sonali: michael mckee, we thank you. jim milstein is a cochairman and joins us to talk more about what we hear about the fiscal picture in washington. even though we have heard so much from the fed already in of gotten past the worst of it for now, the reality is, the canned was just kicked down the road with 45 days or so of securities. with this looming over our heads, how much concern do you have in terms of volatility moving forward? >> i don't think it's over in washington by any means. one caucus of the republicans led by matt gaetz said they will move to vacate the chair which is to replace speaker mccarthy or cut a deal -- for having cut a deal with the democrats. it was to avoid a shut down and they garnered 139 republican votes in all of -- and almost all but one democrat. it seems as though there is a small but vocal chorus in the republican caucus that is unhappy with the speaker. they moved to vacate the chair. under the house rules, until that motion is decided, nothing else happens. you need a speaker to r

with the market data, let's get to michael mckee. the change in manufacturing payrolls of 17,000. for the months of july and august, we have a revision of plus 119,000. the labor market is considerably stronger than people thought. hourly earnings, randy was worried about that come up .2%. that is lower than anticipated, same as last month which pushes earnings on a year-over-year basis to 4.2%. labor force participation at 62.8. not a major concern there. in terms of data, leisure and hospitality are still leaders, 96,000 jobs. government employment increased by 73,000. there were questions about the seasonal adjustment for teachers in august. that may be a bit of a payback. transportation and warehousing up 9000, truck transportation adding 9000. we lost 37,000 when yellow went out of business, about 9000 of those reabsorbed. i will go through this, check out what the bond market is doing. this is the mother of all upside surprises. jonathan: i don't need to check, you can already guess. to selloff resumes. major upside surprise on

michael mckee thank you for complete coverage on this.minutes to review futures. -25, -18, the standard futures down .4%. the vix comes in with a vengeance. we were almost at 22 now we are at 21 06. and lisa, help me i have curbed his inversion but the real yield comes in. what do you see in full faith of credit? lisa: we will find out it is not priced in real time when it comes to corporate credit. to me, the fact that you are not seeing a pop in yields on the fastest pace quarterly growth in the u.s. going back two years, to me that is surprising. tom: october 30 apple will announce a new mac book row, linzie pas is pleased with that because as she ran her xl spreadsheet on the american economy and part of her macbook earlier. she joins us now from slight tifel right now. dr. lindsay: we have a lot of international factors that are impacting the markets expectations. we do have now unprecedented fiscal variables that we are trying to account for. i think right now the market is discounting the third-quarter number focusing instead on th

michael mckee here alongside myself as well as annmarie hordern.e a sense of what the underlying trends are that could indicate whether this disinflation is transitory? michael: the underlying trend is good on the super core that jay mentioned. we have it up just a seven basis points during the month of september. that suggests we are still seeing progress coming down although we did see shelter costs going up a little bit. you take that out and service prices are definitely dis-inflated on a three month basis. we are looking at progress underneath everything else at this point. that in itself is good news. interesting to see what happens with shelter because the expectation had been it would start to decline and we seen house prices go up since there is no inventory on the market. that may be putting pressure in the other direction. lisa: i did see a story about how new york rents are starting to soften, they are actually coming down. any hope they will go to an affordable price dampened. annmarie: i did not see this but it is contrary to what peo

michael mckee leading our coverage. this is bloomberg surveillance.rganizational financial health and you're trying to do that through multiple systems, that makes it very, very cumbersome. ♪ it's not just tech, it's not just people. it's how they work together to provide that experience to the customer. as a finance organization that is what you want to do. ♪ you want to be able to provide your child as a with the tools orion that resources they need.do. with reliable internet at home, through the internet essentials program, the world opened up. fellas, fellas. that's how my son was able to find the hidden genius project. we wanted to give y'all the necessary skills to compete with the future. kevin's now part of this next generation of young people who feel they can thrive. ♪ ♪ you want to be able to provide your child with the tools or resources they need. with reliable internet at home, through the internet essentials program, the world opened up. fellas, fellas. that's how my son was able to find the hidden genius project. we wanted to give y'al

tom: all the stuff michael mckee talks about, he will be with us.hairman like. jonathan: hiring for longer is not a given. given the bank drop, talk about the context. those con -- commas are coming when you have a bond market selling author aggressively you have a real concern that this is not just about the federal reserve, not just about economic data, not just about japan or china and the difficulties they have got but also about the dysfunction in washington and the budget deficit and the inability to get a hold of it. tom: and within the financial valet, it is about yields. we have tried to give you the price analysis. lisa abramowicz is the expert. what is the price analysis of the two movable parts of the spread this morning? lisa: price down, yield up. you see that with credit spread as well. when you have the risky aspect of the company go up, you see credit spreads go up. right now, people are looking and saying, if borrowing costs go up this quickly, you have a fundamental concern about what kind of price you will pay to refinance. if ra

heard someone forecasting fourth-quarter growth at 4.9%, which i thought was amazingly high until michael mckeehe atlanta fed forecast for the court -- the current quarter is 5.4%. with this kind of growth in the retail numbers we saw, every data point we seem to see goes against the fed's mission in a way. are they going to be able to get inflation down to 2%? subadra: inflation has been coming off quite steadily. the pace of moderation has actually been going to wear the fed has wanted. in some respects, this feels like a very goldilocks environment where growth is surprising to the upside and inflation seems to be coming down ever so gradually. the strength in the third quarter definitely has a lot of us by surprise. is it because of the summer splurge? perhaps the taylor swift impact on the economy. for the most part, we are expecting the economy to slow down in the fourth quarter. things like student loan repayments and the consumer perhaps retrenching in the fourth quarter might turn out to be very different than what we saw in the third quarter. our expectation is that from here on out i

lisa: michael mckee, thank you so much.gh what the potential biggest deal announced globally means for the permian basin as well as oil goebelly. this is bloomberg. ♪ >> what we know is that financial market conditions have certainly tightened. that's not even a question. i think the important to note there is that allows us a little bit of patience that we can continue to watch as economic conditions and financial conditions continue to evolve. lisa: that was michelle bowman speaking at a panel at the world economic forum -- excuse me at the imf at world bank meetings. our own colleague of course, tom keene is heading that way. and we will be catching up with him soon. we've been talking about a whole host of issues of course, the conflict in israel as well as the economic data that just came out in terms of inflation and how much it's coming in. maybe not as fast as people would like. you can see that playing out in the markets. although not really that significant move given the fact that we got an upsize surprise to inf

alix: alix: michael mckee is going to be looking at some of these headlines. >> the fed chairman has

bloomberg economics and policy editor michael mckee talking to us about jerome powell's interview there with david westin. let's get over to kathy jones, at charles schwab. during that speech we saw real moves in rates, especially at the long end. what do you make of the climbing curve? chair powell: i thought it was interesting the initial reaction was the short -- the yields came down and then we kind of reversed that and we started to see the curve re-steepen. i don't know there was anything particularly fresh in what powell had to say. that may be what is reflected in the continued steepening of the curve. what you are seeing is a focus on how long the fed has to stay on hold to slow the economy and cool off the labor market even more. those are the two big criteria for the fed. we want to see the economy slowed to a more sustainable level, 2% or less. and to see the unappointed rate go up and the wage growth slow down. it leaves the door open to another rate hike. that has the market concern. matt: as mike mckee just said, it really seemed like jerome powell was getting on the same

alix: alix: michael mckee is going to be looking at some of these headlines. >> the fed chairman has just released the text of these remarks. nothing new, but shades of emphasis that may send a message to the markets. the committee repeats is proceeding carefully right now, watching the data to make decisions, but he does adopt some of the argument that those with the committee have suggested a pause in november have made recently saying a long-term bond yields are a significant factor in significantly tightening financial conditions. those financial conditions are helping to slow the economy. they will keep an ion whether the real rates continue to slow growth before they make a decision. he does note that growth has been stronger and the committee is aware of the fact that it has been stronger than anybody had expected, and he said that is historically unusual, but many indicators according to the chairman suggesting the labor market is beginning to gradually cool, wage growth is gradually declining to sustainable levels, and he does suggest that there are some factors out there th

this afternoon, someone with real knowledge of this is our michael mckee.r tour of duty. i don't think it was london and what we saw in russia but you were front and center in the russian revolution. when the facts change, we change. politically and economically, the facts have changed. michael: the facts have changed and the interesting question is what did hamas think they would get out of this. we saw biden and israel fighting over months and now it has rocked the country together. where it, goes from here it is hard to say. we don't know how firmly israel will be with hamas and gaza but it will spiral out of control if the wrong things happen so there is a lot to keep an eye on we. will look to mike mckee for important data later this week tom:. he is a national security -- tom: we will look to michael mckee for important data later this week. john kirby is on tours of duty with the navy. he has real-world experience that when the facts change, admiral kirby changes. thank you for joining us this morning. in your briefings with the president this mornin

michael mckee is with us.nflection point of the economy, whether it has to do with the jobs or central bankers. what is the biggest prize that you think is likely based on what you are hearing? michael: most of the economic data will probably come in as people anticipate. the big question is bond yields. where do they go? so many things could influence them. people are forgetting the bank of japan is meeting tomorrow. there is a 50% chance that they wind up the band for yield curve control. as the 10 year yield continues to rise in japan, that takes money away from the u.s. at a time when the treasury is going to talk about what it needs to borrow. we could see yields rising. that has the follow-on effect in the economy that everybody is talking about. interest rates are doing their job for them. gina: fed meeting this week as well. no shortage along the central-bank meetings. how much is this yield rise going to be part of the discussion? how much is the bond market doing the work of central banks? michael: t

always a jolting interview, michael mckee joins us. >> you combined the two thoughts.ue baseball, the real season starts tonight. mindy of bloomberg briefed me on the baltimore orioles. a mindy brief is a lecture. we will have more on her majesty, i can't say enough about the excitement of going into the world series. i want you to clean your expertise on what the four were he said yesterday. we have time to act carefully, think about what we do. does it really make much of a difference? i think michael barr doesn't usually talk about monetary policy, but he did yesterday. it's not so much about raising rates once more, it is how long we're going to keep rates high. that is the real question. tom: we talked monetary policy, a parlor game. forget about all that malarkey. michael barr, what is he and his bank supervision doing to study this interest rate move on our basis in? >> he talks to banks all the time obviously and is talking to bank examiners all the time and their message has been very similar since march when we had the banking system, make sure that you are i

michael mckee understands that there is retail sales and then x-this, x-that.ales more than double what we have seen. x autos up .6%. gas also. the retail sales group is up .6%. the forecast was for just a .1% gain. services reporting a lousy month . but it is the retail sales number that will catch everybody's attention today. interesting thing how strong it is. tom: mike mckee will dive into pages of data. no other way to put it. maybe a bigger moves in jobs day. equities self of the yield -- south of the euro market. lisa: megan graber nailed it. the front end is what is moving, the idea that the fed maybe needs to do more. tom: we will get back to the markets in a moment. but you have got 60 days of lift. mike: really strong lift. august number revised up. a lot of strength in retail sales over the last two months. in september, what we are seeing is a gain in motor vehicle sales of 1%, which is interesting. they calculate this differently than the seasonally adjusted sales number for auto sales where they count units. this is dollar value. electronics down

michael mckee on the economy.mckenzie will join us and wei li from blackrock. ♪ ♪ ♪ be ready for any market with a liquid etf. get in and out with dia. (announcer) enough with the calorie counting, be ready for any market with a liquid etf. carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin levels, and balance the hormones that make weight loss easy. release works with your body, not against it, so you can put dieting behind you and go live your life. head to golo.com now to join the over 2 million people who have found the right way to lose weight and get healthier with golo. >> this is a time for humility and multi-asset investing. >>. definitely having a reset to a higher actual return environment. >> this economy has a huge mosaic of factors to what is happening the overall market. >> challenge in the bond market, success in the equity market. tom: good morning. jonathan ferro, lisa abram

michael mckee, thumbs up, thumbs down. >> i guess, at this point, it would be thumbs down, because theat we were expecting. without the autoworkers might start to show up in these numbers. 204,000 was the initially reported number in the prior week. the continuing claims numbers are lower, at least compared with the previous issue, 1,664,000 compared to 1,670,000. so it's interesting to see that what we are getting here is a still tight labor market even that we have people on strike who make others eligible for jobless claims. we thought they would go up and that did not really happen. trade balance comes in lower than it had been expected to be and lower than the previous month, down from a higher number, and that will be something that contributes to third-quarter growth as well. these are august numbers. so the revisions are in for jobless claims, only up 1000 last week to 205, so 207 is hardly any change at all, and it looks at this point that the labor market is not getting a break and your bond trader friends are not either. >> we will get a check. important. lisa, i went to the

tom: thank you you to michael mckee and claudia.y joins us from advisors capital. bloomberg surveillance. ♪ (sfx: stone wheel ng ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™. >> the are not detecting any clear signs of financial stress. these anomalies are concerning and we actually think that the system can withstand rates to 5.5% and it is how quickly they will get there. lisa: that was the chief global strategist at principal asset management and we are seeing stasis in equities as we see anything but in the bond world. that is one of the big takeaways. the s&p futures are risk off but to me it has been relatively immune to what we are seeing with 10-year yields nearing the highest levels back to 2007. tom: talking about the non-correlations and they are th

right now, look understand mike mckee will go into a great length on housing. i have to go refinance my home at 10%. michaelcrease in new homes starts compared with what we had seen the month before. 7% up, lower than anticipated, 7.8%. but better than -11.8% in the month of august. building permits down 4.4%. after 6.9% rise a month before. we see the housing starts number has been revised to -12.5% for august. it is maybe more significant gain than it would definition initially -- would have initially appear. multiple unit of 383,000. it looks like strength in both areas at this point. tom, -- you're not going to get a good mortgage rate but you will get attention from your mortgage banker because earlier today mortgage applications fell to a 28 year low. tom: we have been looking at credit ratings. i'm talking at 285. lisa: i do not think they go that low. fico scores. not seeing much of reaction in markets. you're not seeing a mortgage applications anywhere near come anything we have seen the past three decades. there is a question of whether this is a broken market and indicative of trying to feel some