the latest fomc materials say that the fomc thinks will be appropriate to keep rates near zero untilels of maximum employment and also three rate hikes penciled into the projections next year. in order to set up those hikes what will maximum employment have to look like, when will you know that threshold has been met and how will that be communicated? thank you. >> so maximum employment, if you look at our statement of longer run goals and monetary policy strategy, maximum employment is something that we look at a broad range ever indicators. those would include of course things like the unemployment rate, the labor force participation rate, job openings, wages, flows in and out of the labor force and various parts of the labor force. we also tend to look broadly and inclusively at different demographic groups, not just at the headline and aggregate numbers. so that's a judgment for the committee to make. the committee will make a judgment we've achieved labor market conditions consistent with maximum employment. when it makes that is it is admittedly a judgment call because it's a r

all fomc participants forecast this remaining test will be met next year.projection for the appropriate level of the federal funds rate is 0.9% at the end of 2022, about half a percentage point higher than projected in september. participants expect a gradual pace of policy firming with the level of the federal funds rate generally near estimates of its longer run level by the end of 2024 of course these projection does not represent a committee decision or plan and no one knows with any certainty where the economy will be a year for more from now. at today's meeting the committee also decided to double the pace of reductions in its asset purchases. beginning in mid january, we will reduce the monthly pace of our net asset purchases by $20 billion for treasury securities and $10 billion for agency mortgage-backed securities if the economy evolves broadly as expected, similar reductions in the pace of net asset purchases will likely be appropriate each month implying that increases in our securities holdings wouldsy by mid march, a few months earlier than we

. >> fomc meeting this week, your thoughts on that?> i think the consensus is pretty well got it right. chairman powell has been pretty good communicating things. not everybody agrees what he has been communicating or his pivots from time to time but the end of november he pivoted to be more hawkish. at the end of the november we suddenly had a new variant of the virus and new l variant ever of powell. i think they will raise interest rates sooner next year. look at the bond market. the yield is under 1.5%. the yield curve is saying you know, two, three hikes next year, that may be it. charles: i tend to agree with you. we're told that the bond market is the canary in the coal mine except when it doesn't go in the direction wall street wants it to go in we're told to ignore it? >> thank you. charles: next time we'll go over one of your movie reviews. i can't wait for that. i have breaking news, consumer expectations for inflation is up 6.0%. want to get comments from gary kaltbaum and shah galani. everyone heard the fed that they will

it has become the fomc's major inflation battle.aul volcker in the 1980's, having to fight back against inflation, but the fomc like powell now agrees that inflation is no longer transitory, the economy is quickly moving towards full employment, and importantly, they did not even speed up the taper. they signaled three rate hikes in 2022. look at our classic chart. you can see out of the 16 current members of the fomc, there are now 10 favoring rate hikes next year. there are two who see 4 rate hikes, not three, and there were five that only see one, but remember in september, nine of the people on the fomc or half then did not see any rate hikes in 2022. this was a major shift. when jay powell was asked about moving to rate hikes, listen to what he said. >> the economy is so much stronger. it is so much closer to full employment. inflation is running well above target and growth well above potential. there would not be the need for that kind of long delay. having said that, we will make this decision in coming meetings, and it is n

stay tuned for special coverage of the fomc special rate decision. this time it's fun. bloomberg. ♪

that fomc decision now 48 hours away and lots of commentary, including from mohamed el-erian.oke on face the nation this weekend -- have a listen. the characterization -- >> the characterization of it as transitory as the worst call in the history of the federal reserve and results in a high probability of a policy mistake. amanda: we have talked a lot about whether the focus on transitory was right or wrong. history will tell if the fed and other central banks have got this one wrong, but if confidence is the question about confidence is wavering and that may be the most important emotion for anybody when it comes to central banks. matt: it's not quite as bad as it was at the beginning of the housing bubble or during the great depression, but it is interesting that powell stuck to his transitory forecast for so long, considering everything that was thriving. inflation did not look like it was going away anytime soon. he may be, in a, proven correct. if we see inflation come back down to normal levels over 2020 two, but the question is and always was how long his transitory? i

the median inflation protection of fomc participants falls from 5.3% to 2.6% next year. this projection is notably higher than projected in september. we understand a high inflation pose a significant hardship, especially on those least able to meet the higher cost of essentials, like food, housing, and participation. we are committed to our price stability goal. we will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched. we will be watching carefully to see whether the economy is evolving in line with expectations. the fed's monetary policy actions have been guided by our mandate to promote maximum employment and stable prices for the american people. in support of these goals the committee reaffirmed a target range for the federal funds rate. we also updated our assessment of the progress of the economy is made toward the criteria specified in our 40 guidance -- forward guidance. the committee expects it will be appropriate to maintain this target range until labor market conditions have reached level

the latest fomc materials say that the fomc think it will be prep until labor market conditions reach consistent with maximum employment and three rate hikes in the projections for next year. in order to set up the hikes, what will maximum employment have to look like and when will you know that the threshold has been met and how will that be communicated? thank you. >> maximum employment, if you look at our statement of longer run goals and policy strategy, maximum employment is something that we look at a broad range of indicators and those would include, of course, things like the unemployment rate, the labor force participation rate. job openings, wages, flows in and out of the labor force, and various parts of the labor force, we'd also tend to look broadly and inclusively at different demographic groups and not just at the headline aggregate numbers. and so that's a judgment for the committee to make. the committee will make a judgment that we've achieved, labor market conditions consistent with maximum employment and it's admittedly a judgment call because it's a range of facto

i think you're seeing a bit more panic instead of patients within the ranks of the fomc on the dot plots well. manus: complacency. let's have a look at the short end of the yield curve. we saw virulent moves on the short end. you saw the spike and the role in the twos. the question is, will the fed manage to get three hikes in next year. there was a terrible shirt -- charging of the flat nurse. the one saving grace was the fed's lack of quantitative tightening, driving theon narrative. that's for the doves and the hawks to debate. let's check in on the data. the stocks had a riproaring rally come after the federal reserve moved to indicate three hikes next year. the market doesn't believe it's going to do all these hikes. this was the cash clothed -- close last night. the futures market is what we want to have a look at. oil up just under 1%. two-year yields at 0.66%. there's been shifts in the turkish administration this morning. we will cover that in the moment. we are going for a 100 basis point cut. we will keep an eye on this. we are just for -- tipping 15 on the turkish lira. infl

the fomc began its meeting today. are awaiting tomorrow's decision in the fed's timeline for tapering. joining us to discuss is frank sorrentino from connect one bank, a leading commercial u.s. regional bank. thanks for your time this afternoon. what do you expect from the fed and what would surprise you? frank: great to be back with you, matt and amanda. what would surprise me? a rate increase would surprise me. i do think the fed has been data-driven. i think the data is starting to focus on more tapering, speeding up the interest rate hikes, maybe earlier four 2022. that is pretty much the consensus today. the liquidity in the market today has to be soaked up a bit. there is a lot of money chasing assets which is creating inflation. amanda: one of the reasons it is so helpful to talk to an organization like yours is you are on the front line of the u.s. economy where it counts, the lower level, in the regions with real businesses. what are you seeing? how are your clients experiencing it? frank: connect one does co

change in our spending habits as consumers and businesses, and that was a big part of the team on the fomc. >> we all assume that demand is here to stay. the strength of the u.s. consumer is one of the stories driving the u.s. economy. i'm concerned demand can evaporate quite quickly. there's no reason why there can't be another supply shock, and if you have investing, you need to position yourself to whether that demand. greg: let's talk about that in terms of quality investment. i feel like 2022 will be a year where we have to be more tactical. if you go long on the market at the beginning of the year, it's a decent return. >> i think you have to be more selective. businesses have a taller order in front of them. demand is uncertain because we don't know how omicron will play out. it's uncertain how interest rates will play out through most businesses, especially small businesses that may be dependent on the credit. it's important to think about investing in companies that have strong competitive positions, because that will enable them to do well in a choppy economy. greg: when i think

a failure to pass it would introduce some risk to our expectation that the fomc will deliver the firste hike in march. goldman adds without build back better, the odds of new corporate tax increases are down signific significantly as well. so a mixed bag if you will let's bring in vance howard from howard capital management. vance, goldman had already cut the u.s. growth forecast for this year back in october over fears of a consumer spending slow down. what exactly does this now mean for markets overall if on balance you might not have the tax increases we feared but the same time maybe not as much of that fiscal stimulus as we were expecting. >> the fed has been clear with this they're going to taper, raise rates next year. what's happening here is we're seeing the market sell off this morning but is it because of the gdp number that goldman wants to talk about or because of the spike of covid and inflation when you look at inflation, that's giving me more heart burn than goldman with a number on gdp and the virus spiking up is a little bit of a heart burn too. those are big headwind

frequent guest on your show, on the network, to talk about today's reports, how they would influence fomcolicy. i can share with you my perspective on the report as how it fits into the mission and work of the institute for economic equity. you introduced me as the director. one of the things that my colleagues and i have been doing, we have been following the recovery of what many would call vulnerable groups. young teenagers, people with disabilities, minorities, women in particular. why is this important? there were great calls for social justice. the pandemic raised our concerns about how equity is being distributed in our society, so there was strenuous statements about we have to do the right things to help americans, these vulnerable workers. if you focus on the household side, it shows continued healing. employers seem to have changed their mindset over who the qualified employees are, potential resources, skills that people have. people with disabilities, their employment rose for the third or second consecutive month. still a lot of work to be done, but i found the household sid

ellen: i think there is concern, especially among the group of fomc participants.nk loretta mester put it so simply when she's -- put it simply -- put it so simply -- put it succinctly, that it would give us the optionality move on rates. have they decided exactly when they will move on rates? no. they will take that decision as we are moving through the data and getting possible evidence early next year of whether inflation is going to continue to run hot or whether it is going to start coming off those highs. but you need the optionality, and every central banker ultimately once as much optionality on policy as possible. so i don't think a faster taper is signaling they are going to turn around and hike right away, but i do think they want to be prepared and be more nimble in case that is an action they need to take. alix: to our question of the day in terms of where we are looking, does the number today come in in a goldilocks way? i wonder if there is some truth in that in some of the individual categories. we know prices are going to roll over. we know energy

forecast, the federal reserve forecast of 4% growth which underlies the fomc forecast of three rate ought to go a step further and reduce their forecast for the federal funds rate next year. charles: i love both of those points. put it out all there. they put out just enough for the right public consumption. some of your work you say rapid inflation matters a whole lot more than a solid jobs market. explain in layman's terms what that means particularly with respect to fed policy? >> okay, i was dumfounded by the following period of statistics. the first one has the unemployment rate dropping from 6.7% a year ago to november's 4.2%. that's great news. ordinarily that should lead to a big increase by consumer sentiment but lo and behold, what happened instead is that the university of michigan's index of u.s. consumer sentiment dropped from nearly 81 basis point last december to merely 70 basis points this december. again, that sentiment index based on the historical relationship with the unemployment rate, should have been around 95 points. so what is going on, consumers are very mu

it is crystal ball stuff from the fomc.a:lisa: there is a polarity and some of the discussions, whether the fed is behind the curve in raising rates or behind the curve if they do raise rates and have to get ahead of economic slowdowns. that, to me, highlights the uncertainty you need to know. so debating 2024, you're right, is a potshot. but is good to get a guide on what the fed is thinking about. jon: let's get to d.c. and get to what this administration is thinking about with jack fitzpatrick. i want to start with a vote in the senate to strip back repeal the president's mandate. is that just optics? any substance here? jack: that's really going to end up being a symbolic vote. they did manage to get two democrats to join all 50 republicans for a majority to try to block the private sector vaccine and testing mandate. this is through the congressional review act which does require the bill be enacted into law. there is no plan to take that up in the democratic-controlled house. it is subject to a veto by the president i

we continue our focus on the big decision by fomc officials, moving to one of the most hawkish policies in years, moving to end their asset buying program earlier than planned, and raising interest rates almost as soon as then, but investors seemed to like what there'd. kailey: decision that was taken well by risk assets. tapering, looking at $30 billion coming off a month, and saying that they are looking at three hikes of rates in 2022 and 2023. howell said he is not that worried about the omicron variant and that he thought inflation would come down in 2022. listen to more of what the chairman had to say. >> supply and demand imbalances have continued to contribute to elevated inflation. these problems have been larger and longer lasting than anticipated. we are phasing out purchases more rapidly because with elevated inflation pressures, the economy no longer needs increasing policy support. the economy is much stronger. i was here with the fed when we lifted off last time and the economy is stronger, closer to full employment. there's a provision in what used to be called -- provis

narrative that powell gives when he has the press conference and the headlines that come out of the fomc, you'll get another opportunity, better opportunity to buy these stocks. i'm not saying they can't go up again. rates have moved they're still down far below where they were. you know, not that long ago when we were pushing a 1.8 yield. so, yes, i'm saying that you'll get another opportunity >> doc, you agree with that? whose side are you on? joe's or steve's >> you know, we always get another opportunity. so i'm not trying to carve you up here, steve but we always get another opportunity because tomorrow is always another day i liked a lot of shannon's optimism at the top of the show here and i think she was exactly right, scott, when she said it was about omicron and not about powell because, obviously, powell was exactly where he was when he made those statements and that's not driving the market instead >> it's about both i think we can be fair, it was about both >> it was. >> it was about both, but why have we come back? we have come back so strongly, scott, i believe because omi

. >> the next step will be at the december fomc meeting. jonathan: joining us is bob michele, frances donald, and krishna memani. let's start with the payrolls report, got reaction, and then work our way to the fed decision. francis, your reaction to the november payrolls report? frances: there is only one number i care about in every job number i care from now through 2022, and that is labor force participation rate. this is one of the most important economic data points over the next six months. if we can get labor supply back into the economy, we will see less wage pressure, less inflationary concern, and we can start growing this economy. today's report, i know the headline wasn't good, questions about the underlying component, but this is good news because we see that labor force participation rate rise. it is that number that will be far more important to the outlook to the fed and markets than just generally whether we are missing by 100k. jonathan: bob michele? bob: francis is right, terrific report. you married that with the ism se

purchases, how fast, how soon will it end, and what do the fed governors say, the fed folks on the fomcay about the pace and scale of interest rate hikes in 2022 and beyond this is about as consequential a meeting as we have had in years, melissa. >> it is all about, it will be all about the dots, the dot plots. >>> all right. it is a waiting game meantime. markets slightly lower ahead of this decision. let's get to dom chu with the numbers. dom. >> melissa, tyler, you know it is a consequential decision when there's no action in the markets. the reason why is because every trader and investor out there has jockeyed for position ahead of this and is now waiting to hear, waiting to see what the fed is going to do for that reason, the dow is down .03 of a percent. that's how flat it is right now. only ten points to the downside for a dow basis of 35,534. the s&p 500 is down a little bit more, down about a quarter of 1%, about nine points. 4,624. the nasdaq composite, the outsize underperforming down 131 points to the downside, 15,105 as always, interest rates. the real epicenter of everyt

after the fomc gathering reverberations are being felt. what if i told you jay powell thinks it is still transitory. i have buyen brian wesbury. nancy pelosi says, five million dollar tech trade ahead of the bill was unfair. we're talking about leveling the playing field were jim bianco. rivian the darling set to report after the bell. it went into the from thes to fear. most of the other went into a ditch. should you be buying any of them. so much more on making money. charles: the day after, wall street is sleeping own it, how much pondering the initial reaction out market. we were up yesterday. now we're starting to have second thoughts about the fed still being on side of wall street. now a lot has been made about the daunting task that jerome powell and the fed faces trying to balance the official and unofficial task. in this case it is being built up as the same as getting a camel through the eye of a needle. going for maximum employment while making sure that the economy doesn't boil over. i mean that is their dual mandate. the unsp

>> yeah, wilford a lot of digesting what's going on if you told me six months ago, that the fomc would be doubling their tapering pace and putting three tightenings to next year, i mean, i would have thought you were crazy, wouldn't expected it and probably had an underweighted to equity. we don't -- okay you mentioned day-to-day volatility that's expected. there are a couple of signals, though, really important to us the reason why we have the most equity in our portfolio today than at any other point this year start with the first piece on the fed. yes. at first blush, very, very hawkish. look under the hood what i keep telling people, they are coming from an absolute position of strength on both monetary policy and on the economy on monetary policy, ten-year note at 140. doesn't matter what the fund does or two-year note. ten-year matters last year tapering close to 3% in 2013. second piece, of course, going to be financial conditions of the consumer and the fundamental story. the fed also upgraded a growth forecast for next year to 4% that is double trend growth. double where -- do

is trying to elect to the fomc, because they're more doveish than anybody on on the fomc currently and, and i think they really need to keep rates higher and hike interest rates to combat inflation. i think that's actually the best option for the stock market and for the economy, because i'm a long term thinker, david. yeah, in the short-term, if we keep rates low and we keep on pumping money into the economy, and don't taper the bond purchases you'd think that's going to keep the stock market higher and it will but in the long term we're going to pay for that so i'd rather have a little bit of short-term pain right now and hike interest rates and i think that's what powell is looking to do which is actually a good thing. david: but francis if that happens, if in fact powell comes to be more hawkish on rates, might a lot of money move out of the stock market into the safety people might have like 80% of their money in the stocks right now, and might that grow in terms of bond purchases, shrink ing market cap and stock markets? >> well, this has a lot of nuance, because really, what's g

to make a good point about the factor of a pullback stop if we think right off the fomc press conferencen wednesday, the tech sector try just fine. it was yesterday and today were there has been some lack of breadth. that can be concerning but that's something we will keep her eyes on. in the longer-term, once the volatility has passed, what should be driving valuations? i think it should be around negative growth rates and be very much around profitability of these sectors and very much about how many of these companies especially when you're looking at that, have that pricing power in a world where trees will be higher companies with better pricing power are going to continue to do well. there will be new supply chain issues that could drive markets. sanali: i'm wondering about the more sensitive strategies, things that are more weighed two the tech industry in the sectors that perform so well in this last cycle. what has become of them? >> if we remain in his muted policy path where interest rates move higher as they should because the economy does not need the same level emergency of

by severely limiting the fomc's ability to respond to the downside risk posed by omicron, inflation hasssentially destroyed the fedput. that is a conversation we have been having for the last couple of weeks. inflation has effectively destroyed the fedput, the view coming out of jeffrey's this morning. tom: the markets move ahead of the fed, and maybe we are seeing a lot of that. you mentioned the yields suppressing friday. they have bounced back for now basis points, 1.39%. did you imagine we would be here six months ago with these low yields? jonathan: with this kind of data, absolutely not. tom: they're real yield was standing when i looked at it saturday. jonathan: but that is where we are pure this brings in inflation into sharper focus this coming friday. looking for something close to 7 on cpi, effectively the point jeffrey's is making, that the fed is not have the space tobacco way. tom: 6.7% on combined inflation. jack fitzpatrick with us right now. maybe it is a normal seat in washington. back to i guess normal after a five-year client of the kennedy center honors, but there's

there is a dispersion there but three months ago, it was equally divided on the fomc. no rate hikes in 2022. they wanted to wait until 2023. what does this mean until finishing the taper? jay powell made it clear that it isn't going to necessarily delay the process because of how the economy is looking. mr. powell: i was here at the fed when we left it off the last time and the economy is so much stronger, so much closer to full employment. inflation is well above target and growth is well above potential. there were not be the need for the long delay. having said that, we will make this decision in coming meetings and it is not a decision the committee is focused on yet. haslinda: jay powell said he is comfortable with the away the economy can handle it. he said with every wave of the virus it, businesses and consumers showing they can deal with it. i would say it is not his major concern. his concern is bringing down inflation. rishaad: absolutely. omicron it does essentially -- european central bank's and the bank of england looking at the impact of that, although t

the fomc balancing. perhaps not as aggressive a hiking cycle. what do you have pencil thin?penciled in? hannah: we have seen a five to 6% drop in those longer to ration technology stocks which are relying on -- they've taken a drop in recent days. there are some sectors within technology that have been hit very hard. something like paypal, which is a darling, with a 40% pullback. these are stored very news -- new -- moves in a short amount of time. they are looking for safer investments within the equity sector. if you look at that, you can see real change. you have the information technology sector down. consumer staples are up. they were left behind since the rebound in the markets as a result of the pandemic. the likes of really boring consumer staples up nearly 10% so far this month. manus: you know what? sometimes boring is not a bad place to be. it means it's a little bit more predictable. we started talking about health care being a pivotal shift. i'm also drawn to yours. you are shifting the portfolio away from defensive u.s. health care. that's counterintuitive to m

as we wait for the fomc decision tomorrow we start with the markets and their anticipation with whatming from the fed. without bloomberg markets correspondent, kriti gupta. the market is a little rocky right now >> a little rocky. a falloff in the stock market, led by big tech with software companies and all coming back onto rising inflation. jp morgan, like adobe, will be under pressure as we see rising rates. off the back, you are seeing this big expectation for inflation and it is a story of translating -- that is translating to the bond market. they are not waiting for the decision. those are higher. david:

one of the interesting things about the december fomc meeting is that they revised their expectationsrowth and down their expectations for unemployment and up their expectations for inflation, what do you expect them to do? they will signal more interest rates increases. if you sort of plug all of that into a standard time -- kind of model, they are not indicating that they will hike more than that. it is about their so-called reaction function which we got in the june meeting. that is the one of -- that is one of the reasons why on the day itself the market took the news in stride. so, i would not characterize this as hawkish, this is a fed that has not signaled what they did, and they would look increasing offside relative to the data as it is coming in. >> this is a fed that has accelerated tapering and that looks set to end in march. are we looking at march left off? neil: i certainly think it is a live meeting. one of the reasons they are accelerating is to make it a live meeting. and then think about what will happen between nine and -- now and then. it is likely that we will co

essentially doubling the monthly purchase reduction, and then ending purchases by the time of the march fomceeting. it is also going to give an updated reading on the dot plot, and certainly we are some pathetic to former new york fed president dudley's views that we will probably see more hikes ticket priced. two, maybe three for next year. the thing that could surprise the market that we sense is still underappreciated by clients is the discussion of the fed balance sheet. lisa, you mentioned this earlier. the fed may be gearing up for quantitative tightening. haven't given us much guidance yet, but if they start to strengthen the balance sheet at some point next year, that we think could really weigh against risk assets because it is going to be adding duration risk to the market. it is going to be adding more term premium that will lean against the flattening pressures slightly, but most important he it will be withdrawing liquidity out of markets. the extent to which powell elaborates on this or provides hints in that direction may end up being the big surprise from the meeting next wee

apple is down 2%, and then bonds yesterday flipping a low bit flat after the fomc meeting.ve a bit of a rally as yields are lower. however, the trend for yield is higher. the uptrend really holds in a nice way. it is up in for that 10 year yield. you can see this over the last year. it is a very simple trendline. sometimes simple is best. you can see that there is a backup in yields. it has not been a straight line. finally, one reason to think that maybe stocks can close to the upside, we have another pocket of risk assets climbing on the day. we had the bloomberg commodity index up 1.5% as the dollar falls. we also have oil and natural gas higher. take a look at the s&p 500 energy sector, up 1.8%. so there is a real bright spot on the day, energy. alix: very much so. we just had a really nice draw in natural gas storage for the week. let's talk more about oil. the future of american energy just got a $50 million boost from the harold hamm foundation and continental resources to build the hamm institute at oklahoma university. it will host impose ems and summits and be a s

there were a lot of names thrown around, we will see whether the names that are then put onto the fomc complement powell or are cut from the same cloth. we will see how that pans out. kailey: i was talking to a former fed governor a few weeks ago and i asked him will it shift the balance depending who sits in the seats. he says at the end of the day the fed is chairman lead. ultimately it is powell calling the shots. damian: u.s. treasuries, we have not seen two consecutive years of negative total returns and i think that is what is coming in 2022. we are having a negative year here and i think we will see the same in 2022 considering the path of rate hikes. kailey: the question is when that shows up. i am looking at a 10-year treasury yield south of 150. i do not think coming into this year anyone thought we would be that low aside from steve major. anna: absolutely. maybe we will get steve back on to talk about one week -- where we go in 2022. we got up to 1.7 and that time we were all thinking it was playing save, and it did not turn out that way. kailey: tech is doing very well thi

the fed will have, not at the december 15 meeting, but if i wander onto a great terminal function, fomc staggered to january 27 for the march meeting of next year, what will be the choices the fed has at that time? michael: i think the fed does want to wind the taper up for midyear next year so they have the ability to start placing short-term interest rates if the economy continues to perform as it has been. let's take a step back and recognize the fed is still doing want to take it easy, albeit at a slower pace each month with an unemployment rate in the mid-4%. during the last cycle the unemployment rate fell only slowly. this is a much more rapid recovery and we are far along towards full employment, with the fed still doing qe and short-term interest rates at zero. that is the policy that will cement a more permanent inflationary backdrop in place if policy does not adjust. we are talking about retiring temporary and transitory. a big part of that is adjusting the policy stance to a more neutral level and that will require the fed to wrap up quantitative easing sooner. that is righ

slow, our projection is for 2.8% by the end of next year, and if a lot of more hawkish members of the fomcoff the voting roster at the end of 2022, we will face some difficult questions about what happens in 2023 comp especially with the new board members joining the fed. matt: what did they do that triggers a tightening of financial conditions? is it about the taper? is about unwinding the balance sheets? is it about raising rates? how do they gauge how they are affecting -- yelena: all of the above. they need to talk tough. that is what they have been doing. chair powell at the latest press conference said the way they already communicate is already starting to show in some data. they need to be vigilant, they need to talk tough that they will fight inflation a matter what. we will see by the end of next year what happens. it will depend a lot on what the markets are doing, the yield curve comment economic conditions. our projection is for solid growth going into next year. we see growth in the passivity of 4% by the end of 2023. this is way above potential. economic conditions are there

at the end of that big table where the fomc meets, at one end is the chairman's office. you go through a door, the other you go through a door and it's -- they have a portrait gallery of former fed chairs. nobody looks at arthur burns' portrait. he's viewed as a big mistake. and as you mentioned, it was because he wanted to please the president. and the question now being debated in markets does powell want to please this president? is he looking for reappointment when it comes up in february towards the end of the year and they'll decide. or is he really preserving the independence of the central bank? i can tell you this. i know jay very well. we text each other. we play golf together. we don't talk about policy anymore, i'm not allowed to. but he doesn't want to be arthur burns. and that should be hopefully a saving grace. we'll see. >> let me ask you one other question that fascinated me as i wrote the book. because in 1971 there was a huge debate about the so-called phillips curve, the tradeoff between inflation and unemployment. and a lot of the distinguished econo

that chairman deliberately not reflect the consensus on the film see in the news conference -- on the fomcthat news conference for delivered reasons that forget dilbert reasons -- for deliberate reasons? i'm asking a question. tom: check fitzpatrick briefs this morning was bloomberg government. no shut down. so what? what does it mean? jack: so what is a good question. yes, we are going to avoid a shut down once they stopped at measure is signed into law -- the stopgap measure is signed into law by the president. that check would -- that checks one big thing off the to do list. there is still no action, no movement, some talks on the debt limit. that has a hazy deadline, but it could be a soon as mid-december. there have been talks between senators schumer,, on how to handle that, but every senator i have talked to said there is no plan, and they may need a couple of weeks to get moving on that, so there are a lot of other hard deadlines for them now. tom: my amateur analysis of this is that the democrats have never been more separate from the republicans on this. what is the incentive for

stability, still provides diversification, and it is something that is amazing to me, the fact that pre-fomcng, the two-year was at about 0.66%. even with the hawkish pivot, both yields are below that today. guy: have a great christmas. enjoy the holidays. thank you very much, indeed. sarah ponczek of ubs private wealth management. what will be tal -- what will we be talking about next? vaccine makers mixed. some under pressure, as you can see. earlier on, a lot of the stocks openings in italy higher. we have certainly seen a fade on that. this is bloomberg. ♪ alix: it is time for your bloomberg business flash, a look at some of the biggest business stories in the news right now. oracle taking a bold move into the health-care industry with its biggest deal ever. the company has agreed to buy medical record systems provider cerner for about $23 billion cash or get oracle will be adding a broad customer base bolster its cloud computing and database businesses. monday, the bank of montreal spending billions to expand its presence in key u.s. growth markets. it has agreed to pay $16.3 billion to

from the fed, and how do you think the market's going to deal with it >> so, i think the december fomcup of tapering most likely now to be completed in march you sort of have a range of where economists expect the initial rate hike to occur, some as early as that month in march. we think it's a bit later than that, that they'll allow some span of time between now and then and we're more in the one to two rate hikes next year of course, a lot can change. i think what mattersfor the equity market is not so much the timing of the initial hike but the speed at which the fed has to tighten that's been a big differentiator in cycles past going all the way back to the post-world war ii era. fast-tightening cycles have been met with much weaker equity market performance the market digests slow tightening to a much more significant degree so if we start to get a sense that the fed doesn't feel compelled to sort of ramp up rates every single consecutive fomc meeting, i think that could be a calming force but there's no question that the move from looser to tighter monetary policy probably brings

bullard will be a voting fomc member next year, he sees two rate hikes in 2022. all of this as the november jobs data shows much slower than expected job creation. non-farm payrolls increasing by just 210,000 for the month. however, the unemployment rate, it fell sharp. ly to 4.2%, the lowest since february of 2020 the, aka, right before the pandemic began. it's confusing, i know. department of labor secretary marty the walsh tried to explain it -- marty walsh tried to explain it. here you go. >> my marching orders are to get people back to work, get people trained up. the prime minister's focus is give -- the president's focus is getting people into good paying jobs. lauren: we have our floor show traders, adam, what do you make of the jobs data? >> it's a little bit of a messy month. there's some contradictions in the data. like you said, the payroll are number came in disappointing at around 200,000, but if you look at the households survey which surveys house helds instead of businesses, we had over a million jobs. that's why the unemployment rate fell. i ten

we have the january fomc meeting taking place on the 25th and 26th this would signal to me a similar bet to a 15% down side bet on the s&p >> that's interesting. guy? what do you make of blackrock? >> january 14, i think they're due to report earnings about 21 times next year, the stock is sort of lower left, upper right. 12, 13% eps growth this is an interesting play. you wonder if it is a bearish bet on the market. i love when they drop this stuff. that's why i tune in every friday evening at 5:30 p.m >> either that or you have your vcr taping the machine >> well, yeah, that. >> maike, thank you next friday, we're off this friday for the christmas eve holiday. next friy, udap next, your final trades nurse mariyam sabo knows a moment this pure... ...demands a lotion this pure. new gold bond pure moisture lotion. 24-hour hydration. no parabens, dyes, or fragrances. gold bond. champion your skin. >> announcer: final trade is sponsored by -- >>> time for the final trade let's go around the horn tim. >> so back to semiconductors, the conversation that introduced ta taiwan semi, one most

. >> yeah, i felt like i was at next month's fomc meeting. yeah, the economic outlook and the right policy responsibleness from the fed complicated you have another fast-spreading virus wave and apparent failure of build back better here's the challenge the new virus spread threatens demand and supply. so you could have weak demand growth, but also supply cuts, which could booth inflation. goldman among others cutting their forecast central banks pivoting last week to fighting inflation. bond yields across the term structure have all fallen since the fed meeting with the biggest decline being a 13-basis point fall in the five-year yield. the two and five are up just a bit since november 30th. ten-year remains down, presenting a problem for a fed that wants to tieghten things u. krishna writes -- on some horizon, the fed will need to achieve less stimlative conditions lou writes the less yields rise on the long end -- so the selloff tightens conditions somewhat as did comments on friday from the governor he said he wants the march meeting to b

the most recent data, particularly since the november fomc meeting show elevated inflation pressures, a rapid improvement in labor market indicators labor market indicators without an accompanying addition of labor supply, and also strong spending that signals growth, mosignificant growth in the comg months. remember every dollar of asset purchasesn adds accommodation t at this point the economy is very strong and inflationary pressures are high therefore it is appropriate in my view to consider wrapping up which we announced at the november meeting i expect we will discuss that at the upcoming meeting of course between now and then we will see another labor market report and inflation report and get a better sense of the new covid variant. you say you were surprised. i think most of us were, coming back in september we didn't see more folks reenter the labor force. i believe that tapering and accelerating serves as kind of insurance policy if we don't get this return and we see these potential overheating of the economy, so i do hope that you willve move more aggressive on this. i wo

people are not paying tax to the fact that the fomc is going to change dramatically.ing positions, replacing doves on the market. i think the propensity for the fed taking the overnight funds rate by 100 basis points, maybe 150 basis points it changes the dynamic of market. right after the turn of the year, especially the new fomc meetings in mid to late january, the game shall probably change. ashley: wow. bah humbug. oh, well. >> no, no, bah humbug. more honesty and lesson of history. ashley: yeah. i get you. we have been warned as they say. great stuff as always, dennis gartman, thank you very much. appreciate that. let's bring in lauren if we can. thank you, dennis. lauren, you got some movers. begin with didi down more than 5%. lauren: i know. it ipod at 14 just a few months ago. this has been a hurtful couple months for china's ride-hailing service. they will delist from the new york stock exchange after going public and eventually relist in hong kong, without raising capital or issuing new stock. that according to reports. it is called listing by introduction.

quick. >> we have not madeha a decision that the most recent data particularly since the november fomcng shows elevated inflation pressures with that labor supply and also strong spending that signals significant growth in the coming months remember that every dollar ofdo asset purchase as accommodation to the economy that at this point it is very strong and inflationary pressures are high and then to consider wrapping up the paper of our forces which we announced at the november meeting a few months sooner. and i suspect we will discuss that in a couple of weeks between now and then we will see how the labor market report and get a sense of the new covid variant before we make that decision. >> clearly i was surprised you were surprised coming back in september that we did not see more folks we enter the labor force. i believe that tapering and accelerating serves as an insurance policy if you see these potential overheating of the economy and hoping he was more aggressively that also looking at the new variance with covid, what factors we have to maintain is obviously congress move v

before the jefferies news, former new york fedaries bill dudley came out swinging with what he says the fomc should do next week at its policy meeting. the aim is to complete the tapering program, says dudle y, in time to be able to start raising short-term interest rates as soon as march, should that prove necessary. well, at this moment exactly a week from today, we will know what the fed is thinking, when it comes to tapering and maybe more importantly, interest rate policy. let's bring in our floor show trader, teddy, we've just thrown a lot of news at our viewers but the markets are holding on to green. if you're trying to sort of span the gamut between betting on stay-at-home stocks and reopening picks where do you go here just to cover both bases? >> yeah, i know. it's really hard, liz. we know what the obvious plays are, you know? the stocks that get beat up the most, leisure, travel, hotels, airlines, you know, when the covid news gets bad and of course when it gets really bad it seems they become a great buying opportunity, but i think the trick is to find stocks in sectors that wi

to include in their forward guidance, i thing maybe it is such a shift of tone as we do go into the fomc meeting a couple of weeks, i think it will be key for market participants to really see the timing around the qe tapering, but also around any potential rate increase as well. so i think, given the high levels of inflation we talked about a lot, given the fact that the tone has shifted around that it could be more persistent than we have been so far hearing from the fed, i do think it is supportive. lisa: markets are letting him make these moves, make these signals, without getting disrupted too much. i take a look at credit. nothing like the taper tantrum going back to 2013, but nonetheless, you are seeing money get withdrawn from the high-yield debt market and you slowly see yields creep higher, the worst performance going back to september 2020. is this a buying opportunity or a warning sign for what is to come? marilyn: i think potentially, if you exclude the new covid variant, it could be a buying opportunity where you think that, of course, as you expect to see monetary policy n

we want to remind you, next week , is the last federal reserve meeting, the fomc meeting for rate setting no rate hike is expected but what the fed says could meet the markets we hope you'll join us, that'll do it for us, kudlow is next. larry: hello, everyone. welcome to kudlow, i'm larry kudlow. so, save america, kill the bill, two very important numbers came out today that i think virtually guarantees a pause in the big government socialist spending, taxing and regulating bill that was proposed by president biden. virtually guarantees a pause, and a pause into next year, and a pause into next year gets us closer to killing the bill altogether. now the first number, a h