the top stories, asian stocks rally after wall street softer than expected inflation the fomc could slow the praise that space of heights. feds are saying this does not change their outlook for higher rates this year and next. and cashing in on softbank, floating $34 billion in alibaba following the investment giants record losses. haidi: we are saying -- seeing u.s. futures muted in the early asian session after the s&p 500 jumped to a high in cooler inflation numbers. we have a risk on day. the s&p 500 surpassing the 4177 level, the peak between the may to june rebound that signaled a higher high. that could perhaps mean more gains to come. nasdaq indices gained more than 20% from the june trough. it is now in bull market territory. traders pair back as bets on more aggressive said tightening given cooler inflation numbers. two year yield seeking as much as 20 basis points at one point. around the 278 level. the dollar sinking. oil getting a little boost in the new york session. that's not sustained in the asian session. haidi: the question is really on the topic of being sustained. wh

markets digesting those fomc minutes. what kind of guidance did we get?hey done with the big hikes? are smaller hikes to come? it feels like yields are higher, but coming off in the u.s. at the short end of the curve. dollar is stronger against most asia fx. marginal, but decent declines in the south korean won. in japan lower by .8%. david: yes. coming up, we have this interview, saying they have achieved a small annual profit. that will be in a couple of minutes. millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network and most recommended wireless carrier. that's a whole lot of happy campers out there. and it's never too late to join them. get $450 off any new purchase of an eligible samsung device with xfinity mobile. or add a line to your plan today at xfinitymobile.com david: your we go. -- here we go. the one hour lunch break in tokyo. we got the right time. 11:29 in the morning in hong kong. in to

i think the data will speak for itself, and the key driver of decisions for the september fomc.e: do you see any signs that the yield curve could steepen in the next weeks or so? mandy: i think so. there has been massive short positioning in the front and towards jackson hole this week and i think that could reverse. i don't think there is significant guidance coming out of jackson hole, so that could reverse. i guess since we are data dependent, any rarely in treasuries, is it down to just a short squeeze? mandy: definitely. not sustainable. yvonne: what about the dollar moves we have seen? mandy: looking at the dollar move is pretty interesting because if you see the u.s. yield converge into global yield , the dollar still strengthened. what is happening is, at the commodity prices and the terms of trade are the key driver for dollar strength. the u.s. is starting to export crude oil and gas, while europe continues to be a net importer. i think there will be a near-term factor to drive continued dollar strength. the other factor is i think the u.s. has more room to hike intere

there have going in from the fomc was the powell pivot, and this is the payroll pushback. they will not be able to pivot as aggressively as the market was expecting post that fomc. yield curve flattening, big increase on the front end in rates. equities do not like that because they like the end of fed tightening. inflation does not come down, we are nowhere near neutral. you have a lot more fed hikes if you don't have that inflation coming down. tom: i have a bunch of dweeby bond questions for you, but it is important for a large population. many don't have fancy degrees. what is wrong with generating 566,000 jobs with a revision? why is so much good job three formation a bad thing? i don't get that. jeffrey: it is about overheating and inflation. one of the challenges that you have is, in this report, you see a lot of signs of that wage inflation, wage price spiral. that is really the bigger risk. you transition from covid supply-side disruption, transitory, to something more persistent. the risk is inflation hurts everyone. if you don't snub it out thoroughly, the pain

then it will become a real contest within that fomc inflation is embedded in the economy.t's coming through loud and clear and the fed knows that if they give away too soon, if they back off too soon, they will have even a bigger problem on their hands. they want to say inflation is first but to keep everyone onboard this idea of flexibility is what the chairman is kind of putting out there. he knows they have a big road ahead of them still. >> do you think they're upset about what's happening in the markets? the loosening of financial conditions we've seen and the rally, frankly, since the last fed meeting? >> i don't know they're so much upset as surprise d given they said inflation is number one and so forth when you look at these minutes and this discussion of flexibility, you can't be too surprised that people are walking away from that and interest rates are easing, people are getting, shall we say, more enthusiastic about investing. if the fed sticks to their guns and they are convinced of that in the september meeting or one of the later meetings, then they'll back

i think they are previewing that in the fomc that could be revised higher. jonathan: anna along of bloomberg economics with her thoughts. tom: the interest rate debate, help me with the names. there is a group, with j.p. morgan clearly there. there are other groups saying 3.5. jonathan: we have a perfect guest in just a moment. tom: an anna wong is way up here. dudley abbott put up there. but there is real dispersion. jonathan: let's take as a given that we have a strong underlying economy. what does that imply? do you want to get demand daryl, rates up? if you believe the underlying economy is strong, there is work to do. tom: flat on their negative real wage growth? something a little concerning on that front which is that inflation is the last thing to move. you have to see the weakening before you see inflation really come down anymore material way. if that is the case, we have a long way to go and a lot of weakening to see in that data that we are not going to get in real time. jonathan: the difficult part for markets to swallow is when you get the weak

at our most recent meeting in july, the fomc raised the target range for the federal funds rate to two and a quarter to 2.5%, which is in the summary of economic projections range of estimates of where the federal funds range is projected to settle in the longer run. in current circumstances with inflation running far above 2% in the labor market extremely tight estimates of longer run neutral are not a place to pause or stop. july's increase of the target range was the second and his many meetings. i said then another unusually large increase could be appropriate our next meeting. we are now about halfway through the inter-meeting time. our decision of the september meeting will depend on the totality of the incoming data in the evolving outlook. at some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases. restoring price stability will likely require maintaining a restrictive policy stance for some time. the historical record caution strongly against prematurely loosening policy. committee participants most recent

putting into all of that the fomc, summer earnings.e to get past the 200 day moving average, is the bear market rally finally over? manus: we will debate that probably after the next fed meeting. that could perhaps trigger that bullishness. the fed's meeting minutes have revealed concerns that the bank may need to start cooling off on rate hikes as it made clear it still needs to push further into restrictive territory. officials agreed on the need to eventually dial back the pace of rate hikes while monitoring the effects of tightening. many of whom saw a risk off over tightening policy. let's take that narrative to sylvia. so, the deeply dovish people out there who are desperate for a pivot from the fed will lean into these minutes and go, this is a pivot moment for the fed, but we put it to you that financial conditions are too loose. they have not finished their job yet at the fed. this if anything will embolden the hawks at jackson hole. would you agree? >> basically, i didn't interpret the fed minutes last night as being that dov

the fomc is committed to slowing inflation to 2%. u.s.ures dip and asian stocks attempt to push higher. very well and welcome to the show. risk is starting off under pressure, the pmi contracted in china. is that enough to unseat sentiment? hsbc are concerned about lending in hong kong and china and see a week outlook. it's have a look at futures. ubs says there is a 50% chance of a materially lower equity market in the second half. this is the state of play on the stock market. you put on 9% in the first half of the year but this return to chinese contraction shows the fragility of the global market. ubs saying there is meaningful risk, 50% possibility of markets trading lower into the second half of the year. you're looking at stocks having the best month since 2020. standard chartered saying you have a short covering of underweight risk exposure, is what you saw in the latter part of july. the dax down .2%. to the oil markets, it's have a look across asset classes. it's opec. while the russians even allow any additional supply given th

there is not much of a chance will have stable markets between now and the fomc meeting. >> i want to pick up on your currency, there. i had a look at the board, the fixed today was 6.8, weakening economy, a rally in bond yields, candy trade go further? week yuan, stronger gb -- >> we are not seeing pushback if the pboc was concerned, they could make a message of the market that the yuan has weakened too quickly. we do not see that all. we are coming very close, the dollar on the offshore yuan is on the 684 level. if we push through that traders will be focused on 695, there will be a huge number of options a mature next week. traders will be looking for the low hanging fruit. the low hanging fruit be to push the dollar yuan back toward seven and six that five is close that direction -- 695 is close to that direction. coming to g20 as well, they just gave them fresh meat. if putin and she -- xi jinping do go it would just deepen the rift among the g20 letters -- leaders. david: the music direction -- the music references one direction if anyone got that joke. joining us now, how are y

positioning with hedges, there has to be a catalyst, and we are going to get that with the september fomcnd the midterm elections. kriti: we have a massive risk event coming up, the u.s. payrolls. a lot of people thinking maybe we will see signs of a loosening labor market. is this a pivot point where we are starting to see bad news in the economy as good news for stocks? amy: it is funny. if we rewind to this point last week, i think people felt the same way about jackson hole and hoping for that is bad news good news. at least last friday it was just bad news. we get that positioning point again. it is tough to say how these moves are with the air pockets. when you look at the derivatives rocket, people aren't placing any hedges against the payrolls number and i think part of it is because even with the moves you are seeing, investors were not necessarily all that long and didn't benefit from the june rally and it doesn't pay to hedge right now. jon: i am going to go as step beyond the question on the payrolls report. you mentioned midterms. give us a sense when you are in this part of

what jay powell did today was to come out and reinforce the message that other members of the fomc have been giving him the last few weeks. first, he made the economic case for why inflation and fighting inflation needs to be front and center for fed policy. second, on behalf of the fed he took institutional ownership of the responsibility for getting inflation down. third and probably most important, what you and your colleagues have been talking about in terms of market reaction, he tried to get the strongest message of the reserve resolved to continue to fight inflation as the two of you had just said, even after headline readings have come down. kailey: he said they are going to get restrictive and stay there. what is restrictive? what is your guess of where the terminal rate will ultimately be? if he says they will stay there for a while, what duration are we talking about? dan: you know, that depends obviously on one ends up happening with the economy. something else i noticed about this speech and the brevity is important because it allowed him to leave a lot of things out as wel

embers of the fomc have a different sense of their neutral is, overall. in aggregate, it seems like 2.5%, but it could be higher or lower than that it could determine what restrictive is. it will go into that territory, but were not sure how far. that is a big unknown. that will depend on the data. >> a term that has come to my attention is a job full perception. one where you don't need to see widespread layoffs. i'm curious about what that means in terms of how deep the recession will look labor market stasis type. --. >> i'm sorry i couldn't understand. >> i will repeat. full recession. that comes to mind. what happens to the death of the reception at the labor market stasis type. >> chair powell said that inflation happens a lot. it is more borten to the fed than the fed than labor market. i think is something he was clear on. he said unemployment would take up. they hope it will not take up much, but it will not cause a pivot. that was the message. nothing is going to cause a pivot. it explains why the equity market is falling. the other markets have

charles: but he did say, one of the recent fomc meetings that was his favorite gauge.at point. you've been tweeting about september in a very ominous manner. what are you expecting? >> listen september tends to be an anxious month. it is the worst month out of the year. history shows it. typically down 2% which isn't the end of the world but considering where we are with the fed, with inflation, with the midterm elections which is now a referendum on not only the biden administration but even the trump administration apparently, there is going to be all this kind of noise that creates nervousness, anxiousness, that will add seasonal weakness in september. i think people should be cautious. i don't mean light your hair on fire, run out of the door, be prepared for more chop and volatility in september. charles: you tweeted about rig a tony, is this the comfort food to get us through this. >> rig tony, it goes right to your bell low, feel good food. charles: kenny, thank you very much, appreciate it. coming up what should you may be buying now ahead of jay powell's speec

the thing, jay powell obviously gave some sort of a mint to the market because this is the best post-fomceeting with a rate hike rally i can remember ever and so something is going on here because parts of the market, equity and otherwise, believe that something is going on with the fed that they will not be that hawkish. >> yeah. i mean our sentiments are going to mirror pretty closely to eddie's. we started to talk about this inverse relationship as we started to see pressure on wti crude come down and perhaps a little bit of this bear market rally but, the real clincher will be economic data to follow and we will see a economic slowdown. the reality is they can't pull enough levers to lower inflation. how will they prioritize, stable prices or about maximum -- as they come to show us what direction we go, that i think we'll have more clarity. you're starting to see some shakeout in the bond market. we do think we're going to have some contractions come fall. in just a moment in time. charles: almost all of the major wall street firms feel that way, nicole. they are saying we're misread

our mind what the federal reserve's intentions are after perusing nebulous comments from yesterday's fomcinutes. sure there will be a couple rate hikes, we all figured that. but there were contradictions and additional questions that came think about it, initially the market rallied on the news and we went lower in the last two hours of trading. of course there has been a debate throughout largely one-sided right, about the bounce off the june lows. it is impressive. we hit some amazing milestones yet the street remains in the bearish camp for the most part. for them the notion of a new bear market is nebulous, too early to call. these days when the pros are not sure, they default to something like the worst-case scenario. this will be the case when it clears up, whether the fed whether or not they will pause or not. this is what we're all kind of waiting for so everything is less cloudy. according to bank of america surveys of fund managers a lot of folks still think we have to get inflation down. fewer think it has to be lower than 4% in july but still key. here is what is coming on tha

shery: waiting for the open and the market reaction from the fomc minutes. they were perceived as perhaps slightly less hawkish than expected. let's discuss. kathleen hays. the markets tend to take anything that comes from the fed has less hawkish than expected. any excuse to rally. what do you make of what you saw in those minutes? kathleen: what i come away is the fed is open to smaller or bigger rate hikes. i think in their own minds they are watching everything closely. there watching the impact of the rate hikes and trying to decide how far they will have to go. you are right. the markets solid as dovish. partly what they are seeing is the fed mentioning there could be this eventual pullback, dial back in the size and speed of rate hikes. here is a key phrase from the minutes. as it stands, they are agreeing, the fomc members, it would become appropriate at some point to slow the pace of policy rate increase is they mentioned they would do that. they also acknowledge the risk of hiking rates too much as many participants. there was also a risk the commi

think currently we think a neutral risk exposure because market volatility will say high ahead of the fomcwe would like to get hawkish guidance from the fed during the jackson hole symposium. it is a risk on to the earlier premature market expectation. it is far too early to expect the fed to start easing monetary policy with core inflation likely to say hi and sticky. the investor needs to stay defensive so we focus on adding protection to our portfolio and we expect the u.s. dollar will stay strong. we stick with a neutral allocation to global equities because we don't expect a global recession scenario. we will get a recession in selected regions such as the euro zone and the u.k.. our portfolio strategy position will be partial recession scenario and stay underweight. however, we still seem balance -- we see balance opportunities in risk assets, but not being risk exposure at this point in time because we expect inflation will start to ease in 2023 and we also expect the fed funds rate to kick in february of next year -- two peak in february of next year. david: between now and then, f

. >> the size of rate increases at any particular fomc meeting and to the peak funds rate will dependion outlook, which depends on the assessment of how average demand and supply are coming back into better balance and price pressures reduce. vonnie: a new report says u.s. companies added the fewest jobs in august since early 2021. -- research into the toots says business payrolls rose 132 thousand. figures are based on payroll transactions with -- of more than 25 million workers. -- officially monthly jobs report friday will show private payrolls climbed by 300,000. the opec coalition tightened its outlook this year. members struggled to reach targets. the alliance's technical committee/forecast is by less than half to 400,000 barrels a day. next year, it sees a deficit of 300,000 barrels a day instead of an overhang. u.s. regulators removed covid-19 boosters for both moderna and pfizer biontech that are tailored to the latest omicron variant spirit the move comes as concern grows about potential new waves of illness in coming months. covid vaccines until now had targeted the origina

bond markets under pressure here as well, going into the fomc meeting. china announcing the 20th party of congress, for mid-october. david: october 16. many economists we talk to, including one who will join us in 30 minutes. that's the best piece of news. we will see what ash equities are lower. near six-week lows on the asian edge mark. equity futures are similar picture. sovereign bonds have always been a really bad year. following -- dollar-yen, 140. we have to talk about intervention. yvonne was putting out a seven on the dollar, on dollar china. we are getting close to that as well. we are 40 or 50 basis points in terms of what nominal spread between china and the u.s.. yvonne: you're talking about what agency see that. the pboc's patients among this weakness is likely to continue we take a look at how they have been against that. it has been resilient. whether that stays the same or that strength is sustained is one thing to watch as well. goldman came out with a note yesterday saying it looks like it could stay for some time, given what we have s

andrew: what i would love to hear, especially after the july fomc meeting, is some clarification of howfficials think about the neutral rate of interest. we were talking about it with lisa, where do you need to get rates to to have zero effect on inflation and how much further do you think you need to move rates to bring down inflation? we see some of that in the summer of economic projection but we have also heard from chair powell the confusing statement that may be policy rates are in neutral now. i think it is hard to defend that position in a world where inflation is running much longer -- much stronger but i would like to hear clarity. jon: we are not laughing. andrew hollenhorst, as always, thank you. we have called out with mohamed el-erian who said the same thing. lisa: other people said yes inflation is high but it will come down dramatically. the two camps are getting more entrenched and it is hard to know what data is going to change them. i want to see the research they present at this jackson hole symposium. where do they come out with supply chain disruptions and that has

. >> we are expecting those fomc minutes, the fed continues to be hawkish.arkets seem to be of -- seem to be ignoring all that. now we have this china slowdown story. this recovery isn't going happening in china. >> it will be very volatile. particularly on the short and. the two-year yields will be very focused on what happens with the jackson hole symposium. there is some talk that jerome powell could somebody hawkish in that speech. inflation is out of control. that is public enemy number one. the fact that he pushes harder if the feds over another 70 basis points, if they look like they have a lot more work to do, the risk recession could hit the united states some point next year. that has to be reflected in the long end of the curve. we should find that the inversion stays for a long time and gets pretty deep. because of the way the traders are set up and because they are expecting to see more fed speakers, we are going to get a lot of short-term volatility but the net result is probably the long-term yield. most of the real action will be in the two-y

we are looking at a muted open, the rbn's decision will be a key to watch ahead of the fomc minutes. shery: cross asset editor and mark with our case today. a key decision we are watching out for today could be boosting their key rates by 50 basis points. this could be for the fourth straight meeting already, the big question is what he sees coming for the rest of the year. our editor is here with more on this. kathleen, it is expected, what happens next? >> let us look at what is expected. it is pretty impressive, it is in the vanguard, a global policy, tightening ahead of the fed, head of the ecb and others. 50 basis points, it will take their key right up to 3%, you can see it right here on this chart. it will be a total of 275 basis points they have done what would be the most they have done, the most aggressive since they started targeting inflation back more than 30 years ago. the moves will be more aggressive than what the fed has done. as we see them doing all of this and we expect to get to 4% by the end of the year, what else are they going to signal? if they have done this

. >> from the remarks of several fomc officials, it's clear they are inching away from the soft landingope. i think that's a good thing. in terms of definition of soft landing, what the fed wrote down , 4.1% unemployment rate would be the soft landing. i think the baseline is that job losses have to rise by one point five per-2 million by 2024. that's the baseline now. alix: diane swan was talking about ruth recession today. what is that? >> i have never learned that concept. it's defined as positive gdp growth but it's not positive enough to keep unemployment rates from rising. alix: we appreciated. -- we appreciate it. thank you so very much for joining us. coming up, why investors are bullish on earnings and what the fed is doing. we will talk to mike wilson next. this is bloomberg. ♪. >> the fed has said a lot of things that people already understood. the fed was going to take inflation seriously and in particular the idea that we will tolerate some pain on the labor market. alix: that's on the fed pain threshold. how ugly does the job market yet and what does that mean for the equi

we have more data coming through before the final decision from the fomc.esting to talk to esty d wek. just two sectors in the green where investors move in terms of defensiveness. health care gaining 0.4%. a little upside for telecom after the news from vodafone. they are trying to simplify the business. auto parts, banks and chemicals. autos off 1.6%. let's get the bloomberg first word news with laura wright. laura: in china a province as the heat wave persists. blistering temperatures and surging demand for air conditioning have caused gaps in air conditioning. companies including toyota have suspended operations in the region for several days. a power shortage adds another challenge for companies already contending with the covid zero strategy. a senior diplomat is reported to say that russia does not see a diplomatic solution to the war in ukraine and expects a long battle. moscow is investigating a car bomb that killed a daughter of a russian nationalist who had herself been sanctioned by the u.s. and the united kingdom. the bombing comes ahead of the

dollar, we are seeing weakness as we see bullish bets for the dollar seeing two-year high after the fomces. the kiwi also softer. we have the inflation number potentially even though it is unlikely to move for the bank of japan. we're seeing a little bit of weakness on offshore yuan trading given the myriad of headwinds we continue to see for the chinese economy. >> coming up in the next hour, we will assess the impact of china's slowdown on markets. this is bloomberg. ♪ >> you are watching "bloomberg daybreak: china."

what insights they will include into whether the fomc goes big on rate hikes next month or not. the rates on futures are holding soft, getting 0.3%. this may be due to what we are compared to seeing on the u.s., but also counterintuitive to what some of the stocks in asia did after that surprise interest rates cut from the pboc. it is clear that the investors are trying to maneuver that disappointing data print out of china, that surprise interest-rate cuts means that there were some economic troubles and that filters the rent has an impact on global growth worldwide. jackson hole brought the next catalyst for some of the stocks in the u.s., but also treasuries. if you look at the ftse, getting some 0.3%. -- gaining some 0.3%. iron ore under pressure. gas pretty much under changed -- unchanged. we look at the rhine river and the global water level of that. the problem is also economically, if you have a barge or some of the ships that have to go through the rhine river, you need to put less weight to pass onto much shorter water levels. overall, we look at the global impact not

the fed hedge, fomc will slow rate hikes but noted risks of tightening too far and becoming entrencheda downgrade, a power crunch and covid lockdowns could weigh on demand. the combination spells risk off. european stocks struggle for direction. across equities, the mliv blog on the bloomberg terminal is extremely helpful. congratulations for keeping us entertained in august. the talk about whether the bulls or bears are right when it comes to the key catalyst next week, starting on august 25. if you look at the consolidation in global equities across the world, it has had a huge impact. they argue from early june. the dax, everything else flat. the ftse down .2%. let's look at the sectors on the move. there has been volatility in the tech sector because of the earnings in the u.s. we also had retail sales in the u.s. the latest from walmart, better-than-expected. not flowing through to europe. we have auto parts gaining 0.1% and banks down 0.6%. the minutes from the federal reserve july meeting says they may need to cool off rate hikes. they made it clear they need to push further int

neel kashkari says the fomc is committed to slowing inflation to its 2% full. let's take a look at the futures. let's go back often to what we thousand asia. we have the risk of recession has cooled expectations of how sharply the fed has to hike rates. this is after july rebounds of stocks and bonds. happy august, everyone. european futures a bit on the downside, but not huge. it is also the s&p earnings season. investors on the geopolitics front monitoring house speaker nancy pelosi's trip to asia. then we look at some of the currencies. the british pound at 1.29. the euro at 1.02. this week, it is all about the bank of england. they don't -- they joined several institutions that have been raising interest rates. and looking at commodities, iron ore getting a touch with brent unchanged. let's also look at across assets check. 10 year yields. it is interesting to hear kashkari say the fed will do whatever they can and whatever it takes to keep inflation under control. we are also seeing pressure from the s&p futures, down 0.8%. in europe, a lot of people are o

bloomberg guests have been reacting to the bumper jobs data and what it means for the fomc. >> this is the payroll pushback. >> there is a path to be had to a soft landing that the fed so badly wants to engineer. >> we are not at neutral. the fed will have to do more. >> it's clear that they are on a path to continue to raise rates. >> they are not going to be able to pivot as aggressively. >> we had hot inflation on the one hand and fears of imminent recession on the other. >> the market thanks the fed will make yet another policy mistake. mark: joining us now is tatjana puhan, deputy chief investment officer at tobam. does this kill off any debate about the pivot from the fed at least in the near term? tatjana: actually it's not surprising. my call for some time has been that the fed will hike further and stronger than the market expected. and that there is no real reason for the fed to bring down rates in 2023 but they would rather stick to the policy of raising rates. from my point of view, they will stay on the rising path in the months to come. tom: where does that leave the 2's

especially when you have the likes of neel kashkari who want to be one of the most hawkish in the fomc. rishaad: and you look at the bond market, we had spreads between the 2's and 10's inverted by 58 basis points. that has changed right now. the deceleration in the growth rate of consumer prices is not by that much, one has to say but, it establishes a half-point rate increase for the september federal reserve meeting. we were all looking forward to another three-quarter--point hike. but we are not out of the woods yet, are we. interest rate increases take time to filter through. it takes time to get information down, doesn't it, ultimately? david: yeah. it is 18 months, 9-18 months on the lag in monetary policy. the last time we had inflation at these levels was 19 months in 1981 to go below 3%. obviously not a perfect comparison. kathleen hays, our global economics and policy editor, here to talk us through what stood out in the data, and also the commentary coming out of the fed. kathleen: i think when anybody saw the headline, it fell much more than expected, down 8.5%. who doesn'

the markets i think are caught between the fomc minutes from yesterday and the jackson hole meetings next week, trying to decide where they went ahead. to give us a sense of both of those because he cover the minutes yesterday we welcome bloomberg international economic and

given the fed speak we've heard after the fomc meeting. sonali: thank you so much.for guy and myself. coming up next is eric cantor, perfect person to talk to on a big political day on balance of power with david westin on television and radio. guy: i'm off to radio, on the cable we will be discussing that huge inflation risk we had out of the u.k.. a 40 year high for u.k. inflation. it has a 10 handle and a massive impact on u.k. politics and markets. a significant repricing higher of the yield curve today. we will discuss that with marcus and what's happening with the energy crisis we are facing in europe as well. we dig into those numbers and a little bit more detail. we will think about looking ahead for wednesday, an interesting day. lots of things happening. great stuff today, thank you very much indeed. this is bloomberg. ♪ announcer: from the world >> since january 6 that i will do whatever it takes that donald trump nowhere again gets anywhere near the oval office. announcer: to the world of business. >> transitioning to our needs to get to that more stable

we have the fomc at the end of july. and right away, the fed came out and said hold on. misunderstanding. that message, i think is quite clear. as you point out, in the wake of the july call, the data on inflation, they are saying again we are not going to determine that. knowing the fed knows long -- how long we will tighten, we don't know how the downturn will be. we may get a recession. don't know how quickly inflation will come down. i think the equity market is pricing perfection. it is a razors edge. also, the fed i think are doing a great job in navigating the treacherous waters. but it is not going to be able to snap your fingers and get inflation down 2%. i think the fed is being upfront about it, saying this is a difficult and long road. caroline: encz not just for the fed, of course the federal reserve is central bank seemed as well. but we have seen the bank of canada be very hawkish. the bank of england, what america having to follow suit. mexico used to be the next one. i'm interested in what this means in terms of the rush for the rest of the world and whe

this is a record of an fomc meeting that transpired three weeks ago.e unlikely to deviate much from jay powell's tone at the subsequent press conference. but you are right, there is a kind of tug-of-war or disconnect between markets which believe that peak hawkish has subsided, and fed speakers who are saying we never said we are done, we never said that. somewhere there is some middle ground there. if the fed has overtly shifted to data dependence, then a lot has been on the soft side. so what data are they watching, and it doesn't have to be a dovish pivot, it will be a pivot of some kind. dani: dan, thank you very much. speaking of which, let's take a look at some of the key things we will be watching out for today. in just under an hour's time we will have key cpi inflation, that is expected to have accelerated again in july to 9.8% from the month prior. the tencent second-quarter earnings, juliette saly was just talking about that. we will also have u.s. retail sales followed by business inventories. seven.pm u.k. time, investors will get the minu

fomc member esther george told berg that they have the destination to raise the rates had. >> we have more room to go. that would bring those rates down quickly and i have seen that in some of the forecasting, but that is remarkable to me. that would have to whole -- hold, and it could be well over 4%. but he will not know that until you begin to watch the data. tom: we are joined now by joseph little, hsbc global chief strategist and kristine aquino. kristine, let's start with you. we heard the hawkish commentary from bullard and esther george. to look through this? -- do the markets continue to look through this? kristine: absolutely. that will be a determinant of the fed policy going forward in the signal we get there. it is interesting, the commentary. they are emphasizing the direction as higher but they cannot seem to agree on how high it will get. it is tricky, but that is the specificity in this point in time that markets are looking for. there is a risk that if powell does not deliver that, there is room for disappointment. tom: joe, what is the potential for than negative ma

moments away from the latest release of the minutes and the fomc, of course, how hawkish are the sentiments? we have seen bond yields creep higher, all of this as we await to digest the nuances in the previous meeting and how it pushes us forward. let's get to bloomberg's international economic correspondent michael mckee. michael: well, you preview the minutes and you have to feel it is a

liz cheney loses the election and the latest fomc minutes. i am sonali basak with guy johnson to. . there is more to come on the inflation front. guy: but we are seeing numbers hold up relatively well which is confusing me. i am confused about everything. i am confused as to why we are talking about meme stocks. but it does combine with the shopping story with bath and beyond. and i'm confused in the way the consumer is holding up. spending money despite the squeeze on income. you are smarter than me. have you got a handle on what is happening? sonali: have about you be the bull today and i will be the bear. with bloomberg intelligence expecting inflation at 7.5%, are meme traders buying stock? guy: there seems to be some evidence of that. that comes to the question of the day. bed, bath & beyond, is the consumer spending beyond its means? let's keep that question around and tried to get to an answer. international economics and policy correspondent mike mckee over in new york. andrea also joining us in london. i will start with her. i'm confused. the consumer is holding up. there a

the fomc member esther george told bloomberg it is important to clarify the destination that rates are heading to. >> we have more room to go. we would bring the rates down quickly and i have seen that in some of the forecasting. it is a bit remarkable to me. >> over 4%? >> could be over 4%. i do not think that is out of the question but you will not know that i think until you begin to watch the data. manus: you will not know until you are there. kathleen hays did the interview in jackson hole. thank you for staying up late for us. it is a clear message. that destination is significantly higher than where we are now. >> it's also very important that esther george said it is remarkable that they are going to start raising rates. at least until recently, the quick pick by the market. maybe it is a bit weaker. might have to pivot. mary daly, the fed president, just a couple of weeks ago, this idea that there is a hump that it's going to go up and start coming down, it just seems totally unrealistic and that is one very important point and this question about how much higher they may go,

headline number expected to duck below 9% from june but for now, if the meeting were today, and the fomc fed heads were getting together, give us the fed's thinking and what they feel they must do. >> if they were sitting around today, they'd say thank goodness we don't have to make a decision today because the next meeting is in september. you were exactly right, liz, these cpi numbers, the inflation numbers, in my mind, everything hangs in the next, say, 8 to 12 weeks on what happens to inflation. you know, if we start seeing some relief on the inflation front, we're seeing some signs of it, then the fed can maybe hard and the market might not be ready for that. right now we see some signs, gasoline prices coming down and i'm not convinced by it yet and i think the fed will need a lot more before they decide that they should pull back a little bit from this rate hike campaign they're on. elizabeth: john, i think that's an interesting point because you were the guy who just about a week and a half ago or so, you coined this term jobful recession. could you explain. >> well, you know, on

it only rivals when the bond market was pricing in 75 basis points ahead of the june fomc meeting.repricing is crucial, what you are seeing in this particular index. this measures bond volatility which has been on an uptrend since 2020, close to levels that we saw in march 2020. there is still a significant gap between what the market is pricing for the end of next year and the fed's projections. when you have that kind of cap come it means these swings are more, because repricing happens daily. tom: we have ignored fixed income. ira jersey joins us. when i see the five-years do what it did yesterday, that the minimum, i know that is unusual. why are we seeing these gyrations? ira: two things. number one is misinterpretation of the federal reserve, or the communication from powell was reversed with all of the fed speakers basically all saying we are going to be more hawkish than the market thinks right now. into that you have not only some liquidity but for liquidity overall. liquidity in the treasury market has been very poor since the federal reserve stepped back from its bond bu

. >> the 5% increase is at any particular fomc meeting ended the key fed funds rate will depend on the inflation outlook that depends on the assessment of how rapidly demand and supply is coming back into balance and supply pressures are being reduced. >> india's economy grew 13.5% in the second quarter. still, it missed economists forecast for expansion. particularly, in the vast services sector helped buy loser mobility restrictions. u.s. regulators approved covid boosters from a moderna and pfizer and biontech. concern is growing about potential new waves of illness in the coming months. covid vaccines until now have targeted the original covid strains even as different mutations emerge. global news 24 hours a day on air and bloomberg quick take. i am vonnie quinn. this is bloomberg. >> the u.s. justice department says white house records held in a storage room in donald trump's florida home may have been unsealed or removed before a june spi search. -- june spi search. courtney, they say they don't know yet. if they were, what sort of crime did the president committed? what does it

katie talks about how we have seen and easing, how much does the chair of the federal reserve or the fomc care about equities? mike: it depends. the fed does not really care about the equity markets going up and down. it is only when there is a systemic issue that the fed feels like it has to get involved. unfortunately, that has happened a lot in the last 20 years. the whole idea of the fed put exists. up to today, people were betting on that. i think what we are seeing is a lot of reaction in the markets to what is happening overseas. they have not been a lot of development in the united states. tings are looking bad for europe. -- things are looking bad for europe. we will get some voluntarily -- volatility. don't expect the fed to suggest it cares about the equity markets. but, they will -- powell will have to balance the idea of is there going to be a recession? you're looking at energy -- an energy crisis. how much of an emphasis does he put on inflation with the possibility of recession out there? guy: let me ask this question, mike, it is slightly tongue-in-cheek. does he listen t

but first, san francisco's fed president mary daly says she's keeping an open mind on the fomc's nextng. she's not ruling out a hike of 75 basis points yet. we hear from her next. this is bloomberg. ♪ haidi: san francisco's fed president mary daly said she's open to a 75 basis point rate hike in september, hammering home the central banks commitment to taming inflation. let's bring in kathleen hays with us, and, kathleen, it was such an illuminating conversation and semi-different ways, but from a monetary policy perspective, reaffirming. i love this idea that data focused, not one data focused. kathleen: i agree, it's small, but i thought kind of powerful statement because we have the cpi for july, the headline year-over-year number broke re-substantially, and then we get the producer price index. and it's down, the monthly number for the first time since the pandemic, and it seem like the perfect set up for her to say, yes, my baseline is 50 and that's where i'm ready to go, but we can listen now to what she said. mary: this scale, 50-70 five, does not just depend on a data point, e

i would be a little bit depressed about that they were still using fomc minutes to micromanage. i would be more encouraged if they came out, having seen the payroll data this month, if they came in at jackson hole say we have to get inflation back in box. we can only do that but putting some slack into the labor market. jonathan: that's been problematic. it looked like we were equating peak inflation with the fed hawkish nose. i'm not sure you can do that. lisa: they say it's still a fed call and the more the stocks rally, the fed will have to step in and do something to cause this to reverse and how much of this will be the reality over the next few weeks? jonathan: is this a fed call now and do they have to respond to this aggressive rally in the equity market? >> i don't think the market helps the fed. the labor market where it is, inflation may trend lower over the next 6-9 months stuff the wristlet problem because is not going back under 5% easily. i think the fed messaging and the problem is they don't have a choice. the inflation mandate requires action, more action in th

we thought there would be hints of that, particularly with mortgage-backed securities and the fomc minutesot seeing that come to the fore and that's something we're watchful of >> michelle, good to see you again. >> we obsess over interest rates. we don't talk enough about quantitative easing and the shrinkage of the balance sheet. >> a big part of it. >> see if powell addresses it at 10:00 a.m. >> we have two analysts pick their sides in the battle of the dollar stores, dollar tree versus dollar general and prove that not all stores are created equal. that's next. as we go to break, check out the crude stocks and royal caribbean and norwian uiegcrse line up 10% this week. "power lunch" will be right back finding the perfect designer isn't easy. but, at upwork, we found her. she's in austin between a dog named klaus and her favorite shade of green. it's actually salem clover. and you can find her right now on upwork.com when the world is your workforce, finding the perfect project manager, designer, developer, or whomever you may need... tends to fall right into place. find top-rated talen

probability of the recession and that's nothing to sneeze at, but it's not a slam dunk we have the september fomcons are for another 75 blips of an increase in rates and that could slow down growth even more ed, thank you very much. we appreciate your time today. always good to talk to you >> thanks for having me. >> we thank you. >>> a fresh start for clean start-ups. we'll take a look at how the inflation reduction act could impact green companies, this week's clean start is next we'll be right back. (vo) give your business an advantage right now, with nationwide 5g from t-mobile for business. unlock new insights and efficiency, with leading ultra-capacity 5g coverage. t-mobile for business has 5g that's ready right now. in the next minute... ...thousands of life's doors will suddenly swing wide open. 250 couples will need to make room for a nursery. (laughing) 143 people... yes! ...will get their dream job offer. nine retirees will decide to move closer to the grandkids. 52 people will go... yes! ...all in. this family will become... ...a dog family. and this family will get two bathrooms. an

done a lot of interest rate increase in a short amount of time nothing i've seen in my time on the fomc i think we should still expect some of that policy will work with a lag we've seen it hit the housing market pretty quickly. i think its full effects may not be seen for some time. >> we need to get to a restrictive stance and then see how things turn out. we don't need to rush way up and then way down. we need to go up and sit for a while and let things play out. >> joining me now david wesle at the brookings institution. a lot of people think the fed is talking tougher than they really intend to be are we going to get some tough talk, do you expect, over the next few hours >> i think so. i think that's wishful thinking for some people in the market that the fed believes it's won the war against inflation. it will be freaked out if the economy slows too much and some people are predicting rate cuts in 2023. i expect without any inside information that powell will emphasize his priority is bringing down inflation and they will keep interest rates up until they make progress on that go

he's an fomc voting member this year thanks for being here. we've been to st. louis.seball. we go way back you're a "squawk box" viewer >> yeah. a >> and would you say you're a lies maniac? >> i follow anything, you know, that's tracking the central bank you guys -- >> you're starting early with the tactful answers. anyway, it's great to have you here we're not in a recession, in your view, and we may be able to avoid a recession. >> yeah, the, as the chair said, you know, we're not in recession right now. we do have these two quarters of negative gdp growth, to some extent, recession is in the eye of the beholder. there is a dating committee. and that's really bob hall at stanford, so he makes the call but with all the job growth in the first half of the year, it's hard to say that there was a recession, with a flat unemployment rate at 3.6%, it's hard to athesay there's a reces. i think the first quarter showdown, negative gdp was probably a fluke but the second quarter was more concerning, so i'll watch that carefully. now what i think is going to happen in the sec

. >> to my mind it comes down to fomc versus fomo, everybody wants to get out.f you're on the jersey shore eating smash burger, this economy is deep. people want to go out and stay in place, you can't get a verbo, can't get an airbnb. that's what worries me, the chasm, the yawning gap between 3.5% unemployment, which is grand and 9.5% inflation. the fed on balance will be given fodder to hike the heck out of rates. maybe we should have forced down a full point. maybe we need to telegraph to people we're still on balance. and that has people worried about a manufactured recession. if the economy doesn't fall into recession on its own, the fed might have to tip it into recession to save it. >> he brings up a really important point. you cannot look at the u.s. economy like it's one thing and that's the mistake we continue to make. we've got a divided economy. we have the rich and the poor before covid and it's only gotten worse. so the pent-up demand he's talking about, people looking to go on trips, spend money, renovate their houses, that continues to happen in a