plush kashkari the hawk. 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 see

-- the arch dove kashkari.out for me how perilous the moment is within the global economy. >> there does seem to be a synchronized slowdown now that is deepening by the day. we have u.s. pmi down. new orders, that is interesting because of course the strong u.s. jobs market has been a bulwark. in europe of course pmis are buckling under the weight of skyhigh energy costs. in age of the slowdown has been led by china. australia services contracted for the first time in seven months. the slowdown in manufacturing, it does speak to the impact of surging inflation and surging interest rates on growth. the global slowdown is expected to weaken as we head into the back end of this year. manus: and just in terms of neel kashkari, when i look at the language he used in his presentation yesterday, we are in a completely unbalanced situation. we can only relax. his concern is an un-anchoring of inflation expectations and he channeled paul volcker. he said we may need a volker style movement. this says to me the fed is fa

an interesting video from the office kashkari -- from neel kashkari and people were happy about the comments from jay powell. we also heard from the ecb officials, philip lane pushing back on the idea that we are going to get 75 basis points in september. the cac currently up 0.3% and the spanish ibex up 0.3%. you are lower on the ftse 100. you see iron ore dropping below $100 on top of concerns about demand for iron ore out of china. we know spanish cpr is coming in as well. -- cpi is coming in as well. i will get the tea when i get back to my terminal and can bring -- i will get you that data when i get back to my terminal and can bring it to you. the euro-dollar back below parity at 99. we will be talking with about that with our next guest. we can talk about oil prices, copper prices, but it is indeed what is happening in iron ore. the linkages to china, $97 for iron ore, down almost 5%, licking that expectation that we will get less steel production in china, so less demand for iron ore. we will break that story done for you across this our. let's get more from mark cudmore. you have be

kashkari stopping short of saying they want markets to sell off. he did not say that.e did a that the market are now listening to the fed. what are you hearing, bill? is this a market environment where you do not want to be holding risk? bill: well, we always are taking the risk of holding good-quality common stocks. how are you going to make your money? the fed is a year to 1.5 years behind where they need to be. we are in a very similar period to the 1970's where the demographics in the united states, the amount of federal funds that have been sprinkled into the system before they started tightening credit and a lack of goods and labor at attractive prices. we have got will we used to have cost push inflation and that is what we studied in college in the late 1970's. manus: 1.5 years, a dollar short, and a day late. how much more aggressive do they need to get on rates? is raising rates the answer? every noble low it who appeared on this show 10 days ago said the fed has got it wrong. raising rates is not the cure. bill: the history is the federal reserve has to rais

kashkari has now pivoted to arch hawk. he wants to climb at 4% and hold there. the dollar rolled down, by about an eighth of a percent, curb your inner bear, that is what i take away from evans and kashkari. the worst day since 2020 on the dollar, down over 4%, and the swaps market has abated 100 basis points. you are looking at gas futures up. this is a closed market yesterday, cash flows, -- at cash close, you can see the palpable sense of fear going into the winter. rwe mentioned independence is needed for supplies. let's get to the team. dani: we will get into the energy story. let's get to our team around the world. we will kick it off with michelle, who is covering u.s. inflation. manus: laura has the whole new world in disney. juliette saly has everything between cpi and michigan friday. inflation below estimates, the index rose half a percent, down from 9.1%. gas prices the main driver. neel kashkari says the softer reading does not change the path. >> the idea that we will cut rates early next year, when inflation is likely going to be well in excess of

you heard from neel kashkari and evans overnight, trying to play the optimism in the markets. we are not there yet when it comes to the fed pivot, but it is may a change of regime around the fed now. our guest was saying that post -gfc the fed would have leaned towards being more aggressive. this is a different fed, 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

i'm talking about neel kashkari, he is spending so much time defending his own words.esterday he made some comments but he did -- headline hear is what people looked at the quiet part that neel kashkari was sort of happy the markets were down on this news, on the powell's speech, however, here's the thing, neel kashkari was upset because some people actually went out there and said he was delighted about the market being down. so he felt compelled to set the record straight. he wanted people to know was actually happy the market took a dive. now people were understanding the seriousness of the fed. we get it. why did he go through so much. delighted and happy what is difference. one is adjective, feeling, showing great pleasure, the other is adjective feeling or showing pleasure or contentment. when people say to me is the fed going through with all of this? i'm not so sure. meanwhile as the fed is splitting hairs the market is making no bones about it at least experts on wall street are making no bones about it. they want the market to go much lower. look at this folk

shery: minneapolis fed president neel kashkari speaking in wharton, minnesota at the alumni club.weakening from the u.s. to europe and asia, reinforcing concerned that prices and the war in ukraine tip the world into recession. chief asia economic correspondent enda curran joins us now. these concerns are leading people to think that perhaps the fed will need to slow down. we have the chart on the bloomberg showing services slowing, not just manufacturing at we have the two-year yield taking a hit because of that. how concerning our the latest global numbers? enda: that doesn't seem to be a synchronized slowdown in manufacturing sectors around the world. in the u.s., weakness in new orders and employment. that is notable given how strong the u.s. jobs market has been. in europe, it is about high energy costs that the stock traders on futures are dealing with, that is weighing in on their activities. australia, the sector is turning for the first time in seven months, the big actor up being the slowdown in china, the economy. so the impact and the weight of rising inflation and int

we continue our conversation with minneapolis federal reserve's neel kashkari.you left off on the question of supply. when i was talking with two senators earlier, there was this debate about whether taxation on companies that don't pay a minimum level of taxation will have their supply hurt. so, in other words, you tax them, supply goes down, that hurts within inflation. what is your assessment of that? >> you know, over the long-term, that's probably true on the margin. people say that about raising interest rates. why raise interest rates, that will make it more expensive for firms to invest and that is going to not help with the supply side. that's

neel kashkari said something i think a lot of people are thinking. if we look ahead to the meeting coming up on september 21, the question is give me your 75. we know that this will come down a little bit but not enough for the fed. with that very strong jobs report, does that mean that the fed is doing more aggressive rate hikes? the speed at which it comes down will increase a lot. this is going to put a lot more squeeze on the economy. markets will feel it. all kinds of people might feel it. they are ready to go and he is certainly onboard. >> this will be starting next week. how this all plays out is the big question for the markets. we are considering a 75 basis point hike in the next meeting. >>, think anyone of them in jackson hole said they would not go forward. they'll put it on the table. they are all saying they have to be forceful. they can let inflation get entrenched. the meetings are held, the sessions are held. one of the ecb board members, we have to be forceful. i was really impressed and alley rand who i spoke to is the governor of

it is not surprising to me neel kashkari is saying he is happy.t also shows they have been trying to get a strong message across. this is not an accident. this is what they want the markets to hear clearly. haidi: is he liking the markets are starting to reel from a reality check? he will might like we will see tightening. some looking to offload treasury yields. look at the chart. typically when the tightening happens and the fed pulls liquidity, stocks will struggle. this is part of the broader plan to reduce the chilean dollar portfolio. -- the trillion dollar portfolio. the t-bills will be used as coupons below the monthly level. september will be the first month the coupons will fall below the new monetary authority cap. kathleen: a lot going on. let's bring in senior vice president at wealth enhancement group. great to have you with us after the hawkish speech. i know you have a conservative view as to how you look at your portfolio and how to position with the uncertainty. did jay powell's speech change your outlook and strategy at all? >>

i can tell you this, larry fink, neel kashkari, larry fink of blackrock, neal kashkari of the minneapolist, former treasury secretary were at the aspen institute and they bounced around the notion of 2% inflation target. neel kashkari, open line to fed chair powell, they are 100% committed to 2%, 100%. larry fink chimed in, why not 3%? what is so magical about 2%. he said no, it is 2%. if it is 2% and he said even if inflation down a little bit from -- liz: barry. >> we have a lot more to go. now i'm paraphrasing a little bit. that means there's a disconnect between the market as you see the dow is green and what the fed's going to do if they're going to do it, of at least two, maybe three 75 basis-point increases, that will slow the economy presumably, impact corporate earnings and lead to more market turbulence. there is a disconnect now. now maybe the stock traders are right. maybe they're wrong. i would ask your guests where they think this is going. is the fed, i mean, traders obviously believe, the market, jerome powell doesn't have the fortitude to go through with this. almost used

kashkari said he wants the fed benchmark rate by 4.4% by next year.is unacceptably high. >> the idea that we are going to start cutting rates early next year when inflation is likely going to be well, well in excess of our target is not realistic. a more likely scenario is that we will raise rates and then sit there until we get convinced inflation is well on his way back down to 2%, for i would think about easing back on interest rates. >> three quarters to 4%. shery: two -- vonnie: two former jp morgan employees have been convicted in chicago for manipulating gold rises. they were found guilty of using fake orders between 2008-2016. they will be sentenced this year, both men facing decades in prison. donald trump is refused to answer questions from the new york attorney general into an investigation into potentially fraudulent asset valuations. the president invoked his fifth amendment rights. that was in a deposition probing whether the trump organization manipulated asset allegations for more favorable, -- more favorable terms for bank loans and i

manus: kashkari the hawk, the fed doubts says the fomc is committed to reducing inflation to the 2% goal. future's debt but asian stocks point higher. hsbc has delivered a monster beat, $5.96 billion, way ahead of what the market estimated driven in part by the upgrade on interest rates. but they are beginning to build a defensive case against a major shareholder about breaking up the business. he was clear, united we stand. it will be three to five years away from a material event, this hong kong stock is up 2.5% after the results. in terms of headlines, there will be a material update in dividends. they find it hard to see any value to shareholders but they are listening to their institutional shareholder. they faced their institutional investors in hong kong face-to-face tomorrow. the smtp considered a worst-case scenario in the mortgage market, 6% of the loan market could be exposed to be written off. hsbc expects over a billion dollars worth of credit losses, up 400 million dollars net, hundred 42 million dollars in regards to china. lending is weak in hong kong and china. that's hs

kashkari is calling the rates concerning and says the central bank is committed to the goal of 2% inflation he says we have a long way to go listen in. >> we're going to do everything we can to avoid recession. we are committing to bringing inflation down we are a long way away from achieving an economy back to 2% inflation. that's where we need to get. >> on the economic front today, the july manufacturing data is expected to show a slight slowdown from june of course, brian, the countdown to the july jobs report this friday >> every piece of economic data from here on out will matter a lot to the markets and fed and inflation. so important seema, thank you very much >>> right now, let's get back to the markets and your money coming off the july run, investors looking to the fed we just talked with neel kashkari over guidance with the jackson hole meeting at the end of the month let's bring in gina sanchez who is a cnbc contributor. gina, welcome back you hear neel say we are doing everything we can. do you believe them? >> well, i think they are right now a dog chasing the wrong car. if a

i think, you know, if you believe the fed as kashkari pointed out is committed to 2%, there are many,many more rate hikes involved because we're still at 8.5% cpi. if you believe that they're willing to come off that to maybe three and four, well that's kind of what the market is saying right now. now, i don't know the answer to this, but if they're really committed to 2, that market is -- you're setting up people to get slaughtered. if they're not -- liz: doesn't larry feel there's a better way to bring down prices than monetary policy? charlie: larry was talking about broader thoughts during this thing about immigration we should ramp up immigration and other things to bring down prices and talking about wage inflation and how to deal with that. i think he mentioned the notion that we probably spent too much money in the beginning of the year in a fiscal way but, you know, getting back to the markets, and that's kind of where this got interesting because kashkari said, no, no, we're committed to 2%. he clearly said why do we have to be there? why can't we go to 3? i think, he didn't

kashkari said it was more likely to cut and hold. one positivefactor in the ppi report wholesale inflation up the pipeline is falling faster crude or unrefined products were down 3%, goods for final demand closer to the consumer on the pipeline up 0.2% the cpi and ppi could begin the counting for the fed towards the test of clear and convincing evidence if inflation is falling. it's a conclusion markets look to have made fed officials almost certainly have not. >> what does it mean for 50 versus 75 next time and 25 from the meetings there on out? i don't know if we're pricing in possible cuts early next year? >> reporter: we are. if the guys in the back would bring that chart back up you'll see that it still comes down not a lot of disagreement through the end of 2022 getting to that 3.5, 3.6% rate that's not where the disagreement rate is it's the cuts at the end the fed is really leaning against, down to 3.15. kashkari, evans saying more likely to hike and hold than to cut. they don't want to -- we're not going to go up just to sta

we continue our conversation with minneapolis federal reserve's neel kashkari. neel, let's pick up where you left off on the question of supply. when i was talking with two senators earlier, there was this debate about whether taxation on companies that don't pay a minimum level of taxation will have their supply hurt. so, in other words, you tax them, supply goes down, that hurts within inflation. what is your assessment of that? >> you know, over the long-term, that's probably true on the margin. people say that about raising interest rates. why raise interest rates, that will make it more expensive for firms to invest and that is going to not help with the supply side. that's true over the long-term. but over the short-term, the demand side effects swamp the slide sigh ede effects. when i look at your bill, my guess is over the next couple of years it is not going to have much of an impact on inflation, it is not going to affect how i analyze inflation, i think long-term it may have some effect. near term, we have a mismatch between demand and supply. and it

take back control, kashkari says the tighter monetary policy needed to keep inflation in check.estors look ahead to jackson hole. ukraine marks its 10th independence day, and six months since russia's invasion. there really just waiting for jackson hole. tom: you have kashkari coming out, and that speech yesterday, for him, it's got to be that inflation focus. that is a priority. getting back to that 2% target. where the rate hike lands in september, act inflation expectations and cpi out before that decision. mark cudmore breaking this down forces of the weakness when it comes to home sales and services , manufacturing also looking softer on the slowdown in the u.s. economy. benchmark down, .5%. the ftse 100 done 40 points. let's look at the sectors, just a couple in the green, now just one sector in terms of what we are seeing across the space. 30 minutes into the trading session, utilities -- basic resources down 1%. my comes to basic resources that we continue to look for china asteroid unfolds this morning about scrutiny in terms of real estate executives in china. a remind

bill dudley's over there, no kashkari is over there.ll of these presidents are uniquely different. this is an aerospace guide. this is not a phd economist hedging and all of that. he says what he wants. jonathan: he tells what he thinks. futures are back, up .9% on the s&p 500. i don't think he will give you the commentary on single day market moves. lisa: beyond. jonathan: he was lower about four basis points, 6% on the 10 year. elon musk sending and notice of termination of the merger agreement with twitter. the new letter highlighting additional reasons to terminate the merger agreement according to the filing. look at the stock price move, twitter down by about 2.6%. $39 in the premarket, 54.20 was the price and we are no where near. lisa: people expected this. it shows whether or not there will be a billion-dollar breakup fee that needs to be paid and what the damages to twitter in the meantime. a lot of people quitting or getting pushed out. tom: the market down about 2%. -- jonathan: the market down about 2%. tom: we covered that

and investors look to this week's fed minutes, including esther george and neel kashkari. 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 pu

neel kashkari after jackson hole. volatility and trade downs. best buy stocks still pop over 5%. we get the first read on labor market with job openings moments away. my cohost in london. welcome to bloomberg markets. this is a pivot on the headline from reuters that taiwan fired warning shots at a chinese drone. i'm not saying there is a correlation between the s&p. it is a fragile rally. anna: the context important. this action doesn't happen often. some more negative on the risk asset side. it didn't seem as if the rally had much confidence behind it anyway. this is the end of august. we have the fed ringing in our ears. alix: job openings and confidence. consumer confidence numbers as well. michael: the conference board numbers are up. gasoline prices have probably fallen. consumer confidence rises. the present situation, 145.4 and expectations rise. all across the board, good numbers. people's appraisals of the job market goes into this index. they expect an increase in jobs and incomes over the next six months. job openings, very interesting, go up to 11 million. this is a

jonathan: neel kashkari, the minneapolis fed president, over the weekend.very dedicated fed watcher is basically saying the same thing, that the fed has to push back against some of this price action. teachers right now softer, -0.2% on the s&p after a really strong rally after the last month on both the s&p and the nasdaq area the nasdaq just a little lighter , down 0.2 percent. yields up about a basis point, 2.6559%. euro-dollar middle of the pack in g10, positive 0.3%, 1.0257. tom: there's finally a real dollar weakness. you don't see it in some of the em currencies, but nevertheless an interesting tape and becoming more interesting off the data we will see on august 1. it is august 1 in singapore. it is the evening, of course. annmarie hordern knows this, or bloomberg washington correspondent become us -- washington correspondent, because they speak of the house and the united states navy, the seventh fleet in the indo pacific led by the uss reagan, the tippecanoe and oil kind of ship that refueled etsy. how is the -- refueled at sea. how is the united

and neel kashkari said the fed may need to do more. he is saying he wants to hike rates.flation was encouraging, but not time for a victory map. and looking at fed with the ow average forecast to rise to 3.80 that is a significant difference in the amount or in the direction with the fed hiking and cutting rapidly. fed officials seem intent on the likely outcome for the fed to ho hike and hold. much depends if inflation comes down to convince officials it is lasting and convincing we will have a chance to talk about this stuff next week we'll have several officials on thursday from jackson hole of course, it was made official yesterday. we knew this fed chair jay powell will speak at 10:00 a.m. mountain time. i guess 10:00 a.m. eastern time and 8:00 a.m. mountain time. melissa. >> he has to say the likelihood of hiking is low next year it is straight forward for him to do the jaw boning in the direct manner, steve what i think is interesting in terms of where the market stands with the fed is they see eye to eye where rates are going to be for this year. where the dispari

which are you in line with >> i would pay attention to what kashkari is saying the comments when they raised rates was over done. i thought the assumption we were going to, you know, back off on rate hikes and perhaps it is not 75, but it becomes 50 and trail off and start cut rates in 2023 or early 2023 was not likely look at where inflation is we have a negative real fed funds rate you look at what is happening to lower-income families which are suffering. the fed that's stay focused. i don't think that much has changed. we are getting clarifications. >> i guess the pace of rate hikes and inflation will be different. they take time to work through 9 to 12 months or whatever that time may be from raising rates to when it starts to impact the economy. i'm assuming we stop getting rate increases well before we actually hit inflation targets, no >> it is not -- absolutely right. if you are saying we're going to keep raising rates and, you know, some point they connect. 100% this is act to the lag and act with a lag it is just too far apart right now for the fed to consider anything clos

neel kashkari says the central bank is committed to slowing inflation to 2%. he told cbs the fed will do what is necessary to bring down demand. he says faster inflation is being driven by supply chain disruption and other factors. boeing is starting the week with the week with a double dose of good news. the aerospace company has averted a strike by machinist that would have crippled its factories. deliveries have been largely halted since 2020. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪ >> right now markets believe the end for what the fed wants, lower inflation, they do not quite understand what the means will be, tighter financial conditions. and our forecast we think the fed declares victory earlier. paul volcker did too. jonathan: that was vincent reinhart. he is not alone. this from bill dudley earlier this morning. he said this wishful thinking is unfounded and counterproductive. live from new york city with tom

neil kashkari of the minneapolis fed is making comments right now that are hitting the tape that work into the banking world. number one, he's encouraging the new leaderships and vice chairman area, barr, to be looking at more stringent bank stress tests. there's that. and then on top of it, he is saying it will likely take several years to get inflation back to 2%. we're just slightly off the session highs at the moment, but the 10 year yield has turned around in a tick or two and the markets are reacting to what he's saying here. weigh in on it. there's so many really to unpack when it comes to inflation, and i know you have bigger loan originations for personal loans. do you -- can you deduce if people are needing more loans to pay for high inflation? >> yeah, what i'd say is our members need our help now more than ever. high interest rates, declining economy, the fact that inflation is so high is causing people to rethink everything about their financial lives. the most important thing for us in this environment is to make sure that we stick to our tried and true credit statistics

neel kashkari is trying to clean up his comments to make us more worried.hat do you think the fed is worried about now with the economic data that is coming out? >> the fed is seeing that the economy is holding up quite well. yes there is some weakness in manufacturing but we are seeing but positive increases in durable goods orders, personal income was better than expected, retail sales remain relatively strong so the consumer is still spending. yes as ed pointed out earlier they're spending more on services than goods but they are spending and so the fed is saying that the demand is still higher than they would like it to be and they want people to be aware that they don't want to do, i think this is what some of these fed presidents are trying to warn, what they did in the '70s, with this constant raising and cutting rates which just led to great volatility and it never really addressed inflation. charles: right. >> i think they want to see inflation stay low for a period of time before they would even consider cutting rates again. charles: so i'm asking

we're getting hawkish comments from kashkari.as actually more surprised than not that the market expected more dovish pivots from the fed this last month, right we had such great performance for about a month. really, i don't think we've got any reason to think the fed could back off at all from rate increases. >> anthony, the other thing we talk about was what the fed can like aim at directly and what's really causing the inflation itself. >> it's early prices trickling down to all parts of the economy. >> it's very complicated situation, particularly with the geopolitical outlook we agree with dana we think they keep the foot on the pedal. inflation, 8.5%. core cpi at 5.9% really it's about whether they broke 50 basis points or 75 basis points yes, energy price is a risk. it's too early for the fed to take their foot off despite signs of slowing. >> what's your number that we need to have a target of, anthony? is 5% a good number for you? not double digits. could it get to do you believe digits >> inflation is going to broadly

kathleen: neel kashkari is admitting, the fed has a problem and they have to solve it.g that is very clear. i don't see how they can keep doubting that they will keep going for now, for sure. then of course, watching the data, they have said this so many times, where there are four reports we have to which clearly in august and september. two job reports. we had one, it was very strong. and the cpi report, which pulled back from the highs, but that is good. what will the next reports hold? i think what they forget is that traders got used to having everything spoonfed to them. in the old days there were fed watchers, they got paid to get it right and to make the analysis. that is what people need to learn to do, think, read, listen and make up your mind. that is what traders, investors and strategists are paid to do. haidi: our global economics and policy editor kathleen hays there. coming up, we will speak to the philippines central bank governors at 9:30 a.m. if you are watching in hong kong, 10:30 a.m. in sydney. let's look at the markets now. annabelle: looking at t

strong for the fed you got a lot of fed speak out over the last 24 hours it's bostic, it's williams, kashkari yesterday saying he's glad to see the reaction in the stock market after powell's speech on friday you run up against what you've been telling us not to do for months and that is fight the fed. >> right that's where we are. i think chairman powell has been dealt -- since he's become fed chairman -- probably one of the trickiest times that a fed chairman had to deal with, probably since paul volcker for totally different reasons. what's happening now, when chairman powell came out and was so crystal clear, like, hey guys, i'm not kidding. i'm not going to be arthur burns, i will be paul volcker. we'll keep rates higher for longer until we know for certain that inflation won't rear its head again which is a tall order. so we're in this position right now where the market is recalibrating what multiple it wants to pay for stocks. so i think what josh hit on with housing is so interesting. what he said is spot on, but the conundrum we're in, so all the stats he gave you about new home sal

jonathan: do you still call neel kashkari a hawk? tom: i did not. a good friend of the show but i never thought i would see the shift. i have huge trouble with the word "pivot," whether it was president biden pivoting to the pacific. it is a marketing phrase, an image phrase to describe a sarcastic process where you have mysterious abilities to make a turn at some point, whether it is red sox baseball, the tots, whatever. pivot is baloney. that's all there is to it. jonathan: that's it. tom: baloney, john, is an american food meet. i'm not sure if you are familiar. jonathan: no idea. i am familiar. it is a process the way you go from 75 to 50 to 25. that's what a lot of people are still looking for. yesterday goldman said a shift down to 50 and 25 and maybe stop at 3.5% and sit there for two years. lisa: we heard some pushback saying perhaps you have to go for -- further. andrew hollenhorst saying people don't understand the neutral rate and it is much higher. jonathan: baloney, it tastes good? tom: with olives and mentos it is awesome. -- to mentos

do they lose credibility if they're wrong, marely daleys, neil neel kashkari and that crew?'re not speaking their own philosophy which is strange to see. it is very apparent the message is being delivered on high the door has to stay open to any possibility and you can't wax too dovish and give the markets too much hope and turn around to get the minutes which are completely contradictory what they have been saying. charles, i've never seen communication so conflicted. i'm a former fed insider. >> ironically feels like the market is seeing right through it. financials conditions got looser, not tighter. markets are up, not down. treasury yields are down, not up. there is something i read a couple days ago. you were the first person i thought it, i thought it was fantastic, it was from the st. louis fed. they talked about how we talk about how tight the jobs market, right? you take number of people not actively looking for work and vacancies right now a 9 to one ratio. people are going from work to work, employment to employment. those people right there are looking for jobs.

you mentioned kashkari int interview.rised why the markets rallied in the last couple of days of the week i can tell him why it rallied. it rallied because every indication he was going to back off. if he is going to back off 75 basis point increases in the future, you may have a rally for some point in time continuing. as inflation stays high and you have the issues with natural gas and oil and food prices and rent, you will see the 10-year treasury rise again. that clearly, joe, is why i'm sticking with 3.50 on the 10-year treasury >> based on how sticky the inflation situation is i don't know if we know, sri go ahead >> what we know, it may not be 9.1% it may be 8.76%. you are not saying hallelujah because it came down it is still way too high unless you get anywhere near 3% or 4% and suggesting it is going to 2 is when i would change again remember, i changed my expectation on bond yield in early 2021 there was a reason to that today there is no reason to change my forecast >> the old saying. why do you change? the fa

fed officials speaking throughout the week and you will hear from the likes of evan kashkari daily andnty of economic data on the calendar. u.s. ebi and initial jobless claims coming up thursday. the big one, the inflation report, coming wednesday. u.s. cpi around the corner. year-over-year looking for headline inflation to come down from 8.1, -- 9.1 rather now to 8.7 and looking court to take higher to 6.1. all strata very focused on month over month core inflation numbers. 0.5%. we have a minute on the clock so rapidfire around can happen now. three quick questions and three quick answers. let's start here, the two year yield, what comes first, 3% or 350 on a two-year? we are basically at 3.23% right now. gershon: 3.50. gargi: 3.50. kathy: 3.50. jonathan: what comes first, 350 or 250? kriti: 250. -- kathy: 250. gargi: 250. gershon: 350. jonathan: three hand or a four? kathy: three. gershon: three will -- three but we will get more. kriti: three -- kathy: jonathan: three. thank you very much. from new york city, wiki will not see me in the same time is a place. you will see someone el

neel kashkari says the central bank is committed to hitting its 2% inflation goal while doing everything i can to avoid recession. and we speak to the ceo of pacific basin shipping as they post its best ever profit. we ask what the results toss about overall demand for commodities. rishaad: we have a bit of a mixed back at the moment. u.s. equity features adding pressure to markets and currently japan is positive and the yen's appreciation continuing once more. of course we have challenges out there for china. pmi reads. what are you looking at? yvonne: as you mentioned, it seems like all this gloom around china is weighing on overall what we were seeing when it comes to asia. we are trying to see a bounceback in global stocks, the best in two years. we are kicking off the trending month and week here. it is looking mixed. a lot of downside. hsi down about .7%. we have reentered into correction territory. h-shares in hong kong as well. csi 300 snapping two months of gains. the superlatives are not good. the pmi numbers we got over the weekend seem to suggest that things are really slowin

kashkari, listening to him change his tone, but you do think the bottom is in. >> i think you've seenif you look backto the '60s an '70s, when inflation peaked, the market bottomed. my hope is the fed can look ahead and see what they have already done the rate hikes have caused an impact, seeing housing go from bottom to bust on the good side of the equation, demand is slowed and inventories are being built. expectations are not anywhere near elevated, so hopefully the fed can take a pause, or at least slow the pace of rate hikes and tell graph that a bit on friday. >> ernesto, you seem, i would argue, less convinced that inflation actually starts to decline. >> no, not at all. in fact, i agree with brent. we see softening all over the place, in housing, seeing softening in airline prices, hotel prices, everywhere you look, retailers, everything is soft so i think we're going to get an inflation print in september on a month-to-month basis might reflect to slightly negative that would be good news and i think would drive the decision for the september meeting, and -- but the market is

neel kashkari is one of the most interesting fed presidents and we look at what he has to say and the inflation is still high. this is bloomberg. ♪ this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. >> the idea that we are going to start cutting rates early next year when inflation is likely going to be well in excess of our targets, i think it is not realistic. >>

it leads to this message we had from neel kashkari that markets have got the message of what the fedying to do. this is to date for u.s. equities. it looks like a bad month but if you look at the same benchmark picture two weeks ago, we will have been higher into month end. you get this message from the fed they are going to go at it, try to bring inflation back down , and you get stocks that do a dramatic about-face. manus: that is perhaps more pronounced in the growth of the blue line. look at the nasdaq. the blue line below the dow. jp morgan, they look at the data to 1970, ok? they say history shows in recessions, equity markets rally by 11%. so you know, there is a catharsis if a recession comes because it emboldens policy decisions, doesn't it? dani: it does. at the same time, you have to wonder. stocks had to catch up. have bonds already gotten there? we have seen a move up in the front end, two years at a 2007 hi. you start talking about peak bonds yet, or is that premature? manus: no, i'm going to show you a bear market. almost a bear market, i should be careful. the gtv lib

than rate cuts next year, jim bullard told us on cnbc it was more likely to be higher for longer kashkarifed cuts next year are a very unlikely scenario, and daly said markets are really ahead of themselves. it should tell you the extent of the more hawkish view is shared by the committee that could be a wakeup call. >> you have been saying this repeatedly, that you think the markets, i think, have made a mistake in terms of understanding what the fed is going to do going forward. you have the market on one side, sort of the academic economists on the other who clearly think the market is very, very wrong and then you have the wall street bank analysts sort of in the middle why is there such a dispersion in terms of understanding what the fed is really thinking >> i mean i think there's a bunch of answers to that question i mean, one is i feel like markets sometimes hear what they want to hear, and the market wanted to rally, and so it sort of heard powell say we're going to pivot here. i mean i didn't hear that. by the way, the futures market has kind of come a little bit closer to the f

> i think what you heard was a series of speeches by fed officials including some officials like kashkarias been dovish. a bit more cautious about raising rates. even he said we are raising rates and we are not pivoting anytime soon. i think it was a clear disconnect between the markets and what the meeting result was and what the members believed the meeting result was and they were clear and i think he was super clear and jackson hole. paul: what is the risk of a tightening? you do not know what it is until you see it. >> as my predecessor of many years of said monetary policy has been long and variable legs. this has been taking the punch bowl away about six months ago and we are starting to see more of an impact in terms of housing markets and -- my guess is we sourcing the over the next six months and so that is why it is more of an art than a science because we do not know exactly when it will have the impacts and what impact it will have. i think the fed is micah j said, bringing rates up around 4% or so. -- like i think he said, bringing rates up around 4% or so. paul: elizabeth w

bullard saying he expects the fed to be higher for longer, and cash k-- kashkari saying yesterday --y need to cut interest rates next years. i don't want to say that's imbalance, but i would say that's a unlikely scenario here's the issue right here. both markets and the fed are pretty much in line for this year with 100 basis points, but next year, the market has cuts priced in. obviously the economy and especially inflation will determine who's got this right a full-blown recession could create those -- and then again a recession with still high inflation that's a quandary for the fed. it means rates might not come down since the -- it's tended to overestimate rates in the first year, it projected 2016 rates at 140, and ended at 0.24 the past two years, they have a better track records record. this time could be different no one really cared back then that inflation came in below the 2% inflation target. people care a lot now that it's running well above it, so the likelihood i think is the fed ends up on the high side either way, investors need to mind the gap >> mind the gap. tha

we'll hear from charles evans and neel kashkari. >>> joining us now to help get you ready for the days patrick of rose advisers thanks very much for joining me. let's touch on the inflation number we're getting at 8:30 eastern time is that likely to move markets significantly, or has the risk around it and wait it implies for the fed going forward ben lessened by the jobs number we got on friday and the way the yields rose after that >> well, if it comes in as expected, you know, the reality is the inflation number is still pretty high. so even if the rate of change is 20 basis points lower or just below 9%, that's still a pretty high number. the monetary authorities are certainly trying to tackle it. whether or not the fiscal authorities will be successful in tackling inflation, i'm referring to the inflation reduction act that they just passed i think it's a miss noerm in that it will do very little to curb inflation >> in terms of the outlook for the economy as a whole, are you in the camp that expects the u.s. to avoid a recession, and where do you think the market is at the momen

and rivian we have the consumer prices on thursday and fed speeches from minneapolis fed president kashkarithen jobless claims and ppi business level reports on thursday to finish off the week, if that wasn't enough, consumer sentiment on friday. a lot of potential catalysts on the calendar on macro and micro picture to drive the market. >>> futures indicating what could be a modestly higher open here the dow is implied higher by 55 points you can see here the s&p up 9. nasdaq up 40 points. if you look at the mega cap technology and related trade. apple and microsoft over the last month we are seeing real out performance in shares of apple could that be the place a lot of people decided to buy the dip as things moved to the down side given valuation concerns and interest rates microsoft up 6%. alphabet lagging over the course of the last year to date period. apple, microsoft and alphabet. keep an eye on apple also 10-year treasury yields in the discussion valuations going higher over the last year. 2.8% we are still just on the little bit of the down trend from the highs we saw 3.5% over th

nordstrom and toll brothers and you have somebody from the fed speaking of course, every day neel kashkarig in minneapolis this evening and at jackson hole an lalater on in t week remember the days when the fed spoke twice a year now it is twice a day. >>> and we have the key drivers for the markets and coupled with that and options expirations that happened last week and new hurdles for your markets and money on friday and yesterday. our next guest says for long-term investors, there is always opportunity to be found we love that ing healther brilliant is the ce of diamond hill. heather, you want to invest for the long term. that is why you think as a company. a company like diagio could benefit long term. >> thanks for having me back that is a great example of where we like to look to figure out the long-term earnings power of the business that's how we invest they have great friends and investing heavily over the period i think that gives them an opportunity to come out on the other side stronger. if we go into a down turn, people trade down during the vie environments they make more an

fed president patrick harker, richmond fed president tom barkin and minneapolis fed president neel kashkarien, thank you both for being here andy, let's start with you on just the market yut looc we've seen a nice little bounce today. we'll see if it holds. is this an area of the market that's still feeling good to you right now for future investments? >> sure. so investors are feeling good because the month of july was one of the best in quite a while. it was a really long hope for balance in a year that's had little in the way of good news for investors. i think the reason it's happening is that earnings season is coming in much better than a lot of investors had feared companies have shown resiliency in being able to pass on inflationary costs to consumers. profits are still growing, and that means this bear market has somepotential to pee peter out >> do we have to worry about downgrading? >> thanks for having me on i hear a lot of trepidation with my clients when i talk to them every day with regard to going in the market because of what the fed is doing the fed is aggressively raising

two stock picks in a moment thank you for getting up early i love having you on last night, neel kashkari said the quiet part out loud. he is a member of the fed. he basically said they were glad to see the stock market come down off jay powell's really hawkish comments what do you make about that? >> well, they are being very clear. they are going to accept the consequences they want to know crushing inflation is the goal. unemployment, recession, stock market crash they want to crush unemployment. i think the signaling is clear and i'll act accordingly the problem with additional rate hikes, it puts pressure on other currencies the dollar will continue to strengthen i would avoid making, you know, some of the growth stocks to be avoided. i still think look outside the u.s. there could be interesting names. companies that import into the united states. >> you know, i hate to date myself i'm getting old, cate. the 26th year i've been in business news. i'm not sure i've been in the environment where the head of the federal reserve is effectively saying i'm willing to take down the economy

we know that neel kashkari of the minneapolis fed made a big deal of the possibility that inflation is a lot worse. tell us all something we don't know, a lot worse than expected and it may be sort of more sticky and hard to pull away so what are the bets that people need to be looking at as opportunity at this very moment in light of that? >> well, i think it all hinges on the answer to your question to teddy and i think it hinges on energy, i really do. we've got a dire situation out in europe, and we've got a situation here where look at what happened when the saudis said they might have to stop production. we've got a squeeze in crude oil and own natural gas up 70% since june and up 575% since the covid lows of june of 2020. we have a problem on our hands and being driven by energy and it's not being taken care of on the supply side. we're only taking care of the demand side so my ear -- i think that you've seen that 10 year yield going up to 3.1% today because people see energy prices going up and that might wipe off the wanes that we had -- gains in cpi from 9.1 to 8.5 and only w

even neel kashkari, he is turning into a raging hawk it begs the question what is driven the rally off the june lows i look to the fed funds. right or wrong, what is priced in right now is a terminal rate of 3.7%. it is the back half of '23 that is interesting, wilfred. we will see if jay uses the comments to change the view. >> as we stand, david, do you think the risk is to the down side for markets because they are expecting a dovish tone or the other way around >> we had a strong bid off the june lows. the lows are in for the year, i think. that doesn't mean we can't go down from here or the cyclical bear market is over. we will need to see something we haven't seen yet to break the lows my biggest concern is what markets are not pricing in is energy saudi arabia's oil minister floated a trial balloon saying opec may be forced to cut proper decks. thi production this is after president biden made the visit they will not continue to sell 1 million barrels a day. we are depleting the spr it is at dangerous low levels. the only way to fix that is to buy more oil. >> in terms of the ou

neel kashkari, a dash -- a dove turned a chief hawk, we could say.ps a move to hawkishness is the overall feel? mandy: i think that that tone, everyone will be watching it. if you look at the past rhetoric from powell, he is slightly dovish. he may have a bit of dovish tone versus the other fed governors on the hawkish side. actually, i think the language will be very balanced coming-out of the next couple of weeks, into the fomc. i would not read too much into it. i think the data will speak for itself, and the key driver of decisions for the september fomc. yvonne: 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 ha