>> welcome to bloomberg markets. from bloomberg world headquarters in midtown manhattan, i'm matt miller. >> we are covering stories from tokyo to moscow. the u.s. added 151,000 jobs and a september right trike -- september rate hike dropped. matt: and economist john taylor joins us with his take on the jobs report and what it means for fed policy. nejra: and our exclusive interview with russian president vladimir putin. he blasts both donald trump and hillary clinton. saying he is ready to work with any administration that is willing. matt: let's head over to the markets desk abigail doolittle has the latest. abigail bank -- abigail: it is

interesting to hear you may not like the bond reaction. as for stocks you do have the three major added -- three major averages. the s&p 500 and the nasdaq all nicely higher. perhaps investors think the fed will be slower to raise rates. this has put the three averages on pace. we take a look at the s&p 500 intraday chartres. -- intraday chart. one area of weakness is the cruise line stocks. this includes carnival, caribbean, and the no region -- and the norwegian cruise lines. it looks like a monthly survey suggests demand for cruising declined in august. one stock trading -- under

armour. selling up to 1.8 5 million shares, plus 200,000 shares in the charitable foundation. nejra: how about florida, now that the storm has diverted? abigail: there are some interesting influences. one of the influences is on the frozen concentrated market. having its worst day since august 8. here we go, aig and trading lower. they are trading higher on the storm prospects a bit off the high. nejra: we were talking about

this when we came on air, if we look at w.a.r. p 30% for a rate hike. we have bond yields moving high. matt: to us it doesn't look like it has been moving very much. i have blown up a chart on my function. this is the odds of a hike. over the longer term, because this is a two-year chart, the odds have come down. although we watch it every day, it hardly moves at all. it has actually moved. >> let's check in on the bloomberg first world news to you hat -- world news. , has more from our newsroom. -- emma has more form our

newsroom. emma: the russian president spoke with our bloomberg editor for an exclusive interview. president putin: with all the shock bucket of not only one but the other tattered candidates -- they are smart. they are very smart people. they understand which buttons you need to press. emma: tune in for more of our exclusive interview with the russian president vladimir putin. president obama could achieve one more item on his wish list for china. he would like to get china's president to join him in ratifying an international agreement on climate change. china and the u.s. account for 38% of global emissions. the president arrives in china tomorrow for the g 20 summit. the first hurricane to strike florida since 2000 five has

weakened to a tropical storm as a crosses into georgia and the carolinas. hermine came earlier today bringing high winds, heavy rains, and severe flooding. the storm has claimed at least one life. rick scott says a homeless man was killed when a tree fell on a tent where he was sleeping. the world health organization issued a warning about the zika outbreak. the virus continues to infect new countries. to date it has affected 72 countries and territories. global news 24 hours per day powered by 2600 journalists and analysts. this is bloomberg. >> the august jobs report is out and it came in lower than estimates had suggested it might.

u.s. payrolls climbed following an upwardly gain in july. the jobless rate held steady. they told reporters it seems like a gradual increase. it is now pretty compelling to me. it does not support -- it does report solid but not spectacular. does that take a rate hike off the table? let's get some insight from john taylor. he is a senior fellow of economics and professor of economics at the stanford university. and the namesake of the taylor rule joining us from stanford. what do you think about this jobs number. 151,000 is a miss. but it is a decent margin of error. >> it is a bit lower than what people forecast.

i hope it doesn't change the fed's decision to much. >> wonder if the probability has come down of the market. wage growth is slowing. maybe the fed is going to push forward to december. the bond market on the other hand, after a brief rally, it sold off and pushed yields higher. why that reaction? john: the initial reaction you have to be careful about. last week, the first reaction to it, chairman yellen said it was one direction. i think you have to discount the short-term reactions at the start. i think actually the fed would like to get back to normalization.

that is the message they seem to lead last week. -- seem to leave last week. it is not a bad number. nejra: i know you said you hope the fed stays on track with what they said about rate hike. bloomberg intelligence is pointing out the specific issue of decline in total hours worked, pointing to a rebound in growth in the current quarter. does this jobs numbers show that the economy is strong enough with a rate hike in the short-term? john: the interest rates are quite low compared to where they would be in similar situations in the past. i think the recovery has been slow. job growth has been very slow. i think that is because of other kinds of of policies. what the fed needs to do is normalize, get back to a more normal situation.

i hope they don't delay again. nejra: i know august typically under shoots and this time it isn't much of the average of 47000 that it usually misses by. still my question stands, is the economy strong enough to withhold regardless of whether or not you would like the fed to fight because of where interest rates are. >> i think it would help the economy if the fed began to normalize. they are very low at this point already. i am as disappointed as many other people are in the recovery. i don't think they should do something radical. this idea of a gradual normalize nation i think the markets can withstand it. i think they would benefit from it if it was done in a strategic way. nejra: do you think they need to cut the hike in the future?

john: there is a factor there with interest rates as low as they are now. people are wondering what if there is a slowdown. that is another advantage to being in a norm -- in a normal situation. we had good policy for a long time. and it has been off-track recently. i think getting on track will lead to a stronger economy. matt: what do you think about the way the policy is run? it moves the goal post a lot. john: they are not data dependent in the way they were in the past. they clearly slow down this year compared to what people thought and advanced. i think this strategic normalize nation, getting back to where they were is the path that they

wanted to go on. they worry about the ramifications. matt: professor, standby, we are going to continue to talk about fed policy. maybe it will be more rules-based. and famous rules for the fed policy, john taylor is going to be sticking with us and telling us about that ruled that he made up 23 years ago still used today on the bloomberg. he will helm he fill out the blanks. this is bloomberg. -- he will help me fill in the blanks. this is bloomberg. ♪

matt: 23 years ago john taylor outlined a forecasting model used to determine what interest rate should be or where they should be set as economic shifts occur. what happens when future u.s. growth is opaque? we are back with john taylor himself. i have the taylor rule up on the bloomberg. do you think this rule should apply? >> last week the fact we got off of that rule by while ago is

good for the economy. the experience shows that. maybe a different rule, may be a different thing to do. but this idea of a rules-based policy seems to work. it doesn't work very well. nejra: we have been talking about this neutral rate of interest. john: there is a lot of talk about it. the taylor rule was amount to be 2% real and equilibrium. now people are saying they should be one. some people think it is even lower. and equilibrium isn't so bad. that is where the fed was. that is still about right.

i don't think there is reason to change at this point. matt: we can change these variables. i did fill-in 1% of the real rate. i have 2% core pce target. i have 4.5% for full employment. we are 200 basis points lower than we should be. do you think the fed is way behind the curve here? john: i have been arguing they should get back to normal. i think they still want to get back to normal. they are still way below that and they don't have to do it overnight. getting back would be beneficial.

that is what experience shows, what theories show. matt: bill gross says the baton should be passed off at the fiscal stimulus. we shouldn't solely rely on monetary stimulus to boost growth again. do you agree with him that would be the right move? sort of a caveat is it would cause a bit of pain in the short-term. should be and do some pain in the short-term -- should we induce some pain in the short-term? john: strategically there doesn't need to be pain. i agree we need to have other policies. i think this idea of tax reform regulatory reform, even monetary reform and budget reform, all of those would do wonders. you shouldn't be relying on

monetary policy like this. nejra: i read a great quotes from the chief international economist at deutsche bank, who said nobody understands the inflation process, including the fed. why has inflation been so incredibly well behaved? on going to ask you that. why has inflation stayed so low even when the employment numbers haven't? -- employment numbers -- john: labor force participation is very low and labor markets look good in terms of the unemployment rate. overall there isn't a lot of upward pressure in this economy. a lot of discouraged workers dropping out. it has not been strong.

2% growth has been very disappointing. nejra: do you think we will see a hike in september? john: i hope so, but i don't think so. i think the fed needs to stick to the message it came out with at jackson hole, which is a high probability of thumb move -- of a move. like others i kind of doubted at this point. matt: thank you for your time. great to have you on. john taylor, senior fellow at the hoover institution and professor of economics at stanford university. still ahead we will explore why japanese 10 year yields are creeping back to the zero line and why russia's stopped volatility is starting to calm down as well. this is bloomberg. -- russia's stock volatility is starting to come down as well. this is bloomberg. ♪

nejra: it is time for the bloomberg business flash, a look at the biggest business stories in the news right now. island will appeal as a european commission -- they ordered them to take 14.5 billion dollars from apple, saying the government a leisurely -- government a legally slashed the company's tax bill. matt: young france's setting the stage for a spin off of its chinese operations. the parent of kfc, pizza hut and talk about agreed to sell a stake to a chinese private equity firm. and an affiliate of e-commerce giant alibaba as well.

nejra: there is a report hewlett-packard enterprise wants to sell its software unit. hbe is hoping to get $10 billion . that is your business flash update. so we have some things to chat about. i wanted to start with japan bonds. they have had their worst week in a month. you can see that 10 year yields are almost, not quite, but almost back up to you -- up to zero. that is the highest since march 16. then for the year yield rising to 7%. this is some speculation the bank of japan may tweak its debt buying program. long-term bonds -- a regular

market operation as of today. and analysts are saying people are on edge because they don't know what is going to come out of the boj. you can see it reflected in the bond markets. matt: i recommend anyone who has an see it go back to look at bloomberg.com. puzzling people are continuing willing to purchase japanese that, given the uncertainty. but really the probability that they have a negative interest rate. nejra: no real sense as to how far the seals could rise. -- these yields could rise. matt: i think it is interesting to see the equity market has

found russian volatility is down and interest rates are coming back down again. more and more people put faith in russian bonds, especially at the front of the curve. i'm looking at the 10 year here. this massive spike up to 60% when the. russian -- when russia raised its interest rate. then we had a bit of a recovery thereafter. over the last two years, since the december of 2014 we have cut their yield in half, just above a percent. very interesting russia, a lot of more people are putting faith in it. nejra: you showed me a chart earlier about stock volatility. matt: don't worry, i will have that chart for you. staying with russia, we have and it's elusive interview with russian president vladimir putin. john nichols sweet -- bloomberg

editor john asked him about -- nejra: a former chairman of the president's council of economic advisers ways and on today's jobs number. we may see a 25% chance of recession by next year. will we be driven by the federer the election? we will find out. this is bloomberg. ♪

nejra: live from bloomberg world headquarters in new york, that is the view you can see from our roof.

matt: a gorgeous day on this friday. i am matt miller. this is bloomberg markets. why don't you -- nejra: let's begin with the headlines from bloomberg first word news. andemma: live your putin says the hacking of democratic e-mails was a public service. the russian president spoke with bloomberg news in an exclusive interview. president putin: i don't know anything about that. they can leave their mark at the necessary time and place. other hackers from other countries -- it is an extremely difficult

thing to check. at the same rate [indiscernible] emma: tune in to bloomberg all day for more of our exclusive interview with president vladimir putin. don't miss the report on monday. the first of they will be held at hofstra university in new york. fox news christopher wallace takes over for the third and final debate. german chancellor angela merkel hinted today that she would decide on whether or not she would pursue a fourth term in september. her popularity has fallen to a five-year low, in part because of her stance on refugees.

the acting prime minister of spain gets another chance to win parliaments approval today. it is a bit of a long shot. he has the confidence vote on wednesday. he was not able to work out a compromise with the socialist party. spain would be closer to holding a third general election in september. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. nejra: thank you. now, a quick check on u.s. stocks. let's have a look, if we can, of the indices and how they are faring. the s&p 500 up. we are seeing some modest gains on this job's day. nothing to strong -- too strong. let's go to courtney collins live from the nasdaq.

courtney: the nasdaq is moving higher for a second day. it had been up 6/10 of 1%. it is now trading at around 2/10 of 1%. leading nasdaq is biogenic. the stock is up just 2.5%. it is the top percentage performer in the nasdaq. this is after fast track status for its alzheimer's drug to treat alzheimer's. and, news from jeffries they are keeping their by ratings and price target. meanwhile, a stock not doing well, lululemon. having there were stay in nearly four months. sparking questions about demand

and competition, especially in you aware. initially, foot traffic was low as shoppers get trips to the mall. that is the picture right now here at the nasdaq. nejra: thank you so much. matt: now back to the top story. u.s. hiring remains consistent with steady jobs growth leading policymakers to have mixed signals. joining us, austen goolsbee former chair of the present council of economic advisers. we appreciate your time this afternoon. let's get your take on the jobs report. the bulls would say solid growth.

the bears will say, and fair enough, the wage growth has cooled down, hours worked has dropped, and it does not look like this economy needs a rate increase. where do you fall? >> i think both of them are right with the descriptions of the facts. it is kind of like, as you said in the outset, a bit worse than expected but modestly growing fine, and that is how the economy has been going for the last six years -- plugging along at a modest pace. that puts you in the rorschach test. if you are a person who already thought they would be raising, then you say, i thought the conditions warranted raising and this is more like the same, so i thought we should raise. if you say it has not been strong enough to raise then more of the same.

personally, for the said to move -- i think, for the fed to move right before a present shall election i feel like you would really need to have a strong case that there is dangerous risk of imminent inflation, that we are obviously in a sustained growth period with danger of overheating. there will be controversy associated with what is the fed doing what the implications are. i do not think this rises up to the level of strength. you have poor manufacturing numbers a number of international things that are dangerous. matt: let me ask you because you have experienced in the white house and washington. you think the fed considers the election when are dangerous. assessing the economy?

>> i have never worked at the fed, so i do not explicitly know. i think they are unlikely to explicitly say, there is an election, so let's not do anything, but i do think it is a weird environment, there is a lot of uncertainty because of the election. you have massively different programs. you have donald>> trump proposing 10-20 trillion dollars tax cuts, hillary clinton saying let's raise taxes. maybe there has never been a bigger difference in fiscal policy. i don't see, how when you are the fed, you raise in that environment and two years late -- two months later, you could have a real political shock to the u.s. nejra: you said before that you anticipate a 20% chance of

inflation by about 2017. to see the u.s. falling into a recession in the next five years? how does that inform how you think the fed should approach the hiking cycle? should they really ramp up towards normalization? >> you kind of have two important questions. one is my basic view on the fed and you can disagree with me but if you come through an environment like the one we have come through, when it is time to raise is when you are clearly out of the woods and you have sustained gdp and job growth and there is clear evidence that wages and inflation are rising. i don't think we have reached that standard. if you say, what is the chance that there is a recession in the

next five years in the u.s.? extremely high. we are on one of the longest recoveries in the economic history of the data we have in the u.s. if you say, five years from now, if we are still growing and have not had recession, that would be by far the largest recovery in u.s. history. i think we have to plan for the event that there is recession. that does not have to be a 2008 recession, that was the worst recession of our lifetime. realistically, we have to think through, what would we do if we get some downturn? in my view, risking bringing on a recession is a pretty big charge against the fed. they have to at least think about that. nejra: bill gross calling for a hike in december and another one

as early as march. with that disastrous? >> i would not say disastrous. i hope to be proven wrong. i want the economy to be growing in a sufficient way so we can all look and say, yes, the economy can afford some rate increases here. i do not think that -- by -- december may be by december they can establish that -- but, the notion that we will start one of those. -- one of thoseperiods when we raise, i do not think the economy has been strong enough to sustain that. then, i look at china and europe , and i say, wait a minute there are some serious risks in the world. let's make sure we are out of the woods. matt: let me ask, if you were in charge -- if you were elected

president next year, let's say -- >> everybody is leaving the country. matt: what would you do as far as fiscal stimulus check other is a need for infrastructure and the fed needs to pass the baton to congress. what do we need ideally? >> i kind of agree with that. i am an old friend and fan of janet yellen. i think the position she is in is as difficult as anyone has been in in decades. this is a really hard question. why are they working with the white house to find a way to work with the economy? matt: i think everyone agrees with that. >> not everyone agrees with

that, no way. matt: a lot of people agree with that. what do you think we should look at? bernie sanders is talking about $1 trillion invested in the infrastructure. >> you have to ask yourself, there is one mindset that says is this still a crisis? i think we would be better off shifting out of crisis mentality towards, let's call it, longer run growth entirety. if it were me, i would be saying, economic infrastructure in the country, science, technology, innovation, and investing in human capital, the training of the u.s. workforce. nejra: i believe you are a supporter of hillary clinton. i just want to ask, do you think she will have what it takes to be president to do the fiscal

stimulus side of things that a lot of people are saying the u.s. economy needs? or, will she be more focused on the deficit, the debt? >> it is an interesting way to put it. partly that depends on not only if she gets elected but what happens in the congressional elections also. i think their focus, if you look at a lot of the policy that has come out of the clinton campaign, it is, to my mind geared towards growth not immediate stimulus. immediate stimulus has had a controversial history. i would envision that she do something different than just repeat previous fiscal stimulus is. with the focus on

infrastructure, the focus on investing in the workforce, those are really two huge things that she would do. i think they are exactly what we need. matt: do you think, given your experience, and what you see traveling around the country, that it will be a close race? >> i hope not. it may be. secretary clinton has got a pretty substantial lead, by his stork terms, but it is not a blowout, by any means. everyone should treat it like it will be a close election. in the end, i hope it is not a close election. all the things that donald trump has done and said scare me. matt: what it if it is a

blowout? what happens to the republican party going forward? >> as long as hillary clinton is the one winning in the landslide, i actually think that my own view is the republican party will reorient itself pretty rapidly and they will be able to agree, this i has happened in the past. if they get blown out a couple times in a row, they will say, let's huddle and figure out what landslide, i actually thinkthe voters want. if there is a big victory, i bet the republicans unify an agreement. if it is a close election or trump wins, then i think it will be, in my mind, much more complicated for the republican party. they will be pointing the finger towards whose fault it was. nejra: i want to talk about potential external shocks to the economy. this is something that the fed pays attention to as well. what to think briefly, are the

biggest possible external r isks to the u.s.? >> those are the two big ones. continued slowdown in china. accelerating, deteriorating in a way that freaks people out. you have seen the bankruptcy shutdown of major shipping lines in china. we don't know. it is a major question mark. the second is, i do not see particularly added with the brexit vote, the issues of the european banks and the potentials for financial crises or banking crises, coming out of europe, both of those are the twin towers of fear to make. if you look at the situation for several of the emerging market

countries, especially those which are resource the european banks and intensive those are not looking that great either, by do not think that is as big of a threat to the u.s. economy. matt: we really appreciate your time today. it has been fantastic. a strategic partner, and a professor, of course from the school of economics in chicago. nejra: fascinating. still coming up, more from our interview with russian president farmer put in. what -- vladimir putin. this is bloomberg. ♪

matt: now took more of

bloomberg's exclusive interview with russian president vladimir putin. our editor in chief sat down with him in russia ahead of the coming g-20 summit. putin denies all charges of meddling. president putin: no, i don't know anything about that. you know how many hackers there are today. they are so delicate and precise. they can leave their mark at the necessary time and place, and camouflage their activity. it is an extremely difficult thing to check, if not, and possible to check.

is that really important? does it matter who cracked the data from the campaign headquarters of mrs. clinton? the important thing is what was given to the public. there should be discussion about this. [indiscernible] i want to tell you again, i do not know anything about it. on the state level, russia has never done anything about this. i cannot even imagine that this information be interesting to the american society.

even from this point of view, we could have not officially penetrated it. you understand to do that you need to have a finger on the pulse and give the specifics of domestic policies in the u.s. [indiscernible] >> do not think this is time when everyone should come clean about the struggle russia tries to hack america, america try to hack russia, china tries to hack america -- everyone tries to hack each other. the point of the g-20 is to come up with a new set of rules so that this becomes a new ordered set of policies when everyone is doing it, allegedly. president putin: i think it

would be better for the g-20 not to get involved. there are other venues for this. the g-20 was formed as a platform to do with issues mainly involving the global economy. we will overwhelm the g-20's agenda. then, instead of working on issues of finance, structural changes to the economy, and so on, in place of that, we will worry about other world problems and there are plenty and we will talk about the middle east. it is better to find other forms, the u.s. security council, for example. nejra: continue to catch more of bloomberg editor in chief's exclusive interview with russian president flagman putin.

a reminder not to miss bloomberg special on monday at 12:00 eastern, 5:00 london time. this is bloomberg. ♪

nejra: welcome back to bloomberg markets. we just have some headlines crossing the bloomberg now from the fed. this is from a speech that has been released, ahead of the speech being given just shortly. rates should be higher and inflation raising to 2%. you can see more from bloomberg . this is bloomberg. ♪

>> it is 1:00 p.m. in new york. >> welcome to "bloomberg markets."

matt: we are covering stores from washington, and moscow. here is what we are watching. jeffrey lacher about to speak in richmond. we got text from his speech and stuff siding the taylor rule. we spoke with the creator of this rule from stanford university. jeff lacquer says the recommendations for fed on raising fly almost entirely above zero because of the rate the fed is set is significantly -- should be significant higher than it is now. between 1.5% and 3.3%. with regards to today's jobs numbers insight to the eight month moving average that we have created it hundred 32,000 jobs per month on average in the first eight months of this year. it is double the rate needed to keep pace with growth in the

working age population. double the rate needed. considering the increase in population. inflation appears likely to -- dana is consistent. interesting comments from jeff lacquer as we debate whether or not today's report was disappointing on the wages in the work side. we did miss the headline expectation. >> the average to august, what is it? >> it messed by about 30,000. matt: economists are divided. >> jeffrey lacher one of the more hawkish. we did see a bit of a drop.

i believe that they trade pretty much unchanged at the moment. pretty much flat on the bloomberg dollar index. we want to show this because it is the most sensitive to rate expectations. you've got it up? >> it dropped initially. matt: before the number came out , the yield bounced up. >> the probabilities have gone up as well. >> very easy to check. >> halfway to the trading day let's head to the markets desk.

abigail: not much of a reaction in stocks for the lacker comments. they are up modestly, unchanged at where they were. to be fair, well off the highs as the payroll reports for august earlier, we had stocks up sharply up .7%. the close ahead of this long holiday weekend. the s&p 500 shows this pretty well. we can see we are right down here. it will depend on the weekly directions. it tells us that september for

the s&p 500 has been the worst month for the s&p 500 all the way back to 1950. down on average about .7%. perhaps not voting so well. matt: we have what some are considering a goldilocks number for jobs. not enough to force an increase in interest rates. oil is also moving up. >> in deed. we have a nice reaction from oil. down a little bit may be off of the jeff lacker comments. oil is down about 7% on the week. 3101, we showed this chart at the beginning of the week. we see oil trading in a range. at the beginning of the week it

was at the top of the range. now we are at the bottom. is oil about to break down? matt: i felt like maybe it was the putin interview because he told john nichols that russia is close to a deal with opec. absolutely. let's check in on first word news afternoon. let's go to m a in the newsroom. emma: vladimir putin is looking elsewhere. the russian president spoke with bloomberg's editor-in-chief in an exclusive interview. >> we have a new level of operation. we are on joint space programs. we are developing cross production of a heavy helicopter.

we're working on a long-haul airplane. we are operating in high-speed rail timber processing. atomic energy. we already built a nuclear power plant. emma: tune in to bloomberg all day for more with vladimir putin. don't miss our special report on monday at 12 p.m. eastern. hurricane hermine has been downgraded to a tropical storm but is still making life miserable imparts a florida and parts of georgia. tens of thousands of people were without power. is the first to hit florida in more than a decade and expected to head to the carolinas. bill and hillary clinton's personal foundation donated $2.6 million to charities last year according to a report in the wall street journal citing newly released tax forms. they gave one million in 2015.

the group ended with $2 million on hand. it is funded entirely by the clintons and they accept outside to nations. a campaign to keep the u.k. inside the european union is relaunching itself. it is called open britain. the goal is to change as little as possible. should keep its membership with the single market and continue to have influence like regulatory decision-making. >> global news 24 hours a day powered by 2600 and more than 120 countries. >> payrolls grew at a slower but smaller case. how did etf react to this news? joining us is bloomberg intelligence analyst.

give us the big picture first. >> etf's as a whole are not trading that much. i was look to the volume of este y. == of-- of sty. that brags iexit day, it was 70 billion. we're looking at very low levels. matt said it earlier. the goldilocks numbers. but it's an environment that has been going on since the brags it -- brexit. we saw $80 billion coming in in july and august which is passed with they've been taking in all year. that hot money waiting for something good to happen is already in. if you look at the numbers, it is not anybody panicking. matt: etf is a great function on the bloomberg.

you pointed out a could get a lot of information on e.m. flows. i put emerging markets here and asset classes. no read on the screen there. does that show any signs of slowing down? >> it is 1.3% up. emerging markets are a bit sensitive to any thought that there should be a fed rate hike. back in the paper tantrum days e.m. was down 6% in a month and saw $4 billion come out in a month. right now, e.m. is in good shape. he emerging market etf has $23 billion this year. 47 of them this tells me it is institutional advisors and retail jumping in. emerging markets have benefited.

they see something to the tune of $20 billion come out because that trade is not working. e.m. is down. >> what does this tell you that investors think about today's jobs report? >> not this year? >> it is tough to say. it would not go up today and we would not see spy up today. >> and you have been looking at high. what can you tell us about that? >> i have used this phrase all the time. when the cat is away, the mice will play. the fed being the cat and the mice going into hyg. it has taken inflows since the jackson hole speech. no problems, all clear on the western front.

>> the hawkish comments have had no impact whatsoever. >> not yet. matt: but we do see selling in bonds. >> mostly hyg, there is confidence in the economy being good enough. the goldilocks then, it keeps going on. >> thank you so much. matt: for bloomberg intelligence reports, tech -- check out ei go. we will hear from robin lee, i of the annual g-20 summit in china. what are by dues plans for self driving cars? what about robots? do they have some? this is bloomberg. ♪

>> you are watching bloomberg markets. matt: baidu staking out a spot in the growing field of artificial intelligence including a partnership with nvidia and similar to the amazon echo. we spoke ahead of the g-20 summit in china earlier today. >> we introduced the baidu brain to the general public. i think ai is very important. connect -- the next fields, we started after 10 or 15 years. and over the last four to five years it is pretty much

snowball. but now everyone has a smart phone. the next is the core of the technology. nejra: the link to that is a thomas vehicles. you have just received approval to test ride them on roads. what can baidu provide for the car market compared to global tech giants like apple and google? >> i think that we have a number of advantages. autonomous driving relies on definitions and we have the best technology for that. the chinese government is very friendly.

we have a controlled area for us . the technology for five to six years the self driving cars heavily rely on recognition. we're at the very front of this kind of technology. nejra: you have seen increased scrutiny there. when will the challenges and? >> it is normal for a company like us. there are just areas that we need to clean up. going forward, a few very

dependent services. right now, most are text format but people will start to use voice and images to search. it is very high and also basic ai related technology and beyond. nejra: well ai technology be able to make up for some of the downside you have seen in your search business? >> yes, i think five years down the road, 50% of our queries will be in the form of images that people can express their need in a more natural way. right now, people think typing is the natural way to talk to a computer. but it is not.

the next generation is already used to touchscreens. it is even more natural. we have the technology to support that. nejra: how can this kind of innovation aid in china's growth going forward? >> the chinese government and much on internet to fuel the growth for chinese economy. they call it the new normal. to drive the economists growth. we think that is ai and we have been heavily invested in the technology and it will open up a lot of new possibilities in the car industry and the health care industry. in china will benefit from that. matt: with the baidu ceo robin

li. nejra: various food industry groups, challenging the state. the now defunct gml labeling law. we will get into this story up next. this is bloomberg. ♪

nejra: groups have agreed to dismiss a lawsuit challenging the genetically modified organisms or gm owes. it marked the end of a years long legal battle and comes just over a month after the president signed a bill and creates the nationwide labeling system. bloomberg reports in washington.

>> the federal law the president signed in late july creates a nationwide mandatory labeling system for gml foods and keeps states from enacting their own labeling laws. it makes the vermont law irrelevant and that's the lawsuit challenging that. matt: what does it mean for businesses? >> canceling a lawsuit doesn't impact businesses but once important to note is that the vermont law was the impetus for the federal law. the attorney general of vermont says he will no longer enforce that law. nejra: does anybody benefit here? >> vermont says fighting the

lawsuit was worth it because it rot gtmo-- brought gmo labeling to the national stage. food groups and companies say that this court battle was worth it. they ultimately got a national standard. food groups were concerned that other states will create their own labeling law and have this state-by-state patchwork system of regulations that would ultimately cost them more compared to a national standard. matt: does that mean that particular debate is solved? >> we have a national labeling law now. the usda has two years to implement it but there are still challenges ahead.

they need to figure out the details of how the label will look, what it will say and it has to figure out what foods fall under this labeling law. nejra: i've got a little bit of a pet peeve because this happened to me coming to the u.s. for the first time in a while. i ate a snack this week and it said no added sugar and i look at the ingredients and there's sugar in it. how does that work? >> added sugar is different from naturally occurring sugar, for example. food makers will add sugar to make it more sweet or more palatable to the consumer. but you don't necessarily have to include that. matt: this brings up an interesting point. i spent a lot of time in europe and nejra lived in europe before the brexit. she now lives in the u.k.

are the labeling rules more stringent their then here -- there than here? >> the large scaling gtmo practices in the u.s. is much more strict. most countries require labeling in europe. in the u.s. we are starting to work on labeling and we use gmo's a lot more. practically all the corn grown in the u.s. is genetically modified. matt: you won't be eating corn anymore, will you? nejra: not anymore. matt: go check out dno ga go for more on this. nejra: still getting my head around it. matt: time for the bloomberg business flash.

the august jobs data ensures the federal reserve will raise interest rates this month. the central bank will wait. bond traders are on the fence. futures prices show a 30% chance of a december move. matt: under armour ceo kevin plank plans to sell more than 2 million shares of the sportswear company he founded. it is valued at more than $72 million today. they entered into a prearranged stock trading plan that will be active for nine months starting in october. plank enacted a similar plan last year. and that is your business flash update. matt: louisiana still dealing with the aftermath of the floods. we will talk to the red cross. this is bloomberg. ♪

nejra: live from bloomberg world headquarters in new york. matt: this is "bloomberg markets."

let's start off with the headlines on the first word news this afternoon. emma has more from the newsroom. emma: russia wanted to compromise and stretch back more than 70 years. the soviet union occupied japanese islands. in an exclusive interview president vladimir putin says resolving the conflict should be part of developing a long-term relationship. >> several years ago we return to the discussion of this topic. and we did that, we met them partway. so in the last couple years led by the japanese side these countries were frozen. but now partners are showing a willingness to return to the discussion. we're not talking about an exchange or sale but finding a solution.

when either of the parties feel like they were a loser. emma: don't miss our special report on monday at 12 p.m. eastern. donald trump's first appearance at a mostly that -- black church is being carefully scripted by his campaign according to an eight page draft obtained by the new york times. it shows the pastor a great faith ministries as well as suggested responses for trump. hillary clinton wanting to protect patients after backlash for an emergency allergy treatment. it will give the government more power to push back against what she describes as unjustified costs. rahm emanuel's party leader says they plan to hire 100 more police officers after the

deadliest month in decades. it is tied to the 2017 budget. global news 24 hours a day powered by 2600 journalists and analysts in more than 120 countries. this is bloomberg. nejra: as the tropical storm max its way along the southeastern coast, residents are still reeling from august floods. the state was hit by trillions of gallons of rain enough to fill 10 million olympic pools. it has reached 120 $7 million according to the white house but may not be enough for louisiana already under financial pressure . joining us now is the vice president of disaster operations. thank you so much for joining us on the program.

just bring us up to speed on where we are with the disaster at the moment. >> have a number of disasters. the responses in the third week and we had over 1400 people in 11 shelters three weeks after impact. it is still a significant relief operation going on there. the hurricane made landfall in florida last night. we had about 450 people and about 50 shelters overnight. hermine will continue off the east coast and park itself off of the peninsula and wait to see if it will re-intensify and become a problem for the northeast. in the pacific, hurricane metal line passed by with minimal damage. and over the next 24 hours, hurricane lester is forecast to impact the island of a wahoo and maui at a minimum.

i feel like we are standing at one of those pitcher machines and it is automatic and it won't stop. that's how things are going. matt: do you have all the funding you need at the red cross? explain how the red cross funding works and the decision to disperse those funds. >> we are completely a volunteer organization and donor funded. we depend on the generosity and philanthropy of the american people. the operation in louisiana right now, we are forecasting to be somewhere between dirty $5 million and $38 million in terms of the cost. please -- we raced $17.4 million. and had we decide how to disperse them? we work with partners in louisiana, the parish government, other organizations

and we look for where they need is greatest and try to meet the unmet need. it includes sheltering feeding supplies, and casework to help folks with their medical needs and reintegrating and recovery for those that lost their homes. nejra: i have first-hand experience with the billion work the red cross does. how much money is needed to flood the gap. >> one of the most important things folks can do is donate to the red cross. $.91 of every dollar goes to help someone who is a survivor of the disaster. you can call to make a donation. today alone, we have over 2000 volunteers working in louisiana. several hundred in florida.

and we have all sorts of activity going on around the country. they can go and look for volunteer opportunities. they're also looking for volunteers. those are the best way to help to donate funds. matt: i'm sure you're focused immediately on the problems that victims of these floods have had. will they try to move these people out of flood zones? we see high waters every year. >> there is a very intense regulatory framework around the floodplain management. the federal government are

actively involved in floodplain management. we continue to see increasing number of floods through the single largest adapter in the united states and they cause the most damage. this issue of how to live in flood zones and build resiliently will persist until we solve that issue. matt: brad keiser in there, vice president of operations and majestic's for the red cross as we see floods in louisiana, hurricanes along the coast of florida and natural disasters that they go out and help people who need it first. nejra: very important work. coming up, more with the exclusive interview with vladimir putin. his thoughts on the turkish president at a one. this is bloomberg. ♪

matt: we have breaking news on fed governor jeff lacker giving a speech right now that you can watch on the bloomberg. talk about the need it appears rates should be significantly higher than they are, should be between 1.5% and 3.3%. the jobs we added are running at twice the pace needed. considering the inflow of new

workers to the labor force. you can follow all of this or watch on live go. nejra: we are not seeing much shift in the dollar. it pretty much unchanged. the yield sticking around. yields up for basis points. we're back down at 1.6%. russia and turkey have had a tense relationship in the past year after the shot down a russian aircraft. they sat down for an exclusive interview. this occurred in china. they asked president putin about his recent change.

>> turkey apologized for the incident that took place and for the death of our people. we see a clear interest on the part of the turkish president in restoring full-scale relations. we have many common interest. we very much will be able to establish a dialogue. we have many projects including streaming the energy sector. it is expanding transfer capacity. there will be the possibility of european partners. if the european commission supports it, we have a very large portion. the federal elements, we will finance and operate it. we have reason to believe that have taken into account the agreement -- this will be

economically beneficial. in addition to everything else we have a mutual desire to have agreement about the region's problems including the syrian one. when i hear not from inside the country from outside, it raises major questions. democratizing iraq and libya. we see the collapse of the state. where do you see elements? i very much count on it. and what will happen in january.

i have a big question. organizational legal standards. to master this patient. these changes happen. maybe that is what political wisdom. the political system -- it is unacceptable. once we are in contact on a political level and in the defense ministry and more in ministry -- foreign ministry.

i am sure we will often discuss this. nejra: and you can see more of the extensive interview with president putin on monday. don't miss the one-hour special monday at 12 p.m. eastern at 5 p.m. london time. matt: we will head to italy where the forum is underway. i think i said that right. nejra: you did. well done. matt: the challenges ahead for europe's growth. this is bloomberg. ♪

nejra: this is bloomberg markets. matt: finance and business leaders are gathered at the forum in chernobyl italy to discuss what is next for the block once the u.k. leaves. joe weisenthal joins us for a special conversation. the dutch finance minister and euro group president with us.

can i first ask if brexit is the first order of business? i think it's the most interesting because the most rheumatic but obviously not the only thing going on in europe. >> it is not the only thing. the economic recovery is still progressing in europe. of course, there is uncertainty coming from world trade. and to some lesser extent, migration issues. in that respect, it is still about encouraging growth. stimulating and building on the monetary policy and restructuring our economy. >> you talk about building on growth and there is a growing consensus that monetary policy has reached the limits of

efficacy and more needs to be done on the fiscal side. it would preclude what a lot of economists are calling for. how can the eurozone take some of this advice into account? >> the space is not just limited because of the situation in a number of countries where it is still high and deficits have be dealt with in the short term. for other countries, we have to expand on that investment agenda. it is also a third pillar of the policy which is about structural reforms. politically difficult, not always popular, very important. a lot of work can be done there by politicians.

the critics are right. it you can't just wait for monetary policy to do the trick for us. >> does the low interest rate environment worry you at all? and talking about the possible rate hike from the fed. how can that impact growth? >> interest rates have been going down for 30 years. a number of circumstances are technological development, aging energy prices and inflation will be low for a longer time. we have to adjust to that new reality. it is already further ahead. reaching high levels of

unemployment. we are catching up but not there yet. our economic progress is in a different part of the cycle. nejra: could a rate hike derail progress in europe? >> i don't think so. it very much depends on whether the timing is right for the u.s. economy. we are not as far in the economic cycle is the u.s. is. perhaps that is different for germany. they are still coming out of the crisis. it is a different time. perhaps even extending it. matt: pushing for structural reforms as well as fiscal

investment. can you give specific examples of structural reforms that you will be pressing your colleagues in spain or italy to make as well as specific request? >> it is an ongoing debate. markets are still overly protected in europe. they make it difficult for young people to enter the market and start their businesses. there is still potential extra growth out there. on the tax policy side, we create more jobs. that would require tax reforms. perhaps italy or portugal they would have to the legal system.

those of the kind of issues that get too little attention. a lot of attention goes to monetary policy, extra fiscal expansion. and it is still too little taking away some of the structural barriers. >> i wanted to get your assessment of the confidence that you have in the current greek program. we got a reminder this week from the retail sales numbers that the economy is still dismal. the finance minister gave a domestic warning that there were concerns about backsliding. and to mention criminal charges against the former statistical head over claims that it is his fault that the budget data or the deficit data was understated. in light of all these things the poor it economy criminal charges. how confident are you that greece is continuing to make

good progress and will get out of this bailout? >> i am reasonably confident. i think the government is committed. it some of these reforms are difficult and will take time. we will keep pushing them and they will keep pushing them in athens, i'm sure. realize if they take a number of additional steps which we have agreed that further disbursements to the greek government stand ready. and that money can also support the economic recovery. i have little comments there and it is crucial.

there is a government for the situation. >> it is discussing it coming what the concerns are. i believe it has weakened. versus the pound. we're not at a level of satisfactory. i think that is the case.

it is a currency thing. matt: do you think the refugee crisis will hurt the economic outlook or will it be a help? >> i think when the very large numbers came in to europe last year there has to be extra spending. there was fiscal expansion through the migration crisis. numbers are a lot lower now. still relatively high coming into italy and lower coming in degrees. in the long run, these refugees will have to be integrated. nejra: we have to leave it there. ♪

>> welcome to bloomberg markets.

david: we're live in new york over the next hour. a couple stories at a san francisco, washington, russia, south korea. we talk with bnp paribas for them to take action in september. vonnie: vladimir putin sitting down to talk with bloomberg tv. david: the tone is set for apple with the iphone camera upgrades. business tracking. the markets close in two hours time.