scarlet: from bloomberg world headquarters in new york welcome. matt: here is what we're watching. the speech the world has been waiting for finally arrives. federal reserve chair janet yellen says the case to raise interest rate is getting stronger as the u.s. economy approaches the central banks goal. scarlet: and markets are reacting to her bullish comments. she gave no guidance on when the move could come. matt: so the question is where can you invest your money? what area may you want -- one area you may want to know better is etf's. kevin o'leary joins us this hour. scarlet: let's head over to the markets desk where ramy

inocencio has been tracking commodities and fixed income after janet yellen's speech. ramy bank -- ramy: right now the dow and s&p 500 are going into negative territory. the dow is the biggest laggard down a quarter of a percent. they all have been hitting session highs about an hour ago after yellen said the case for rate hikes has strengthened. also talking about that are guidance for the u.s. economy. i want to show you the sector of health in the s&p sectors. i talked about how these were all probably in the green. this has changed in the past 60 minutes or so. he looks like three of the s&p sectors are positive, but not by much. about 1/10 of a percent, telecom

utilities down the most. but stick to health care because there is a lot of movement going on. first off mile and -- first off my land -- first off mylan. mylan did say they would increase the programs after the scandal that hit last friday. the actual retail price does not change. meantime let's switch over to herbalife. herbalife is down by more than five percent. this is on reports of carl icahn is trying to sell all or part of his stake. the walls tr -- wall stretet journal saying he's trying to

sell it to a group, including bill ackman. a lear is down by 2%. it has actually filed a suit. it is now down 4/10 of a percent. avid has been trying to get out of that deal there. let's head over to st. jude medical. them being the target of a carson block short trade. it is down a couple of percentage points. i just calculated it is a market loss function of 16. billion do -- of $1.6 billion. mark: there is a new problem of the central italian real estate

after this weekend's earthquake. even before that the roads in the area were congested with emergency vehicles. the death toll has risen to 267. turkey is blaming kurdish militants for a suicide truck bombing on the southeastern part of the country. a truck exploded at a police station, killing 11 officers. last year violence resumed between police and kurdish militants after a two-year truce. hundreds of security personnel have since been killed. hillary clinton has depended upon her family's foundation. the former secretary of state said the foundation's programs would continue, possibly through other organizations. she promised to put into place additional safeguards. nothe storms maximum

sustained winds were near city five miles per hour but the national hurricane center expects gaston to gain for us. it could re-strengthen to a hurricane by tonight. the storm is centered about 200 miles east southeast of bermuda. global news 24 hours per day powered by 2600 journalists and analysts in more than 120 countries. scarlet: janet yellen says the case for an increase has strengthened. those are just some of the key takeaways from chairman yellen's speech in jackson hole, wyoming. let's get straight to jackson hole where michael mckee is standing by with harvard finance officer carmen reinhart.

michael: janet yellen is responding to economic data in an old-school model of recovery of recession. i am reminded that you pointed out to me here may be six years ago that this was not your garden-variety recession. this is a financial recession and it takes much longer to recover from that and the policy prescriptions are different. guest: i think we became accustomed. we have highlighted that recovering from financial crises is not the metrics of the postwar recovery recession cycle are not particularly good. if you look at the u.s. recovery to date and compare that to postwar u.s. recovery you will

be disappointed. if you compare the u.s. recovery to the worst systemic financial crisis, which i think is the appropriate metric, it is not as disappointing a recovery. europe is a separate issue. it had already been lagging behind. i think that it is the appropriate compares him paid a financial crisis we get -- i think that is the appropriate comparison. i would add that chairman yellen and the fed at large are very much aware of the rules of the game at this stage. they are different and have changed. -- and the fed at large are very much aware the rules of the game at this stage are different and

have changed. the regulations themselves may be affecting how affective monetary policy is in getting the economy going. i think that is a concern they are a tackling -- they are tackling. michael: what would you do to smooth out this process? carmen: i have been and continue to be a favorite of a gradualist approach towards normalization. by normalization i don't mean getting the fed balance sheet to where they were precrisis. i don't think that is in the cards anytime time in the foreseeable future. but i do favor a more gradualist approach. let me also explain why. we have to put the u.s. fed

policy in the broader international context. even if the fed does nothing, u.s. monetary policy will be tighter vis-a-vis the rest of the world. everyone else is loosening, one after the other. i think that kind of widening gap would be consistent with an appreciating dollar. and appreciating dollar is a drag on economic activity. -- familyan appreciating dollar is a drag on economic activity. i would tackle the tightening process or the unwinding process. andmichael: where are we in the recovery process? how much longer to receipt growth and 2%

inflation? when does this turnaround? carmen: different indicators have turned at different speeds. if you look at the u.s. labor market it compares well with recovery from a systemic financial crisis. the challenge we face is recovering labor markets have not translated to more robust gdp growth because productivity has been disappointing. that is an area where there are still question marks, whether the productivity slowdown we are seeing is going to be reversed

or is more secular in nature. michael: the title of your book was apt. it is different in terms of what brought on the recession. in a recovery, have we seen a secular change? do we have a different kind of economy? carmen: some would argue growth has slowed for an extended period of time. the democratics -- demographics of today are not the same as the demographics in the past. i think we are still coping with a dead overhang. from the global financial

crisis. part of my presentation in jackson hole was basically saying those cycles are seven-year cycles, they are deleveraging. it is a headwind for growth. i would argue that process is still ongoing. and in europe that process has been, even by historic standards, the worst. even by the standards it had been sluggish. i think the u.s., first of all a big her off for the fed -- and big who ra -- big hoorah fo

rtheor the fed. i think the timing and magnitude of the response explains a lot. i think the u.s. in its more typical maverick fashion allows are deleveraging of households. we all remember the foreclosure crisis. foreclosures were ugly they were messy. but they did reduce household debt balance sheet and bank balance sheets a lot faster than what we are seeing in europe. the process of think debt in europe still a little large. i think the monetary policy response speed, and leveraging has a lot to do. i have been a big proponent that

the ecb should tackle the deleveraging in europe, to the extent that it can. michael: you use the -- definition of recession and recovery. we are seven years now from the end of the recession. are you optimistic about the future course of the economy? are you optimistic? carmen: are -- if you are asking me if i'm looking for a recession around the corner, i'm not. i think the axis that often characterized the [indiscernible] when you are at low levels of growth, which we are derailment doesn't take much drama, which

is also my concern about to being of unwinding of qe -- too unwinding of qe. we have become an increasing service of economy. but the sector gets hammered each time you have sharp sustained appreciations in the dollar. michael: so don't do it, basically. carmen: treading carefully. it is understood there is normalizations in the works. it is understood speed and magnitude are important. michael: we will send it back from jackson to new york. scarlet: michael mckee, our economics editor. this is bloomberg.

scarlet: let's head over to the nasdaq where abigail doolittle is tracking the movers there. abigail: just about an hour ago we had the nasdaq higher than 7/10 of 1%. now the index is down 2/10 of 1%. some interesting intraday policy post. this is caused the index to fluctuate on the week between gains and losses currently down. if the nasdaq close on the week -- close down on the week it will be the first down week in nine weeks. it will be the ninth weekly --

winning a week higher for the long list winning streak since 2009. if we stay in the red it will be the first weekly decline in nine weeks. that will be below 5238. as for the big story on the week, biotech is decidedly down on the week. we had the biotech debt -- biotech index down. the big story, mylan. lots of controversy around the companies. and hillary clinton said the pricing was outrageous. the company responded by lowering the price but all of this has really dragged on the biotech sector. we go into the bloomberg and i took a look at -- you see a market down as much as 40% at one point. what set this off was a tweet from hillary clinton pit right around this time last summer, voicing her concerns about high

prices in drugs. you have people and investors who could be concerned that this was going to be the issue once again. they continue to make this biotech market, their market, much worse. definitely something to keep an eye out on here. scarlet: still ahead, donald trump and hillary clinton trading jabs over racism and their support for minorities. is this rhetoric on the swing either way?

scarlet: welcome to bloomberg markets. matt: we have's -- we have seen new reports -- we have seen donald trump reach out to minorities, saying they have nothing to lose by backing republicans, and we have had mrs. clinton trying to tie trump

to the altar right fringe movement a phrase i just heard yesterday for the first time ever. hillary clinton: from the start donald trump has built his campaign on prejudice and paranoia. he is taking hate groups mainstream and helping a radical fringe take over the republican party. the disregard for the values that make this country great are profoundly dangerous. matt: joining us now is bloomberg politics reporter -- it strikes me that this whole altar right thing could have been made up to distract us from what is going on with hillary clinton's e-mail. is that a possibility? steve: made up in the sense that there is no doubt that donald trump has impacted some unseemly supporters. that has been documented.

hillary clinton went through a laundry list of things trump has said and supporters trump has attracted. so putting that aside, let's step back and look at that this week. by the end of the week, we are back in the fight to define donald trump. that is where the campaign wants this election to be. we see a roundtable. his new campaign is trying to -- a bunch of different rhetoric. until yesterday he just scaled back a little bit. and the clinton campaign -- we

want to keep that fight over how the voter see them. we are probably going to see this race continue the direction it's going. scarlet: their lease keep it on their trail of the other. you mentioned distraction. what about trump's campaign ceo? has he become a distraction? there have been's -- have been some headlines. steve: we will have to see how much of this gains traction. donald trump had the last chairman of his campaign, paul manafort, step down. the cousin of distractions storing us, over his -- distractions. those the reason paul manafort had to go, he was too much of a distraction.

a new win out today digs up a 20-year-old domestic violence -- a new one layout today digs of a 20-year-old the mystic violence altercation. stuff like this is going to come out. and he was a huge centerpiece of the clinton speech about the altar right. -- the alt right. donald trump's staff is going to be in the middle of a place where they don't want to be. matt: thank you very much. scarlet: coming up, you know him from the hit show shark tank. but did you know he has a whole line of etf you can invest in? kevin o'leary joins us next. this is bloomberg. ♪

matt: live from bloomberg world headquarters in new york, i am matt miller. scarlet: i am scarlet fu. this is bloomberg markets.

let's begin with bloomberg first word news. mark c.: the food and drug administration once all u.s. blood banks to start screening for zika virus. the requirements were originally limited to areas with active zika transmission. blood things already test -- blood banks already test for hiv and hepatitis. a new proposal would put a device on vehicles weighing more than 26,000 pounds. turkish officials say that the president and vladimir putin have agreed to speed up efforts to deliver aid to the syrian city of aleppo. the two leaders reached the decision during a phone conversation earlier today. a trial against brazil's

president turned into a yelling match and was temporarily suspended for the second time. the head of the senate declared that stupidity was an list. de la rue says -- dilma rouseff speaks out on monday. she denies any wrongdoing and argues that her enemies are carrying out, in her words, a coup d'etat. global news, 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: thank you so much. canadian businessman and shark tank investor, kevin o'leary, is celebrating one year since the launch of his oceanshares. since then, it has gained 20%. he has seven new eps in the pipeline. we have kevin o'leary joining us

from toronto. also with us is our own eric who covers bothetfs for bloomberg investments. it seems the funds would take a more conservative approach. is that your view of the bond market right now? >> it is my view of the bond market and equity market currently. i'm not particularly enamored with market cap industries because they are market cap waited. i'm not interested in owning a large percentage of anyone stock. what concerns me the most about the markets now is the actual balance sheet of the company i am owning. when he think about one factor

there are many stocks i don't want to own because they are using debt to increase the dividends. i have some basic tests in mind. i am an investor and use them in my trust. i want low volatility, guess, and i want dividends, but that is not my number one concern. i want companies that turned her assets quickly, for example. i don't want a company that is slowing, like apple was, and that is why i don't own that. it gives you an idea of the kind of thing i'm looking for. quality quality, quality. i don't know a time in history when of quality balance sheet will fall out of favor. in my mind, never. matt: when i look at ohusa that is obviously a hit. dividends are hot.

my question to you is we have seen dividend etf's explode. this is outperforming. how much money do you think is chasing performance allocating long-term to the dividend strategy. >> i don't think people are buying ousa for the dividend strategy. ousa is capped at 5%. 20% in any sector, that it owns in every sector. you own the best balance sheet. we owned energy when it was not popular. the strategy of attracting investors who want really high-quality balance sheets, at the same time, one of the symptoms of owning high-quality balance sheets is a high dividend yield. the yield right now is under 2%.

the yield inside the companies inside ousa is more like 4.6. the reason they buy in ousa is for performance. matt: you are clearly bullish etf's. i want to get to the story of why in a moment. i think it is really fascinating, your theory of what happens to active managers every seven years. first, i want to ask about some of the etf's you have out there that do not trade that much. the asia-pacific etf only trades about 2000 shares daily on average. the ones that turn out to not be very popular, do they go in the bin? >> that will not be happening.

we took the same rules that worked so successfully in the u.s. and applied the exact same metrics, the exact same roles, into the asian market. if you look at the last 90 days of volume, they are growing. ousa outperforms the s&p wildly almost 10%. if you look at what is happening in europe, the same thing. what happens with etf's? you are right, it takes a long time to get them created, to create a partnership, but then you have to let the world know. what the world wants most is performance. i think you will start to see some significant volume in the european hedge and unhedged products and the asian hedge and unhedged.

now, almost a year has gone by, and a year is a while. i'm not a short-term trader, i'm a long-term investor. these etf's are not going anywhere. why? because i buy them. >> that brings me back to the story of why you started this. you started noticing when you had active money managers deal with your wealth that every seven years, they blow up. do you see any studies out there that confirms that or have you done any research into why that is? >> rather than research, i have real anecdotal data. i had a mutual fund company for nine years. i had 50 people working there. great people. i love active managers. i found, every seven or eight years, they either go flat, or blow up. there are lots of examples. look at the market today. i don't have to name names. they have had a really tough year.

just by coincidence, they are in the ap or of existence. i rest my case, your honor. what happens is style drift. they are people, they make mistakes. what i love about etf, no style drift, no drifting from the rolls. there is no emotion in picking stocks when you reindex. i am in love with etf's because there is just no emotion in making the decisions. it is pure analytics, sign me up. >> with that said, etf's are taking a assets than any other of product types. active is losing money. it has been that way for about five years. in terms of this idea of making everything into a robot or

rules-based index, there was a report about -- scarlet: i'm glad you bring that up. >> i had to. everyone is talking about it. about how passive trading leads to marxism -- matt: let me read a quote from the story. "a supposedly capitalist economy where the only investment is passive is worse than either a centrally planned economy or an economy with active market led capital management." i wonder if you think the data you are making is that different from a passive investment? >> yes, it is. let me explain in. simplicity what it is.

i call it rules-based investing. if the company is using sales accruals, i don't want to own it. if the company's return on assets is slowing, that means inventory is building, i don't want to own it. you put all of the rules -- it is like actively managing. it is like getting a really good manager that lives and dies by those rules and has no style drift. all of these rules-based etf's, and this will be a big factor in the market. this is actively managed in that sense. except, i found a manager that over the next 100 years, he will never have style drift. he is called ousa, i love him. every morning, he does the same thing. he never changes his mind. scarlet: kevin o'leary, you will stay with us. we will continue this

conversation. this is bloomberg. ♪

scarlet: we're back with kevin o'leary, investor on share tam nk and of oshares. i want to get your thoughts on janet yellen and her speech today in jackson yellen. she basically indicated that the economy is doing well enough to warrant an interest rate increase this year, without giving more details. and want to get your view of how that fits into the market. >> i think what it indicates is an extremely high probability of a rate hike in december.

it will probably get sustained down in banking stocks, which have been so low. in itself, it will not help the sector much next year. yellen is keeping maximum option now the rates low. her greatest concern is that the u.s. dollar puts s&p 500 companies output extremely competitive and puts pressure on u.s. earnings. that is the problem here. she has lots of data that she can point to to say we have to be muted in our effort. this has been frustrating to the markets for the last two years. we are on that tipping point where the economy, on most metrics, looks a little better, but certainly not a 3% gdp

market. if you want markets to move, we meet the 3-3.5 gdp growth. matt: we can type back to your rules-based investing. i can't remember what you called it but basically to the etf that stick to these rules without style drift. is that more difficult to do when the fed has so little credibility? in the past, we have seen the fed indicate, for example, that it would raise rates four times and the market reacts, and no rate hike comes. that must be frustrating and make it difficult to invest. >> market conditions change all the time. all etf that use this new dynamic are kind of agnostic to what the fed does. it doesn't matter. every year, we rebalance in

september. we look at the balance sheet of every single company in the s&p, in the light of current conditions. we do our work and only choose the ones that we think will do the best in the next 12 months. at the end of the day, the balance sheet tells you the tellale of the company. it will be unfavored in the index. that is why love about rules-based investing. it is agnostic. it does not care. it is not emotionally tied to anything. it worries about what she does. -- it does not listen to what janet yellen says, it worries about what she does. it is based on the balance sheet. that is by like about this kind of investing. by the way, it captures 95% of the upside and 40-60% of the

downside. that is more important to me than anything else. scarlet: as people pirate their money -- pile their money into these etf's, what you say to those who are looking for yield in fixed income? there have been allegations or comments that the bond market is broken. you believe that is the case? >>ss liquid. that is the challenge. people who do's etf designed just to pay dividends are at high risk. that is not ousa. if you are using etf's to buy bonds, the number one question you have to ask -- i look for one thing that is more important than anything, what is the liquidity of the underlying holding? for example, if you use an

equity etf like ousa, it is very liquid. if you use a junkie bond etf where the bonds don't trade, there is risk. all of a sudden, you have a huge correction in the market. the quiddity, liquidity liquidity. that is the hallmark of a good strategy. matt: i have to ask you something related to shark tank. we have so make concerns from small businesses. it is said that regulations are making so hard to start companies. on the other hand, from watching your show which is so deeply enmeshed in popular culture now, i feel like there is a rebirth of entrepreneurialism. how would you rate it in this country right now? >> we celebrate entrepreneurialism on shark tank, you are right about that.

you bring up a very important point. the number one growth cost on my income statements across 32 companies are lawyers trying to keep the companies compliant. we have overregulated all of our companies in the states in a way that i have never seen happen. in the last decade, the amount of regulations we have to comply to have grown 6000 times. it is ridiculous. i'm completely against what has happened with regulations. one of the reasons we do not get the rebound was because companies are not hiring anybody. that arteries of lunch when you listen -- entrepreneurialism in america are clogged and choked with plaque of regulations.

we need the next president to reduce regulations and make tax reform the number one priority. i would rather have someone go in there, cut regulations, cut taxes make america competitive and let me do my work as a not for newer -- an entrepreneur. you want to save america? let entrepreneurs do it. matt: now in 31 locations around america, we will take you to tribeca. this is bloomberg. ♪

matt: in pursuits today, some 10,000 products are on offer downtown.

the marketplace that just opened inside the world trade center last week. the ceo joins us now live. thank you so much. talk to us about the growth in this business. i remember when the first store was opened by the flatiron building. now you are all over the place. what kind of growth and how are you coping with the? >> right. we originally opened in the u.s. in 2010. we now have three locations in the united states. like you said, 31 locations worldwide. right now we are about a $130 million company in the united states. within one year we expect to be close to a $260 million company. worldwide, we are looking for the year to be over $550 million. scarlet: of course your newest location is downtown, near

tribeca. how is it different from the one in the flatiron district? >> every time we opened a new store, we try to do something different, focusing on the customers that will be in the area, and also a new experience. there are many options to come in and get a quick bite to eat for the 70,000 people that work in the offices is around here. indigestion, we have an entirely different restaurant concept. i would say it is great for business lunches and dinners. we have even imported and italian chef who is an incredible chef from milan. matt: i wonder, do you try to aim towards the financial district customer because obviously, a lot of brokers and traders will be coming in to the world trade center. on the other hand, you will have a ton of tourism as well. do you try to aim your approach

at any one customer? >> absolutely. obviously, we are thrilled to have everyone from around the world and that is usually what happens. our goal is really to focus on the local customer because we are both a market and a restaurant. from a market perspective people are coming in here every day to buy their fresh produce bread, fish, they are the local customer. at the same time, there are people who need a bite to eat. they can come in and have a two dollars slice of pizza or can come and sit down for a formal lunch. we try to focus on the financial district customer. so far, the response has been wonderful. everyone who lives in the area have come in and said, we are so happy to have you. it has been great. scarlet: very quickly, what

other locations are in the works? >> right now, we are working on boston, we will open in november in boston. we are working on los angeles. we have las vegas as well. that is the u.s. globally, we have copenhagen and a few others in the works as well. matt: thank you so much. ceoo of eataly america. i like the roast beef sandwiches. scarlet: this is bloomberg. ♪

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scarlett: it's 1:00 p.m. in hong kong. matt: welcome to "bloomberg markets."

phlegm -- from bloomberg's world headquarters, i am matt miller. scarlet: and i'm scarlet fu. stocks and bonds yields are rising after janet yellen says the case for an increase in short-term interest-rate has strengthened in recent months. matt: one in three odds of higher u.s. rates in september. more reserved officials argue the case for policy tightening. scarlet: we hear from one voting number from the som see -- the fomc. matt: we're halfway into the trading day. let's head to the market does, where ramy inocencio has the latest on equities. ramy: we have some interesting lines crossing from bill gross right now. you can see this, basically bill

gross is saying that janet yellen's economy may never walk normally again. he is also negative on the fed opening the door to creating what he is calling greater asset bubbles. negative sentiment from bill gross coming out after janet yellen's quote at jackson hole this morning. let's take a look at what's happening with the majors. see if there is any reaction. nbc, nothing offer that right now. negative across the board especially after stanley fischer gave as saying that the rate hike was on the table for september. the dow is down by 25%. the nasdaq is flat, the s&p down .1%. curiel and gave her comments with all the market pop with positive sentiment. that has definitely taken a downward turn. in terms of the s&p intraday use even more clearly what i'm talking about. chair yellen's comments came out

at 10 a.m., and is pop in the markets, a couple points away from the record close of 2190. at 11:30, that's when stanley fischer gave his comments about that september rate hike being on the table. we get session lows just afternoon, and we are down about .1%. meantime, there are some corporate news to talk to about. let's go to telecoms. in the way of apple, if you are looking for the iphone seven or whatever name is going to be out when it comes out next month, you may be facing a shortage. this is according to the nikkei, saying the first round rollout may have problems because of faulty components. we see apple at its lowest in three weeks, down .5%. verizon down about 1%. both of these other lowest in two and a half months. in addition, we have earnings to tell you about.

earnings are petering out in the last few days. brocade communications down 12%. this is a switching solutions company. its fourth-quarter view has a weak either not. gamestop down nearly 10%. the biggest falsehoods april. it's video -- fall since april. game sales are about 20% down. and's blanche -- and splunk is down, saying revenue growth is falling. let's go macro and talk about the bloomberg dollar index. after fischer's comments, we see a turnaround of events. the bloomberg dollar spot is up near session highs of the day, up by about .4%. is having an effect on metals as the dollar rises, metals fall. the gold futures are up about .3%. palladium futures are up 1%.

a stronger dollar today usually mean metals fall. looking ahead to futures, they are up in positive. matt: ramy inocencio on stocks. on stocks and currencies. scarlet: we are cross asset here at bloomberg. let's go to mark crumpton in the room -- in the newsroom. mark: stephen harper is walking away from the world politics. harbor revived the conservative party and candidate and let it to three election victories. he served as prime minister from 2006 until last year, when conservatives were defeated by justin trudeau's liberals. a person familiar with the plans is harper will resign to become a consultant. a judge in south africa has rejected a bid to appeal the murder sends a former olympian oscar pistorius. prosecutors want to lengthen his six-year sentence for killing his girlfriend.

calling it shockingly inappropriately lenient. the judge said there was not a reasonable prospect another court would overturn the original sentence. vice president biden will be at the train station in wilmington, delaware that bears his name today. he will announce new funding to improve infrastructure and efficiency along amtrak's busy northeast corridor. it comes up to the federal railroad administration awarded a $5 million for 11 projects including $2.5 million for the northeast corridor. amtrak recorded 11.7 million in ridership, a record high. another record-breaking night for bruce springsteen and the street band. last night's show at metlife stadium in east rutherford, new jersey lasted nearly four hours breaking the previous u.s. record set at the same venue just two days earlier. the boss's longest show of all time was four hours and six minutes in helsinki, finland in 2012.

global news, 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton, this is bloomberg. matt: mark, thank you. scarlet: as you know, janet yellen and two months of public silence on her view on the economy and monetary policy today. she spoke in jackson hole wyoming and cited continued solid performance of the labor market and said the case for an increase has strengthened in recent months. dennis lockhart also sounded a hawkish note in jackson hole. he's giving his view of the economy and appropriate monetary action. dennis lockhart: there elements of the data we are seeing that are mixed. we are in a moderate growth economy, and i think it is natural when you have an economy that is making relatively slow progress, you are going to see data that you can take in

different directions. there is still some haze. >> speaking of hayes and uncertainty, the labor market growth has fallen if you look at a quarterly basis. 150,000 versus 250,000. inflation is far from the target. in a time of uncertainty, the fed not knowing quite what the world looks like, why move now? you said recently you could see one or two rate hike looking at september. dennis lockhart: i can see two rate hike's as possible would look at the calendar. we have three more meetings this year. that is possible. what i said recently is i can't imagine circumstances if we continue to see the economy perform as it has been -- in my opinion, the least one this year.

none of that is locked in, in my thinking. we just have to see how the economy seems to be performing. i don't think the committee is risking a lot by being cautious and gradual. i don't think we are behind the curve in terms of either inflation or even risking a big financial instability events. i think the by words that the public should understand is cautious and gradual. there is no gun to her head. >> einstein famously did not say his definition of insanity is doing the same thing over and over again and exciting different result. it people think he did. but the fed has kept interest rates low now for eight years. and we are still in generating growth, we're still not generating inflation. is it time for a rethink of what monetary policy can do, and how it works? dennis lockhart: you've seen

signals from my colleagues that they are beginning to rethink things. john williams admitted talk as well as a paper that he posted on his website that suggested we should be be thinking -- rethinking the basic assumptions around policy. jim bullard has taken quite a different approach than the rest of the committee. i welcome the suggestions that periodically, particularly if things are not jelling perfectly , that you go back to your basic assumptions. and think them through again. i think both of them have made a good contribution. >> do you trust the atlanta fence models -- fed's models? [laughter] dennis lockhart: i view models as input to a decision process that necessarily requires some judgment. i don't let the models tell me what to think or what to do. they are useful inputs. we can use models to test hypotheses, to run through a

certain set of assumptions and see what the model tells us. they are very useful. i have an outstanding team in atlanta the does modeling. scarlet: that was atlanta fed president dennis lockhart speaking with michael mckee and kathleen hays in jackson hole. matt: we spoke with robert kaplan, he said the central banks benchmark interest rate will likely rise more slowly than previously projected. here he is earlier this morning speaking with mike mckee. robert kaplan: the anticipated that the rates going for will be much flatter. we have a number of persistent headwinds. even though i do think in the near term the case for removing some amount of accommodation has been strengthened, that's in the contest -- in the context of a slower path of rate increases. for business people and people in the markets, in the path of rates is just as important or more important than the exact timing of when the next move is.

michael: do you think the fed has a communications problem in getting those views across? what you are saying is the consensus on the fed that you have people interpreting the remarks of various fed officials over the last couple of weeks as someone says raise and someone says stay and no one really knows what's going on. robert kaplan: we all have to improve our communication. you have to understand when you give a speech or an interview, a snippet of what you say may be taken. it may make it look like there is more debate on certain issues than there is. i think it's an important challenge for the fed. we have to improve our communication. that falls to all of us. it is something we need to do. if you actually have the time to read all the fed's speeches and read the minutes, you get a much for picture -- fuller picture. often when you watch television you get snippets. it can create more confusion. i think we need to be cognizant

of that and adjuster can medication. -- our communication. michael: when you look at what's going on, do you think there are distortions in the markets these days for monetary policy? robert kaplan: there's a cost to having rates this low for so long. there are reasons to have rates this low. the cost is it hurts savers. if you have any money in savings, you can't turn on it. second, he causes people to take more risks. people who have one type of asset allocation are pushed to take more risk. institutions are taking more risk. it can create imbalances. i think there are some of those imbalances today. my experience is there are the imbalances that you see. sometimes it is easier to see them in hindsight. they are building and i see them in certain places. for example in commercial real estate, from a macro prudential point of view we tried to tamp down bank exposures on commercial real estate. we see some of these imbalances. matt: that was dallas federal

reserve bank president robert kaplan with bloomberg's mike mckee. coming up, ea sports released the latest version of madden this week. i still came to work. gamestop hopes the game will turn around their fortunes. their stock falling dramatically in today's session. we look into the numbers, next. this is bloomberg. ♪

scarlet: this is "bloomberg markets," i am scarlet fu. shares of gamestop are falling the most in 10 months let's

explain why. the latest earning report showed a 10.6 central in comparable sales. that is double analyst estimates and marked the second straight quarterly drop. overall sales are coming under pressure as new videogame sales fell more than 30% and the software fell more than 18%. his other category is gamestop's technology brand unit. it's the lone bright spot. it's part of the diversification strategy. gamestop is now at&t's biggest authorized retailer with more than 1400 stores. positioning has been bearish. game stock was the most shorted stop in the s&p 500 last year. it remains one of the most shorted stocks on the new york stock exchange. it could change of investors and see a renewed push from video games, which is still at the core of gamestop's business. at the moment, developers put most of their effort into pc and smartphone games. but sony, microsoft, and nintendo are getting ready to

release new versions of the playstation or the xbox. you have the pokemon go effect. online to messick sales for pokémon branded -- domestic sales for pokémon branded merchandise stored in july. gamestop capitalizes on this with more than 400 stores your marked as pokestops. matt: time now for the bloomberg business flash. a look at the biggest stories in the news right now. medical device maker a layered has filed suits against abbott labs. they say they failed to get antitrust clearance for the merely $6 billion merger underway between the two. potentially scuttling the agreement. abbott is offering to pay off $50 million of alere's costs. they say the lawsuit is without merit and is working to close the acquisition. norwegian cruise operator is

attracting partners. it's according to people familiar with situation who declined to be identified. those people say the billy is -- the business could fetch more than $2 billion. the company's owner is working with goldman sachs and others to find a buyer. twitter is working on a keyword-based tool that would let people filter the posts they see. people familiar with that matter say it would give users a more effective way to block out harassing and offensive tweets. and that is your bloomberg business flash update. scarlet: still ahead, the maker of vegan mayonnaise is under scrutiny from authorities. to the undercover buyback campaign finally the law? that conversation is next. this is bloomberg. ♪

scarlet: this is "bloomberg

markets," i'm scarlet fu. matt: i am matt miller. scarlet: the justice department has opened a criminal investigation into whether hampton creek committed fraud by buying its own mayo from the stores. >> thank you. olivia -- olivia zaleski is our technology reporter. where are we on this hampton creek story? olivia: yesterday, -- this morning, we reported that the department of justice opened a criminal investigation into hampton creek and the purchase of their own product. last week, we know the securities and exchange commission opened an inquiry into the company as well. carol: they are basically looking to see if hampton creek was giving up their numbers,

correct? olivia: correct. we don't know if they are looking at other things yet. carol: give us some background on hampton creek. who they are and why they might need to do this? olivia: hampton creek is an incredible company with a beautiful mission. the mission of the company is to replace meat products with plant-based proteins. if you have mayonnaise and you are putting egg in the mayonnaise, there would create a plan based proteins use instead. at the profound idea, if you think is developing economies grow and the appetite for me products continues to -- for meat products continues to grow at an unstable level. a lot of companies have poured in money. we have founders fund giving the money, coastal ventures giving money, as well as notable large players in the space like mark benioff.

carol: what's interesting in terms of strategy -- they have done a lot of in-store demos to popularize the product and say how it's a better alternative to some established brands. olivia: exactly. they build their brand based on these evangelists that they call creekers. there are just over 100 of them, they would do these in-store demos. what we found in our reporting is that job title or job description really changed in 2014. they started asking people during the in-store demos to purchase their own product. carol: to boost sales. talk to us about the amount of backers they have had. olivia: at the moment, we understand the company is trying to close around any moment now that would value the company over $1 billion. i know they are interested in or

pursuing venture capitalists in asia at the moment. the company also has raised, to date, about $220 million so far from these noted venture capitalists like founders fund as well as coaster ventures -- coastal ventures. justin: --carol: in the report -- matt: that was olivia zaleski talking with carol massar. boston is 1200, san francisco is 960. in washington, on the fm dial 99.1. scarlet listens on the bloomberg app. onto something else also goes well with fries -- beer. that's because mayonnaise goes well with fries. cory: --scarlet: i do gravy. matt: s.a.p. miller, the takeover there is resulting in a

$2 billion payday for bankers, lawyers, consultants and the tax man. this is one of the top read stories on the bloomberg. the fees that ab inbev o are going to pay include 705 $5 million for financing agreements. -- $725 million for financing. $475 million for taxes for that transaction. sab miller pays about $2 million in fees as well. 180 my million dollars for broking -- 180 $9 million for broking and legal advice, $9 million for pr, $2 million to the accountants. scarlet: it's a windfall for everyone supports this deal. it's a huge payout for the beer companies as well, and in bed -- ab inbev is going to cut a lot of jobs. matt: not a payday for brewers. scarlet: i want to show you m&a

and the volume of dollars for m&a for brewers. this is on the bloomberg terminal, for brewers specifically. the blue bars will show you the volume. the dollar amount. in the green line shows you the deal count. the deal count rose in december of 2015. since then, it has gone back down. matt: that was a record year for m&a. a lot of people are saying we won't make it back there this year. scarlet: you don't have that many big players. matt: if you want that chart, you have to message scarlet. congress returns a september 6, there's already talk of a possible government shutdown. we tell you why. ♪

matt: we're live from bloomberg's world headquarters in new york. i'm matt miller. scarlet: i'm scarlet fu. "bloomberg markets." this is -- this is "bloomberg markets." market: the impeachment trial

was temporarily suspended for a second time today. the head of the senate declared stupidity is endless and sharply criticized his colleague who questioned the body's moral authority. the suspended president is accused of breaking fiscal rules in her management of the government. she says her enemies are trying to stage a coup. turkey blames kurdish militants for a kurdish truck bombing. the truck exploded outside of a police station, killing at least 11 officers. more than 70 others were wounded. last year, violence resumed following a two-year truce. hundreds of security personnel have since been killed. hillary clinton is defending her family's foundation. the hearing on msnbc, the former secretary of state suggested the foundations programs would continue possibly through other organizations.

she promised to put in place additional safeguards to prevent conflicts of interests, should she become president. a spacex dragon capsule is back on earth with scientific gifts from the international space station. the spacecraft parachuted into the pacific just off mexico's baja, california coast. it is loaded with 3000 pounds of research and equipment including one dozen mice that traveled on the dragon as part of a genetic study. global news, 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. matt: mark, thank you. will we see a government shutdown in the critical weeks leading up to the november election? it's a possibility as the pressure mounts to clear a new stopgap spending bill by september 30. nancy at outage -- nancy o'donovan -- nancy ognanovichh.

they have to pass some kind of bill to keep the federal government funded. isn't anyone getting tired of this, year after year, sometimes quarter after quarter? nancy: they are all getting tired of it, except perhaps some people in the most conservative quarters of the republican party. the leadership is getting tired of it. the big challenge for speaker ryan and senate majority leader mcconnell will be when they come back to corral everybody behind a plan to fund the government. they have to spend the first couple of weeks to get people to solidify behind somebody. the leading option seems to be pretty simple a three-month bill that would take them past the election. scarlet: more short-term solutions. talk about the obstacles that would complicate passage of even a stopgap spending bill. nancy: the first question will be how much will that cr

provide? liver when go along with this extending current funding? -- will everyone along with this extended current funding? and then they have to decide what kind of add-ons will go on to this month's past bill. we just obtained a white house list of add-ons or extras called anomalies, that they want to see on this cr. that will have to be negotiated and discussed. that could take the first half of the month. but the goal is to get a bill in the house floor by the third week of september. and then to the senate floor by the fourth week of september. matt: what happens if they miss that goal? nancy: federal funding runs out on september 30. after that, the federal government agencies have to start looking at cutting back services and furloughing employees until some kind of funding comes through.

as you have seen before, that could mean the fbi having to prioritize the cases they pursue. some type of cutbacks at department of defense. we don't know. but truly, mcconnell and ryan do not want to see a government shutdown on the eve of the presidential election. scarlet: they don't want to replay the 2013 crisis. how likely is it there might be something unexpected the comes up, we could see some shutdown? nancy: there are a lot of people coming from a lot of different places. the republicans and the democrats seem to hate each other. a lot of republicans hate other republicans. you would think it would be simple. you think there would be enormous pressure just to do it. but they don't have very much time and they have not been good this year at getting deals together really quick. until you really see something you just can't completely rule out the threat of a shutdown. scarlet: it's like trying to fly out of laguardia. you can't rule out anything. matt: definitely going to lay --

definitely going to be delayed. thank you nancy ognanovichh. you can check out more bloomberg "go," for more stories. scarlet: jim bullard says it is time to rethink the fed's policy normalization plans. we hear from him. this is bloomberg. ♪

scarlet: this is "bloomberg markets," i'm scarlet fu. matt: imm miller.

scarlet: time for a look at the biggest business stories. sean stewart's role will be to help commercialize driverless car technology. google currently has about 50 test vehicles on the road and has driven almost 2 million miles anonymously. -- autonomously. matt: saudi arabia says ipo is on track for aramco. the goal is to raise about $100 billion by selling 5% of aramco. one of the issues still to be decided -- where will the saudi's decide to lift the company? scarlet: richard branson was in a serious bike accident this week and thought he was going to die. it took place at night on one of the british virgin islands. branson it a bump in the road and was thrown over the handlebars. he says his cheek was badly damaged and had a number of cuts on his body. matt: apollo global management

is buying clout services company rackspace hosting for $1.3 million -- $4.3 million, a 38% premium for the closing stock price. the deal is expected to be completed in the fourth quarter. and that is your bloomberg is this flash update. scarlet: september will be important for many of the world's central bankers. near zero or negative policy rates have struggled to lift growth, and the fed basis for the schism in its efforts to generate inflation. earlier, you had jim bullard speaking with mike mckee and kathleen hays in jackson hole, wyoming. they asked if it was time for a total rethink on fed policy. mr. bullard: i think it's time to recent are normalization plans. if you look at that. plot, which has all of those dots going up at any moment 200 basis points that's probably not the right characterization of what's going to happen. that's why we can up with this

idea about let's not pretend we have a lot of certainty about where the long-run outcome is for the u.s. economy. let's make policy for we are today, which is a low productivity growth environment. and a very low real rate of return on government paper. those are the parameters we are working with. and then make the draymond shelley policy for that and keep those things in the future. kathleen: i was at a conference in the last week for a money manager in the audience says what's going to happen after the next recession? the fed cuts by 400 to 500 basis points. with the rates so low and you are not in favor of raising it until you see a shift, what is going to happen in the recession again? the fed seems to be at an impasse, almost a dead end. mr. bullard: i'm not one that talks about let's raise industry so we can lower than later. i don't know that's a good way to go. if you look at this paper by a

forward staff person, he says there's a bit of ammunition out there. that's the best way to look at it. some of it would be lower rates, some of it would be quantitative easing. still, it would be forward guidance. if we deploy the things we have deployed last time we can probably get through a recession. even do well during a recession. michael: is your goal to put a floor under recession? you've done qe, you dumb forward guidance, cut rates to zero. we still don't have any measurable -- you have done forward guidance, cut rates to zero. we still don't have any measurable inflation. michael: it's half a percentage point or less low our target. mr. bullard: that's fair. but some of that is driven by energy prices. it is pretty low. but unemployment has come down below 5%.

we are basically right on target for that. inflation is a little oh, we think it's going to come up. we are really doing pretty well as far as the goal variables. michael: we are not generating inflation or growth. mr. bullard: monetary policy does not rhyme -- drive growth. you can have a temporary effect but that temporary effect wears off. in the medium-term and longer run, it's driven by productivity trends and population trends and legal force trends. those things need -- if you want that to be better, and i do want to be better, you can't do that through monetary policy. monetary policy is is about cyclical movements. kathleen: in june, if flat lined your forecast. -- you flat lined your forecast. we've had two pretty good jobs numbers. gdp tracking, a lot of us -- it's looking at 3.5% of gdp in

the third quarter. if you were going to make your predictions right now, would you change -- is it possible the regime change you were waiting for is going to start to unfold? mr. bullard: i don't think so. the regime would talked about is the low productivity growth regime and labor productivity growth has only been about one half of 1%. we don't see that changing, near term. another part of the regime is very low real rate of return on government paper. we don't see that changing anytime soon. those of the fundamentals. and then we say let's make monetary policy given these few facts. and that brings us to the six of three basis point projection. kathleen: however, we are seeing more strengthen the economy. is it possible that if this trend continues -- even if the regime hasn't changed, that growth numbers have picked up and you will be in the camp saying we better debated seriously in september.

if we don't move them, maybe in december. mr. bullard: i haven't seen anything in the data that suggests that those two factors are really changing in a fundamental way. it is true that tracking forecasts are up for the third quarter. with gdp growth in the third quarter and an annual rate of 3%. but i would see that as making up for slower growth in the first half of the year. the year-over-year gdp growth in the u.s. is only one point 2%, and that is below trend growth over the last year. one of the reasons why we did ß approach to this is that we kept forecasting that we are going to have above trend growth. but we don't have above trend growth. i think the cyclical thing played out and we are in this very low growth regime. scarlet: that was kathleen hays and michael mckee speaking with jim bullard. matt: coming up, we head back to jackson hole wyoming with a live interview on his thoughts

on shery ahn's comments. scarlet: on blackberry, trading has been halted. the reason stop -- no reason given. a shares have fallen 15% trailing the broader market. the market cap of the shadow of its former self. a $4.1 billion market cap versus its peak of 78 billion dollars in may of 2008. this is bloomberg. ♪

matt: this is "bloomberg markets," i am matt miller. scarlet: i'm scarlet fu. matt: that's a market, which are continuing to digest janet yellen's speech, were she says the case for an increase in the fed funds rate has strengthened in recent months. let's go to jackson hole, where michael mckee is standing by with jay powell.

michael: thank you. we welcome all of our viewers and listeners, i'm here with jay powell, a member of the federal reserve board of governors. and obviously, of the open market committee. janet yellen did say that this be -- the case for a rate increase has improved. when you look at the economy, what is the assessment of where we should be? mr. powell: the economy weakened , it's not clear how much. it's also the case of the labor market we get a little bit. i think as we move towards the middle part of the year, we have increasing data suggesting that the economy is on the path that has been on for some years which is to say growth strong enough to support the improving labor market that job creation that is taking slack out of the

labor market. job creation faster than the growth of the labor force and inflation movement back to 2%. i feel constructive about the economy today. michael: do you think that rates need to rise? mr. powell: my view is and has been that we should be on a program of gradual rate increases. we can afford to be patient. when we see 2% inflation and a tightening labor market we should take the opportunity to do so. in the absence of some big exogenous event like brexit or such. michael: do you think the fed has been thrown off too many times by exactness events -- exogenous event? should they just be responded to the fundamentals of the u.s. economy? mr. powell: i really think we are being data-driven. we are also being patient and a bit cautious. demand is weak around the world other central banks are cutting rates. we are below are inflation target and growth has been 1.25%

in the first half of this year. i think our caution is appropriate and i think it has paid dividends and will continue to do so. michael: at this point, where would you put a terminal fed funds rate? mr. powell: this is the rate it would be in place at full employment and 2% inflation, it would be 3% or perhaps lower. that is more than a full percentage point lower than the neutral rate would have been before the crisis. michael: how long would it take you to get there? for people on wall street, the question is how fast do you go to get there? mr. powell: that's going to depend on incoming data. it's very difficult to say, and there is no preset course. you have to see how the economy performs. do we continue on this path? if we do continue on this path of growth around 2% and reasonably good job creation, we should again be patiently raising interest rates. as the economy and the global

economy warrant. michael: the argument from a number of fed officials has been at the end of limit rate goes down, inflation should go up. the phillips curve. inflation has not gone up. are you a phillips curve believer? mr. powell: it's an interesting question. there is the wage phillips curve and as labor market tightens, wages should go up. we're just getting to see that. we are seeing clear but not really strong dispositive evidence that wages are moving upward. the transition between wages and prices has actually weekend over the past 20 years. and the transition between slack in the labor market and labor has weakened. the phillips curve is flat. the connection is much weaker than has been historically. michael: what gives you confidence that you will get to the 2% target? mr. powell: core pc inflation is

one what 6%, maybe 30 basis points can be contributed to a strong dollar and lower import prices and lower oil prices. as a move through -- though should be transient effects. they get you fairly close to the 2%. it does not leave a big gap between 2% and where you would be pro forma for those things. if we stay on that path with oil prices basically flat and the definite dollar has not been going up, it's actually gone down a little bit this year. 2% inflation would be very close. you don't need a very steep phillips curve to get the last 10 basis points. michael: the dollar has been cited as a reason for the fed to be cautious. as you know it rose significantly in 2014 and has been flat cents, gone down a little this year. hasn't moved -- has it moved off your radar screen? mr. powell: along with the

dollar being more stable and going down a bit this year has been the market expectation that rates would be lower than the market thought. to the extent that the market changes its expectation that rates will be higher you may well see a stronger dollar. it's an important factor in a world where other major central banks are reducing interest rates. inevitably, the dollar is going to be a mechanism for shifting demand overseas. it did that in 2014 and 2015. it could do that again. it is not a current concern. it is on them to keep an eye on. michael: there has been criticism of the fed lately and questions about credibility. markets have read fed statements to mean and it just rate is coming and and then it's pulled off the table. do you have concerns about the committee cases ability and the credibility you have with financial markets? mr. powell: i think r framework is clear or should be clear, which is if you see progress

towards 2% inflation and full employment, and reasonably strong demand, i support a gradual rate increase. as data comes in, they can surprise on the downside or upside. we had employment reports and weak topline reports. we reacted to incoming data. when you are data-driven and you can and should be patient, that is how it looks when the data is volatile. michael: the data are volatile which is a criticism of the fed. you look at the may payrolls report, which everyone said put the fed off an increase in june, and that we recovered back up to $190,000 average. it was terribly -- apparently just statistical noise. mr. powell: we did not know that in may. even accommodation of -- you had a, nation of risk in the economy and through the last three

years, we've been able to point to strong payroll growth as anchoring the central view that the economy is very strong. you can look through volatile gdp growth, which is very volatile on a quarterly basis. when the labor market sends a negative signal for the first time in three years, you have to look at that. the wise thing is to be patient. i think we did the right thing by waiting. michael: you have a background in financial markets. do you think the fed has been pushed around too much by financial market excitation? -- expectation? mr. powell: i do not. market volatility tended to not leave a mark on the real economy. it doesn't really leave a mark on payrolls or growth or inflation. i'm concerned about what is the right thing over the medium and longer-term for the economy, not so much on market reactions in the short term. i don't take about that much. i think about the real economy. michael: monetary policy in the

future, let's talk about the predicate question. do you think the current way that monetary policy is conducted, the tools and models that produce the forecast on which you base your policy -- does it still work? mr. powell: those are different things. i think we have a policy framework that seems to work. the one rate increase we have done went quite smoothly. i think we have the tools to control it just rates. that is pretty clear. there are many questions in economics which are really under study right now. not just that the fed, but throughout the world economics community, which is local activity growth and low interest rates and low inflation. why are they happening and what can we do about them? many of the answers will not be monetary policy answers. they will be answers for private sector people and governments.

legislatures and such. it is a time for intersection on those type of issues. -- introspection on this type of issues. michael: do you think the criticism is deserved that in eight years of extra ordinary policy, you have not been able to create additional inflation and by implication, growth is lower than would be expected in a recovery? mr. powell: i think that all forecasters have been surprised by the lower level of growth, given low interest rates product should be moving. and it's not. productivity has been good. the good news is that labor force -- hiring in the labor force has been stronger than ever. the reduction in the unemployment rate and job creation has outperformed expectations for the last three plus years. and a time of lower growth rate.

that implies lower potential growth, you need more workers to get less growth. that is productivity. productivity is an area of tremendous importance that no one understands particularly well. it is something that we all need to focus on. michael: what is the point of on-site policy now? -- of monetary policy now? is it to maintain the status quo? people think is not stimulating the economy, because we not seeing demand for additional credit. mr. powell: the point of monetary policy is to achieve stable prices and maximum employment. i still think that there is some slack in the labor market. we had a significant drop in labor force participation. some of that is because of aging. but there is a sense that there is still people out there, who, in an economy that is tight want to come back to work. they probably all have family members and friends who fall into that category.

i certainly do. that is what monetary policy needs to be focused on. as important as that, is we have to get inflation to 2%. we have to be completely committed to achieving 2% inflation. it's very important that we do that. i am personally committed to do that. you do that by supporting economic activity. and that is by keeping rates low and being patient about raising them. michael: do you think the fed is behind the curve on inflation? are you and the wait till you see the whites of his eyes camp? and what is the inflation rate going to be by this time next year? mr. powell: i expect as the effect of a stronger dollar lower oil prices become stable i would expect a gradual increase in inflation for the next couple of years. it should be marginally higher than it is right now, moving back towards 2%. that is what i expect for inflation. it's very important to achieve

that. inflation excitations are deeply anchored at 2% -- expectations are deeply anchored at 2%. we don't want to put that at risk. it is a critical aspect of our economy mike: thank you for joining us today. david: that is mike mckee with jerome at the jackson hole conference. the conversation they were having about inflation, how governor powell thinks that reiterating a lot of what we've heard from that officials. -- fed officials. very data-driven. vonnie: consensus is inflation will move back up to 2%. there is still slack in the