lisa: how splintered is this fomc? chair powell has done a good job trying to keep the sense of unity. that broke down this time in a big way. not only did we get four dissents including three from nonvoting members but there was a sense he was struggling to make sense of the very non-consensus on the committee. i want to understand who holds the keys to what happens next? who has the model the market can hook their teeth into? jonathan: where you think they are now? q1 worry about inflation, turns out to be a head fake. q3 worried about unemployment. write about the labor market. all of a sudden it feels like they have shifted back to inflation going into the new year. lisa: i don't think there is a consensus. that is why i think jay powell gave a very confusing speech that did not answer the question of why would you be wrenchingly up expectation -- larger be ratcheting up explain -- ratcheting up expectations for inflation -- this did not make sense but he was contending with the fact people were using a different m

tomorrow's fomc decision.ts from general mills, nike, and fedex will supercede and be more important than the fed decision, why? >> well i think the fed is making it up as they go along. ceo's on the other hand have to get it right because they have more money and the investor's interest at heart. we'll find out whether or not consumers are still going down market. we'll find out whether the wallets are still stretched and what the digital economy is really doing to our world. chairman powell has no idea about these things because he's playing with academics in a model that i would submit is badly broken. charles: you know what? most of wall street either. every now and then listen to a conference call, read the data. i mean golly. it's so crazy. >> exactly. charles: continued success, keith you're really killing it thanks a lot man. thank you charles. charles: folks, you heard it yesterday. president-elect trump vowing a new golden age for america. my next guest says buckle up because it's also a golden age f

. >> i think the fomc will down cut by 25 basis points. >> the important thing is the fed has room tout. >> when we head into next year, we could have shots providing trade or fiscal policy. >> you could see the fed implicitly signal pauses. >> we rounded out the inflation data up for this year in an ok place. >> hopes that inflation picks up again. that to me is the biggest risk. >> inflation is, if anything, bending up a little bit. >> they will be cautious and rightly so. >> they will have to look with one eye going on the economy right now and one i with what might be coming in terms of policy going forward. >> this is the irony of this market at this very point. dani: that you could have traders pricing in a near certainty that we will get a rate cut next week. 97% odds is where future pricing is that we will get a 25 basis points.. you look at this, a 10 year yield which has been rising. it is not clear on this chart itself but we are up 20 basis points over the past month. we will get a rate cut maybe next week but what happens in 2025? do we get a hawkish cut that puts us on a

not say anything about his own projections regarding the administration but he said for some of the fomcs who put in their projections, they were folding in some projections about what the next administration's policies might mean for the u.s. economy. he said some also did not and some did not say anything. certainly there is somelement of the policies or anticipation of what the next administration's policies are going to do to the economy in the sep projections. >> what does that mean for rates next year? >> it means the fed is going to be cutting 50 basis points less than anticipated back in september meeting. this is not a forecast but this is with the fomc participants are thinking right now so that is a slower pace relative to what markets have been pricing in which is four, maybe five cuts next year. the fed is talking about two it is a much slower pace than many of us expected. >>>> does that suggest the economy is cooling a thaad? >> no, they are cutting rates. the thing is the economy is not growing as rapidly as when it was recovering from the pandemic. . imagine falling into

i think the fomc will be cautious and rightly so.een people pile into money markets and it is a risk-free yield. what you have seen is almost $2 trillion into money market funds from the lows of this year alone for nearly $7 trillion. how much of this do you expect to just stay given what you expect from the federal reserve? deborah: our expectation is 90%. maybe there is 10% that sideline cash if they are enticed by the equity market or some other asset allocation. quite honestly if yields have three or four handles for a portion of 2025. there is no reason with it being a very low risk product that it does not have appeals. it is not just one sector. the retail trade into money market funds drove the bus in 2023 and the beginning of 2024. institutional has kicked in in the second half of 2024. we think both of those sectors will continue to be strong from an asset standpoint. dani: in the summer there was a concentration that the reinvestment risk is coming. and if you are not further along the curve you will be missing out as yiel

contrarian risk and could help to to explain why you saw i such a negative reaction while the december fomcference was going on. i do want to point out though that, you know, there's been so much attention on the resilience of the market this year and how many record highs there were. but there's been really a tale of two markets in 2024. the first half of 2024 you were so dominated, the market was so dominated by the magnificent seven, it kept the cap-weighted indexes afloat, but there was a lot more churn and rotation underneath the surface. then you saw broadening out from mid july up until the presidential election. but the point from the election going forward even before that selloff that kicked in with the fomc meeting, you had the market still looking great, the market, but the average member maximum drawdown in the nasdaq had hit bear market level declines just from election day forward to the point with where you and i having this conversation. so i think to really understand what's going on in the market -- i know i keep doing the air quotes -- requires a lot more depth of analys

fed chair powell said caution is reigning at the fomc when it comes to policy make. listen to how he put it. >> some did identify policy uncertainty as one of the reasons for their writing down more uncertainty around inflation. and, you know, the point of that the unis serbty is it's -- uncertainty is it's kind of common sense thinking when the path is uncertain, you go a little slower. it's not unlike driving on a foggy night or walking in a darkroom full of furniture. you just slow down. so that may have affected some of the people. but there's a range of approaches on the committee. liz: yeah. well, the range, the median range, is what has the dow and the nasdaq and the s&p falling. look at the dow, down 638 points. the low of the session, a loss of 641. we are right there now, folks. let's bring in some voices who understand all these movements, asset management chief economist, market strategist and fed critic peter schiff and global fixed income head andy brenner. andy, the bond market is gyrating in a pretty dramatic way. what is the message here? >> this is

fomc participants, these are some of the assumptions they had, uncertainty about inflation.lly, you know, not a lot of uncertainty about it, right? i mean, inflation, rather. and now all of a sudden inflation, everyone's sort of worried about it. this is just a 3-month change. those are dramatic. now, the risk is more inflationary. same sort of thing, no risk and then all of a sudden are risk is through the roof, you know? what are the tea leaves? they're supposed to have the best out there. and then there's this, so in september they thought that gdp would be up 2%, now 2.1%. that's not a big difference, right? so why the significant differences in inflation from 2.1 to 2.5? and the fed fund rates, i think this scares a lot of people, particularly those hoping for a lot of rate cuts, from 3.4 to 3.9. again, that's a dramatic shift in a short period of time. but here's my progress, i'm really concerned that -- pri mob, i think they're going to hurt people who are already hurting. the bureau of labor statistics that puts out the cpi put out ap annual report. in september this

after your last three fomc gatherings the best action came with semiconductors, smh made almost a 4% move pretty significant, technology did sort of well, silver made pretty big moves and then banks, large and regional banks all reacting. of course getting back to the semiconductors, the chips are probably going to have the most significant reaction over the next 24 hours. the rest of today's session and tomorrow because micron reports after the close and that stock has been acting amazing. of course that means a disappointment could actually upend this market so let's bring in chief investment officer nancy tengler. nancy? first and foremost, the market, here is the thing. over the last two years since this market rally began october 2022, there have been periods of time when it rallied on the assumption of a whole lot of rate cuts and those assumptions went away the rally stalled and kept going up. how much of this rally do we need to have the fed priming the pump for? >> thanks for having me charles. i don't think we need it at all. i think the market, we're getting a reaction tod

it sounds like cpi will be probably more critical to that december 18 fomc decision. speaking of jay powell and the uncertainty over what is to come, he did say he expected good working relationship with the trump administration, even as he resisted gaming out with trump policies might mean for the economy and inflation. where do you think something like a 10-year yield should be trading given the situation we are in? kelsey: the range right now is around 4% to 4.5%. prior to the red sweep i would have said the range is around 3.5% to 4%. the reason the range moved higher is because primarily of term premium. it is not necessarily that it is 100% clear we will get a lot of inflation or growth. just the uncertainty alone warrants a slightly higher yield in the future. i would say in terms of the policies for next year, it's a mixed bag. what we're are focused on is not only what gets done but this timing and sequencing. do they prioritize tariffs before tax cuts or tax cuts before tariffs? that will be important for the market to understand. scarlet: what is your asses

from one voter but the dot plot shows that she was joined by three others, meeting nearly 20% of the fomc had their hands raised for the fed to cause their interest rate cycle yesterday. we saw in the sep that a good chunk of members saw inflation risks as weighted to the upside. powell claimed he is seeing a new phase of the cycle. that is fedspeak for a fed on pause next year. let's talk more about the dot plot. not only did we get that one dissenter. she was joined by four others. when it comes to 2025, 1 fomc member did not see a cut next year, this hawkish message rattled the market. tom: talk about the market reaction yesterday, it was pronounced. >> especially in the equity market, it was one of the worst post-fed sessions for the s&p 500 we have seen in some time, down nearly 3%. it was a shocking move in the dollar, we saw a big about of dollar strength, which is surprising because the market is already long dollar. to see the dollar move higher another percent after this decision was very surprising to the market. we saw that reaction in e.m., the brazilian real hit fresh lows v

it ties to the fomc response reaction. fomc kind of rides out for a bit, but when you have a 10% drawdown, it tends to reverse course. that communicates. it feels like 2018. 2018 we had hawkish fed, 10% selloff in the s&p 500 and them he got to january, and powell changed his mood music quickly and public statements, and we had most of the selloff come back in the first part of january. that is the pain threshold where you get members responding and they perhaps change your language but it is difficult because macro data supports a much more hawkish fed. a lot of people join this in a race to 4% once trump was elected and we are now pricing that pretty much perfectly in the rates curve, so it could be the case. the risk reward as we price and more cuts than what is now in the market. i think we should be pricing in a cut, on cut by june and march is around 50/50, so we should see some steepening on the back end of it. lisa: we've talked about whether it is the tariffs or whether it is the donald trump risk to a weaker euro

investors are eagerly awaiting the fomc decision and the jay powell news conference tomorrow. here is how federated armies is approaching the trade. >> we expect short rates to come down come along way to stay where they are. that means shorter duration fixed income, one to three year fixed is in the sweet spot of total return. we expect this market will brought it out and shorter duration equities will see relief as long rates stay high, short rates come down. we think that yield curve steepening is the big market story of 2025. sonali: tcw is still betting the fed's elevated interest rates are about to crack the economy, even though that trade so far has not paid off. here to explain is michael mckenzie, who wrote about a tcw flagship fund. brian whalen, the ceo of the fixed income group, has been sticking to his guns, why? >> tcw believes eventually they can keep rates high at least for another year and then eventually the economy will start to crack. there are signs with subprime borrowers, weakness in commercial real estate, even today's retail sales were not as strong as

extreme fear and the extreme eternal sell-off happening for two weeks and the extreme reaction to the fomc. here is the good news i've got some of the best in the business, to set the stage for 2025, liz ann saunders on deck and meanwhile the mag7 riding to the rescue yet again, just like yule brenner, why can't wall street live with that? i'll ask jim bianco, plus if you read the headlines trump economic plans worsen inflation. well i've got a special guest coming armed with an 80 page report that says it's the exact opposite and you don't want to miss my power panel out with dei in with meritocracy and also why do women live longer all that and so much more on "making money." breaking news. we interrupt these animal spirits to report that the fear and greed index hit its goal into extreme fear zone. so break out the champaign. i mean, think about this , right? the market stumbled this week, both professional and retail investors though none of them are running for the hills. in fact however, we have to be honest, right? there has been significant carnage in this market. think about this

>> sure, so this is the projection from all of the governors or members of the fomc and right now, as of september, the projection for the end of 2025 was for four rate cuts in 2025. i think the markets now closer to three rate cuts, so just given how strong the economy has been, how sticky inflation has been, i think that we're trying to price out a little bit of this , you know, really accommodative fed, so i think that's where the attentions going to be at next week's fed meeting. charles: i've got 90 seconds let's cover two things. i love your note when you mentioned m&a. its been a long time. we said merger monday. turns out the headlines are building up in the last week. patterson $4.1 billion deals, of course walgreens and talks with the private equity. what does this mean when we see a pick-up in m&a why is that positive for the overall market? >> so i think, you know, from an m&a standpoint, just that activity really provides a little bit of a floor to valuations, right? and a lot of companies can be attractive in this environment in which rates are coming down, regulations a

in our summary of economic projections, fomc participants wrote down their individual assessments of an appropriate you path for the federal funds rate based on what each participant judges, to me the most likely scenario going forward. the median participant projects that the appropriate level of the federal funds rate will be 3.9% at the end of next year and 3.4% at the end of 2026. these median projections are somewhat higher than in september, consistent with the our firmer inflation projection. these projections, however, are not a committee plan or decision. as the economy evolves, monetary all policy will adjust in order to best promote our maximum all to best promote our maximum employment and price stability goals. if the economy remains strong allif the economy remains strong and inflation does not continue to move sustainably toward 2%, we can dial back policy will restraint more slowly. if the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy more quickly. will policy is well positioned to deal with the ri

. >> the longer that the fomc takes to achieve the 2% target, the more risk i think comes around those expectations being unanchored. >> 2% inflation would be really hard. >> we are anticipating more cuts next year. >> i think it's important not to anticipate anything and to wait and see how this unfolds. sonali: taking a look at the volatility on the short end of their, the two-year yield this week, we have been paying attention so much so the long end, we lost track of what is right in front of us. we saw the two-year shoot higher at one point this week and you saw it hit above 435 before dropping back down to end the week below or hundred 30. let's flip the board to talk about the two-year as related to the long-term as well. the treasury curve steepen to and at one point it steepened to the most since 2022 and you have seen it really move in one of the most drastic fashions so far this year. the problem is investors are being met with a bear steepener and we will talk about the ramifications of that later in the show. sticking with the fed right now, mary daly joined us earlier, em

after the fomc meetings november december the statements more anodyne he walked out in the press conference gave dovish guidance of great hike rake cuts were comic and a massive ease of financial condition. by doing that what happened? the top 20%. what i mean higher for longer. he hurt biden chances. re- accelerating economic growth. they could have been cutting rates. but they are not. it won't be a slowdown in inflation because rates get cut. it could be an economic wubble. quickly sit economic wubble maybe a quarter of negative growth or something like that. quick some kind of a slowdown. i think it will be an economic slowdown. in the administration excellent tricks up their sleeve just to see probably 100 or 150 billion come out from the covid employee retention check. this checks are going to conveniently start getting mailed out next month. >> fascinate using student loan forgiveness and a variety of other administrative measures assigned to help the bowie the economy. >> him back to the younger voters have really started to y turn on president biden. i've seen soment of the numbers

we had the dip post fomc and i think we have had a lot of santa rally and the stuff that went on with the budget. people have to digest what does it look like in the new year with president trump and musk and how is the economy going to shake out and that is maybe we get the santa rally but come early january will get a lot of volatility. annmarie: so you think the market has baked up the good stuff with trump. peter: you go back to post election everyone was worried about taro's but then the consensus came it is just a negotiation point. he tends to like volatility and chaos and so the more it gets complacent the more he will up the ante. annmarie: what to think about sequencing. peter: as a get out there, he is going to be looking at what can be done. anything that can be done executive order, look for it to be done and then we are already seeing progress in terms of immigration. he has already started work with the new york city at mayor eric adams. when he doesn't get those winds you'll see it more chaotic. annmarie: what the market is really looking for a tax bill. when you start

district and we are gathering information from our constituents and bringing that information back to the fomcen though it was 100 years old. >> where is your neutral rate, 3. 5% to 4%, a full percentage point from where we are? >> i put it closer to 3%. to my mind it has gone up a little bit. it has gone up a little bit, but i'm not willing to say it has gone up that much. >> how fast do we need to get their? >> we can take our time and adjust as the economy gives us more information. the most important thing, inflation is going to get to two and we are going to continue to have restrictive policy. >> in your mind, rate hikes are off the table. >> i don't see a reason for a rate hike. ico trajectory, change is down. >> thank you for your time. there you have it. hedging on a december rate cut, january rate cut, we could have one. we get you on that. julie: both made a lot of news the big news item, december rate cut is not off the table. strong economic data including of the jolt report showed more job openings. we will ask kenny polcari. rate cut not off the table? >> i don't think they shou

staying clear of any kind of political discussion, and certainly that was powell's stance at the last fomcmake sense for him to continue with that stance when markets have priced in a lot of policy from the incoming administration? betsy: well, you price in a lot, and people are putting their money on the table and have to include that. i think that the fed, we will have certainly some preparation by running different scenarios and testing them on their model. but somebody's stated policies and what actually they implement could be very different. i think they will wait and see exactly how policy evolves and then incorporate that into the forecast. scarlet: so what are you thinking in terms of what we will get in 2025? are we going to get four rate cuts? i've heard as few as one rate cut from different economists. betsy: if i were summoning own projections, i would have two rate cuts in 2025. scarlet: so that invites an interesting comparison to the 1990's. there was a period of time when the fed quickly cut rates by three quarters of a basis point in aggregate and move to the sidelines be

it's just a guest by fomc members, a snapshot in time. the fed is data dependent. i'm optimistic the disinflationary process will continue i believe that the fed ultimately will be giving us three to four rate cuts next year >> i'm happy that we had this sell-off on this side of 2025. i think it was coming on the other side of 2025 >> because of tax purposes >> you have to acknowledge there was speculative froth in the market we are sitting here right now, you have bitcoin below 97,000. i think that's actually a good thing. i think when you look at positioning in 2025, you have to kind of be open to everything. the one area i disagree with you on is the small caps i think when you look at small caps, you say to yourself, why do i need to go there when i could stay high up in the equity size class with mid caps and large caps they give me all the exposure i need to the common themes that are strong in the market right now like artificial intelligence and cybersecurity. then looking at small caps, the composition of them, you are reliant on health care it's literally

and obviously we have the fomc meeting tuesday and wednesday.l be whether the fed shall cut. there's a 95% probability they will take 25 basis points out of the overnight fed funds rate and for a long period of time i have maintained we probably get the overnight fed funds rate within two years down to 2 and-a-half to 3%. i'm going to change that and say it's not going to get close to that. the overnight fed funds rate may go down to 3 # and-a-half, 3 and three quarters percent but that's as far as they'll be able to push it. the economy's doing well, better than i expect and animal spirits are rising with the advent of the trump administration. maria: why do they need to cut rates? why are we talking about two more rate cuts in 2025? >> it's up for debate. historically, when the fed begins the process of cutting rates or raising rates, it moves rates in a much larger direction and takes them much further for a longer period of time and i was going by historical standards but the economy is stronger than i would have anticipated, stronger than m

charles: so, the fomc gathering this week, it's no doubt it's going to be intense, right?n light to cut rates based on wall street consensus. everyone thinks it's going to happen but golly. going into 2025, there's a lot of confusion. in fact goldman just removed from their forecast a cut in january. they still see one in march, june, and september and the reason is, inflation is rebounding and it's not just the so-called sticky inflation folks, but we are also witnessing a rapid deterioration of the labor force at the same time, right? take a look yearly full time work year-over-year. that's gone negative. so the question is, has the fed just blown it? are we looking at a potential arthur burns moment, maybe double dip recession and another bout of inflation. i'll bring in chief economist daniel la calle. daniel, what do you think has the fed's attention most? i felt like they felt comfortable looking the other way at inflation that will drift to the target and focus was labor. powell drew a line in the sand, and 4.4 which i thought was relatively low. where do you see th

you do not want and fomc that thinks exactly alike.ieve that what people are looking like is the fact that now the world is more uncertain and people are debating and bringing in their views and that is appropriate. when it was a pandemic and there was only one direction to move interest rates it was obvious everyone agreed. when inflation was high there was no disagreement. now you should expect more disagreement, more differences of opinion but they are always framed to the same thing. i would get inflation to 2% and keep full employment? jonathan: when i hear the world is more uncertain, i say that is not about the data, that is about the new administration. mary: i would disagree. we have risks we always deal with. housing inflation. right now there is a substantial housing imbalance in the united states. the models all say housing will come down but we are uncertain about that. it has not come down as quickly as the models would have predicted so that is an issue. the labor market and consumer spending and growth are much stronger

you are on the fomc for the first trump term, how different is this one?ent -- jim: it's a big advantage we've seen this movie before. the first time it was more uncertain. this time, you know that, how for president-elect trump, how he operates, the kinds of things that they consider most important. for markets it is basically a pro business administration and that carries a lot of weight. lisa: we are talking about the potential for signaling into next year, how far do you think the fed chair is willing to go at a time where the market has low expectations of having rate cuts next year? can he or would elect to get ahead of them and signal more restrictive stance? jim: i think the dot plot will do the job for the fed here, and it is three or two as the median number of rate cuts for next year. those will be spread out over the years. and there is a lower pace of rate reduction that come with this meeting. hundred basis points of three meetings. it will be nothing like that next year. i think it will set up a clear case for pause and january. that will gi

it's a big negative for chair powell and the fomc. look at natural gas prices. highest of the month and rising. we could see lng exports significantly increase next year. that could lead to higher inflation on energy services for u.s. cpi. another dollar story. it leads to higher inflation momentum in q1 and q2 and for europe buying more u.s. goods. it is a dollar positive story from both angles. katie: really appreciate you taking the time. jordan rochester of mizuho. some good news from american airlines experiencing a technical issue with all flights. that's according to a post from the airlines on x. it does not have an estimated timeframe frame but is trying to fix the issue in the shortest possible time. not what you want to be hearing on december 24. scarlet: i feel for the people who have to be at the airport this morning and are looking at this tweet or post. contending with what might be a very long day. there's at least in the new york area snow forecast as well. it just adds to the mix. katie: a 40% chance of snow. coming up in the next hour, we are

nela: we are starting to see there is a lot more disagreement on fomc then there was previously.ion was unspeakably hi, it was easy to see the path, as we get closer to that 2% target, we are seeing the opinion start to diverge, where is that neutral rate and how to get there? lisa: thank you so much, we will see you for a full hour tomorrow. morgan stanley put this out. i would love your thoughts on this. payroll incomes provide strong support for consumption. stronger than the 4.5% in the third quarter. we are looking at re-acceleration of how much people are earning and the hours they are actually working. dani: the big risk has been a restocking of demand. the policy that we might get. are we going to get policy that includes tax cuts, things that will allow people to have more of a disposable income. if you are seeing some of that happen, already seeing that in wage growth, what does 2025 look like then? annmarie: one thing we did here was he wants to focus on the first 100 days first. kind of what we heard out of the senate was immigration and taxes. the big question is whe

thursday and friday is when jay powell will talk to every fomc member.i'm concerned. i'm open-minded, i think i can go along with one more cut, but i'd be happy if we didn't move. and then we'd have a discussion, and i would go into the meeting next week with an open mind and prepared to listen. there's some meetings, again, i go into with a strong point of view. this is one where i'm torn. i don't think it's a no brainer. i think on the margin i would expect we're probably going to cut. but i want to have a real discussion and debate. >> rob, thank you very much. robert kaplan. >> good to talk to you, becky. >>> coming up, in the wake of the kill of the united healthcare ceo, social media has been buzzing with memes and even what looks like support for his killer. john fort joins us next to weigh in on the phenomenon. "squawk box" will be right back. with the l'or barista system. enjoy richer, bolder flavors complete with velvet smooth crema. for a satisfying moment unlike any other. business. it's not a nine-to-five proposition. it's all day and into t

vonnie: they were particularly happy last week good in the wake of the fomc decision.enchmark lower like tesla, meta and broadcom. looking at stocks today, he would not know. alix: we've got about 270 stocks advancing into hundred 22 declining, pretty much mixed -- and 222 declining. pretty much mixed. tech and communication services and health care outperforming. consumer staples, materials underperforming on the day. vonnie: maybe the christmas tree and mistletoe. alix: the tomato pesto pie, what is that? let's break down some more here with bloomberg's emily graffeo and alexander s. i've got to say the russell down by .2%, off the lows, but still underperforming. let's start with the gainers. let's go to emily. what have you got? >> the big news is honda. honda adr's were up 15%. the biggest jump since 2011 after honda and nissan signed a basic agreement to explore a merger. this would create a new historic force in the automotive industry and create a holding company to house the new entity. the two japanese auto manufacturers assigned a basic agreement for merger

we have operation chokepoint, the fdic, the fomc, monetary policy elite that took place as well a few years ago. there's the regulatory issues we have to take up. i will point out on financial services we have capital markets on wall street. with all the banking, big banks, small banks, insurance, housing, the federal reserve, monetary policy, it's a big space. we have a small team and representative to figure out what spaces we can get into. there are so many issues but instead of having 500 people i have five people on our team that does all this work. we have to pick and choose. we will take a look at that. >> host: let me get in rake n jacksonville, florida, independent caller. >> caller: one guy called it about testing welfare recipients. we tried that in the great state of florida and it was like less than 2% of the people didn't pass the drug test. i want to say you talk about educating the young, and in the last presidential election also republican candidates -- the department of education. what you say about that? >> guest: the point is making sure your bureaucrats in washin

. >> not every fomc participant, you'll notice a number of them in their sep suggested pause.re. i think that's a good thing. now, given where they are, they need to wait for demonstrable progress. >> what are the odds of the fed getting closer to thinking that they might have to actually hike? we were debating earlier a call at apollo, a 40% chance. >> i saw that. i don't think that's on the table at this point. and i think you got four or five big structural changes. they're going to change this discussion. you've got -- it's a substantial regulatory review economy-wise. you're going to have a change in energy regulation and the energy ecosystem. you're going to have a stated attempt to reduce or bend the curve of government spending which would be helpful. on the other hand, we don't know what they're going to do on tariffs. i have said publicly if it's tariffs on china, but you allow a corridor in north america, and you don't put tariffs on mexico, i think we can manage this tariff situation, but we don't know what they're going to do. and then the big thing for me is you

points of cuts in september, we expect fed chair jerome powell will use his press conference after the fomc framing of a hawkish cut could be coming this week. >> yeah, and fears the middle of the last year we'd get a dramatic melt-up. >> it's hard to argue financial conditions are asking for a rate cut now, stocks at a record high, it's interesting what's happened with cuts, steady climb up in treasury yields, more firm inflation data, doesn't necessarily -- with the fed cutting. >>> meantime with the stock market higher, etfs has seen $250 billion, breaking the previous record in 2021. wall street firms trying to meet the demand. now pivoting to active etfs over $250 billion of inflows to year to date. welcome back. congratulations. >> thank you. glad to be here. >> brought a huge crew. talk about where active sits right now in the year it's having. >> what's interesting, we launched the first mutual fund 100 years ago, it allowed individual investors to invest in the market. we celebrated the anniversary earlier this year, now we issued five active etfs last week, it's about taking exist

i think, you know, you pointed out participants in the fomc really thought that the risks and uncertainty had improved relative to the labor market, and it's because things have just gotten a little bit better. it doesn't mean the unemployment rate's flat and things like that. nonetheless, we're watching it closely. >> if the idea is no additional softening labor market is welcome here, what's to prevent that from happening if rates are still restrictive? >> so what i said is we don't think we need further softening to get to the 2% inflation. not that it's not welcome. we don't need it, we don't think. you know, if you had a situation where inflation's moving around by a tenth every few months, that's, you know, we'd have to weigh that against the fact that inflation has in recent months been moving sideways in the 12-month window. so we've got to weigh them both at this point. you know, for a while there we were only really focused on -- mainly focused on inflation. we've now gotten to a place where the risk to the two are what we think broadly, roughly in balance are. and so that's how

annmarie: was it appropriate that some members of the fomc took trump all of these of 2025 on board whileaw very clearly one dissent coming out from the new member who joined in as well as in for others that showed up in the dot plot. that tells you even within the fan then there is quite a bit of that independent thinking. and i think that there is still a lot known and unknown from this policy. the agenda from the administration, we also very clearly now that the deficit situation is not policy effectuated at the same rate or at the same magnitude. flatley insisted in terms of how the policy rate. very clear in terms of the foot pole -- the push and pull that is why the last cuts were not as clear, but i think the forward-looking market is slightly ahead of itself completely pricing out the fed at this point. scarlet: thank you so much. there is a two year yield option at 1:00 p.m. today. annmarie: markets are still open. i know everyone is excited about the holidays but there is going to be a bond auction today and we are back on tomorrow and thursday. scarlet: let's count you down to

. >> as we get closer to the 2% target, we will see the fomc started average. >> we are trying to maintainlanding in the fed has done an incredible job so far of doing that. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz and annmarie hordern. lisa: welcome back as stocks claw out of their one-day pause, a decline of .6%. annmarie: it is the lamest pullback. lisa: the biggest going back more than three weeks which is important as we head towards cpi tomorrow. the market once ago higher with 57 record highs. people wonder how soon before get a 58th. back to the races for the trump trade. there seems to be this euphoria hovering over markets that don't want to go down. annmarie: they don't. yesterday we had a slight pullback and a lot of this, maybe they are waking up for the tit-for-tat. a harbinger of what could come in 2025 when you have china probing one of the biggest american companies, nvidia. this morning there was some good news. small business confidence. everyone seeing a major shift in economic policy. the market continues to price in deregulation, tax cu

. >> the fomc will not cut by 25 basis points. >> we are looking for a fed that remain sensitive in termsy. >> we are trying to maintain a soft landing in the fed has done an incredible job so far of doing that. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: the federal reserve decision 31 hours away. we are counting down. equity futures on the s&p 500 down by a quarter of 1%. we have retail sales in america in about 90 minutes. 2:00 p.m. tomorrow afternoon we will hear from the federal reserve. we forecast the update to the previous forecast. a news conference with chairman powell 30 minute after that. annmarie: -- lisa: whether we get a sign. there was a huge battle over 50 basis points. it seemed like jay powell jawbone them into that 50 point cut. cavity message concern -- how does he message concern that maybe there is a fear of re-acceleration? annmarie: you have that with neal dunn or talking about concern going up. labor markets have been cooling. homebuilding stocks are underperforming. i see myself on the more cautious si

least from harry truman, johnson, nixon, all had a lot of influence on the fed's chairman and the fomc not going to change with trump at all. the other thing, remember, you have really a committee that has full discretion over monetary policy. one of the most important things, money and interest rates, are controlled at the discretion of the policy body. that means it is going to be subject to political pressure regardless of who is president. so that will be the case with trump, and should they find themselves in a situation they need to raise interest rates, trump will put a lot of pressure on them not to do so given his other plans going forward. so i don't think it's going to happen, and if it does, if he starts putting pressure on, powell in may of 2026 will be gone and looking who he puts in trump's place will be his priority, i suspect. >> trump has said that he doesn't really like high rates. he's not going to want high interest rates but also wants a stock market that gives him a really good great grade about how his administration is doing. that's important to him. those seem

it will be, you know -- some members of the fomc will look at it as a stalling out of progress that they'vein the deceleration core. if we get a 0.3 rise in the core it will be the fourth straight month and the prior three months you had gains of either .1 or .2. we've seen inflation reaccelerate a little bit over the course of the last couple of months here that i think it would signal kind of a hawkish cut by the fed next week, and probably dial their expectations back for how much easing that we're likely to see next year. >> maybe that's -- maybe that's warranted at this point. 2.7, kevin, is not 2, and it sounds like, you know, when we talk about most things, who is going to quibble with, you know, 0.7 of a percent, but that's like 35% higher than the fed wants and it's on top of what's already in there from, you know, when we were at 40-year highs a couple of years ago. so prices are still rising above what the fed wants, so i don't -- do you think that's -- do you think the labor market is showing enough signs of softening to where we need the cuts? the stock market certainly doesn't

fomc members upped their projections. how do you take inflation into your forecast?t rates aggressively and now there is more caution in their statement. that could pose a negative for oil as well. i don't think oil or energy will be inflationary in 2025 but it is obviously a risk factor. if the fed slows down its interest rate cuts, there could be ramifications for the dollar. the dollar has been fairly strong. oil is globally traded in dollars, so that could impact the price of oil. something that we will be watching ahead. romaine: i wonder if you could circle this back to the consumer, a lot of talk about gas prices. as of today, gas prices are about 40% lower than a year ago. it gets to the question of whether we see prices at the retail level remained where they are or maybe even go lower, or are there forces out there but we should prepare ourselves for higher prices ahead? patrick: for consumers, i think it will be a third straight year of the kleins. ever since 2022, likely to trend lower. consumers should not confuse that because we could see prices go up a

this time, a preview of the fomc meeting which kicks off today.cial media companies to remove graphic deepfakes. the coauthors of the take it down act, amy klobuchar and ted cruz from both sides of the aisle will join us here on "squawk box." do not go anywhere. it's time to feed the dogs real food in the right amount. a healthy weight can help dogs live a longer and happier life. the farmer's dog makes weight management easy with fresh food pre-portioned for your dog's needs. it's an idea whose time has come. z's bakery is looking to add a pizza oven, wi arissa's hair salon wantsd to expand their space, and steve's t-shirt shop wants to bring on more help. with the comcast business 5-year price lock guarantee, they can think more about possibilities for their business and not the cost of their internet. it's five years of gig-speeds and advanced security. all from the company with 99.9% network reliability. get the 5-year price lock guarantee, now back for a limited time. powering five years of savings. powering possibilities™. >>> welcome back t

do you think that that would hold today for this fomc? they're making assumptions on tariffs because they don't know what the administration is going to do. the difference is, the tariffs that were done in the first trump administration relatively small. the total tariff on imports went from 1.5% on imports to 3% of imports during the first trump administration. we are talking about much bigger numbers. 10%, 20%, 60% against china. it may be much greater. we aren't sure. is this a threat or will turn out in terms of substance? annmarie: we essentially have -- dani: we essentially have the incorporation of tax cuts and missing and on two key pillars, immigration and tariffs. i know that this is a sacrilegious question so you'll have to forgive me, but are the dots even useful this time around? bill: the problem with the dots is that you will have an unusually rosy forecast because it doesn't include some of the more controversial economic policies that could change the outlook with respect to growth, inflation, and productivity. higher tar

that is why i think it is the inertia of the groupthink on the fomc that it takes time for the committeer view and that is why fed speakers more recently have been switching away from saying it is a soft landing, we need to cut rates more, to saying we can proceed, we can proceed more slowly and jay powell saying we can proceed more cautiously. all of those things tell the market we should still be position for rates higher for longer which means in fixed income how yields continue to be a good strategy. jonathan: jim bianco joins us in the next hour and agrees with you. he says the fed cannot cut anymore. just around the corner. torsten slok of apollo. coming up next and the third hour bloomberg surveillance, we will catch up with natty a level of ubs, -- with nadia lovell, jim bianco, mohamed el-erian, and jeff rosenberg. the third hour bloomberg surveillance is up next. ♪ it's our son, he is always up in our business. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. w