the economy is critical. dian incomes fell again, the question is what do we do about it. the fed is part of the problem. trish: let's talk about what the fed did, what was nothing. i have been warning of this, you heard me, saying they are not going to do a darn thing. they don't move at all. probably are not going to move in december either. why is that? >> or october. >> or october. >> right. >> they have october and december to do this year. i think we learned today surprise today is that we learned that fed is unlikely to move for the rest of the year. the external conditions are weak, with china, and the emerging markets, europe and japan, no one is going well. and financial conditions have tightened. looking at 2 year rate, sthoarm, short-term, rates almost double, financial conditions, no matter, conditions are tighter, in a way fed's work has been done for it by the market. trish: the political implication of this with our debt situation, we heard don done talk about how -- donald trump how we can't o

the other advanced economies. you look at productivity, it outperformed them. the real growth was never a problem. the problem in japan was of course the lack of inflation and that is why i look at the nominal and the nominal numbers, even in this quarter which was a great quarter, showed slow growth. that is on top of the annualized 9% growth we talked about last time i was here. the numbers are quite good, actually. kio, we were talking to somebody that was telling us that growth is something they do not look at because so much is spent on state welfare or pensions. mikio: that is a demographic issue, something that economic policy cannot solve. the result of a lot of policies so i cannot say much about that. what economic policy can do, what it is actually doing in the past couple of years, is trying to get the correct monetary policy to focus on the right things and they are moving in the right direction so that is a start area rishaad: what he was -- start. rishaad: what he was saying is look at the corporate

will they let the economy generate low unemployment. the only rational to pull back and not test low rates, we shi test that. >> we'll take a break and pick it up in a moment. why the attention on a rate increase that will lead interest rates at lows. is it the idea that a slow rise will mean the end of an historic region of money. slow to recover housing markets. households repairing family balance sheets. why the fuss. the end of freak ash. stay with us, it's "inside story". >> we're here to fully get into the nuances of everything that's going on, not just in this country, but around the world. getting the news from the people who are affected. >> people need to demand reform... >> ali velshi on target weeknights 10:30p et >>> you're watching "inside story", i'm ray suarez, the end of free cash, this time on the programme. we'll look at the federal reserve's plans to raise interest rates, confirmed by the fed chair. >> as i noted most of my colleagues and i anticipate economic assistance are likely to warrant interest rates at a gradu

,e real the financial economy. the real economy is slowing. the fact that china has adopted a very, very ambitious transformation policy that changes the entire model of the economy from export led to domestic demand led. they are calling it the new normal -- a much higher share of services and the economy. in other words, we are going to see big changes. with all big changes, a slow down as their. -- is there. they are and have been slowing down significantly. investment has been slowing down. one of the reasons is that in the past we have had excessive investments. i would call what is happening a correction. it is not something that is going to last one year, it is something which is a multiyear process. we need to get used to the china that is not growing at 8% or 9%, but maybe growing at 6%. anna: and if that is the case -- carry on. how much stimulus should the government deliver? well, the stimulus they need to deliver needs to be much more focused. it is not an economy wide stimulus, but into specific areas, what they would call acupunc

the consumer side of the economy looks particularly good. in our conversations with company executives, we hear similar messages that the u.s. economy is in pretty good shape. some of the dislocations has found a way in asia that may be too early. everything else being equal, today's beige report is another step in the direction of higher rates in a few weeks. >> let's talk about the stocks. you mentioned that you don't think energy has hint bottom yet but one of your picks is objection dentalal petroleum. what makes it different than the others? >> it is neither a major integrative company. it has elements of both businesses so in the downturn will trade with the sector and be unfairly punished. it has a very conservative balance sheet. we're looking for companies that can play offense amidst the downturn. that can do smart things with conservative offsheets. it has a did i have denied rate of 4.3% so it is a name we like a lot. they can make money at these oil prices. i think the did i have denied is safe. >> let's go on to kroger. a very c

the question is in an environment in custom the u.s. economy is doing okay, the labor market is doing well, is the right policy rate zero? i would say probably not and i think that's why they missed an opportunity. >> russ, thank you for your perspective. we appreciate it. russ with block rock. ty. >>> sue one part of the economy sensitive to interest rate moves is housing. how much would a rate hike have mattered to the housing market today. rates cut into afford lt, surprisingly buyers are less worried about that than other roadblocks to buying a home. >> reporter: even before today's fed decision consumers were not as worried about rising mortgage rates as you might think. >> 85% said they would carry on with their home purchase plans even if rates topped 5%. that's significant: it tells you the state of their minds is. >> reporter: in fact, home buyers are more concerned about qualifying for a mortgage and finding about the right home than they are about rising rates according to a survey by trulyia. it's important to remember that mortgage

the much-anticipated debate on the economy. i like to thank everyone who has joined does and made this evening possible and to the mayor in calgary for hosting us. you believe in the national debate and i'm sure you agree we got one tonight. a final word of thanks to the three leaders, mr. harper, mr. , we wishmr. trudeau you well and we know you have a common interest in doing the best for canada, just a different way of doing it. stay with us. we are carrying the postdebate later. joint is nothaver to begin the postdebate debate. thank you and have a good evening. [applause] >> the pope's upcoming visit to the u.s. c-span has led coverage from washington. on first stop on the tour wednesday, september 23. a welcoming ceremony on the south lawn followed by a meeting with president obama. on thursday, the pope takes history on capitol hill, becoming the first to address the house of representatives and senate. follow all of the live coverage of the historic visit to washington. watch live on tv or online. attorney general lorett

it will become the largest economy in the world. i'm confident with chinese economy. i feel the way now is necessary correction. it's like a stage come to teenage, you get a pump. over the next 5-10 years, the chinese government, politically is right, firming control. china has ha culture. it's hard driving, hard work. still t 1.4 billion, they are able to do something in china. next 5-10 years. this is - i think this is necessary correction. you mentioned that the government is in strong control. is that part of the problem. chinese shareholders didn't know the state of what was going on in the chang high change, because they couldn't find out from a controlled media, and the leaders weren't being straight with them. yes. that is one of the things, very you feek about china -- unique about china, i never thought i would say something like this. i left china when i was 22 years old. and here was a democratic system. i love both country. but what i've been doing this in china for 22 years. and what is jaw dropping is this system, the unique system of it democratic and e

fortunately, prospects for the u.s. economy generally appear solid. monthly payroll gains have averaged close to 210,000 since the start of the year and the overall economy has been expanding modestly faster than its productive potential. my colleagues and i, based on our most recent forecast, anticipate that this pattern laborontinue and that market conditions will improve further as we head into 2016. the labor market has achieved considerable progress over the past several years. improvement inr labor market conditions we can we are probably not yet all the way back to full employment. although the unemployment rate may now be closer to its longer run normal level, which most fomc participants now estimate is around 4.9%, this traditional metric of resource utilization almost certainly understates the actual amount of slack that currently exists. basis,clically adjusted the labor force participation rate remains low relative to the underlying trend and an unusually large number of people are working part-time but would prefer full-time employment. c

it touches every part of the american and global economies. stocks, bonds, commodities, your money, your life. this is a cnbc special report. countdown to the fed with mandy drury at cnbc headquarters and tyler mathisen in washington, d.c. >> good afternoon, everybody, and welcome to a beautiful nation's capital today. i think it's no exaggeration to say that today the biggest, most consequential decision, the one that will affect the most americans in the most immediate way is being made right here today in washington in the building behind me, the headquarters of the federal reserve where the men and women of the open market committee have been meeting. mandy? >> will today bring the first rate hike in nine years? that is the big question. in less than one hour from now the fed's decision will drop. where do policymakers stand right now headed into the big decision? senior economics reporter steve laesm liesman is also in washington live. what are you hearing? >> i think it's worthwhile to go back and say how did we get here? how do we go int

when the economy speeds up it is kind of like that old till the tiltawhirl. it starts to draw some of these people. well, that never happened. our economy never got going fast enough to really start to create the kind of poll that would push push thoset would people out of sitting on the sidelines and actually looking for work. you would've thought that with some of the longer term unemployment extensions ran out that those people would have started coming back in, then you look at the dynamics and you say ok, if they moved over there and the economy starts to pass them by their skill levels are to erode. then they collect unemployment for a year, or in some cases over a year, so that they are out of the workforce for that long, then even a slowly moving economy tends to pass them by. as a result when it is not growing and generating so many new jobs they just lose their reentry point. it is a situation where it could be any one of a number of factors. i have not seen a whole lot written on that, but many of us that forecast on a macro level expected to see so

turnbull had condemned management of the economy. german vice chancellor says germany can take one million migrants this year. eu ofbreaking down the voters policy. germany is bringing back porter call -- porter control. there are sound reasons behind the change. >> you have to do it safely. that means that in. i expect temporary closure is to facilitate a better vetting process. you use big data searches. you look at social networks. you can't do that with 10,000 people a day. you slow that flow down. i think that's how we do it safely. olivia: slovakia is joining germany. the former traders sent to jail for interest rates is appealing his sons. while found guilty working at citigroup. he is serving a 14 year prison term. the kentucky county clerk who was jailed for refusing to issue same-sex marriage licenses is back at work. she is promising not to interfere with her deputies interfering. she says they would not be authorized by her. she questions their validity. she was overcome with emotion while discussing her predicament. >> i

the two biggest evils of the greek economy. a clear message for whatever kind of coalition comes to power after the greek elections. former e.u. commissioner, former italian prime minister mario monti, thank you for joining us. did draghi deliver? we will ask a man who knows a thing or two about running the institution. the former ecb president, jean-claude trichet. he's standing by shaking hands with mr. monit. -- mr. monti. after that we talk u.s. jobs. that is our 20 question of the day. -- our twitter question of the day. how strong do the numbers have to be for a fed hike? let's take a live shot of new york city. they are waking up and will find out how many jobs they managed to acquire in the u.s.a. a lovely shot. back in two. ♪ manus: welcome back to "the pulse" live in london. let's turn our attention to mario draghi. president the ecb revealed some changes to the q.e. program. the question we are asking is going into the press conference, how dovish will mario draghi be? >> the governing council decided to keep, to kee

that may sound counter intuitive since the global economy is so interconnected and china is the world's second largest economy. that theory has been backed by recent reports. as steve explains, a slowdown in china may not necessarily pose big a threat in the u.s. >> much of the market volatility has been tied to concern over china's economic slowdown. to several economists, it looks like the tail wagging the dog. the u.s. buys five times for stuff more stuff from china has the it buys than us. in fact total trade, imports and exports, is only about 3% of the $17 trillion economy. >> when china slows down, it tends to have a ripple effect on the whole region in asia. with the 1% slowdown in china, it only has 0.1% impact on gdp. the impact on the u.s. overall both direct and indirect is very limited. >> a recent study of 27 countries found the u.s. among the least vulnerable to a sharp chinese slowdown. commodities would fare the worst. still, some sound the alarm bells. they note the u.s. corporate profits as opposed to the economy would suffer because chinese consumers buy less from am

the flow of money into the u.k. economylast few years -- we run quite a big deficit -- peter: continuously. guy: continuously. a lot of that is ported to property. once you start seeing commodities coming up, that is going to mean that that flow drives up. peter: only 2% in london, mayfair. it has been slowing for a year anyway. guy: you don't think it will have any effect? peter: while mr. cameron is not necessarily keen. half a billion disappears from corporate accounts every year. there is lots of money that goes all sorts of places. i think what has been most interesting is the so-called energy beneficiary affect. secondarily, people drive currencies -- does it make any difference. most, butenefited the it doesn't make any difference. poundsra 10 because the car gets a million miles to the gallon -- i don't think it will be that damaging. anna: well let's go to the good thing, then. it needs some stability. peter: commodities will be great because commodity nations are consuming nations, and we are handing them to the j

done a greatj has deal to boost the economy. it is not filtering to the consumer or business sector. it is not doing enough to encourage executives to rage weight -- raise wages. consumer spending is weakening. retail sales are not doing well. this is just for global stock market -- this is before the global stock market crash. this is before the chinese crash of the nikkei falling. in many ways you have to expect it worse. this leave thes government attempts to generate inflation in the japanese economy? we have a chart of the ddp deflator. upwards,en trending but it has just fallen away in conjunction with other measures of deflation, which also seem to be weaker. willie: i think the government is realizing that deflation is a distraction, that is not the problem it is a symptom. the problem is a lack of confidence. when i speak to executives, households, average workers, no one believes that five years now -- from now lives will be better. they do not believe their living standards will increase in five years. the government n

that imposes a tightening on the economy. we have had some tightening already and something that has not been picked up is that the ,trong dollar means that oil which is priced in dollars, is more expensive to the rest of the world, and that helps explain why we have had some of the oil bust in our oil-producing states. there are quite some headwinds there. put the pieces together, demand and supply, and you see no inflation, no wage growth matching productivity growth, and pieces together add up to exactly the decision that chairman yellen and the fomc made, hold rates, don't move now, and even lower going into the future. alix: there is one chart going against what you are saying, tom, and it comes to us from deutsche bank. people who are available to work joba job opening is -- per opening is falling. the idea being there is not enough workers for jobs out there is the economy transforms. that's great, of course. job openings are up and it is time for employers to raise wages. as mike was saying, the proper chairs way up wh

i can run the economy best. carly fiorina will say i was ceo of a fortune 20 company at hewlett-packard, i know what to do. all the governors and a couple of senators on stage are going to be saying, no, i have the solution. if it's rand paul it's going to be his flat tax. marco rubio, his different tax reform plan. people like chris christie, scott walker, jeb bush are all going to be claiming they added jobs and balanced budgets during their tenure. >> which of the candidates, john, has been the most granular about taxes or entitlement reform? >> well, not donald trump, i can tell you that. donald trump has not been heavy on policy so far. but interestingly i sat down with carly ffiorina, who is the new candidate on the stage having graduated from the table debate last time and asked her specifically where she stood on entitlement and on taxes. >> republicans have been talking about this forever. i'm not in favor of revenue neutral taxes, i'm in favor of revenue reducing taxes. how long have we been talking abo

refugees are about the economy. e fact of the matter is, we have not taken away health care from immigrants and refugees. on the contrary. the overtime we removed it is are we had clearly bogus refugee claimants that have been turned down. we do not offer them a better health care plan than the ordinary canadian can receive. on the issue of refugees, this remains one of the largest countries in the world in terms of refugee resettlement. i have said we will bring in more. these guys would have had in the last two weeks, throwing open our borders and literally hundreds of thousands of people coming without any kind of security check or documentation. >> that is not true, mr. harper. m.p. mulcair: mr. harper is playing on fears all the time-- [indiscernible] mulcair.'s go to mr. immigration on the economy. m.p. mulcair: canadians wanted prime minister that understand the sense of urgency we all feel when we see the current crisis in syria. mr. harper unfortunately is fear mongering. its complete be false to affirm that

what is the security issue in the economy. ule of law also means environmental laws are very good in china and not being jinemented and such as jin we have very good chemicals but the implementation is basically nonexistent because of corruption. jon: the slowdown in china may have taken global markets for a wild ride but will not be enough to destabilize the world's biggest economy. that is according to jpmorgan, goldman sachs and deutsche bank. even if they slowed by one full percentage point, economies should not be too concerned. let's bring in simon kennedy. a doom and gloom scenario for china but not the developed world. why not? >> to quote the big guns of offstreet -- there are offsets for the bad things -- the big guns of wall street, there are offsets for the bad things. the slowdown in china is generating lower commodity prices and is moving capital out to elsewhere. there are positives from the slowdown. altogether, jpmorgan and goldman sachs say when they look at the u.s. and europe, they should be ok and should no

i don't think we have a story of the economy going full steam. maybe we will get 2% for the rest of the year, but that's not terribly strong. david: i want to put a chart up with potential gdp. why is that giving you pause? : this is the congressional budget office assessment of where the economy could be if we had full employment and everybody working if they had a job. it's still 400 ilion dollars against potential gdp and the estimate is a potential growth of 2.7 percent a year. down two percentage points and we are making it up at the rate of half a percentage point, we are talking about four years until we get to potential gdp rate. jumping on the point about the overall economy, it seems like financial conditions in the u.s. are getting tighter. they seem like they are the tightest in three years. what is fascinating about that is despite the tightening -- alix: i should point out that when you see this going up, it means things are tightening. think about what has happened in the last six months. not only did we have the recent information

anna: even if the fed -- one of the economies is very unfocused, the new zealand economy. chart here. this is the chart that shows the drop more than 2%. another rate cut coming through from new zealand. they have their own the mystic issues. -- they have their own domestic issues. steven: a lead indicator to what is going to happen next. austria and new zealand are both key. this is reflecting what is happening in china and elsewhere. it would affect u.s. policy. i find it incredible that anyone would think the fed is not watching this. anna: we spoke to morgan stanley . he's a compared to 2008, this is a much more international fed then it was seven years ago. seven is go, they had to be. -- seven years ago, they had to be. now they are much more mindful of what is going on internationally. steven: there are two main channels, one is through the dollar and what it does to u.s. inflation. depressingt has been . the other one is the bonds. half of the u.s. bonds are held by central banks around the world. that wasn't the case 20 years ago. that means other central banks ca

what are the biggest pending issues in the economies. xi comes to america, it's the "inside story." >> you're watching inside the reef, and i'm ray suarez. with legendary columnist, 1.4 billion chinese, and we fly to the world to meet the giant of the economy. you get to washington, you shake his hand and the doors close behind and you then what? she comes to america, and gordon chang, what are the largest pending issues, the must-dos on the two president's lists? >> . >> everyone talks about chinese hacking that is used for commercial purposes, and then we have the china sea, where they're trying to close off global conflicts, and in 2012 from the philippines, an acts of aggression, and you have china support for russia in the sanction busting activity. and you go down the list, and there are so many issues that should be discussed and i don't know if all of them will be covered at this time, but clearly, cyber is going to be the one that's attracting president obama's attention at this point. >> pole stores asked americans what they thi

the. concerns chinese economy in seattle. he told the audience the chinese economy will maintain stable, relatively faster growth and he reiterated the opposition to currency wars. he says the stock market has reached a phase of self recovery after the government stepped in. > these are normal ups and downs in china's stock market. fluctuating according to laws, and it is the duty of the government to ensure an open and fair just market and prevent massive panic. the chinese government took steps to civilize the market and contain panic in the stock market. thus in avoided a systemic risk. let's go tomore, the event in seattle. you, theeat to see president also spoke about cyber security during his speech. >> that is exactly right. that was one of many issues that the president talked about. basically, it was a laundry list of top u.s. concerns. he finished policy speech about half an hour ago. i spoke to many people who were waiting to hear what he might say, if he might move some markets. in the end, he did not really do tha

the whole world economy. point is the slowdown in asia led by china and the impacts on trade and some potential talk around stabilization policies there. i think those are the two key foci but there are plenty of issues out there. in a fragile global environment, it seems like the concerted action is even more important. andshould financial leaders central bankers address this? a very interesting. coordinated policy action in the aboutew decades has been coordinated monetary policy action, exchange rates, we have had a little bit of hand of coordinated fiscal policy action through the kfc. innovation could be coordinated structural or micro economic policy. there are things around trade and trade harmonization and this sort of thing. i do think that is where we are shifting in terms of coordination is towards how to get governments operating to lift the potential advancing of the economies. that the business sector, the corporate sector in advanced economies have good balance but a lot of liquidity and saving

housing is now a very small sector of the economy. and --ot the driver of ais is my own forecast -- driver of ongoing improvements in the u.s. economy. , butays a supporting role consumer spending is the main by decentstered outlook for investment spending. but i would continue to expect housing to improve. , ifmber we are envisioning things go as we anticipate, a of increasesl path in short-term interest rates over time to some extent that is already embodied in longer-term rates. on the other hand, as time passes and you move beyond the window and short rates are zero, it will be natural for rates to rise some. we recognize that the housing market is sensitive to mortgage -- market rates. it's an important factor. that is something we are definitely taking into account in thinking about the appropriate path of policy. nancy from market place. you mentioned you got a lot of unsolicited advice. there's another side that says the fed should raise interest rates because keeping rates so low for so long has actually exacerbated the wealth

the u.s. is not an autonomous economy. it does strange with the rest of the world and there are important financial relationships. what happens elsewhere is important and does factor into the decision. factors into the gdp numbers, the evaluation of financial concerns. at the margin, this is a move to be a little later than this week in terms of hiking rates. it is a risk relative even to a december call. if things go badly rest of the world, and they intensify from here, in that case they would have a good reason to push it in 2016. it is not my baseline, but it is not a crazy scenario. joe: you are staying with us after the break. alix: when we come back, what was real gdp the last three times the fed raised rates? ♪ alix: i am alix steel. joe: i am joe weisenthal. what did you miss. you can see three points were the fed hiked. real gdp growth averaged 3.9%. alix: we are not there. we're back with jan hatzius. you said there was a risk. there is a divergence here. what is this part line telling you about actual conditions

he says the chinese economy is growing at 7%. e fact he talks specifically about the stock kind of thing that you would expect a secretary of state to start? betty: this is much more important than china. market ish the stock something like 1% of the entire gdp in the entire economy, it cannot be it nor that the entire world was watching in the shanghai composite. you happen to be australia or any commodity producing nation -- affects every single part of china. we will have much more about interview. pimm: is sure to watch betty liu's special. it is entitled behind the wall. an interview with one of china's most senior state officials. it premieres 9 p.m. eastern only on bloomberg tv. it is time for today's options insight. let's go to julie hyman. julie: let's take a look at what stocks have been doing this hour. we have seen the fed induced step -- fed induced selloff. stocks are bouncing up off the lows of the session. fromng me is dan denning chicago. dan, we are seeing this selloff on the fed. marketsthe options the fed deci

but what do you think this portends for the economy? >> well, i think it pore trente that the fed is worried. you raise rates when your economy is starting to overheat and we certainly don't have that happening right now. the fed missed its window about 9 to 12 months ago. because they should is the wrong time to start thinking about it. they're looking at a global slowdown. you have china has slowed down significantly, that affects a lot of emerging markets. is that contagion effect there. so far the united states has been able to stand alone and the feds say they were independent that once the unemployment rate got below a certain level, they would raise rates. but what they're not the saying to me is even more important because they're obviously worried about the u.s. economy. we're not doing bad. this is not a depression, but we're not doing great either and that's what the fed is saying i think here in not raising rates and that is worrworrisome. >> people like me and others with money in their 401(k) see triple digit swings and the

>> the worldwide economy has slowed down. driven by china. >> with commodity prices going down it gives the e.u. and other people more room to use monetary policy to lift them up because they're less worried about deflation. in terms of the united states, we're in good shape. i wouldn't worry about it. >> what about the fact that some of the shale companies are over leveraged. if, in fact, oil prices keep coming down they have to renew their credit facilities. that's another worry. there are going to be job cuts in the oil sector. that's where we've been seeing the job creation? >> clearly energy sector is under pressure. we have a huge $40 billion fixed income portfolio. we follow all those companies. the energy companies have gotten themselves a little bit over. yet it's just one sector of the u.s. the beauty of the economy is oil is down, manufacturing is up. we have services up. we're not concerned about it. >> i want to ask you about your patents that you've recently received in terms of the connected car. >> yes. >> you

anna: remind us of the way that the korean economy contracts with the chinese economy. w much of the impact will we see in south korea as china slows? >> significant amount. drivernese market was a of south korea's growth for a decade. slowing, itith the will have a reverse effect and that is a considerable worry for economists here. anna: what is the likelihood of another rate cut this year? is -- it is a big number but there is a growing sentiment that they may need to cut it perhaps as early as october. some are expecting it today. now, even more analysts are thinking maybe in october. cut it today because they are waiting to see what the u.s. says do next week. do nextthe u.s. feds week. anna: let's get more on the story coming out of china. it is taking major steps to make the yuan more of an international economy. that, those speculations the pboc has intervened in offshore yuan trading. imf deputy managing directors say that china's opening up is a good sign. --it is important the cut because they are opening to the central bankers. [indiscernible] i think it is a

the economy is pretty strong. it's stronger than people think out there. >> so you're also in the camp where you think they should go ahead and raise in september as well? >> yeah it's like a lawyer. if you don't have the law on your side, you don't have the evidence, you pound the table. i'm not going to back off september because then if i go to december people will push it out to march. it's a game. >> people keep saying it's october. let's just say they need a couple of extra weeks. could they go? >> yeah, they might change the language from saying in july they said some further improvement. maybe they'll put in there in the meeting just a little bit more improvement meaning october. >> does it remind you of a driver trying to pull out into a crowded avenue and you're waiting a long time and finally you drive and you have to go just because you've been waiting a long time. that's not really a great reason to raise rates. jus because you've been waiting a long time. >> we can find an excuse. >> it's not tighteni

we are looking at, as i emphasized, the u.s. economy that has been performing well and impressing us by the pace at which it's creating jobs and the strength of domestic demand. so we have that, we have some concerns about negative, negative impacts from global developments and some tightening of financial conditions. we're trying to put all of that together in a picture. i think, importantly, we say in our statement that in spite of all of this, we continue to view the risks to economic activity and labor markets as balanced. so there's a lot of different pieces, different cross-currents. some strengthening the outlook, some creating concerns. but overall, no significant change in the economic outlook. >> ian? then we'll go to michael. [inaudible] sorry? >> [inaudible] with reuters. just to piggyback on the global considerations as you say, the u.s. economy has been growing. are you worried that given the global interconnectedness, the low inflation globally, all of the other concerns that you just spoke about that you may never escape

focused on the health of the global economy. e concern was sparked by comments from the federal reserve yesterday, when it decided not to raise interest rates. in part because of a slowdown in china and heightened volatility around the world. the dow jones industrial average fell 290 points to 16,384. the nasdaq dropped 66. the s&p 500 sank 32. for the week the dow and the s&p closed lower. the nasdaq was higher, posting its first back-to-back weekly gains since may. but there was something else that the federal reserve said yesterday that could be cause for concern over the longer term. steve liesman explains. >> reporter: when it comes to the economy over the next several years, what you see is what you get as far as the federal reserve is concerned. the unemployment rate, it's 5.1% now in the fed's latest forecast is that it will only fall ever so slightly to 4.8% and stay there through 2018. inflation, the fed has been aiming for and missing a 2% target for several years. it's going to miss it for several more. the latest for

is he going to talk about the economy, and how this he described the state of the chinese economy? mr. yang: they will talk about the world economic situation, the economic developers, the respective economies and the economic policies. it is very important on the macro level that the two countries have more coordination of their policies, but let me point out that since the outbreak of the financial crisis seven years ago, people have all worked very hard to revise the world economy. it is not as far as people have expected, but that does not mean that we should not continue our good efforts, and china has done its part. you are no longer having double-digit growth rates. it just like a high jumper, the higher you go, the more difficult to raise the level. on the other hand, we still have a handsome 7% growth rate here in china. of course, china is not free from its own set of challenges and problems on the economic front. of course, there have been some ups and downs in the stock exchange market, but given china's economic development, given the fact that china is a developing cou

money is separate from the economy. is the measuring stick and root of the value of money is in time this insight i sort of came up with, but not fully because to know she macken-- the inventor of the coin, which is this new digital currency for the internet, chiefly could ultimately become a important world currency. that coin is explicitly based on zeroing out the impact of technology, so morris law says the computer power doubles every 18 months to two years. he was worried that it be made his bit coin dependence and responsive to economic activity in the computer industry it wouldn't be a stable measuring six, it would just be a function of the ingenuity of computer scientists. so, heat nullified the advance of technology by making transport explicitly based on the time it takes to makes another block in the bit coin block chain as they call it and this is the genius of him who has been anonymous. we don't know who he is. although, i have my suspicions were influenced him at least and i discussed that in my book. nic

i don't think it's helping the economy. would hope that regardless of wherein flags was that they would start raising. you are right they have been signaling this for a long time. they are punishing the people who prudently tried to start preparing for this by standing pat. so i think there is a problem with mixed signals as well. i don't think the economy is going to get any better than that th without better policies coming out of our elected officials. monetary policy can't do it. monetary policy deals from the future. you are encouraging people to borrow more, which they may or may not have the attempt to pay back in the future and in that sense you reduce demand. we're seeing that with student debt right now. we have a combination of interest rate and government policies that are encouraging a lot of students to borrow money. when they graduate and go to the work force it is dampening their ability to buy consumer goods, a house, a car because they have this debt. monetary policy borrows from the future it doesn't real

but this is not an issue that we can put on the chinese plate. our economies are inextricably intertwined so. the more they try to generate the demands and mosque to an export driven economy is in our interest, so with the strategic dialogue, so we can be the partner to the extent possible out. >> gram webster, average chinese on the street, we're talking to reporters about how state information organs, and government controlled newspapers were urging people to buy, even as the stock market was on the precipice of a big, big shedding of value. and is this the kind of thing that's going to happen in a country that's trying to be capitalist and command and authoritarian controlled at the same time? >> well, i also have to say that i'm not an international economics expert. >> but you have a 401k plan. >> maybe not big enough. but what i think you need to look at the fact that the chinese communist party, and the chinese government have a strong governing hand of their economy, and in some ways, and in a lot of ways, it's a capitalistic economy that moves with th

there as well and the structure of the economy. the kind of growth seen in the first half of the year as long as there is sufficient employment and incomes keep growing. and the environment improves. they also talking about the yuan stabilizing, saying a currency war was in nobody's interest, particularly not in china's. of course, fdi numbers. just camese numbers out, up 22% for august. that comes about an hour and a half after inflation data. are we getting back to the point of 2-3 years back? mr. talking about that, than the conversation shifts to social stability. rishaad: there is huge factory overhang, it is a headache for when it comes to producer price index. it is on the doesn't seem to be addressed. david: back in 2009, when they spend their way out to save the global economy from a crisis, a lot of that money went into questionable.re now they are trying to work through that excess capacity. not nearly the end of that. rishaad: thank you was a bad is it for this thursday edition of "trending business." we will recap the

that does affect the u.s. economy. e to take those into consideration. >> you are haling from san francisco where we've spoken about this before. all this innovation going on and technology euphoria. where is the growth in the country today? >> in the u.s. economy it's coming mostly from consumption and business spending. and housing still has a ways to go to get back to full strength. what's remarkable about the expansion is we're still growing 2 to 2.25%. and that's in the context of a global economy that's quite weak. these global headwinds are what's holding us back from growing much faster. if you look at domestic spending, business investment, that's on a good trajectory. >> really interesting story. john williams, nice to see you. thank you so much. he is the president of the san francisco federal reserve bank. >>> last week's standout debate performance. what her rising stock means for the 2016 play as we look ahead on "sunday morning futures" next. usaa makes me feel like i'm a car buying expert in no time at a