michael mckee is in washington. michael: the fed officials have to be talked out of a rate increase in december rather than talked into one explaining the change in language in the october 28 statement that suggests that they would consider a rate increase at the december meeting, the minutes say this change was intended to convey the sense that while no decision had been made, it would well become appropriate to initial the normization process at the next meeting provided that unanticipated shocks do not adversely affect the economic output. weaker than expected job growth in august and september led to what the minutes describe as all members agreeing it would be better to wait for all data, almost all said the economy is growing fast enough to keep the unemployment rate stable or moving lower. inflation was seen as likely to continue moving higher as the influence of energy and commodity prices diminished, although the risks of a stronger dollar were noted the minutes say. as for the market and international devel

. >> michael mckee is in washington with a question. michael: in the boilerplate about when they are going to raise rates, they have been saying for months and months in determining how long to maintain their target range they will assess progress on inflation. in determining whether it would be appropriate to raise the target range in its next meeting. how much of a commitment to you see that being and how hard would it have been to get that into the statement? >> regardless of what the outcome is they will debate the issues on the merits. i obviously wasn't there. you have a lot of the same debates take place in this meeting that you didn't in the previous meeting. many have kept saying in 2015 and the meetings are all live meetings, there was a debate whether a press conference would matter or not. i think they are keeping it on the table. >> he would once again reemphasize you do not cover up the importance of the exchange rate. my first question would be the expansion of the qe policy. how much of that as a response to the ecb last

michael mckee, thank you so much.with an extended conversation on radio later. look into her closet and find out how many gold buckles are on the toes of her shoes. burch better than you think you do in the 8:00 hour, maker of shoes with gold buckles on the toes. ♪ franice: welcome back then you are looking at live pictures of london. the mood is summer and more politicians say the terrorist attack cannot lead to a closed europe. it's time for the morning must-read. vonnie: i picked something month nye wrote last before the attacks in paris. we just heard president obama affirming a compact with japan. or globalilateral agreements do we need to enter into in order to combat something likeisis? >> the london economist at an estimate of either the close allies or the close working partners the united states has about 60. some of these are treaty allies like japan, others are close working relationships. basically, we will have to do more of these partnerships. there is not as much you can do alone. events from these the

david: that was professor joe stiglitz talking to tom keene and michael mckee on bloomberg.hey arecome, why stepping up the investigation of the in emissions scandal. ♪ david: welcome back to bloomberg markets. i'm david gura. more bad news for volkswagen. a new recallsuing notice. plus, volkswagen failed to report fatal injuries to a database. what is this database? the database is supposed to be all of the allegations of defects that resulted in a death or energy -- or injury that the auto makers know about. it is supposed to let the government or people like us to they happen.efore and honestly if they are not in there, you can't. it is a way to see things developing. david: how did your team crack this? jeff: we'll been looking at this for a year. takata. some stuff for chrysler said, yeah, we were not complying with the database either. just on a whim, we said, let's look at what other automakers might have an issue. we were not expecting to find volkswagen, and we did. and then it seemed that volkswagen have the lowest reporting rate. and then, can we find actual losse

tom: i want michael mckee to get back to the jobs report but i believe this yield is higher and bondrices are down. how do you adjust in unconstrained manner this morning? bill: hopefully, you go into it as we did at janus with a regulation. to prepare for a mild bear market -- it's a down day in prices like today -- yeah, early this week, negative durations going short the 30 year treasury as opposed to long. obviously making money the moment but the fed has prepared markets for this. you know, i think the markets may not be prepared because hedge funds and retail investors will look at this headline and use etf's and maybe mutual funds as an exit vehicle and they cannot get all out at the same time. ♪ ♪ scarlet: welcome back to "bloomberg best." international things are under pressure. capital outflows of all lead to a direct impact on income and sparked major strategic shifts. this is led to consternation and much conversation during the week. >> it was a very challenging quarter. in addition to everything you just mentioned, think about the seasonality you have given the summer.

michael mckee is in washington. icials have to be talked out of a rate increase in december rather than talked into one explaining the change in language in the october 28 statement that suggests that they would consider a rate increase at the december meeting, the minutes say this change was intended to convey the sense that while no decision had been made, it would well become appropriate to initial the normization process at the next meeting provided that unanticipated shocks do not adversely affect the economic output. weaker than expected job growth in august and september led to what the minutes describe as all members agreeing it would be

notable because again it sort of emphasizes what we have our hearing already, as economics editor, michael mckeent it is a case of them needing to be convinced not to raise at the december meeting. if anything derails them. still being priced in is a chance that we will see a raise in the december meeting. it really has been bouncing above and below 70 and a tight range ever since we got the jobs report. if you look at the treasury market as well, you are seeing the yields moving higher, which is one of the reasons we are seeing utilities and telecom stocks underperforming today. betty: thank you so much, julie hyman. let's check in on the bloomberg first world news from courtney donohoe. courtney: questions are main after a police assault aimed at finding the organizers of the attacks. two people were killed, including a woman who blew herself up with a suicide vest. the fate of the alleged leader is not known. it took place in the suburb of saint-denis. the french president says that war with the islamic state. he says he wants a large coral -- coalition to take on the group. the islamic state

is that mean michael mckee doesn't get to go to anymore press conferences? that the fed hasn't raised rates since 2006, the forward guidance is important because the markets are so nervous about the first move. the point being made is that if the markets see conditions are generally ok, then they will perhaps become less concerned. i have to say, the most important communication at the dots, andthe fed perhaps that is what they will use on the 16th of december. rates for 2016 is lowered even further, implying three rate raises. tom: there is nothing like talking about the dots. francine: i like the.. dots.ike the the only way to combat inflation is with radical new ideas. do you think that central banks have a holding pattern to deal with this? derek: i am not so sure, to be honest. i still think that we need a bit of time. if you remember in the period after the crisis, when china implemented this fiscal stimulus program, commodities when soaring through the roof and we had concerns about inflation. i think we are getting the reversal of that. i think we ne

more on that jobs report in a moment with betty in michael mckee. russian president putin has agreed to a recommendation to ask that -- stop all russian feisty egypt. the russian intelligence agency said it would be quote reasonable" to in-flight. u.s. and british officials fear a bomb might have blown up the plane midair. rescuers are searching for burstors after two dams in brazil. authorities sent one person was killed and four were injured and 13 are still missing. a small town was flooded. project is owned by two of the world's biggest mining companies. whether maven a factor a crash that killed six people. the bus get off the interstate in arkansas last night and hit a bridge support. police say it was still foggy after heavy rain. the news rightt now and you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. betty: thank you so much. let's get back to the top story. it is a job stay in america. today's robust labor report much stronger than expected. pretty much blew past any economist's estimates. a com

michael mckee with important perspective here. conference for december -- you will be in the , and mr. applebaum of "the new york times" will be there as well. press conference change for chair yellen? michael: these two central banks have faced an annual crisis that have affected her ability to make monetary policy. i have put together a chart that shows that each year there has been something -- greece for a number of years. the budget shutdown. in august, china. all of those things affected. whether theye, will spend money or hire people, that led the fed to hold off. goldman sachs is out with a note this morning. tom: i saw that. michael: tourism and consumer spending is going to be down, but the impact depends on whether or not there are more attacks than if there are not. you and i know that these actions are what peter bernstein would call and uncertainty. that folds over mathematically into -- no one is talking about euclidean mathematics, and yet france's gdp must be dampened. michael: it will be dampened a little bit. un

central park -- later seven avenue today on bloomberg radio, joseph stiglitz will join me and michael mckeeiglitz is out new book, "rewriting the rules of the american economy." we will talk with him about the republican field. that will get his blood going on a monday morning. stay with us. "bloomberg surveillance." i am running next year. ♪ tom: good morning, everyone. "bloomberg surveillance," new york city and london. hot for the runners yesterday in the marathon. it is gorgeous out there, the third week of september as well. it is time to do a forex report as well. there is not much going on -- euro-yen shows a little bit of lift in the last week toward abenomics. i am going to look at turkish than dollar-lira stronger 2.81. this is good news off of the erdogan and election. let's go off to our business flash. here's david. david: the irish drugmaker shyer has agreed to buy dyax. the perdition from the analyst to correctly forecast that oil prices would collapse -- gary ross says opec will probably hold production steady next month. getting one big investment can make up for a lot of l

michael mckee has been looking at that and joins us now. we saw duringing 9/11 here as well. impact of terrorism and -- terrorism impact is about the same as market impact. it's going to look a lot like what you were looking at -- this is consumer confidence. a sharp plunge after the 9/11 attacks but you can see the rapid rebound we saw. there wasn't much of an effect on the overall economy. it was barely measurable once everything was put together. goldman sachs has a comprehensive note on what to expect. they are saying tourism and tourism is likely to fall. they say the overall economic impact is likely to depend on whether there are any more attacks that will keep the psychology depressed. us a littleh earlier here, the ecb chief economist agrees. things can have a transitory effect on the economy. see the evolution of the european economy, it is true on the other hand that we have a fragile recovery with downside risks and these events do not help. michael: given that and that france is the second largest economy in the eurozone, it takes it likely the ecb will ease in th

alix: with more now, we have bloomberg editor michael mckee. we heard her talking a little bit about what she would do with the ballot expansion. what is the expansion? hot topic? mike: the hot topic was the word live possibility. she basically read their last statement to the committee. that was their last statement after the fed meeting couple weeks ago. she added the words that december is alive disability -- a live possibility because people want to know how serious the fed is about this. she went a little farther than i thought she would and suggested they are serious about december. alix: looking at the movement in two-year and the stocks, it seems a measured and calm response. would you agree? mike: this was a fairly rapid move higher for yields all across the curve. no, would be the answer there. [laughter] clear that when get the next data, we get the jobs report on friday. follows that with adp today and significant job creation and it was the unemployment rate again and we see any kind of wage growth, the fed does not have to see inf

michael mckee has said the people he talked to are saying they don't expect this to be a fed rate cutobability unless there is another incident. in the mars model, we saw a drop in interest rates on government date but that's because of a fight to wally and that's something we are seeing today as well. stephanie: let's talk european consumption. talking about the hospitality industry. how will this affect europeans? when we look at back in global markets whether it's spain or london or the u.s., the historic consumption went up. >> i don't think it affects the european consumption inside or europeans traveling outside europe. we think it affects broader this yearause we have and immigration. the u.s. population will cast a wide view on europe as being a little risky because of this syrian migration. i think that is the real challenge. when need the u.s. travelers to flow into europe. there is probably too much capacity across the atlantic for i think the u.s. traveler will not want to travel because of this. stephanie: thank you, everyone. i want to share more of these special images.

mckee. it's an ongoing question, how the fed deals with regulating small banks. he was pretty straightforward. he said there is a window of opportunity to ease up. michaelestion is not just a fad, but the other bank regulators. how much of the requirements for large banks that could bring down the financial system. banks work hard. reporting regulations in particular are so onerous that it costs the banks a lot of money. that may affect their ability to make loans. it's coming out of their profits. it's been a battle since they started writing the regulations over whether small banks should be subject to the same kinds of rules. the regulators are saying we can probably back off a little bit. erik: why is there even a debate at all? michael: the system itself came under fire after the great recession and the credit crisis. dodd-frank was written as an omnibus law. the regulators were given the right to write specific regulations. looking at they are the benefits and effects. it's not a one day we switched on the light kind of thing. it's taking a long time to figure out. regulationuch more and capital requirements might they be subject to? introduced th