responsible to me. thank you, madam chair. you, mr. chairman. madame chair, welcome. as i listened to your monetary policy report, it strikes me as the ranking member had indicated earlier that we talked about productivity growth and the need for public and private investment. that requires that the dollars come from someplace. i would like your thoughts on this just in terms of -- on the basis of what the joint economic committee had reported earlier this year. they laid it out in some pretty stark terms. they indicated that -- 10 years 2026, whichthe year is the 250th birthday of our country, we can look forward to 99% of all the revenue coming in to the federal government. highway taxes, corporate taxes, personal income taxes. 99% of it is going to go out in

two categories. interest on the federal debt and mandatory payments on entitlements. that doesn't leave a lot for public investment. and clearly does not drive private investment. working on short-term activity right now and monitoring very closely. you are following the economy right now which is you suggested is doing very well and yet i think a lot of us would disagree. on one quarter hardly seems appropriate. even --it's trouble or double or even triple we will not grow our way out of our crisis that is upon us. i would like your thoughts because we're looking at areas that if we want those jobs to come back and if we want wages to rise, we will have to be in a position where we actually grow this economy once again. policy, regulatory reform.

actually managing our entitlements, all of which seem critical and yet today we have not talked about that at all. we don't really seem to have a place where we can. can you as an impartial individual in this process who watches the economy grow or falter on a daily basis, can you talk about the need to do something now to avoid crisis in 10 years? >> well. i think we all know and we have known for a long time that with an aging population and with have byare costs that and large risen more rapidly than inflation that we faced a situation where we would have an unsustainable debt path. and that this would require reforms. medicaid,, medicare,

social security. >> so you are saying the affordable care act needs to be reformed. part one. >> i didn't say anything about the affordable care act. i am saying that the entitlement need to be considered have to put those on a sustainable asus. >> would it be fair to say they need to be managed? >> to have congress look at revenues and the structure of the expenditures to ensure that those programs remain sustainable in the overall federal budget. and death associated with that remain on a sustainable course. because as you go out further with an aging population, as you said the dead to gdp ratio is rising simply unsustainably and requires changes. over it fair to say that the long term basis, every time

the interest rate that we have to pay at the federal level goes up by a quarter point, it is estimated at a $50 billion a year federal increase in our costs being paid out. simplys to me like addressing and beginning the process of slowing down the increasing aderholt debt and recognizing that we can't just simply say in a one-day that we have all the answers, we will have to grow our way out of this as well as reducing ongoing expenditures. is that fair to say? would betainly desirable if the u.s. economy were growing at a faster rate. a very depressed number for first-quarter growth. over the last four quarters the average growth has been about 2.5%. innovaro recorders it has been 2.5%. sort of smoothing through the ups and downs we had in

experiencing growth of 2% or 2.5%. >> and we are not going to grow our way out of based on that number, are we? >> we would have to do better than that and that is a matter of productivity growth been quite depressed relative to the levels that we enjoyed in the second half of the 90's. so it's not certain what's responsible for that. factors come into play. we have had depressed levels of investment. we seem to have a depressed rate of business formation. change as itical shows up in output gains seems to have fallen relative to those better times.

and there are a range of policies we could consider -- >> my time is up but it looks to me like what you are giving us is a wake-up crisis -- call about a crisis that is not 10 years from now, it is now. >> it is a very serious matter that productivity growth is so slow. i want to highlight that. >> chair yellen, thank you. about raisingg manufacturing jobs in america. our trade policy has given full access to our market to goods manufacturer by companies in countries that do not have to abide by the same labor laws, wage rules or environmental rules or enforcement. this is a very unlevel playing field for american manufacturers. the loss is extensive. is that really fair to the american worker to have american companies having to compete against companies that are allowed a completely different set of standards to lower their

cost are medically -- dramatically? >> i would say in the view of most economists, more open trade creates net benefits. but that doesn't mean benefits for everyone. there are gainers but there are also losers. >> the losers are the manufacturing workers. is that fair to the manufacturing workers? >> well. it's important to have policies that address the losses. 1975 we have had four decades in which virtually 100% of the new income has gone to the top 10% of americans, leaving basically nine out of 10 americans in our economy out in the cold. ais is substantially reflection of the shift of manufacturing overseas. we have had a series of geostrategic decisions. we wanted to nurture the

recovery of japan. we wanted to pull china out of the sino-soviet bloc. now we want to pull the rest of asia away from china. is there awareness among the fed of how these decisions affect the welfare of americans? we have certainly look at this question of wage inequality, income inequality. data.lect our survey of consumer finances is one of the key data sets that gives us insight into what's happening. academic work on this topic while it has focused to some extent on trade more broadly also looks at the importance of a phenomenon of technical change. that the nature of technical change in recent decades has continually shifted -- demand

away from less skilled workers. >> technological change has occurred. a lot of the shift overseas has been to lower wages, not technological change. they have been rooting of our factory machines and shipping them overseas. it's the same factories producing the same goods in a place that pays less. that is an issue of trade policy. technological change does have an impact. so in a situation where there is more higher skilled demand, education becomes very important. but as compared to other developed economies, higher education is far more expensive. it is the single factor that has inflationster than in our economy. not only is it daunting to our students who in blue-collar communities like the one i live in are getting the message that

there is not an affordable path to fulfill their goals in life. and statistically we see students who do pursue that education burdened with debt that is having a profound impact both on delaying marriage and homeownership, which has been a major engine of wealth for the middle class. so we see the high cost of seems to methat like the type of structural concern in our economy that the fed should be using its economic thertise to highlight long-term devastating impacts of failed to provide the opportunity or the skills needed for the economy of the future. what i don't hear the fed talking about that. >> we are looking at trends in student debt. we will be hosting a conference this fall on student debt and looking particularly at what it means for low and moderate income households. >> over the last few years i

have asked so many questions in which the response is always, that is something we're looking at. it would be nice to have a muscular representation of the big challenges to our economy because the fed has the expertise to put its hands around that and be able to project that into the policy debate. since my timeose is expiring rising one of those issues i have raised multiple times is the fed's power of the conflict of interest in commodities. the ability of large financial institutions to own pipelines, ships full of oil, energy generation stations, where houses of aluminum. and each time i hear, we are looking at that. are we still looking at that or we actually going to do something about that? we will come out with a proposal on that. but some of it reflects decisions that congress made and not fed policy.

>> that's true. there are some restrictions. but there is still considerable power resting with the fed. thank you. >> madam chairwoman, thank you for joining us this woman. in my conversations with kansans -- they see their economic future more disillusioned. no one feels more secure in their job. no one feels like their children are going to have a brighter future. parents are concerned about their children's opportunities when they graduate from school. the ability to pay back student loans. worried about saving for their retirement.ent -- people are worried about having enough in savings to pay for health care emergencies. the sense of economic recovery is far from being felt universally with kansans that i visit with across our state. i want to just raise to questions. -- two questions. one that is related to lower

andculture commodity prices prices in oil production, natural gas production. part of that is a consequence of i assume the value of our dollar in comparison to other currencies. and our ability to promote exports certainly of agricultural commodities and oil as well. where are we in the value of our dollar? what is the intermediate expectation for us to be able to jumpstart the sale of cattle, ,orn and other products airplanes manufactured in our state that seemingly are not able to access those markets in part because the value of our currency? >> so the value of the dollar has increased significantly since mid-2014. partly that reflects the fact that the u.s. has enjoyed a

stronger recovery than many other advanced nations. expectationated an in the u.s. interest rates will rise at a more rapid pace than other parts of the world and that has induced inflows into our assets that have pushed up the dollar. but more broadly the trends you have seen in commodity price is i think reflect a larger set of global forces. in some cases we have seen increases in the supply of commodities. in the case of oil, the rapid growth of u.s. ability to supply oil markets has been a factor. and then there has been a slow down in global growth. particularly in china which has been an important consumer of so many commodities. will is on a path and

continue a path of slowing growth. the plumbing you have seen in plummet youices -- have seen in commodity prices because of basic supply and demand considerations. tradeoften talk about agreements. has the fed weighed in or have you expressed an opinion previously about other countries and their ability to manipulate currencies to our disadvantage of exports? >> the responsibility for currency policy rests with the secretary of the treasury. we don't weigh in on that. >> madam chairwoman, let me ask you about something in your testimony. you indicate that business investment outside the energy sector was surprisingly weak. on theou elaborate

factors that lead you to that statement and when you exclude the energy sector is that just because of definition? or something happening in the energy sector that indicates investment? drilling activity has been very important and it is counted as part of investment activity. plunge in oilge prices even though there has been some recovery, we have seen the number of rigs in operation just plummet. that is part of why aggregate investment spending has been so weak. and we understand that and expect it because it reflects the decline in oil prices. but even when we go outside the energy sector or other sectors that are directly related to energy and supplying inputs to recentlytment spending and this is just a report on the

data, i don't have a story to offer you on why this has happened. weaks been surprisingly over the last several months. has not been very strong investment spending generally. we talked about this earlier during the recovery. we think we understand some reasons why it is generally been weak. namely slow growth and less rapid increase in the labor force. but it has been surprisingly weak in recent months and it is something we are watching. is n't tell you what that due to. >> in my view in part, that lack to avestment is related wide array of circumstances. one would be the best and deficit -- debt and deficit. generally the economic indicators are down trending not up trending.

the next regulation that may come their way as a business person, just decisions to make investments. deciding it is more risky to invest into not. >> those things are certainly mentioned by business people. corporatequarters earnings have also been under downward pressure for a variety of reasons. >> i would conclude by indicating one of the places we ought to focus is on innovation startup businesses and new entrepreneurs and the uncertainty they face is even more -- has more dramatic consequences than a larger business that can internalize and handle that uncertainty. thank you very much. mcconnell -- senator cotton. >> thank you. i know these are always highlights of every year for you. i want to return to the earlier discussion of the so-called brexit.

referendum on whether great britain should remain or leave the eu. 4 says,timony on page one development that could shift investor sentiment is the upcoming referendum in the united kingdom. a u.k. vote to exit the eu could have significant economic repercussions. could. which he stressed to senator heller -- you stressed to senator heller in your comments. that sounds like the usual prudence and caution you using all of your public comments. you also stated, i don't want to overblow the likely impact. that reminds me of yogi berra's old stage advice that predictions are hard, especially about the future. >> that is true. i could not agree with that more. how the guardian reports are testament to the committee. "yellen warns on brexit."

not exactly what you said. >> i said we are monitoring it and it could have consequences. >> you would not characterize your testimony as a warning on the brexit? -- if that means that ts,m warning u.k. residen i'm not attempting to take a stand. they are going to go to the polls. they have had an active debate on the issues and i'm not providing advice in that sense. >> good. thank you. i sympathize when headlines don't exactly capture the exact meaning of what one says. and to be fair to the guardian, they are not the only outlet that has reported your testimony along those lines. the bbc and fortune have as well. so to be clear, you take no position on whether u.k. citizens should vote to remain

or leave the eu and the federal reserve takes no position. >> that's correct. i'm simply saying the decision could have economic consequences that would be relevant to the u.s. economic outlook that we need to monitor carefully. >> thank you for that. because i certainly think that we all in positions of leadership in government should respect the british people sovereign right to govern their own affairs. one point you made in your earlier comments about the potential source of these economic repercussions is a period of uncertainty. that is something i hear frequently in commentary about the brexit. is there any time when the global economy or the u.s. economy does not operate in a condition of uncertainty? there is uncertainty but this is a unique event. no close parallel. it is hard to know what the

consequences would be. of course there is always uncertainty domestically and globally. we operate in an uncertain environment. counterparts in the continent, and many of my elected counterparts in the continent have not treated the matter so evenhandedly. they have opined on what your citizens should do. they have also been responsible for other things that have caused uncertainty in recent years like the greek debt crisis or other debt crises in europe or the suspension of the schengen zone privileges because of the flow of migrants into europe and terrorists infiltrating that flow and launching attacks in paris a few blocks away from the heart of the european union. those would certainly cause periods of uncertainty. >> absolutely. >> is there a risk reaction to the brexit could become a

self-fulfilling prophecy in the economy? some british politicians have promised or perhaps i should say threatened immediate budget cuts if the u.k. citizens vote to leave. some continental leaders have threatened punitive action if the u.k. votes to leave. our own president has said the united kingdom would have to "go to the back of the queue" for a new trade agreement. these statements have the potential of a self fulfilling prophecy? >> you know, i don't want to comment on what various participants in this debate have said or the advice they have given the british people. there is an active debate. inappropriate with a decision of this sort for many parties to weigh in about the consequences. not trying to offer advice myself to the u.k.

residents. ecbour counterpart at the has said that the ecb is "ready for all contingencies following the u.k.'s eu referendum." 10 you say the same thing about the federal reserve -- can you say the same thing about the federal reserve? >> in the sense that we will closely monitor what the economic consequences would be and are prepared to act in light of that assessment. >> and should the u.k. vote to leave the eu, the united states government as a whole and the federal reserve in particular will handle that contingent the in the spirit of magnanimity and generosity and friendship among nations? >> it would certainly be my inclination to do so. >> thank you for that. >> thank you. will shift thei

conversation a little bit to custody banks which are very important. that would be banks like state street. and others. it has been reported that custody banks have turned away deposits or are charging fees on deposits because of the enhanced supplementary leverage ratio. you have received public comments stating that the rule could limit the ability of custody banks to accept deposits particularly during periods of stress. is the fed currently examining how this rule is impacting custody bank's ability to accept deposits? could this rule increased systemic risk during times of stress? bank as is a custody opposed to an ordinary retail bank? is one that bank handles transactions for other customers.

>> very important. a trustee bank is important to the banking system, is it not? >> yes they are. they arenly are aware concerned about the supplementary leverage ratio impacting their profitability. leverage ratios are normally form of to be a backup capital regulation. they are not oriented toward the risk of particular assets in the balance sheet but impose a minimum amount of capital that applies to the entire balance sheet. assets and banks --t hold a particularly safe large quantities of safe assets, it can be a burden. it is something that we will monitor.

but this is the way leverage ratios have always been imposed against all of the assets of the overall size of the organization. >> thank you. you forim chair, thank your participation. i know it has been long but i thank you for appearing before the committee again. committee is adjourned. you are just listening to a live testimony from janet yellen in washington, d.c.. for more reaction we want to yelena from bloomberg intelligence. what was the difference between today and what we heard just a week ago? really minor changes. i would say imperceptible changes. the tone of the speech was almost identical to her remarks last week. they acknowledge slowdown in

payrolls and she's puzzled about that. she says that it might be temporarily. and this will reverse and this is what they are hoping for. but in fact we don't really see that many changes in today's communication relative to what she said last week. did shed some light on the recent slowing in the labor market, characterizing it as transitory. what evidence do we have to show it is transitory? >> last week she referred to the very low level of jobless claims and she also pointed out that jobs data suggesting that vacancies remain really high. and that should eventually materialize in higher growth rate. one thing that some are pointing out is when she talked about the overall economy. we have some sound. proceeding cautiously in

raising the federal funds rate will allow us to keep the monetary policy -- the monetary support to economic growth in place while we assess whether growth is returning to a moderate pace, whether the labor market will strengthen further, and whether inflation will continue to make progress toward our 2% objective. everyone is pointing to it was whether and not when. it seems much more in certain. what do you think? >> i agree with that assessment. whetherlly are puzzled these effects are transitory or not and they would like to see that. this is a subtle change but it might be worth noting. scarlet: what kind of questions did yellen raise that might give us an indication of where the house might pick up where she continues her testimony tomorrow? >> we will see. that's an interesting one.

for the house of representatives it's really interesting to find out about all of the regulatory changes. about how banks will continue and the living wills questioned will come back tomorrow for sure. and she is very well prepared. to answer these questions. she noted a lot of progress on the living wills front even though a lot of institutions were found she stated that the fed is prepared to act if the banks insufficiency.s this is the thing that will come back tomorrow. alix: definitely. from last week to now, it seems like some of the rhetoric is also that the fed is slowly adopting larry summers point of view that stagnation is here to stay. with the new undertaking last week, we heard that theme. you believe that is true? >> they are talking about it. they're very much puzzled about

the productivity growth. these are the things that came back today. she mentioned the same thing last week as well. they are very concerned. there is a paper on different hike thatd one rate was mentioned last week. these are the things that have been discussed. ison't think the fed changing their thinking yet. they will be able to raise rates is things improve. these are really major concerns. scarlet: things that need to be addressed in the coming weeks and months. meantime, let's go to eric, who is standing by on capitol hill. very interesting was her being asked of brexit. it is appropriate for us

to start with brexit because the vote is looming just days from now. what she has to say about the exit is more or less what you have heard from people before. it would be negative for the u.k. economy. number two, it would at least put a dark cloud, if you will, over the future of the european experiment. in alld result likelihood in all likelihood in volatility in financial markets. it was unlikely she was pressed on this point, to take the u.s. economy into a recession. you heard in the last few , furtherf questioning doubts over the fed's posture on brexit because some people might interpret her point of view as being a political one. .he said, at the not nor is she trying to influence the way that british citizens vote on thursday, she just felt it was her duty to answer

questions as honestly as she could. let's give people an opportunity to hear at least a little about what she had to say about the brexit in her own words. the financial uncertain these unleashed by that decision could result in risk off sentiments that we would see impact on financial markets. we might see flight to safety flows that could push up the dollar or other safe haven currencies. we are aware of the likely impacts and will watch them. and, consider those impacts as we make future decisions on monetary policy. other issue that

came up repeatedly was -- this ofimportant -- the governor the fed indicated a few days ago that they will exempt banks of assets from capital planning, what is known colloquially as .tress on u.s. banks she faced repeated questions on the whole resolution issue, whether banks can in fact be wound up without impairing the u.s. economy. thisof those banks failed exercise. she would not commit to raising capital and the quiddity requirements for this bank if in fact they continue to fail by the october 1 deadline. she had a lengthy exchange with elizabeth moran on that point and she would not be drawn out. alix: great stuff.

hang on with us for a minute. i'm glad that he brought up the brexit debate. in trying to understand what change in the last seven days from her press conference last week to the teleconference now is brexit. we had the poll on friday with the main vote in the leaving camp. have a lot of other issues. is that what changed? the subtle change that we saw. >> one of the first questions after the statements at her press conference was about brexit and how that will impact. they are very much unsure what will happen. the impact will not the through economic forces. is export share to britain minimal. it will be financial conditions. that is what they are watching. no one really knows how much and

what extent that could impact their policy and the economy. they are clearly watching what is going to happen. going back to what she had mentioned, one thing that is interesting is the stress test result will come shortly after .he brexit vote itself we don't have a lot of time to prepare from one news item to the next. no, but the adverse scenario with extreme stress and isre that the banks undergo during this exercise and does take into account financial that that in all likelihood are far more severe than those that we encounter in

a brexit vote to leave tha the eu. sitting here today, it is hard to imagine waking up on friday morning and finding ourselves, thanks to brexit, in a situation that is worse than 2008. scarlet: that is a really good point and goes towards explaining all of the volatility that we have seen in the markets. what are you looking for when janet yellen speaks tomorrow, in terms of shedding light on her view on the economy? it has not really changed that much from her news conference last week. might we be getting more? >> i don't think so. the tone will be almost identical. the fact that she has not changed tone really tells us that she is satisfied with the markets reactions after the meeting. scarlet: speaking of the market reaction -- alix: i was looking at it on the bloomberg function. if you look at the terminal, you see what investors are engaging.

for july, we are at 10% as of , and for september, 30.1 as of yesterday. basically we are pretty much in line. for november, we're looking at 33. no huge change, but nonetheless, factoring in some sort of change. scarlet: a lot of people speculate that some people want to get to the position where they get markets maximum stability. alix: you heard them saying on friday that they will not make any predictions over the next 3-4 years. scarlet: there was a bizarre exchange between chair yellen and senator bob corker of tennessee. tell us what happened. erik: i'm glad you brought it up and bizarre is the word i would use to describe it as well. threerker asked about

things. why the taylor rule does not seem to be working, whether the fed would ever go to negative interest rates, as the japanese and europeans have done. she said no, that is not something that they plan to do. there was this question on the fed's balance sheet and why the fed is reinvesting the principal interest from securities in the is mature.et that it owns an awful lot of securities. specifically, he asked whether the fed had embarked already on qe4 as of today or yesterday. janet yellen had to point out that no, in fact, qe4 has not begun hearing the fed has been reinvesting proceeds ever since the end of qe3, and furthermore, it will continue to do so until it believes the economy is stable enough to run off the balance sheet. that point is so far in the future that she cannot predict

when that will happen. it was a very strange exchange and not something we expect from bob corker who is strong on monetary policy. scarlet: hillary clinton is speaking now about the economy. she says that her opponent, donald trump, would throw the country back into recession and the u.s. faces problems like low wages. much from,re talking we will not pay the debt, forget about it. that came up, right ? >> absolutely. indeed, that will cause probably and highation borrowing costs for consumers. i absolutely agree with that. alix: thank you both so much. scarlet: let's head over now to

the market has were julie hyman been checking in on what has been moving during the janet yellen testimony. take it away. julie: she may have switched to whether and when, but the markets have not changed. mention, in the past, when we have gotten the results of stress tests, there has not been a huge market reaction. something to note. see stocks trading higher, a little bit. a little bit is also the term when you talk about the range. in the wake of the testimony, not much movement over all. take a look at the bloomberg here. this in the index that was created by scarlet at some point, the daily range in the dow. the range for today is about 62 points. it is the second smallest range that we have seen this year.

in other words, not a big spring , not a lot of volatility. imap.s the we have telecoms stocks leading gains. someh care of providing counterbalance. with energy, we have oil prices lower. natural gas has been holding up relatively well. are also gaining after united-can't know came out with a new plan in order to save more money and most profit -- boost profits. alix: what about the losers? what is not doing so great? julie: commodities are not doing so great. we have oil prices that remain lower by 2%. we have the weekly inventories

report coming out tomorrow. go futures are also training lower. index also continues past 11 down 10 of the sessions. as i mentioned, bond isis also, we have not seen much movement during the testimony today. interestingly enough. scarlet: thank you so much. we will have much more coverage on the fallout from the brexit vote with an investor. this is bloomberg markets. ♪

aarlet: the prospect of british exit from the european union is weighing heavily on global markets with holes

showing the referendum to close to call. even janet yellen acknowledged the issue as complicating her job. how are activists responding? we bring it david. this is all anyone is talking about. what are your thoughts on this? is a getting in the way of what you do? is typicallyk this a very slow time for the markets. i think a lot of people that are making investments are either in the market where they have higher levels of cash. had aear you actually better made than in the past -- may than in the past. i think people were anticipating higher volatility. they did not receive it for may or june and the market hit peak.

now, reality is setting in. and i think people are paying more close attention to brexit. alix: you are an activist hedge fund. does this kind of uncertainty with volatility make your life harder or easier? of thethis makes it easier if you have levels of cash. the whole idea with hedge funds in the past decade is there has not been a lot of volatility or dislocation in the market. typically, you one-times when people are afraid to invest so you can put money to work in situations where there is opportunity. in the short run, yes, there's a lot of dislocation, by rations are blown down, and there are companies with really unique assets. we want to buy situations just like that. alix: you talk about the board, are they more skittish and say, cat take on the macro

environment? >> they tend to always be skittish. business tends to move very slow, even though we think think should happen faster. couplen talks with a of different comedies about changing the board. we are in talks with them weeks or months at a time. scarlet: there is a lack of urgency there that you experience. give us an update on entertainment one, ike u.k. company, but canadian listed. great they have a franchise. there is a big disconnect between the value of that company and other companies out there.

i think content is king. i look at entertainment one as a value play, but also one that needs to alter their strategy. we have had contact with their board and with the largest shareholder, which is the canadian pension plan. my view is that we need to see changes and adjustments to the board and also changes in investments to their strategy. if they can start to deliver on that, i think the gap will close on valuations. i also think there is tremendous m&a opportunities in the space. ingomberg was announc they might be in play and in talks with itv. scarlet: that ended up not happening, yet, what kind of changes have you seen from the management side? how have theythey might be in pn talks with responded to what you are suggesting and what the

market is asking of it since then? david: we are in constant dialogue with them. we have a call with them tomorrow. there is an update from the company. they seem to be coming around to investorshat think there needs to be that kind of change. everyone really agrees that there needs to be some changes at played and therefore the valuation is too low. going back to your initial discussion with itv, rumors are rumors, but part of the idea there is the deal will happen anyway because even if you add a 30% price to the premium, that was way over the initial stakes. obviously in a lower valuation, by think there is tremendous upside. "is a lot of value. alix: talk about value.

last year, you had the trade of the year. when you told me you were going long glencore, i thought, you are crazy, and that was the best trade of the year. what is your next hot trade? we tend to not look at hot trades, per se. alix: what will be the awesome trade this year? glencore, over the next several years, has further upside as the balance sheet comes more in line. i live for treating business. in terms of new opportunities, we don't like retail right now. initiating a company called urban outfitters.

we think there are some issues with their business model, going forward. everyone is pulling back from the physical aspect of the business and going to online. clicks versus bricks. whereas, this company is increasing their store count, and we think that might be the tipping point. scarlet: thank you so much for joining us today. alix: this is bloomberg markets. ♪

next hott is the investment in energy? we will ask david neuhauser. what is the number one trade you see? david: in energy, we talked to a few months ago, in my view was the first quarter was the low. i think for the next several years, if you are an oil company and you can stay in business, you will do very well. we made a lot of investment in the first quarter because of that. investment in the

along with two other hedge funds. we transformed the whole company. we took it from a next version company to an operating and production company. we will back it was a lot of along with two other hedge funds. capital. we think there is a phenomenal opportunity to put capital to work by depressed assets in the private market and put those assets in nature and grow and develop it. scarlet: within energy, what sectors would you avoid? which sectors would you not touch? david: i think there is still a lot of stress and services. offshore is an area that we are looking to avoid. us, this is an opportunity because as people pull out of the asia-pacific, that creates the dislocations

that we have discussed. i think people are trying to lessen ther their footprint. we see opportunities abound in a lot of different areas. gas companyl and which we are holders in and we think there is long term potential in par. we have a good stick their and other situations like that. alix: thank you so much. great to see you as always. scarlet: coming up in the next hour, hong kong's richest man. he explains why he is bullish. more on that exclusive interview. ♪

scarlet: welcome to "bloomberg

from bloomberg world headquarters new york, good afternoon. alix: the brexit vote is two days away and janet yellen is weighing in on what it could mean for the markets and the economy. scarlet: hillary clinton is leading donald trump in polls and fundraising. alix: plus, and exclusive interview with hong kong's richest man. hear what he has to say about the state of the economy. scarlet: first, let's go to the markets desk and julie hyman. we've got a mixed picture and the nasdaq just turned negative in the last 10 minutes and volume is down about x percent. 6%.bout the range of trading is small and investors, many of them, or watching what will happen from

the u.k. vote on thursday. i had of that, we are not seeing a lot of action today. yesterday started with a pretty substantial rally and then it faded. looking at the two day of the s&p 500, you see it they and then the sideways movement today. you can see how small the range looks today versus what we had yesterday. in terms of what is moving, technology shares have helped lead some of the gains. the wall street journal reported next iphone update will only include minor changes and it's not ready to roll out larger changes until next year. microsoft is trading higher and facebook is higher. the company's shareholders affirmed the members of its boards and approved mark zuckerberg bus nonvoting share structure. andre also watching telecom

trying to look for something going on causing an increase. sprint is rising after the nikkei reported it might look to secure ties to stone frequencies. interesting. alix: wow. scarlet: i thought it would be stone -- cell phone bills but it's cell phone frequencies? what was the market reaction? julie: not much. we did not see much action. the yield is taking a leg up but it's a small move. dollar has been moving higher throughout the day. it has not seemed to react to the yellen testimony, up about 1/4 percent. we will continue to keep an eye on that as brexit takes place in london. alix: let's look at first word

news. mark: thank you, two days before the battle over whether the u.k. will remain in the european union is too close to call. a new poll published in the times newspaper has the leave camp in front of 44%-40 2%. >> we can promote and preserve the values we hold so dear like democracy, like freedom, like tolerance. that is how her extraordinary country has always made its influence felt. not by walking away from the world but by engaging with it. brits don't quit. has remainvey holding a 53%-40 6% advantage. a shameful display of cowardice is how josh earnest describes the senate's failure yesterday to pass gun-control measures

following that mass shooting in orlando, florida. he said the republican led chamber blocking of fork on control proposals does nothing to keep -- locking of 4 gun-control proposals does nothing for progress. hillary clinton is scheduled to meet with houston mcgrath on wednesday. it is her first session with them since becoming the presumptive democratic presidential nominee. she is expected to discuss her agenda and how she expects her campaign to unfold. nominee,y republican donald trump, plans to meet with house gop lawmakers on july 7. 2 wildfires have burned seven square miles in the foothills of los angeles are growing fast and are surging closer to each other. they have forced several hundred people from their homes. triple digit heat has aggravated wildfires from the pacific coast to new mexico. the crews are making progress against the nearly week-old fire

in coastal mountains west of santa barbara, california. global news, 24 hours a day come up howard i more than 2600 journalists and analysts in more than 120 countries. scarlet: thank you so much. wrapped up her testimony in the last hour the market vocus on a slight change in the language from her statement. >> proceeding cautiously and raising the federal funds rate will allow us to keep the monetary policy -- the monetary support to economic growth in whetherile we assess growth is returning to a moderate pace and whether the labor market will strengthen further and whether inflation will continue to make progress toward our 2% objective. scarlet: the key word there was whether not when. she had set a cautious of roach would allow us to -- a cautious

approach would allow us to assess if things are improving. literally changed in the last six days? you had the brexit campaign suspended for 46 hours. markets are not reacting to dramatically but there is a slight shift downward and caution about the economy more than anything else. the fact that markets are not paying attention to yellen is perhaps a sign that whatever people are reading into it, the bloomberg characterized it as a subtle shift. she discussed the risks that brexit could cause. yellen i think it would usher in uncertainty and it is very hard to predict. ofre could be a period financial market volatility that would negatively affect financial conditions and the

u.s. economic outlook that is by no means certain but it is something we will be carefully monitoring. alix: just the latest central bank official warning that things might get dangerous if this happens. joe: she did not say that much there. she said it would cause uncertainty like any of us could say but that is probably smart for her not to commit to too much about what it means. it's the huge source of uncertainty and that's why we are not talking about anything else for you alix: everyone keeps warning that this could be a risk. scarlet: which is why we will devote all of tomorrow talking about brexit and the risk. we have george magnus coming up later on. joe: that should be a fantastic discussion and we will talk about the economics of a possible brexit and what it means for the pound and the politics of it. i'm looking forward to that conversation. scarlet: he says there is a

10%-20% drop in the pounds of value? alix: he said that might be optimistic. he outlines what it could mean for sterling comparing it to 1992 and why it would not be a good thing like it was before. joe: how stunning to see the headline that sterling was at its highest level since brexit was announced. alix: we will catch you later at 4:00 p.m. $4ebook bought instagram for billion and it looks like that is paying off. instagram has doubled in two years and now reaches 500 million monthly active users, 300 million daily users, 80% of those numbers are users outside the u.s.. scarlet: emily chang sat down with the cofounder in menlo park, california. he says this is a tremendous benchmark. >> i think the last time we talked, we had a couple of million users on instagram. it has been a little over five years. it has been like getting there

b -- we build from a company of 13 people too shy of about 500. it is crazy this scale. we have nearly one out of three people in the united states using instagram every single month. it is ubiquitous and that's every entrepreneur's dream. emily: you out of the last 100 million users faster than the first 100,000 -- 100 million. >> images are universal language and they speak to everyone. it allows us to glow -- to grow globally quickly. and if thereebook is any company to learn how to grow quickly internationally, facebook has been a tremendous help with her infrastructure and expertise. you just more than doubled in the last two years and averaging 4.2 billion likes per day. how fast is instagram growing? >> a lot faster than it was when we first talked. what's interesting about growth

now is that it's happening mostly overseas. you are seeing countries light up in the same way the united states did early on. you are seeing android take more share on instagram. it is definitely a more global growth. you can see a global diversity of interests. -- sushio she chefs chefs in japan and amazing people doing arts and crafts in france, a diverse of interest. that's what's cool about the growth happening today. emily: talk to me about the demographics. are they mostly young people? >> it's a range and that's what's cool. it's not just for teens or established tech folks. it's about being anyone you want to be on instagram. it's not for one particular group. you sold to facebook in 2012, the skeptics said this would not be good for you and being part of a larger company would slow down growth. does this validate your choice

question mark >? >> every single day there is skepticism about everything. that arehanges we make not only popular on day one usually turn out ok. that's because we see them through. mike and i have been with the company for 5.5 years we take these challenges one by one. there are skeptics back in the day but i like to think that getting to 500 million users is an amazing milestone for our community and for us. emily: 80% of users outside the united states, what do you think it is about instagram that makes it so universal and can appeal to a sushi chef in japan or somebody in africa? part aboutest instagram's early on, we saw an international community blossom. the popular page or discover page, you go on that in the early days and you -- and depending on the time of day, there were different people posting photos.

you would see an international community arise and i created links between people who did not necessarily speak the same language but could understand a common image. that's what's most powerful about instagram and why it has grown so well overseas. emily: where you see large pockets of users overseas? >> i think brazil is one of the biggest. you see that as a very different type of culture especially technically because they use different platforms and phones but they are into social media and they love sharing their lives through images. my cofounder is from brazil and when he goes home, he is an all-star. emily: mike is from brazil? >> he is. emily: what are your plans to harness that during the olympics question mark >> every single time the olympics comes about it's a big deal. in differentrest countries represented and now that instagram is so big and global, i think it's a great platform to see what's happening on the ground. emily: anywhere else globally

you would single out where you have seen growth skyrocket you did not expect? >> it's easier to point out the places where it doesn't grow. that was the instagram cofounder and ceo. erik: coming up, scarlet: clinton versus trump and who is leading in the polls in the fund-raising. ♪ -- and the fund-raising.

alix: you are watching bloomberg markets. scarlet: hillary clinton is holding her lead over donald trump. voters supported

hillary clinton. is fallingillionaire behind in fund-raising as well. joining us as to why he is falling behind is our campaign finance reporter. >> the short answer is he has not done much to raise money. during the primaries, for the most part, he paid his own money and depended on free media exposure to win the republican primaries. after that, he said he would start raising money and would appeal to donors and hold fundraisers. the numbers show he really has not done anything in the month of may. there is a real concern on the republican side that he does not have the organization he will need to compete with hillary clinton. scarlet: that's why you have a change in the campaign manager. what indication do we have that republicans will support him? >> tonight, he is having a

fundraiser here in town where some of the big republican names on wall street like john paulson and stephen feinberg of cerberus will host an event with many people slated to show up. some republicans are coming around but is he starting to late? can he get enough of them to compete with the hillary clinton machine? may with $1.3d it million on hand and hillary clinton ended with $42.5 million. donald trump is all over twitter and he gets more exposure than he would from a campaign ad in iowa. what do you think? >> that's his whole argument. he says i am a different candidate and i don't need to play by the same rules. if you look at the republican primary, it's hard to argue with him. he ran a different campaign than his opponents and beat them. does it work in the general election? i don't know if anyone knows that answer.

scarlet: what you hear when you talk to experts? , youere are differences are appealing to a different audience that is more national. you are appealing more to people who are independent who may not really be democrat or republican. some of the messages that worked well to win over republicans might not work so well when you are reaching out to independents. alix: thank you very much. scarlet: coming up, as companies turn more to cloud computing, look at the winners in the tech sector next. ♪

scarlet: this is bloomberg markets. alix: we want to turn to the tech sector. some investors are moving away from so-called legacy tech and

is ours and towards higher growth cloud companies. scarlet: you've got companies like ibm looking to the cloud and microsoft is doing that as well. alix: microsoft potentially bought one company but actually bought linked in. carol massar and cory johnson join us now. carol: at what'sre looking going on with tech stocks. when you are looking at the world of tech stock investing, are there trends you are focused on? >> the long-term macro trend right now is the shift away from and thet, on premises shift to the cloud so away from and more like ibm

toward companies like amazon and workday and service now and salesforce.. l: what has that meant in terms of your portfolio? >> the big shift we made earlier betweenr january-february during the volatility was to move out a lot of the legacy it positions and concentrate the portfolio in the higher growth, more rapidly being adopted, cloud companies. we think this year is the year for cloud adoption where in order to keep your job as the chief information officer, you need to be moving to the cloud now and make these changes to improve the security of your organization. rol: the more specific, which companies have you been buying or selling? some of the leaders in the cloud are clearly amazon with their web services and work day

which is a manufacturer of hr software and salesforce. calm and ultimate software which is cloud-based payroll and a host of smaller vertical cloud companies like guide wire in insurance, tyler technologies in the private sector for state and local government cloud-based software. a cory:ltimate is company that has been around forever, since clouds were in the sky. is it truly a cloud company? their growth really has not changed from when they were on premises to whatever they are today. >> we defined cloud as multi-level. if you run multiple customers on the cloud off premises, that's truly cloud. we would contrast that with p.acle or s& they are not really reaping the benefits of it so real

cloud-based companies are steady growth because they can pick up market share from a legacy company like adp in payroll and slowly grow. out as a money manager manage that? s, we focus at grassroots research so we attend an industry event. next week, i will be at the red hat summit in san francisco. that is where we try to pick up on the shift in starting last fall, there was a major shift where it became i will lose my job of i don't get my organization into the cloud. cory: we have covered these issues for a long time. think it's still early days. of theseall percentage

organizations are in the cloud, less than 10%. cory: because it is cheaper? it is but it's not as much a cost savings as much as opening up a new set of opportunities for company that can move faster and innovate and stay ahead of the competition. cloud from athe pricing perspective is becoming a smaller issue. carol: how you see the cloud longer-term? is it a handful of large players? is there plenty to go around and you will have multiple players and some developing specialties? >> it's a major platform shift. in some respects, it's truly a tell but as things move to the cloud is the big get bigger. of clouds 90% share infrastructure. and googleas 5-10 has 1%-2%. amazon could gain significant

share in the cloud. cory: who might miss the boat? >> we like google for other oninesses but it's incumbent them to figure out the cloud and they have not yet. cory: thank you very much. scarlet: thank you so much. ahead, oil prices at $80 per barrel? we will have the latest upgrade from raymond james. this is bloomberg markets. ♪

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alix: from bloomberg world headquarters, you're watching bloomberg markets. scarlet: let's go to the headlines.

let's go to the newsroom. ark: hillary clinton says donald trump presidency would push the economy back into recession. speaking in ohio, the likely democratic presidential nominee portrayed her likely republican rival as erratic and unfit for office. she also criticized his business record saying it's evidence of how he would treat working families and small businesses. u.s. attorney general loretto lynches in orlando, florida where a shooting on june 12 left 49 people dead and dozens more wounded. she met with victims and first responders. authorities are trying to determine why omar mateen targeted the popular gay nightclub. the taliban has carried out a series of ambushes on bushes -- on buses and cars and southern avenue n a stand. -- in southern afghanistan.

an afghan official says about 60 people were kidnapped and insurgents claimed they released all but 27. the abductions come as the taliban increases attacks as part of its summer offensive. brazilian officials say the summer olympics will bring in a strip 350 thousand-500,000 tourists and they are standing firm despite evidence to the contrary. the travel entry says a two-year recession and ongoing political virus has the zika taken a toll on tourist enthusiasm. brazilian air travel has fallen and only 2/3 of event tickets for the topics have been sold. hours a day,24 powered by more than 2600 journalists in more than 120 countries. alix: thanks so much. let's turn to the oil market as thee is up 85% from february lows and was trading around $50 per barrel.

what about $80 barrel next year? we go live to houston. what is the number one factor for wti in 2017? >> it's simply that we are under atnding capex and we are not a replacement level for supply so it continues to dwindle at $50 per barrel and demand continues to increase. we need to get a higher price to incentivize activity and higher production. take a look at my terminal -- this is a function that shows the curve of oil prices. around $49 we are per barrel but next year, $52 per barrel. the call is up to $80. it's literally off the chart. scarlet: what do you see that everyone else doesn't? we get a lot of pushback on

the inventory level and we don't think it needs to come down to normalize levels to get there. once the under spent starts and we see the declines in production and the continued increase in demand, we see the oil market being undersupplied in the second half of this year and next year, inventory drawdowns of over one milli on barrels per day. scarlet: they say outages will continue in nigeria and canada. alix: and that could relieve the drawdowns but we are so far above the average. how do we get there? i think we've got to major we are thinking about how much the cash flows are needed in order to replace the production that is there to maintain production and because demand continues to grow next year. we actually need to grow production so we need to incentivize the u.s. to grow production and we don't think

that's capable of being done at $50 per barrel. you need to be closer to $75 to do that given the constraints and the system that has been decimated over the past two years where capex spending is down in the u.s. by 70%. scarlet: oil has been a supply driven asset for years now. what about the demand side? where do you see that picking up? demand has been strong over the past couple of years. the low prices have intensive -- has incentivized fuel usage. go back to 6%hina growth in 2015 but we don't think it will stay there. the amount of driving in the u.s. being about 5% and the actual fuel consumption has driven a resurgence and how much global demand has grown. it yields to a higher base in

2016 and we expect to continue to grow next year. markets as well as china and india. alix: so the long-term call is to incentivize u.s. production. the issue i have to wrap around is with a rally, we are seeing a lot of producer hedging. c producerrted cft short positions. if you see a rally in crude and you are a producer and you short and you are selling oil forward to lock in a good price and in essence, that acts as a cap on oil prices. scarlet: what will it take to get the oil companies to change their way of thinking? they are still pretty suspicious of the rise in oil. >> i think that's rational. we went through a significant rise in oil prices last year and then it pulled back. we see in under

balanced market in 2017, a higher oil price and hedging is reducing the cash flows throughout years and thus reducing your and activity. -- capex and activity. in the long-term, you are reducing the fundamental supply into the market. alix: so that creates more issues going forward. ofthe short term, what kind downside potential do you see? >> we see the market is being undersupplied in the third and fourth quarter. there may be trading volatility but we think we need to start incentivizing rates -- rigs to go back to work. near term, there may be downside but toward the end of the year,

oil prices need to be higher than what they are today. alix: thank you so much and that's an outlier call. scarlet: how can you make money off of rising oil prices? according to a new report, 25% of rival equity investors plan to deploy money into oil by the end of the year and more will join next year. alix: joining us now is the ernst and young transaction leader from london. i have been hearing this for 1.5 years that p/e will get in and we will see lots of m&a. why do you think it will take off in the first half of next year. the mood think about in the market around the turn of the year, there was no question of anybody having an upside view. is peopleappened now and the market feel more confident and they understand

where the market is heading. there is now some of you that perhaps we might see prices surprise on the upside as well as the downside. that means everybody is looking at the assets and saying can we take advantage of lower asset prices and get in at the right time of the cycle and make some money? scarlet: so no one was willing to take a stand before and now that there are people, they are willing to make a call. have been hearing that the bankruptcies will take hold in the fall and you have to have a watch out before you get the mergers. do you see that time sequence? >> yeah, we have already had i andk 80 or so bankruptcies there is more to come. there has not been too much m&a activity driven by the bankruptcies. people are coming out of the bankruptcy and looking at their portfolio was they have sorted

out their balance sheet. as everybody looks at what they've got to where they have the operating abilities, there is a huge amount of assets and owners that need to change. p/e has a huge role in that. talk about the amount of money that p/e firms have on hand to deploy. >> there is a huge range of numbers. in terms of the total number they could access, it is near $1 trillion. if you look at the number that is more specifically a la get into and gas, is probably lower than that. it's still somewhere between 70-$80 billion.

they've got a lot of money sitting there and there are several funds out there that raise money specifically for energy. if they don't put money into energy, they will have to explain what they will do with it. there are people now who cannot wait forever for the come back in. there has been a lot of worry and they don't want to look stupid by coming in at the wrong time and overpaying nets being balanced by the fear of looking as though you were left behind. alix: what kind of private equity structure and deals will we see in the cycle that is different from what we saw in the past? >> i think we are going to see a few changes. i think we will see some use of jv. i think we will see more use of drill codes and more use of structures where private equity comes in not necessarily to buy companies that sign onto expansion programs.

p/e firms things the want to do is put their capital in to grow the business but not sort out existing balance sheet. what regions do they see the most opportunity? unanimous inas so the asia-pacific region and north america. there was almost no disagreement. the oil and gas world, north america and the u.s. in particular is the 800 pound gorilla that has way more activity than anywhere else. it's a more liquid market than anywhere else. the funds are comfortable operating there and that will come back first. that was no surprise. apac surprise me a bit because it's a different type of market. when they look at that market, with ac is this giant demand

growth potential that your previous speaker was talking about. -- where will it come from? it will be asia-pacific. you are buying into a high-growth story which is what the private equity houses love to do. alix: what kind of sectors will we see the most p/e activity? it sounds like you're talking about mainstream. >> certainly midstream. split roughly 50/50 between upstream and midstream. for those in the downstream, there is not much interest. you've got one group that will target upstream heavily in the u.s. they understand that supply chain and how to make money. you have one group that will target the infrastructure assets in asia-pacific. you've got a much smaller set of interests between those two that

will look into either oilfield services or into downstream but it's those two that -- where we will see interest. of that workslot because interest rates are low and you can put it in very efficient debt structures. if interest rates start to climb, i have a question in my mind about what that does for the demand for infrastructure type assets. scarlet: we will leave it there, thank you so much. alix: it's finally going to happen. scarlet: we have already said that a couple of times. alix: coming up, is amazon about to cut out fedex? we will crunch the numbers ahead of the fedex earnings scarlet:. this is bloomberg markets. ♪

alix: let's go to the markets desk with julie hyman, looking at decliners. julie: i want to start with big groups that are declining. the nasdaq biotech index has been selling off not just today but 10 out of the past 11 sessions. the russell 2000 of small-cap stocks, 70% is down on the day. jones transportation average despite some strength in airline stocks is trading lower. let's dig into biotech. the drug and biotech companies

are trading lower today. there is a coming ruling on whether there will be medicare cuts in the coming year. there is the continued scrutiny on drug pricing coming from congress. that seems to be one of the things that is helping prompt these stocks to selloff today and selloff recently. another company is impax laboratories. forill buy portfolio drugs $586 million. analysts like the deal. a j.p. morgan analysts said the impact attractive that has cut its underlying guidance and that appears to be one of the reasons the stock is selling off to such a high degree, down by 12.5%. in the transports, airlines are higher today but trucking and logistics companies are trading lower. this is thanks to warner enterprises. rnerannot with -- we

enterprises. it came in way below what analysts were anticipating saying its earnings per share will be $.21-20 five cents and the estimate was for $.40. one analyst said the magnitude of that miss may take investors by surprise. werner cited sluggish conditions and other conditions. any of these things could affect its competitors and that's why we are seeing a selloff across the logistics and transportation industry. scarlet: thank you so much. staying with logistics, is amazon about cut fedex out? amazon might build its own delivery system. fedex ceo had called these reports fantastical and unlikely. let's go inside the fedex numbers. amazon has given every indication that it is serious

about investing in logistics. ehrlich -- earlier this year, they bought to boeing jets. this is the revenue growth part over the last decade. to increase at a five year compound annual growth rate of 6.4%. the ground segment is the white line at the top and that led the way, up almost 30% last quarter. fedex raise the bottom of its full-year earnings forecast as .7 neared the end of a 4 billion dollar cost reduction program. fedex is considered an economic bellwether because the company publishes projections for global and the mystic gdp. 2.2%es the u.s. expanding and the global economy expanding 2.5% in 2016. that is lower than the forecast from a year earlier.

fedex has a more global footprint. it's 4.4 billion dollar deal for it gainess should help more of a european express market where fedex has trailed its rivals. will get more on the fedex outlook after the close of u.s. trading today. up, an exclusive interview with hong kong's richest man. hear what he has to say about the state of the chinese economy. this is bloomberg markets. ♪

alix: this is bloomberg markets. economic datat

shows the chinese economy is stabilizing despite concern about rising debt. hong kong's richest man owns many assets in china. -- he spokeo exclusively with us. he says he remains optimistic about the future of china. >> i have a lot of experience when it comes to manufacturing. the fact is, china exports more than imports. aside from manufacturing, there is also the service industry as well as many other channels of income. debt inan only see the the state owned enterprises. when they need to recognize that china is a big exporter and the inflow from foreign exchanges is positive for china. exports exceed imports and that's a fact.

a lot of income is generated from the service industry. so, in the long run, the chinese economy looks good. >> recently, you faced criticism from some publications on mainland china accusing you of diversifying away from china at a time of slowing growth. is this true? in 1977 and 1978 when the gang of four lost power, it was then that i visited mainland china. there was an opportunity and they invited me to visit. a ping hadme, den xi not announced he would be leader. inclinationom their and i met with uncle deng. at the time, china gave me a hopeful feeling. >> there are many chinese

companies who are looking overseas to acquire businesses but they keep adding shut down by regulators including yourself. what is the impact for chinese companies in the future? how do they fix this? >> it needs to be fair. china welcomes foreign investments so other countries should also welcome chinese investors. >> is this frustrating? no, we don't have problems with our situation. we are in 52 countries and we continue to expand their business. in the past couple of years in europe, we have gone into new sectors and making new investments. no problems there.

we need to be respectful of y's regulations. that was our exclusive interview. scarlet: amazing she got an interview. up, senator richard shelby, head of the senate banking committee, will join us to discuss janet yellen's testimony as a committee gets ready to question her tomorrow. this should be interesting. scarlet: this is bloomberg markets. ♪

it is 2:00 in new york, 7:00 in london, and 2:00 in hong kong. nnie: welcome to "bloomberg markets."

david: a janet yellen signals the fed may hold back while others question the credibility of the fed. senator richard shelby joins us. as we doixed sessions with brexit. david: will it have an impact on the travel industry? ar guest is the founder of travel website. ramy inocencio has the latest. y: term right now is range bound. janet yellen speaking on capitol hill with her t