caroline: he is talking about our wirp function, guy.other chart i want to be focusing on, because this is what he is saying to prepare yourself for, volatility. this shows you have the volatility is on the rise in the stock market. we are seeing that spread, the three-month volatility futures, versus the vstoxx. it is the highest since 2013, in fact. this starts to beef up his argument. was it calm before the storm before the central banks start to say, "we can't do much else." guy: i think we need to take a moment to enjoy the fact that wirp has become part of the vocabulary. this is a really good case and point. screen, that wirp on my interest-rate volatility. i want to show you the brent two day. that is the u.s. data, the effect it has had. we are going to talk about the eurogroup next. this is bloomberg. ♪ hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page an

we are of course, obsessed with wirp here. manus: wirp, wirp, wirp.laughter] nejra: exactly. >> my guess is the next time the fed tightens is when we are below 50, maybe 45 or 48. they will say, we cannot be replaced by this wirp function. manus: there you go. nejra: i was just going to say. gundlach, saying it is time to get defensive with bond. i want to ask you about a nuace, because this rising yield he is talking about, will it come from or will itish fed, be about fiscal policy coming borrow u.s. needing to from the and more supply coming into the market, pushing those yields higher? >> i don't know if it will come from the fed. frome not that far the top of the cycle. this is a fed a becomes more dovish by the start of the day. if you go back to the start of the year, we were going to hike four times this year and now we are still wondering when the one hike is going to come. when we started the process in may of 2013, we are still talking about it three years later. i am not certain that is what is going to burst. that is a really good questio

holger: well -- >> the next time the fed tightens will be when the wirp is below 50. they are going to say, we cannot be raised -- replaced by this function. francine: mr. gundlach saying this is the beginning of something. do you agree? are you still there? holger: yes. i'm not sure that we really have the beginning of something. more likely is we would see a bit more of the same. the yields will likely stay low. growth will remain modest. central banks will be somewhat slower in acting than they were in the past as the ecb has difficulties finding enough extra paper to scale up its program. francine: i'm looking at a chart. i'll go through it. there's a blue line with a german 10-year bond yield, a white line with a japanese 10-year bond yield. in the last couple of weeks, it has been edging higher. we are very close to zero. they are almost no longer in negative territory. if they touch zero, for the german, what does that tell us? holger: it wouldn't tell us very much. it would be a psychological sign that we are no longer indeed negative territory. but the econom

jon: can we bring up the wirp function and talk about what he is talking about? it is a market that is basically saying, no thank you, you are not going to do anything until september. jeff gundlach's argument is that the fed has allowed this to happen. they have outsourced monetary policy to a very simple function in his mind on the bloomberg terminal, and he thinks the fed should be able to take back the control and say we do not care where the fed rate futures implied rates are going to be, we are going to hike anyway. do you think that could actually happen, matt? matt: the markets are putting such low weight on the probability of a move -- because that is what the fed has signaled at this point, especially after the latest round of data we had for august not looking so great. the good news is we will hear from a wide range of fed speakers over the next few days, from hawks to doves. and bob kaplan, brainard one monday. jon: i mentioned about a narrative running away with itself. headline yesterday that lael brainard is going to do a speech ahead of the black

interestingly he also said that the bear market in bonds has been delayed and caroline, if we look at wirpthe expectations have changed for the fed. more than a 60% rate hikes coming in december. 61.2 to be precise. caroline: we'll see whether november solidifies it. not only the fed that is envogue today. there are some other key highlights for our viewers. continue the week's central bank theme. the e.c.b.'s mario draghi makes a keynote address in frankfurt. at 6:00 p.m. mark carney right here in the city i sit in berlin. we'll have policy announcements from south africa, egypt, central banks aplenty today and also maybe beer aplenty. guy johnson in munich just in time for oktoberfest. that is not what drives you, is it? it is a unicredit investor conference. y: i'm going to wrap it up here and walk down to the unicredit event. this is an investor event. people trying to come to terms with how they invest their clients' money in a world where negative rates abound. we have seen a number of global sovereign bonds in negative territory. dipping to around a trillion in the last couple of mo

trying to get that wirp reading a little bit higher so it could be more justified by december and doeshat then yield volatility in the markets? >> well, i think this could be volatility in the markets, but many analysts have kind of got an ack nice tick in their thinking. strange interest rate policies, negative interest rates in varies places. and i have suspicion that that environment is not going to be with us forever. that, in fact, it's already on the cusp of change. and i think what the markets are going to need to digest isn't yet another three months of us get guessing every day what a speech from a fed official means. but rather understanding that there's a growing awareness in europe and japan, and i think indeed in the united states, that these policies have not generated the results that they were designed to generate. yesterday people were saying, watch out for the boj. that's going to be the big market mover and no one is even talking about that today. they said they would. but they aren't talking about it. but something did -- interesting did happen at the boj and that i