his name is richard clarida, vice-chair. he is saying that there are concerns specifically about what the president talked about this morning and that's inflation. >> you know, inflation is stable but uncertainties about that outlook have increased. disinflationary pressures if anything i think are more intense than i thought six weeks ago. liz: do you see a deflationary spiral at all? >> no, no, not at all. no, no. i think the fact is that under fed leadership really going back a decade, the u.s. was able to avoid that risk. liz: okay. so for those who don't know, inflation pricing power or higher prices, deflation, falling prices, disinflationary is when you see a slowdown in inflation and you know, the president came blasting out today and talking specifically about inflation, which is what we heard from richard clarida. he's got to be thinking about that. reporter: yeah. and it was that interview with richard clarida yesterday that certainly gave the market the impression yet again that a rate cut is around the corner at

federal reserve vice chair richard clarida is here in a fox business exclusive. we will ask him all the important questions that could definitely move the markets. >>> plus, senator bernie sanders rolls out his $40 trillion plan to fix health care but senator lamar alexander, the republican chairman of senate health committee thinks he might have a better idea but is ready to work with both sides. he is here in a fox business exclusive. >>> and forget the wolf of wall street. a 2020 candidate is hunting wall street vampires. senator liz warren teaming up with senator tammy baldwin for the stop wall street looting act. dow is down about 25. oil is slipping in the aftermarket session. and netflix, all day long, is getting throttled. less than an hour to the closing bell, live from washington, d.c. let's start "the claman countdown." liz: breaking news. we need to look at fed funds futures. this is a betting pool, right. these are traders who bet on the odds of interest rate hikes. well, the futures are jumping as traders now in the last 35 minutes are suddenly bett

richard clarida and john williams say policymakers need to act quickly if the u.s. economy.s has reinforced that the fed will cut rates as much as 50 basis points. the u.s. and china have spoken for the second time since they called a truce. trade teams spoke over the phone, but there are no details on what was discussed. president trump reiterated he could impose additional tariffs on china if he wants. a deal on the u.s. budget and raising the debt ceiling are very close. that is according to steven mnuchin. he says the administration and congressional democrats have agreed on spending levels. this paves the way for a deal before, was these town for the summer. president trump has distanced himself from a "send her back" chant focused on congresswoman ilhan omar. the president says he was not happy when he heard the chant and felt badly about it. inflation fell again in june hitting a two year low. it has pressure to increase policy stimulus. consumer prices including fresh food rose by 0.6% from a year earlier. inflation has not topped 1% since 2015. global news, 24 hours

shortly after, richard clarida was asked if they should do more. he gave the comment then. he was not specifically referring to july 31 either, but because the markets, as you say are twitchy, they want to do that. it is kind of odd because both guys know the way it works, and the market do not read their speeches, just look at the headlines crossing the terminal and trade on that. perhaps they should have known better. vonnie: right, but they don't tend to make mistakes. something tells me they knew what they were doing. wonder, who says aggressive and quit means 50? some participants are expecting nothing. could you see a 25 basis point rate cut at the end of the month? mike: we are set up for a 25 basis point move. chair powell all but promised it at the hump hearings. even though there is a strong argument for may be doing nothing. but they are set up to go now. what do you do to be more dramatic than that? go 50. the argument is unique 50. if you need stimulus, and will needed at some point, why not do it now? we will see if they do that or not. vonnie: it will be an e

itid: richard clarida, wasn't long we were talking about the fed being patient. now perhaps being too patient might be a problem. kathleen: when the facts change, i change my mind. what do you do, sir? in interview, he was asked about -- because the data has been stronger lately, do you need to cut rates? some market people have pushed back but he says you can't wait until the economy is stumbling to cut rates because you need to keep the economy on an even keel. wait untileed to things get so bad to have a dramatic series of rate cuts. we need to make a decision based on where we think the economy may be heading and where the rest of the economy are lined up. this is heartening to the idea that you only have so much ammo. are almost pricing in a 50 basis point cut at the july meeting. that might be too aggressive but we will know july 31. yvonne: we're watching moves in dollar after the comments of steve mnuchin, perhaps a failed threat of currency market intervention. is there a likelihood this could happen? kathleen: people are talking about it more seriously

one of them, fed vice chairman richard clarida, right here on

vice chairman richard clarida data and chief john williams boosted u.s.forcing the fact that the fed could cut this month as much as have a percentage point. new pressure on the bank of japan to boost monetary stimulus , the key inflation gauge falling to a two-year low. excluding fresh fruit, prices rising to tens of 1% in the last months -- 2/10 of 1% and the last months. boeing is paying for the grounded 737 max 8, preparing to account an accounting charge as a concession for airlines who have had to line up replacement planes. the grounding is reaching its fifth month. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. hurtado.ana this is bloomberg. tom: equities, bonds, currencies, commodities, they continued lift in equities, futures up, dow futures up 69. we will see where and we get to the opening. stronger a churn, dollar. vix, 13.05. the 10 year yield was 2.09% yesterday. euro-swissie with a really interesting grind, stronger swiss franc. might be something to

caroline: how much do we think the market is thinking that is where we are going. >> richard claridathere is only a limit where u.s. bonds can diverge from global yields. know they are red zero or negative right now. you have to ask why the fed is cutting rates. they are trying to stoke inflation. 0% is a bold call. i think the low of all time is 1.32%. it would have to go down far. it is hard to wrap your mind around what it would takei thine u.s. for that to happen. there is a lower for longer feeling out there. everyone is getting ahead of themselves to see how far they can go down. romaine: we will bring in allison williams. she joins us from princeton. have gotten a few of the biggest banks out there. one interesting thing is the idea that the consumer side of these businesses had time pretty well or better than some of the trading and wealth management sides to the business. rateyou look at the environment and see what the ceos are saying, what do you make of that? and do you see it continuing? a it does seem like there is shift of the health of the consumer business. the u.s.

kathleen hays is here with remarks from john williams and richard clarida. that theto be narrative stays the same. we want those rate cuts. kathleen: let's start with john williams. a three-dayg off conference at columbia university. he was talking about living life zero lower bound. when rates are so close to zero, how should you conduct policy? one thing he said is the fed should cut rates quickly when you see the stimulus need arising. he also said there's no advantage in keeping your powder dry. the markets here that. this is the number three guy at the fed. they move. justhort end of the curve, five days ago, we were up nearly to 1.9% on the 2-year note. going down, yield the price going up. so it seems to most people that you do not give a speech like that if you are not trying to tell people something. i think because the market move was so dynamic and so many people jump to the conclusion that he meant to signal something, maybe he is setting this range. maybe not. the new york fed put out the following statement. this was an academic speech on 20 ye

richard clarida is the number two man at the fed. people really listen to him. a voting member. connell: we see that with the reaction. liz, great interview. see you back in new york. liz claman. melissa: good stuff. that is what charles payne has been saying. i don't think a lot of market was convinced. liz's interview locked in the idea that they're trying to be proactive. connell: say more than 70%, most people think that, which is a lot different than where we were. yep. melissa: democratic presidential hopeful elizabeth warren has another plan and wall street isn't going to like it. we're breaking down the details. that's next. connell: calling it a national security risk for millions of americans. senate majority leader chuck schumer is urging the fbi to investigate the new social media trend, face app, how you can protect yourself and your family coming up. melissa: have you seen this? look at that! how crazy is that! off the southern coast of england, they discover ad human-sized jellyfish. liz daily and her partner dan, estimate the sea creature was alm

the vice chairman richard clarida says i agree with the speech from the new york fed president. and then the new york fed tries to walk it back and tells us it is academic. gershon: here is what is going on. this is unprecedented in my career. it is not that we have this framework we are working with and we have slight disagreement on what the next move should be. we are working with different frameworks. it is not that we have this there are people in the fed who don't believe the philips curve matters. people that think we should pay attention to the global economy and not just the u.s. economy. one interesting thing, -- i was if thein the camp that economy is strong, the fed does not need to cut rates. the real federal funds rate is around 75 basis points. that may argue that a little bit of a cut may be warranted if we are truly slowing. lisa: i agree with kirsch on. the fed doesn't know what they are doing yet, and that is why we are hearing so many comments. bullard said we should be cutting 25. the fed has not decided yet, so you are hearing the gamut. the more important

the vice chairman richard clarida follows up by pre-much saying, i agree with the speech from the nework fed president. and then the new york fed tries to walk it back and tells us it is purely academic. how on earth are we meant to interpret that as purely academic? gershon: here is what is going on. this is unprecedented in my career over the past 20 years. it is not that we have this framework we are working with and we have slight disagreement on what the next move should be. we are working with different frameworks. there are people in the fed who don't believe the philips curve matters anymore, or at least that it shouldn't be on a global basis. there are people that think we should pay attention to the global economy and not just the global economy and not just the u.s. economy. one very interesting thing i think, i was always in the camp that if the economy is strong, the fed does not need to cut rates. look at where inflation expectations have gone, it means the real federal funds rate is around 75 basis points. that might argue that a little bit of a cut may be warranted if

i don't think that powell, clara do and williams -- richard clarida and williams have the vote to do think they are uber dovish, that they send the message they are serious and that they intend to create -- jonathan: if it were up to those three, they would go 50? bob: absolutely. i think they are, they are mostly market practitioners. they have been in our seat. they understand that once disinflationary expectations indebted, they are very hard to root out of the market. i think actually the markets are in a very perilous position with that. jonathan: final word here, george. george: i think the fed has a difficult time to meet or beat market expectations. if draghi could not do it this week with a relatively generous offering of dovishness, the fed will be challenged to do so. i think it is going to reinforce the reach for yield strategy. and i think the next sort of point that people will start to focus on once we get through next week's data is actually september. it is sort of safe carry, save -- safe reach for yield, set your portfolio by the end of the week. the next point of

thinking back to the dovish comments from both richard clarida and the fed, new york fed, john williams ramped up your you can see it clearly on this chart in the gtv. good want to reference because it shows how quickly the move was to be paired back. you had the big mover late thursday, a big spike as investors moved towards the idea 50 basis points is what the fed would do have the end of july. all of it came back out friday night what happened in the asian trading session, you had the big gain in stocks because the market was leaning towards a dovish side of things. as we got in to the new york session for equities, some heat came out as people started to pare back moves on the rates side of things grew that is the set up for asian equities, starting on the back foot, the risk premium coming out a little bit as people assess what is the blackout timeframe until with a decision at the end of next week. up with the onus on company fundamentals and earnings. the earnings season ramps up this week. we have across the board from anancials to industrials, large swath of companies. it will

fed vice-chairman richard clarida and john williams reinforcing that the central bank could cut interest rates by as much as 0.5% later this month. esther, what did you and commerzbank make of the comments from the u.s. federal reserve federal president this last time for hours? did it make a difference to market pricing and what you believe? esther: while we sought interest rate expectations to decline further, we do not think it make a fundamental change. the fed has already indicated they intend to cap interest rates at their july meeting. the big question for the u.s. market, will they continue to cut after the july meeting, or is it just a preemptive cut? to this extent, it did not give more insight. act indicated they want to early, but whether there are further steps coming is unclear. perhaps the more immediate impact on markets today is the ecb impact today and yesterday, we saw a big move in peripheral bonds. troubles in italy aside, we saw a little more movement in the bond market. what is the ecb's next move? esther: interestingly, the dovish comments on the fed might put pre

vice chairman richard clarida and john williams says policymakers need to act quickly.nforced the central bank will cut rates, potentially by as much as 50 basis points. the u.s. and china has spoken for the second time the two sides called a truce. spoke over the phone but there were no details on what was discussed. president trump reiterated he could impose additional tariffs if you want -- if he wants. a $4.9 billione charge as it reports earnings as the fallout continues. the charge covers potential compensation for airlines who have had to cancel flights. it will flip more than $5.5 billion from revenue in the quarter. his disposing of assets after the failed listing of hong kong brewing. to asahi for over $11 billion. , 24 hours a day on air and on tictoc on twitter. powered by over 2700 journalists in over 120 countries. this is bloomberg. anna: thanks. bmw has promoted the production chief to the chief executive officer, resetting its leadership to catch up with arrivals in the transition to an era of self driving, election cars. they will succeed harald kruger

and was not about potential policy actions at the upcoming fomc meeting separate separately, richard clarida made comments that added fuel to the fire he argued the case for cutting rates quickly saying you don't have to wait until things get so bad to have a dramatic series of rate cuts. let me show you some of the price action on the dollar yesterday. we saw the dollar fall back on the back of these comments now right there on your screen you're seeing sterling rallying versus the -- excuse me, sterling falling back against the dollar sterling, as joumanna mentioned, a lot happening on the uk side of that currency pair. i want to bring in colin asher now from mizzou bank the markets took this to heart and are pricing in a more aggressive rate cut at the end of july. did this change your view of what we might see in a couple weeks time >> rates are going down, it's a question of how far and how fast the fact they tried to walk it back suggests that they are not -- were not particularly pleased with the market reaction they felt they had to do something to roll it back. so i still think that

liz: fed vice-chair richard clarida speaking exclusively to "the claman countdown" last thursday, heavilyng that an interest rate cut is coming july 31st. but by how much? so thursday morning, we want to back this up, morning, right, the fed funds futures were pricing in the odds of a half point or 50 basis point cut at 30%. by the time the markets closed that day, post-our interview with vice-chair clarida, that figure buoyed up to 71%, combined with the fact that new york fed chair john williams had also struck a dovish tone earlier in the session, but it was one he later had to backtrack on. that's why at this hour, the odds of a 50 basis point cut right now have also backtracked, now stand at 22%. what is really going to happen? to wall street's most closely followed economist, allianz chief economist mohammed el-erian here in a fox business exclusive. thank you for being here. what's it going to be? let's get your anticipation first versus what should happen. 25 or 50 basis point cut? >> so i think it's going to be 25, but let me stress that the problem today is that the fed is viewe

richard clarida told a conference in helsinki that the federal act is appropriate to sustain the u.s., noting mounting uncertainty about global growth and trade. president trump has repeatedly criticized fed policy and there have been calls for a so-called insurance cut. president trump says he's taken tariffs against mexico off the table after the country stepped up efforts to stem the flow of central american migrants attempting to reach the united states. the president says mexico is doing "a great job" and that it has a big impact on migration. president trump drops plans for additional tariffs on mexico after the government said it would do more to help. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. , this is bloomberg. paul: thanks very much. asiantake a look at futures at the moment. we have seen nikkei futures turn a little south after the announcement by the u.s. that there would be $4 billion in additional tariffs on e.u. products. kospi futures weaker as well. futures are in interes

--ncine: if you litter listen to richard clarida, he was saying it was much more tempered and that the market cap -- priced in. fed going to worry they are facing a lack of independence not just from president trump but the markets? erik: it is always the problem. there, i think the fed has been to state its independence, in a sense. thisntral banks don't do -- when a central banks don't do this, it is because the markets tell them. let me look at my chart showing one of the preferred yield curves the fed looks at. if you look at our question of the day, will the treasury curve the flatter or steeper after jay powell's doubleheader? erik: i think it will be flatter. but i am not sure if there is a whole lot left in it in the sense that it is priced. the market has understood what they intend to do. i don't think they will correct us at the stage. francine: if you look at the fact that the three month 10 year yield has inverted since may, is the fed worried about that? is it an impending recession? the message out of the fed has always been that we should not be so worried about the inv

francine: if you look at the 6, 7 weeks we had, we heard from richard clarida. we are data dependent, let's see how it goes. the market got ahead of themselves. they're going to cut. why the dichotomy? larry: the atlanta fed's measure of gdp is below trend. the fed could argue that with below trend growth recent order, concerns around global manufacturing, protectionism, geopolitics and core pce below target, that easing is justified. however, against that, we are looking at employment growth above trend and wages that are growing above 3%. the fed would like to keep options open but importantly, what it does not want to do is to disappoint markets. it does not want to be the source. francine: is it worried it will be dictated by markets? larry: the hall of mirrors analogy is appropriate. the fed is beginning to shift toward this kind of insurance type approach to risk management, consistent with easing in a message they have a bias. the challenges, that is ok to say. well it still be enough to assuage the markets? the fed does not want to be the source of any b

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not so far from the view that i'm expressing i think that chairman jay powell and vice chair richard claridapeeches, expressed a lot of skepticism about the models to which you're referring. a lot of skepticism. i know some of the messages are mixed and probably got lots of brilliant fed watchers out here, but if you read carefully and listen carefully, i guess jay will be in front of congress this week and we'll hear some more, they're having a lot of questions about some of these, you know, what should the unemployment be, what should r star be, p star be, the right neutral rate, so i'm not so sure that view i've expressed on price signals or the views that the president has expressed is necessarily so far from where the fed is. >> jay powell's job is safe? >> yes i believe it is. i will say that. there is no effort to remove him. i will say that unequivocally at the present time, he's safe, yes. >> when art has been saying that monetary policy should be accountable to people, the same way that any other kind of policy is, especially through the executive branch, when he says that maybe th