. >>> coming up, it's like having a crystal ball nomura changed its jump in july.arks now just following along we'll speak to the economist behind this call right after this break bubbles bubbles bubbles bubbles there are bubbles everywhere! as an expedia member you earn points on top of your airline miles. so you can go see even more of all the world's bubbles. >>> welcome back to "power lunch," everybody. a big fed call by nomura the firm expects the fed to hike rates by a full point, 100 basis point, at its next meeting in two weeks. this call came after the inflation data this week and before rafael bostic left that possibility in remarks this afternoon that left the markets to price in the chance of a full-point hike for the first time as steve liesman reported at the top of the hour markets interestingly, recovering the dow is only down 69 points and let's bring in robert, nomura's senior u.s. economist good to see you. even though the cpi is higher than expected the numbers look better over the last number of weeks and so why do you think the fed would incre

nomura looking for .98 in august. treasuries firmer, yields lower.t is the core government bond rally. germany, down 12 basis points. 10 on the 10 year. tom: a lot of this has happened in the last hour of the different headlines. the equity market is down, but not down to where it was july 1. the vix has not come out. over 30 would catch my attention. jonathan: jonathan golub is pretty constructive on the back half of the year. he says 4300 is the base case. 4900 previously. this is not recessionary concerns for the team at credit suisse. tom: the cost to capital, nominal and real, and that's a great place to start with john ryding of brean capital. the question right now, businesses, to they think in the nominal space, is everyone a slave to the inflation-adjusted analysis? john: if you think about it, we have not had these inflation problems since the 1970's, 1980's. many businesses are not used to handling an inflationary environment. money illusion exists with consumers and businesses, as well. if you start with the policy rate, with the inflatio

i will allow nomura to provide one. expect a recession in -- 25 in november and december and february 2023 and then the cuts arrived. it is the rate cut call. 25 basis point cuts per meeting and likely starting september 2023. that is way off. tom: i've never witnessed this. i don't understand the guesstimates of getting the incense bottle out and rubbing the sides. jonathan: isn't that what the clients are asking? when do the carts -- cuts stop? tom: the answer is maybe we don't know. what is the ramifications of a 1.17 pound sterling? jonathan: -- lisa: there is a bigger point here regardless of the parlor game of when the rate cuts begin. people have been so conditioned that is what will happen. they have not been conditioned by inflation that is going to become entrenched and they don't buy that story. that to me is a big takeaway, to the idea of rate cut costs. jonathan: my take away from my interview on friday. he turned around and said how sticky will it be, that is the number one question you need to be asking.

the worst-case scenario was from jordan rochester at nomura. nomura at $90.rude is someone hundred dollars. copper -- crude is sub-$100. copper. losing the faith and dr. copper. as this a global recession narrative rises. said the -- sam fazeli said the fed can raise rates by 200 basis points and still not cause a recession. dani: we have a reporter standing by, and the current, annabelle droulers in hong kong. manus: a report in beijing. lizzy burden in london with the final poll of potential prime minister's is down to eight. dani: the imf warning a broad-based surge in inflation posts systematic risks to both the country and global economy. we are joined by enda curran. walk us through this warning from the imf, of course, i had of cpi today. enda: slower growth and rising unemployment. they are now looking for growth of 2.3% gdp in the u.s. this year, down from 2.9%. they are expecting unemployment to go up to around 3.7%. they said policymakers need to be focused on tackling inflation but also said the stakes are very high. they warn it is going to be ve

rishaad: robert subbaraman from nomura does stay with us. let's have a look at first word headlines. president biden discussing possible reductions in tariffs on chinese goods. he is meeting with advisors friday. sources say the path forward is unclear, he has been weighing a decision to remove some of these tariffs to curb inflation. we are looking at the foreign ministers of china and australia holding talks for the first time in almost three years. they will meet at the g20 meeting in bali all against this background of a strained relationship. rising political tensions saw china impose tariffs on china in 2020 and block trade in other goods. u.k. politics, boris johnson facing pressure to speed up his exit. he finally agreed to quit as prime minister following days of political chaos. he suggested staying on as a caretaker while party chooses its next leader. possible candidates include this -- liz truss, and former chancellor rishi sunak. >> to that new leader, i say, i will give you as much support as i can. and to you, the british pub

last week it was all 100 basis points, it was the base case for nomura and it drops a little bit wheree day is the odds of a 100 basis point hike to look at that decision in the last five days where you had the odds going 80% and the reasoning is twofold. on the one hand there is an end ration story that's tough to go. 9% cpi, 11% cpi numbers with strong economic data on friday. does it change that scenario through the fact you have wrong retail sales with lower inflation occasions with 75 seeming more likely? jonathan: it was a morning note this morning, thank you so much. the reading on the weekend, wherever you live, it's simple, they nailed it at fos. you wrote about where i went, the sticking point around rent. a huge uproar in new york city about it. east of manhattan, an apartment listed for a cheap $3500 in a frenzy of 4050. how do we bring down rent in america? >> this disincentivizes homebuilders in an environment where we have an assorted amount of housing supply. very likely over the next year we continue to see rent putting upward pressure on inflation. getting into the da

jonathan: jordan rochester, of nomura.urope, there are all these micro stories and i like what he said about little flyers this morning. to go to the other side of the world, out on twitter from bloomberg, writing on property bonds. i don't know anything about this in china but we are underplaying the stresses of china. jonathan: could not agree more. we talked about that a few times. the prospect of more covid restrictions. wti, down by 4.6%. coming up, jim polson. looking forward to that. from new york, this is bloomberg. ♪ so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now, there's golo. golo helps with insulin resistance, getting rid of sugar cravings, helps control stress and emotional eating, and losing weight. go to golo.com and see how golo can change your life. that's g-o-l-o.com. >> underlying

nomura out with a note that they think it is 100.anus: which asset class will convulse the most on a 100 basis points hike, is it credit or the dollar? but if you want to understand jumbo, this is a heat map. it is a scorched earth policy map. those who have done jumbo rate hikes, canada the first to hike a hundred basis point since 1999. are we seeing emerging markets playing defense when it comes to the currency wars ahead of the federal reserve? sonja laud is looking at that heat map intensely. the chief investment officer for lgim. good morning, good to see you in the flesh and in person. sonja: very excited. manus: here we go. the rhetoric has shifted so quickly, hasn't it? swaps are priced at 100 basis, which asset class is fully priced for a volcker-style 100 basis point hike? sonja: good morning. it's important to understand how the narrative has shifted before we got to the point with the cpi print yesterday. if you look at markets from mid june, you have had a real shift from the inflation narrative to slowing growth, i.e.

analysts at nomura are predicting it will fall to $1.10 by the end of the summer — which would be thef the adamis principle, a foreign exchange consultancy based in london. good morning to you. remind our viewers why this is important, why a strong currency is good for an economy? it why a strong currency is good for an economy?— for an economy? it attracts business. _ for an economy? it attracts business, it _ for an economy? it attracts business, it attracts - for an economy? it attracts business, it attracts flows, | business, it attracts flows, and it brings up the power of wealth. it'sjust and it brings up the power of wealth. it's just a and it brings up the power of wealth. it'sjust a really and it brings up the power of wealth. it's just a really good thing, but not too much, and what we are seeing with sterling, as no—one wants it, there is a fundamental lack of belief in the economy. you have got this toxic mix of dire forecasts in the economic growth, you have exploding inflation which if you believe the bank of england could reach 11%. i think it could be higher. and you a

as you mentioned, you have nomura we could get to 3 1/2% interest rates trying to bring down inflation from the federal reserve. guess what? september, final quarter of 2023. the economy will slow down so much that the fed will have to cut interest rates, start cutting rates. that is why you're looking at stocks higher but i will say this, you heard this again and again, you will hear this again and again during earnings season. pepsico started off numbers this morning they did better than expected in springtime but risk of currency and strong dollar. the strong dollar, the highest since 2002 and inflation and input costs. neil: that strong dollar, good thing people look at us as a haven. as susan pointed out ray, the fact of the matter is that hurts international companies. whatever they're earning abroad translates into fewer dollars. that could have a big impact. are you worried about it? >> i'm worried a little bit, euro-dollar parity a little bit this morning we'll see more and more of, people look at europe to say, this is more after risk. it is creating options in terms of propp

nomura think the eurozone, u.k., japan, south korea, and canada are going to into recession within theis becoming consensus. but how much of this is about jumping on the bandwagon, about taking the safe bet, which seems to call for recession right now versus the data actually telling us that multiple countries are going to be entering a recession within the next year? nina: a couple of things. something i have been saying for , even before invasion was near the levels it is now, is if we see inflation, and this can be applied to any range of developed economies, if we see inflation around 7%, 8%, 9%, you can probably bring that little down with monetary policy measures. but if we see inflation consistently in the double digits, if we see inflation consistently above 10%, it is going to be really hard to bring down that level of inflation without an economic downturn, and i think that might be a reason why we will see a lot of change because people are now saying central banks are taking this seriously, but at this point inflation has really gotten out of control and we just can't bring