david: kathleen hays, our global economics and policy editor there. l have more from kathleen throughout the next few hours as jackson hole is concerned. joining us on set is, the head of markets for asia-pacific corporate investment bank she also oversees markets at wells fargo. what is the advice before and shortly after jackson hole? guest: talking about jackson hole, it is a key event to watch, but i doubt that we will hear any significant announcement. i think the fed will continue to drive monetary policy, very much data-driven. you get the august cpi in september and also the august jobs report in early september before the fomc. these are the key data to watch. if we don't really hear any drastic significant news from jackson hole, i think the market will continue a bit on a temporary relief rally. it is good for the market, but having said that, i would really watch the data in september. rishaad: they do say they are data dependent. they said there would be lots of labor flexibility and also that inflation would transitory. at that level. he

kathleen hays is with me from jackson hole. i love that line. steve stitching ski is tracking the energy story. talking through the good news on the u.s. listed chinese stocks. as ever, it threads the needle of the markets from singapore so the financial world is counting down to the fed chair, jay powell's hotly anticipated speech in jackson home. the fomc member esther george told bloomberg it is important to clarify the destination that rates are heading to. >> we have more room to go. we would bring the rates down quickly and i have seen that in some of the forecasting. it is a bit remarkable to me. >> over 4%? >> could be over 4%. i do not think that is out of the question but you will not know that i think until you begin to watch the data. manus: you will not know until you are there. kathleen hays did the interview in jackson hole. thank you for staying up late for us. it is a clear message. that destination is significantly higher than where we are now. >> it's also very important that esther george said it is remarkable that they are g

our global economics and policy editor kathleen hays is here. what did we hear from fed officials after the jobs report? kathleen: renewed determination to continue hiking rates until they can see clearly that inflation is coming down sustainably, month after month. forget peak inflation. have to see more progress. mary daly made it very clear the fed is not looking in the rate cut direction, it's about rates going higher. >> we are far from done. that is the promise to the american people. we are committed to bringing inflation down and will continue to work until the job is done. >> it will be appropriate to raise rates in september by half a percent? >> absolutely. we need to be data-dependent. kathleen: it's clear that she has not made up her mind yet. she has been leaning towards 50, but leaving the door open to 75. michelle bowman from the board of governors saying on friday that as far as she is concerned, more large rate hikes, 75 basis points on the table until inflation declines. we have the two months between the july 27 meeting, twice

for more let's bring in kathleen hays and garfield reynolds and stephen angled. -- stephen engle. kathleen, what is mary daly adding? kathleen: what she added even before this report came out. the fed has been signaling that we are going to keep hiking rates, even if the economy slows down. things are looking strong. payroll up 528,000 in july, more than double the forecast and sharply up from the month before. jobless rate is back to pre-pandemic levels, 3.5%. lower than the estimate of 3.6%. a 52 year low. average earnings accelerated month to month and kept steady at 5.2% but if you look at the monthly number you get what looks like 6% so that is why the former treasury secretary, one of the most respected economists thinks an economy that is getting too hot for the fed to stop hiking rates and let inflation keep rising. >> everything in this number says to me overheating not yet under control, not on path to being under control. so i was not gratified by these numbers but my concern was actually magnified. kathleen: the july cpi report is the big focus. it's very important. dow

let's bring in kathleen hays with us, and, kathleen, it was such an illuminating conversation and semi-differentut from a monetary policy perspective, reaffirming. i love this idea that data focused, not one data focused. kathleen: i agree, it's small, but i thought kind of powerful statement because we have the cpi for july, the headline year-over-year number broke re-substantially, and then we get the producer price index. and it's down, the monthly number for the first time since the pandemic, and it seem like the perfect set up for her to say, yes, my baseline is 50 and that's where i'm ready to go, but we can listen now to what she said. mary: this scale, 50-70 five, does not just depend on a data point, even an important one like the cpi. i would like to say we are data dependent, we are not data point dependent. really, how i think of it being 50 or 75, i think of a lot of things coming in. you have inflation numbers coming in, we have employment numbers coming in, we actually spent a lot of time, i know i do in my colleagues do, talking to businesses, households, community groups, people

our global economics and policy editor kathleen hays is here. what is expected? en: the big focus is on jay powell. additionally the fed chair kicks off this two day symposium with official remarks. over the years it has become more expected of the fed chair to make a big statement. we certainly know that there is a big focus on inflation. how worried or how hawkish is the path he is going to paint? we haven't heard from jay powell on inflation since the last fed meeting, and since then, inflation numbers cooled off from a super sizzling rate to just very, very hot. we also see the perils -- payrolls numbers jumping. so it may be starting to break a bit. but we still have a strong labor market. a big question here, is powell ready to risk a recession? jay powell has said that he sees a soft landing, but he is still hoping that is possible. we have a look at the fed funds rate, clearly the fed is looking to go to a 4% by the middle of next year. markets don't seem quite onboard board. the latest person was tom barkin on friday, he said, we are committed to returnin

haidi: bloomberg's andreea papuc and kathleen hays. kathleen will be speaking with fed president mary daly tomorrow. 7:30 a.m. hong kong, 7:30 p.m. new york. vonnie: china's central bank says we will strike a balance between supporting the economy and a fighting inflation. the pboc monetary policy report warns inflation pressure may rise near term. consumer inflation make live about 3% at times in the second half of the year. the report came the same day data showed july inflation surged to a two-year high. china promised to continue regular patrols near taiwan after declaring an end to military drills around the island. the pla successfully completed all tasks in last week's exercises. he left open the possibility of frequent military exercises across the taiwan strait military line. it is in response to nancy pelosi's visit to taipei. u.s., secretary gina raimondo says nancy pelosi's visit to taiwan obligated trade talks with china. president biden is looking at what to do with trump era tariffs on $300 billion worth of chinese goods.

let's get more from kathleen hays. some of the data was comforting. however, there is the expectation it will continue to eat into household spending. kathleen: could take a while to erase that expectation. no doubt the fed is keeping an eagle eye on this one. let's look at the numbers. this is one of the fed's number one concerns. we cannot let expectations get out of control. what inflation can we expect over 12 months? six point 8% down to 6.2%. the three year outlook went up to 3.2%. gas prices fell at the pump and are expected to rise 1.5% in the next year, down eight percentage points from what people said in march. revenue increases at less than 10% over the next year. that is the first time we have seen it since march. fewer homebuyers and a lot more sellers. one year expected spending, 6.9%, down from 9% in may. if you think things cost more, you're not going to buy as much. these themes will be reflected in the inflation report wednesday. the headline cpi is expected to fall 8.7%. core cpi, 6.1% year-over-year from 5.9%. we will wait to see c

andreea papuc and kathleen hays there. thleen is in san francisco where we will be hearing from the san francisco fed president mary daly. that exclusive interview is tomorrow at 7:30 a.m. friday in hong kong and 7:30 p.m. in new york. vincent: -- vonnie: china promised to continue regulatory roles after declaring an end to military drills around the island. the pla successfully completed all tasks in last week's exercises. he left open the possibility of frequent military exercises across the taiwan strait median line. taiwan staged the drills in response to nancy's visit to taipei. u.s. commerce secretary gina raimondo says hello sees visit competition -- anti-proceeds visit comforted trade talks with china. gina raimondo says chinese officials were already hesitant to engage in talks and the fallout from nancy pelosi's trip has not helped. >> it has made it a little more challenging at this moment. it is harder. but, i am hopeful that we will get beyond that and back to a place where we can have more concessions. vonnie:

kailey: kansas city fed president with michael mckee and kathleen hays.rs are set to purse through fed chair jay powell speech from jackson hole. marcus ashworth will be listening for one more sentiment. he writes "the track record of central bank economic forecasting is in tatters as confidence that are monetary overlords know what they are doing. missteps this week triggering -- risk triggering market dislocations." marcus, it's a great point. do you think chairman powell would be that honest? marcus: not a chance but we can always hope. he did say something, central banks in portugal, he said they understand now how little they understand about inflation. not very reassuring but they are perhaps aware that some of the models aren't always as perfect as they might expect to be. and christine lagarde came out and said exactly the same thing. reminds me, why did no one see this coming. it's a bit like that for central banks. powell this time last year essentially said with transitory inflation we've got this covered. it's not all their fault. governments

of a global economics and policy editor kathleen hays is here with more. u get from all of the fed speak? kathleen: one message is very clear, it's not whether they will hike, they are still trying to figure out how big the rate hike will be on september 21. neel kashkari from indianapolis saying, the fed must get it down urgently, even at the cost of taping the economy potentially into recession. >> i don't think we are in recession right now, but as we continue to raise rates and raise costs of borrowing across the economy, it should be tapping the brakes in the u.s. economy and that makes it likely that we end up in a recession. kathleen: jim bullard from st. louis talking to the wall street journal, saying that we should just go ahead, do the bigger rate hike. 75 basis points. frontload, go fast and do bigger rate hikes, make an impact, then sit back and look at what is going on. he said, let's get it done now. esther george, reserve bank of kansas city, says, the case for rate hikes remains strong, for sure, but i will still be debating with my colleag

kathleen hays. . i would like to say our editor. the neutral rate may be higher than the fed thinks. this line is just coming through out of the rbnz. they just had the discussion if the neutral rate is higher than what they are currently projecting, it is hawkish. yvonne: very hawkish. they can't figure out where that neutral rate is that at the moment. have they reached it or not? we have seen sign in the property market, that things are starting to cool down. we are seeing the effects of these 300 basis points of rate hikes in the past year. it is starting to be felt in the economy. . but whether we have hit neutral, that is up for debate at this point. david: that neutral is 100 basis points from where we are now. are we thinking of were that is, it could be higher. the doves get back in bed for now. [laughter] more on this decision and a lot more context. on your terminals, get a lot more commentary. including this top in the kiwi you are seeing on your screen. vonnie quinn is a new york. >> thank you, president biden has signe

shery: let's bring in our global economics and policy editor kathleen hays, chief north agent correspondent stephen engle and andreea papuc. jackson hole, what can we expect on the policy side? kathleen: weekend expect fed bank president speaking with bloomberg television. jay powell is more of a question . how hawkish will he be on inflation? what will he say about how hard they will have to push? remember, jay powell has not spoken since recently, the last couple of weeks. the headline cpi breaking from 9.1% in june year-over-year to 8.5% in july. that is one of the reasons markets may ease up and not hike rates as quickly. a couple weeks before that, u.s. payrolls in july were double what was forecast. the labor market is still strong. that's a green light for the fed to push as hard as it needs to. the big question is, is jay powell ready to risk recession? how high, how fast will he signal willingness to take the funds rate higher? you can see from the bloomberg chart the forecast from inflation. you go from the bottom up. as traitors and economists look to the future they have gotten

kathleen hays, our global economics and policy editor, here to talk us through what stood out in the data, and also the commentary coming out of the fed. kathleen: i think when anybody saw the headline, it fell much more than expected, down 8.5%. who doesn't feel good that is finally something is moving in the other direction? and you look at the core cpi, not looking so good, stuck around 5.9%. and the details, that is another thing that is very important. to a certain extent, this drop in the headline of cpi year-over-year, you see that one, and the monthly one was hopeful. suddenly it is flat. that is how inflation numbers used to look on a monthly basis. core cpi was also well behaved. gasoline prices, that was a big story and gasoline prices falling is not exactly like bringing down inflation. maybe you will reduce inflation expectations a bit, but that will not do the job. when you look in the core, gasoline prices fell, but guess what, heating your house and paying your utility bill went up year-over-year. food, 13%. you go out to a restaurant, probably twice as much. household

in fact, kathleen hays, our global economics and policy editor is here with us to talk about the latest, the list that keeps getting better of federal officials basically saying, now is not the time to pivot. kathleen: absolutely. neel kashkari is the one who remarked loudest today. he said that, it there is some recession risk. but even if there is, he is laser focused on fighting inflation. talk about a pivot? maybe the fed cutting rates? listen to what he said earlier. doesn't want likely, desert? >> some financial markets are expected to cut interest rates next year. i don't want to say it is impossible, but it seems like a very unlikely scenario right now, given what i know about the underlying inflation dynamics. the more likely scenario is that we continue raising and we would sit there. kathleen: the latest nail in the coffin in hopes of that fed pivot anytime soon. jim bullard talk about what he said 24 hours ago. he repeated what he said in his interview today. he thinks that fed policy still has to get more restrictive. right now people are expecting 100 basis points between

kriti: that was the bank of korea bank are in are speaking to kathleen hays, wyoming.&p 500 choppy, back-and-forth. about flat. the underperformance happening in the nasdaq, down .4%. in the yields, two-year yields at the highest back to 2007. this is bloomberg. ♪ mark: here is the first word. the european union can offer ukrainian forces new sniper for officer training as part of the new mission. they plan to propose this in a meeting with minister was in prague investors tonight. bloomberg has learned iran has identified a specific training needs and that ukrainian soldiers have already been offered various training efforts. the ukrainian president is accusing russia of trying to create a global sense of fatigue about its invasion. that includes

kathleen hays is here with the latest. crushing those expectations. the fed did not signal the pivot, the fed decided there would be a recession. very quickly, jim was speaking at nyu, he was in a room with bond traders and economists. in terms of what we got out of the q&a, jim think they have to get in restrictive territory. then depending on inflation, they can sit back, slow down, take that pause. they are going to pull off the regime change, his whole speech was about pushing inflation -- rates up so hard that it cause a recession, this is the 20 20's, and central banks people have more credibility, and that is what they can achieve the soft landing. jim is convinced they can pull it off and it has everything to do with this shift, having fought inflation, this will carry the data, that soft landing. haidi: kathleen hays. let's take a look at how european futures are opening given we are seeing asian stocks holding up pretty well given we see that rising geopolitical risk, stocks slipping given mixed earnings results as these concerns, growing ten

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

kathleen hays is here with us. hawkish comments coming from the fed recently. kathleen: there is still no appetite to cut rates. it is still going to be rate hikes all the way. and the jobs report, it is not going to change the fed's mind. nevertheless, they would love to see a strong report so they can say, see we are right, we are not in a recession. the july payroll, 250,000, the consensus number. down from 200,000 in june. that is a healthy number showing and expanding job market. we have got the unemployment rate expected to it a 50 year low. wages, or .9% year-over-year versus 5.1% in june, still a strong number. once you take inflation out you can barely buy anything with those paychecks. jobs are slowing of the u.s., but services to men is stronger post-pandemic. jobless claims are up a little but still very low. the fed is committed to bringing down inflation, that means more rate hikes. what about second quarter gdp contraction? consumption slowed the second quarter. there is to assigned the economy is on track. that is one of the most important things

from done bringing down inflation, also on that surprise upside, let's root -- let's bring in kathleen hays stephen engle. let's start with what mary daly had to say because you've got parts of the market considering if we might see a move between meetings. kathleen: that would be highly unusual. we talked about this last week. this is the longest interval between two federal ridge -- federal reserve meetings. usually the interval a six weeks. when i heard that story, i thought no way. i talked to one of my favorite fed watchers on this and he said they made it clear they want to be credible on inflation. you maybe can't rule it out. that's why there's so much focus, particularly after this jobs report. look at payroll -- more than double the estimate of 250,000. it's back to its pre-pandemic low. wages are rising faster in the month of july. and you've got the year-over-year rates surpassing the estimate. if you analyze that monthly number, it comes to 6% according to bloomberg economics. a former treasury secretary at harvard university fester is very worried about the jobs report showing

our global economics and policy editor kathleen hays is here. riticized for being behind the curve. how much will this help? kathleen: it will help some, but probably not enough. they will need to go higher. their inflation is at the fastest pace since the year 2000. last year the inflation rate rose 3.5%. in the first quarter of this year it jumped to 5.1% year-over-year. and in the latest quarter 6.1% through the month of june. and it is not supposed to peak into the guts gets to 8%. let's look at what is expected in terms of interest rates. they are seen hiking the key rate by 50 basis points today, the third 50-basis-point rate hike since may. they'll you see that cpi. rate hikes, if they do 50 today, it will be a total of 175 basis points. it will be the most tightening, most rate hikes in any six-month month period since 1984. so you say, what about recession? consumer spending is flowing in australia, home prices are falling. people's mortgage rates will rise. earlier we spoke with our guests from rbc capital markets, the chief economist,

haidi: kathleen hays there. look at how futures in europe are opening, given the headwind potentially going into the start of trading in the chinese equity session. as kathleen mentioned, we are getting the preview ahead of the boe. european stocks gaining as we had not just a rate pass, but earnings expectations. futures looking positive, a little bit of a pop, germany up by .3%. a little bit of a pullback when it comes to trading in euro-dollar. second quarter earnings season has been ok in europe. we also have gotten the better expected data from the u.s., passing the fed commentary that is ongoing, said testing a pivot would likely be fading. geopolitics particularly for markets, house speaker nancy pelosi has moved to the relationship with south korea. but the repercussions and the reaction still being felt. for more, let's bring our chief north asia correspondent, stephen engle, in. what do we know about the military drills circling the island? >> there is a lot of wake following this. nancy pelosi's visit

let's look at kathleen hays with the preview. >> there was a jobs report, looking at payroll.ow much demand for labor is there? what we will see is potentially 250,000 in the month of july. that is the consensus from our bloomberg survey. >> 72 in june. beyond that, there is enough job creation. wages are still rising. 4.9% year-over-year in july. 5.1 in june. it is still about double what the average used to be there. she is committed to a rate hikes. inflation, that is the coming rate hike. that is the main worry. jobs may even be weaker. they don't think we are going to get a recession but they will settle for a soft landing. the message seems to me to be that we will. >> when we see what is going on, is the market still misinterpreting expectations? i want to thank you instead. that is the question here. as the market mispricing what is going on with the fed intentions? >> i think we have stepped back from giving any forward guidance. we have seen some fed speakers come back and after that. that still remains the bigger problem. there will be some economic slowdown to come

kathleen hays is here with more on this. we have heard plenty of fed speak already and the cleveland fed president adding to it. >> she is making it very clear. let's start with the job market because it seems softer on the payrolls numbers but still at levels that are healthy. in june, the number was 372,000. july, the number is supposed to go back to 250,000. that is considered a solid gain in payrolls and it's enough to keep the unemployment rate low. wages are expected to rise 4.9% year-over-year. that is still healthy. it's true that job openings and hirings have slowed a little bit in the u.s., but services demand is still strong. today, she said she is committed to more rate hikes to get down the inflation. she said the u.s. economy is not in a recession. she noted in the second quarter gdp contracted not because consumption was negative, just because it slowed down. in terms of september, she said inflation will determine the size of the coming rate hike. that puts a lot of emphasis on the cpi report. haidi: the boe,

kathleen hays is there covering it for us.expectations from jay powell are running so high, you have to wonder whether his usual level of hawkishness will be enough. kathleen: that's what some people are arguing, that he needs to go in next or mile. he has to go past what he has said previously. he has certainly said that more needs to be done. the distance of a soft landing has led them to wonder how the recipe is going to be. it's every year at the kansas city fed symposium. he will have that opportunity as he opens the proceeding. that's how we starts to decide if he wants to send a stronger message. do i want to make it clear there's policy framework. i want to make sure everyone is seeing. he could be theoretical or academic. it's probably not the speech you will talk about how the economy looks. but there will be a bigger framework. but there is no doubt that he and everybody at the fed must realize this is the fed when the markets would like more guidance and they are hoping they will get it right here in jackson hole.

let's bring in kathleen hays, stephen engle, and andrea possible. expectations are high for what we can expect from chair powell this week but we've had a chorus of fed officials emphasizing the need for higher rates. kathleen: that's a great way to start this -- jackson hole, the federal reserve, the fed chair, especially at times like this, if the central bankers set the course, not only for the u.s. but frequently other markets as well. i wanted to start by reminding everybody back into but he 10, ben bernanke signaled the second round of quantitative easing. how do you do something like that? it depends on how hawkish he is going to be. this is the first time he's going to be speaking since the cpi headline number pulled back from 9.1% in june and then you got a jobs report, the payroll up twice what was forecast in the month of july. that is a push-pull there. is he ready for inflation to come down. perhaps partly because of the consumer price index starting to look a little weaker. will he jump on that bandwagon? you can see over time that expe

kathleen hays is standing by with our special guest.our guest was at the very first jackson hole symposium. >> john taylor, a professor of economics at stanford university. so many more accolades you can put with your name. but let's go back 40 years ago. let's go back to 1982. inflation was crushed finally. there were two recessions. what was the mood? what was the conversation as all of you looked at what had happened, try to figure out what had happened, were you happy you have gotten through it? are you worried it would happen again? >> we rumored how difficult it was to get through it. we had inflation raging through the 70's. it was not an easy time to get rid of it. he did not wanted to come back again. what an amazing conference, what an amazing place. but i emphasize is don't get off-track when it comes to business. i think it was the right thing to say. >> controversial to stay on track. to maintain tight policy, it seems at that point, people had learned that lesson, inflation was enemy number one. we had to do everything to

for more, let's bring an kathleen hays as well as our asian editor. let's start with you and what we got from the fed minutes today. the market reaction was pretty confusing at some point. >> the fed is open to smaller or bigger rate hikes, that is my headline. there was a lot of nuance. there were a lot of statements. not necessarily going in the same direction but the minutes reflect what 18 different people said. they tried to make it clear that there is definitely some leaning a little this way, some leaning a little that way. markets took that dovish fed view. they say as monetary policy tightens further, it is likely to become appropriate at some point to slow the pace of policy rate increases while seeing how it is affecting the economy inflation. they also said the fed sees the risk of hiking rates too much. markets remark that the committee could tighten the stance of policy by more than necessary to restore price stability. when they say it could slow the pace of rate increase, they already indicated that is what will happen. they are not go

let's get more from kathleen hays. for all of these numbers and what they make on the market. the ppi numbers are easing today falling for the first time in two years. >> a big surprise. producer prices are wholesale prices. business-to-business prices. you're looking at the inflation trend, the dynamic further back from the retail sector. when you see this happening and everyone's trying to figure out where the momentum is, this is why it's important. the monthly number was down 0.5% in july. it was expected to be up 1%. it was up 1% in june. it has a lot to do with energy prices and it reflects in the year-over-year numbers. the headline ppi up 9.8% year-over-year but that is down from 11.3% in june. it was expected to come in stronger than that at 10.4%. even the core ppi slowed. stepping back from the numbers, you can see this is a sense of has this peaked out. it's true a lot of this is due to falling goods prices. 80% of the drop in goods prices was due to nearly 17% drop in gasoline prices. some people even ahead of this report said commodity prices falling, maybe we wi

kathleen hays joins us from where the all of the expected and our growth as it reporter at our chief cross aspect correspondent. you are at the epicenter of everything that markets are watching for this week. what are we expecting? >> here we are in the sh adow of the mountains, we have been in jackson hole and it is probably one of the hardest, most important meetings. a couple of weeks, last month about what jerome powell is going to say at this meeting. friday morning he opens the symposium officially and this is a place where fed chairs have chosen to make a clear, statement, a signal about where policy is heading next. markets seem to be doubting jerome powell's resolve and risk inflation. in terms of what he is expected to say, that is the question of will he doubled down on inflation is still too high? those are the questions everyone is asking. the former dog who is now the hot saying he is worried about -- the former dove who is now the hawk is wondering about cutting rates, the fed is looking for the funds rate to get to 4% and stay there. these are the questions jerome pow

yvonne: let's bring in kathleen hays at jackson hole. set the scene for us. what is in store the next few days? is jay powell going to reset market expectations? >> this is jackson hole. this is wyoming. they don't call it windy wyoming for nothing. we will see what he stirs up. markets, they seem to dread this more hawkish jay powell. maybe they just want him to get there so they don't have to keep wondering. the tough thing in this speech is he may not want and even if fed chair's are signaling some change, they may not, it's not like going to the press conference and here it spelled out, but presumably if he focuses on how high inflation is and how much they intend to move it up and keep it there, if he gets away from seeing what the long-term neutral rate and say they need to be more restrictive, when he said that, that confuse people too, and if he does not focus too much on why they need or can create a soft landing. if he starts talking soft landing, people will wonder if he's going all the way with reception to get the inflation down. maybe he will ta

it has a big impact, kathleen hays more. is this likely to reassure? we are looking at this new york fed survey. >> it has been since 2013, closely watched, the fed is watching any news, any signal about inflation expectations. think back to last year when they said inflation was transitory and they thought it would go away, there are watching inflation expectations and when they started rising that would be a critical sign. they did, look at how much of rose, it shot up. now they are starting to cool off a bit, the one-year outlook for inflation for the new york fed survey is down. the three year inflation outlook from 3.6 to 3.2. david: kathleen, apologies to interrupt, we are getting some breaking news. once it's your react to it, the philippine gdp numbers, you're on your number 7.4, a full percentage point below the median estimate. this is actually a quarter on quarter contraction. we were expecting a little bit of an expansion, but we got -.1. once you chime in on this? mike this change their mind? >> that was the question i was asking myself, t

. >> kathleen hays with us in new york there.et's get more on market action with the director of asian equity research joining me now here. great to have you with us. we want to get your thoughts on what kathy mentioned. let's start with what we are seeing in market action. things are more sanguine even though we have nancy pelosi in taiwan. she has made it clear that the u.s. is trying to stand with taiwan. >> yes. i think the markets are a lot more relaxed because we did not see an explosion or whatever. i think in reality, so far we mainly just speak. >> we are watching very closely. does this change the outlook or what kind of reliance you could see from china on some of these chipmakers? >>, think that has changed. china has mentioned it would like to develop its own industry and reduce reliance on wherever they think there are risks. i don't think that changes china's game plan at all. i think there is no choice but to rely upon this going forward because it does have this technology advantage. >> the thing is how does this

. >> i am kathleen hays. conscious sentiment as traders recalibrate rate hike expectations. all major u.s. indices had their worst months since june. >> the cleveland fed president makes it clear she does not expect the central bank to cut rates next year. she says they need to be above 4%. >> australia holds a economic summit in canberra. now, august is ending with a whimper rather than a bang. the likelihood of a fed visit -- pivot is embraced after the jackson hole speech. jack josh -- jay powell gave a very hawkish message. look at the futures. a little rebound here. not surprising. it was not such a big move, just the totality of all major indices having the worst month since june. the s&p down more than 4% in august. every major asset class fell in august. new york crude is now down about $.71. $88.84. for the month we had a drop of more than 9% in august. that was the biggest monthly drop since 2020, the start of the pandemic. people are worried about rate hikes. they are worried about slowdown in china. the 10 year. it looks like it is actually a little higher in yie

she spoke to kathleen hays a little earlier. >> they are significant and they are saying we are seeingent. they are not victories. we have the inflation report and on deployment report coming up before the next meeting. it really behooves us to stay data dependent and not call it. i have a baseline case going into september that is 50 basis points. that is where i have been since the last meeting. i have an open mind about whether 70 five is going to be necessary. -- 75 is going to be necessary. austan goolsbee from the booth school of is this, professor of economics. former chair of council of economic advisors with his take. do you think inflation has peaked? joe: --austan: i think it has peaked holding other things constant. that we don't get another variant. the work in ukraine does not deteriorate over don't have supply shocks that happen. the chinese don't shut down again for the zero covid policy. those are a lot of assumptions. we have over the last two years consistently had assumptions like that disproven. if we don't get that, it feels like the most important thing to come o

. >> kathleen hays, our global policy editor.t is one of the major themes that the markets are looking at. nancy polizzi -- nancy pelosi should be meeting with the taiwanese president. that is, the what is happening there. she is such a hold joint briefing as well. she has also come out and said that she had come in peace to the region as well. maybe that was to suasion some of the more hawkish tone coming out of beijing. it is certainly happening as we speak here as well. she is also saying that this service and know it contradicts the long-standing u.s. policy concerning taiwan and the unilateral effort is such a change the status quo so there we go. we have china condemning this visit. including the banning of sand exports to taiwan and it is holding some fish and fruit imports as well. let's have a look at that and leave those images there. let's get it over to you guys in hong kong. >> absolutely. this will also give our viewers a little bit more clarity on what is coming in these next couple of minutes. this meeting is immi

on that very point, kathleen hays, are global economics policy editor, who did a fantastic interview with mary daly. what did she say? what is she looking at? >> 50, 75. let me start there. i think i cap -- kept calling her mary. the scales you put how much on 75 and how much on a 50 will be tilting. she said after that, that her baseline is still 50. she is going to keep her mind open to 75. she thinks 50 is enough to keep them on track. i also thought it was interesting that yes, 100 more basis point hikes this year and next year, probably a couple more. they're talking about at least 100, maybe 150 more basis points, unless the data look different. when it comes to data and what she thinks about the latest inflation data and what it means to the fed, listen to what she said. >> there -- they are significant insane that they are seeing some provement. but they're not victory. we have inflation reports and an unemployment report coming up for the next meeting. it keeps listing data dependent. >> not victory yet. she is hopeful that moving carefully will avoid a recession. she would

tom: the bank of korea governor speaking with bloomberg's kathleen hays at jackson hole.t comment on how closely they end of the team at the bank of korea are watching the developments in china. talking of asia, singapore will be offering a five year work pass to ex-pats earning more than 30,000 dollars per month. that is about 21,000 u.s. dollars per month. clearly targeting higher earners as part of this talent crunch that we are seeing. also competition between singapore and hong kong as well. that is a redhead across the terminal on singapore's efforts to attract more talent. that is it for the european market open. the markets, you're currently looking at losses of zero point 8% across the benchmark stoxx 600. the ftse 100 is closed for a bank holiday. the s&p down 0.6%. the nasdaq with losses of 1%, after a drop of more than 4% on friday, more than a 3% drop for the s&p friday. investors continuing to adjust to a high environment and more hawkish central banks. higher for longer was the message from jackson hole. plenty more coming up. " surveillance" is next. stay

let's bring in global economics and policy editor kathleen hays. ide-ranging conversation, very timely. according to the taylor rule, you can see the fed funds rate should be about 10%. what else stood out to you in this conversation? kathleen: i think we asked john specifically, there are a lot of things you have to adjust. that's a very simple reading and i think john would agree the fund rate doesn't need to be 10%. at the end of the interview i asked to clarify where the fund rate should get to. he said they should be aiming for 5% and if inflation doesn't start coming down more quickly or at all, they may have to go higher than 5%. i don't think john thinks you need to take his model that literally. i think it's important that he said they cannot avoid recession. that was very important. they need to communicate to nip it in the bud. some people say if that couldn't happen a year ago, is it going to now? you can find that conversation on bloomberg.com and the bloomberg terminal. the next central bank in focus is bank indonesia, meeting today wi

let's get back to kathleen hays on the ground in wyoming, jackson hole, and kathleen, i hope the brisktor of market reaction when we finally hear from powell. kathleen: it is a good metaphor, because at jackson hole, you have to be ready for anything, hot sun, sudden storms and maybe that is what the market is thinking because they don't know what jay powell is going to say. is he going to be more aggressive? john lipsky joining me now, johns hopkins university, former debbie managing director of the imf and head of national bureau of economic research. what is jay powell's message going to have to be in light of the fed performance the last couple years? john: the economy itself has performed in ways that were unexpected, not just to the fed, but market participants and scholars in general. so, there has to be a recognition that they need to look more closely at how the economy is going to be performing, and reacting more rapidly to signals they see. the problem was that they waited too long, they have acknowledged that, and now they have to enforce credibility or at least gain credib

kathleen hays has more on this. we are expecting heights and what happens next? >> this was the very first when the pandemic was getting started, the moved back up to 50 basis point hikes long before the fed, in terms of what is expected today, 50 basis points will take that to 3%, hundred 35 basis point of hike -- 235 basis points of hikes. the most aggressive path since more than 30 years ago when disorder targeting inflation. one of the first central banks in the world to do so. to have hiked a lot, you need to keep going like this, that may signal a pull back to 25 basis points. the housing market is in decline and it gets worse as mortgage rates keep going up. unemployment has started to rise from a nice low, business confidence is slumping to a two year low. we spoke to mary jo vergara, she is from kiwi bank, this is how she sums up the post facing the economy after the aggressive rate hiking. >> we have seen consumer and business confidence hit recessionary level. our yield curve conversion is indicative of how much tightening the reserve bank has delivere

paul: the royal bank of korea governor speaking with kathleen hays. let's bring in our guest more.did get some lines from the south korean vice finance ministers saying the bank is going to have to closely monitor fx bonds and financial markets. the comments from powell change the equation for policy normalization. >> it certainly seems the comments from these policymakers are hawkish and very much in line with what powell was saying at jackson hole. the biggest risk for korea right now is if you have a higher interest rate in the u.s., it is going to affect the one, and that will have the depreciation pressure on the one as the bank of career -- maria governor said. which means prices will go up higher and that will put pressure on exporters and the trade bottom line and also economic growth for korea. i think we are going to be seeing more rate hikes becoming clearer. there are greater chances of policy mobilization being cemented as we go along for the rest of the year at least. paul: when you were listening to the interview, what were the standouts for you? >> it is interesting

tom: surveillance archives, this is a great image of kathleen hays and michael mckee moving from the past wyoming on their way to jackson hole. jonathan: are you driving? tom: kathleen, she is driving. tom: kathleen, she is driving. what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create jonathan: live from new york, good morning to you. futures positive 1/10 of one person on the s&p. yields higher by three basis points, 3.0. call it 3.05%. if you look at foreign exchange, the dollar stronger against the euro. tom: there is a way to this. -- weight to this. jonathan: we saw that yesterday. i think by the end of the day, we had a move that was almost four percentage points. tom:tom: for those keeping

tone tony lummis, we will try to get kailey leinz to go but michael mckee will lead coverage with kathleen haysitish guys coming if he is back from europe. lisa: [laughter] yeah, jon will be with us. tom: and we will stop the show off the reporting of craig torres and kata unit -- katerina sarajevo with something that has been a wonderful destruction, so-called trading from fed officials. jack fitzpatrick joins us from bloomberg government. the chairman and the former vice chairman have been clear on various sundry inspector general's and that. but others have not in the question is not so much rich guys being at the fed but actually the buying and holding and selling back and forth like during a month or two. jack: yeah, it does seem to be focused on the timing of when we saw that incredible amount of volatility around march 2020. there is a letter from senator elizabeth warren now that is expressing a lack of satisfaction. the inspector general report on this issue of trading at the fed did not address a guidance that came out march 23, 2020 that at least warned about not making unnecessary t

kathleen, i see you have a lot of animals around you, one, we see right there. how has inflation impacted you and your business? >> it really hurts. >> carley: how so? >> well, the prices of hay%, which is just horrible that i have two still take care of the animals at the farm no matter what i do. we have got to feed them because they are my animals. so that really hurts. >> carley: so, in order to rid make ends meet you had to raise prices for the first time in 25 years, which is something i know you didn't want to do. >> i don't want to do that. having animals for children and having them come here for an educational tour and learn about the animals, which is important to the kids. you know, birthday parties, day camp, it is so important to have kids interact with animals. but when you have to raise your prices in this day where people are counting their pennies right now. i hate to see this come out of children's and families lives. >> carley: you have to raise your prices, otherwise, you would be out of business. just like a restaurant it is not only you you are taking care of. you have to raise prices to feed your animals. >> absolutely. when you take on animals and mak