Queen Elizabeth approves UK prime minister's request to suspend parliament

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Queen Elizabeth approves UK prime minister's request to suspend parliament

Brexit Party leader Nigel Farage weighs in Prime Minister Boris Johnson's request to close parliament in order to push through 'no-deal' Brexit. He says the closing of parliament is normal.

This is a rush transcript from "Your World," August 28, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, ANCHOR: Thank you, Shep.

And Fox on top of two major storms bearing down, Dorian, now officially a hurricane, about to wallop Puerto Rico with heavy rains. The storm expected to be a Category 3 hurricane when it makes landfall in Florida over the holiday Labor Day weekend.

Then the firestorm in the U.K. over Prime Minister Boris Johnson suspending Parliament, and the queen letting him do it. Don't look now, but Brexit is on, and the Brexit Party leader, Nigel Farage, is here.

Welcome, everybody. I'm Neil Cavuto.

The Brexit storm in just a moment.

First to the very real storm building just miles of our shores, with meteorologist Rick Reichmuth on just how big a punch this hurricane is packing, Rick Leventhal in Puerto Rico on heavy rains that could soon be whipping, and Phil Keating in Florida, where fears of that Category 3 storm have a lot of folks there bracing.

We begin with Rick Reichmuth in the Fox Weather Center -- Rick.

RICK REICHMUTH, CHIEF METEOROLOGIST: Hi, Neil.

So, yes, the radar picture -- this comes out of Puerto Rico -- this is their radar and gives it a really good sense of what we're dealing with. The storm was across the northeastern part of the Caribbean last couple of days. It kind of kept jogging towards the north and kind of recentering.

That really spared Puerto Rico the brunt of it. It also spared the storm from really big mountains that would rip it apart. So the storm staying intact, and it's going to stay intact. That means what happens next has now much bigger impacts for at least mainland USA.

U.S. territory here Puerto Rico also spared. Last couple images, that's where the storm is. It's going to continue to pull towards the north. And that means it'll continue to pull away from Puerto Rico, still some rainfall there, but that rain isn't going to be anything that's going to cause huge problems, although the eastern side of the island, maybe some spots picking up three to six inches of rain.

That will certainly cause some flooding, especially because of the weakened state it's still in after Hurricane Maria from a couple of years ago. That's a satellite image of the storm, pulls off towards the Northeast. And, as it does so, now the conditions become much more favorable for strengthening of the storm than we have seen over the last couple days.

Last couple of days, conditions were not very favorable and it strengthened anyway. Now we're going to move into much more favorable conditions. And that's why official forecast brings it up to a major hurricane by the time it gets somewhere here along the Eastern Seaboard.

The two most reliable computer models that we have run are still not in agreement. Because of that, we still don't have a great sense of exactly what's going to happen. One of our most reliable ones pulls this across the Florida Peninsula into the Gulf.

If that happens, that would mean we would have a landfall on the eastern shore of Florida and then eventually another landfall somewhere probably, maybe Panhandle of Florida, some way maybe over towards Eastern Louisiana.

Another option is that it gets pulled up by a weakness that's going to be left towards the north of this and pulls it somewhere and potentially bring some impacts to North Florida, Georgia, or the Carolinas.

So there's a lot of territory that we cannot rule out. We don't have a good idea just yet. What we do know is, there will be something very close to the Eastern Seaboard sometime this Labor Day weekend.

So many people, Neil, thinking they're going to be traveling and vacationing on Labor Day. Not going to be the case across these beaches.

CAVUTO: Oh, boy. All right, Rick, thank you very much, my friend.

People have been boarding up in Puerto Rico, as you might expect. We have got Rick Leventhal there in the middle of it all, San Juan -- Rick.

RICK LEVENTHAL, CORRESPONDENT: And, Neil, that drift to the east by this storm is a relief to the folks here, the three million residents who live on this U.S. territory and were devastated by Maria some two years ago.

They have been getting ready. And you can see the tarps on the windows here along the oceanfront and a lot of the stores on the main drag also boarded up. And we can show you our FOX storm cam. It's been lashed to that tree over there. We may not need it in this particular storm here in Puerto Rico, which is good news for the folks in San Juan, if conditions don't get worse.

But it does provide weather data and live images. And, Neil, if we show you the beach, I mean, there are people out there because it's not raining. So there are folks in the ocean, even though there are red flag warnings because the surf is considered pretty dangerous right now.

And off on the horizon there, you can see some dark clouds. It looks kind of ominous, but not apparently what the biggest fears were, that they might get slammed here, and that could trigger mudslides and flooding on the streets if they got up to 10 inches of rain that some had predicted.

So, good news for Puerto Rico, it sounds like, if this storm continues toward the east, but bad news ahead for the mainland and the state of Florida, perhaps I know Phil Keating is standing by.

CAVUTO: Indeed, he is, Rick. Thank you very much.

Let's go to Phil Keating right now in Miami with the latest on preps there.

Hey, Phil.

PHIL KEATING, CORRESPONDENT: Hi there, Neil.

Getting into the International Airport in San Juan, Puerto Rico, no longer an option for anybody on the island. You can't fly there either, not that you would want to at this point. All major air carriers canceled all their flights in and out this morning.

So, essentially, for most of the day, the regional and international terminals have been closed. As for the cruise vacations, the major lines, Carnival, Royal Caribbean, Disney, started changing their itineraries Monday.

Several cruises are now skipping San Juan, Turks and Caicos, and St. Thomas. And this is Webcam footage not too long ago of the port there in St. Thomas, where usually you can see one of those massive cruise ships, today, empty and rainy.

Several weeklong cruises changed their schedules, flip-flopping ports of call. Navigator of the Seas canceled it stop at CocoCay in Bahamas. Allure of the Seas totally changed its vacation crews from the Eastern Caribbean and those islands to the Western Caribbean, as did Symphony of the Seas.

The Coast Guard completely shut down all maritime operations in San Juan late yesterday. All of that remains closed. Things could reopen tomorrow. All depends on what happens tonight. As for Florida, people up and down the coast for the pay day or two have been stocking up on water and nonperishables, but still a few days out, and a lot of uncertainty as to where this eye hits the Sunshine State -- Neil.

CAVUTO: All right, Phil Keating, thank you very much.

So just how bad could things get? Remember, we're just revving up to the hurricane season.

Meteorologist Joe Bastardi with us right now.

Joe, what do you think?

JOE BASTARDI, WEATHERBELL CHIEF FORECASTER: Well, I will tell you what.

This has a classic bend in the track to the west, which is usually an earmark of a major intensifying storm, if you go back and look at -- I'm talking about the track in two or three days -- it's been moving east of north -- or -- excuse me -- more to the north. And it has avoided what we refer to as a Caribbean gauntlet.

At this time of the year, the Caribbean can be a graveyard of storms. But instead of continuing into the Caribbean, it's just in the extreme Northeast Caribbean, moving into the Atlantic. It avoided that.

Now, it's going to continue this northwest path over the next couple of days, and then turn to the west. And I fear, when it turns to the West, that's when you're going to see it become a major hurricane.

So there are two different computer models that are -- that we look at quite a bit, but the one that has it further north is usually the one that breaks down the big high pressure to the north too quick. We have noticed it over the years. It is a new version of that model.

And the other model is taking this right through South Florida, south Central Florida on into the Gulf. And I will tell you, one of my fears is, the 1947 hurricane, for those of -- we don't have the track there -- went into Fort Lauderdale as a Category 4-5, and then went back toward New Orleans.

Now, this one at this time looks like we're going to see some kind of landfall between Fort Lauderdale and Daytona Beach during the day Sunday or Sunday afternoon. But I think this is going to get back into the Gulf.

The ridge of high pressure off the southeast coast is buoyed by this warm water. So, in the wake of Erin, which is east of Cape Hatteras, when that moves out, that high is going to build back in. And when it does, it'll just point this storm at Florida.

And that bend in the track -- and you're going to watch it happen, folks, over the next few days -- northwest and then back to the west, that is a path is notorious for intensification.

CAVUTO: So what are we looking at season-wise?

BASTARDI: Well, the season itself is -- we don't expect a lot of storm activity in the Caribbean and in the main areas.

What we try to emphasize to folks is, storms will be stronger further north than they are to the south. And that's what you're going to see here. You saw that Barry -- Barry developed right off shore like that. And even Erin developed way to the north like this.

So what will happen is, in this season, the ones that try to come into the Caribbean, most of them will stay weaker than what they will do later on in their career.

Overall, I think it's a little bit below normal as far as what we call the ACE index, Neil, but I think the problem is in scattershot seasons, when there's a big high pressure over the Northwest Atlantic, the United States tends to have higher impact.

CAVUTO: Joseph, thank you very much.

BASTARDI: Thank you for having me.

CAVUTO: All right, Joe Bastardi.

Well, here's how big a deal this political storm in Britain is getting. The queen herself was called into action, and act, she did.

Why Brexit Party leader Nigel Farage says not a moment too soon.

(COMMERCIAL BREAK)

CAVUTO: British Prime Minister Boris Johnson wanted to suspend Parliament to force this whole Brexit move, just make it happen.

One problem, he had to get Queen Elizabeth to go along. Guess what? She went along. She did. She approved his suspending Parliament for upwards of a month to, well, close the deal, or at least that's the impression.

Brexit Party leader Nigel Farage joins me right now on the phone.

Nigel, always good having you.

What does this mean now? What's put in place?

NIGEL FARAGE, BREXIT PARTY LEADER: It's not, Neil, as exceptional as people may think.

We have a constitutional monarchy, which means that Parliament operates through -- through the -- not the power, but the auspices of the queen. So, actually, what Boris Johnson has done is, he closed the current session of Parliament, announced the reopening of Parliament.

The queen has approved. And on the 14th of October, Boris Johnson will lay out his new legislative program for the next year. It's a little bit like the State of the Union speech that happens in America. And it's all being portrayed as some sort of terrible trick that Boris playing on the British people.

It's actually a very normal thing.

CAVUTO: All right. So is there anything to stop the Brexit decision to move, to go ahead and bolt from the rest of Europe, deal or no deal?

FARAGE: Well, here's the big dilemma.

You know, how do we leave the European Union on the 31st of October? Do we leave with a clean-break Brexit, or do we leave with the withdrawal agreement that Mrs. May put to Parliament three times, and was three times rejected?

And here's my concern. Much as I think Boris has brought great optimism and energy to the job, things that President Trump has identified, it looks like he wants to go for an amended form of that withdrawal agreement.

And that would still leave us very tied to E.U. rules and would mean we could not do a trade deal with the USA for several years to come.

So, I'm -- what I'm doing, as leader of the Brexit Party, is putting as much pressure as I can on Boris to say, come on. We have spent over three years waiting to do this. Let's just get out with a clean-break Brexit and get on with our lives.

CAVUTO: All right, the fear was that, if you did that, that there would be all hell to pay, and that your British pound has been tumbling on the concerns this is going to hurt you much more than it's going to hurt the Europeans, than the rest of the world.

What do you say to that?

FARAGE: Well, you know what? I spent 20 years working in financial markets before getting involved in politics.

And, very often, you get short-term hysteria in markets, and it's always the old thing, isn't it? Sell the rumor, buy the facts. And I think, frankly -- I think, frankly, once the U.K. has left the European Union, if we do it in a clean way, I think foreign and direct investment will flood into the United Kingdom, because we will be free of Greece and Italy and all these economies that are doing so badly.

And the arguments against leaving are those from the status quo, those from the big firms who are doing very well, thank you. And life's always like that. You always get the big and the rich want no change.

Actually, the time has come, not just economically to change, but democratically. Why should my country be run by unelected bureaucrats in Brussels? I want to be free.

CAVUTO: You know, Nigel, I sometimes wonder -- obviously, you know what's happening there a lot better than I do -- but that maybe Boris Johnson is forcing Europe's hand here.

You say you won't renegotiate the deal? The clock is ticking. You better, or we're out one way or the other.

FARAGE: Well, of course.

I mean, look, a lot of this is -- a lot of this is negotiation. But I do think Boris Johnson talking tough on no deal is because he actually wants the European Union to make adjustments to the deal that Mrs. May put in place.

And my argument is this. The deal May put in place, even with amendments, is still a terrible deal, is still the worst deal in history. And I'm going to go on campaigning for a clean-break Brexit. And when we're clean, we could, by Christmas, have sectoral trade agreements with the USA. How bad is that?

CAVUTO: You know, Nigel, I wonder, too, whether the Europeans are more worried about this than they let on.

After all, it's a club that you don't want to be a part of. And you mentioned what's happening with some members like Greece and Italy and Portugal and Spain that are struggling as members of that European community.

And maybe the Europeans fear, Belgium fears, more to the point, that you go, all bets are off.

FARAGE: I think that's right.

And I think us breaking free, us two years down the road being seen to do well will be the end of the European Union. And, of course, the European Union is at the heart of the globalist projects.

And Brexit, Trump winning, these are all big blows back, big fight backs against globalism. Globalism is about losing your national democracy, losing your independence, losing control of your borders.

So I think right at the moment, Neil, we are -- with this Brexit battle, we are on the front lines of something that doesn't just affect us. It affects America. It affects the whole of the Western world.

And it's all propelled, pumped up by money from half-a-dozen giant multinational banks and businesses. It does not suit men and women who want to set up -- set up their own enterprises. It does not suit democracy that our forefathers made so much sacrifice to defend.

I know, in my heart, that Brexit is the right thing. I know we're getting closer to it. I just want Boris Johnson to do it the right way.

CAVUTO: Nigel Farage, thank you very, very much.

FARAGE: Thank you.

CAVUTO: Real quickly, to Nigel's point, take a look at the corner of Wall and Broad today.

We were up 258 points. If they're worried about this turning into some international crisis, they had a funny way of showing it. Among the issues advancing the most, financial issues, banks. Go figure.

Meanwhile, a new poll out that shows the president still trails all the top Democratic contenders. That, of course, is not new. What is new is the grades he's getting on his single biggest issue, the economy.

But be careful on any of this stuff. He wasn't even in those polls little more than a few years ago, and he became president.

(COMMERCIAL BREAK)

CAVUTO: All right, it's way, way early, right? But we can can't help ourselves right in the media.

President Trump trailing the top 2020 Democrats in a new Quinnipiac University poll, but, but, but if you look at another Quinnipiac poll from this same time frame leading right up to the 2016 election, then candidate Donald Trump was behind in hypothetical matchups back then, too.

So would this, should this be a worry for the campaign, or is it simply too early to tell?

To 2020 Advisory Trump Board executive Madison Gesiotto. We have also got RealClearPolitics' Tom Bevan, Democratic strategist Robin Biro.

Help me with this, Madison. I mean, these are snapshots in time, like one snap, that it's shot. The image is gone. So we can't overstate it.

But what do you make of what kind of battle could be ahead?

MADISON GESIOTTO, CONSERVATIVE COMMENTATOR: Well, I think they will definitely be a battle ahead.

But, of course, when we look back at the polls in not only 2016, but those primary polls within the Republican Party nomination process in 2015, many people said that there was no chance Trump was going to win. The polls said that he was going to lose. And he won both that primary and that general election.

So I don't really look to these polls to give me an accurate representation or potential result of what we will see next year. Of course, we're seeing the economy still doing very well. When it comes to job numbers, unemployment is remaining low, historic lows for women, for minorities in this country. Jobs are growing.

We have seen over 5.5 million jobs created since Trump took office and 500,000 of those being manufacturing jobs, 600,000 women out of poverty, many people off food stamps. It's a great time to be an American right now, Neil.

CAVUTO: You know, Tom, that doesn't jibe with another feature in the poll that showed that the economy, arguably the president's strongest asset, now 37 percent seem to think that it's getting worse vs. 31 percent that it could get better.

And that just struck me as odd. What did you make of that?

TOM BEVAN, CO-FOUNDER AND EXECUTIVE EDITOR, REALCLEARPOLITICS.COM: Well, I think all the chatter about the recession that's been going on in the media over the last weeks has definitely taken its toll. And it's taken a couple of points off of Trump's job approval rating.

It's taken a couple of points off his approval on the economy, although, in our average, he's still over 50 percent approval rating on the economy. But, look, this is all going to come down to how voters feel about the economy next August, next September, next October before they go to the -- before they go to the polls.

CAVUTO: Right.

BEVAN: And, again, it's also about perception, right?

Do they still -- we can talk about sort of some of these esoteric numbers, but it really comes down to consumer confidence. How do they feel about their wages? How do they feel about their bank accounts, their 401(k)s? And then what's the alternative?

If they don't feel it's good, what's the alternative? Are they -- is it going to be Bernie or Elizabeth Sanders or whomever? And that's the decision they will ultimately have to make on the economy.

CAVUTO: You know, and, Robin Biro, as our Democratic strategist here, I can remember a lot of polls that were showing Hillary Clinton was unbeatable against any one of the, then, dozen or plus Republicans vying for the nomination, and that she'd crush them all, and that the ones she would have the toughest time with would be Jeb Bush?

We know how that turned out.

ROBIN BIRO, DEMOCRATIC STRATEGIST: Yes. Well, exactly.

And I'm grateful that we have refined the polling methodology. I looked -- for example, the FOX News poll that you guys put out 10 days ago really had a great job, because we used to only poll -- the pollsters used to pull people with landlines only.

That Fox News poll, two-thirds of those were from cell phones, which is more up to date, because the only people I know...

(CROSSTALK)

CAVUTO: The president was not a fan. The president was not a fan of those FOX polls.

BIRO: I know.

And that's what I was going to say, Neil, is that he dismisses those as fake news and pushed out that other -- the Zogby poll, which was just an online poll with no methodology.

So kudos to Fox News for giving us good, accurate polling and good methodology.

CAVUTO: But you don't know until you have to results, right?

And so, Madison, what I'm saying is, let's say these are off-base, and it's way too early. And I agree with all of that. If you're the president overseeing a pretty strong economy, pretty strong markets, this doesn't jibe with any of that. So what do you have to do?

Or if you look forward to the long campaign ahead, obviously, you need a challenger, a single individual to focus on. But we're a long way from that. But what do you think the president needs to do?

GESIOTTO: Well, I think, right now, the most important thing that the president and his team can be doing is to be out there and continuing to push strong messaging, not only on the economy, but on so many of the other issues that he's focused on, like immigration and so many others since 2017, things that he talked about during the 2015-2016 elections, promises made, promises kept.

And that's something that we continue to talk about from the campaign, because it's something we haven't seen in years. We have so many Democrats out there talking about this upcoming recession. They have been talking about that since he won in 2016. We haven't seen a recession.

I don't think a recession is likely. We even saw former Obama appointed Fed Chair Janet Yellen saying that she thinks it's very unlikely that we'd see a recession, and that the inverted yield curve that many people are speaking to specifically over the past week or two won't necessarily be a predictor in this case.

So, I think we need to continue to push forward.

(CROSSTALK)

CAVUTO: No, to your point, Madison, even if it is, it could be a ways off. But recessions have not been repealed any more than bull markets or bear markets have.

But having said that, Tom, do you think that the trade thing is a wild card here? Let's say we don't get a trade deal by the election. It's a problem for the president.

Or is it a strength if it says, I'm not going to cave for just any deal?

BEVAN: That's a good question.

I mean, I do think Trump runs the risk of -- by pushing forward with this trade war, that it's going to hurt farmers, continue to hurt farmers in the Midwest, where he can't afford to lose those folks if he wants to win reelection.

At the same time, he is pushing forward because that's one of his core promises, it's one of the reasons people elected him, and people generally agree with his policy. They just don't like his -- maybe the tactics that he's using.

I would say, listen -- and I'm sure Trump's advisers are telling him this. And the FOX News poll confirmed it. One thing he can do is to -- is to sort of lay off the tweeting a little bit. It's not going to happen.

But even among Trump supporters, more than 50 percent disapprove or want him to sort of lay off the tweeting, because that leads to this constant battle, public battle, whether it's with his Fed chairman or with foreign leaders, any of that stuff.

CAVUTO: Right.

BEVAN: If he turned that down, I think it would -- I think it would benefit him in some of these swing states, for sure.

CAVUTO: All right. Did the president just black out our screen? I don't know.

Anyway, guys, thank you all very, very much.

Meanwhile, forget the missiles that North Korea is shooting up in the sky. Is the bigger worry what it is building under the sea?

(COMMERCIAL BREAK)

CAVUTO: All right, Dorian, as you might have heard, is now a Category 1 hurricane, former tropical storm.

But the worry right now for at least Floridians who are in its path, it could be a Category 3 by the time it gets there.

Updates after this.

(COMMERCIAL BREAK)

CAVUTO: By land and not by sea?

There are some new photos reportedly showing North Korea may be building a submarine capable of launching nuclear missiles.

Retired Lieutenant General Jerry Boykin on all of that.

General, good to have you back.

What do you think of this?

LT. GEN. JERRY BOYKIN, RET., U.S. ARMY: Well, I look at the imagery there, and it's -- I think it tells the story.

What you see in this imagery, for those that haven't looked at it, is you see a SINPO-class SSBA, which is a -- it's not a nuclear-powered submarine, but it certainly is one that has capabilities to fire sub-launched ballistic missiles, SLBMs.

And if you stop and think about it, those are as dangerous as some of the intercontinental ballistic missiles, because the submarines can be moved anywhere, and they're very hard to track.

But there's also a test barge that, when submerged, gives them the opportunity to test underwater SLBMs, in other words, test them like they would be on a submarine. So I think this is very significant. And I think that this has got to get the administration's attention.

CAVUTO: I haven't heard any response from the president on this revelation.

But I know, in the past, when it comes to some of these other launches that he said technically didn't violate whatever verbally they had agreed to, but they keep pushing it. What do you do?

BOYKIN: Well, they are pushing it.

And I must tell you, Neil, I think that the president is going to have to - - have to back off on praising Kim in terms of him not violating the -- at least the intent of the treaty or the agreement that they had before.

Look, I think this is a serious situation, Neil. And I think that the Chinese are potentially right in the middle of it. And I think that's something that the president is probably considering as well.

CAVUTO: When you say they're right in the middle of it, sort of pushing this?

BOYKIN: Yes, I think they're pushing this.

They push Kim to act in a bad way. And then -- but, at the same time, there's a subliminal message that they're sending to the president that, look, we have influence with Kim. If you want this problem solved there in North Korea, you will back off on some of this -- your demands with regards to the trade treaty.

CAVUTO: All right, now, what Kim Jong-un has done in the past is write a nice letter or a card or whatever to the president, and that mollifies or at least eases a little bit of the friction here.

But do you think the president seriously has his number, though, and figures it out; he just doesn't want to let on that these accounts that he doesn't appreciate the severity of what's going on is just a ruse? What do you think?

BOYKIN: Yes, Neil, look, I think president learned from it, but he made a terrible mistake, I think, after the first meeting that they had in Singapore.

He said -- he came out and publicly said North Korea is no longer a nuclear threat. Well, that proved not to be the case. And he's seen nothing but resistance from Kim ever since.

So I think that he knows what Kim is up to. I think he understands this. I think the problem is, the president hasn't yet figured out a way, nor have his advisers given him much, in terms of a way to back away from this, and really begin to call Kim out on this.

CAVUTO: We will watch closely.

General, thank you very, very much, General Boykin.

BOYKIN: Thank you.

CAVUTO: All right, just a few days away from new tariffs that kick in on a whole host of goods, from baby products to school supplies, come Sunday morning at 12:01 a.m. Are you ready to pay up?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KEN FISHER, FOUNDER, FISHER INVESTMENTS: We have had a lot of positive trade agreements in the last two years, and people pay almost no attention to those. They, in fact, in total money aggregate, are bigger than the China discussions.

(END VIDEO CLIP)

CAVUTO: All right, what the billionaire investor Ken Fisher was telling me on FOX Business, which, if you don't get, you should demand, is that these trade deals are outweighing some of the trade tiffs, notably with China, because we're scoring them left and right with countries that matter and not necessarily a soap opera that won't end and maybe doesn't matter in the scheme of things.

The U.S. Trade Office, by the way, officially filing the paperwork to up tariffs on $300 billion worth of Chinese goods, not all of them. Some will be pushed back a little bit. But a lot of them, from baby products to school supplies, will be marked up from a 10 percent tariff originally intended to 15 percent.

And they, by and large, hit on September 1, another batch right before Christmas.

So what happens here? Because if the markets were worried about any of this, they, as I said, had a funny way of showing. The Dow was up 258 points.

Let's go to market watcher Troy Gayeski and our own jolting Deirdre Bolton. That's what I call her.

(LAUGHTER)

CAVUTO: And she just puts up with it.

Deirdre, end it with you, begin with you.

What are folks telling you about the minimal impact of that announcement?

DEIRDRE BOLTON, FOX BUSINESS CORRESPONDENT: Well, the minimal impact is interesting, because we just see these volatility swings.

I mean, I was looking at August alone, and seven days, the Nasdaq has closed down by 1 percent. It's been five days for the S&P 500,four for the Dow. So, today, it's green on the screens. But, in general, this volatility is showing up. Today, we can just say, OK, they're up.

But then we're also seeing these conflicting signals from the bond market as well. So I do think that there is some sign of worry that comes in on some days, whether you measure by volatility, whether you measure by the signals that the bond market is telling. But the worry is here, just not right this second.

CAVUTO: You know, what's interesting, Troy? We have climbed the wall of worry. I mean, we have our crazy volatile days, don't get me wrong.

But this inverted yield curve and everything else...

TROY GAYESKI, SKYBRIDGE CAPITAL: Yes.

CAVUTO: ... where shorter-term rates are higher than longer-term rates, that's wacky.

GAYESKI: Yes.

CAVUTO: And that doesn't end well, usually.

GAYESKI: Typically, it doesn't.

I mean, the signal you get from the yield curve, though, has broken down in the cycle, because rates are so exceptionally low overseas right now. So, in the past, it's been a very reliable indicator. We think it's less reliable now.

And a lot of it has to do with, if you look at the domestic economy in the U.S. itself, the consumer is still in exceptional shape when you look at debt to GDP, debt to income, you look at the labor market. It's not white hot anymore, but it's still red hot.

CAVUTO: But the rich are -- people like Deirdre are holding back, right?

(LAUGHTER)

GAYESKI: Yes.

CAVUTO: Right?

They're not spending as much. You see the Tiffany's and Sotheby's and Christie's, they're not my crowd, but, apparently, when they...

(CROSSTALK)

GAYESKI: Nor mine, yes.

CAVUTO: I'm joking.

But when they retrench, that could be a sign. What do you think?

GAYESKI: Well, yes.

It's one of many leading indicators you can look at. But our point is, you can't get overly focused on any one or two.

CAVUTO: Got it.

GAYESKI: The core issue to look at now or data that we're focusing on, it's initial claims in terms of the labor market, which continue to be exceptionally low.

And in terms of the JOLTS number, which measures how many job openings you have vs. how many are unemployed.

CAVUTO: And how's that looking?

GAYESKI: It looks fantastic. We have somewhere between 1.2 and 1.4 million more job openings than unemployed right now.

And the first time that happened was two years ago. So until the trade rhetoric spills over from CapEx,, which is all it's hit so far, into...

CAVUTO: Capital spending.

GAYESKI: Capital spending and business investment, so which has definitely slowed because of it.

Until that spills over into labor market, it's unlikely to have a recession anytime soon. That being said, it could occur 12 months from now, but our best case is that we can still avoid a recession and the yield curve for the time being is wrong.

CAVUTO: You know, Ken Fisher was saying pretty much the same thing. Look, if everyone's worried about something, then the contrarian in me says don't be obsessing about it.

What do you make of that?

BOLTON: Right, which is, of course, an admirable point of view.

The one thing I would add -- and I agree with you, Troy, about all these indications being positive for the U.S. economy -- I think the thing that I personally think about is that you mentioned the negative rates in Europe. China is slowing. OK, fine.

They still have 6 percent growth, which most countries would kill for. But that's slower for them.

CAVUTO: But they lie about that.

GAYESKI: Yes.

BOLTON: They also lie...

(CROSSTALK)

GAYESKI: It's still a massage.

BOLTON: But it's slowing. We can just say the trend is down.

Europe is really struggling, no other way to say it. So even if we are in good stead, I just think an open question is, can we kind of brag and say, oh, we're in great shape, when the world is so interconnected?

So that's just something that I monitor.

GAYESKI: Yes. No, I agree 100 percent.

The growth overseas is highly problematic. Europe's a basket case. I mean, if Germany can't grow one, usually that means France can't grow 50 basis points.

CAVUTO: A lot of these countries have negative rates.

GAYESKI: Negative rates and negative growth.

Germany is about to go into a recession. So agree with all that, but that's already feeding through into the economy. That's one of the reasons we're slowing from 2.5 percent growth to 2. And the concern is, do we actually have a recession?

And all we're saying is that mathematically it's basically impossible the next two quarters, but it could occur 12 months out. But we still think it's unlikely.

CAVUTO: Troy, final word. Deirdre, thank you, as always.

GAYESKI: Yes.

CAVUTO: All right, Joe Biden has some company on a debate, but it might stop at 10.

I will explain after this.

(COMMERCIAL BREAK)

CAVUTO: All right, Joe Biden will be addressing supporters at a town hall going on in South Carolina. No problem for him making the next debate. He is the front-runner still.

He and nine others qualifying for next month's showdown, but those who didn't make it for that or don't look like they will are speaking out.

Peter Doocy in Washington, D.C., with the latest.

Hey, Peter.

PETER DOOCY, CORRESPONDENT: Neil, this is what the DNC wanted, to shrink the field to a single stage and deny a platform to anybody that can't muster 2 percent national support or 130,000 donors.

But candidates that couldn't are mad. Michael Bennet's adviser tells us this: "It is not the DNC's job to winnow the field. It is the job of voters in Iowa, New Hampshire, South Carolina, and Nevada."

And Steve Bullock feels the same way.

(BEGIN VIDEO CLIP)

GOV. STEVE BULLOCK, D-MONT., PRESIDENTIAL CANDIDATE: You go back to when John Kerry was running, an example; 31 days out, he was at four points. Al Sharpton was beating him.

So I think that there's a long way to go along this. And, you know, our rules have been less inclusive, if you were, than even the Republicans, which is unfortunate.

(END VIDEO CLIP)

DOOCY: Tom Steyer appears short of the polling threshold, even though he met the fund-raising goal and spent hundreds of thousands of dollars every day during his weeks-old campaign.

Others who appear poised to miss, Tulsi Gabbard, Kirsten Gillibrand, and Marianne Williamson. Julian Castro is going to be there. And he says he's sympathetic to rivals who are going to be watching on TV.

(BEGIN VIDEO CLIP)

JULIAN CASTRO, D-PRESIDENTIAL CANDIDATE: It's hard when you have 20 people collectively that are on stage. And so I agree with some of those who have questioned whether the thresholds the DNC has put in place are the best thresholds.

I know that it's a work in progress. This is an experiment, and I do think the DNC is trying to do the right thing.

(END VIDEO CLIP)

DOOCY: So it does look like one stage for September, but there could again be two in October, because the qualifications are the same.

And some candidates came really close. And they're suggesting they just need a little more time -- Neil.

CAVUTO: So the ones that don't make it don't necessarily quit. They just have to slug it out.

DOOCY: Right.

But it's going to be tough when tens of millions, potentially millions of people are going to be watching the debate, and they're not there.

CAVUTO: All right, Peter, great reporting, as always, my friend, Peter Doocy from Washington, D.C.

Meanwhile, I enjoyed reading so many of your fine letters yesterday so happy that I came back, that I decided to read the follow-on and the follow-up ones after that.

I don't know -- after this.

(LAUGHTER)

(COMMERCIAL BREAK)

CAVUTO: You know, nothing, nothing is more humbling than coming back from vacation and getting an earful from viewers, you guys, wishing I had just stayed on vacation.

I read just a few, and they were doozies, but your response to those responses, they were even bigger doozies.

Bill in Naples, Florida: "Take a couple of more weeks off. The vitriol that results is the best comedy on TV."

G. Mason out in Agoura Hills, California: "I have heard of love-hate relationships, but things have gone too far. You are articulate, honest, handsome, intelligent, unbiased, courageous, and one of the best personalities on TV. I am forced to get up early on Saturdays just to watch you."

Well, I'm sure it's well worth it, right? Right?

(LAUGHTER)

CAVUTO: Anyway, Robert in Williamston, Michigan: "I'm 81 and feel a lot more optimistic when you were there. Keep it up."

Thank you for that, Robert. I'm very honored.

Barbara via Yahoo:"I don't understand why people who don't enjoy your show continue to watch and even take the time to send rude e-mails. I, for one, cannot watch your show when you are not on."

That's what I say. Just flip.

And, by the way, you might as well tell Charles Payne that, Barbara. The guy's got an ego that size of the Chrysler Building.

Apparently, Mark in Lake Elsinore, California, disagrees. Charles is his choice: "Cavuto, please take another vacation. It was refreshing to have a true intellect like Charles taking your place. If only it could be the Payne show instead of the pain, bashing Trump show. Anyway, please just go away."

One word, Mark: No. Not going anywhere.

Lorie via Hotmail.com: "I think the other people who write mean and nasty e-mails about you are jealous. Pay no attention to them."

Well, I try not to, but it gets hard when they keep calling me fat, Lorie.

(LAUGHTER)

CAVUTO: I am vulnerable.

Erik e-mails: "I think you secretly love those e-mails that have to do with all your medical issues, so viewers feel sorry for you."

Well, is it working, Erik?

(LAUGHTER)

CAVUTO: Then there's Jim in Fort Lauderdale: "I was once walking on 48th Street. And, as you passed me, I said, 'Neil Cavuto, big fan,' and stuck out my hand. You all but ignored me. Perhaps this is the smugness a lot of the viewers are talking about. P.S., I still enjoy watching your show."

Now, I don't remember doing that, Jim, nor would I. I'm a little hard of hearing and a lot scatterbrained. Just ask these guys in here. So if I was rude, maybe you thought I was Sean Hannity.

(LAUGHTER)

CAVUTO: Just kidding. Let's see Sean. What?

Anyway, Jeanne via MSN: "OK, when you criticize the president, I'm not thrilled, but mostly because the other news organizations criticize him nonstop. But a journalist who never criticizes the president is as bad as those who always criticize. Continue being honest and balanced."

That's what I do.

Anyway, Marsha via Gmail: "Neil, I am a Trumper, but I appreciate your sincere criticism of our president. I feel it's never mean or cruel."

Well, I have no reason to be mean or cruel, any more than I do fawning or gushing. I have said it before. I will say it again. I have no agenda. It's not about being pro-Trump or anti-Trump, just calling balls and strikes and sticking to the facts. That's what I try to do here.

Just ask Wilbur, who e-mails: "I'm one of those offended you're too kind of this idiot in the White House. I have heard you give him credit for the markets simply because they advanced on his watch. That proves you're an even bigger moron than he is."

Well, the way I see it, Wilbur, the presidents get the blame for bad stuff if it happens under their watch. They should get at least a tip of the hat when good things happen too. I applied the same standard to Barack Obama when the markets and economy came back when he was in the White House. Fair, balanced. See where I'm going?

Anyway, Chris in Wilmington, North Carolina; "Sure, I don't agree with everything you say, but I really love my wife, and I don't agree with everything she says either. So don't feel bad."

(LAUGHTER)

CAVUTO: Chris, also in North Carolina: "I once told you a long time ago you will probably never be remembered as a great anchor or host or whatever your title is, but you will be remembered as a good man. And that means a lot more and is much harder to accomplish. Now put a cork in it."

What do you mean I'm not a good anchor or -- the heck.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, R-S.C.: The price to standing up to China, I think, is a lot less than just giving into China. The tariffs are a tool. Nobody likes it as policy, but I don't see how you make China change their behavior until there's a consequence to what they're doing.

That's why we have the tariffs.

CAVUTO: So, Senator, when the president says he loves tariffs, and he's gotten better than $30 billion...

(LAUGHTER)

CAVUTO: ... from the Chinese because of those tariffs, what do you think of that?

GRAHAM: Well, tariffs are generating revenue. He's sharing some of that money with the farmers that have been hard-hit. But tariffs, as a policy over time, I don't really like, because it does eventually go to the consumer.

But here's what I do like. I do like the idea that President Trump, unlike every other president, is actually doing something about China's cheating.

(END VIDEO CLIP)

CAVUTO: You know, Lindsey Graham is right. Tariffs have a cost.

Now, he says the cost is worth it and China must be held to account. And he might be right.

But the president ignoring that cost is wrong, because here's the thing about going to war. You better go in with eyes wide open, obviously rally the nation around winning that war, but do let them know there will be costs to that war. There always are.

And that contrary to what the president has said, it will not be an easy war, and it won't be a wonderful war, because tariffs are not a wonderful thing. Tariffs are taxes on goods that you pay. Governments don't pay them. You do.

China isn't sucking them up. You are.

Now, the president says you have been spared the pain because China has been busy devaluing its currency, so you wouldn't even feel the pinch. But someone is paying the more than $30 billion in tariffs. And it is not Chinese buyers. It's not, well, any of them. It's American buyers. It's American distributors and retailers, not Chinese companies that do business with us, American companies that do business with China.

They're the ones who have to pay up or suck it up. And, right now, they are sucking wind. They absorb what they can to avoid passing it along to you. But they can only do so much.

And let's just say they can't do much more. And I'm not just talking American farmers, who have lost a bundle. I'm talking American companies that, if things don't change, will lose an even bigger bundle. Where is their relief? Where is your relief, especially now that they're facing -- let me rephrase that, what you're facing -- a whole new wave of tariffs that kick in come September 1, on everything from school supplies and sporting goods, to infant formula and meat and dairy products?

They're days away from costing up to 15 percent more on your tab, not China's tab, from your wallet, not China's wallet, when you get to the register here, not when Chinese shoppers get to the register there, not them, you, not later, now.

That is the pain Lindsey Graham is talking about. That is the pain he's acknowledging the president is not talking about. It's a pain Graham says is worth the fight.

Trouble is, Americans don't see it coming, because all a lot of them know is what the president keeps saying, that tariffs are beautiful, until they get to the register themselves and look at something quite ugly: the receipt.

Good night.

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