美联储10月议息会议前瞻：市场押注加息与通胀压力

This is a special edition of Bloomberg Surveillance with Jonathan Ferro, Lisa Abramowitz and Tom Keene Bloomberg Surveillance. The fed decides live from New York City this afternoon. Good afternoon. Good afternoon for our audience worldwide. That right decision is 27 minutes away. That news conference is 30 minutes later. The data in America says go. This market says no because of the guidance we've had from select fed officials over the last few weeks.

Yeah, we're talking about Vice Chair Jefferson and the New York Fed, President Williams coming out and saying it was unlikely that the fed essentially was going to be hiking in October. Ergo, we have about a 7% chance of a fed rate hike today. That said, it is almost a certainty being priced into the market. This is just a punt to December and that rate hikes will follow in that month. Is this where he changes his process?

How long is this press conference going to be? Is he going to be a little longer than that. Checks all my understand from a select individual. There are no follow up questions in today's news conference. 25 minutes. 30 minutes tops. Yeah, 30 minutes tops. I think that's I think it's a huge he's got a huge opportunity here to mix things up. And she's a pro. So the mother of all opportunities to blow it forward can't. It's if you want to take the set inside and you with there.

We're not in the business of doing that anymore. Some people are in the business of offering guidance. It's why many people believe there's no hike in 27 minutes time if they choose to hike. We've blown up the old fed. Hello, the new fed. Well, people listen to Vice Chair Jefferson and New York Fed President John Williams, because they comprise the troika, along with the fed chair, that typically are together when it comes to decision making.

If he's breaking that up and if he hikes rates and surprises the markets, it will cause a lot of volatility because a lot of questions about a reaction function. But it would underscore the fact that we does represent the collective fed and that they are not in the business of John Fahrenheit in the time out chair, because we both agree it is a snooze fest, except the story. John is moving in real time. Michael Darga over Dagobert Roth, Steven Stanley.

Just in the last 20 minutes. Blistering notes on this boom economy. Nominal GDP spread. Huh? I think that the amount of money that's been raised this week, we could see a record breaking, entropic IPO in the next few weeks. We've had an upsized monster equity capital raise from meta. You've had a $40 billion chip deal out of space and others, and all of that money is going to be put to work in the next year or so. And that can feel the next leg of growth and inflation.

Yeah. And is this something that the fed wants to take into consideration. And how much is this a problem versus a feature of the backdrop they're looking for. In other words, are they willing to torpedo some of the economic momentum that's coming from the eye trade. Or are they hoping to support it? And are they really not looking to necessarily bring inflation down to 2% in a timely fashion? The overwhelming consensus says no hike in 25 minutes time.

There are some select banks who suggest there might be a hike. Bank of America RBC just two of them. Everybody else saying no hike in about 25 minutes time. The equity market set up this afternoon. Looks like this. Equity markets stand with the S&P 500 firm following two days of gains up another 2/10 of 1%. A nice tech rally Monday through Tuesday Wednesday Brammer up another 0.1. Yeah. Very curious to hear what the commentary is ahead of this press conference coming up shortly.

We'll get the view from Apollo's horses lock, stock and see Badger in Joppa and Deutsche Bank's Matthew Lusardi. They'll be taking us up to that fed rate decision at 2 p.m. eastern. As we get those headlines, we'll get immediate reaction from former vice chair Rich Clare to Diane Swonk of KPMG and Stephanie Roth of Wolfe Research. Let's see how long the press conference is. Maybe it'll be 20 minutes. Maybe that'll be 15.

Breaking it all down. Will be JP morgan's Priya misra, BlackRock's Jeffrey Rosenberg all speaking with us here. It's an anomaly. So what you go on for 22? I think it's going to be 27 minutes, 27 minutes long. I think it's like 28, 24 prices. Right. Rules 20 minutes. All right. I'll take 20. Make it interesting and talk of Apollo's with us. He's got better questions to answer than that. Torsten. Good afternoon. It's good to see you.

Thank you. If the midterms weren't Tuesday with this fed behind it. Well, if you take out your textbook and you look at what's been happening with the two things that the fed is trying to control for, namely inflation and unemployment, inflation in the last number, it was just truly ugly. We're seeing a broadening out of inflation pressures. We're seeing more components showing higher inflation. That would certainly argue for a hike today.

At the same time in the labor market, yes we did get nonfarm payrolls at 29,000. So it was a bit of a slowdown. But a lot of other indicators when it comes to ADP, the weekly data is still strong when it comes to jobless claims, is also still strong when it comes to job openings, is also still strong. So net net, I would still argue that the Taylor rule and the framework that we normally use when we think about the dual mandate that would argue for a rate hike today.

Explain how important this fed meeting is. Some people might say it's a snooze fest. Other people might say it's actually going to be a risk clearing event. To see whether the fed is going to confirm the market's expectations, that December is another hike, and maybe they aren't going to necessarily go as far as the two year yield is suggesting they will. Where is the sort of issue here that could potentially lead to some volatility?

Well, from the beginning of the year, the expectation was when we entered the year that the fed would be cutting three times. And now of course, we have pricing that the fed will be hiking three more times. So in other words, a complete change of sentiment in markets in terms of what is required from the fed. So from that dimension, it's very, very important that the fed now begins to signal, or at least begins to deliver on this expectation that the market has.

Alternatively, we need some very different message today saying that no, we do not expect three hikes. They don't give forward guidance as usual, but at least begin to lay the groundwork from the broad expectation that the market is saying that a lot more hikes are coming. I look at the Taylor rule, as you mentioned, clearly saying one, two, even three rate hikes. Someone would say, I look at the job market as a good 27 weeks unemployed.

Up, up and away it goes. There's literally two Americas into the midterms and into the December meetings. How should the fed Prosecute policy given to America's will. We have a split economy in so many different ways. We have a speed economy in terms of growth, ie spending is less sensitive to interest rates. And the one Big Brother bill, which is the fiscal expansion we're seeing this year, is also not sensitive to interest rates.

That's very different relative to what we're seeing in the auto sector and in the household sector. In the housing market in particular, things are not doing good because interest rates are very high. So that's a very slow economy when it comes to the consumer. There are also different signs, of course, that the high end consumer continues to still do well because stock prices have gone up, home prices have gone up. And if you own fixed income, then the cash flow you get in fixed income is the best it's been in many, many years.

So the upper leg of the case is still doing reasonably well. Whereas at the lower end of the case you're seeing delinquency rates going up. And for that reason, we're also seeing on the consumer side that