market moving forward. i'm not worried about any of that until it actually happens. charles: same question to you, gary. listen we know there is a direct correlation. all the central bank money printing around the world has really helped the so-called fang names. do you make adjustments or wait? >> let me sate, they are never, ever, ever, ever, ever, ever going to raise rates again unless they are forced to. i call it tapering smhapering, maybe go 250 bill

seeing a rebound, investors have turned cautious ahead of the fomc.is done with, we will see how investors continue to watch them markets. and more global central bank rules, haidi. haidi: yes, take a look at one hour of trading and how that has laid out when it comes to the sydney stocks. asx 200 holding onto gains. investors reacting to similar telegraphing out of the fed. aussie dollar 0.3% higher. the kiwi is stronger but we are seeing the lag continue when it comes to equities trading in new zealand. over next guest says he remains optimistic about current valuations. let's bring in the asia equity portfolio strategist. we have seen record high after record high when it comes to trading in the u.s.. what is going to be the next driver, particularly when it comes to momentum in asia? >> the fact is that a lot of investors were waiting to see what would happen with the fed, and specifically now, trying to focus and see well here at year end, how things will be falling, especially with asian economies opening up from covid. a lot of investors taking

charles: we covered the fomc meeting. it is real interesting.et the audience take a look at that the s&p heat map, see a lot of red on the screen as the fomc decision was being made. yet at the close, it was all green. uma, explain that to me. stocks are going up, bond yields going down. that doesn't speak to an aggressive fed or speak to a lot of rate hikes next year. so what's happening here? >> exactly what you said, charles, right? the message from the fed like scott was mentioning they will still be here accommodative policy here to stay, right? that means, economy on good footing we have a lot of support and rates are not looking to be increased in the near future. we're hearing that same type of commentary from central banks around the world, right? we're hearing rate expectations getting reset. what that means for investors two things, they need to find yield, come somewhere else and second something that we spoke about, charles, that inflation is here. right? so investors really need to be focusing on hedging against inflation, making s

that deviation could be a source of contention as we move forward to the december fomc. what is the difference between what powell is saying and what the minutes were saying? jeremy: the minutes were ramping up the debate about tapering, and that was not the narrative powell was trying to portray. there was also a perception of how transitory are the nation pressures going to be? is it going to be more attractive -- that was a slightly different message from mr. powell's testimony. the nomination is out-of-the-way. perhaps that will liberate chair powell to be more communicative with the market as it moves forward to the december fomc, particularly if we go to that meeting on the back of strong payrolls and high patient. anna: i was taken by a substantial move in the hungarian, not specifically around hungary because it attacks the zeitgeist about higher interest rates. you've see the third interest -- you see the third increase in just two weeks. this -- is this a story globally getting momentum or are received lots of countries trying to support their currencies in thi

the fomc decided to begin scaling back its bond buying program in mid 2022.eral reserve report says the collapse of rko capital management would yield vulnerability. the feds twice yearly supervision report says the event exposes weaknesses and margin practices. the family office blew up in march, contributing to billions to morgan stanley. singapore and malaysia have reopened a causeway. it allows land travel for the first time since march of last year. vaccinated passengers will be allowed to transit on buses. prior to covid, some 300,000 people streamed across each day making it one of the world's busiest land borders. germany's coalition government is promising to slash greenhouse gas emissions with a faster coal exit. more renewables, and a new carbon price lower. after in negotiations, the democrats secured a deal with the free democrats. it takes away for angela merkel to be replaced as chancellor. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie qu

that is going to form your view and the fomc's view about where they need to be when it comes to rates>> clearly we have had -- the data is quite clear in terms of some of those elements. oil is down but it is a demand shock element which is more important at this juncture. so it's really -- we're trying to get a -- how much we have transmitted through. will wages really increase? tom: ok. so looking at wages, is there any data that you're seeing that suggests that wage inflation is for -- stateside? >> we haven't got the details. a lot of data is -- you have to look at some of the employment. the rate of the five million jobs that have left, over half are not going to return. that is pretty material. also i think we have sometimes underplayed the ill pact of the immigration debate and up to 2 million jobs therefore may have been lost by a lack of innovation in the -- immigration into the u.s. as well. we need to find out how that is transmitted into wages going up. tom: clearly this is a challenge for jay powell. the markets surprising in as many as three rate hikes next year for the

manus: commentators there on the possibility of rate hikes and fed tapering at the fomc meeting todaye fed is expected to announce the tapering side of the bargain. the main question remains around the pace of the tapering, perhaps the trajectory of rate hikes if and when they come. let's bring in my guess this morning, jeffrey. the debate with state street progressed the narrative, which is to stop getting caught up in the taper narrative, probably 15 billion per month that they will do. i need to understand where they might get to with rate hikes. have we gone too far and aggressive with our estimate for a hiking initiation by the fed next year? >> yes, i do, and happy fed day, good morning to you. in the fed funds futures market, we have over two rate hikes priced in by the end of next year. i think that is too far, too fast. if they start tapering this month and they wrap that up mid year, i think they would want to wait some period of time to assess the economic impact. i think more importantly for me, the rate hikes decision was supposed to be based on a separate and far more st

if you look at history, jerome pal has been in the fomc nine years, lael brainard, nine years.em have dissented every time on monetary policy. they have voted the same way. both of them are well experienced in the ways of the fed. there is no particular reason to think that either would dispel a direct change. the other argument to make is that people tend to think that democrats want to be more dovish, less keen to raise rates. with inflation where it is now, i'm not sure that is operative. matt: just to sort through the colloquialisms, when we say there is an elephant in the room, that means there is an issue that everyone is ignoring. but no one is not talking about inflation, we are all focused on it, with the exception of maybe the fed. why is that? john: the thing that worries me most about this, the place where there is an indivisible elephant is perhaps the oval office, rather than where the fed is. you would think that inflation now becoming a big political issue is a major -- that that would be a bigger issue. yet, more or less, it is irrelevant to the choice of the n

thank god she did it today, and hopefully after maybe the fomc meeting today, we are going to see a bitpushback across the board for a lot of central banks, and specially for the ecb. guy: do you think the market is overdoing it? the polish central bank has raised, and no one in the market expected that. is there a danger that the fed ends up having to do an accelerated taper, that the bank of england hikes more than the market things it is? does the ecb get pushed into doing what it once? that's what it wants -- what it wants? gdp is not that far behind. i know there are big differences in europe, and italy and other countries are on a different page, but what if actually these central banks are forced into action? how is that going to affect asset prices? seema: if they are forced into action, it is not because we are suddenly accelerating beyond the already solid pace we were in his baiting. if that happens and that pushes of inflation, that is going to be a positive. that is a market positive overall. if on the other hand citro banks are forced into action because inflation goes bey

the composition of the fomc will change.ot think bided will put people in that are going to adopt a more obvious response function to the data. tom: neil dutta emailing me moments ago. thank you for watching. he is watching stronger u.s. dollar. lisa: rate hike expectations as people bring forward the pressure on the federal reserve and the expectation they will be forced to respond. tom: the bond market closed for veterans day. i will quote euro 1.1463. i sent a note to lee brody who does all of our booking with leon cooperman and said get leon cooperman on. there are any number of reasons we can always speak with the chairman of goldman sachs and now chief executive officer of omega family office. far more is it about the never ending debate of a wealth tax and of going after the billionaires. leon cooperman has been more than vocal, harkening back to a letter of two or three years ago to the senator from massachusetts, it is a five page single-line doozy where leon cooperman takes on the progressives and senator warren. w

first of all, we don't know if they are going to pivot because i would say the key take away from the fomc minutes is that they do think inflation is going to be transient and is going to come down by the second or third quarter of next year. they still believe they are not really going to pivot, so it really depends on when we get one more cpi print before the december meeting. you are going to get information on employment, which we already have a pretty strong trajectory for. we are also going to get a third data point before the december meeting. will other global central banks follow the u.s.? perhaps not. i think global monetary policy is probably going to remain a secret us -- remain asynchronous wells for next year. lisa: we've gotten about 100 different fed officials speaking at different forums. what is your sense about anything, if anything, we have learned that is new or has moved the ball forward about how they are thinking about the rates policy? subadra: it was kind of disappointing that we heard quite a few fed speakers, but not really anything substantive or new for many o

within one fomc cycle we announced a new set of rules to try to put us back where we need to be. we need to have the complete trust of the american people that we are working in their interest all the time. that is critical for our work, and i would characterize it strongly and forcefully. if there were other things we could do, we would do them. you asked about lines trust, -- blind trust, there is a long-held position which is not favorable to blind trust. they think they are cumbersome, and there are better ways to get out the things that need to be done. for any blind trusts, for that reason. they are the regulator, they say that on their website. in terms of laws broken, i asked the inspector general to see whether there were rules broken or laws broken. and i won't speculate, but that is with the inspector general now and out of my hands. >> we will go to mike mckee at bloomberg. >> mr. chairman, critics of your policy say you are likely to end up with inflation by having to raise rates faster and farther than you would have liked, and therefore send the economy into recess

this is a voting member of the fomc next year and he is talking about two hikes next year.isa speaking to foxbusiness early this morning. 2.5% was below going into the pandemic. 3% already. that is his call. lisa: let's hear from richard clarida next. jonathan: through the week. coming up on the open, oksana aronoff from jp morgan. matthew, thank you, good to see you. matt miller. it is been about seven or eight years. matt: will do it again soon. jonathan: join us the next time tom is out. with bramo and ferro, this is bloomberg. ritika: president biden is facing pressure to decide how to address a surge in gasoline prices. officials be looking at new energy pricing as a guidepost while weighing the strategic petroleum reserve. opec has ignored requests from some of the biggest oil producers to increase applied to meet elevated demand. elon musk social media followers have voted that the tesla chief should shell -- should sell 10% of his tesla sailors -- of his tesla shares. musk asked the question after recent discussions of billionaires porting unrealized gains to avoid

in many ways, there was some evidence for that argument within the latest minutes from the fomc.n three weeks ago there was debate about the need for a faster pace. we are now certainly seeing the data supporting that. the pce data yesterday very strong. even the core number very strong out of the united states. however, has the market already price to? -- already priced it? fiona frick, unigestion ceo, still with us. the traders have already gotten it, haven't they? fiona: yes, i think the market is pricing three hikes next year , and inflation linked bonds are quite expensive, so i think yes, it is priced quite aggressively. i think what the fed has done is adjusted its narrative to the level of what the market was mentioning. guy: when do stocks start to meaningfully react to this? we have seen some wobbles in x stocks recently, but nevertheless, you don't feel the full impact of higher rates is fully in the equity market. fiona: i would say with rates where they are today, the tenure at 1.6%, equity still looks like a good deal because it is a good bit higher than that. i wou

he was the first voting member of the fomc who came up with the idea of tapering faster to set the conditionsate hikes starting in the summer of 2022. he has been joined by richard clarida, who also argued inflation is on the rise. it makes sense from a precautionary perspective to end the asset purchases sooner than originally anticipated. that is definitely a debate gaining steam. tom: if we get more clarity on that debate in december, if indeed they change the asset purchases to bring taper forward further in december, what do you expect the market reaction will be? some will see that as pulling the rate hikes cycle forward as well. christian: absolutely. i would rule out the decision to speed up the tapering in december, there could be a debate. that is all that richard clarida is calling for. if they were to speed up the tapering, that is a decision that would likely have to be taken in the spring of 2022. we have different forces pulling and pushing on euro-dollar exchange rate, and the possibility of faster tapering in the u.s., which would lead to a stronger dollar, at the same time t

if anything the composition of the fomc is going to change.o not think biden will put people in who are going to adopt a more hawkish response function to the data as it is coming in. jonathan: love catching up with you. the perfect guest to talk about this. neil dutta. tom keene, it is a six handle. tom: back to 1990. 1982 before that. jonathan: the airline ceo scott kirby in about 30 minutes. looking forward to that on tv and radio. this is bloomberg. ritika: the governors of michigan and eight other states want congress to approve aid for american semiconductors. they're trying to ease a shortage that has hurt manufacturers. the governor sent a message to congressional leaders asking for $52 billion. the question of whether president biden's tax and spending package will be fully paid for has gotten complicated. the administration estimates that a better funded irs could bring in $400 billion over the next decade through corporations and the wealthy. under the budget rules government analysts cannot cap money that will be spent. democratic

we think of the fomc meeting we will have an announcement of the tapering of asset purchases.us is no longer so much on the headline number. now the focus is is there a shortage of workers in the labor market? you can have a week reading because there is no demand for jobs. if we get a week reading, it will be driven by the fact there is not the supply of workers behind it. we are looking at data on wages, on participation. kailey: let's focus on participation, which has stayed stubbornly low. is that structural? andrew: it looks like at least a piece of it is structural. where we get a structural element is with those 55 and over, somewhere between 500,000 and one million workers dropped out of the labor force, which are early retirements. you had savings during the pandemic, loss of a job. now that retirement, which was five years off came early. those workers are probably permanently out. we are watching on a month-to-month basis as the primate workers, you see the prime age workers coming in or going out. there's a view at the fed that enhanced unemployment benefits will e

the fomc said earlier this month it would begin tapering the $120 billion among bond buying program which put in place in the early days of the pandemic. the planned pace of reduction puts it on track to cease purchases entirely by mid 2022. >> the inflation rate is quite high. the core p.c. inflation rate that the committee is -- favorite measure is about 3.6%. that's the highest it's been in 30 years. so i think it behooves the committee to attack in a more hawkish direction. we could move faster. we kept optionality on this. that we could speed up the taper if it's appropriate. vonnie: china is accelerating plans to replace foreign technology. sources say a secretive government-backed organization is vetting and approving local suppliers in sensitive industries. acting as a gate keeper for sectors from banking to data storage. we're told that 1800 chinese suppliers have been invited to join the committee. and any company with more than 25% foreign ownership will be secluded. -- secluded. fizer has asked u.s. leg raters for emergency use authorization of its covid-19 pill. the drug was

at 2:00 p.m., the fomc releases there policy decision. then of course, fed chair jay powell gives his press conference. two-year guilds have come down recently, as tom was talking about. part of the reason why is the pushback we are getting from the likes of ecb president christine lagarde, but also the australian central bank coming out and saying we will give up yield curve control, but don't expect us to hike rates anytime soon. jonathan: full coverage, special programming, the fed decides on tv and radio, a little later this afternoon. what do we knew when they moved back to new york city? tom: the special welcome is to suggest they go below 59th street. i think that is a good idea. lisa: have you taken the advice? jonathan: to your favorite mcdonald's? tom: drop down into deepest lower manhattan, like the 30's. jonathan: murray hill is what you suggest for david stubbs. let's ask what david thinks of that, global head of macro at j.p. morgan. this talk about this market. the fed decides a little bit later. what are you looking for? d

jay powell giving himself and the fomc that flexibility in the months ahead to respond.adjusted and reframed that the concept of transitory. the market still pricing in two rate hikes by the end of next year, but jay powell sang the conditions have not yet been met. those conditions are more stringent. in terms of the handoff, because you had another record close, and it was not just the snp and the dow, it was also the nasdaq and the russell 2000. gains of 0.5% across the benchmark. in terms of the dax, gains of 0.3%. we've had credit suisse, socgen. that is fueling the gains partly we are seeing in the dax. the cac is posited by 27 points and the ftse 100 as well, up as we look ahead to that boe decision. christine lagarde yesterday trying to make the case that a rate hike and the conditions there have not been met for 2022, pushing back against the market expectations, essentially saying that it is not on the table. you have oil prices in focus a get. you are seeing some gains across wti and brent ahead of opec-plus, real estate also higher, banks also getting. at the

jim bullard making the point the fed might have to move faster if the fomc -- if inflation persists.gregory daco joins us. you take the line this is not runaway inflation. we just had on francisco blanche of bank of america talk you about $120 barrels of oil. i extrapolated out to a low level of $4.77 where many in america would pay over five dollars a gallon for gas. how is that not inflation of the runaway kind? gregory: if you look at the broad inflationary dynamic, they remain procyclical. that is the key element. if you look at the decomposition of inflation in terms of cyclical and a cyclical components, we still of inflation reacting to strong demand. we coined the term messy inflation dynamics. moderating inflation with sticky supply driven inflation. that means you have an environment in which you are seeing strong demand and supply gradually responding to the strong demand. that is leading to sticky supply pressures and leading to sticky inflation. we do not expect inflation to fall below the 3% mark before the second half of 2022. there will have to be some patients in thi

we are going to have another cpi report by the december fomc meeting.t is probably going to be another hot one. i thing there is a growing probability that at that meeting, the fed accelerates the rate of tapering, maybe even doubles it, which would put them on track to finish by march as opposed to june. guy: you wonder whether that brings forward the first rate hike. this is a hot subject. it is going to be debated widely. thank you very much for giving us your thoughts. annetta markowski -- aneta markowska, thank you. rivian hitting the market today, looking to make a dent in the ev space. rj scaringe, rivian's ceo, joining us next. this is bloomberg. ♪ guy: i am not sure what the hottest number is today. it is either the inflation print we just had or the numbers i am seeing on rivian. the indicated price has gone from $110 to $120 within the last couple of minutes. let's call it circa $12 billion ipo. it is absolutely massive. the prices indicated that it could be superhot as it comes out of the gate. we think that is going to happen sometime aroun

is this an fomc mirroring the postwar period or the 1970's?om: i'm going to say it was the bank of japan, which had to capitulate and reverse. that is the ultimate fear in this deflationary time, is we've got to go higher, oops, we were wrong. jonathan: that's what is what was behind the shift in the framework for the federal reserve, to ensure they have that patients. now it seems the conversation has shifted just around this word transitory because it is so hard to keep repeating the same thing when the data is moving the other way. tom: we are making jokes about it, but the cost of the ecb to ///%w which i have been screaming about for months, which is the x-axis dynamics. jonathan: when fear. -- lengthier. tom: we need long come along charts. jonathan: if you accidentally tuned into financial news and listened to the conversations, they are utterly ridiculous. lisa: i think that is just us. [laughter] jonathan: it is not just us, the. it is the scent -- us, though. it is the central bankers. it is all of us. from new york, this is bloomber

that being the chair doesn't change policy because we are always all committed, each member of the fomcs committed to the same thing, achieving the goals that congress gave us, price stability and full employment, and thinking together on how to do that. so each of the people you have named are amazing. there are lots of wonderful people out there who could lead our organization, and most important is that we are all delivering it together, always on the same goals. so the continuity is of the conversation we have, not about who is chair or not share. -- not chair. i think wall street is built to be uncertain and worry about things, and i think that is a good quality maybe, but right now, i would just want to reassure all listeners coming soon wall street, that the continuity of policy is based on the conversations we have, and we really are an institution that serves the american people through those dual mandates, and that won't change. that is a commitment everybody makes. michael: you are down a governor now. you will lose a couple of more before the end of 2022. is the fed shorthan

investors looking for clues on the fomc leadership. bloomberg policy correspondent mike mckee joining us on set. where are we? i feel like we have been going round and round the wheel on this one, waiting for some news as to what exactly is going to happen. there are lots of empty seats. the key one is the top. what happens next? mike: we have to wait until the biden administration settles on who it will nominate and finds a window of opportunity to make the nomination. it has been busy with the build back better. they had to get through the entrance russia plan through congress. what going on further congress, but it is about time. let's leave aside the question of the fed leadership because we talk a lot about jay powell. let's talk about the other seats that have to be filled. if powell is reappointed, you end up with receipts to fill. the vice chair for supervision, which is what they are talking about brainerd for and there is an open governor's seat. the qualifications, usually if you have a chairman who is not a macroeconomist l

markets are hiking one full 25 basis point, quarter point rate hike by the june fomc meeting, charles know. >> another subsequent to that in november. charles: 30 seconds but i got to ask you've done extraordinarily well with quill intelligence but there is a job offer out there. i'm wondering if you might be interested. part of the profile, macroeconomics, banking experience, familiar with the federal reserve system. talk about the job as dallas federal reserve president. you have any answers at that gig? >> there are a few feelers out there, but i'm still not convinced that security would let me in the front door. charles: [laughter] >> certainly something being spoken about, charles? charles: danielle, thanks a lot. keep an open mind. that is all i'm saying. >> thank you, charles. charles: all righty. >> i would serve my country again. i would happily serve my counttry again. >> i know you would. america is creating the foundation for fourth industrial revolution so why are we importing workers to work it? before going to war with business i will ask what make as corporation a good

the entire fomc has supported the current policy path.e been no dissents for many meetings. the chair can't just do what the chair once. they have to bring the rest of the committee along with them. i think the difference between powell and brainard is pretty slight in terms of what monetary policy will actually turn out to be. tom: some of this is a guesstimate of previous inflations. we will talk about this with jeffrey lacher in a bit. dudley leans to the post-world war ii, 1947 super inflation, and then eisenhower deflation, where mr. lacher suggests maybe it is more pernicious like what we saw in the 1960's. which kind of inflation is this? william: i don't think we have the answer to that because we haven't had this kind of recovery from a pandemic before. what we do know is inflation pressures are turning out to be higher for longer. we know it is starting to feed into wages and that is starting to feed into inflation expect patients, so even if the initial impulse turned out to be transitory, we could still have low nesting -- hav

i am glad the nomination came before we got the minutes from the last fomc meeting. it is clear from the rhetoric that a lot of the fed have already moved to wanting to accelerate the tapering that larry was referring to. they have left the door open to do that. and then get that separated from the process of liftoff, which i do think we will be seeing by mid 2022. it is important that the messaging is right. one of the things that brainard and powell are very cognizant of and have -- i'm think of other fed chair men's on this -- they bring the international perspective. the fed is the central bank to the rest of the world. you don't want to have a taper tantrum, accelerate things so much, hike rates so much that you overshoot. the fear of how you get a soft landing. you don't want this to get out of control and you. you want the fed to be prudent but not panicked and rate hikes. powell has said that they will be patient. now i want them to not panic. having that international lands. understanding what happens in the u.s. does not stay here, there is no las vegas in

remember the fomc makes these monetary policies decisions. there are 12 of them, right?embers around five reserve bank presidents. now biden will have three or four new appointments to the board, okay, after brainard? charles: all doves. >> they will be woke. they will go woke. trust me. yes, you're correct. i will say yes, you're right. so it will be up to jay powell to get a coalition of reserve bank presidents and maybe, one person on the board. but here is what you haven't seen. we haven't seen this in 30 or 40 years, some of these board members may openly dissent and make speeches against the chairman. reagan appointees by the way, stopped paul volcker in his second turn. wayne angell, johnson, robert heller, they were commodity watchers. volcker wanted to keep tightening this is long past the early '80s when volcker did a good job. they wanted to keep tightening and rebelled against him to stop him from doing stuff. charles: he got enough good work eventually they got inflation down and we had a big run ever prosperity. i do want to ask but the strategic petroleum

the most recent data, particularly since the november fomc meeting show elevated inflation pressures, a rapid improvement in labor market indicators without an accompanying labor supply and also strong spending that signals growth in coming months. remember that every dollar of asset purchase adds accommodation to the economy, but at this point the economy is very strong and inflationary pressures are high and it is therefore appropriate, in my view, to consider wrapping up the taper of asset purchases, which we announced at the november meeting, perhaps a few months sooner. i expect we will discuss it at our upcoming meeting in a couple weeks. between now and then, we will see another neighbor report and inflation report and get a better sense of the new covid variant as well before that and before we make that decision. sen. warner: clearly, most of us were surprised coming back from september that we didn't see more folks we enter the labor force. i believe that tapering and frankly accelerating it can serve as an insurance policy if we don't see this return and we see potential ov

several policymakers signaled the topic might be on the table when the fomc meets. the plan announced earlier this month slows qe at a pace to finish by mid 2022. >> the rapid improvement in the labor market and deteriorating inflation data have pushed me towards favoring a faster pace of tapering, and more rapid removal of accommodations. vonnie: china's foreign exchange committee is urging banks to limit speculative currency trading. sources say the organization is advising lenders to improve risk management. we are told a proposal but sent to more than 50 banks that cover 90% of china's fx markets. china has raised its growth forecast on the back of the tourism revival. the economy is set to expand 1.2% this year, exceeding an earlier forecast. growth next year could hit 4%. thailand will be reopening next month. more than half of the population is fully inoculated and the daily infection rate is about 6.5 thousand. the japan and the u.s. will reportedly make an announcement on oil reserves. a newspaper says the gap -- japanese government says it is considering t