nejra: that was federal reserve former chairman stanley fischer that into account.sive interview with bloomberg's tom keene. still ahead, john speaks with russian president vladimir putin. one-on-one with one of the world's most powerful leaders. this is bloomberg. ♪ ♪ >> this is "bloomberg best." this week bloomberg editor-in-chief sat down to an exclusive interview with russian president vladimir putin, a rare opportunity to directly engage with one of the world's foremost political leaders who exerts a vast influence on the global economy. here is a portion of that conversation. >> who would you rather have at the other end of the telephone if there is a geo political situation, donald trump or hillary clinton? >> i would like to work with a person who can make responsible decisions and implement any agreement we reach. the last name doesn't matter. of course it's necessary for that to include the trust of american people. the political will to field all those agreements. therefore we never intervene, do not intervene and try not to intervene in domestic politica

later, we will get further fed insight from tom keene's exclusive conversation with stanley fischer. another exclusive interview -- john sits down with russian president vladimir putin. robert shiller on home prices. eduardo li oil market and bill gross on why central banks need tough love. this is bloomberg. ♪ ♪ nejra: this is "bloomberg best." i am nejra cehic. economists, investors, and policymakers around the world were watching closely this week for positive signs of global growth. indications continue to be mixed. let's look at the best, starting with the prospect of more central-bank easing from japan. rishaad: the bank of japan has reiterated that it will reduce -- boost stimulus is -- if needed. kuroda says he has ample room for additional raising when he addressed central bankers at jackson hole. what clue does this give us to this meeting next month? >> it means we have a tense wait until the next meeting. governor kuroda, as you mentioned, is signaling with again, as he has before, that increase to foreign policy is possible. we know negative interest rates could be cut f

you've got close to full employment as stanley fischer calls it.hat is been janet yellen's main focus, what is happening to average earnings. both looking the right number. friday is a key day. mark: is very number that says yes, september is happening? 150,000, that is the number. that is all you need to meet the consensus and you should get a rate rise. unless there is some bizarre action that happens between now and the first of september. the interesting thing will be is how the markets react. mark: a 36% probability. it is not being priced in. there needs to be a market shift . jonathan: there needs to be a market shift or there needs to be some news that people are expecting that happens now train -- that happens between now and september 21. if the data remains reasonable, we should see a rate hike. then what happens to markets? if you get a tantrum that we have seen before, then you get perhaps a delay in when the next rate rises. mark: meaning the fed is a slave to the market? jonathan: anyway it is a slave to the markets. you look at what

in an exclusive interview on bloomberg television this week, tom keene asked stanley fischer how thatl affect policies in both the short-term and long-term. ouran you do one and done even to and done, or do you have to go to a measured set of rate increases like we saw a decade ago? stanley: well, the work of the central bank is never done, and i do not think you can say one and done and that is it. choose the pace, but if we choose the pace on the basis sodata that are coming in -- i do not think we know at the time we start whether it is one and done or several. it depends entirely on what is happening in the economy. in your speech, you stated, "i am an optimist." you are surrounded by pessimists. we stick to them everyday on bloomberg. i want you to redefine margaret's, that jackson hole, per se -- pervasive pessimism is out there. it exists today. how do you push back against that? stanley: what is the pessimism about? it is not about unemployment. it is about growth. and that is largely about productivity growth. which is verying hard to control by policymakers. it depends enorm

i think the stanley fischer interview was rather amazing.e's the heavy and he puts out there could be two hikes with steve and after that i think people just said there's got to be one, so let's just get it -- that's what really changed the dynamic. it was fisher saying it could be two. it's hard to take that back and have none. >> you buy the argument that whether it's september, december, whatever, the fed is more hawkish now than they were several months ago? >> absolutely. >> and -- >> absolutely. >> and that keeps the lid on stocks? >> i think they've been saying data dependent, but if there's any sort of exogous event overseas we're not going to take action, and right now, the g20 meeting, seems okay, japan's propping is up perfectly, and europe and brexit. >> you do have the respect for political change, in terms of populous parties winning larger and larger followings. >> that's true. >> in germany, for example, some recent elections there. >> merkel delved defeat, but i think things are fine. if we added 40,000 jobs i think we'd all

art, earlier you mentioned stanley fischer, an interesting one at the fed.e's seen as close to janet yellen of a friend and like mind an one of the more hawkish people on the fed. so where does he stand? >> that's a great puzzle. markets are asking that. i mean, clearly he has for months and months talked the hawkish game that every meeting should be on the table. and yet, you talk about fed credibility, down here on the floor they're wondering if he's that hawkish and sure rates should be raised when they pass on it, why doesn't he dissent? he has not yet. >> that's exactly right. i think the sanly fischer kabuki dance for the photo generalics of the jackson hole convention. after that, he's put back in the closet again. stanley fischer was loved by all economists and hoped for as a leader on the fmoc. he is just a person they drag out to show unity when they need it and they put him back. i think the real power is with the doves of janet yellen and branyard calling the shots. >> rick, what kind of number does the fed need to see to move? you are not a fan

i look at negative rates, stanley fischer was quite adamant.resting and important experiment. do you agree with the vice-chairman that nations should continue to study negative rates, do negative rates, and distribute them more across their societies? with stanleygree fischer about issues that are of great interest. it is an interesting experiment. i do hope that it will not picture ofneralized the world's financial markets. negative interest rates are not healthy for the financial system. and low interest rates are also not healthy for a sustainable financial system. we have had very significant -- monetary policy all over the world has been productive saving the world from a deep recession. now is the time to agree that monetized policy should not be the only game in town and interest rates should aim to be normalized and that is where we should move. with jeani spoke trichet earlier and everyone agrees that this should not be the only game in town. sot needs to change central banks are not the only game in town? when you start as the only ga

stanley fischer echoed that you.n cramped -- eric aboutratz gave a speech the case building for gradual rate hikes. let's jump into the bloomberg and look at the world interest-rate projections. hike are upttember to 30%. fedy, there will be three speakers closely watched by the markets, starting with dennis lockhart, president of the atlanta fed. he has been relatively upbeat on the economy, looking for a stronger gdp growth in the second half. if he continues in that direction, it would not be such a surprise. kashkari will be talking about banking. he will not give us any clues on monetary policy. it is governor brainard everyone will be watching. she is typically dovish before and interest-rate increase. the markets learned she would be speaking. thate sounds hawkish, could be a sign the fed is trying to get people prepped for a rate hike in september. our bloomberg intelligence team is saying it will not happen in september. it will be december if at all this year. the last survey of economists shows only 17% ar

herewe had stanley fischer a few days ago.n you look at what bankers are doing right now on the september 1, are you like focusedat deutsche bank on future financial and stability. ? david: i think the gap between riskless and risk, the why bore isead thing going on now restating the price of risk. there are now two categories of things. you have riskless under percent level one assets. you get paid no matter what, and you have the rest. then you have the divide bill. tom: -- jonathan: people maybe not want to live in frankfurt. they are try to persuade people to live in poland. people don't want to move along. so there is a kind of embedded infrastructure it will take a long time to unwind. and who is to say the decent deal cannot be done, david? why does it have to be doom and gloom? david: we don't know. uncertainty rises. i agree with what you have said about the current situation. but if you had the u.k. in one position, what will the new one look like? norway, switzerland, iceland? whatever it looks like, it will be diff

german, we had a stanley fischer around altra point versus modestly, dating. i cannot believe that is in the 42nd edition of your textbook. explain whatase those mean? altraould lean toward though i do not think i would've used that word. the consensus of the fed seems to be the neutral real interest rate now is around zero. economy, state of the they seem to think it is around zero. inflation rates, 1.6%. so, you have got a negative and the actual nominal fed funds rate is 640. you're looking at about a -1.2% real federal funds rate, quite a bit low zero. i do not think i would call that ultra or modest, actually. i give deutsche bank huge credit for this, given the research capacity, the idea of financial stability. i'm not sure that came up in the press conference today. how concerned are you about a central banks at that will have a at bank financials ability or instability because of negative interest rates? >> negative real interest rates. -- thereot seem to be was a lot of talk years ago remember that if we were ever to get the interest rates down to ze

yet stanley fischer and janet yellen at jackson hole saying we want to raise rates this year, maybe even twice. the conversely the last speaker before they go silent, sort of having this extreme dovish case. no way are we going to raise rates. it is a lot of communication from all of these different people. the markets want to hear things, want to react, want to get ahead of this rate movements, but at the same time, that is causing a lot of problems of the medication between the fed governors. vonnie: it is supposed to be more nuanced, right? the reason fed has had to bring it hasis every time brought them down is because of data, whether it is domestic or international data. surely, the markets can see that. >> the one thing the markets do is they increase their expectations slightly whenever there is good data. whenever there is a bad data point, he goes down tremendously. you can see it on the bloomberg terminal. the slightly underperforming jobs report this past month, just completely derailed all hopes. brexit or china or all of these things -- it is always something. people say, i

cheryl: you know, again we've heard stanley fischer and janet yellen both say that there is likely acoming. let me ask you this, the banking sector, banks and energy didn't do so well in august but overall banks are positioned to do very well once the rate hike hits, if not before. is that a sector you're following right now, and do you like it? >> absolutely. a lot has been made that the dividend area is been overbought and is very expense sieve. that is true on the defensive said with banks and health care. you get wonderful dividend yields with very low valuations and they're going to do very well in a rising rate environment. it is also not true in energy. it is not true in dividend-paying technology and some selective industrials. there are some wonderful yield opportunities where you don't have to pay up for. cheryl: hank, is there anything we should avoid? >> we continue to say sovereign debt is the most expensive asset class. it has been expensive for a long time, but, it is continues to be very expensive to us, and avoid gold. gold is not an investment. gold is a speculation

folks from vice chair stanley fischer raarguing this is more conventional tightening.ood deal of uncertainty right now. shame so much relies on friday's employment report. even if it was revised data, in august revisions have averaged 62,000. it wouldn't tell us about the future. it's amazing the wholeo outlook is going to depend on a single month employment data in the summer. >> what does that mean for if markets. >> certainly softened us up a bit. hurt the rotation within the marketplace. i think our story really here is that low return expectations, low yields everywhere, have made the value of stocks higher and their future returns lower. you see rotation away from things like utilities into financials. those that would move with some change in the rate outlook. >> as that got further to go, the rotation. big divergent still year to date. >> in terms of relative valuati valuations, yooults are trading like growth stocks. this is about exceptionally low bond yields. difficult to go from there. whether or not we're going get a bit of relief depends on friday's numbe

when we heard stanley fischer speaking to cnbc, he made a big point to say it's the productivity we're watching. the nonfarms are strong, but productivity continues to be a puzzle there. >>> meanwhile give you a check on european markets one by one. first trading day of september. we say good-bye to the sleepy summer season. not so sleepy you might argue this summer. ftse 100 higher .30%. xetra dax holding higher .40%. ftse mib and french cac all stronger. let's give you a check on the effects curve here. showing you a picture of the strike in sterling. the euro dollar off just slightly by the green back. the greenback making gains against the yen. seen a little reversal here after dollar weak neness overni. higher now by 0.14%. sterling higher. that will be a focus this morning. >> still a long way to go to 1 .40 handle there. >>> got breaking news for you. the russian energy minister novak says oil prices at $50 are normal. that's according to the news agency. russia may look into an output freeze if the price falls. bullish comments for oil. whether that output freeze happens, we'll

fed to want to raise rates so badly in december and do they see recession over the horizon and stanley fischerlly is concerned there's not enough in the way of conventional monetary policy to address a recession i.e. interest rates. 25 basis points won't cut it when you need 3% or 4%. >> it's started to help in the uk. we'll see. thank you so much for joining us this morning. >>> in corporate news more outage at wells fargo following headlines on sales practices. it's emerged the executive who oversaw the knit that created 2 million unauthorized customer accounts who had stepped down in july did so with a pay package worth nearly $125 million according to reports. however, wells fargo says that executive as retirement was a personal decision after 27 years with firm and was, in fact, aware of the wrongdoing and already working to reduce it. regardless cnn analyst says it raises questions whether some of her pay should be called back. this comes after wells was handed a $185 million fine for those questionable sales practices. today market watch report its analysis raises the possibility that t

we've been talking about stanley fischer and his hawkish statements.s a lot like last summer when he was hawkish around a fed rate hike. we didn't do it in september. waited until december. >> we raised the credibility question. lacquer comes out and says okay, justifies it. that's where we are. now if they don't go in september people are going to be raising the same old question. has the fed lost his credit. >> do you have the stomach for this. we're back to data dependency. if the data is there, they're going to do it. we go back to nonmanufacturing, services, that's what this economy is. look at manufacturing data. >> and rob kaplan said that on your show. >> good having you here. thanks so much. see you again soon. barbara dujoining us today. does it for us. >> here's what's on your power menu. the new war on drug. hillary clinton out with a plan to try to rain in drug prices. do we really need another government agency? the details of debate straight ahead. >>> with a blah august job's report, is the fed on hold? maybe not as some still see a sep

stanley fischer said two rate hikes before the end of the year. we backed off in september. 25 basis points is not going to throw the u.s. economy out of bed. i wish she wouldnthey wouldn't of their own shadows. >> you just reminded me we'll have another two, three months of fed speak. i don't think i can take it anymore. for investors that means more volatility, right? >> i've been watching the fed since greenspan, and greenspan used to confuse, but is that any worse than what we have now? one paragraph is what we used to get from the fed. now we get press conferences which last an hour, then the long statement as well. so i don't know which one is better. more communication or less. i would lean towards less and action. >> i would do you think they didn't hike? why weren't more on the side of the three dissenters? >> this is something they talked about, the asymmetric impact of what they do. there are more dangers in moving too son than staying too long. they think if they move too soon they could tighten markets. i disagree. i think if you hike

you have stanley fischer on what -- on one side saying how important the numbers are. but there is a slight moment of calm. it does not happen often. --a: on the global markets putting up the risk radar. you can see where we are on various asset classes. asia equity session, fairly you did. we weree last week, waiting for his yellen and now the jobs report. september -- chances of a rate hike are at 34%. they were of up 40% a week ago. things shifting a little bit. generally, we are waiting for the jobs report. while is in at 43.44. a lot of discussions all week about what we can expect and what we shouldn't expect at algeria. biggest four-day drop since february. stay tuned to one station only to get the conversation from a man that knows a lot about it all. anna: here is christine harvey. christine: cleveland fed president loretta mester's says there is a compelling case for gradually raising interest rates. with the u.s. economy approaching the central rights target. she declined to say exactly when she believes hikes would be necessary. the next policy meeting on s

economics like blanche art, stanley fischer, the idea of a modern the lips curved orthodox, traditional economics and some people are saying, wait a minute. irving fisherthin of 80 years ago and generate low rates, you generate disinflation and outright deflation. talk about with the zero bound does. does it help us get to inflation , or does the zero bound and negative rates help us get to disinflation and that ugly thing, deflation? there is a very serious risk about the zero lower bound, you cannot decrease interest rates enough, the economy remains weak which leads to less inflation, which eventually needs to disinflation. this makes real rates adjusted for inflation even higher and you get into this disinflation 30'sl, which we saw in the . fortunately, we have not gone there. ,hat we have now is deflation low inflation. it has not gotten much worse. the reason is partly because the .xpectation is of inflation but we know there is a great danger. when we get to the zero lower bound, these people expect deflation, interest rate, higher and higher. when you are there, you are in deep

consumer confidence, stanley fischer on the table last night, again invoking his view that wages areng to respond to the labor market. and still the probability drops. anna: a look into asian equities in the wake of this morning, you can understand that people interpreted that strong u.s. data as a high probability of a rate hike, but the action is the reverse. the last week and has been coming down. alan, what are your expectations around interest rates now? not aecember now, that is certainty. alan: i think you are right. i think we have a mini cycle of wage increases. consumers are in a good place, as we can see here. and no sign a recession. and they are data dependent, but also market dependent. the markets are well behaved. they will deliver a rate hike. manus: the goldman sachs conference, the only overweight position may have a moment's cash, a number of institutions. blackrock warning, goldman is overweight cash. how does all of this confidence play out, in terms of positioning? do you still want to be overweight u.s. versus the rest of the market? alan: not necessarily over

stanley fischer said everything she said in her speech was consistent with one if not to interest rateesident of the boston fed spoke. he is known as being more dovish, yet he said there is deathly a case building for gradual rate hikes by the fed, pointing to wage pressures. that could lead to more inflation. let's jump into the bloomberg. our world interest-rate projections come the odds of a september hike are now 30%. a couple of22% weeks ago. december hike, up to 60%. it's been a long time since we have seen anything that high. theformer president of reserve bank of minneapolis spoke to bloomberg and said the federal reserve is deftly trying to get the markets ready for an eventual fed move. nothe federal reserve does want to surprise people in the marketplace, so if you want to increase rates, you can try as best you can to communicate that that is coming and to try to make people understand that that is coming and they should mentally and may be financially be prepared for that. in fact, he said that if he were at the fed right now, he would be voting for a rate hike next week,

caroline: stanley fischer says it is about the day to you

stanley fischer saying me might get two.the data suggesting this is not going to happen. i don't know if it is a credibility problem but it is a communication challenge. is because just like participants and forecasters, they are responding to the flow of the data. withinve their forecasts their best case scenario and as the data comes in they have to tweak their assumptions as they look at the evolution of financial conditions. they change their trajectory for interest rate projections. part of the issue is their communication. they have the dots, they don't showing theare not risk profile, which is closer to what the market is saying. >> the article is focused on the idea that we are going to see a recession in the next couple of years and the fed cannot address at. what do they do? according to this new paper, at the fed, they will have interest rates at 3% and that will be enough to cut. summer says we may not be at 1%. >> i think summer raises an important point, which is that if the fed goes to quickly they might have

stanley fischer reinforced that, say we might get two. the data seems to have disappointed, and the markets have priced out a september move. even if they wanted to, can they raise rates now because the markets are telling them we are not ready for that? say the always like to fed takes the path of least resistance. they only push back if they think the markets have it wrong. so the markets have taken down the probability of a september hike, starting with auto sales rolling over last week, both isn's falling sharply, and the beige book overall was just meh on the economy. the markets read the at incoming read that incoming data, and the fed says the incoming data has not confirmed their outlook, and therefore it is not time to hike rates again. so i would say the fed not putting back against that is telling the markets you are reading the data right. mike: target alert, fran. "meh." you have to have a doctorate in economics to be able to use that word. francine: it is a great technical term that i know mario draghi uses a lot. mario drag

stanley fischer said last week the problem is there's so many numbers you have to sift through it and figure out what's happening. to rick's point earlier, the fed is absolutely missed numerous opportunities to have raised rates and started on normalization. they talk about it now when the data is weaker and the problem which is why i think they're stuck into the corner and why i don't think you see it happening at all in september and to peter's point, i'm not really sure i'm not in a high yield space and i don't understand where he's seeing the economy so, so strong when you're getting the weak data. >> peter? >> well, good point. and i'll tell you this. i think the fed, why the fed isn't raising rates isn't necessarily just because of the u.s. economy. i think they're looking at a global perspective and there's so many moving points like brexit not played out yet. i think that the fed dare not do anything at this point until we see how the global economy plays out. to that end, though, domestically we look very, very attractive compared to any other place on the planet. wouldn't yo

the unbelievable interview with stanley fischer where steve liesman said sure, it could be a couple.f it's going to be a couple they have to do it in september. i am prepared for it and raised a lot of cash for my charitable trust, really concerned we're not ready, because so many people, look, you talk every day about the volatility. nasdaq has been up forever. >> in fact, 44 days in a row now, the s&p has closed within 1% of an all-time high. in the week you said go elevated cash position because you're seeing weak data into a potential hike. >> right. you have the vix at 12. i mean what is everybody on vacation? the volume is low but a big seller comes in, blast it down. i looked at the retailers. ollie's bargain store the only one that has really delivered the numbers. when focused on ollie's, well let's say it's a narrow universe. i am concerned. i think people aren't concerned enough and i think people will overlook a kroger. kroger is a national supermarket chain down 25% going in but i use that as an example, carl, of well, you know, hey so it's a bad number. wait a second. s

this fall, we will have the federal reserve vice chairman stanley fischer, october 17. cook,cal activist shirley october 18. amazon founder jeff bezos, october 27. former mayor mike bloomberg, november 28. dallas federal reserve president ceo rob kaplan, november 30. commodity futures trading commission chairman on december 26. so quite a lineup of speakers. try to get yourself tickets early because there will be big demand for all of these events. now, enjoy your lunch. thank you. just before mr. lundgren, paul ryan making remarks, taking questions at the economic club of new york. in the house today, they will be in but only for a brief pro forma session. atwill take you to the floor 2:00. members will be back tomorrow for legislative business taking up a bill that would exempt olympic and paralympic athletes from taxes on their medals and prizes. also information sharing and cyber attacks. a ban on u.s. cash payments to your aunt and possible work on a bill that would fund the government short term. current funding expires at the end of the month. go to the white hou

caroline: stanley fischer says itis about the day to you -- is all about the data. china outperforming, that has helped the bid. >> italy and france coming in light, a mixed field across the globe. onhas a significant move asset classes. >> coming up, we will delve into all of that. take of america-merrill lynch head of economics joins us ahead of the jobs report. plus, why he says the fed should overshoot its 2% inflation target. >> 25 hours until the important jobs numbers, markets wait and see but we got global pmi's and a little bit of risk taken on. in the equity market, the dax off the high for the session but pmi cominga german in line with estimates and european banks seeing a huge rally, the biggest three-day jump since july. a little risk, especially across europe. the fx market, the stronger -- the u.k. pmi coming entity 10 month high, the other story is still going to be the relatively stronger dollar, the dollar-yen 10369, now at a one-month high, the dollar grinding slightly higher. , the china pmi coming in almost at a two-year zinc,leading copper, ti

we saw janet yellen take a neutral view, stanley fischer say they could do two rate rises this year sonow. the august payrolls report is somewhat disappointing at 150,000 but it is what you need to keep the unemployment rate from going down. recovery again, the number has been revised by 100,000. the fed knows that but the question is do they act on it? janet yellen providing no guidance. jonathan: michael mckee, a busy man. as wall street gets back to work, futures are widely positive. let's get some movers with julie hyman. julie: i want to recap all of the deal headlines. we have a few as we kick off the school year and the end of summer. spectra energy and enbridge combining in an all stock deal. owners will own about 40% of the combined company which be a -- which will be a national gas pipeline. a $28 billion deal overall. up about 9%spectra and enbridge trading down just slightly. buying cepheid. you can see cepheid shares rising by 2%, danaher little change. cepheid is a provider of diagnostic testing so that is what danaher is giving -- gaining. 30%star shares are gaining as v