a great round table, liz mccormick and mike mckee. start with the more specifics. we heard the reaction but what were some takeaways as you look deeper into this jobs report. mike: basis for everyone examining it is what is the fed going to do with it? 209,000 is still more than twice what you need in terms of job creation to absorb the new interest to the labor force. it is a strong number but maybe we got off track yesterday, but as rick rieder wasn't noting, the unemployment rate goes down to 3.6% in the fed is forecasting we will be at 4.1%. more jobs created in the household survey and more jobs -- fewer jobs lost. you are seeing strengths in both assets and also in wages, 4.4% annual rate, a point above where the fed thinks it needs to be. until we see something having -- happen with wages and slowing of job creation, the fed will be on track to raise rates. jon: as you sample what the interpretation is, at what point, even if some see rakes high comment they it viewed as a risk? liz: it is funny you bring that up. i had one trader say to me, the fed is going

trying to figure that out, mike mckee and edward harrison. mike, what did the labor market teach you this week? mike: that it is still strong, and the fed raising rates in july -- that is almost a certainty now, and leaning that way for september, depending on what we have for july and august data. we have been thrown off by the adp report yesterday -- 200-6000 is a strong number for job create -- 206,000 is a strong number for job creation, so there is a long way for the fed to go in terms of bringing down what they might view as inflation causing wage gains in this tight labor market. three point sent -- 3.6% unemployment, and we are finally seeing wage gains above inflation, but the fed needs to do more, they think, and these numbers support that. alix: and you write a lot about how we are looking at a recession at some point. did these numbers over the whole week help frame that any better? did they help make you nervous about the call? ed: no, well, i should say yes in the sense that what we are at now, we are at the highest level of econ

mike mckee in this romantic love fire cabin seen --scene. what are we doing wrong?gh ground. jon: beautiful. thank you for taking some time to come on with us. we appreciate it. cpi in four minutes. what are you looking for? >> we are looking for a good report, especially for headline numbers but as bill made good point that things will be transitory on the way down. we will not hold the same numbers and we run into what is called base fx in economics because inflation rose so much in june last year because of energy, it is going to look better this year. we will see a big drop in the headline number. the fed will be looking past that. they know it will be tougher the rest of the year. inflation may come down over a month over month basis significantly after june so don't put all the money on this being the turning point. jon: we were told we had two employment -- important data points. we had payrolls last week and we have cpi this morning. deutsche bank and jim reed earlier today, -- one person said, quarter port -- point hike on july 26 is a foregone conclusion.

and from idaho, mike mckee. ira, the bond market is looking at what we have got right now, figure out where the data goes next, wondering whether the cycle high for the 10-year is in. do you think now is the moment to step in and buy that duration? ira: the 10-year and the long end of the curve, looking out to the 30-year we think will continue to be range bound. we tested the top of the range when 10 yields got about 4%, but there's not a lot a reason for the long and to move right now even with these little gyrations, will the fed another 25, 50, or pause? that doesn't matter much to the long end of the curve. pricing in for the federal reserve to steady rates plus or -3%. if you think the fed will have to cut interest rates during the next recession, sometime in the next three or four years, 3.9% looks relatively attractive given the potential for 3% short-term rates. alix: mike, is it time to buy duration? have we seen peak rates? mike: i don't think we can necessarily say that we have seen the worst of

tom: i will come right back to mike mckee.ket move with the 2 -- with the yields lower. big move, 4.67%. lisa, critically, i have a 1.49 on the 10 year real yield, this is a disinflation half of a report. we are making for -- we are waiting for the meat of it. michael: the meat is better. the control group, which takes out gasoline and building materials and autos is up 6/10. there is a weakness in one of those three areas we haven't seen and i will look for that. lisa: we are seeing the move lower in yields but i want to pick this out. u.s. retail sales may have revised upward from your .3% to 0.5% so even though the headline number came in slightly -- slightly softer than expected, revisions of birds in the prior months, this is not a clear-cut report especially with broad-based gains outside of the gas in the auto sector. tom: here are the revisions. i feel like i am doing miss universe. michael: the numbers for may, the headline number revised up to 5/10, have a percent from 3/10 and the control group revised up to 3/10 fr

we are joined by sonali basak and mike mckee. what is that retail sales number? what is the consumer telling wall street? michael: the consumer is saying things are ok. the may numbers were revised significantly and the june numbers were not as strong but they may be revised. people are spending money according to most of the economists who have analyzed the numbers, it means that second quarter growth comes in stronger than they have penciled in. the fed can raise rates and it may not have too much of an effect on the consumer. that is the interim message right now. kailey: what are the banks on wall street saying that they received in not just be an economic -- not just in the economic data -- sonali: the banks would agree. if you think bank of america, you have payment trends that are upward. that payment volume number is fascinating because you do have that steep drop-off in gas payment. are strong enough increase in travel, and get -- entertainment spending and food spending that is keeping payment volumes up as well as one million new credit cards open up i

we are joined by liz mccormick and mike mckee. are we on board with the idea that we will see a soft landing. meaning we get higher nominal growth and inflation remains elevated the fed can kind of deliver a slowdown without a significant pickup in unemployment? liz: i would say everyone is on board with it now. maybe, there is a possibility. it was like recession was always imminent. i would not say everyone is on board with having a soft landing. the door is cracked open. i never like to fade one and along says. she said in the last 50 years, the fed has pulled it off once. they still think a recession is coming. that is where the market is. now, maybe this is possible. what do we do? a recession is coming next year or later, that is where the market is trading. alix: mike, what do you think? i was reading at the end of last week and i was like ok, we are at a soft landing. what do you think? michael: we are storing to get there. when you look at what futures markets have priced in for the fed, it is a slight rise in interest ra

explain how mike mckee sees our wage increases and agony right now?here are wage measures. today, we get average hourly earnings and we are starting to see average hourly earnings meet or exceed the inflation level. for a long time, workers have been losing ground. the inflation rate was higher than what they were getting in additional cash. now, we are seeing wages rise at 4.2% is the forecast for today, average hourly earnings and inflation is running at about -- we are expecting next week to see it in the 3's. tom: we are looking forward to 8:30 this morning. jonathan: good to see you. tom: alex from auto sport, from the new york times, says from lewis hamilton -- he is with the mercedes team. jonathan: [laughter] tom: is it sir lewis? jonathan: it is. tom: sir lewis says it has the best layout. for our american audience, i grew up in the fumes of lincoln's glenn. explain what silverstone means. jonathan: we can catch up with christian horner. going into race weekend in silverstone. can we start there, just how special is this race for you and the

what you see mike mckee? the eci for wages going down from a 1% gain from a 1.2% gain in the previous quarter. that would be considered a reasonably -- reasonably good news, but when you look at the income figures, wages went up .6% in the month of june. that is up from .5%. that is the highest increase since january. we have sort of contrasting views of what wage pressures are doing at the moment. as john mentioned, as we do every time we get an inflation gear, the super court which is jay powell's favorite thing. core services ask housing comes in at .2% gain. if you want to rounded up it can be .3% and that puts it in a 4.1% increase for the year. that will be your lowest since basically last august. things moving in the super court direction take housing out of the equation and services for the pce like the cpi are down. the wage numbers are still healthy and i guess consumers can still keep spending, but the question is will the fed see that as inflationary? lisa: as we talk about the numbers 4.1 percent

it that from evercore isi or mike mckee but mike on wages do you look at wages wages or inflation-adjustedbest value? >> you're going to want to look at the hourly earnings which are not adjusted because of course nominal spending, nominal wages are the way you're going to be able to compare those but it is average hourly earnings that the fed is looking at to see we are starting to see some sort of progress on the idea of companies having to pay for labor. if that comes down some more they will feel better. we have seen inflation fall below wages and earnings particularly for the eci. that is good for the american public for people who are getting paychecks. but it doesn't mean that we are seeing a decline in the inflationary pressures. what we are not seeing as ed was just saying his productivity. right now, that something that has to come down or productivity has to go up. tom: what about the technology overlay? i say this with the immense respect for mike's encyclopedic knowledge of the data and what it represents. paul romer the noble on technology does our present clumsy math of prod

lisa and mike mckee will run that down. opening bell after that news conference wraps up, it will start with president lagarde in 20 minutes time. we will come out the other side and break it down with winnie caesar -- peter to cheer and dance salmon. a press conference with christine lagarde in 20 minutes time. we are positive by .7%. from new york, this is bloomberg. ♪ ♪ 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? ♪ ♪ was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com lisa: welcome back. this is "bloomberg surveillance." 15 minutes away from christine lagarde's press conference, following raising rates by 25 basis of points -- basis point. economic data, including the gdp reading, as well as initial jobless claims, at

[laughter] jon: do you ever wish -- tom: do you ever wish that you were mike mckee in the press conferenceike has a dream job. [laughter] mike: i can't remember how tom put it when he was introducing you from the deep arc past, but i'm there with you, we go back a long way. i can't remember a time when future fed policy has been as undecipherable as it is now. this is not the gang of four kind of disagreement on the fed that got rid of paul volcker but there is still a lot of disagreement among members of the open market committee around what should be done next. does it take it difficult for people on wall street, for investors to go about their duties when they don't know what the fed is going to be doing? they told us what they were going to do for so long. peter: i have had two careers. my first 25 at the fed, second 25 at deutsche bank in the markets. going back to the first 25, this fed is unusually unanimous in their view. you have no disagreement about the fact that they need to have a, keep with a tightening -- tightening bias at this point. yes numbers are starting to go the righ

and mike mckee somewhere in there will be direction. on the forecast of the jackson hole meeting. you lead on the forecast and economic projections which indicate one comment to hikes. tom: boj and ecb with the french slow down as well. they are massively data dependent. maybe we are getting back to traditional economics? i don't see it. if we went to sintra and took the entire team we would go to symposia? jonathan: a little bit of a lift in this equity market. 10-year at 3.8944. euro-dollar is 1.10. six consecutive days of euro data. things are looking great on the continent. tom: the down is up 11 however many days in a road. i am fascinated by the double barrel of tech out to august third. double-barreled with the luxury which i believe starts today. it will be interesting to see the high multiple of tech and luxury. should i go over to 57th and asked their? jonathan: do you want to go there? tom: they do have a tiffany thing going and that's been a big thing here. i think we will find out and earnings call. were going to get into i

mike mckee went through that yesterday. torsten slok, coming up.pes and dreams of a soft landing in america. lisa a.: what is he looking at in terms of labor market softening? that is what people talk about as the key indicator of what is to come. what is the timeframe and how he interprets the effects versus true disinflation. jonathan: and when that begins to hit the economy. tom: it hits the economy and i'm glad you mentioned it. they are talking about the markets today but, oh yeah, the economy. there is maybe not the recession call but a slow down call. let's not forget that. you can talk about the financial end of this but then there is the gdp end. that said, you look at the optimists that do not get enough credit. what if we get another 2% gdp? lisa a.: victory lap. tom: no one is modeling that. jonathan: will give them that. tom: i'm serious. jonathan: we know you are serious. don't worry. we are just winding you up. tom: where is europe, flat? jonathan: year to date? tom: flat. jonathan: but parts of europe -- tom: germany is difficult. j

let's get to michael mckee who is standing by at the federal reserve. mikey raise more questions about where the fed was three weeks ago than they answer. while the decision to leave rates unchanged was unanimous, during the discussion the committee was divided. quote some participants indicated they favored raising the target range for the federal funds rate 25 basis points at this meeting, the minutes say, or that

kailey: michael mckee is joining us now. mike like it is going to be difficult for him to navigate. even if the were done, he cannot say that. and he is trying to speak for a committee that seems divided. mike: if you not have a lot to say, do not say it. probably his statement will be straightforward. they will change the language about pausing but still look at what they might need to do and how they are going to look at the economy going forward in terms of possible additional tightening. they will raise rates 25 basis. you've got a 97% chance but look what happens. the kind of feeling in the markets as they make skip september, but november gets more attention but look at december. it is not enough for a rate cut, but it does suggest that rates might be headed down. the market is thinking they will do that. jay powell is going to want to push back on that. dani: if otherwise they tread lightly, what is the chance that friday is more exciting than today with cpi data? mike: it could be. you saw the chart abigail was showing. p

michael mckee is looking through that. mike: job openings did fall, as guy pointed out, 9.8 million, which is down from just over 10 million. i suppose that is good news, but there is strength underneath the numbers. the quit rate, which the fed watches to see how confident people are in the labor market, goes up to 2.6% from 2.4%. there is some strict in the underlying numbers. over all the number of job openings that dropped the most were in health care and social assistance, which anthony was saying, the area where people are still trying to find workers. this is may data, not june data. it is delayed, so we may have had a change in the way people are looking at things. the jolts data is what the fed was looking at in terms of tight labor markets. seems to be loosening up a little bit on the headline area. we will see if that continues. the quits rate suggests there is some strength in the overall economy. but that together with what we got from adp today, employment numbers from the ism services index, jobless claims. i'm l

mike: not so much here because it's too light. tom: maybe you need to go up to yonkers. the astronomy report with michael mckeedy for the 9:00 hour. the mystic final sales seems to be front and center versus the international. mike: you take at the exports and we take out basically government sales. we know the government spending a lot of money on weaponry. it is what consumers are doing that's the key issue. everybody thanks they are spending down their pandemic benefits in the inflation rate has eaten away at their salaries even though we are running ahead of that and they will pull in their horns. coming up, we got back to school and then the holidays. if you're going to see any kind of serious slow down, it will have a major impact of consumers pullback but a lot of that is confidence. confidence has been going up. tom: we mentioned this earlier, the israeli parliament approved their controversial judicial oversight law. please stay with us, worldwide, this is bloomberg surveillance. . talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even s

michael mckee will go through it with a fine tooth comb. what are you going to be looking for? mikemeeting. they decided not to raise interest rates but did move the dot plot to suggest two where rate increases this year. why? that will be question one. and how serious are they about raising two times versus one. how did independent are they. it will be interesting to see if we get enough information out of them to really -- despite there is a rate increase coming at one point or the other or if they have as much optionality as they usually do. so far this year, having both on inflation and unemployment stalled out. what does the fence he happening? another like it down or do they have to do more to start bringing the down? alix: i was asking this question earlier. are we going to learn anything about how the fed looks at market pricing? i knew jerome powell would say no anti-has, i have to wonder if part of the skiff and the 50 basis wanes after has to do with pricing out cuts. mike: it will probably get mentored with the staff briefing on the markets and the idea that mark is at t

mike. >> we thought it would be easy breezy, the crash would clear. there are no major injuries, but there may be a second crash in the backup north 101 approaching mckeeit might ripple over top north 280. not yet. traffic is so light in the south bay and rest of the bay, things are moving nicely. they did just activate the metering lights at the bay bridge. >>> happening now, the mega millions jackpot hits $910 million. tonight's drawing happens at 8:00 p.m. if you win the whole thing, a one-time payment nets you about $460 million. this will be the eighth largest lottery jackpot in u.s. history. >> it's nice to dream. >>> we all know a lot of people have been dreaming and hoping for tonight's show at levi's stadium for taylor swift's concert, and for swifties it's a concert of seismic proportions. you may not realize how true that really is. still ahead, we're going to talk about what's trending and explain why it's putting a lot of people on earthquake watch, in a sense, as fans shake it off late into the night. >>> then at 6:00, a large house fire in san francisco finally out this morning, after an hours-long battle. the big questions still lingeri

mckee is here and a very busy week. what is the whisper number that matters this week? is it mike: mike: jobs or something else?ifferent things the jobs will probably be the most important thing of the week. i'm looking at the whisper number now. isn we do tomorrow and the whisper number is 47 to people think we will have a week number but the number for jobs is 194 at the moment. a little bit lighter but we will get a lot of data this week that will influence what all those late arriving forecast will be. tom: where will we be at 9 a.m. friday given the compendium of data starting with jolts to adp. what do you guess we will feel it 9:00 a.m.? mike: we will feel glad the week is over because it's a very busy week for economic data. the underlying feeling has to be that we will see a little bit of a slowdown in terms of job creation but not much movement overall in the jobs numbers. the unemployment rate is not expected to change and we are basically thinking that things have slowed down but they are not falling off a cliff. we will get some interest with the senior loan officer survey this afternoon. tom: that

mike: i don't think there is other than to say the initial reaction from most economists is kind of an outlier. it is hard to explain small business is added one million different jobs. jonathan: michael mckeeinutes to break down jobless claims. andrew hollenhorst responding to that. the two-year yield 3.5% -- 3.9%. the should you sell the low volatility? amy lu silverman of the opening bell. it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. tom: if you thought it would be a quiet start to july, are wrong. we are seeing history in the right market right now. the two-year yield is of a solid nine basis points after a bang-up adp report. the data will come in six seconds but we have a new and sobering reality. michael mckee really matters for the next 25 hours. a trade balance or incomes on -- in on plan. how do claims dovetail into the adp report? michael: they come in higher than anticipated at 248,000 which is higher than the initial report of 239,000 last week and higher than the anticipated 245,000.