christine lagarde said there is a targeted key.s was for banks who lend to small and medium enter prices and it will continue to be the case even when these hikes have ceased. guy: how high do you think they will have to go? this is front loading. what does that tell us about what the terminal rate is? >> no one knows. they will admit it and they won't be more specific about it. there were some comments from the french governor that neutral rates would be 1% or 2% and hawkish members believe it will be above 2%. i think the broad conditions will dig date how fast we can go. they might get to 5% at the condition is not very high at the moment. alix: christine lagarde seem to say that the bond market has it right right now. are they worried at 4%? is this a danger zone for the ecb? >> it is but i don't think there is a sense of panic. they have put their money where their mouth is and they've used flexibility of the balance sheet and that's very telling because they don't want to use this new tool. some political issues with probably

christine lagarde will speak afterwards.has made an unannounced trip to ukraine, arrived in kyiv today with a meeting with ukrainian officials. it is his third trip there as the war with russia began in february. the pentagon has said -- sent ukraine artillery shells according to budget documents that show the u.s. military is spending $92 million to replenish its stock. it costs around one hundred thousand dollars. there is one major surprise at apple's latest project unveiling, one of the worst years of inflation in decades while the company is not raising prices. apple introduced the new iphone 14, new airpods earbuds and apple i watch. the iphone similar to the older version with an improved camera and satellite messaging feature. global news 24 hours a day, on air and on "bloomberg quicktake." powered by more than 2,700 journalists and analysts in more than 120 countries. i am lisa mateo. this is bloomberg. ♪ jonathan: an update on the queens health from buckingham palace moments ago. a statement, following further eval

ecb president lagarde says policymakers want consider qt until interest rates are normalized. the bond vigilantes out in full force yesterday, sending gilt yields to historic moves. u.s. yields moving to multi-your highs at the same time the equity market was crushed. we do have some relief today. we're looking at christine lagarde at the moment, there we go, looking at a software dollar today allowing some relief when it comes to sterling and europe. both hovering around 1985 and 2002 lows, respectively. today's weakness means we can jump in and by risk, s&p futures up .7%. goldman and blackrock warning to ditch stocks. we have yet to price in earnings recession, and continued aggressiveness from the fed. 10-year yields are down five basis points after the biggest move since 2020. now looking at a 20 high in u.s.10- year yields. this comes after a week two year auction yesterday that reinforced the selling. is this the beginning of something breaking? this picture was started by what we saw in the u.k. yesterday, starting with record lows in the pound but morphed into a crisi

guy: ecb president christine lagarde on a conference in frankfurt. the euro went down.et's talk about what's been the single currency. joining us now, mr., if i told you a year ago or two years ago the ecb was raising rates by 75 basis points and sounded as hawkish as christine lagarde did and the euro would go down, how surprised would you be? mr.: very simple -- esther: i would've been very surprised. this was normally priced in though, the debt managed to shift interest rate expectations. it somewhat more frontloading. it still clear that the risks are tilted to the downside. alix: what is the downside for the euro? esther: what you see now today but also there was a lot more aggressive ecb was priced in. clearly the economic downside risks and we are not only looking at downside risks but also the effect on higher energy prices. this makes energy relevant because higher energy prices on the trade affect. >> are you surprised that the euro is a strong as it is. >> i do not see that much more of downside in euro-dollar. it goes somewhat lower but not significantly bec

christine lagarde hints at more hikes to come. jay powell says fed officials will not flinch. i'm francine lacqua in london. all of the attention focused on the passing of queen elizabeth. >> yes, good morning. britain's longest-serving monarch has died at the age of 96. they grieving nation starts to come to terms with the end of an era. she reigned for seven decades working with 16 prime ministers. for the united kingdom and much of the world, queen elizabeth the second defined the latter half of the 20th century. king charles iii takes to the throne. francine: i know it is so moving and you are there in front of buckingham palace. seeing these wonderful and heartfelt pictures of people leaving flowers, what is it like there? anna: yes, we are surrounded by the world's media, as you might expect. the passing of one of the most famous woman in the world, one of the most recognizable women in the world. in britain, many people still find themselves quite shocked at the news of her being monitored carefully by doctors and then things move very quickly. it wasn't until just afte

yvonne: and they both spoke at the same time, lagarde and powell, which was interesting. kathleen there from new york. let's get to chief investment officer, managing over $300 billion in assets. thank you for joining us. great to get people based in europe to talk us through the ecb. after we heard from lagarde, how long do you think the cycle can last? do rates go above neutral? >> yes, we think that the situation in europe is slightly different than what it is in the u.s. because the inflation is only a supply issue in europe versus a supply and demand issue than the u.s. nevertheless, interest rate is the only tool they have two suppressed amanda. we think they will bring rates higher but not necessarily as high as in the u.s. mrs. lagarde was very tough in her statement yesterday because they lost credibility over the last few months and they need to reinstate this credibility. that is what they are doing right now. rishaad: it does seem that she has been highlighting supply-side issues, as others have done. and highlighting those and doing 75 basis points is a rate

doves right now on board with, as christine lagarde said, having to front load make it clear that you are serious, as one of our earlier guests said, restore your credibility after you got so far behind the curve. investors pricing in a 40% chance of another 75-basis-point rate hike in october. haslinda: we also heard from powell who said the fed will not split until the job is done. kathleen: so many are seriously considering it, just waiting for a little more data. let's listen to what jay powell said. >> we need to act now, forthrightly, strongly, and keep at it until the job is done. we think we can avoid the kind of very high social cost that paul volcker and the fed had to bring into play in order to get inflation back down and set us up for a long period of price stability. kathleen cullinan let's remember, when he talked about paul volcker and that period when paul volcker had to work so hard to get inflation down, he also had to realize that he stopped hiking rates to quickly. jay powell particularly mentioned not moving prematurely, so don't be looking for a pivot any time s

what was the message from chair powell and christine lagarde?ey are 110% committed to that inflation fight. they are not going to back down. forget about pivots. forget about a central bank that is going to worry about it recession. definitely keeping the 75 basis point rate hike firmly on the table, saying they are going to keep this fight until they win. >> we need to act now, forthrightly, strongly. we need to keep at it until the job is done. we think we can avoid the very high social cost that paul volcker and the fed had to bring into play in order to get inflation down. -- long period of price stability. >> he's alluding to what people consider the misstep paul volcker made. they thought they were getting inflation under control, so they started slowing down rate hikes. guess what? they had to go back in the fray and raise even more, causing a deeper recession. jay powell also said they are going to put their decision on the back of the totality of the data. that puts a lot more emphasis on the cpi's, if there was not enough already. the

lisa: jay powell, conversation christine lagarde and of course, st. louis and minneapolis, what are they all going to say that is going to change the perception? basically health in the market, strength and resilience. the chief economist from the bank of england is going to be speaking today. we saw the stock going to act in an emergency kind of measure just yesterday. house price data at nine, and then send data at 10:00 a.m. housing prices, how much are we declining given the lack of volume? given this feeling that perhaps people are not as willing to pay these prices. i didn't mention yesterday the auctions and i regret it because yesterday's auction was actually working to markets moving. how much demand is there for five year yield in the highest level to bring back financial crisis? jonathan: i find those charts to be absolutely amazing. through the pandemic and out the other side, almost vertically. lisa: i do wonder if we are looking at something that is a five year treasury yield or bitcoin. jonathan: thank you, looking forward to the auctio

plus, christine lagarde says the ecb will only think about tricking its balance sheet once rates are normalized. -- shrinking its balance sheet once rates are normalized. francine: a lot in focus today and we have a fantastic story. the perspective saying that we have the worst bond rout we have seen intensifying. tom: that is rippling to the housing market, everywhere else on the back of this. essentially history making when it comes to the selloff we saw in gilt yesterday. it moved about 50 basis points higher on the front end, so we will see how it will open up in the bond markets. the ftse 100 posted a more positive day yesterday even though the european benchmark is lower. the beneficial -- international focus benefiting from the weaker pound. the spanish ibex currently gaining 0.7%. the u.k. sees gains of 0.2%. we are weighing up what happened yesterday stateside as well, talking about history making bond moves. you also saw some significant selling of u.s. treasuries at one point. it was almost a 20 basis point move on the benchmark. that was reversed somewhat in the session t

lagarde says the ecb has taken steps to move on inflation and also said more hikes are coming in themeetings. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom. tom: laura wright in london. thank you. coming up, investors in europe have nowhere to hide, and an energy crisis reduces the appetite for risk. this is bloomberg. ♪ dani: welcome back to the open. we are about 44 minutes into your european trading day and trading on a headline basis for the european stocks 600. we are looking at some of the dax and the cac that are moving lower. the ftse 100 is pushing higher given we are seeing a lot of energy companies up today. wti prices staggering about 3%. all of this surrounding the fed and continued geopolitical risks in europe given putin announcing my -- partial mobilization. what does this mean for the appetites of private markets and capital? we are joined now by vincent policard, director of infrastructure at kkr. thank you for joining us this morning. this news co

we will have coverage of madame lagarde's news conference today at 1:15 p.m. u.k. time. joining us to talk about the big rates decision and everything with energy prices is maria municchi, fund manager at m&g, and kristine aquino. what a day, i don't know whether we just look at dollar strength because this makes it a nightmare for a lot of european companies. >> one of the things we will watch out for for the ecb is whether madame lagarde addresses the euro weakness. we know that anytime a central banker pays attention to currency, that is significant. that is something we are seeing out of japan and china, if we see it out of the ecb, that would be very interesting. francine: maria, what are you expecting from the ecb? maria: today, the market is prepared for a significant act from the ecb. eyes have been on monetary policy for the past be months. is it 50 or 75, the market is prepared for that. the risks are more into the fiscal policies, and particularly, the meeting is extremely important in that respect. francine: i the greater scheme of things, does it make a mate

you do not envy christine lagarde. that is a huge amount of different challenges that the continent is trying to deal with. let us take a more closer look at how all of this is playing out across markets in different asset classes. let us talk about the fx market reaction to what we see as we look at the energy crisis in the eu? >> we have seen the ramifications of what happened on the weekend play out. most significantly in the euro which is down against the u.s. dollar this morning and as you mentioned, we are going to meet this week. there are expectations of a 75 basis point rate increase. that is not going to be enough to assure up the euro which has fallen below parity. as you mentioned, they are trading that fine line with what has been going on over the weekend. as a worsening energy crisis, fitting into fears of a recession in europe and of course anything like that going to have far broader impacts across markets. the euro is the main thing or we have seen the main as it were we have seen that play out this m

we have comments from christine lagarde and what is happening with the italian story.l and leisure is up, technology is up, the car sector is having a good day. we will talk about volkswagen in a moment. the bottom of the market retailers and insurers. that is the yield story. let's talk about individual stocks. jope will be stepping down at unilever, the stop responding reasonably positive. volkswagen looking like it will price the porsche ipo at the top end of the range. let me show you one of the use k -- one of the u.k. households, the prospect of higher rates steering this market. alix: i am seeing a headline that says the boe andrew bailey is monitoring elements and financial markets very closely. i'm not sure where that is coming from but i wanted to alert you of that and says he will not hesitate to change rates by as much as needed. i'm trying to figure out where that is coming from but it looks like we are getting the beginning of verbal intervention. speaking of verbal intervention, ecb president christine lagarde says the central bank will continue to incre

as for christine lagarde and the ecb, it was considered a tossup.e an energy crisis, yet they have high inflation. >> the governing council today decided to raise the three key ecb interest rates by 75 basis points. this may set front load the transition from the prevailing highly accommodative level of policy rates toward levels that will ensure the timely return of inflation to our target. >> just as important if not more so, she said they see more hi hikes as needed and importantly it wasn't just the hawks pushing the doves in that direction. the doves are on board also. >> not a done deal. before this meeting before we heard these remarks and saw the kinds of things we were seeing in their statement, people were not expecting it but they are now. >> global economics and policy editor kathleen hays. let's bring in our next guest. kathleen just explaining jay powell doubling down on the hawkish rhetoric. the markets are rising. our the markets second-guessing the commitment of central banks again? >> i don't think they are. i think the markets fin

what a decision that is from adam lagarde followed by a press briefing from christine lagarde and on friday, eu energy ministers will attend an extraordinary meeting in brussels to discuss an emergency intervention and electricity markets and eu finance ministers meet in prague. a busy week for officials in brussels as a wrestle with the cut off of gas from nord stream 1. let's check back in on the single currency. the euro declining below 99 u.s. cents for the first time in two decades. it drop of close to 0.7%. the weakest euro adding and exacerbating these inflationary pressures. the ecb will make its rates decision on thursday. the market is pricing in 70. let's check out the european futures. a drop of more than 3% as markets weigh that energy shove. it will be a brutal day for european equities. coming up, the julius baer yves bonzon. and later, we will have more on the race to become the latest uk prime minister and the mounting economic challenges facing whoever takes up residence at downing street. this is bloomberg. ♪ >> we are convinced that year, if -- the level of inflat

nothing yet. 75 basis points hike, christine lagarde today talking about qt.but getting there. a lot of moving parts in it europe, trying to digest it all next. -- will join us in the next hour, europe's analysis -- to give us her analysis on what is happening. the close is next, this is bloomberg. ♪ millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... add a line to your existing plan, or see for yourself how easy it is to save by talking to our helpful switch squad at your local xfinity store today. guy: monday the 26th of september. european stocks fairly mixed. the action is in the bond market and foreign-exchange. we will talk much more about what has been happening. the countdown to the close starts right now. >> the countdown is on in europe. this is bloo

next up, lagarde. the ecb is on the brink of a 75 basis point hike even as recession risks rise. eu leaders ready to merge with energy measures. most likely outcome. andrew bailey reiterates a recession is probable. sterling hits a low. trust enters 10 downing street. good to see you this morning and have you back. stephen majors shifting gears. maybe calling time for mr. lau on those jumbo rate hikes. good morning. how are you? dani: good morning. relief in the bond market. someone seems like they are slowing down. 75 basis points instead of 100. i don't think that's what we can assign the equity market rally to necessarily. let me take you into what the futures are doing. europe starting to rally this morning. we saw a rally of nearly 2% for u.s. stocks. that's what we are seeing on the euro stoxx 50 futures. s&p, nasdaq are higher. they were unchanged. we have aussie news coming out that helped support stocks and bonds. in terms of my argument while yesterday wasn't about the fundamentals, it's because of the goldman sacs index. that rally to nearly four point 5% yesterday, do

rishaad: meanwhile, the european central bank president christine lagarde, saying that the economic council will only consider shrieking into balance sheet -- shrinking its balance sheet. the debate about quantitative tightening will be held when rates reach neutral. four point $8 trillion worth of bonds were bought during the latest recent crisis. vladimir putin has granted citizenship to edward snowden, the former nsa contractor who disclosed a top-secret spying program in the u.s. snowden has been living in russia for nine years, and obtained permanent residency in 2020. he leaked classified documents that showed how the u.s. and british governments monitored communications of citizens not suspected of crimes. japan is holding a state funeral for former prime minister shinzo abe, it the current leader fumio kishida's decision to spend millions of dollars in the ceremony, is met with anger by households grappling with inflation. among the attendants will be vice president, harris and the presidents of india and australia. those are your first word headlines. david: just ahead, we will be

ecb's christine lagarde reminded everyone it is the role of government not the ecb to find energy trades. it is to provide liquidity to banks. everyone seems to agree that the energy traders need a financial aid. the fight starts next week when the commission president sets out concrete measures for legislation. one week after moscow shut down its main pipeline in europe and moscow has been tinkering the amount of gas available to the european nations over several months now. it is getting increasingly desperate for the european union to solve the energy crisis that could become both economic, social, and financial. many of the nations are trying to get ready for winter with various reserves. resorting to add to their storage. they are not there yet. gas supply would not be restored to the north spring pipeline which is another maintenance fade after a sanction after the invasion of ukraine was lifted. increased fears that there may be some total cut off of russian gas? shery: we are seeing the price pressures across europe. we are hearing from the ecb president on the potential approach

. >> i think christine lagarde wanted to believe that for a long time and they just kept seeing inflation rates skyrocket and everybody else doing 75 basis point hikes. peter, what does it mean ultimately for europe? what's the prognosis there, and what are you doing at lazard in terms of business with all of these forces hitting at once >> well, the macro situation, again, particularly in germany where the hard stop on russian natural gas is a significant shock. combined with the fact you've got a climate-driven crisis on water and very low levels on the rhine and others is that it's very hard to ship coal to help substitute away from russian natural gas. so for now in terms of deal making, i think europe, the microstory is actually still quite active and optimistic, but the macro story i think is pretty dire. that brings us back to both monetary and fiscal policy. >> do you think that the u.s. is also facing recession? >> this is a path here look, let's just be clear, if the fed wants to or needs to create a recession in order to disinflate sufficiently, that's what will happen it is wi

let's listen to the head of the european central bank, christine lagarde.e eurozone, affecting all areas of citizens' lives. the latest euroborometer polls show that two out of three citizens consider inflation to be one of the most important issues at the moment . expected to get worse before getting better. sergeevich interesting recipe yes , the situation will worsen, first of all, than to become better. well, you still need to pay attention to the appearance christian lagarde her diamonds, okay, so to speak about food. actually. e from friday, starting. here, such a wave of economic events took place precisely on the news, which actually confirms what we have been talking about for quite a long time, uh, the fall is actually the economy of the european union, the economy of the european union is in the hands of the united states in the first place, uh, european enterprises are curtailing production due to high prices. energy carriers are curtailing their production and transferring them to the usa, that is, by by and large, what trump was trying to achi

christine lagarde will focus on the messages for europe. front loading those interest rate hikes which means the economy perhaps can get central stability going through the rest of the year and only increasing rates. speaking to analysts, that will be the case front loading the hikes. we will see a few come through before the end of the year economies may begin to flat line by the end of the year france expected to have zero percent growth the last three months of the year in that final quarter. how exactly the interest rates situation is laid out from christine lagarde later today will bear just how much pain the inflation pressure has put on the rest of europe >> arabile, thank you. we are awaiting that decision. >>> let's get a check on this morning's other top stories. pippa stevens is here with us. >> good morning. the chinese city of chengdu extending the covid lockdowns. rules were expected to be lifted yesterday, but officials late in the day said the virus some are. of the 21 million residents, 16 million are under lockdown a numbe

finally this evening, the ecb president christine lagarde will give a speech.ext, we will talk about whether the strength in the dollar can continue, what you should be looking for in this very busy week. we will be speaking to the commerzbank fx strategist on all of that. plus, back to business. the 10 day grieving for queen elizabeth comes to an end. stay with us for that. this is bloomberg. ♪ >> they have been less eager to really stimulate this time. that may be good further economy and for the long run, but it means for the world, you have the number two economy that is not really jumping forward. that puts more burden on the u.s. the runway for the government and the central banks to go is the focus more on production. how do you get more things out of the economy? that makes -- that means you won't have to do as many rate hikes. dani: world bank president david malpass giving his thoughts on the inflation problem in china. it is a big week for central banks. in number of players had to reveal their latest rates. first, it is the turn of sweden's bank whi

president lagarde saying the inflation outlook will determine rate hikes, but what caught my eye, shes she expects to raise rates further over the next couple meetings. they say the ecb has frontloaded the rate hikes, but also saying the euro area is not seeing the demands overheating like the u.s. is, saying they will not allow a lasting inflation problem and still talking about the risk of a wage price spiral, but still remains contained that so far. right now real reaction. -- now, no real reaction. but it is certainly to be watched. it let's go to international headlines, the nato secretary general says that russia's plan to hold elections in four territories in ukraine and formally annexed them "does not have legitimacy." he called for continued support from allies and also commented on sweden and finland joining the organization. he spoke with bloomberg at the united nations. >> both referendums do not have any legitimacy, and therefore they do not change the nature of the conflict. this remains a war of aggression by russia against a sovereign nation in europe, ukraine. and thi

and an ecb decision from president lagarde. 50 or 75 in september for the fed? subadra, 50 or 75?adra: 75. robert: 50. george: 75. jon: for the ecb? robert: 50. george: 75. subadra: 75. jon: who cuts rates first, the ecb or the fed? george: the fed. subadra: the ecb. robert: the ecb. jon: enjoy the long weekend. that's it for me. i will see you next week. this was bloomberg real yield. for our audience worldwide, enjoy the long weekend stateside. this is bloomberg. ♪ >> i am mark crumpton. first word news. . president biden says there are signs that inflation started to wane in that the latest jobs report shows more good news. >> inflation, maybe, i'm not over present -- promising maybe begin to ease. gas prices have fallen 80 straight days, the fastest. klein. in a decade -- decline in a decade. >> mr. biden was speaking abou

maybe it wasn't widely expected by everybody, but all traders i talked to thought lagarde had littleity of the last 45 minutes or so which has two year and three-year notes going in and out of negative and positive territory with respect to their yields, but i would continue to stress that we have turned the corner a bit after that august 2 of speech after the chairman of the fed. and equity markets thrown into a tizzy that seems to have moderated to some extent back to you. >> steve liesman joins us right now with more. steve, what do you take out of these numbers? >> yeah, you know, rick is right to point out this difference, which is interesting, between the continuing claims and the weekly claims. and i'm looking here looks like continuing claims are up by about a million here, 1.3 million and 1.47 million a little more than that, actually which tells you that people are being laid off and spending a little bit of time in the being jobless before getting rehired but the inputs, the weekly inputs to the jobless claims numbers are low, and it suggests that job market remains tight.

christine lagarde will be speaking.h do you get the sense that they are committed to these potentially rate hikes that they are all but committing to. rafael bostick around noon. do they talk about the dollar? how concerned are they about weakening, the ramification of very hawkish rate hikes? jonathan: he just laughed. lisa: uncontrolled laughter. it really raises this issue of the tension between the real leadership and all of the noise around the message. jonathan: you think it is noise? lisa: here is the issue. it is noise that you have to pay attention to. try to influence the conversation but don't necessarily pay attention to the conversation of the leadership. what does that do to the credibility of the fed? jonathan: entirely agree. staying awake all weekend waiting for aaron judge to do something he never did. one good week right now, what is it? >> one good reason to be bullish is that we he g to the point ata minimum to provide some balance. it is really transitioning from an environment where folks are real

i know that the forest is once a powerful , strong leader, a female leader and as christine lagarde once said, if you want to achieve a result and solve a problem, call a woman and i hope that this will also have its effect . she has support in the parliament, she formed a powerful government, she left key people such as the minister of defense in the government, and moreover, even in the pre-war period, i am responsible for euro-atlantic integration, they were responsible for building a system of state stability in various conditions, including in conditions of full-scale war has always been this model, that is, it is the basis of the functioning of state institutions, which are unshakable, so there are no doubts. we, on the contrary , are already thinking for ten years ahead about how we will build our relations on the basis of this basis which we have already built now, in your opinion, in general , the european union has done enough to restrain russia's armed aggression against ukraine. but i would not divide them, then again, these are almost the same leaders, yes. that is, we have

we've heard from lagarde -- we've not heard where she sees policy going.o be an interesting session. it feels if you listen to the market there's a chance for the hike are little bit higher. alix: wondering what the market is going to do and what the ecb will do versus what the press conference looks like. the other main event, apple supposedly the biggest event of the year joining us to preview his emily chang who joins us at apple headquarters. what are we looking at? >> we are expecting a few new iphones and a couple of standard models with some improvements potentially more significant improvements than we saw last year that might catalyze a big cycle of upgrades. were looking out for new apple watch. they believe will be called the apple watch and provide more screen space and more geared towards rugged athletes if your mountain biking or marathoning maybe you want a lot that can do more. in terms of the question is are they going to be dealing with these expensive devices in a downturn. that is the question. guy: at the same time i'm sure apple is fa

we will hear from madame lagarde on thursday. money markets pricing about 55 basis points, split between 50 and 75. and to what extent will oil prices be strained as governments have to switch due to the lack of gas. pressure on stocks in asia on the back of news that the u.s. is considering further restrictions on investments in chinese tech. francine: let's get to our mliv managing editor, mark, you are looking at g10 rates? good morning. mark: yes, absolutely. the backdrop around the world is the rising rates and the inflation problem that is still underestimated. the bank of canada expected to hike 75, and the ecb between 50 and 75. even if the ecb only does 50, the average g10 benchmark rate will this week surpass the february 2011 level and go back to 2009. this is the straight average, not weighted. they went to zero in the pandemic, it was stuck down there and this year it has been skyrocketing. this redline is where we expected to be if the ecb only goes 50 this week. it will blast through this level. we have got a diffe

we heard this morning from christine lagarde to the governments that you need to be clear on what youuse otherwise we might have to do more and you might not like it. tom: jana randow, comprehensive on the ecb and the ramifications for what is happening here in the u.k. and the fiscal spending as well. let's get the bloomberg first word news without atkins. alice: hurricane ian is regaining strength across the atlantic and is set to make landfall in south carolina later today. that after leaving a path of destruction across central florida, destroying homes and the power grids and leading to unprecedented floods. power was knocked out to more than 2.6 million homes and businesses. abc reports at least nine people killed. president biden has denounced russia's plan to occupy regions of ukraine. moscow says it plans to apply what it calls treaties in ukraine's east today. this after the annexations were condemned as illegal by the united nations. hsbc is considering relocating its headquarters in canary wharf when the lease expires in 2027. the bank is aiming to create a more flexible w

where christine lagarde sees the long run rate relative neutral rate. expect to have to tighten and be in restrictive territory to bring inflation down. we may not get a sense of that given dave been clear they are not looking too far ahead. secondly i would be interested to see what their conversation is around quantitative tightening. there's not much chatter about that in the euro zone and there is a question of whether there should be quantitative tightening given dave -- given that they are hiking rates so much and are rallying to fight inflation as their top priority. should they be reinvesting everything, maybe we will get a hint of that tomorrow. we may have to wait a bit longer though. guy: we are seeing a lot of policies out of london and paris and brussels, out of berlin to try control the energy crisis into winter. if we get a cold winter it's going to be difficult in europe. the problem at the moment is there is limited efforts to reduce demand. we heard them speaking about this earlier on. the danger is there's a lot of money for winter, w

i wonder what you make of madame lagarde saying that debate should start to happen once we are done withest rate hikes, would that be too little too late do you think? gediminas: we started monetary policy normalization in december last year. we need to have this holistic view of all the instruments in our toolbox. quantitative tightening is one of ours, so we need to start discussions as soon as possible. it doesn't mean making decisions exactly after the discussions, but we need to have a strategy how these instruments go hand-in-hand with our monetary policy normalization plan. dani: and another one of these instruments is that of tpi, keeping spreads contained. we talked about this idea of financial stress, the boe stepped in and we saw yields fall everywhere. given the market stress we are seeing at the moment, are you getting concerned about italy? at what point does it make sense to use these tools at your disposal? gediminas: interest rates is also a reflection of stability. all of our economic factors explain the development of one or another country. the same for spreads, tpi i

making comments as well. >> the timing of lagarde, this cato appearance, the piece in the journal, all of that probably not a coincidence i thought they got to a fair number of structural questions about the fed, single mandate, whether m-2 is an inflationary dynamic, crypto, whether we're in a new period of structural inflation, but it did sound like an effort to push back on the question of why are you feeling to hawkish when expectations have not become unmoored, and as you appointed out, the longer it remains over targets, the more likely that acts as a time bomb. people demand more in paychecks, they get used to rising price, and that feeds itself. >>> let's bring in bob pisani for his reaction. >> not a surprise with powell. he reiterated that history strongly cautions against premature loosening of monetary policy take a look at the market here what happened is the growthier parts of the market were weaker at the open. you sea semiconductor, cathyie wood's ark fund surprisingly bent positive. energy went positive, as oil moved up a bit and was a pretty weak day yesterday overall

and quantitative easing while they were doing tightening, christina lagarde has the same play sheet so do you think the bank of england ought to be singled out, isn't it all coming home to roost? >> central bankers go from a dull profession to a dynamic profession and they are being dynamic in trying it to reconcile inflationary expectations with fiscal policy. so that is what we should be expecting from every central banker >> they coordinated what -- they were all going down to zero, but multi speeds, whether europe, japan or the u.s., they are never going to be able to coordinate with the up side. >> but cyclicality is a different situation. from a timing per spending difference, we're playing different games in different innings of the event so when we think about it, the u.s. is in a very different situation, perhaps later in the game than eurozone and bank of england and the situation dealt to them will have to be dealt with in a variety of different factors. the fighting power of the fed might be viewed in a different lens than the bank of england. >> let's ask the question that

or is he trying to overshadow christine lagarde?line, it is unclear what will be more important for markets, the ecb meeting tomorrow or friday with the energy ministers from europe on the energy crises. to me, that might be a bigger market mover. jonathan: could not agree more. if you could tell me what will happen to gas prices, kailey leinz, i have a much better actor of what next year looks like -- i have a much better picture of what next year looks like. kailey: it is whether that will actually materialize. there are questions about how they might be able to rein in demand, allowing people to potentially for more electricity. the problem in the u.k. is something that lists stress -- liz truss will have to speak to in parliament. jonathan: good luck. i think it is an occasion where circular storm -- where sir keir starmer has to let the prime minister talk. lisa: would you want to be prime minister right now of the united kingdom? jonathan: i used to think theresa may had a tough time when she became prime minister, but perhaps

it appears they're not good at that job in europe, it's still many of the same, christine lagarde. like the same names for the last five or ten years. do you think that the market has confidence in these people does the market -- should the market have confidence in these people, who were there when things went awry >> i think we're right to be looking at what central banks are doing with a lot of attention, because what they will be doing will be key in determining the global outlook and the pace of the slowdown even if it adds pain in the form of slower economic activity. that's really the goal of most central bankers today, is to curb demand. as we know, they have very little power in terms of reestablishing supply. they're weigh on demand. the question is, how capable of they of managing a soft landing in this environment. >> i want to go outside of that. you know what happened with the pipelines this week. norway is flying fighter jets of some of its oil platforms in the north sea today. jpmorgan chase came out with a note i'm going to summarize it, read one line from it the d

lagarde collapsed and the attacker took off with the cash.e say the victim is a man in his sixties who's worked for gardaworld for 40 years. the hospital was placed on lockdown for several hours while police search for evidence . so far no arrests have been made. caltrans crews have started clearing oakland's largest homeless encampment, large group of count, trans workers and the chp moved into the woods street encampment this morning. following a standoff with homeless advocates. they were there protesting in an effort to stop the people from being evicted from that site. two weeks ago, a federal judge ruled caltrans can move forward this week with its plan to clear that sprawling camp about 200 people live there, and the homeless advocates say the city doesn't have enough beds or shelter for all of them. caltrans the city of oakland and alameda county have all been pushing to clear the site, citing several recent fires that have started at that encampment. the ongoing hot weather affecting students in the bay area, the changes for several

interest rates, so it would be a 75 basis points hike for interest rates, that move by christine lagardeay from negative interest rates and no more zero interest rates and the question is prior to this, how does this mean, will people be able to refinance and find more favorable rates and it will get interesting. >> and lastly, twitter has agreed to pay roughly $7 million to the whistle-blower whose allegations will be part of elon musk's case against the company in his ongoing dispute about whether he will purchase it or not. tell us a bit more about that settlement please. >> the story gets worse and worse for twitter, and it is confirmed $7 million is the settlement price for the whistle-blower who had the information, and he said that twitter did not have the kind of security measures that they needed to put in place in order to not get into security issues. so the security plan not necessarily in place. and made misleading statements about their defenses on hackers. and scam accounts as well. and he will meet with the u.s. judiciary committee on december 13th to discuss more of thes

vonnie: ecb president christine lagarde's is the governing council will only consider shrink the balancinget onto has lowered rates. interest rates remain the appropriate rate to fight inflation and the debate about quantitative tightening will be held. the ecb is holding about $4.8 trillion of bonds bought during the recent crises. the new zealand central bank governors says there is still work to do. they told an audience that the inflation rate is too high but still lower than other countries. forecasts suggest the bank may hike rates at least 4% by early next year. the inter-american development bank has announced its new president. governors voted to fire over an alleged romantic relationship with a top aide. the u.s. supports the dismissal. the idb is a key part of u.s. influence in latin america. japan will hold a state funeral on tuesday for former prime minister shinzo abe. the current prime minister decision to spend $12 million on this are money has been mint wit -- has been met with growing anger. among those attending will be u.s. vice president kamala harris and the prime mr.

you have dutch schemes doing derivative strategies and german schemes -- this is a risk to madame lagardethe continent? christian: the european systemic risk board yesterday issued for the first time, which admittedly wasn't long, a general warning. it is very general but clear we are worried. pockets of various markets europe and beyond, energy derivatives, we know there are issues, also bond market, equity markets, volatility is a major risk. tom: how does that change the prism for the ecb launching their meeting end of october? christian: the meeting is fairly safe. the risk is ecb is going to hike. the question is 50 or 75. you better act gradually to prevent major volatility. big shifts in the dovish direction don't make much sense if governments come out and support the economy in massive ways. lisa: how much are you ratcheting up longer-term inflation outlooks? christian: in the short run, they will lower headlines. price caps will reduce inflation by two percentage points in germany. in the u.k., they are lobbing off six percentage points with price caps. this is an allusion. they

it is a region at war and christine lagarde and the leadership will have to deal with.hat you will see is currencies give way and what the germans fear most, this is my first question. the heritage of europe and declining incomes is totally different than the new world optimism. jonathan: from new york city, futures up half of 1% on the s&p. nasdaq up. there was an ecb rate decision coming up later this week on errors they. chairman powell is going to speak at a conference at 9:10 eastern time. make sense of that. futures up half of 1%. this is bloomberg. ritika: the u.s. justice department is deciding what to do next in the case of those documents taken from donald's home. a judge granted the request for a special master to review the documents. justice department has not said whether it will appeal. in the u.k., energy bills at or below the current level. cost as much as 150 billion dollars over the next 18 months. planning a 46 billion dollars support package to lower entry bills. one of the suspects in the stabbing death of 10 people has been found dead. they also b

i don't buy the template lagarde can do 75 beats. they are not the same economies, are they? i'm glad you mentioned that. what we are seeing in europe is an energy crisis that is still intensifying. what we are expecting to see in the coming months is a fall in real income that we have not seen in decades. you expect the contract of the third quarter and into 2023. a much deeper level than in the u.s. momentum is different. this is energy inflation driving the problem. the room for the ecb and the arguments they are having is very different. that can result in hiking and there is no way around it. tom: this is my chart of the year, nominal gdp. for the u.s., europe, japan. europe is flatlined since 2009. is there a risk, even at a more elevated level of europe getting into a sclerosis of 10 and 15 years where it is not assumed they can get a late 1990's pop that will not occur? sandra: it's very complex. i think the risk we are seeing, we might actually look at a eurozone economy which is getting into quite a recession. at the same time it is not going to have the recovery th

. >> christine lagarde, the ecb president. this is bloomberg surveillance.ity futures are down 4/10 of 1% on the nasdaq. we are down .8%. the main event is in the u.k.. the bank of england is announcing a guild market operation to buy bonds at the long and. yields are down by 40 basis points. that is 4.8%. a big statement from this bank. there are couple of things here that i guess don't add up to some people. the purchase will be carried out on whatever scale is necessary to affect the outcome. then in the final paragraph, these purchases will be strictly tied -- time-limited. can you reconcile those two things? >> that's a key question. i don't want to walk into a time of this, but this is the x axis. these banks are all worldwide. there were more combined right now. i would point out for our american audiences, the u.s. yield comes in as well. why is that happening? the bank just blinks. when will the fed blink? >> that's the question being asked. who is next? for working with a producer out of london. >> i did know you are on speaking terms. >> it is now

that is what madame lagarde will face in the coming days.n all the financial turmoil, but joining us again with his wonderful prickle thinking skills across economics and finance, from bank of new york mellon, geoffrey yu joins us. thank you for taking time with us today. starting as a student, black wednesday in 1992, in the theater, market participants could corner the market. george soros and others did back then. could the markets corner the prime minister of the united kingdom? >> they are certainly trying to do that within the currency market at this point. but the bank of england is providing some relief. their reserve this time around, they are not even going to try with the eastern european countries at this point, but they can get into the gilt market, which is something much more within their control. jonathon: this is a band-aid. and a band-aid gets worked off again on october 14. what will things look like by the time we get to october 14? >> that is a lifetime away. monday is the immediate risk. now, it appears the chancellor a

tom: bringing over lagarde and the weakness in the euro we saw yesterday, .985. this has been a hallmark of bloomberg surveillance too many years. we never spoke to rudy dornbusch, who died tragically so early. this stuff matters to our listeners and viewers. we are going to lead on it. jonathon: chairman powell talking problems. on the nasdaq, down about 0.25%. yield shaking higher by a basis point. 354 are the 10 year. 4.1% on a two-year yield. lisa: now, it's over to the bank of england and the rest of the world. it seems like overnight from the national bank, it is going to be hard to get a hawkish direction. i would argue it was not a 75 basis point rate hike. it was a change in the projection and outlook. at 7 a.m., the bank mainland has a very difficult situation. maybe 50 basis points, but markets seem to be thinking there could be some outside surprise. because of that incredible weakness we continue to see, this is between a rock and a hard place for governor bailey. they have one of the most difficult jobs. he has been out front and honest. how low are