. >> hi, chair powell, i'm be bloomburg. the fed is facing two more ethics related incidents with the revision of financial statements from president boston and president buller speaking at a closed event and some senators like elizabeth warren is seeing this as a sign of greater ethics problems that the fed -- can you talk about what this does to the public's trust in the bank and what the fed is doing to prevent this kind of behavior from becoming common. >> sure. so you're right. the public's trust is really the fed's in any central bank's most important asset and any time one of us, one of the policymakers violates or falls short of the rules, we do risk undermining that trust. we take that very seriously. we do. at the beginning of the meeting yesterday, there was a committee discussion on the full committee on the importance of holding ourselves individually and collectively accountable for knowing and following the high standards set out in the existing rules with respect to both personal investment activities and spe

chair powell: yes. people will tend to look at it. >> when you tell chair powell: in this particular situation we think it's important and we will find out empirically whether that was true for the reasons i explained. we can see a big decline in job openings and less then you would expect in the increase of an employment. this was a unique -- in 70 different ways this series of events was different. so much of the inflammation was due to the supply-side constraints, which is not a feature of the u.s. economy for a long time. >> vice chair brainard said the other day in a speech that she raised the question if a long-term change in the economy like labor supply, deglobalization, climate change could reduce elasticity of supply. chair powell: that's a great set of questions we have all been thinking about a lot. the speech was really terrific on that. so, the question is, is the new normal going to be different? you don't need to worry about that, it will sort itself out. supply shock from oil prices or

just the idea stocks might be rallying on his jeremiad seemed to horrify powell. so he revealed himself as one of the biggest inflation hawks out there. next thing you know right when powell finishes his most bearish soliloquy since he took the job, an orderly decline turns into a full-fledged rout. as the clowns who bought stocks up on the initial statement dumped them furiously right into the press conference you always search for reasons why powell would turn so harshly on this reporter who was simply trying to find out if he was happy that the stock market liked his statement. and that's my statement. the fed doesn't just want it lower. they need it lower because it makes it more difficult for companies to finance growth we don't need any growth right now. we don't need any. if powell's going to beat inflation he needs everybody to spend less and that very much means business of course lower stock portfolios means less spending for individuals and he he needs that too. to me powell's comments means you should prefer bonds over stocks here, that the two-year tr

let's ring in been powell -- bring in been powell from -- ben powell, from blackrock investment. is warranted in the market, we're singh signals that the global economic picture may not be looking as healthy as before? >> good morning. we at the blackrock investment institute are a bit cautious. we think the rise in equities we are seeing is something the fed actively doesn't want to see, equity markets going up, translates as a loosening of financial market conditions. the fed's home messages they want to tighten the financial market conditions -- whole message, they want to tighten the financial market conditions. weirdly, i think equity is going up. we could see powell and the fed move even more hawkish lee. -- hawkishly. i thought the chair's comment were in line with that, that there is potential for them to go higher than what the market implied. at the moment, 5%, they may go higher. it's possible, as equities rally. they might stay there. powell's message was quite hawkish. not so much in terms of the tapering or slowing pace. they might go higher for longer, because brin

but chairman powell gets chairman powell's way and he made it very clear in the press conference, he views inflation as the number one scourge in the country and he might not be wrong on that. he views the best way to get inflation down is the reverse wealth effect. you can't have investors making tons of money like they did last year when the stock market was up 29%. that will spur demand and push up inflation even more. charles: jim, you put out a chart, it is all over with everyone is gravitating to this chart. you see the terminal rate about 5.1 but as i showed earlier you had the cme fed watch model at 5 1/2%. so what gives here? >> yeah. any that the chart you're looking at was a little bit dated and the cme has been actually moving up but what the chart is showing in, that is the new metric jay powell wants us to look at. not how much they will raise in december. almost doesn't matter if it is 50 or 75. the terminal rate is the fancy word we use where the fed will stop raising rates. we're off into the five handles, 5.10, 5.25, maybe as high as 5.50. interest rates were in the

. >>> stocks reversing earlier losses this afternoon, getting a big boost during fed chair powell's speech, where he signaled smaller rate hikes ahead. this is a make or break hour for your money coming from the cfo council summit in washington, d.c. quite a rally, up more than 400 points, the s&p 500 up 2%. the nasdaq is zooming, up 3%, some of the hardest-hit parts of the market all year long, like technology, are leading. we have the ark innovation fund, up 5% right now. take a look at the action following fed chair powell's speech you can see where yields move lower, buying of bonds on that signal of lower interest rate hikes ahead, after we started the day with higher yields coming up on the show this hour, businessman and investor glenn hutchins, who introduced chair powell at today's speech at the brookings institution. we'll get his biggest takeaways. >>> plus the chief financial officer is here from chevron he'll join us with oil -- the stock is up 50% on the year. >>> mike santoli is here to break down this news is this just about positioning if you listen to what the fed chair s

fed chair powell made that clear. premature to think of a pause, still very much in tightening mode he said he'd rather overdo it on higher interest rates than under do it on inflation by the way, this is all playing out in the dollar index. if you look at the u.s. dollar intraday, big selloff on the news, and then we got a spike up it is the at the highs of the session. the ten-year and the two-year yield are higher 4.6% on the two-year bob diamond is still with us as well karen, what was your impression of the fed chair's news conference >>. >> i think that jay powell is doing the right thing. he's making clear that at this point he's still seeing a pretty strong economy and the fed tradeoffs are not nearly as tough as they're going to get once the economy actually slows skbh so at this point the fed is in a much easier position. the economy will turn over and needs to turn over because that is the only way to get inflation to start coming down at this point where we see the economy as strong as it is today, you sho

>> clearly it's powell es goal. i don't know if it is the goal of the rest of the federal open market committee, charles, but clearly it is powell's goal. he is acknowledging the academic yield curve, three month 10-year finally inverted. the academics can finally shift their stance heading us into recession. he is blowing it off. charles: chris, listen, all of the numbers, the terminal rate, whatever we thought cpi was going to be, it is going to be higher. he keeps saying that brace yourself for much higher inflation numbers, much higher terminal rate. >> right. charles: i thought that was interesting because this morning on the cme, on the that fed watch, they did go to five to 5.25 i think the first time i've seen that number. you think we go higher than that? >> look two things. last time i was on the show 6%. >> you did. >> that has been my call for a while. you have got to get the fed funds rate above core inflation rate. charles: that is scary though. the correlation between 6% and the stock market, where wo

but remember what powell said. i want to get the language exactly right. >> they're centered around the flows of capital and the flows of capital certainly didn't correlate with the flows of words >> agreed. what i was going to say, rick, is that powell puts out a pretty strong litmus test here for being convinced about doing less he says he needs to see substantially more evidence to give comfort that inflation is declining. i'm not sure what that means i've kind of had in my head the fed needs at least three months in a row of serious declines in the inflation rate i don't know if maybe he upped that or made it tougher this time around. rick, i think you're right seems to suggest that what the market is doing is not necessarily a reaction to the words, but they were just kind of waiting to clear a hurdle of potential risk out there before they made a trade and they wanted to trade higher i don't know and i'll ask you this question, rick. are you hearing anybody saying something different from what randy and i are

you're pumped for powell and company. >> i sam so pumped for powell and company. 2s are virtually unchanged 10s are virtually unchanged. all other maturities are basically within a basis point of settlement, which is actually quite typical. but the lead-in is very interesting. remember, the 20th and the 21st of the last fed meeting. let's look at all maturities of relevance were affected by the last three quarters of a point increase on the 21st here's two-years they're currently up about 57 basis points they were up several basis points below 4% on the 20th. the day before the three quarter point increases. here's what's really interesting. three months of 10st the recession spread is definitely paying attention to the last fed meeting they were positive 27. now they're minus 10 and now five sessions in a row that we've closed inverted the dollar index, well, it's about a penny higher than it was a the last fed meeting here's where it gets interesting. you said, what is the market preparing for? is it pricing in well, january fed funds of '23, i sloisolated it. right now it's roughly aroun

jay powell ripped the rug out from under the markets. this was a case of tough love. markets were seeing what they wanted to see ahead of time and he dropped a dose of reality on them >> i agree with that, becky. i have been consternation in the last couple months where there was a bubbling hope up i get it everybody wants things to get back to a nice gradually rising market or increasing market. we just don't have the data to say inflation is cooling and the fed is in front of us. we saw the jolts numbers and we still have a strong job market powell made clear, becky, he is super focused on the job market. we will get some job numbers tomorrow that will be north of 200,000. he is not seeing that. essentially the fed is saying they have to play the hand dealt them that hand is where supply is not meeting demand. >> i'm trying to look at my soul i feel myself nodding. you talk about elizabeth warren. i feel myself nodding. that is an uncomfortable thing for me i feel more like arthur burns than a volcker right now i don't know why i don't

and jay powell will speak at 2:30 p.m. we will do a fed decides program and we bring that to you on fed days. a stellar lineup today including richard clara., diane swonk and scott minard, how do you talk about not loosening financial conditions while signaling perhaps the fed is getting closer to where they want to because they are expected to end up at 4% by the end of today. after the bell, earnings continue with qualcomm among others including zillow, ebay and robinhood. how much do we see the chip pressure on going especially if you see more disruption to manufacturing especially in china. did you see what's going on at foxconn? that entire region of china shut down due to covid raising questions about the production of iphone 14. this is the factory that produces 80% of the iphone14 for apple. jonathan: lockdowns in china again but there is this committee being formed to assess whether we should drop covid zero. should we keep china keep rallying off of the back of that? tom: much like here, the damage has been so ba

powell has somewhat less lifting to do. krishna gu ha writes, this is not a jackson hole revisited before powell spoke in jackson hole in august, the peak fed fund rate was 3.8% this morning trading at 5.05%. that's 125 basis points higher on the market's outlet for the fed showing powell's work is done in jackson hole, the fed chair faced a strong stock market rally. since then ten years up by about 80 basis points. the two-year almost 110 basis points higher. powell and the fed's biggest challenge could be the resilience of the u.s. economy the government revised higher the estimated third quarter gdp to 2.9%. estimates for the fourth quarter running around 2% suggesting not much slowing from gdp potential. adp reported lower than expected job growth the fed may get weakness or slack in the economy powell will be careful not to pump markets to rethink the 5% peak funds rate or cuts are coming any time soon powell has less convincing to do david. >> steve, thank you. steve leisman. that sets up our next conversation joinin

chairman powell: i don't. i will refer the matter concerning president bostic to the inspector general, and once that happens, i do not discuss it with the inspector general or anybody. the inspector general has the ability to investigate. we do not have that. that is what he is doing. >> michael mckee from bloomberg television and radio. earlier this year, you touted a three month real yield to 18 months as a yield curve with 100% explanatory power. you said, if it is inverted, that means that fed is going to cut, which means the economy is weak. that curve is only two basis points away from inversion now, so i am wondering why you are so confident that you have not over tightened, given the rates with the lag. chairman powell: we monitor the near-term forward spread. that has been our preferred measure. empirically, it dominates what people tend to look at, which is two and 10 and people -- and things like that. you have to look at why the rate curve is doing what it is doing. it expects a cut because it in

so, powell was pretty clear about that. but he also said, but, there may be a longer series of rate increases. charles: right. >> you have the 2023 calendar. february 1st meeting. on march 22nd. maybe two more rate hikes after december and a very long pause. the market taken up the pivot narrative which the fed will somehow have to stop earlier to cut rates but powell said no, that is not what we plan to do at all. yeah i think he is making it very clear if the market has a different view, that is one thing but, powell has said, he used the word pain in his jackson hole speech. he kind of repeated that. charles: i will ask you a little bit. i will tap into other parts of your knowledge, talk about the idealogical divide in this country that is severe but now seems to be becoming economic and business divide. elon musk allowing free speech to americans who were previously banned from twitter has advertisers fleeing. the white house now saying they're monitoring him. apple may be ready to cut the chord to millions, potential

after powell started speaking, that's when we saw stocks web sign. it really was not until he said that it was premature to think about pausing the rate hiking cycle did we see the movement in the bond market. stocks were going up and down. when he said that, i noticed the two year yield moved into positive territory. it was not doing much. it was falling, then we ended the day up about seven basis points. that's really one stocks took the leg lower finishing the day down over 2% on the s&p. haidi: we had a strong year and seasonality element as well, but bfa, really throwing out some caution seeing u.s. stocks still have downside risk? emily: in talking with strategists today, we were saying that it was largely expected, that we could see a signal for a 50 basis point rate hike. now the narrative is, if we get smaller hikes but we get more of them, that's not exactly good for the equity market and we know that a lot of the rally that we saw in october, the 8% gain in the s&p 500 was powered by not only thinking about earnings, but powered by this op

i think that -- i think powell was correct. i generally see it that way. i don't think there was any indication i didn't read the statement as any indication -- any indication at all that they were -- powell or the fed was under pressure, at least not yet i really think that the difficult part for the fed is yet to come. they're going to have to raise rates further. i think they could get as high as 6% or more. >> wow and i think that -- i think it's really important the fed stick with that and try their best to demonstrate the resolve they need to make this work because i agree with powell that the danger to risks are not staying firm long enough if they raise it, then solving the problem will get even more difficult and more damaging to the economy. i think that's the right balance of risk at this point. >> certainly we've had a number of folks, i belief yourself included, have point out that mistake has been learned by this fed from previous central bank compositions in the past, most recently volcker in the 1980s. charles plosser, thank you for joining

the markets are getting a powell push. the dow was deep in the red, just look on the left side of your screen. at one point it was down 300 -- let's see, down 268 points. right now you see where it is, up 413. now, this happened, the low part of it before federal reserve jay powell began his monetary policy speech at the brookings institutions. but if you see this inter-day and we can go onto the s&p as well, the headline that probably elicited the knee-jerk response in the dow, the s&p, vaulting into the green was powell's statement that "the time for moderating the current interest rate hike pace may come as soon as december". here was his thinking. >> we think slowing down at this point is a good way to balance the risks of -- >> slowing down on the pace of rate hike s? >> yeah. liz: the markets absolutely love that. investors eager for the fed to take a breathe eric because of course higher -- bruter because higher brate!s make it more expensive and dove high into nasdaq stocks and tech heavy index down by as much as 1

cheryl: jerome powell moving the markets right now. the market really switched gears, the fed stays the course until the job is done. the time for moderating rate increases as soon as the december meeting. i want to bring back aaron gibbs and dan geltrude. we will moderate fed funds futures. >> i'm going to say this. everybody could hear what they want to hear. here is the way i see it. 2% is still the target rate for inflation. we are around 8%. we will keep going on this path, 50 basis points next month, down from where we thought he would go but how long will this go on? until we can get to 2%. i say that is a long time. cheryl: you want more aggressive hikes. that's what you are not hearing today from him. the full effects of fed tightening can be felt and then he says he will hold it for some time. it is pretty clear to be cautious. it is happening but we are going to slow it down and take a pause. last month was a big enough cut on the inflationary rates. they've been cautious the 8 and higher time but this is consistent with the

i really got that from powell yesterday. many others said this was the most interesting process -- conference in ages. jonathon: let's go through the market for you. a dreadful day of losses yesterday off the back of that news conference. yields a whole lot higher on the 10-year, just south of 4.2. taking out the highs of the year, up nine basis points on a two-year. tom: yields are moving higher, but also a shift in the curve. -52 basis points on the spreads. a -60 level would be critical. jonathon: euro-dollar this morning is -- lisa: in about two hours time, we get that bank of england rate decision. a 75 basis point rate hike is coming in the face of this. perhaps the biggest about a we heard from fedor -- fed chair jay powell is that it is essential to kill off inflation for a stable labor market. our dual mandate is not in conflict. it is working together over the longer term. how does governor andrew bailey message that same thing at a: 30 a.m. when they aren't pressured by a week or pound, a fiscal policy that has ye

. >>> right now, powell drops the hammer and markets should get ready for even more rate hikes than expected. stocks went from cheering to tumbling once the chair said the inflation fight is far from over so how high could rate gs go fr here crude crossing 90 bucks a barrel for the since october. will this keep the bulls piling in and the company's largest plant being shutdown for at least a week more covid lockdowns how big a problem will this be for apple? and later, roku dropping almost 20% on grim guidance and a somber take on the az market a host of earnings on tap this hour i'm melissa lee. we start off with the market's post fed ride. the dow jumping nearly 400 points immediately after release, but then giving back. closing near lows of the session. the s&p down 2.5%. nasdaq down more than 3. treasury rates jumping but the short-term two-year rate briefly climbing let's get more with steve liesman. steve. >> melissa, thanks markets were absolutely whip sawed today by a dovish statement and then a hawkish press conference the statement ignited the rally was when said the committee woul

coming up, fed chair jay powell says u.s. interest rates will go higher than earlier projected and take longer to get there. we assess the impact with the institute of international finance. find out what further aggressive rate hikes will mean for asian economies. this is bloomberg. ♪ xfinity rewards is a program whose sole purpose is to say "thank you" with experiences big, small and once-in-a-lifetime. sometimes it's about cheering hard enough to shake the stadium! sometimes, it's as simple as movie night right here at home, on us. you mean the world to us. so we're bringing you closer to what you love. kinda like this. welcome to 30 rock! join xfinity rewards for free on the xfinity app today. our thanks, your rewards. >> today everyone here is our policy industry by .75 of one point. michael is iris truly committed to bring inflation back to the were 2% goal. if we do not get inflation under control because we do not tighten enough, now we are in a situation where inflation will become entrenched. we have the tools tha

that is what you heard from jay powell. the risks of not doing enough are greater than the risks of doing too much. if you don't do enough you just have inflation, you have to go higher later. the concern you heard from yesterday is what if they back off now, in january and a year from now inflation is going back to 6% and they have 2 get back on the horse, markets aren't going to like that. 's idea is get it over with. if you do too much you can always cut. if you don't do enough, nobody will be happy if that is what they do. neil: you are right to point out implications of this policy in real estate and mortgage rates but as far as getting inflation under control or showing signs that it is denting inflation we haven't seen that. the criticism, you guys are overdoing it, here we are, the 4% funds rate or quadruple where we were at the beginning of the year. is there a sense here the fed is quite willing to roll the dice even if data confirms they overdid it. >> that is what you hear hear from powell. he risk making 2 mist

jay powell said a 75 basis point hike seems a done deal. we look at how the fed gets to price the market and bank of america sentiment indicates it's at its lowest level since 2017 which could be a contrarian sign for stock rose but the s&p 500 rolls over to the lows of the day. a big warning from a shipping giant, maersk says a weaker global economy and -- is here to stay. from new york, i am alix steel and welcome to bloomberg markets. as we go through the morning, the jolts number poses a tricky thing for the fed. guy: it makes you wonder which will be the biggest influence this week. i think we should focus on this today but when we think about the bed, we've got to factor in where we are starting from. i was the market positioned? we've seen the run in stocks and how much have we priced and what have we priced? those are key questions because only then can we start to answer the question how could the fed surprise? i think we need to set the groundwork so let's try to do that throughout the program. let's start k withriti gupta and ira

the big speech, jay powell on labor economics. tom: we are expecting further commentary from jay powell. spanish ibex is up. in the u.k., the ftse 100 gaining 0.2%. the month of november has been the best month for the ftse 100 in around two how things are plg out cross as a. the dollar is a big talking point, the worst month i'm about 12 years, we continue to watch the fed, and the commentary from officials like fed chair jay powell. futures stateside pointing to modest gains of .2%. gains for the single currency in europe, 1.03, and inflation data out of france coming in higher than estimates. we will get the all-around figure for the euro zone later on. the u.s. 10-year 3.73, a move of 11 basis points, and more action in terms of sovereign debt in the euro zone on the back of that inflation print out of france. money moving out, yields up for the boones and btp's. brent $84 a barrel, we will discuss that later in the show. i'm the lead up to opec+. officials on the u.k. are looking at relaxing the ring thing thing -- fencing. b

powell/world cup trading day >> losing steam. in the last hour or so, we went from mildly positive, generally speaking, to taking a sharp leg lower towards the session lows the dow industrials are down about 200 points the s&p 500, 345, the last trade there. down about one third of 1% the nasdaq composite clinging on to 1/10 of 1% gains. still below, by a hair, that 11,000 mark. a lot of that steam coming out of the market, as we head towards fed chair jay powell's remarks later on, about a half an hour or so. one other place not seeing a real slowdown has been in the intraday trade, and the shorter term trade, if you will, for west texas intermediate crude oil. right now, we are back up above 80 bucks a barrel. and we know at the lows of the day that we saw just over this past week, we got down to $73.60 per barrel that's a sharp move higher some of those expectations about the upcoming opec plus meeting, also the idea that maybe the biden administration would look to replenish strategic petroleum reserve assets at some lower le

we're joined by andrew let me ask you about jay powell at this stage. i think the market is wondering whether we get any change to hawkish commentary of late, and there doesn't feel like any reason why, the job honing going in his favor without having to increase interest rates. surely that's a win for the u.s. economy. >> yes, it would be, if they didn't have to anticipate the call for rates of around 5.25% and 5.5% our baseline is a little bit below that they're likely to go to 5.5% but certainly not 6% as some indicated earlier. we would expect more of the same the chair powell and fed governors as well going forward to recommend acknowledge there's quite a bit of ward to do in the battle against inflation and the outcome can be measured in years, not weeks and months. >> andrew, i want to pick up on the difference in the forecasts because if we take the top end of the citi forecast of 5.5% versus the bottom of 4.5%, we have 100-point basis spread, what gives out the different scenarios in your view >> for now we're looking for signs of the data. we

mike: if you are not in shape powell, you are worried. we are exporting inflation to other nations and that is a problem for the rest of the world. the present for the u.s. is there is not much anybody can do. it is the strongest economy in the world and the fed's mandate is to do what it takes to keep the u.s. economy in that position. the fed not going to back off from rate hikes because it is bothering other nations. it is our dollar. alix: from that central banks speak, i think we are freaking out a bit. coming up, our central bank, your problem? we get the view from amy wu silverman. . this is bloomberg. ♪ >> week cap to the open to the -- wheat half to be open to the idea that the fed may end up significantly higher than 5%-five .5% in the first half of next year. >> they are still looking at as high a terminal rate they need to derail inflation. >> the fed does not want to see they reply of july. it does not want to see premature easing on the signed of any fed pivot. >> the fed is going to keep that peak until they see improveme

to begin right now the big question right now what does the fed have to say especially with jerome powell saying we're going to see rates going even higher. how are you adjusting? >> i think there's two things i want to say in response to that. it's pretty simple yesterday he said he's going higher than the market thinks. what it's doing today but i think the key thing here is how much higher than what the market expects is he going? the market expected somewhere around 4.60% on the peak funds rate now it's looking 5%, so another 50-ish basis points. that's something the market can adjust to relatively rapidly it's not that big of an increase i think we will be done with it today as far as the downturn and adjustment in the markets. the second thing is a bit more nuanced and i have to compliment the chair on this. he's kind of having his cake and eating it, too he's being more aggressive pounding his chest, big gorilla here is going to raise rates, got it, good, not letting up on inflation. but when he said he's slowing -- or he didn't say this. i'm inferring. he said there may be a time

tom: this report gives chairman powell room to wait. he can now comfortably wait for these inflationary reports we have seen before the december meeting. do you agree that it not gives a decrease of freedom but that it gives him the room to analyze price change? jeffrey: i would agree that this report is not changing anything that we already have in the expectations for the fed to begin a step down in the pace of the increases but not necessarily ending that pace of increase until they start to see the development and inflation of a slow down so they can slow the pace because they want to incorporate the brainerd perspective. that is about the fed acknowledging, we don't want to go 75 forever. we don't want to overdo it. we want to give time for the data to show up. today's report is in line with that market expectation. lisa: are we going to get back to an era where we ride through this post-pandemic reality, inflation gets back to 2% and then we struggle with disinflationary forces or is this a different decade coming out? jeffrey: th

blake: i think powell is likely to repeat that town. we heard from him in the fomc meeting and one thing i pointed out to people is in the post press conference, powell really changed the script. the prepared statement that came out on behalf of the committee and his prepared speech -- which the committee also has a degree of input into -- they were very dovish. it was when he got into the q&a portion and speaking his own mind that markets got that hawkish interpretation. what drove that, i think, he intimated the fed's expectations for where this ends is higher than where it was in september. he also talked about where it would be better to err on the side of hawkish and us. kriti: what does that mean for the market? you've bond yields that junk, the equity market is dovish. the next day it turns right back around. how do you price something in? blake: there is a lot of chop. we will move on these comments but, to some degree, investors have taken a backseat because of the uncertainty of where the fed cycle ends. several times througho

what is the jay powell playbook? anna han joins us now. >> what we need to see is the fed will not be tone deaf and see if the inflation trend is starting to come down and they will ease their foot off the gas pedal which is different than pressing the brakes. also communicate the message that inflation could last quite some time and not jump ahead and price in those rate cuts too soon. guy: if you look at it the other way, the labor market is superstrong and financial conditions are easing in the consumer is out spending money, mortgage rates are coming down. i assume all these things are not what the fed wants to see if it wants to win the battle against inflation. >> you bring up a great point. is this odd situation where good news can be bad news for equities and the economy is very strong. perhaps chair powell and the fed have to do more and get more aggressive but if we are starting to see indicators, particularly in consumption, you see people are starting to use credit card lines and you are seeing the excess

then jerome powell. does he have any interest in how the market responds to what he says than what he says? is there still credibility and weight behind his words? will also hear from janet yellen, amazon ceo andy jassy and ceo sam bankman-fried. he has been quiet since his company went bankrupt ftx. where did the money go? how did he come up with those shortfalls? controversial that he is on the stage. some people pushing back and saying there are still many questions around the nature and disappearance of certain funds. we have a host data, jolt in particular job openings. do we see an ongoing decline in the number of openings? a company say we are not going to hire so much, or do we see an ongoing need for workers in certain sectors, even big tech, continuing to push back? i will be reading the beige book. tom: do we have any weak labor data? is there any thing besides the type -- tech blowups? jonathan: labor markets were surprised. tom: i don't know what he says today. is not want to talk about labo

we'll discuss and debate how to respond no matter what jay powell says. joining me for the hour today, everybody's here at the desk and good to see all of you let's check the markets. we've been really in a wait and see and jolts were less than expected chicago pmi was just flat ugly, pending home sales down again. you told me yesterday you expect a, what, calming or comforting fed chair today? >> well, you asked me the question yesterday on overtime how does the market rally. and i said the way for the market to rally is that chairman powell has to comfort a market that this week is upset. it's upset about the development. one week ago we were talking about breaking out of the 200-day average. we had positive momentum going into thanksgiving. the market was up 40, 45 we're a hundred handles lower right now. the way for the market to rally is we can't have a repeat. we can't have chairman powell come out today and channel his inner st. louis -- >> eight minutes of hammer >> we can't have him be james bullard within his speech. extreme hawkishness isn't go

i know you will be zeroed in on the commentary from jay powell. what will you be looking for in particular from that language from jay powell? madison: the good news is that growth is holding up. the bad news is that that pushes the fed further out in terms of how much it needs to employ interest rate hikes. what i need is not so much if we get confirmation of the move, but what is the rhetoric surrounding that move? do we get a sense of the lack affect, potential interest rate hikes ahead? is there a potential pause coming? inflation is still too high and too broad. the markets are flirting with this idea of a potential deceleration. tom: they are, indeed. if they want to go there, that is going to be on top of mind for jay powell. how much of a risk is that? madison: i agree. jay powell is keen to avoid that type of scenario. telegraphing the shift to a dovish pivot. when i think about what that means, we need to stay central. this is an incredibly acute environment. the interest rate is two times we saw -- i think that is enough to cool growth

he knows -- powell, he knows the 3-month to-ten-year has been inverted for more than a week. he knows that's a precursor often to a recession he knows the count down clock is ticking so he has to act accordingly. he doesn't want to crash the economy. he may be content with simply, you know, slamming -- slamming the breaks on for a little bit, but he doesn't want to crash the thing. >> he doesn't want to crash it, scott, but i think he would. and i think that it's probably worth thinking about that. i think powell is willing to accept some form of negative growth he's already said he's willing to accept the higher unemployment rate. he feels and i think the committee feels there's an absolute imperative to focus on one side of the mandate, which is the inflation side of the mandate because unemployment is so low right now at 3.5%, because job openings just went up and remain high, i think they feel like that other part of the mandate or the second mandate which is not second, it's coequal, has been fulfilled, and they're free at this point or they feel like it's their mandate

i am expecting a hawkish powell. i don't think he's going to diss way markets in any way or form he's going to stop raising what he may be clear about is not only will they continue to raise, but they will not probably raise 75 basis points. he's probably going to announce there maybe some easing in the actual hike levels, but i think he's going to make sure that the market understands they're not done except the market realizes they are on the other side already and we've got some pretty good pce numbers already. we've got pce coming out on thursday, and if that's lower than expected, then there's no reason for the market to try and go higher. ashley: and, you know, i was reading your notes, shah. you're saying there's been some resistance on the s&p up 40-50 and he says if you can get above that, you say, maybe 4,100, then we could be off to the races for a little bit, right? >> a lot of traders a lot of investors are looking at the down trend this bear market has been defined by and once again we're coming up to t

that's the way it works under the powell fed. now the other compelling action is the oil patch folks that popped on headlines of possible invasion of iran of saudi arabia , and that keeps hanging around. that won't go away. also more scuttlebutt that china moves away from the zero covid policy. by the way, their key kweb, their key etf down 23% overall but up 23% since october, so it's making a bunch of head way. we'll talk about going into that and of course, going into the weekend investors are faced with a dilemma. it's the same that talked to charlie brown every time lucy invited him to kick the football do we try in hopes of scoring or do we just remember every time we took a shot and ended up on our back. chief investment strategist jim paulson, and jim, you to, i know that you've been sort of focused on the fact that listen, we know bigger rallies have fizzled but you've made the point that there has been some resolve in this market that it's holding up above those lows and for you that means a lot, right? >> i think it do

the fed's in a different place powell has less to do. this is not jackson hole revisited and the fed chair will not take a maximal challenge. it was 380 for april of 2023 today that peak contract is 502 for june of 2023 so much higher in jackson hole, the fed chair faced a strong stockmarket rally as well as he had bond market, declining interest rates amid high inflation since then the 10-year, 80 basis points higher. almost 110 points. powell is going to suggest the pace could slow for sure and will need to be careful not to suggest the peak funds rate will be any lower than the market is currently priced in or the fed will cut any time soon five is the new four that is five, much more than the 4% they were talking about the key today, the market believes the fed, so powell has left convincing to do. joe, does that make sense? >> it does i was just saying -- i think some things have changed with these inflation numbers, but i don't think they want to say things have changed. >> not yet. >> that's what i was saying. he's got to keep tal

this is all after fed chair jay powell delivered a 75 basis point hike for the fourth time in a row and admitted rates will top out higher than expected >>> investors are bracing for a one t one-two punch from the bank of england. >>> and elon musk gets set to pull the atrigger on the cost cutting measure that could cost employees their jobs. >>> and the china stock market rebound ends as beijing reiterates support for zero covid policy we have reaction ahead it is thursday, november 3rd, 2022 you are watching "worldwide exchange" here on cnbc >>> good morning i'm dominic chu in for brian sullivan let's chieck on the stock futures. stable dow imply lower 16 points. s&p down 5 and nasdaq down 25. not bad. it is not great. this is all after a wild swing for stocks the dow moved 1,000 points from the high point to the low point only to end the day sharply down lower. we got a nice move higher and the fed rate announcement and move to the lows of the session down 506 points by the time things were said and done. it was worse for the s&p and nasdaq ending down 2.5% and 3% respectively fed ra

i am really concerned that chair powell is actions are neither -- that chair powell's actions are neither addressing the root causes of inflation that we're seeing today, namely supply chain solve a war in ukraine, corporate profiteering, and also it's going to potentially really harm millions of people who are really struggling with higher prices already. william: when you look at pain in the economy, who is that hurting the most? rakeen: it's always for the most vulnerable people in our economy who are hurting the most, right? if you're poor, and the price of essentials goes up, then you have less of your budget to pay your rent and to pay for other things that you need to pay. and that's that's always the case. so and similarly, you know, an aggressive rate hike campaign, like the one that chair powell is in the midst of would really, really harm some of the most marginalized workers in our economy. so, you know, economists such as larry summers have advocated for unemployment rates as high as 10% to combat inflation. when you unpack what that actually means, that means in unemployment

tom: i know you are watching the fed and jay powell closely yesterday. we have another 75 basis points, the view is that if you get into a rich -- recessionary environment, what does that mean going forward? sir martin: that is very difficult to forecast. i think the rates of inflation will end up higher than we think. interest rates will be lower than we think. terminal rates will be lower. i think people will start to go worried about the impact. it is not only about controlling inflation, it is about unemployment. same with the bank of england. i think it will be more balanced. the honest answer is that the rates of growth of digital advertising have slowed but they are still strong. when i look at 2023, one thing is for sure, digital used year -- this year is probably about 60, 65 of budgets, vector it will be 65 over 270 and the following year it will be closer -- 65-70, and the following year it will be higher. digital will continue to prosper. clients will be looking for a performance. the pressure from a cfo on the cmo is, let's look for volume a

our next guest says not to take jay powell to seriously. i guess you have to contrast with what we heard from the boe overnight trying to manage market expectations that they think are too extreme going forward. does this just emphasized the challenges for central banks that they have only so much data to work with right now? >> that's exactly it. they are as a grunt about the future as anybody else. the way that chair powell, what he was doing was trying to play good cop bad cop investors. he had the policy statement come out that was interpreted as being dovish because they might not pause but at least slow things down. then maybe the compromise that he struck with the rest of the committee was that then he would go out there and deliver hawkish message. when you listen to the details about what he was talking about, he was almost like rehashing old arguments. to prove that they really don't know what they're going to do next. there effectively flying blind. he shouldn't burst ash pretend as though they're going to push rates higher when

i think the market won't move away from powell. that basically means the market pricing for december, if powell does what we expect, she will not alter pricing. it is 50 basis points or 70 basis points. it will be depending on data. it will be with more inflation data. dani: we also have u.s. midterms. are we underestimating anything? stephen: on the way things are headed for congress, generally we are headed for gridlock. nothing really meaningful in terms of policy initiative. i think midterms will have a dramatic impact on the u.s. dollar. i expect the uncertainty is a slight dollar negative. the dollar may rally but we are headed for gridlock. dani: let me try to bring up someth impact. everything we have heard so far is of a potential committee forming to evaluate covid zero. what is the swing factor if we do get china to abandon some of that covid zero policy? stephen: we do have a downward sloping. the zero covid policy's turn to get rolled back. [indiscernible] asian currencies probably have more appreciation in their count

investors are waiting down jay powell's speech today. that is ahead of the former new york -- as the former new york fed president and the st. louis fed president called for more rate hikes to tame inflation. joining is paul dobson. again, the markets have a singular blinkered vision, going for rate cuts at the pivot next year. underestimating the trajectory of the fed, are they? or and -- ignoring fed speak for now? paul: i don't know whether it is deliberate or not. but it makes you think the message powell will deliver will be very tough on getting rates higher and keeping them there and not backing down. that is what the fed wants us to believe, that it will do everything it can to get inflation under control even if that causes hurt in various asset markets. it is pricing in lower rates towards the back end of next year. that is the position the bank of america strategist recommend. within the analyst community there is skepticism over whether the fed will be able to stick with what it is saying and keep rates up. dani: ahead of the

equity futures are doing this ahead of jay powell. it takes us back into jay powell's speech and does he say anything really different? are we supposed to act surprised if he tells us rates will go higher? yvonne: we are cementing expectations. this is the last week ahead of the quiet period. jim bullard yesterday repeating the call for fed hikes. the pricing continues to be very much around 50 basis points for december. we will see if it changes. rishaad: just having a look at the month's end and taking a look at some of this price section we have been seeing. jim bullard repeating his call for interest rate hikes. these are some of the data we have been putting together. run us through these, david. david: it has been stellar. the dollar's worst month in 12 years. rishaad: these currencies absolutely crushed of late. this is the pmi reading we had. the composite 47.1. manufacturing really contracting . we were looking for 49, we got 48. yvonne: it is really bad. this is when we saw those record number of covid cases. it goes to show

they don't believe when powell says we want to kill inflation. >> yeah. and the labor market is something they're going to be paying a lot of attention to. you mentioned the jolts data. the fed's looking at job vacancies to unemployed workers ratio. that went up in the report that came out this morning. that is the wrong direction. the fed wants to be sure that they've gotten control of this inflation problem. and the way that they're going to be sure is they're going to see a softening labor market, reduced demand for labor. it doesn't mean that layoffs have to increase, but the more that the unemployment rate goes down, the higher you see that job vacancies to unemployment ratio, the more concern people are going to have that even though they've done a lot, if it's not slowing down the labor market, then that gives them a yellow light or a green light to continue raising rates here. liz: nick timiraos of "the wall street journal," thank you so much for weighing in, we appreciate it. i want to look at the markets right now with scott redler, our trader.

powell. >> chair powell. >> what time is that >> 1:30 we'll be talking about that >> get an advanced look? will he send you the transcript or something >> i don't know. i've got to give him a ring. >> whatever works. steve liesman, thank you very much >>> still ahead, the aforementioned j. powell rocked markets with his hawkish speech back at jackson hole in august, with stocks on a tear the last two months, the dow is up more than 15% since that speech, will powell's talk tomorrow bring another round of pain or joy we'll discuss. probably should haveald ouitith steve, but we'll talk about it with somebody else, apparently what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the inte