Some are saying it is a series of management missteps catching up to fedex right now. Guy i think the fact that the president is going down the sanctions route rather than taking a route which could become a little more connected is probably why we are seeing oil come off a little bit. Doesnt mean saudi wont go down that route, but brent crude, as youve indicated, well markets are lower. We are down by 0. 8 . A reversal when it comes up to the market from a sector point of view. We are just waiting for the fomc. We are barely budging. Eurodollar just a little lower. Will today be dollar positive or negative . Saying, it iswere Federal Reserve decision today. The committee is expected to cut rates 25 points. Carl riccadonna is with us now. Will be first question to the fed chair today be about repo markets . Carl i think theres a good chance of that. I dont think we should look for anything on the repo facility or what they are doing to try to contain the situation in the official meeting statement, but i do think at the start of the press conference, jay powell will probably comment on this, and this is obviously going to be a big focus in the q a as well. While it is not likely to be in the meeting statement, i would keep one eye on the new york fed website to see if the open markets desk actually issues some kind of statement concurrently with the fed statement. We seen that in the past. Theres no guarantee, but often when very technical things are happening in the marketplace, you do see those kind of joint statements released. Guy im assuming the focus will not be on Interest Rates, but more on the Balance Sheet. Carl well, during the questions about what is happening in the repo market, i think there will be some questions about the Balance Sheet. Obviously, back when bill dudley was president of the new york fed, he basically said we will shrink the Balance Sheet until we smell smoke, and that is definitely what we are seeing now. We draw these parallels back to 2008, but it was a very different environment than. At that point, there was a crisis of confidence, of banks afraid to lend to one another and other financial asked her to other financial institutions. At the current point in time, these are more technical issues developing because of Balance Sheet management and whatnot. They will have to take action to keep this under control in the shortterm term, and then unveil perhaps a repo facility or some modest expansion of the Balance Sheet later this year to contain the longer run, but a very different environment at present compared to 2008. Vonnie you will be monitoring the situation all day long. Dont forget, the decision at 2 00 p. M. Eastern. Bloombergsnna is chief u. S. Economist. For more, we are joined by ethan harris, bank of America Merrill lynch head of Global Economic research. The repo market obviously less systemic than in 2007. It is about 30 of the treasury market. Will the fed address it today . Will we see some kind of standing facility started . Ethan just to add to the previous comments, the story today is that new regulations that require banks to hold tremendous amounts of liquidity have created an environment where liquidity shortage can be quite stressful on the system. The fed has just discovered where that threshold is. They really have to get more reserves into the banking system. They are doing it initially with overnight operations, but i think they are not quite ready at this meeting to discuss exactly what they are going to do. Going forward, they have to start increasing reserves again. They need to do kind of a hownical qe to recalibrate big they want bank Balance Sheets to be. Otherwise, we will get more days like this where rates spike. It is a technical issue. It is not a sign of some fundamental issue in the markets. Theres no rush for the fed to do anything, but in the coming month or so, we will see them roll out a new plan that recognizes this. Vonnie so theres no credit issues underlying any of this potentially, yet yesterday the fed injected 53. 2 billion worth. Today, the full 75 billion. How many more days will this be necessary . Ethan i think they have addressed the problem now, or put a pretty big bandaid on the problem for now. Adont think they need to do significant additional injection now, but they need a more permanent solution. They need to recognize that everyone had been wondering, what is the new Balance Sheet . Does it need to be really big or big . Ately now they are finding out it has to be quite big because banks want to hold high levels of reserves because of all these liquidity and Capital Requirements imposed on them. They are now learning through finding the smoke here, as you mentioned earlier, that theyve hit that threshold. Again, big bandaid for now. More lasting solution later. Guy ethan, everybody is playing this down. Everybody seems to be unconcerned, saying it is largely technical. 2008, 2007, alike little bit along those kinds of lines. If you look at the overnight lending last night, 12 billion went through at 9 . That is right at the extreme on the secured overnight, but nevertheless, 12 billion went through at 9 . Somebody is hurting out there right now. Ethan theres absolutely pain out there, and im sure theres a lot of upset people at the rates market, but this is a oneday kind of funding shock. Some people must have lost some money on this. But again, what you worry about is if there is something more systemic. Is there a flight to quality going on . Are people losing faith in the credit markets or Something Like that . I really think that even though this looks very dramatic, it is not 2008. The world is very different now. We knew that at some point this would happen because the fed is doing an experiment here. They dont know what the right size of the reserves is. They just found out in a pretty dramatic way that reserves have to be better, but that is a problem that can be fixed easily. Fedsthan, the credibility is on the line here. One thing you expect the central bank to be able to do is manage the public is manage the plumbing. It is a fundament to aspect of the job. It seems to have fallen over on this one. How important is this for the feds credibility that it needs to get this right . Ethan i think that is a valid concern. What the fed needs to do, and normally they need to do continuous planning and be ready for these events, and it doesnt feel like they were that ready for this. It does add to a broader concern that the fed communication has been very awkward lately. This big debate about going 50 basis points in july, which i thought was a totally ridiculous actuallyhat the fed fueled with some of its statements. This is a technical issue, so it is not nearly as important as some of the communication issues around Interest Rate policy, but theres a little bit of fumbling going on there. Vonnie we had a new variable this week when it comes to rates, and that is obviously Higher Oil Prices. It didnt last very long, and it is probably too late for the fed to factor into the dot plot or into its projections, but what will it cause the fed to have talked about yesterday and today. Yesterday and today . Ethan we are in a world where the fed wants higher inflation, so they are not worried about Higher Oil Prices as an inflation stock. They are worried about it as a shock to the spending power of the household sector, that higher prices will reduce peoples ability to spend on other things in the economy. , this is margin another slightly dovish push to the fed. But it is small. We are talking about moving in at prices that come up for us, didnt change our forecast for u. S. Growth. It is just another nudge towards a dovish attitude by the fed. Vonnie stay with us, ethan harris. Lots more to talk about. Ethan is bank of America Merrill lynchs head of global comic research. Lets check in on the first word news. Heres viviana hurtado. Viviana President Trump ordering tougher sanctions on iran days after strikes on saudi arabias biggest oil facility. Secretary of state mike pompeo blaming the attack on iran. After exiting the 2015 nuclear agreement, the u. S. Imposed sanctions on much of irans economy. President trump says he will appoint the state department hostage envoy to be his new National Security advisor. He will head efforts to secure the release of american hostages, including those held by north korea and iran. U. S. Home construction surging in august at the fastest pace since 2007. For future construction housing permits also rising to a 12 year high. Lets go over to london. Thats where Boris Johnsons government is back in the Supreme Court for day to of those hearings for day two of those hearings on his decision to suspend parliament. Judges asking for a statement of what johnson will do if he loses the case. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im viviana hurtado. This is bloomberg. Guy thank you very much indeed. Stay with bloomberg. We are going to bring you live coverage of the feds latest policy decision, followed by chairman powells News Conference. It kicks off 2 00 p. M. New york, 7 00 p. M. London. More on what we should be expecting next. This is bloomberg. Expecting next. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. Lets get more on those markets with emma chandra. Emma Global Equities drifting somewhat as we await the fed decision in the u. S. Later today. Look at the stoxx 600 here, essentially flat. U. S. Equities opening a little bit lower, but the s p 500 down a good 0. 2 . Investors also digesting that slashed profit forecast we saw from local bellwether fedex. It is also a big weight on the dow, the secondbiggest constituent on the dow. We are also seeing the dow transportation average fall some 1. 6 . Fedex is falling a good 13 today, headed to its worst day since december 2008. We will talk a little more detail about fedex and the stock of the hour later. A weak forecast also taking down 3. 8 . Falling some of got richemont ive got richemont falling after it sees its top brands losing traction among wealthy chinese. In other asset classes, oil stabilizing a little bit today after those roller coaster two days. Saudi saying they have restored about 40 of output now. Turmoil seems to have moved to the money market. The fed having to inject cash into money markets yesterday and today. Vonnie thank you. Harris,th us, ethan bank of America Merrill lynch had of Global Economic research. You said a hawkish 25 basis point cut today. You think the economy is holding up. We may be seeing that in the data. Corporate america, however, not so much. Trade confusion and so on. We are seeing fedex down double digits today. Just how is the trajectory for the u. S. Economy . Ethan you really have two economies. You have the economy exposed to trade, which is going into a mild recession. You can see it in the Business Investment plans by manufacturing firms. The rest of the economy looks fine. Overall, we are looking at growth this quarter of 2 or maybe a little higher. We are going to slow further. The trade war shock takes time to develop, and we do think we will slow down to about 1. 3 growth in the fourth quarter, but the trade war is really just chipping away at the economy. It is not a dramatic, overwhelming shock. It is more of a gathering headwind. Guy as a result of this still a midcycle adjustment from the fed, or is it something more . Ethan well, i think it is a midcycle adjustment. Lets look at what the fed has actually done here. Despite all the discussion about how the fed should have done 50, and the president tweeting they should cut to zero, the fed has actually been very proactive. Theyve never cut 25 basis points within economy this healthy and with markets this healthy, and they are about to do another 25 basis point cut, again, preemptively before you we aret weakness expecting in the third and fourth quarter. This is a pretty aggressive attempt at the fed to make sure we dont get anything close to a recession. I do think there is more to come, but i think the next cuts are going to be much more dependent on the data. Now that the fed has moved ahead of the normal, they dont want to keep sprinting ahead of normal. They want to stay one step ahead. That means react to the dataflow. If data weakens, we get more cuts. Weve got two more cuts in our forecast. If the economy continues to hold up, we may get no cuts from the fed. Vonnie so what is a fair price on the 10 year these days . Weve been bouncing around a lot. Theres been a 40 basis point range. Problem with, the the bond market is that youve got these crazy divides this crazy divide in the world. The u. S. Outlook looks fine. Inflation is a bit low. Growth looks pretty healthy. Beview on the 10 year would as the trade war hopefully abates a bit next year in an election year, and as this soft patch we are experiencing now get an bit, we probably upward drift to it, but i think the forecast on the 10 year is extremely difficult right now. Guy ethan, final quick question. Values caught a bit over the last few days. Would you buy that or fade that . Ethan i think that we are still in a period of weakening growth. I think the focus can be more and more on the dataflow. Im kind of in a cautious mood in general on risk in the economy. Thats the way i thing about the markets now. We are still a little bit biased towards the risk off. Vonnie ethan, we much appreciate all of your insight. That is a ethan harris, bank of America Merrill lynch head of global iconic research. On the terminal as we lead up to our special coverage of fed decision day, 2019 is shaping up to be one of those rare years, it seems, that global stocks, bonds, commodities, and Foreign Exchange markets are all poised to deliver positive returns. Still a few months to go, but that is what it looks like right now. Check out all the charts featured on bloomberg tv using the function gtv. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. Time for our muni moment. Taylor riggs joins us from San Francisco with a guest that is bearish on the sector. Taylor youre right, and that is none of her then tom kozlik, head of none other than tom kozlik, head of municipal strategy and credit at hilltop securities. I scoured your latest research note, and your pretty bearish on the outlook. What is the biggest Downside Risk you see . Tom thank you for having me, taylor. I appreciate the time. We assigned cautious outlooks to both the State Government and local government sector. There are issues of cybersecurity and infrastructure, all kinds of things in the news recently that are impacting state and local government. The Biggest Issue we see is funding for pensions. We think that is something that not only near, but the medium term, is going to impact credit quality for state and local governments. Taylor what is the biggest risk if we do get a recession in the next few years . Tom all states are going to have an issue whenever the economy turns. The good thing for the state sector is that State Governments are sovereign entities, and they have a good amount of control over their revenues and expenditures. That control is really what is going to allow states to get through the next recession or the next economic downturn. It is not going to be pretty for some states. Theres going to be some headline risk. But that sovereign control is what is going to help states get through the next economic downturn. Taylor weve been talking about this pension crisis for 10 years, and frankly, states have gotten out of it ok. Why the concern now . Tom the pension issue, it is still out there. Its still important. Important. I think one of the big reasons is that State Governments havent done more because of the new fiscal reality, and it has been difficult for states to put more money into their pension plans. But it is an issue. Moodys published a report back in may that showed there are three states that, under a stress scenario, or a scenario where the equity market falls, they will lose their pension assets in four to six years, and another six states that will exhaust their pension assets years after that. Us thatmbers tell Pension Funding is definitely an issue, and it is definitely going to be impacting credit quality in the near and medium term. Taylor something we will continue to watch. Thank you. Kozlik, head of municipal strategy and credit over at hilltop securities. Vonnie thank you. It is time for a look at some of the biggest business stories in the news right now. Buildings leased to wework are on the ropes. The Company Recently slashed its valuation and business prospects. Shares of fedex down nearly 14 now. The begich carrier slashed its profit outlook. It is the latest sign trade tensions are dragging down some of the u. S. s biggest companies. Fedex will reduce the size of its cargo jet fleet to meet expectations. Workers says gm may have jumped the gun, and may have to cover Workers Health insurance until the end of the month. Since the strike began on sunday, there have been no progress in talks. That is your latest Bloomberg Business flash. Guy thank you very much indeed. Saudi arabia reassuring its customers that crude exports will keep flowing as normal after the attack on its oil fields over the weekend. Thats part of our conversation with the saudi finance minister. That is coming up next. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. Vonnie we have some Incremental Oil news right now. We are waiting for a News Conference out of saudi arabia, but we are also Getting Department of energy oil inventories. The market looking for a draw down of more than 2. 5 barrels. In anticipation of both of those events, wti is at 58. 25, down about 2 . And we got a build, which we may havent dissipated given the news over the weekend, of more than one million barrels. 1. 0 6 million barrels. The market was looking for a drawdown. In terms of refinery utilization, that was down by 3. 9 . The market was looking for that to be down 0. 3 . Gasoline inventories up by 9. 6 million barrels. Not as much of a build as the previous week. Nevertheless a quite strong build. Oilaps to be anticipated, is down, but trading now at 58. 33 a barrel. Saudi arabias finance minister says the saudi aramco attacks had zero impact on saudis company willthe continue to spend on defense as needed. He spoke at the saudi arabia conference in riyadh. We are back online, so the oferruption is, in terms economy, in terms of revenue, zero. Couple ofes for a days before we are back online so absolutely no im packed no impact, either on spending or revenue, as you look towards the end of the year . Absolutely. What about additional allocations for defense . Is that something you would be looking at . Generally, if we would cut our budget as of now, there is significant allocation to all of the economic sectors, but also to our needs for military, including defense. Theres no change, and we will continue spending as we need on our defense and protection. Yousef you look at a world where there is increasing economic uncertainty. You have the geopolitical risks in this part of the world. You have the fed and other Central Banks easing. How confident are you that you can reach your targets for growth . Guest one, you need to remember that we have embarked on significant reform, economically and financially. That is yielding results, and we are seeing that result in the economic response to the last two,that is yielding results, ae are three years reforms. Ing with the oil growth dividend on decisions would depend on decisions made. The gdp is growing. [indiscernible] is going to go at 2. 9 . So we do see an impact. We are seeing real results happening. Guy that was the saudi arabia and finance ministers the Saudi Arabian finance minister mohammed al jadaan, speaking with bloombergs yousef gamal eldin. Yousef is with us now. . S it a surprise itsef government is making clear they will be able to recover much of their output and much of their capacity, and ultimately youve got everything done and dusted by the end of the year. The key concern here, bringing reduction on much faster than the capacity that the kingdom has. We are awaiting this press conference that is absolutely critical. It is expected to get underway imminently, where the departed of defense, the Defense Ministry and the kingdom is going to be presenting evidence of alleged iranian interference and coordination in doing this attack on saudi aramco. Theres been a flurry of diplomatic activity. We hinted at this overnight. U. S. Secretary of state speaking with saudi counterparts and the United Arab Emirates. The Saudi Crown Prince has been on the phone with president s of france and south korea. It shows you that even though the Oil Price May give you a sense that this is over, it is far from over. Vonnie and obviously, weve got the president here in the u. S. Tweeting out that he has spoken to the treasury secretary and asked him to substantially increase sanctions on iran. We are also getting news out of russia from ifx that russia is saying tougher iran sanctions are not a solution. What is the major risk that this escalates and becomes another front in any fight in the middle east . Yousef this is going to be a very difficult line to walk. The kingdom here, in the conversations ive had on the ground, needs to show theres no appetite for a wider conflict. There is a recognition that an attack could easily escalate into a broader war in the region. So what the saudis have done here for the most part is try and export this into a global issue, which is why we are seeing all of the dip medic activity coming through. The change in the position of the National Security advisor and these new, preemptive sanctions from the u. S. President to show you that there is additional momentum coming through that could lead to some form of climax in the coming hours, but again, decisions dont appear to have been taken just yet given how risky it is to set off the smallest set of dominoes around geopolitical risk in this part of the world. Guy is there a sense that america has saudis back . There is a conversation taking place in washington about a iscerned that the president basically outsourcing u. S. Foreign policy to saudi. What is the view from riyadh . Issef thats not how it being dealt with here. It is being seen as a strong, collegial relationship thats lasted many decades. Its had ups and downs, no doubt, but its worked fairly well. Oilably, with u. S. Production now making a turn in its own direction, that has kinda been put into question, but still, the axis of stability in the gulf still goes through saudi arabia. The u. S. Has a lot of assets in the gulf. It is not quite the prism that is seen through here, but having said that, the kind of influence that the saudis can carveout in the United States is still very much respected. But you need more than just the United States, if you think about the countries that have exposure to oil from iran, especially in asia. Think along the lines of china. It really adds a whole new angle to this conversation. Guy thank you very much indeed. We are looking forward to see what comes out of that press conference. Yousef gamal eldin joining us from riyadh. Lets check in with the bloomberg first word news. Here with the details, viviana hurtado. Viviana the u. S. Federal reserve is likely to cut Interest Rates for a 2nd street meeting, but policy makers may be reluctant to forecast further meeting, but policy makers may be reluctant to forecast further cuts. Thats according to a Bloomberg Survey of economists. President donald trump may not be happy with another quarterpoint cut. Last week, he called fed policymakers own heads. He said policymakers boneheads. He said policymakers should scrap rates to zero. Revoking california and mission standards would have a major impact. Several other states follow its lead. Ofy represent about 1 3 automakers. Israel, neither nonyahoo benjamin neither Benjamin Netanyahu nor rival benny gantz can form a coalition government. In india, the government agrees to ban ecigarettes. The manufacture, sale, and import has been prohibited. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Ims of the our tonto. Im viviana hurtado. This is bloomberg. Guy thank you very much indeed. We are waiting for the saudi press conference in riyadh. Up next, we will talk about how airbus is managing the global slowdown. My interview with the aircraft officerchief commercial is coming up. Vonnie and on the David Rubenstein show, nba commissioner adam silver discusses his role and how the league should benefit from changing Sports Betting regulations. That is at 9 00 p. M. New york time. This is bloomberg. Would you like to own a piece of the betting profits in the league . Not the prophets. I think our not the profits. I think our proposal, it is a bit controversial, but we have received something ive called an integrity fee. Some people have said that is just a euphemism for getting a royalty. I say ok, call it a royalty. Guy the saudi Defense Ministry is holding a briefing in riyadh on the attacks that place on the Worlds Largest crude processing facility over the weekend. Saudiledg led by the coalition in yemens spokesman. He is basely saying the attacks unquestionably were sponsored by iran, displaying a number of pieces of equipment damaged that have been labeled as iranian. The saudis also indicating they have the ability to defend their facilities, and they are making that absolutely clear. This is some of the equipment that has been recovered as a result of the attacks. Remember, some of the weaponry made it and successfully attacked the facility. Other weaponry fell short, and some of that has been recovered. As you can see, it appears to be clearly labeled at this point in time. Thisll continue to monitor , but the indications are at the moment, the line that really stands out for me, the saudis are saying this was unquestionably sponsored by iran. Vonnie fascinating to get a look at some of the weaponry and the drones that saudi says were used. Obviously, we are getting maps and grid details on the investigation into the aramco attacks. Lets bring in the bloomberg head of National Security coverage bill faries out of washington, d. C. This feels like there is a bigger play here. Do we have any idea what it might be yet . Bill it is very interesting that so far, our read art our read out from this press conference has the saudis saying this was a choreographed or sponsored by iran, but i havent heard them yet, and perhaps i missed it, but they havent said yet that the attack came from iran. There are a number of places it could have come from. There are proiranian militias in iraq. It could have come from a couple of other places. There is a difference between saying it was sponsored by iran and saying the attacks were launched from iran. That is something we will all be looking out for. Secretary of state mike pompeo is expected to land in saudi arabia within the next couple of hours. Obviously he will be following up on this presentation by the saudi Defense Ministry. I guess the big question is the more you point the finger at iran, whether they just sponsored it or launched the attack, the question immediately becomes, what are you going to do about it . There has been some hesitation on the international communitys part to point the finger too quickly at iran because of uncertainty over what they will do next. Do you launch a retaliatory strike . Do . Already do you do Something Else . Theres criticism from Donald Trumps supporters that if he doesnt do more than in act tough sanctions, he risk making his administration in the United States look weak here. Theres a lot of choreography going on behind the scenes. This is probably just the first part of what i think is going to be an unfolding process as International Governments try to put more pressure on tehran. Guy one of the things the oil market will be trying to figure out is how well defended our saudi facilities. We seen the fact that they clearly werent. The question is, are they now . How critical a part of the calculation do both saudi and the u. S. Have to go through now depending on how there will be a the pentagon if there will be a counterpunch depending on if there will be a counterpunch . Bill they have touted their access to Patriot Missile systems and other means to supposedly protect them from just these types of things, and they clearly got hit hard. I think markets and geopolitical strategists are kind of reacting to that in a surprising way. They just didnt think saudi would be this vulnerable. I dont know. They can say they are better prepared now, that they are rounding out their defense the strikes i think show in fact they were not ready. I think some of their hesitation in directly accusing iran for launching the strikes may be because they know that requires a response from their part. It is a small, tightly packed region there. Weve already seen the United Arab Emirates backing away from the saudi led war in yemen. I think this also gives them caution. Thatan could lead a strike does so much damage to saudis crown jewel, where does that put a city like dubai if they get on the wrong side of iran . Theres a lot of serious thinking going on in the region about what an escalation would mean and how serious the cost of that could be. Vonnie to your point, the Saudi Defense spokesperson saying that the attack came from the north. It feels like bed is a very careful use it feels like that is a very careful use of words. Our correspondent bill faries there from d. C. Fedex shares are plunging after the company cut its forecast. , chandra has the details emma chandra has the details. Emma cutting its profit forecast for the third time this year, blaming the economic slowdown and trade tensions. Ceo fred smith calling out policy uncertainty on the earnings call, as he has done in prior calls. Shares being hammered, and we are now looking at fedex shares negative on the year. We can look at why this was an important story, because fedex is seen as a global bear whether a global bellwether. Ahead of had peaked the prior two recessions. At least three analysts downgrading the stock. We should be able to show you how those and list price targets have also been falling on this news. The analyst over at citi culling this cut to the outlook drastic. That is your stock of the hour. Guy thank you very much indeed. Airbus is also watching the Global Economy very closely, and the slow down. Earlier, i spoke to the plane makers chief commercial officer askedian scherer, and why the risk concerns arent showing up in their forward numbers. Christian it doesnt show up in our numbers because we are doing a 20 year forecast, and we have experienced in our industry great resilience of traffic growth towards occasional negative influences. So we do continue to see overall , Economic Growth of 2. 8 . That in itself fuels traffic growth on average of 4. 3 . It is the resilience that makes us confident. Guy ok. The trade narrative, though, is not going away anytime soon, it seems. It seems to be dragging on and on. Theres now a possibility of a new front. Airbus has lost a wto dispute with boeing. The understanding is that as soon as this ruling is made public, the white house is going to hit europe with a series of tariffs, including on aircraft, and a range of goods including luxury goods. It effectively looks like the start of a new front in the trade war. Is this how you see it as well . Is this the Trump Trade War of europe beginning war with europe beginning . Christian it would certainly be negative if it actually translated into a trade war. We would see similar and probably higher barriers being built on the other cited the atlantic. What we do hope is that this is the premise of negotiation, of people coming to the negotiating , burying the hatchet, and moving forward. There is no gain for any side of the atlantic in a trade war around aerospace. Airbus procures 40 of what we do in the United States. We produce aircraft and employed thousands of people in the United States. An impediment to airbus busines s in the u. S. Would have immediate ripple effects into the ecosystem of aerospace, but also to the consumer by issue of higher ticket costs. Guy just to change direction a little bit, do you worry that an escalation of tensions in the gulf, a military conflict in that region could affect demand . Theres talk of a war in the gulf. Emirates is about to potentially complete in order. Are today talking about a 20 year forecast. History has proven, and the early 1990s, that the industry rebounds very, very quickly, and without any negative effect that a crisis of such nature has on global traffic and Global Economic growth. The main growth arena in our ,ndustry is going to be in asia it is then itself, bulk of the growth that we are going to experience in the next 20 years. Guy welcome back. Time now for futures in focus. Joining us from the cme is the managing director for futures and commodities at btig. A lot of conversations about the funding squeeze and the repo weve seen from the fed. Has it got people worried . Guest it does, and theres clearly been a lot of talk about that. Some people in the market were wondering even about repose from the fed since we havent seen that since before the recession. Theres a lot of talk about what it is, where the demand came from, but in the end, you can sum it up that there is a demand for liquidity, and that banks need in bunny and the fed is going to supply it the banks needed money and the fed is going to supply it. Is it going to be a more prolonged thing . Will that force the fed to come up with a more permanent standing repo facility like theyve been talking about quite a while . Theres been quite a bit of talk, and maybe this will be the impetus to get it done. Guy 25 looks baked in. Are people expecting more rate cuts coming after this one . Holly there is talk about more rates baked into the cake. Any are pricing in additional 25 basis points cut at the december meeting. If the fed really wanted to do something dramatic, given that the repo facility problem, given the trade tension, they could cut 50 today. Nobody is really looking for that, though. Guy thanks for your time. Holly liss joining us from the cme. Vonnie we are still counting to the feds rate decision. Head ofey, rafa bank ethics strategy rabobank head of ethics strategy, joins us next. This is bloomberg. Guy 30 minutes left in the european trading day. From london, im guy johnson. Vonnie from new york, im vonnie quinn. This is the european close on bloomberg markets. Guy the saudis pointing a finger vaguely in the direction of iran during the press conference weve been watching coming out of riyadh. Brent is trading down by about 0. 5 . We are waiting for the fed. That is the big decision weve got coming up. In thel of the action markets over the past couple of days, focus on the fed right now. A little bit of rotation away from some of the defensive names. Eurodollar pretty flat as well, down by 0. 1 . Vonnie here we have novartis stock. We are getting breaking news on it. One unit is halting distribution of all versions of the gen