joining us is mohamed el erian. welcome back. good to see you. >> thanks for having me, stock. >> pce on friday. let's kick this around. if that comes in favorable, okay, should the fed consider cutting in july? >> in my opinion, absolutely consider cutting, but i don't think it will. >> why do you say it that way, they should absolutely consider cutting in july? >> just think of the conversation you had earlier. you had disagreement about what's happened to inflation dyn dynamics. you even had disagreement about the impact of low interest rates. we're living in this very uncertain world. if you look at the tails of distribution, which you worry about in an uncertain world, they're heavily tilted in terms the economy slowing much faster than people expect. in such a world, if you want to deliver a soft landing, you've got to start cutting sooner rather than later and not go too far in cutting. so, the most likely mistake right now, the most likely policy mistake, is a fed that got shaken by two pretty bad calls in the last two ye

bloomberg opinion columnist hamed el-erian -- mohamed el-erian had this to say. mohamed: this is on the demand side, not on the supply side. strong in terms of demand for jobs, employees, targeting wages paid, etc. it does close the door on a july rate cut. that is it it almost regardless of what the cpi numbers as next week. sonali: bloomberg's michael mckee joints me now. interesting to see some of the banks push back their rate cut expectations. the market was not really exciting july to begin with, so who does? get hurt? michael: there were some, citigroup the most prominent, but as they say out west ,there ain't no education in the second kick of a mule. the jobs number, 272,000 and we saw wages going up, but two things happening at once put a kebabs on things happening in july. as you mentioned, things will be shaky at this point. morgan stanley went back to november. under the hood, you take a look at what happened, and basically, we got a normal may in the sense that we had a normal, nonseasonally adjusted number, than the seasonal adjustment takes it dow

mohamed el-erian of queens college cambridge.f 1%. that is the good news. all the bad news for a certain president is down in washington, d.c. this is bloomberg. ♪ okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot want to save on some of the biggest names in streaming on the network made for streaming? x marks the spot. now you can add the new xfinity streamsaver™ that includes netflix, peacock, and apple tv+. that's xfinity streamsaver™ for just $15 a month. all your favorites. all in one place. only from xfinity. for more watching and less spending... x marks the spot. do it all on the network

joining us now is mohamed el-erian alongside jeff rosenberg. four ways. this is a really strong report on the demand side, not the supply-side. strong in terms of demand for employees and in terms of wages paid, etc.. it does close the door on a july rate cut. i think that's it. almost regardless of what the cpi number says next week. then step back and asked the question of reconciliation with other data. the story gets a lot more interesting. we have a situation with a backward looking data is strong. forward-looking data is weak. we have to reconcile these things which leads us to the point that lisa raised. what is your view of the economy? if you don't know or have the view peopl -- you will get whipsawed for a few months and miss windows of opportunity that are important. jonathan: it's a question we both asked mike mckee. can you reconcile the data this morning with the data we had all week? your view on this morning's number and second, can you reconcile this elsewhere? jeff: the big market reaction is not only because this is a strong

paul: that is bloomberg opinion columnist mohamed el-erian speaking with our colleagues.hifts to the bank of japan. markets in japan are coming back from the lunch break. >> we have seen caution creeping in to japanese equities. they are underperforming on a day when most of the asia-pacific peers are rebounding against the backdrop of what we got from the u.s. inflation print and if you take a look at the sectors, it's the growth stocks that are tracking performance in mega caps, but the japanese banks are declining today. it's the anticipation -- remember, the boj could talk about the reduction in bond purchases, and anything more than a trend of ¥500 million would be seen as slightly hawkish. we are also waiting to hear if the bank of japan starts priming the markets for a rate hike next month, saying anything concrete about the entry -- an increase in interest rates. let's take a look at japanese bonds because don't forget, overnight, we saw a bit of a relief rally in u.s. treasuries, and there is a bit of green coming through in japan, but if that will last is the ke

mohamed el-erian was here saying that could be a real problem and that's an accident and that's anotherand if they wait too long by the time you really see the data getting all the way cool enough and i think i still expect there'll be a short recession and going for monetary policy and going for a way of going for shallow and nothing dramatic and i think that's consist with how the data revolving and the ensuring that inflation comes down sustain blizzard warnings to target. sustainably to target. liz: going for may cpi or 2%. going for 4% and here are the feds and they're looking at it going to ask yourself and seeing any danger and the fed continuing to plant her flag on the 2% target rate mountain. should it be a little higher? people said 2% is arbitrary and outdated. >> so, a couple of things about that . i actually think the 2% target is the right target, a 3% target which some argued for and would suggest we're at target. i don't think it is low enough to really be consist with people not taking inflation into account in their economic decisions. but whether that's right or not,

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. >> mohamed el-erian was with us and argued for the same reasons you mentioned too, he thinks the economy is weaker than most people would otherwise want to believe, that they should cut now. they should cut in july. now, i think the chances of that arereasonably low, right? pretty low at this point. others make the case that rate cuts for any reason are going to be positive for the market. that the chances of us going into a severe or steeper recession between now and the end of the year unlikely. but the fed wants to cut, they keep telling you they want to cut. bostic said, yeah, probably appropriate to cut later this year. and that's going to be positive. why get negative in front of that? >> i think that's a really fair point, which is that we do know that it can lift animal spirits, maybe it reenlivens the epo market. if we get easing in the backdrop of policy, maybe we could see better activity. i think the challenge would be what does one or two cuts do to the underlying economic picture? if we are starting to tip into a softer period, does 50 basis points make that much of a diffe

jonathan: the most diplomatic person i know is mohamed el-erian. participated. every time. lisa: then i get the message, come on, why do the mets suck? jonathan: the mets and jets, which i have always found to be the combination -- loser combination. lisa: i'm more of a mets and giants fan, so i don't understand. maybe there is a feeling of virtue in following a losing team. jonathan: got it. never really understood that, but all right. we are one hour away from that opening bell. we are down by .2% on the nasdaq 100. we have had quite a run of gains, four days of gains. looking to do some more later, but at the moment it is a struggle. on the russell, small caps down 1.2%. even with this move in the bond market. here are the scores. 4.6643. we are down two basis points on a two-year. we are down four on a 10 year. we had a brief break in the session. lisa: you really raised the point, at what point do we start talking about the labor market and how strong it really is? at a time when the fed might not be having any dovish speak the market is saying

jonathan: usually it is mohamed el-erian. e use the full name. lisa: i do not want to blow his cover. jonathan: thank you to the other mohammed. there are two of them. equity futures shaping up as follows. yields down four basis points on the 10 year. the euro a little weaker. down one third. coming up this hour we will catch up with alicia levine of bny mellon on why she is constructed with the markets. bill chappell of truest saying ozempic is no threat to krispy kreme and stephen stanley of santander. stocks hitting new highs the of tomorrow's doubleheader. alicia levine saying "market surprising in a soft or no landing with a cutting bias at the fed. we agree with this view and are constructive on markets through 2024." alicia joins us for more. what would you expect from chairman powell? alicia: ps to thread something interesting, because we are already at 4% unemployment which is where the fed predicted for the end of 2024. we are only barely halfway through the year come into to move from a three cut to a 1.5 cut, let's

something we can talk about with mohamed el-erian when we catch up with him on thursday.eek. hotter than expected inflation data out of europe, stronger than expected growth. deutsche bank actually upped their expectations for growth by half a percent while keeping the u.s. the same. is that positive, does the ecb keep that going, or do the hawks win out and say inflation is is not quick to kill off? jonathan: you will find it around things like optionality. keep your options open. we don't want to shut down july completely, but you don't want to start talking about kicking off the process of normalization. the chief economist on the ecb executive board talks about the need for the rest of the year, you can reduce interest rates but still remain restrictive. lisa: you don't want to talk about normalization because what is normal? if you have to talk about what the neutral rate is, that is a dangerous place that nobody wants to talk about. jonathan: one is normal for this stock? nvidia, the ceo, saying that the rise of generative ai is a new industrial revolution. he expec

i keep thinking about mohamed el-erian.just responding to every input they get, and will continue to. it is only volatility when yields are going up or stock prices are going down and when they come down it is suddenly a path that you can bet on. jonathan: mama joining us friday, don't miss that. charles schwab and the bifurcating economy. why there is more pain coming for tesla and tom porcelli on signs of an easing labor market. all eyes on the u.s. labor market as investors look for more signs that they can begin cutting. the jobs report friday is obviously pivotal but details are just as important as headlines. it weaker labor market likely holds the key to giving the green light to the fed for easing. good to see you. great to catch up. the current market environment is brought to you by the letter k. what is that all about? >> you might remember earlier the pandemic that k-shaped recovery was one of the big themes, but i think we are seeing it again across the spectrum of what is going on in the economy and the market

morgan's bob michele, julia coronado, we will catch up with diane swonk, and mohamed el-erian.t today, we take a look at how much the bond market has reacted. will it stick after the press conference? jonathan: equity futures positive on the s&p and quite a sizable bond market rally. from new york, this was "bloomberg surveillance." ♪ from recent grads... ...to rising stars... ...to living legends. —you got this. —thank you. vanguard's retirement solutions can help all your employees be well on their way to their financial goals. that's the value of ownership. want to save on some of the biggest names in streaming on be well on their way to the network made for. streaming? x marks the spot. now you can add the new xfinity streamsaver™ that includes netflix, peacock, and apple tv+. that's xfinity streamsaver™ for just $15 a month. all your favorites. all in one place. only from xfinity. for more watching and less spending... x marks the spot. do it all on the network made for streaming, and bring on the good stuff. matt: off to the races after inflation came in later than expect