Have room to run we debate that but first i. C. E. Is that the Federal Reserve is that what its feeling right now . Under pressure it should be under pressure no its not it will come. Between the ecb relaunching open and monetary easing and the president tweets urging the bone heads of the fed to cut rates, does the fed have no choice but to move in that direction, guy. I hope thats not the case. I hope they back in october Jerome Powell when he first started in job he said we are going to do whats right for the United States and for the economy. And i really felt he was on the right track. He was going to raise rates in a systematic way and reduce the Balance Sheet. That was the right thing to do in my opinion. I still think that he did a complete 180. Are they under pressure to do this we talked about it tweeted about it, hottest number in 11 years i dont understand why with inflation rising without question, and with the greatest economy in the history of the republic the president s words not mine we have to do some rate cut that is effectively would be a emergency measure in a situation where there is no emergency. So i dont think they should be. Now do they feel pressure to well you listen to the president absolutely and its funny, quickly the president talked about the europeans manipulating or currency manipulating he talked about them as geniuses whenned to to do it whep the chinese do it. It didnt work for them the youre owagons stronger dollar was weaker here the problem the fed has in release to u. S. Economy. And the more european and other Central Banks around the world cut, the more likely our yield curve inconverts that creates talk about recession. Creates a problem for the banks. So whether they want to or not, with the rest of the world cutting rates, particularly in the negative territory, u. S. Rates still positive, you can get in yield curve inversion which they dont want. Cpi, they hit the number for the first time in ten years. Seems like thats working. We have good employment. Hitting both the mandates but now they have the boengs for inverted yield curve. I cant remember a time where the divide between reperception and reality mab as which had as it is. Think about the things we worried about this year trade, brexit, china and the market hasnt flinched there have been the signs of cyclicality all summer semis outperforming software seeing it recently in the couple weeks in industrials catching a bid. Banks better i think the message of the market is hey things are actually pretty good underneath here and i would be very careful getting too bearish here. Maybe perception is reality and i think you have a dynamic here where you know, we probably say this a lot but i hate hyperbowl. Another extraordinary day. If you think about the ecb steps in potentially expectations high and they were aggressive thrown in a lot of stimulus and basically said they will be patient similar to the do well do what needs to be done you have a dahm where bunds were back up and the boj saying they are getting worried about longterm Interest Rates falling. Combine that with a fed that we dont know is moving as quickly as people think. A defends over a trillion. Major issuance going on. And suddenly it looks like bond yields go higher if you look at the remember are reversal we had and marko was on talking about the technical factors, it was an important day for markets. And its very good for risk and good for reflation trades and good for gold which i thought was trading mostly on deflation but clearly gold rallied on the sense there was the 2. 4 inflation. Hedge or inflation, deflapgs, the cure all, the cure all class. Its interesting, i mean, you know we talked about this a couple weeks ago the banks traded well in the environment. Tim brought it up and we brought it up week and a half, two weeks ago, the bond market got ahead of itself. We talked about it that day, i think it was tuesday two weeks ago. Quite frankly that proved correct. Name like citi bank rallied 13 in six sessions. Thats interesting i think there is room. But i think the banks are in this longer term downtrend take advantage while you can and 180 in the 10year give or take has been a level a lot of people flagtd for the retracement back to in other words bonds selling off yields going higher he we see how it reacts tomorrow fascinating to see what our bond market does tomorrow given some of the rhetoric we are going to hear. Although with all of this said, if you told me two weeks ago we had a weaker dollar, ecb cutting rates appear multiple others cutting rates and would have some kind of movement maybe on trade, i would have naught the stock market would be at yalltime highs dow up 3, 400 points i know we priced a lot and participated alt of this. We are. But i was roadways disappointed we are effectively there breyen talking about the trading today, right all the news came out today. When there is good news and bad price action i get concerned and the fade today i thought we would have had more. Im reluctant to call price action bad today look at the breadth the last two woks as good as we have seen coming off the lows seven, eight months ago when you long about long yen, long gold, long german thats been the trade. Not a mu trade. Bellwether. Taiwan, semi, these are the memgs of the market that say things arent bad here. So you think gnat writing isnt oh the wall for new highs on the s p fiechd. I think the writing son the wall for decisive new s p high through the end of the year. Whats zies disbelieve 1350, 3,200. Okay. Whats risky for markets is the risky markets have been rallying any it could get worked off pretty quickly im just telling you the momentum behind the trade is as good we have seen since the blow off top of january 2018. You want emerging markets and youve seen the currency rally dramatically thats a part of the risk spectrum fast money its hard to see where it changes overnight unless you get a bad trade headline. Our next guests take is basically its time for the fed to be proactive and leading. Lets bring in jim skarn, Portfolio Manager at morgan stanley. Its the central bank of the world. Isnt it by default the leading central bank. Its supposed to be lets put what the ecb did today in context talking about 20 billion of qe per month until they start hiking rates again if you look at the forward markets what that tells you is that the ecb is not expected to hike another six years if you do 20 billion a month for six years its over a trillion dlarps of quantitative easing. What is the fed doing talking about the phillips curve cant decide in terms of rates do they cut 25 do they not . I think this is what any mean about the fed is lagging behind. The more fed lags the more markets price in they have to do more later i understand the topics discussed cpi is higher why do we care. Because the fed is looking at core pce below the antarctic of 2 . If you disembed deflationary expect aches into the economy you end up with a japanlike situation and theyve been trying to dig out of that for 25 years. Pifrpg the fed is trying very, very hard not to get there the ecb has got the message and they are doing it proactively. The more the ecb does that means the dollar will probably get stronger because Interest Rate differentials rates go down in europe and not so much in the u. S. I think in puts pressure on the fed to do more. What does the fed need to do to be proactive. I think there are two criteria that will define success. They need steepen the yield curve weaken the dollar. That probably comes with a rate cut. How aggressive and how much becomes the next question. So i would expect the fed to cut two more times this year and probably at least another two times going into next year i would expect about 100 basis points more of cuts. And thats what the market is pricing in right now if we if the fed does deliver that and this we are getting some recovery in the economic data, then what the fed will show us is that theyre getting ahead of the curve, becoming more proactive rebuild inflangs expectation rebuild into the curve resteepen the yoeld curve. I think on a relative basis when we look at the dollar relative to other currencies, the dollar may weaken or at least not rally as much. New and i think thats the key. Jim ten year peelds yeemds peaked almost a year ago anniversarying a year of lower Interest Rates, does the stim la active effect start to show up in the data . It does but also the fiscal benefits from the tax cuts that we have had for a while is also starting to fade. So yes you are getting a decline in Interest Rates which should start to help. But also the fiscal stimulus from the tax cuts from two years ago, year and a half ago is starting to fade whats more important is when we look at the forward aspects of the economy, look at trade, china, what is the potential for we canness i agree with whats being said where does the fed have to be aggressive in this economy look where the market is injury thats a little bit the wrong question i think the question is is how much insurance does the fed need to take out so the u. S. Economy doesnt turn into a japaneselike economy where she have perpetual deflan flags inflation. I think the wererd ward for me is lets do too much if the stock market goes up we can hike rates aggressively and well turn that around fast but we cant fix the other which if the Inflation Expectations go down too long. Jim you cant fix if the other way once youve got too far there is this fear we have so many bullets. First of all its very interesting its not a thought thats out there but the fact that the ecb could be leading the fed here is an extraordinary concept because its the tail and the dog. The ec b has always been the tail. Indiana the worries bubbles and inflations the thing is i dont see an inflangs problem in the world if i did then i would say the fed needs to tread carefully as far as bubbles, i think bonds are acting perfectly reasonable relative to Central Banks. Im not an Equity Analyst and dont invest in equities but i would say equity markets are reacting properly relative to low Interest Rates. I dont see things as frothy as a bubble i dont see a lot of lefrpg thats a problem corporate leverage is high but we have to remember that the term of the leverage many corporations have termed out the debt refinanced a longer term debt and their cost of borrowing is really really low. Even know leverage is hi and people like to highlight that, the cost of servicing it is really really low. So i dont see this as a Pressure Point so this to me gives the fed a lot of room to be very km kaitive, at least trying to keep up a little bit with the ecb if it turns out the krechlt ecb is doing the wrong theng the fed can go the other way easily fixed. Of all the Asset Classes out there you dont see frothiness in equities. Commodities certainly not frothy but the bond market might be called frothy. Other people call it a bubble. Your youre a fixed income Portfolio Manager do you think its a bubble how do you handle it. I dont think its a bubble i think there are good pockets of opportunities and particularly in emerging market local bond local currency em debt a lot of the bopped markets havent rallied said say what with with regard to the Investment Grade or bond markets are doing. We want to find pockets of places that really havent participated in this many emerging markets have steep yield curves higher Interest Rates. Their Central Banks have plenty of scope to cut rates. They have positive real Interest Rates. Thats where the money as it is gravitating towards. One prerequisite you have to have a semblance of calm between the u. S. And china if the u. S. And china continue to battle em is going to sit in the back seat. That that calms down and i think it will for the remaining part of the year and maybe into next year, then the money is going to start to chase the assets that havent appreciated yet. Emerging markets is one of the places ill give you another outliar space. Some of the Energy Sector which has gotten destroyed you get calm energy does better. Plus if people move back to high yield for example they by the etfs and buy the Energy Secretary are and take that high are. Thats a contrarian call right now, risky but could be worthwhile. Great to see you thank you. All right what do you think. Makes great points. Listen, its hard to argue he is not 100 correct i guess my point is this just because everybody else is doing it doesnt mean you should do it quick example. The big thing now is you hold your kid back for a year give him or her competitive advantage but if everybody does that youre back at square one so what point does that stop. And youre shaving in second grade. You know were not foor from that my point is if all the Central Banks are doing it we get there at what point is it madness and has to stop . Almost by definition i think there has to be some nchgt ramifications for the recklessness of global Central Banks just miep. The challenge of targeting a steeper yield curve also does the fed have control over the yield curve with the blunt instrument like cutting rates . Exactly one thing they have is the Balance Sheet where they actually can do like a reverse operation twist. I talked about that before but basically the idea is they have more control over the yield curve than they have in the past one thing i would say, you call on high yield is interesting particularly for us bank stocks. Because one thing we always get concerned about when oil goes down so much is how much exposures do u. S. Banks have to the oil patch . If that gets baier better that might put a bid under bank stocks. Walmart ramping up grocery sore what that could mean for the consumer bitcoin struggling to break out. Tom lee says one catalyst could finally help the cryptocatch a break. Much more fast money right after this i get it all the time. Have you lost weight . Of course i have ever since i started renting from national. Because national lets me lose the wait at the counter. And choose any car in the aisle. And i dont wait when i return, thanks to drop go. At national, i can lose the wait. And keep it off. Looking good, patrick. I know. vo go national. Go like a pro. Hey. You must be stevens phone. Now you can know whos on your network and control who shouldnt be, only with xfinity xfi. Simple. Easy. Awesome. Well back to fast money. We have a news alert on we work lets get to dedra bosa in San Francisco for the details. Melissa, we work is considering curbing founder and ceo adam newman voting power to save the ipo according to a Financial Times report citing sources earlier this week our leslie picker reporting we work was considering making some Corporate Governance changes and come as early as this we can among the changes discussed according to the f. T. Report would be revising neumann supervoting rights giving him 20 times the vote are power also potentially the role of his wife Rebecca Neumann currently the chief brand and impact officer and under the current guidelines, the current policy she will be able to pick his successor if he dies or if he is permanently disabled in the ten years following the ipo longside two company border are board members. Melissa, already this was a highly unusual s one we have heard lots of about it we know the ipo is struckle to get off the ground the changes could help push the ipo forward if they go ahead. This sound like they would have to eliminate the three class chair system that they have right now well, we only know right now that it would be revising Adam Neumanns role so perhaps less control. Im not sure if it would take away the class c entirely. But certainly its evident that there are some changes that need to happen before any reach an ipo given what the market and privately is happening. Dedra, thank you. Dedra bosa in San Francisco with the latest on we work. Is that enough curbing his voting power when he has a supermajority of shares by the three class voting strurt. Lets think about what the story is emblematic of exterior the where is the excess in the private markets or Public Markets. Private. You see the way the ipos this year has acted its terrible the Public Markets are on strike when it comes to owning these. That should be almost reassuring as an Equity Investor that there is not the excess often present near tops. Just where it would go and just yeah, at most tops Companies Like this they would have gone and gone up 20 on the first day what are we seeing seeing people selling out at 20 losses. To me im speculating a bit here but it shounds like you have some early investors in we work that want liquidity want the and want to get out softbank did the last round and almost doubled the valuation today. There is wrangling behind the scenes to get the liquidity because venture skpam capitalists raising the next fund need to move on thats whats going op even still i dont think its a great ipo if we use the other ipos as a proxy. Youre specifically referring to smile direct which raised raised the frown direct it was today. Yeah. Down 27 on the debut day even though it raised its youre mileage. Im not we had a whole conversation about it before the show it should it should have trait traded better. It should have. And we didnt speak to this type of move today. But we spoke to buyer beware and kkk. B. K. Is being nice i think softbank was a 48 billion valuation there last round. And this is somewhere between 14 and 18, far more than twice. And again they should be beholden in my opinion to the to the concerns of softbank. Yes. But were going to find out what happens here. From we work to walmart, the biggest retail are announcing today it will be expanding the Grocery Delivery Servi