mckee had with direct fed. guessll three of you, i you just assume michael mckee, this will be low rates jay? >> it will be for now. what we don't know is when the economy changes, how does he change, and what kind of changes does he do to policy? some economic forecasts that the fed has put forward, 2% growth, inflation, yes, he's going to keep raising rates in a slow, gdual pace. tothis -- is this guy going butt the trend of going to normality? >> it's pretty interesting. when you are chairman -- when you are a member of the board, things change when you are chairman. janet yellen and her predecessor really did move to try and build consensus on that committee. there are very few descents over the years. jay powell will now have to figure out what kind of chairman he wants to be. a consensus builder, listen to all opinions and actually provide unanimous views on policy? or a more forceful leader? i would suspect it's more of the former than the latter. until he gets into the job, you never know. >> let's go t

the fed after janet yellen. we are waiting for the official announcement on thursday. thes get back to tom keene, host of surveillance, hopefully with a better line. great to have you back. you have spoken to so many as this game of celebrity apprentice, who will be the next head of the fed, has gathered traction. what has been the take away, is powell a market friendly leader of the fed, or is he seen as friendly when it comes to deregulation as well? >> the deregulation is there. i'm sorry for the bad phone line before it i had to pay my phone bill. i think that jerome powell is a mystery. we have had phd economists with substantial track records and changes along the way of their track record when they speak on monetary theory. jerome powell will be a huge shock to the financial media and the people who care about monetary theory. we really don't know where he stands with his decisions, and particularly we don't know where he would stand given a crisis. with others you never know either, but at least we could

the futuree fed, plans will not necessarily be the fed that we have. lisa: there is some speculation one of the first orders of business will be looking at the inflation target. seeing if 2% is actually the right place to be or maybe a little bit higher. that introduce term premium to the curve. a lot of people are positioned and flat mirrors -- flat because they affect the cycle that produces flatteners. vishwanath: in terms of premiums, the significant difference between the term premiums at the long end of the curve and the short end of the curve. negative term premiums the flat of the curve. it makes sense to exploit that by continuing to flatten absent a big change in the direction of the fed. jonathan: guys, you are staying with me. vishwanath tirupattur, lisa hornby, and iain stealey. coming up on the program, the auction block. canada taking advantage of its own flattening yield curve. the tightest's are since 2008. from new york, this is "bloomberg real yield." ♪ ♪ from new york city, i am jonathan ferro. this is bloomberg real yield. the

the topic for the fed chairman. the announcement expected formally tomorrow in washington. we will be back with more. this is bloomberg. ♪ >> it is 10:00 a.m. in sydney. welcome to "bloomberg daybreak: asia." top stories now. there was one. president trump will make jerome powell the new president of the fed. the governor faces gradual rate hikes. financial regulations. >> and from bloomberg's world headquarters, i am betty lou. a case of highs and lows. facebook smashing estimates in the third quarter. to

a lot of people have suggested lotyou were a fed staff, of people say the fed staff runs the fed, especially in the absence of a lot of governors with academic and economic credentials. is the staff going to be pushing jay powell around? should we be looking to the head of the monetary policy division for guidance? >> i think it would be a mistake to try to push him around. he is pretty solid and he's been working hard. he's been around financial markets and policies since the 1990's. he was in part hired for the job because he represents continuity. the destiny that he will be his own person. >> how much can he be his own person in the face of 12 regional bank presidents who as votingon the board members, now there's only going to be three people on the board until donald trump appoints new people. is this going to change the balance of power? certainly affect the balance of power in terms of the votes. the fed operates most of the time by consensus, anyway. part of the chairman's job is to form a consensus that he personally believes is the right policy, but the vast majority of the commit

we have a fed chief. we had a terrible incident last night and there were indictments that touched the trump circle one way or another and yet the markets in the united states and around the globe isn't bothered by it at all >> it's been a little bit nuanced. it's faded some of the optimism that some of the other risk markets have built in. the markets keep going up. there's a lot more at play as you have discussed if you just look at what's going on in washington, there's a lot of things to distract them from their pro-growth agenda. indictment being one of them >> we're off in the fed decision here steve said watch for what they say about growth is there any concern that they will talk up interest rates in a way that maybe the market hasn't anticipated. >> we don't think so we think this is a fed that is very much trying to be as transparent as possible. we were just talking about this. we don't think the choice of fed chair is going to make that much of a difference in 2018 because thing vs been so rel

"the fed decides." ♪ the fed decides. maybe bill gross will decide. i am really looking forward to my conversation with mr. gross. the last time we talked, it was extraordinary. he talked about the difference between the 260, and the 240 level, and we are there. let me get my bowtie straight, as well. someone who does not need to worry about straightening his bowtie in washington, michael mckee. we will pick it up with the former vice chair of the fed. michael. worked under a fed chair, when you were the vice dominated the committee. i'm wondering if we get a new fed chair, how much difference will they actually make? operation of the fed and the open market committee, and we are not going to see a whole lot of difference, maybe a little bit stylistic, or could we see a major change like the kind we saw between greenspan and bernanke? lan: we will only see a major change of the economy changes in a major way, or if the president put in someone who is dramatically different from bernanke or yellen. j powell would not be such a person. as far as we know

you have to have a fed on board. yet, the hawkishness people are expecting from this fed would go exactly against that. there is a huge dissonance here. it is hard to square with a conservative idea of a fed with the need for really a very dovish fed for this whole thing to work president trump. jonathan: we are going to wrap things up with a rapid fire round. you know the drill -- three questions, really short answers. you are all in your boxes. 2018, the yield curve flatter or steeper from here? lisa: flatter. rob: flatter. alan: flatter. it trends. jonathan: the u.s. bund two-year spread, wider or narrower? lisa: wider. rob: it will be wider. alan: wider. jonathan: the final question for you, chinese bond rout, contained or get ready for the pain? lisa: contained, because they have a lot of money. rob: contained. they have a tremendous amount of resources to throw at the problem. alan: contained. you are going to have to find more difficult questions, jon. jonathan: alan higgins coming in hot at the end of the pro

the concern that the fed should get ahead of inflation. that's causing this incredibly flat yield curve we continue to experience the changing -- if you look at who is up for the fed, and who has been considered who was considered for fed chair before powell was chosen, i think the fed will become slightly more hawkish. >> in terms of yield curves elsewhere, it's flat in china. what do you take from that market point in hchina? >> china is dealing with a managed slowdown you just had news out of china that the government, that beijing went after the small online lenders so they're trying to take out some of this continued credit creation and put a cap on that that will constrain the outlook for long-term growth and potentially inflation. so that will keep the chinese long and down, similar to the u.s. but for different reasons so you will get flattening that wa way. >> gina, thank you very much for joining us this morning. >>> nokia is shooting down reports it is in talks to buy juniper. landon has all the details on that >> nokia releasin

it is hard to square with a conservative idea of a fed with the need for really a very dovish fed for the worker president trump. jonathan: wrapping things up with a rapid fire around. you are all in your boxes. 2018, the yield curve flatter or steeper? lisa: flatter. rob: flatter. alan: flatter. bundthan: the u.s.- two-year spread? lisa: wider. rob: wider. alan: wider. jonathan: chinese bargraph contained or get ready for the pain? lisa: contained., they have a lot of money. rob: contained. they have a tremendous a lot of resources to throw the problem. alan: contained. yet if i were difficult questions. jonathan: alan higgins coming in hot at the end of the program. great to have you with us. that you very much. my special thanks to bloomberg's lisa abramowicz, rob waldner and alan higgins. that does it for us from the york. we will see you next friday at 12:30 new york time. this was "bloomberg real yield." this is bloomberg tv. ♪ ♪ from bloomberg's world headquarters in new york, i'm shery ahn. kevin: welcome to bloomberg markets. ♪ shery: markets are closing in new york. bl

this reflects continuity of a dovish lee inclined fed -- dovishly inclined fed. this is contributed to a lack of wage pressures and inflation. i think a john taylor would've been more dismissive of that argument. heyou look at jay powell, will look along the lines of how janet yellen has conducted business at the fed. it is very much continuity. someone who will be inclined to trust the staff feedback at the fed. if you read the first half of the fed minutes, which a lot of people skip over, the staff forecast and staff commentary is in it. that has tended to a more dovish side than what we have necessarily gotten. david: chief u.s. economist joining us here in new york. our special coverage beginning in just a moment. we will have analysis and reaction. janice anderson, bill gross and black rock's chief jeffrey rosenberg coming up right now. tom keene and scarlet fu are waiting in the wings. julie: sign up for the balance of power newsletter at bloomberg.com. from new york, this is bloomberg. ♪ ♪ scarlet: live from bloomberg world headquarters, this is the f

i live on the atlanta fed's app. i know that is a snapshot of current time, and snapshot is not a trend, but it is very helpful in removing some of the mysteries. now to run it through a dozen questions as quickly as i can. and you actually touched on this. having the expense of a flying back to phoenix about a week ago, i was looking at something that was a few years old, and in the current unemployment, it was looking at the tables of labor force participation, and what was predicted a few euros ago of what would happen, and what we see happening right now. it was talking about the , labor forcerend participation is going to continue to fall. and yet we see interesting things the last three quarters of folks that were being predicted not to be moving into the labor force are moving into the labor force. we just saw some recalculation of numbers of social security disability. and all of a sudden, the longevity of the trust fund jumped substantially because it turns out and number of folks on social security disabili

the fed is audited. i chaired the committee of the board that oversees the audit of the reserve banks and the board of governors. we are audited in the sense that the general public would understand that word. it means something very different in the current context and in this context it means congress has chosen to shield monetary policy from a policy audit by the general accounting office, general accountability office we call it. i think that is a wise choice that has been made as a way of showing respect for the independence of monetary policy. the gao audit at the request of any member of congress would be a way for congress to insert itself in the making of monetary policy on a meeting-by-meeting basis and this is something that would not serve us well. sen. heller: do you still largely support the dodd frank reforms? mr. powell: that is a big, broad bill, 1000 pages of bill. let me broaden it out if i may. \ to the post-crisis. think the things we have done, our capital, liquidity, stress testing

that's the feature of the fed. president trump will announce his nominee, and we understand that's how is the next fed chair today. that's according to four familiar with his decision trade market reaction has had to do with market expectations. trump is expected to make a formal announcement at three clock p.m.. let's get straight to our guest host, who stays with us for a while. is the current head of this strategy and joins us now in london. it's are you are on your own. thinkingts right in that drupal is in line with what janet yellen had to do so far, may be cautious in the stimulus? >> think that's right. bernanke isetween one of -- is a great solace to the market. all things are changing, and we have some continuity at the federal reserve. the key difference is not during normal circumstances. currently -- there's not much of a change. think the things change, the next time we have a recession or crisis, how fast the new chair will be to adopt unorthodox measures, whether its balance sheet or yield target, l

stocks mixed as the fed keeps on track for the debt rate hike and we await news for the next fed chair. can add tax reform to the list of tax agenda items facing a delay on capitol hill. house republicans plan to rewrite -- unveil the plan tomorrow morning. gears up to phase investors after facing lawmakers on capitol hill for a second days hearing. advertising sales expected to take center stage in third-quarter results coming up after the bell. also reporting results, tesla. it could be the moment of truth for the model three at the heart of teslas bet for mainstream success. ♪ the tax reform bill is released tomorrow, gop leaders will have just 10 official legislative days before the holiday to do nothing short of rewiring the u.s. economic engine. here to talk about what is feasible is congressman chris collins come a republican representing new york. he joins us now from capitol hill. chris: good afternoon. are reports you have managed to find some kind of compromise with congressional leaders that will allow deductions for state and local taxes to remain in some form. is that t

for a long time reporting almost straight and on the fed what your own paul be a good choice i would say he's definitely a solid choice his safe choice as we just heard he's been on the order of fed governors five years he has some experience he is an interesting choice as much as he does not have any formal training in monetary policy is a monetary it cannot mix he's from the private sector but i mean as i said he's been on the board of governors for a while he has gained a lot of experience and if you listen to what his colleagues at the fed governors have said about him he seems to be a consensus maker he seems to be experienced enough for the job so it's definitely a safe choice you said that he's been in the private sector in the public sector he's had some real jobs what kind of policy a different policy could be expect from him that's interesting enough he will not really changed. policy at all if you look at his voting record over the last couple of years the last five years that has been on the board he has never once dissented from janet yellen always voted with her whether

he served the fed for five years, but it's a republican to run the fed now. these are the kinds of things he is going to get asked. you anticipated my question, but i have another 1 -- it says the fed must respond decisively if the economy faces new threats. do you expect jerome powell to identify any new threats? kathleen: that is a great question. think a flate yield curve portends concerns about a recession. when it comes to acting decisively, there was a lot of criticism, more from the republican side of the aisle, about purchases, quantitative easing. some people thought it was a bad idea in the first place. they are unwinding the balance sheet now. maybe part of the thought behind that is, if we face another downturn, if there is some kind of shock, interest rates are not that high to re-stimulate the cuts,y with interest rate and in fact, janet yellen and others have said that bond purchases are now a tool in the fed's monetary policy kit. perhaps that is something jay powell is opening the door to an presumably it will be something he, will be asked t

it is hard to swear with a conservative idea the fed with the needs for a very dovish fed for this whole thing to work for president trump. jonathan: we will wrap things up with rapid fire. three questions, really short answers. you are all in your boxes. 2018, flatter or steeper. lisa: flatter. robert: flatter. alan: flatter. jonathan: the u.s. to your spread, wider or narrower? lisa: narrowerr. robert: wider. alan: wider. jonathan: chinese bond routes contained or get ready for the pain ? lisa: contained because they have a lot of money. robert: contained. contained, you have to find more difficult questions. have nothing left to throw at you. great to have you with us on the program. my special thanks to bloomberg's lisa, robert from fixed income and alan higgins. that does it for us from new york or it we will see you next friday at 12:30 new york time, 5:30 london. this was "bloomberg real yield." this is boomer tv. ♪ -- bloomberg tv. ♪ is this a phone? or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why x

a policy mistake by the fed? lisa: one interesting thing i was going to point out is we are looking at the dot plot, but the fed composition in 2018 going to look dramatically different than it looks today. when you think about the fact that there are for governor appointments that needs to be made, including the vice chair, and on the fomc, of the five voters we know dudley has to retire this year, richmond has to replace lacquer. there is a significant change in the fed. i do not know looking at these dots tells us a whole lot. i agree they will continue hiking rates, but the composition of the fed may be very different next year. jonathan: does that necessarily mean that the fed will change at all? lisa: i think it will be a bit more hawkish, especially if data continues to come in the way that it has. i do not think they will try to become aggressive unless inflation picks up. that is the question. if you see inflation here or abroad, that is the end of this bull run in risk assets we have had for a long time

and trump's fed man well jerome pollack. the feds monitor a policy on janet yellen scores. this is the w. business live from berlin i'm going to her office ten years after it launched the game changing i phone apple has released the most recent model in the series the computer giant is still moving from strength to strength profits hit ten point seven billion us dollars in the last quarter alone and many are predicting that the i phone ten will break sales records even though at nearly a thousand dollars for the cheapest version it's not exactly cheap. the images are practically identical all over the world there's a countdown customers burst in when the doors finally open like here in tokyo they put down a pile of money and leave like this student euphoric. i think i want to go home and get some rest and then enjoy the phone. the latest i phone has an edge to edge display and uses facial recognition technology. but otherwise it doesn't seem to be the huge technological leap forward that apple claims even so it costs around one thousand dollars in the u.s. and up to half ag

forget the fed today. it is all about the fed tomorrow . so much to think about and factor in. plus the we have data coming through on friday. the market is short the dollar coming into all of this. what is the potential for a whippy move around this? all the scenarios out there, depending on who is going to be nominated, he or she will have a short-term impact, but bear in mind it is not a one-person fed. it is a committee and a wide range of factors at play. i think when we take a step back and look at the geforce central well, it isg3 as not about one person. it is about the direction of the economy. we still should have confidence in the fed, no matter who is leading it. the dots are here in the market is here. that will be determined by the person who ends up leaving the institution. the u.s. economy is chugging along quite nicely. inflation data is coming up, you've got a 3% gdp read. that factors in the hurricane as well, so that number could be better. u.s. market is generating these numbers, yet the market is still cautious. take a step back and look at the inflation n

jerome powell is going to be the fed's next fed chair. we are getting breaking news. manus: headline from sanofi. annual diabetes sales have worsened. this is for the diabetes business, the top line coming through from olivia. he is trying to fight the price pressures in the u.s. and also the generics that can [indiscernible] dropping 6% to 8% between 2015-2018. net income third-quarter 1.7 one billion, that is down from last year, 1.79. ge above. sales fell by 22%. they are making a comment in to changehe plan their holding in sanofi and sanofi would look at any option to buy back the l'oreal shares. numbers from the banking sector. ,ifting their full-year outlook giving us a breakdown of total income, net interest income looks to be ahead of estimates. net interest income comes that 5.69 billion danish krone. ratio ahead of estimates. we are talking about this is the top pick among nordic banks. fromrength in that update danske bank and the upgrade for their full-year outlook. bloomberg radio is about to sit down with the cfo to discuss the story and that upgrade. l

liz: the fed writes that policy? >> the way dodd-frank is written, take something like the volcker rule, thousands, many pages long, there is interpretive phase of the rules that the fed has to interpret. some of it is locked in stone in terms of capital ratios and things like that. so much interpretation what the fed does with banks that you would have a guy that pushing for a more open interpretation, particularly on something like volcker which is all about banks, trading and proprietary trading and does add to the bank's bottom line if they have a liberal view of it. but that's one aspect of it. plenty more. and having the fed as the uber regulator pushing for regulation to change dodd-frank wouldn't be necessarily the bad thing. liz: this is interesting, most people saying are my student loans going to spike? >> that's a whole other thing. liz: what's the interest on the credit cards, about the rate hikes we are expecting but he'll be at that moderate pace, correct, just like yellen? >> he'll be a yellen on that

off.played nine holes of they fed fish. there were a lot of things that about showingore that the relationship was good on thesed to delivering president's promises for the u.s. vonnie: any indication of whether the president is more or less inclined to visit the dmz? think that is ruled out. he is going to a military base to visit the troops. an administration official last kind of a cliche for leaders to go to the dmz at this point in time. tryinghink this is about to avoid ratcheting up tensions anymore. a couple of cabinet secretaries have been to the dmz in the last few months. go there andump to stare down north korea at this whencular moment in time he is threatening attacks all the time and sounding the alarm bell for potentially a nuclear attack of some kind, i think this administration -- or people who are not the president decided not to send him there. shery: we will have to leave it there. thank you. away ina world washington, republicans are in a sprint to rewrite the tax code. to our chief washington correspo

looming,w fed chair the u.s. adds jobs in october. how the jobs report will impact the rate hike to be going forward. european politics, yanis varoufakis joins us. we will talk greece, the ecb and get his take on the crisis in catalonia and what lessons it may hold for the eu. european equities trading right now, what we gets been good that's what a week it has been we are taking a look at european equities trading right now. what a week it has been. the euro falling against the dollar. the u.k. 10-year up for basis points today that four basis the u.k. 10-year up four basis points today. the maker of high-end lipstick and mascara in china giving loreal a boost. makers leading the way. company has had strong performance in china and hong kong, helping the luxury division post double-digit growth. ar france klm shares opened bit up-to-date. the stock then slumped, it's now rising. air france shares are lower. we will come back to that. these are renault shares. france giving up some of its control with the sale of a 4.7% stake in the c

then we got the fed minutes. and that seemed like a more deeper discussion among those saying yes inflation will rise, we are on the path of gradual rate hikes. high debtan't raise we can't rate hike again until --see inflation's and inflation is on a sustainable path higher. let's take a look at the fed week ahead. a lot going on on monday. a stock ally -- staunch ally is

we have been listening to fed chair janet yellen. she is speaking with former boe governor mervyn king, kind of just giving a recap of some of the memories of her career at the fed as the chair. have comelines that out, her saying, so far, so good on the balance sheet rollout off -- roll-off. just a reminder that while we are taking a short momentary break, you can continue to watch fed chair yellen on live go on the bloomberg terminal. if you want to continue to watch the conversation, log on to your bloomberg, and you can do so. let's have a quick conversation about what we are hearing so far and about the legacy of janet yellen. we have kathleen hays. also, "bluebird businessweek" -- editorerg businessweek" peter coy. largely speaking, her legacy will be seen as positive. peter: i think she can leave with her head held high. she achieved a lot. in a veryed it resolute, steady way. look at what she did. she took the economy that was recovering from the worst financial crisis we have had since the great depression and kept it on the

of the fed and tesla stalls electric comically delays delivery of its new sedan and post its biggest quarterly loss ever. and then fizzle and that's the business the bank of england has raised its key interest rate for the first time in more than a decade from one quarter of a percent to half a percent the rate increase was already priced into the markets so the focus now is whether the rate is likely to be slowly inched up over the next months higher interest rates could see the pound rise sharply. over to frankfurt for the european reaction on this story with all the bonds our financial correspondent ali would you say that this is a sign that the economy is now really pulling itself together in the u.k. or is this a warning sign because it it breaks. it's a warning side warning sign because of. some people say the weak the weakening british economy is about to strengthen again the labor market but the pound is still trading at fourteen percent below the level that it was trading at before the bracks a vote and the british people and industry are feeling it with imported inflation i

i asked dennis lockhart, former president of the atlanta fed, who came to the fed with a long career in banking and became a voter policymaker and did well at his time at the atlanta fed, i asked him if he will follow in janet yellen's footsteps even with inflation so far from target. here is what dennis lockhart said. dataflation and inflation are very much i think in the minds of the policymakers. time, i think jerome powell and the fomc for the most part would like to continue with the removal of stimulus and monetary accommodation. faces thatome powell senate banking committee, he will get questions about that. janet yellen's term is up february three. the senate banking committee has to get this done in the next couple of months. heare meantime, we will what the white house has to say about the next fed vice chairman. haidi: the boe raising its key rate for the first time in a decade. they did it and sterling fell. i guess the statement was responsible for that. why? >> the most dovish rate hike in history is what people are saying. they kept the key rate on a seven-to vote, rai

is there anything for the current fed or new fed to be concerned about? michael: if they are concerned about anything, it's the low level of wage growth. if you average over two months, you get 2.5% gain and you are looking for something stronger than that. we are come at this point, seeing unemployment levels we haven't seen since the year 2000. there's no wage growth. the absolute level of job growth is not a big concern, vonnie. we know over the length of an expansion, the number of jobs created each month starts to go down as the expansion ages and we are averaging over the last three months, 162,000. last year, 191,000. it's about where you think you would be. vonnie: i will want to say we are at a freakishly low unemployment rate, and we are seeing participation drop. this is the job report to be almost discarded in some ways? michael: absolutely. the fed will look at this one from distortions of the hurricanes. ofre was also a weird aspect the other rate, 764,000 people leaving the labor force, the most since 2013. it is unclear with going on. they

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primarily that fed decision. not the typical fed decision we get aftder the fomc meetings, bu who is the next head of the fed. we're anticipating that it's going to be powell we don't know for sure that's why this morning we'll watch the president's twitter handle closely we'll find out what he will do anticipation is he will name jerome powell. we have guests on to talk about those issues we'll find out what it means for the fed decision, fed policy and the markets. the other round of news is we're going to get a look at the tax plan, see some details we have several congressmen on to talk about this including jeb hen hensarling and we will talk about the details are, whether they have the votes for this where the push back may be and when they think if something might actually get passed. we'll talk about all of those issues today we also have the head of the fda on this morning. we will talk about that war on opioids, try to find out what the fda can do to help with that also talk about drug prices. is that so

we had quite dovish fed minutes. equities weakened a little bit after the fed. that is because either way now, if it is the fed that is wrong, people get worried that the people are supposedly our guardians of the financial markets are walking into disaster. if it is the market that is wrong, they need to price in more tight pentagon. either way it is not great for equities. even though it is good in terms of growth, earnings and liquidity, we think the next three weeks will prove tough particularly for u.s. equities because any data point will remind invest thoors either the fed or the market is very wrong. they are going to need to correct soon. each data point will remind people of that and that will be hard for equities. matt: let me ask you mark about what this thanksgiving low liquidity trading means even for european markets as we get ready to go into the open. do you expect we'll see more volatility across the asset classes without the u.s. playing? >> i think there are two things. what is great about the holidays, you can skew it chaver way you want dep

they do not get it at the fed. do their own economic forecast, they probably have a pretty good idea of what we are. this month is not going to matter all that much. it is a catch-up month because of the hurricane damage in the month of september. they are going to look past that along economy is chugging picking up speed a little bit. hand that for any they will move through september. they will preserve their optionality which is a phrase they like to use. it foruld like to leave the markets to decide. decide,the markets to is there any risk that we could see a big move in markets if there is any sort of hints about that rate hike? >> i would say probably not. we will have that announcement coming likely tomorrow. also a announcement on the tax plan. thereis so much news out that people have to be wary of. they are not going to react too much to this one. that fed chair announcement hanging over the meeting. you want to talk about awkward, that guy who is sitting across the table. anys there going to be applaudoe

it will be interesting to see how a powell-led fed will react to tax stimulus. what do you think his response will be if his view is like yours, this is late cycle? >> it's uncertain now. you know, i'm not making big bets as to what happens with tax reform any more than you would wanted to make big bets on healthcare reform. what's interesting is that practically every fed chairman that has been a newbie back to arthur burns made interest rate increases their first move a lot of the time we're already in that process. look what happened with alan greenspan, took over from volcker, raised interest rates, flattened the yield curve and then 1987. i'm not saying that will happen this time around, but we're in the full swing of the fed tightening cycle people call it normalization, that's a nice way of saying they're tightening flattening the yield curve my sense is that -- everybody talks about powell and a new fed chairman but you are very rarely seeing initially that the new chairman puts his or her own stamp on the fed. you have to remember it's a whole committee

has become a low volatility market which is a challenge for the fed because the fed is raising rates. they want conditions to be tighter and they have not gotten tighter. yields are still below where we started the year. i think you're going to be seeing the fed increase volatility, uncertainty in the market and that is going to be healthy. if you look at the change in nominal yield, real yield since the fed started tightening, the changes are all within 10 basis points. there is little going on, on the rate side and of course earnings and stock prices are way up. liquidity has really eased this fight the fed tightening 100 basis points. it is a remarkable juxtaposition. we havene of the things talked about repeatedly is what the fed says it is going to do and what the fed actually is going to do. we have what -- had to say to surveillance back in march. >> we have seen wage growth strengthening. we have not seen the kind of wage growth that is explosive, but the economy is getting strong, operating on all cylinders. the key point is that interest rates are too low. david: you heard

n this is an opportunity to jay powell as fed -- the fed ?eadership changes >> i think you're putting your finger on an important issue that is going to have an influence on the project three policy for the next year or more . that is the performance of the inflation data. very importantly, the interpretation of the inflation numbers, what kind of economy the inflation data suggests we are in. here's the way i think of it. december,w and committee members are going to be following inflation data very closely. to some extent, it will be influenced by inflation performance in the december decision. continues attion 1.5%, about where we are today, and we see no firming on this will take a real introspection. will how inflation behaves in a modern economy. all, i'mrprise me at out of it now. it wouldn't surprise me that the staff is tasked with putting what we a deep dive on know about inflation. maybe with the idea that there will be some kind of a new synthesis around how inflation really works. inflation and inflation data are very much in the

fed, on the fmoc even if she's not chair? >> reporter: she can choose to stay as a governor she would be -- she would not be the fed chair. that happened once before for a period of time my understanding is there was some confusion as to who to call chair on that mind gue my guess is she would not do that, bow out gracefully and leave that position which would mean there's still -- >> another -- >> reporter: for the beleaguered people in the president's office, four positions to fill on the federal reserve board. >> it was mariner ecleys who stayed on the board. truman would not renominate him. he was the first chairman. devoted keynesian. he actually stayed there three more years fortunately that hasn't happened since. >> reporter: any historical event in the past two centuries, larry was there. it's really quite amazing. >> whoa, whoa. >> it was in the late '40s i was just born. i mentioned whether this was you know, according to establishment rules. >> all right we have is to go at this point a fun segment. we got what we

fed withck the appointments. be doves.hey will the potential you can learn in my view is that there are subjective factors, longer-term structural factors, such as demographics in place such as technology advancement and displacement of labor at play and ongoing globalization. we can learn from those things come as opposed to the old-fashioned model, such as the taylor rule and the phillips curve, that have been failing us 20 years.st 10, 15, i hope he appoints someone with a more subjective, as opposed to model-driven view. tom: here's the key question, bill gross, and we thank you for joining us. j and wee low rate ,ave yield curves flattening what does that signal to bill gross if you see flatter yield curves and the zeitgeist of a low rate centered bank? bill: a flatter curve is not positive. let's look at it this way. since 2011 come of the curve was 450 basis points and now it is 100 or less. it has flattened considerably since then. has it made a difference? not really. in my view, at some point it will. t

yellen and the fed saying one thing, the fed trying to tighten policy. and the bond market not playing. along -- not playing along. if you look at the yield line, it is flattening, typically a sign of recession. what is going on with that curve and why has the fed been unable to push it up? mark: if you saw the curve invert that would be a sign of recession. that is something we are watching for, we do not anticipate that happening. the long end of the is responding to some of the comments you just showed by janet yellen. a lot of the recent commentary from fed presidents, that they are simply no longer sure that inflation will necessarily pick up again, i think we are seeing that in the 10 year. that is a very interesting phenomenon. at the same time they have been tightening and preparing themselves for future financial crises, they are also concerned that inflation just is not been responding the way they anticipated. tracy: when a da vinci hinting sold for $450 million earlier this month, it broke all the our world records and triggered warning bells

the fed chair is similar to the outgoing fed chair. the number of vacancies has to be a concern. institutional memory has been brought up. these are a lot of changes in a short time. i would like to get those seats filled and let them figure out what the chair feels like a move forward. david: thank you so much for joining us once again. bob is going to be sticking with us. joanathan: if you look at the situations in cross asset, equities are up on the dow. straight00 after eight weeks of gains, the longest winning streak since 2013. it closed friday at an all-time high. stockspe, we have performing well off of metals. all, metal, copper performing well. board,switch out the this is what it looks like to begin anew trading week. yields are coming up a basis point. , the fxaven't heard market is set up for the year. the dollar is a little bit further against the euro and weaker against sterling. about one dollar 31 flat. -- $1.31 flat. this is bloomberg tv. ♪ who knew that phones would start doing everything? entertaining us, getting us back on track, and finding us dates. phone

talking about the composition of the fed, i would love to see someone from industry in the fed. if mohamed el-erian gets the job, he is a market got. francine: light gary cohn or someone from retail? >> someone who has to meet payroll every friday, someone like jeff bezos who has built a business from the ground up and understand what the value of a dollar, pound, euro is and knows what the cost of money is and what draws an economy. central bankers talk about entrepreneurs and how they drive the economy. why not let one of them into the hallowed halls of central broadenas a change to -- janet yellen spoke about grouping and said the broadness of the fed takes away -- i think there is group think in the central becky community and if you brought in the pool of central banking community and if you brought it the pool of talent. maybe explain things and understandable terms what is driving the economy and why policy is doing what it's doing. francine: i love that idea and we have to do a whole show on you on doing that. i do not know whether they have thought about it. mark gilber

markets and show you how we , particularly after those fed minutes. the dow, s&p, and nasdaq closing to the downside for the most part. lead in for us. we are seeing futures go nowhere. the dollar looking soft ahead of thanksgiving. take a look at how things are faring in new zealand, up .1% on the index. for retail sales this morning, the smallest increase in two years thanks to automobiles and hospitality sectors. australia down, taking a breather this morning. pretty flat at the morning on the asx. it will be a quite open the next hour. japan is closed for labor thanksgiving. they are starting earlier. south korea a one hour delay. take a look at the dollar-yen, 111.23 right now, it's best day in six months with a 1% gain overnight for the yen. we are below the 112 handle, but it has been trading all around. when it comes to you for that thanksgiving holiday. i hope you don't get stuck in holiday traffic tonight. >> i will be getting out of here as quick as possible. a closer look at the u.s. market, mixed. we have more. stocks down and the dollar