Guy every single sector bar. None down in europe. A lot of this out of the u. S. Clearly we see the big market to the fed that is being priced into europe. The ftse is down. You certainly have the pause in effect coming through into the u. K. Market. Taylor wimpey is one example of that. We are seeing affects positive effects coming through of a right pause into european, and more specifically u. K. , equities. The question is, what happens if pi goes up next time . Does the bank of england hike . Who knows. Alix in the u. S. , we are data dependent. We get existing jobless claims coming in under 200,000. We are seeing equities pick up to the downside on existing home sale numbers. The s p 500 is down 1 . Major sectors in the red. Amazon down 3 . Seven Straight Days of losses, its longest losing streak since february. What is different in the bond market in the u. S. Is the front end is rallying. You are seeing buying in the twoyear. Yields are lower and the backhand moves with you guys. We are seeing some speed from the ecb saying, maybe we are done. Maybe no more hikes. Yields are up by seven basis points. Also the dollar. The dollaryen now down by 0. 6 . As we head to the boe tonight, we have to wonder if there is some intervention over what they will say around the currency and those rates. Guy are we going to see some currency intervention . The bank of england today is fascinating because it is so hard to decipher what is happening over the road from here. We have a cap which means the governor basically was the deciding vote. The governor andrew bailey. We did not get a press Conference Today so we have to work our way through the statement. We have a little clip coming from him from the bank of england. This is what he has to say post the Rate Decision to leave rates unchanged. Governor bailey it is a premature celebration because we have a ways to go. You are watching the market carefully and have to do that. We also have to be careful in the judgments we reach on how permanent it will be, effects of the economy will come from it. You will be watching carefully. Guy that takes into the question today. The one from yesterday, we evolved it. We have now had the fed and bank of england. Are we there yet . It is a question that needs asking. The chief european economist is joining us now. Nice to see you. I am struggling to understand the bank of england. You get a big cpi print earlier in the summer and he of england hikes by 50 basis points and we are caught off guard. You get a soft print this time and we have a hold. Is the bank of england being pulled by the wind of the cpi data, which itself is quite volatile at the moment . That is a really good question. There are a couple points in aunts. First, we are close to getting to peak rate. There will be a lot of indecision. You will think i need to go 25 more or less rest six months to one year ago we were on the same page of we have to raise rates. As we reach that, we are seeing the disagreement that number two, around the cdi print, that is the case. We should not be looking out the window and saying, what is cpi today . That should not push the decision. I should hope not. It is hard to decipher how sticky the inflation is. We have seen a little of this reaction. The cpi print came out and markets responded. The whole dynamics changed. Which is the wrong way around. Alix i have to wonder, how bad to be think the pci will be friday . I understand the cpi projection but we are still at ive six. I find it hard to believe we will drop. Jumana if you look mechanically at the cpi numbers, the base effects will drop dramatically over the coming months. Yes, inflation will come down. According to our inhouse projections, it will come down to 3 for the end of the year. If everything works like it should based on history, that is what we are expecting. The pmis have already been quite bad. Tomorrow, given other leading indicators, it could be we do see it see recession we expect to see. Guy they have been expecting recession for quite some time so you may have to take that data with a pinch of all. Dan hanson and i were kind of kicking around. The frustration we have with the bank of england of where we go next . Where do you think what do you think will happen next . Do you think we are done . I feel like i should get a royalty for this one, do you think we are on top of the mountain or the meter horn the materhorn . Jumana a review at vanguard is we do not think we are done yet. Guy the bank of england, a couple more hikes still to come . Jumana one more hike, maybe two. Are worried about wages and the stickiness of inflation so the terminal rate is a little higher than where it is today. Guy we did this months ago. In terms of royalties, do you think there is a danger they break the economy . Is the race to 2 are we going to get to 2 or is today an admission that we cannot get to two percent without doing too much damage . Jumana we dont know that answer. We know the scenarios of hard landing, no landing or soft landing have played out. Can we get to 2 . Of course. Can we get there with a soft landing . In other words, no recession . Our view at vanguards we do not think so. We think a recession is the intermediate phase to Something Different which is likely to be a mild recession. We are not talking about a hard landing but we are talking a landing which involved some costs. Alix the big difference is growth was upgraded here at the fed and not at the boe. Who gets to cut first . We are pricing out 50 basis points of cuts now as indicated by the dot plot of the fed. Will the boe have the same luxury . Jumana that will depend on a lot of things. The growth point you mention is important because we see more fiscal and you lives in the u. S. Compared to the u. K. If you look at the fiscal impulse, our work shows that we have had more fiscal impulse through 2022 and 2023. The one thing i will say is the fed has a history of being more activist. They go up quicker and down clicker and down quicker so that may play into what we see next. Guy what is your expectation for what happened . How big do you think the gap will become between what happens in the u. S. And what happens in europe . The central bank of greece is talking about cust being the next move. The ecb does not want to admit that but the fed feels like it is miles away from that. If the bank of england cuts first, what impact will this have . Jumana that will have an impact on the dollar. That is where you will see it first on currencies. You will see it in capital markets. We dont know yet. It depends on how the stickiness plays out. If you think they are looking at inflation today, but also in the future, in the future, it will be determined by growth. It is not obvious that we will see cuts first in europe. Alix i appreciate you. Thank you for joining us. Jumana saleheen of vanguard. More on the question of the day, are we there yet . Caroline simmons, ubs u. K. People investment officer. As we hear more, you have the Swiss NationalBank Surprising with a right. Here is the president on the choice. Inflation pressure can lead to longterm flag longer than a few months ago. The horizon is not below 2 . The other factor is monitored killed monetary condition is likely tighter than a few months ago. Below 2 at the moment gave us the comfort could not change Monetary Policy at the moment but eep licy conditions unchanged. The first time you connected your godaddy website and your store was also the first time you realized. Well, we can do anything. Cheesecake cookies . The chookie manage all your sales from one place with a partner that always puts you first. we did it start today at godaddy. Com is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. For 10 years, debt was priced way too cheap and you were forced to go into equities. Basically that subsidize a massive amount of returns. Guy the copresident of Asset Management eating a few minutes ago it easy global credit form taking place in london. When it comes to the rate story, now you know what the said and he of england said so, are we there yet . Joining us now is caroline simmons, chief u. K. Investment officer. Nice to see you. The bank of england and the fed pauses. Are we there yet . Are we finally at the end of the rate hiking cycle . Caroline possibly. We thought we were but we didnt think the fed would move the dots as much as they did. Our view was sort of one and yesterday. We thought the bank of england would move today and that would be it. They did not so there is potential they will still do one more. The question is, why did they not do it today . I think it is bigger than you that in have to do with the slowing of the economy. And if it is slowing faster than they were expecting. Maybe they dont need to hike again. Alix basically, our view there because inflation is no longer the target . Or are we there yet . If the boe is more on the latter, what does that do . Caroline for the u. K. , it is more we are worried out growth which is why we are slowing coming off. For the u. S. , it was that it is ok and the u. S. Economy is quite strong. Thats is why we saw the moves we saw. For us, we stay with fixed income and yields are attractive. Theres plenty of room until you get to the breakevens. If things are worse on the growth picture, which lets face it, growth is going but we just dont know how much. Guy there is an argument that says the bank of england is not brave enough to do the damage necessary to get inflation down to 2 . The journey from here to 2 is quite a long one. Especially when it is already quite weak. If that is the case, do you think they are prepared to live with 4 or 3 for much longer . If so, what are the implications for investors in that world . Caroline i think 4 might be a bit higher than what anyone might be comfortable with. Above 2 is probably ok versus below 2 which is what we had the last decade. We have to think about what is driving inflation. If they raise Interest Rates today or they do not, it takes 18 months to have its full impact. We have external shocks and prices like oil. What it means for investment is if you have inflation staying slightly higher than target, but within a range, then that can actually ok for equities. If you have consistently high and concerns about inflation not being able to be stabilized, that may not be so good for the equity market because you would expect the bond yields to continue to rise. Alix i cannot believe i will say this but if we go back to the mountain thing, tabletop or materhorn if there is proof you said this before guy if anyone wants to email me, i can provide proof. Proof can be easily demonstrated. Alix caroline, you are an investor. Which mountain are we on right now . Lets go to just u. K. Assets for the moment. How do you invest on that . Caroline it depends on time frame but we are expecting tabletop until q2. Guy this is not higher for longer. When the cuts come, how quickly do they come . Caroline it depends on where the growth appears. Our view is for the u. K. , you will probably get because of 50 to 100 basis points over the course of next year. It is a gradual decline rather than we are in severe recession and cut. Alix what does value do in this world and where globally is the best place for that . Caroline value general release should perform well when yields are rising and generally should perform well when yields are rising at the growth is rising, or when inflation is consistently above 3 . The area is particularly interesting for places like the energy sector. You need to be careful about banks which are technically a Value Segment but also Interest Rate sensitive. You have to get through the years before you can allow the valuation to unwind. You can have value in emerging markets and in some asian regions as well. Guy do you like all stocks . Caroline we do. We have a preference particularly for globally and the u. S. I like them on the u. K. Side. We have a view that oil stays around 95 for the next 12 months so that is quite supportive. The cast yields on these are phenomenal, double digits. Alix do you think oil can close the gaps with the oil price . Because oil markets here in the u. S. Have closed the gap. Caroline i dont think they have closed the gap as much. It is one of the big conundrums. The share prices between oil and gas prices have been different. There is an element of esg and uncertainty around oil prices. I do not think the gap closes fully. Alix thank you so much. We really appreciate it. Caroline simmons of ubs. We want to clarify some mountain stuff. We talked about mountains june 27 and that is when i had no idea what guy was talking about. And the huw pill speech was august. Guy august 21. Almost the exact same. I can send anyone who is ibing you a time stamped question of the day that comes off our video feed from the 27th of june. Huw pill on august the 31st. Alix you should do a package about this and put it on social media. Guy i agree. I may need help on that. I can do media. Alix i was thinking of media. You want to move on . That is fine. I was going to say post it and send it to the boe. Coming up, alex murdoch announces he is stepping down from the head of his media empire so more on the impact of that next. This is bloomberg. [announcer] if youre thinking about earning your degree online, snhu can help you get there. I felt supported throughout the whole process, even from the first call. [graduate] my advisors consistently reached out and guided me along the way. It was like i was talking to a friend, like someone that i had known for years. The instructors were very helpful with everything that i was going through. [announcer] well be with you from day one to graduation to your dream job. It all starts the moment you find your program. [announcer] go to snhu. Edu to get started. Alix big news in the media world. Rupert murdoch stepping down from box court. He is handing the reins to his son. Joining us now is Bloomberg News reporter gerry smith. However, he is still cheap emeritus. What does that mean . Jerry he put out a letter saying he would be very much involved, visiting corporate offices. He made it clear that his health is good and he will continue involved even though his title will change. Guy in terms of what this means for the way businesses run and the effect this big business this business can have, things have changed. He has been one of the most controversial figures in big media for generations. Phone hacking and the list goes on and on. Does this now change . Is this a less controversial organization without mr. Murdoch senior at the home . Gerry the news solidifies locklins control over the entire empire. To the extent that laughlin and roofer are still in touch, it is hard to see changing. Alix in terms of strategy or how fox approaches 2020 for . It is hard to understate how important for murdoch was along with the likes of turner, etc. , in shaping media as we know today and politics. Gerry the timing is interesting because you have a big 2024 president ial election with donald trump still the leading republican candidate. There is a relationship between fox and donald trump. For example, where fox had a debate and try to bring donald trump used for show up. Rupert murdoch had huge influence in not just the media world but the political world. This does change things but i do not think it was a huge surprise to investors. He is 92 years old and had already handled the succession question when he handed the r eins to locklin lachlan. Guy this is succession. It is amazing to watch. Thank you. Gerry smith on the expected exit of mr. Murdoch. The european is up next. Way fascinating day for european assets. Every sector in negative territory. The bank of england is pausing. Who knows which way they will blow next . But yields continue to climb except for the front and in the u. S. But nevertheless, equities under pressure over here, fixed income under pressure, bonds under pressure. The close is up next. This is bloomberg. With your hearing, if you start having a little trouble, youre concerned that its going to cost you money. To this day i only paid what i had to pay for the device. When i go back everything is covered. Theres so much youre missing by not having hearing aids. well find you a hearing aid that fits your lifestyle and budget. Unlock your riskfree trial during our limitedtime sounds of autumn event. Call 1800miracle to book your appointment today. Guy it is a sea of red here in europe. The effects of the phantom bank of england rippling through markets globally. The bank of england has paused. Let me show you the session, and europe. We are down by 1. 29 percent. Keep an eye on what is happening here, from a technical point of view. It is getting interesting and i think the market continues to see a bumpy september. Lets talk about single stocks, bnp paribas, the effect has been really dramatic. The stock has been hit hard. Today it is being unwound ferociously. That stock is down by 20 . Taylor wimpey is down. 04 . There was a call by the governor at the bank of england, there are all kinds of factors in the mix indicating the bank of england is not quite done. You have next, and upgrade their. That stock is responding clearly to the upside. It speaks to the narrative how confusing it is to read what is happening in the u. K. Economy. The u. K. Consumer continues to hold up. There is wage growth, lets talk about the picture as to what happens next. On friday, france and germanys pmi data. It has been pointing to a recession for quite some time. We will talk to Chris Williamson tomorrow. You have the u. K. Pmi, but that his Rearview Mirror stuff. You have the s p pausing. What is the bank of japan doing . Its alix if they dont do anything in the next few hours what did they have to look forward to in the next few months. Thank you so much for joining us, we really appreciate it. What do you expect from the bank of japan . I expect no change, guy if the bank of japan does not move soon, are we in danger of missing an opportunity to normalize rates . To at least get back to some degree of normality . Thats an interesting point. I dont think they will miss their opportunity at this moment , there will be a moment for them where they can focus on quality. Alix they yanis at 148, for dollaryen. Do we get that in a forceful way . I think the yen is not depreciating as quickly as it should be. Maybe we will see more diverse comments coming, but i dont think they will conduct an intervention this time. Guy what is your expectation with what happens with the dollar . The yen is down while the dollar is stronger. Do you think we will get intervention in the future . What tools can the bank of japan use if it doesnt change policies . They dont have a lot of firepower for that. The japanese yen dep