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dot com. Slash. Imagine stocks fluctuating after briefly erasing losses. Right now, we've got the SMP five hundred index up one point to seventy nine, a gain there of one tenth of one percent. Down Industrials up eleven again, also of one tenth of one percent. The Nastack Composite index down three points, a drop there of one tenth of one percent. Minutes from the latest Federal Reserve meeting show officials were split on weather and in trust rate increase
is warranted soon. The tenure up six thirty seconds, Zeal one point five, Gold down three tents of one percent. Thirty nine ounce crude oil West Texas Intermediate now unchanged. I'm Charlie Pala. Fat's a Bloomberg Business Flash. You're listening to taking Stock with pim Box and Kathleen Hayes on Bloomberg Radio and Divine. I've had a reserve over how
soon to raise its key rate again. That is one of the elements it seems to emerge from the minutes of the July seven policy meeting, released just about eighteen minutes ago here on taking Stock on Bloomberg Radio. Let's bring back to the table now. Chris Lowe is chief economist at f t N Financial. So, Chris, if what do you what would you say about the odds of the FED moving in September moving in December? Based on
number one, these minutes? Right, so, even after a week employment report which they had seen, they were still thinking about the need to raise the key rate, right uh? And then also based on what you've heard from BEETE officials the last couple of days. Well, okay, we can start with they think the odds are higher than the market does. But the market is pretty much dismissed the rate hike this year, especially right away, so it is
interesting to see those odds readjusting after Dudley yesterday. Uh, my sense is that the odds are probably close to about in September, which might sound high, but my my thinking is that they really would like to get this done before the election, so they're feeling a little bit of pressure that sooner is probably better than later if they can get away with it. But at the same time, it still doesn't quite get you over because they are still worried about things. Uh. Two things that jumped out
at me in the minutes. First, Uh, they had they spent quite a bit of time talking about inflation, and they're just not convinced it's going to accelerate to two I think that's really important because after all, what's the point of raising rates if you never get to two percent inflation. The the other one is the discussion of risks overseas. Yes, Brexit is on the radar, but there were two other things they're watching as well. They're watching
bad loans at European banks. They're worried about the possibility that that could uh weigh on economic growth in the region, and of course that's something equity investors have been on too as well. And then they're watching China. They are still worried about China's far an exchange policy and the implications of Chinese debt, which has run up now to
a very significant portion of GDP. Chow, Is it possible that we're going to get uncertain events between now in September or even now in the end of the year that will preclude any action on the part of the Federal Reserve? I think it's likely. Uh. You know, when when you look back, the FED had every intention of tightening once a quarter when they made the decision to raise rates last year, which by the way, they made at the April meeting, and then they didn't get that
first rate out hike out until December. And of course now we've already moved out to September, so it's nine months later. So the reason is that at every meeting since December, there has been something going on overseas. Uh. And what's noteworthy about that is it FED officials Bob Kaplan, for example, in Dallas, are starting to connect the dots. Maybe we shouldn't worry about each one of these crises.
Maybe it's time to recognize that they're all connected, uh, that they're connected by virtue of the fact that global growth is absolutely disappointing. That means that there's too much global wage slack. That means that global inflation is low, global interest rates are low, and you know, if you follow that to the obvious conclusion, it means the need to raise rates just isn't what you would normally expect.
And at the end of a business, you know, Chris, uh and of course all our taking stock listeners will be speaking to Rob Kaplan, President Dallas FED a week from tomorrow at the Jackson holl Symposium. He'll be joining us live to certainly to talk about these very very issues. It's it's an interesting connection he's making in that way, Chris, in terms of in terms of the bond market, you know, and you look where things are. The work as a matter of fact that I just mentioned being above has
dropped to forty five point three. Clearly there's a little bit, at least from the FED funds futures traders standpoint, a little bit of a sense of huh. Maybe it's just disappointment that there wasn't more of a sign of the Fed reared up to raise rates or even considering September. As Bill Dudley from the New York FED was possible yesterday. Yeah, I think that's exactly right. You know, I read these minutes and that they still tilt towards caution as much
as they do. You know, there's there's never anything definite, but uh, you know the fact that they are still looking at problems that we know are have not gone away, particularly problems on bank balance sheets in Europe. I think that is a major issue, uh, which I can't remember the FED focusing on since the European banking crisis way back in and eleven, So it's it's noteworthy they're looking
at that. Uh. And by the way, remember too that there were two big European banks that they're subsidiaries failed the FED stress test, so that might be another reason they're on the fed's radar. Thanks very much for spending time with us. Chris Lowe is the chief economist for f t N Financial, giving us his perspective on the release of today's f o MC meeting minutes from the July six and twenty seven meeting, in which it seems as though the participants were split about increasing interest rates
sooner rather than later. You're listening to taking stock. I'm Pim Fox, my co host Kathleen Hayes and this is Bloomberg and in Focus. Brought to you by Willoughby's New York Cities boutique camera store for precision craft, hostile, blood and Mica cameras, plus a full selection of go pro action adventure cameras. Willoughby's at the corner of Fifth Avenue and thirty first Street,