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is eric rosengren correct? does this pronounce some kind of a risk, and if so, would it be systemic, scott? >> look, rosengren is correct in the sense that very aggressive monetary policy has probably birthed some of the issues that we now have at this point in the cycle with respect to firms like wework and wework is a great concept. the problem with rework is it's overvalued and appreciated with respect to the risks of this business model and i think that's what he was talking about. and yes, there are certainly risks to the commercial real estate market as a result, but i think there's a bigger issue here i think the question we need to ask ourselves, is wework just the tip of the iceberg because when you have an 80% gap between where wework is priced in the private market and the public market, does that call into question the valuation of all these other unicorns, all of these other private technology companies? and does that then have a flow-on effect into the real economy in terms of investment, spending

and we are awaiting exclusive comments from eric rosengren. he is the only one of the three fed heads who of course voted against hiking rates a quarter of a point. edward lawrence has just wrapped that up. i was able to greet him and he and edward had this conversation and by the way, we are going to hear more of what eric said about why he doesn't think we probably need another rate cut this year. with the closing bell ringing in 47 minutes, on a wing and a prayer, want your lipitor via drone dropped on your front lawn? walgreens leading the dow 30 after announcing it will be testing a new drone delivery service in conjunction with amazon startup wing. as the number three pole position, walgreens is up to $55.09. it's getting in on the moonshot economy. one of the original lions of silicon valley's internet age, larry ellison of oracle, torching the young whippersnapper names that are recently dominating the startup stock scene. up next, the market guru who lives and breathes all things millenial is here next on which companies are the real

. >> boston fed president eric rosengren explaining his ecision to vgainst the rate cut this week. said the big concern is interest rates too low too rung canoo le to financial instability and bubbles in asset prices created by those low rates. and rosengren signalled out a business model used wy wek as a possible source of future losses and the boston fed president said low rates can encourage excessive risk taking, create too much leverage or debt in the system and causeto inv to reach for yield, one example he said, the real estate model known as coworking space used by we work which rosengren didid n specifically name. >> very aggressive monetary policy has b bst some of the issues we have in the cycle with respec to stores i like we work. the question we need t ask ourselves is wework the tip of the iceberg. >> does it call into the value of the other unicorns does it have a ffflo-ont into the real kmm investment, spending and growth that then coule lead to s kind of unrachlg of this cycle. >> under the coworking space model wework rents vastom space landlords and become as ma

this is the first time that i can recall that we have seen someone of rosengren's stature that said wek is a risk to the economy if there's a downturn so far it focused on what does it mean for wework in the prospectus, they say both yes, we would be impacted in recession, never experienced a recession with this business model before on the flip side, we cater to companies looking to lower their own expenses and they turn to wework to do that. we can benefit from more companies using the service. i think it is significant. >> steve, do you think he is over his case? >> the fed has a spotty record identifying bubbles while they happen, before they happen it is now a bigger part of central banking in the wake of the financial crisis to use what they call macro tools, leaning on the banking system, spotting, identifying, trying to deflate bubbles while they happen so the fed can be freer, independent to use its monetary policy for the broader economy. so this is now a new thing the fed has to be doing. i think the concern, two specific ones here first of all, that wework concentration or

boston fed president eric rosengren sees no immediate need to cut. meanwhile, dallas fed president robert kaplan is watching to see if we can macro economic data filters into consumer attitudes. we will decode fed speak and what it means for later this month. cannabis in canada. we speak to a special guest, the commissioner of the global commission on drug policy. let's get started with a quick check on the major averages. we are seeing risk on and green in the market today. the s&p 500 and the dow gaining almost a percent, with the nasdaq up 1.2%. tech shares leading the gains, the biggest loser in the session yesterday. we also see energy being the second-biggest gainer today. crude prices above $55 a barrel. of course, we continue to see this risk on move around the world. u.s. shares following european and asian shares higher, as we see political tensions subsiding a little bit in europe and hong kong. theaw hong kong shares leap most since 2018, that as chief executive carrie lam said she would formally withdraw that extradition bill to china wh

the second meeting in a row rosengren dissented. he thinks federal reserve policy is accommodative enough. adding stimulus when we already have 50 year historic lows and inflation close enough to the target, it could am anify the next town attorney. he is not worried that the federal reserve will run out of any issues to handle the downturn. >> unlike europe and japan we have some room on our short-term interest rates. we're at 1 3/4 to 2% right now. there is a little bit of space before we hit zero. long-term rates are still well above see row unlike where they are in europe and japan. we have room to buy securities if we need to. we can use what is called forward guidance. reporter: rosengren is looking for a bubble that could form with the low interest rates. he thinks stock prices are inflated and the conditions make it easier for companies as well as households to take on too much financial risk. >> so i do worry about the price of risk assets. not just really just stocks. if you look at highly leveraged loans the underwriting

eric rosengren says it does not need to act yet, but the market disagrees. as ecb bond buying divides opinion, we will hear from christine lagarde, plus how negative yields are impacting the world's largest sovereign wealth fund. matt: i know what the big news for you was last night. number in the u.s. showing manufacturers in contraction was fascinating. it definitely moved markets. if you are, even sitting in the u.k., there is no doubt that was one of the biggest market moving things yesterday in terms of increasing fears, changing the price on futures. we will discuss that. matt: we will touch on brexit. we are going to be going down to westminster throughout the morning and following the fall out of last night's vote. let's take a look at the market numbers right now, starting with asian equity indexes after those big drops in u.s. stocks. we see asian stocks rising. yen bouncing back a little bit. just an hour ago. to sellare more willing safe haven assets in the last 60 minutes. crude oil i think fascinating. weakness we have seen in crude oil, the st

. >> i think the bond market is somewhat concerned i think the bond market listened to eric rosengrenf the boston fed. i think it also listened to the comments coming out of clarida and i think you get the sense the market overall is then going to be concerned about growth if the fed is not as aggressive. >> i was surprised that rosengren saying that machining was already in recession effectively. didn't hit the markets hard sfleer i mean both the fed governors were not too enthusiastic about the u.s. economy. and particularly clarida talked about theeuropean economy hit hard we know that filtered over the danger to that stock rally and the danger we have is you have this pro longed trade war which guy talked about for probably a year and a half now and continues to hit earnings. we are back in this pattern of one day great news stock market goes up. next day all of a sudden it falls apart. stock market goes down. >> we have heard fed representatives tell us gnat tariff issue hasn't filtered through to the economy yet i think if if continues on you're just guaranteed more of a rate cu

eric rosengren sees no immediate need to cut. incoming ecb chief christine lagarde says policy should not be guided by the market. carrie lam bows two processors -- bows to protesters. will it be enough to end the unrest? david: welcome to "bloomberg daybreak" on this wednesday, december 4. we also have a hurricane that won't go away. it is just parked there off the coast of florida right now. isx: i guess the better news that it is a not category 5 hitting florida. thes now i category 2, but winds are still incredibly fierce. about 90 miles east of daytona is where it sits right now after really devastating the bahamas. david: i don't think we still understand the extent of it. it is really tragic what happened in the bahamas. there's a lot of rain and water coming. the storm surge they are worried about up and down the coast. alix: in the markets we are paying attention to the broader political sphere. 8/10 -- upres up by by 0.8%. the cable rate up over 1%. yields in the u.s. now up by three basis points. commodities, buy every

money and fracking as well so here's the headline we work business model is systemic risk to economy rosengren says so remember back in 2008 when the economy collapses the banks that were too big to fail we could have he's you know accordance with mythical magical business models that apparently might be too big to fail and we might need to bail these companies out because we work they are the largest tenant in new york city chicago denver and central london they have 47000000000 liabilities and eric rosengren who's the boston fed president he was speaking at n.y.u. your alma mater and he said he's saying he's looking at he's basically against all this cheap money and that is encouraging a huge amount of leverage in particular he says the commercial real estate market and he doesn't mention we work by name but he says that you know that coworking companies are in particular a concern to him as fed president at boston he said and the downturn the coworking company would be exposed to the loss of 10 an income which. both them and the property owner a risk if they cannot make lease payments to th

in new york city chicago denver and central london they have 47000000000 in liabilities and eric rosengren who's the boston fed president he was speaking at n.y.u. your alma mater and he's he's saying he's looking at he's basically against all this cheap money and that is encouraging a huge amount of leverage in particular he says the commercial real estate market and he doesn't mention we work by name but he says that you know that coworking companies are in particular a concern to him as fed president at boston he said and the downturn the coworking company would be exposed to the loss of 10 an income which. both them and the property owner a risk if they cannot make lease payments to the owner of the building i'm concerned that commercial real estate losses will be larger in the next downturn because of this growing feature of the real estate market which could ultimately make runs and vacancies more likely due to this new leasing model we could see a run on commercial property in new york city people storming out of the building well lord and taylor the retailer has been there for i th

you had rosengren and george who dissented. bullard wanted a larger rate cut, but certainly seems like jay powell or powell doctrine not influencing his fellow members, whatever that might be by the way. >> not influencing the vote, getting the same outcome. losing a few votes but running the day what he want to see. that issue about projecting a rate hike in 2021 opposed to another cut, i want to remind everybody, 2016 we started off the year with them anticipating four rate hikes that year. we got a doughnut, nothing. i don't believe it for a second. i think they will adjust that as soon as the market goes down. charles: speaking of adjustments, john, many came in today the dot plot would have to be explained on the q&a. there were talk about them dumping the whole dot plot it has been so confusing and to david's point so wrong. >> that is exactly right. they should have gotten rid of the dot plot. they have done poorly as broadcasters. it borders on rid i canlousness. this rate hike is meaningless given all the uncertainty w

rosengren has charts charts we have to move on let me say that rosengren is ill advised here >> to youroint, jim, we're watching some consumer products like apple the company's iphone 11 line and the apple watch series 5 going on sale today as many analysts say preorders have been stronger than expected. tim cook greeted customers about an hour ago, in new york city. they reopened the flag ship store, open 24 hours a day, 365 days a year. katy huberty saying the demand trajectory is improving. risk to the upside >> i have to tell you, the crazy thing here, i interviewed david taylor yesterday, ceo of procter & gamble where is the strength? where has it been growing? china. starbucks. spoke to kevin johnson recently, in preparation to go out to the annual meeting, where is the acceleration china. yum china. where is the acceleration? in china but apple, preorders what is this now apple lowered the price, very value conscious in china. >> that's where analysts say the real demand is coming from. >> if you think about, if the chinese hated us, you would see the people, you would see a decl

eric rosengren sees no immediate need to cut.rde says policy should not be guided by the market. carrie lam bows two processors -- bows to protesters. will it be enough to end the unrest? david: welcome to "bloomberg daybreak" on this wednesday, december 4. we also have a hurricane that won't go away. it is just parked there off the coast of florida right now. isx: i guess the better news that it is a not category 5 hitting florida. it is now i category 2, but

inflation, too low and better to act aggressively earlier but boston fed president eric rosengren who dissent ed for the second time looks at the same situation comes up with very different bullet points. he says really weird for the fed to be ease iing in good economic times given the 2% gdp number's about what you would expect with this economy the risks are moderate including by the way, the trade risk he says inflation's near target and rising then he's really worried about these potential costs to the economy the longer run costs of keeping rates too low for too long he said they can encourage excessive rs k taking, too much leverage and a reach he uses as an examine principle, he uses the real estate model known as coworking space. he did not name rework by name these models, they're short-term leases to small, less mature firms that could go under during a recession. landlords and banks. they don't have much recourse back to the rework parent company or cospace and cities where there's a lot of concentration, they could face more defaults. there's a big concern not the model wi

you heard from rosengren and esther george, we are not ready to do that.hat could shock the markets. jonathan: what led to the steepening was secretary mnuchin coming out saying that he is still considering ultralong bond issuance. i would love your view on this. this is what the treasury borrowing advisory committee said in 2017. we have talked about this so many times. ultralong is most likely to be demanded with those with longer dated liabilities. the committee does not see evidence of strong or sustainable demand beyond 30 years. of course, what matters is what the curve looks like now versus what it looks like in. -- now. but the advice, will it be any different this time around? priya: i would argue not. there is demand for the long and -- end but there is not a lot of demand at current levels, below the 30 year points, from this ldi community. they will still say the same thing, the treasury does not have to follow the t back. the treasury clearly wants a steeper curve. everybody wants a steeper curve. we would all benefit, banks would benefit in a

including boston fed president rosengren who argued we're doing just fine. i wonder if that might temper a little bit what the federal reserve wants to do going forward. the next move is to cut rates, might have more nos. i wonder where you see this going? >> right now the market is pricing in a 75% chance we get one more rate cut by december. neil: not in six weeks? >> by december. that is under 60% by the next meeting. neil: that consensus changed a little bit. so i'm wondering whether, this insurance stabs whether you want to call them on the part of the fed to deal with this tray thing is eventually going to be enough, and whether the markets will be disappointed that come by december we don't get an additional cut, whether they will then start getting antsy? >> i think what is happening some of the dissent, some divided members what we're seeing is some of them are saying we want to see more visible signs that the recovery is in danger before making a decision to cut further. i think that is what is happening. they want to see further data, more data, t

esther george and eric rosengren have already made it clear they do not think the market needs another jim bullard once a 50 basis point cut. he could do a dovish dissent. they will possible decide they have made their point and do not need to dissent and do not want to tell the markets the fed is divided because that hinders the policy transmission and we see no dissent. we know where most of the voters come down. vonnie: i have seen talk about how it is used -- when we used to watch m1 money supply back in the day. is that what it feels like watching these repo operations? michael: it is probably not the same. in those days it was paul volcker using the money supply as the lever to control monetary policy. you did not know what the rate was. you try to figure it out from the movements in the money supply. in this case, the fed has reduced its balance sheet and it needs to have enough reserves available. the markets need enough cash available. they have to figure out what that level is. as they figured out, things smooth out. vonnie: thank you for all of that. michael is in d.c. stay

and where the fed guys differ is in what they want to do about it bullard talked about cutting 50, rosengrenay from boston talked about holding the line. williams kind of in the middle, but seems maybe more inclined to also cut and just so you know for your information there, we got 100% chance of september cut. but a 14% chance by one measure and 7% chance by another of a 50 basis point cut. that still seems to be a very minority stance that is out there in the market, carl. >> steve, not just rosengren, bullard, not just williams now but this op-ed doubling down on the fed to not enable the president's trade tariffs. >> that's out there too. i think the fed is -- i guess cringing is probably a good word they don't really want to be in this political fight you know, it is funny, carl, if the fed wanted to say something politically, they might have said it. instead, what they did is come out with a strong statement, kind of disavowing dudley when it first happened. so it is pretty interesting that that's going on. you do not hear the fed guys saying that, except to say, look, this is a very

rosengren and george wanted to leave the rates where they were. one more rate cut this year. they needed two more to have

noc rosengren says he sees need for immediate policy action and the chorus of voices against bond buying grows at the ecb. good morning. matt: good morning. less than half hour from the european open and looking at the japanese yen to see what kind of effect the removal of the extradition bill is having on risk sentiment. this is a three-day chart. maybe a little easier to see what is going on in those terms if i put it in a one-day chart. the yen is weakening. more willing to take risk after the extradition bill has been removed. that reaction should show you how important these hong kong protest have been to global markets. look at what we are expecting in today's trade in the european equity index futures. we do see green arrows across the board here. dax futures are up more than 1% right now and cac futures are up .75%. to riseures continued in the face of a climbing pound after yesterday's hip. -- dip. the hang seng is surging toward the close after reports carrie lam will withdraw the controversial extradition bill. let's get over to david inglis in hong kong. he's been covering th

we heard from eric rosengren saying he thought fed policy was already accommodative, denying any need for further cuts. he rebelled last time. what is your latest thinking on the dollar? >> if you look at it from the point of view, the fed speakers are going to be important. some people might be saying, the fed have already moved a few times. there is pricing to suggest another rate cut as well. going to getlar is support here. reallywant to be negative on the dollar based on interest rates. there probably would have done so already. leaders at the major the united nations to discuss climate. there is certainly room for people to come to disagreements here. so many people in the room at the same time. that could also unnerve markets. you have the chinese holidays coming up. there's a number of small things coming together here with my support the dollar on the basis that it is the biggest, most liquid currency. it has a bit of a yield. nothing huge. probably a slight bias towards dollar strength this week. matt: it does not look like there is a rush to safety in the dollar right now.

you have rosengren and george that dissented last time and now you have bullard who wants 50. you could get three dissents from both sides. they will never get a consensus but he won't ease more than 25, whether it's warranted or not, we tend to agree that the economy's doing fine and yes, the global economy's terrible and we are very concerned about what the ecb does next thursday. that could be a disaster for europe. liz: wait, wait, wait. what could they do, andy? >> well, right now, there's an expectation, draghi has even said qe, they will lower rates and yes, they will lower rates but negative rates haven't worked. lowering more is not going to work. will qe happen? i don't know. i listen to the head of france, the head of germany, from the financial side, austria as well as the dutch, none of themant qe. so with two more meetings left, i think he's going to have a real hard battle to get qe. if he doesn't get it, it's going to be a disaster for him and they will do horribly towards the end of the week. liz: phil flynn, let me give you a quote from chairman powell. he sa

esther george, kansas city federal reserve president and federal reserve president of boston eric rosengren believed there not be a cut at all. the federal reserve is not forecasting recession as we go forward. they're not forecast anymore rate cuts this year however chairman jerome powell pushed back on that a little bit, that they're watching the data coming in. things may shift related to that, looking at volatility and uncertainty out there. listen. >> what we think we're facing here is a situation that could be addressed and should be addressed with moderate adjustments to the federal funds rate. as i mentioned we are watching carefully to see whether that is the case. if in fact the economy weakens more, we're prepared to be aggressive. we'll do so if it turns out to be appropriate. reporter: he said the federal reserve would not hold on to the firepower to let a downturn pull the economy down. president donald trump tweeting. look at his tweet, calling out federal resoil chairman jerome powell, federal reserve fails again, no guts, no decision, failed to respond to the president. he

that is after eric rosengren said u.s.policy is already accommodative and further stimulus is not needed. there's a host of speakers we will be monitoring today. catherine doyle is still with us. i was showing a chart that said that showed futures earlier. a pullback in terms of expectations around rate cuts, pricing one by the end of the year. , we love it when viewers interact, he said it has distorted the fed fund future signal so much that it is not a useful number and will not be until markets calm down. saysou in the camp that the u.s. economy is in an ok place right now so no rate cuts are needed? >> we think to some extent this discussion about one rate cut, two rate cuts is by the by. it's not going to make that much difference to the prospects for the u.s. or indeed the global economy. -- we say to sort of one rate cut this year is likely. problems arehe deeper than that. they are structural. they have been creeping problems that are going to come to ahead if we see some sort of catalyst that propels the economy

. >> i agree with you and the wealth effect quickly of markets and what rosengren talked about right now it actually feels pretty good for investors and that wealth effect has not bit but the dollar is the biggest drag in the economy. the conditions are fine. >> our next guest says the fed can keep cutting rates here, actually we have some breaking news sorry. we're going to go straight to wilfred fox with news on brexit. >> we are awaiting the result of that vote in parliament to where we believe mps are trying to seize control from the government, from prime minister boris johnson of the agenda and they have succeeded. the rebels have succeeded and defeated the government 328 votes to 301 so abos johnson's own conservative mps must have voted against him for that to take place what does this mean now for brexit it means tomorrow there will now be a vote aimed at tying prime minister boris johnson's hands to take no deal off the table because he has lost tonight's vote it's highly likely tomorrow's vote will go similarly to today, the same rebels would once again vote against boris

eric rosengren sees rising risks that are not yet a reality.a: this comes as the global yields grind lower and lower. ubs, bnp paribas have all cut their forecast for the citing year yield, further federate cuts or weaker growth. markets have not priced in five rate cuts between now and january of 2021. john wraith from ubs is still with us. thanks for waiting patiently with us. i want to ask you about your rate cuts call and treasury call. one of the biggest risks to this is that we see an abrupt change in stance or peace breaking out really in this trade spat between the u.s. and china. how much of a change would that make to the calls that you currently have in place? john: a sizable one. we think growth in the u.s. and china suffers the most in and around the first half of next year. that is largely a direct impact from the tariffs coming through and that are still in the pipeline. where those to be reversed or not to happen, clearly it would prospect.e growth we think the rates are going to be cut five times by the fed and we think it will

we heard this morning from bullard but we heard yesterday from rosengren conflicting messages, to saygren you heard the economy does not need immediate action from the federal reserve. then you hear the option from bullard calling for a 50 basis point cut. because of the data we are seeing. mixed messages and that tells me there are many different opinions on the fomc so there's no sure bet with what they will do at the mid-month meeting. stuart: is there any significance to the former new york fed guy, bill dudley, walking back his comments from last week? last week he said the fed should not cut rates because that would help trump win in 2020. now he says he wasn't trying to suggest that the fed should take political sides. is there any significance to this political, this debate that's going on here? >> look, i think maybe, stuart, current and former central bankers are talking too much. there's probably a limit to what we need to hear from them to get the economy going. too many mixed signals, not only that, and former central bankers delving into politics which we discussed that

if they want to get rosengren notgeorge do not duiss -- dissne -- went not dissent.basis point cut, and neutral for a while going forward. that would be positive for the market, positive for yields, and positive for equities. alix: you see higher yield and higher dollar because they will be able to tread that line, not go full out? think it is going to be more the insurance cut. i don't think they can make another flip so quickly to say that the tightening cycle is over because the data has been good. alix: do you really care about the repo rate? i've been talking about it all morning. michael: no, not at all. this is something that the fed did on a regular basis prior to the greenspring area -- the greenspan era. we will probably get back to that. we are going to need the repo rate from the fed more often. alix: thanks so much. joining us in our fed day of nuveensarah malik will be here. this is bloomberg. ♪ at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk..

laureate michael spence and boston fed president eric rosengren giving their views on central bank policyivided over the u.s. economy, their comments this week will be scrutinized closely. in australia, the serve bank governor speaks on tuesday evening -- the reserve bank governor speaks tuesday evening as market expectations for the next rate cut in australia. let's put the central bank watch in context there next guest, qic is one of australia's biggest money managers. beverly morris qic director of rates and inflation dundas from brisbane. can your members such a diverse range of use? -- views. >> yes, last week's rate decision was clearly not unanimous. we had to fed governors who did not want to see that rate cut being delivered last week. on the other end of the spectrum, we had governor bullard who actually voted for a 50 basis point rate reduction. clearly there is a range of views on the committee. our markets, obviously they do not-they will need to discern through the signals. tokets are used to having listen to hawkish and dovish members expressing their views. markets have go

i agree with eric rosengren of the boston fed who was one of the two that dissented based on the factt rates should be held. neil: one other disagreed as well, but he wanted more. >> he wanted more of a cut. look, i think this is a situation where the president has browbeaten the fed to the point where they will cut under pressure. not everybody will agree with that, but i believe that's true because with an economy that's so strong, i just don't believe there's a need for a cut. we're taking antibiotics here before we're even sick. it's a waste of our ammunition. neil: i agree with that. what do you think >> i like the parallel. it really does feel like -- it is like a broken window theory here. neil: you're just jealous because you used the apple to apple thing. he used the antibiotic. >> i like the antibiotic thing. i my think my apple to apple is better. it is not just powell trying to make a decision in cutting rates, but i think it is a back and forth between president trump and powell. there's an election that's about to happen. if the economy goes into a recession, president t

. >> one person on the opposite side of you is eric rosengren of the boston fed doesn't want to be cutting he talks about the costs of cutting and one of the more powerful charts was the one where it showed low interest rates are encouraging more leverage and riskier debt transactions just this idea that the more the fed cuts, the more it encourages risky behavior, more leverage in the system and more potential dangerous bubbles that could end up hurting in the long term. how do you respond to that >> yeah. i think coming into the 2007, 2009 crisis, we have better radar on this. my sense is that there may be a few areas of excessive risk taking but nothing on the order of magnitude of what we saw in the mid 2000s or for ma matter the late 1990s i don't think that's where the balance of risks are we would be better off protecting ourselves against the possibility of global slowdown feeding back into the u.s. >> do you expect those people who say if we step back and go into a further loosening cycle we just delay the problems for much bigger fallout years down the line >> yeah, i'm not sure.

eric rosengren, one of the great thought leaders, obviously is resisting.city is resisting st. louis is moving in the opposite direction this is a very healthy dialogue and i thought powell handled that question very well as well. there's a division of -- it's not confusion, it's an honest debate you put your arguments on the table. everybody listens to you and then you try to figure out what the proper course of action is according to the total unanimous part of the group. that's the way decisions are made so i think there's a division of opinion here i do expect a quarter rate point cut, but i don't think it's a lock >> richard, i wanted to ask you about the ecb. next week of course a meeting coming up, mario draghi's final meeting. why the expectation that he's going to announce a further cut and perhaps reinitiation of bond buying one simple question on that. it's his final meeting and a new president is due to come in. in your mind do you expect that that would see a big change in direction in policy on a final meeting? is that something that people li

we heard eric rosengren at the boston fed saying he doesn't see the need for further accommodation, yetames bullard from the st. louis fed is looking for an immediate 50 basis point cut in rates. how do you square that circle? how do you consider these opposing views? >> sometimes it's easy when the path is clear. how fast to move and things like that. sometimes things are relatively clear. other times it's murky out there. and you don't really, you know, there's a range of views. i think this is one of those times. trade policy uncertainty is not something central banks have a lot of practice in dealing with. so as i mentioned in other occasions, we are trying to look through short-run developments and try to assess what the implications for the outlook in the medium and longer term will be of those developments. it's challenging and we are clearly at a time where there's a range of views. again, i do think that's very healthy thing. we will, of course, reach a decision. i expect we will have a strong support for the decisions that we made, as we had in july. i expect that will continu

. >> maybe rosengren said yesterday the lack of low spreads and high yields is an indication that thenot as bad as peel e people think >> that is one interpretation. >> right >> the other interpretation is rates are so low people are reaching for yield itself, they'll talk own 10 or 2030 basis points they can get. what itself the answer for why the spread on high yield, which should be so much higher >> they're not mutually exclusive. >> they're no i think what -- is it reaching for yield or is it an assessment that the credit is good and the economy is not in bad shape? >> it's a little in the middle what i say by that is, there is definitely a lot of capital in the system or a lot of liquidity to the markets these days. certainly when the spread widens out, you see a philosophy come in, in terms buyers like ourselves, that said, we think there is still overall a strong tone to the economy moderately strong, but we're very worried about certain sectors. i think the default rate being so low, that's going to move up more when you see certain sectors, like retail, which we've seen rece

doubt there's agreement -- >> last time around we had two fed presidents disagree, esther george and rosengreny dissented. this time around, we will see who else dissented and what about the dot plots? david: don't get too in the weeds. susan: it's important because basically it indicates to us how much appetite is there for one more rate cut this year before the end of 2019. >> i have to get into this conversation the fact we had an incredibly good production number. fed ex is out there saying it's china, it's trade. where's the evidence? industrial production was up .6%. another big beat versus expectations after a .4% decline the prior month. but look, i think yeah, i think the market sells off because it's pavlovian. you have the fed -- david: what about the president? is he going to fire powell? >> no. he's not going to fire powell. >> the problem is, this is not a recession-saving move by the fed. the economy, although we have gotten some mixed signals, look at housing starts. at a 12-year high. it's not like a crazy economy. we are doing it for other reasons. david: we are the only game

later >> i think it's possible and you have seen a bit of a dovish shift in the hawkish member eric rosengreneems more open to a cut jim bullard is arguing the data hasn't slowed enough to get consensus on the committee for 50 bases points in december. >> mostly cap x. >> what's hurting cap x. >> trade uncertainty is a trade driver the leading indicators there, export orders have plunged they have been very good indicator for cap x. a world where you have this consistent and persistent trade uncertainty, i think it's difficult to see firms being willing to do big cap x. >> how can you see president trump allowing the gdp to fall to one and three quarters because of something he's doing himself? you don't think he can connect the dots between the trade war and one and three quarters and his re-election? >> i think he can. so i think he will eventually back off. >> too late? >> the question is it too late and how fast could growth actually snap back as a result of that. i think there is something more persistent here. i think you need to have a firm resolution for businesses to be willing to in

don't forget to tune in with his interview with boston fed president eric rosengren, 2:00 p.m.fox business. >>> starbucks trying something new, openly a pick up only store kristina how does this work? >> you have to use your app in order to pick up the goods there. according to starbucks they have 17 million members downloaded the app. none of us downloaded unfortunately. can't speak for edward. we're seeing the growth rate 14% quarter over quarter. see a lot of strength. luck coffee, ashley is nodding right now, a popular regional rival here. they also do the whole pickup thing where they accepted as. starbucks moving forward with smaller locations, makes it a lot cheaper in metropolitan cities. david: we have a rival fox, free coffee. a hard thing to beat. ashley: i am glad they put it at penn station. you don't want to hang around long. david: the man who correctly predicted donald trump would become the gop nominee in 2016, announced who he thinks will be the democrat nominee in 20206789 we'll tell you his pick. >>> the president raising $50 million during his 2:00-day fund

rosengren saying we don't need a cut. think we will see a 25 basis point cut at the september meeting. shery: great to have you with us. victoria fernandez, chief market strategist. you can get a roundup of what you need in today's edition of brave -- of daybreak. can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪ shery: this is "daybreak asia." paul: let's get a quick check now of the latest business flash headlines. saudi aramco is expected to finalize its list of underwriters for what could be the biggest ipo in history. sources tell us global investment banks are finishing their pitches for roles in the offering. aramco planes to make a decision in the coming days. the company is expected to name four or five banks to lead joint level coordinators while others will have more junior roles. zara is denying rumors that -- supported hong kong protests. business is under increasing pressure from the protest with retail sales and tourism numbers slumping. a