, policymakers at the senior level do talk to one another on a fairly regular basis. the governors meet six times a year or more than that. finance ministers and central bank governors meet at the g-20, i.m.f. meetings twice a year. the g7 meets. we exchange notes on what is happening in our economies, and we try to explain to one another how we are thinking about implementing policy to try to promote understanding and avoid surprises. we all understand our policies have spillovers. that is certainly true for the united states. we have seen our policies have spillovers in emerging market countries. obviously, what happens abroad

also greatly affects our economy. so even from the perspective of narrow self-interest, it is important for us to be mindful of those spillovers and spillbacks of our policies and take them into account. policy coordination is difficult. possiblenot sure it is given our separate legislative mandates. contact in anlose attempt to promote understanding. and in crisis situations, when it is necessary to mount defenses because we are worried, for example about an incipient financial crisis, that network resulted in very

close and effective coordination and cooperation. it has been important in recent years. students are often told inflation is always and everywhere a monetary phenomenon. yet you listed three reasons for inflation, none of which were too much money. what is the role of money in inflation? chair yellen: i guess i would is too muchn there demand for a limited supply of goods and services that is a situation that creates inflation. it ties in with the framework i articulated with economic slack. i would say for example just now after all these years of growth in theer

economy and trying to diminish theployment, probably now labor market is in a normal state. would foster inflationary pressures if demand rose at a sufficiently rapid pace and on a long run basis such that we pushed against dwindling labor resources. that is one reason why i believe it is important for us to normalize or move monetary policy towards a more neutral level. accommodative monetary policy when it is not occurring in the context of an economy that is close to full employment, that is not inflationary. when -- first at the end of 2008, the fed lowered its

overnight interest rate to zero. then we started buying up longer-term assets which swelled the quantity of reserves in the banking system. and people who reasoned money causes inflation but thought that is somehow independent of the state of the economy worried our purchase of those assets meant that inflation was around the corner. theresponse was to say unemployment rate is very high. it is 10%, 9%, 8%. very high. maybe when the unemployment rate has declined to low levels that is a legitimate concern. but it is not in the context of an economy with this much slack. i think history proved the view i just explained to be right. so, money does not cause inflation independent of the state of the economy.

>> this question comes to us from twitter. has the effect of quantitative easing been underestimated? quantitative as the i will interpret fed's purchase of large quantities of longer-term treasury and mortgage-backed securities. our objective in purchasing these securities was to drive down longer-term interest rates on treasury and mortgage-backed securities, that would also filtered through to private securities and the market in general. there is a lot of research now. but it is difficult to unambiguously know just how large the impact was of those purchases.

read is finding our purchases did succeed in driving down our longer-term interest rates by a meaningful amount. and as a consequence, our policies had the favorable effect of holding inflation up a little closer to our target, stopping it from falling quite so much and lowering unemployment. and the job growth was stronger. there are other countries also, japan, the bank of england, the e.c.b., that are engaged in similar programs. so now we have international experience to add to that in the united states. i read all of that experience as saying that these programs are successful. but does it have a larger impact than we think? i suppose there is some research

at the larger and and some on the more skeptical and. my assessment would be it had a favorable impact. i don't want to exaggerate exactly how large it was. but i think it was certainly favorable. with labor force participation rate relatively low compared to recent history, do we change how we think about -- what constitutes full employment and how that dictates monetary policy decisions? chair yellen: did you say labor force participation rate? >> right. chair yellen: the labor force purchase of -- participation rate has been declining for some time in general in the united states. because weing trend, have an aging population, is for it to fall further.

but what has been hard to know following a very severe financial crisis with very high unemployment is how much of the decline, what portion of the decline we saw labor force participation might reflect not just voluntary retirement but discouragement of people searching for a long time and dropping out of the labor force because they were unable to find jobs. some of the decline in labor force participation might reflect a weak economy and be a kind of hidden unemployment. we saw declining labor force participation not only among those in the retirement years but also among prime age working people. thato, the fed recognized

we were uncertain about just how much additional slack there might be that was taking the form of depressed labor force participation. we have monitored that very recognize the we unemployment rate itself might be misleading -- a misleading indicator of the extent of slack in the labor market. now, i think there was something correct about the reasoning that labor force participation was a form of hidden slack. essentially the last couple of years, the labor force participation rate has been flat. and even though the demographic trend should have been pushing it down. that suggests as the economy has recovered, we have seen the unemployment rate fall, but it has not fallen nearly as much as

you might have expected. in part, we have created a lot of jobs. and yet, the unemployment rate has not fallen very much. part of the reason is i think we have drawn people in to the labor market who have been discouraged. this is something we have watched very closely. i think what we found over the last couple of years is our economy because of that had more room to run then we were certain it had. and it has been a good development to see labor force participation improved to some extent, especially among primates working people -- prime age working people. >> unfortunately, this is the last question we have time for. you mentioned in your conversations the role the fed plays in managing expectations. to that point, it seems like more than anyone in the world, you have to be careful about what you say.

how has this affected your life? [laughter] right.ellen: you are [laughter] guess i have had a fair amount of experience and training for this job having chair as a governor, vice in san francisco. it is an important role i have two talk about monetary policy and to communicate it clearly as i can what the committee's strategy is and how we see the economy unfolding. it is very important in managing on the one hand, i want to be careful not to say something that will needlessly roil expectations i do not

mean. it on the other hand, i do want to talk about monetary policy because my job is to promote understanding of monetary policy. although that is a difficult task, i try to do it to the best of my ability. i knowre we wrap up, that there are so many students here, many of whom are really committed to making a difference in public service which is something you have dedicated your career for. i wonder if you have any words of wisdom for the young people. chair yellen: it is wonderful to see so many young people who are and many to education of you to public policy. the core offor me, having a satisfying career first and foremost was finding something to do that i really love and am really interested in.

i was lucky as an undergraduate to discover economics, which is a field i regard as implicitly fascinating. it is pretty true to say almost every day of my life i get up with a sense of enthusiasm about wanting to work on economic issues. and so, the first piece of advice for everybody is obviously not economic. you can me -- it can be many different fields that make capture your intellectual interest. but finding something you love, that you're really interested, want to focus your career around it, that is the starting point of having a good career. i would say second, people say to me, don't you feel your career was a success because you got to be chairman of the fed? and i would say, no, that is not the right way to look at it

because one's career is about everything you do along the way and precisely where it into -- ends up. even if i had not ended up in this role, i've would have felt i had a great career i have enjoyed great i think it is important to choose things you do at every stage of your career that you find interesting and engaging and rewarding. say atic service, i will the federal reserve i have found, and i think this is important, and i found this and people if i knew can brainstorm with, problem solve with, three respect -- whom you respect, whom you like spending a time with. i think that is an important aspect of any job that makes it satisfying. i have certainly found it in government. people devoted to the public interest and using public policy to advance the public interest. and finally i would say being

affiliated with an organization that you feel proud of, that you think makes a contribution to society. and that is certainly true of being at a university. no hesitation about feeling good about what universities do. i certainly have felt the same way about the federal reserve. i know we are an organization that really is devoted to the public interest and enables me to feel good about how i spend what we and we will -- are engaged in. >> as we wrap up, let me thank our audience for coming, for all of your questions. i am sorry we did not have time to get to more of them. also, a very special thank you to chair yellen for sharing her's perspective and also for her public service through so many decades. thank you so much. we really appreciate it. [applause]

joe: dallas fed chair janet yellen speaking from the university michigan school of public policy. i want to talk a little bit about some of the key ideas she had. she said the u.s. economy is growing at a moderate pace right now, operating a slightly more robust and healthy weight -- way. she says the intention is to gradually raise funds rates to neutral. as the economy is performing as expected. once again reiterating the point that fed policy is not on a preset course. she was asked about inflation. she insisted the inflation target is symmetric at 2%. a lot of criticism of the fed on that point. people say 2% is a ceiling and not a floor. i want to open it up to our coast. what struck you? >> one thing that stood out to

me is chair yellen saying global coordination is difficult. she also said the global economy is operating in a more robust manner, basically saying the path is clear for the fed to tighten. what also stands out, this new tool we have been hearing about recently, the unwind of the bounty, no talk of that. this is probably not the venue to bring that up. >> questions from the student audience for interesting but did not give enough scope to ask something is caucacus that. they did ask the effect of qe in general. it was interesting she did not want to overstate the impact of qe, but she did think it had a beneficial effect on the economy. for "bloombergl technology." miss""what you

time for "bloomberg technology." >> that is the immediate one that people connect with and the easiest. , comparednk about it the number sold. when you look behind the numbers, about $350 of content of chips in a car compared to about $50 in a phone. potentially this has the potential to have a big impact. caroline: more value. fundamental drivers, the internet of things. we are talking about how at&t. uses ishrase everybody internet of things. what does that mean? our research and when we speak industrial-- people automation is where the volume is at this point. even ethernet connections for factories is something they are just about to get. in terms of connections, remote

management, bringing the data of the machines to manage them to be more efficient, right at the beginning stages. but the potential is supposedly huge. caroline: what about the runaway successes when you dig into the chipmakers? nvidia comes to mind. is it still the standout? >> sentiment has turned against it. there have been downgrades that have brought it back close to being in line with where everybody else was. nvidia was ai, self-driving cars, we will be the heart of it. to be fair to them, they posted some numbers. they are not particularly huge. they are better than anybody else's. they have shown progress. ultimately, that will attract competition from companies like intel. that are bigger with more resources. that is where some of the sobering sentiment has come from recently. caroline: is there a divergence

as to who the key players are to watch in semiconductors? >> potentially this year if you listen to analysts and investors, they are due for one trade memory is old school. why does anybody care about that? it is just computers. a lot of the data has to be stored somewhere. traditionally, that was stored on spinning disks. there are only three or four the news that make thing. increasing demand limited to supply. prices go up and everybody does better. beoline: ian king, we will driving you -- dragging you back on when it is safe that. china's farmers are looking to the sky. how the chinese government is planning to replace manual

labor. that is next. this is bloomberg. ♪

caroline: the future of farming is heading to the sky. island,hern chinese agricultural drones are being used to spray pesticides over crops. the government is accusing -- encouraging farmers to move from manual labor to automated farming. we have this story from china. >> ♪ >> the farm is about 44 acres. this year, it is trying out new technology. he has hired a team of joan operators to 's decide -- to spray pesticides over his crops. [speaking another language] >> the team of six arrives at

dawn and got to work. >> agricultural drones are taking off in china. in recent years, the government has encouraged farmers to move away from manual labor to automated farming. right now, drones are only used on about 2% of chinese farms. the market could be worth $4 billion u.s. a year. the world's top drugmaker is betting more farmers will start automating. the company has introduced two drones for pesticide spraying. they use radar to maintain the right distance from crops. .> it follows a planned route

the system is doing a lot of the work automatically. we can ensure more precise spraying. drone has a small payload. the operators have to refill the canister every five minutes and change the battery every 10 minutes. it can only be used on smaller farms about 50 acres. it is tedious but cheaper and faster and hiring a labor. he paid about $22 u.s. per acre. cheaper perst $7 acre than hiring men with that taxpayers. -- backpack sprayers. caroline: fascinating. coming up, we speak with former apple c.e.o. john sculley.

his futures on the thoughts of artificial intelligence. that is next. if you like bloomberg news, check us out on radio. you can listen on the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

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boom baby! rated pg-13. [ screams ] tually hold your business back? say goodbye to slow downloads, slow backups, slow everything. comcast business offers blazing fast and reliable internet that's over 6 times faster than slow internet from the phone company. say hello to internet speeds up to 250 mbps. and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. mark: i am mark crumpton. you are watching "bloomberg technology." let's begin with a check of your first word news. two adults including a teacher are dead following an apparent murder suicide at an elementary

school in san bernardino, california. two students were wounded. police say their conditions are not known. the shooting happened inside a classroom. the school district spokeswoman said officials believe the teacher knew the shooter. judge neil gorsuch was sworn in today as the 113th justice of the supreme court after a senate battle exposed a bitter partisan divide that resulted in republicans changing the rules so only a simple majority of yes votes was required for confirmation. in sweden, people are questioning their country's open immigration policy in the wake of the truck rampage that left four people dead. the suspect is an asylum seeker from uzbekistan whose request for a residence permit was turned down. a second person has been arrested. in france, the presidential election is a four-way race. the communist-backed candidate has caught francois fillon for third place.

and nationalnt front leader marine le pen are each.or first with 24% the first-round voting is april 23. the runoff is may 7. in london, thousands lined the streets to pay their respects to the officer killed in the terror attack outside the houses of parliament. keith palmer was guarding the palace of westminster when he was stabbed by the attacker who was shot dead by police. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. it is just after 5:00 monday in new york, 7:30 tuesday morning in sydney. david has a look at the markets. good morning. david: good morning, mark. in sydney, futures have opened a little bit down. the nikkei pointing down

slightly at the moment. we will be looking at japan today because toshiba is due to announce results. they are the december quarter results, delayed twice. hadcompany auditors have trouble coming to a common picture on where it is. toshiba's westinghouse has felt for bankruptcy in the u.s. so that was a big part of this. we will also be looking at china which has been having trouble with auditors. those are the main things we are looking at today. i'm david ficklin. back to "bloomberg technology." ♪ ♪ caroline: this is "bloomberg technology." i am caroline hyde. back to our top story this hour. a battle of billionaires brewing in india. on one hand, the amazon c.e.o.

has pledged five blinged dollars towards growing the -- $5 billion taken on the local leader. the other c.e.o. is said to be closing in on the deal to merge snap deal with the cart to fend off --flip cart to fend off amazon. also joining the fray is ebay. it just gave flip cart path a billion dollars in exchange for a deal. one number worth noting. , $10atest funds valuation billion. that is down from the morning $15 billion valuation given in 2015 making this a down round and serving as a warning that the indian e-commerce market may not be the same growth driver china was. artificial intelligence is quickly being adopted across every sector,. one company utilizing this technology is based in newport

beach. the startup provides an interactive credit report that allows customers to see how actions might impact their credit score. the company also partners with banks and uses computer learning to provide offers to customers. joining us from new york is the vice-chairman john sculley, former c.e.o. and chairman of apple. it is great to have you here on "bloomberg technology." thank you for joining us. tell us what is different about my turn credit -- western credit -- lantern credit. how does it make it different question mark >> credit scores have been a central part of financial wellness for many years. not been anhere has easy way for people to be able to know more about what their real credit worthiness is, find whether they can get much lower cost loans to be able to improve their credit scores rapidly.

and then on the side of the make muchng able to better informed decisions. what makes lantern credit unique is we turbocharged it with the ability to use machine learning to do things that have not been possible before in consumer credit finance. caroline: like? >> for example, the ability to have an intelligent credit score which enables someone to in real time be able to determine what their credit score is and be able to improve that credit score. this is the thing that has been missing in the market for consumer credit scores. normally, it takes many months to know whether you can approve -- improve your credit score. we can use machine learning to look at the behavior of consumers. these could be bank customers who are our partners. we can predict before they do anything if they will be turned

down for a credit card, what they can do to improve their chances for being accepted for a credit card, how they can get a lowest --lower interest rate for a big-ticket item. all of these things can be done with machine learning. it is something i think will set us off on a home --whole new way of thinking about consumer credit. caroline: you say you are working with the banks. you got a luminary from the banking industry, the chairman of morgan stanley. what about working with banks internationally? is it a u.s.-focused product at the moment? are you looking globally? >> we will look globally virtually. right now, we are focused on the u.s. we have a number of bank partners. we will be in the market later this year with our first release products. the thing that is exciting about lantern credit is we made an acquisition of a very advanced machine learning company based on what is called nonlinear

symbolic regression. this means we are a white box solution. white box is different from google deep learning. no one knows how that is done with a black box. in a regulated industry like consumer finance, the ability to have it human readable is incredibly important. we have a white box solution. it has been proven in the market. now we have adapted it for being able to determine the risk of a on ther a lender based underwriting requirements of that specific consumer. what is really interest in about bank partnerships is they have massive amounts of consumer data, but they are only using about 1%, maybe 2% at best. data,ther 98 percent of we can start to harness that with our ai machine learning technology. that is what i think is going to

help change the way people think about alternatives, options, what they can do, and help educate people which is a big deal for the consumer finance protection board, to see consumers better educated and eliminate confusion about finance. caroline: is the regulatory environment helping or hindering in the u.s.? >> we are on very good terms with the consumer financial protection bureau because they love the idea we are educating consumers, that we are giving full transparency. no one has been able to give this level of transparency before and be able to enable consumers to be empowered with tools that open up all kinds of new options for them. really expanding the credit possibilities by lowering the cost of interest rates for many consumers, particularly on larger ticket items. i think the way we are positioned for the market is not only going to be good for

lantern credit but going to set a new bar for the whole consumer credit industry. you have got credit bureaus, credit reporting companies. this is a chance to say, how can we all work together and take that to a new level? i could not have you on and not ask you about apple. apple is going to have a great year. probably a great three years because the refresh cycle for the iphone, 10th anniversary, everyone is looking forward to it. it is coming later in the year than some of us thought it was going to. belooks like it will announced in september and delivered after that. it looks like it will be a spectacular product. apple is the iphone company these days. you will see a lot of growth around innovation of services for the iphone. caroline: does it need more than

an iphone? >> the stock is up almost 50% over the last 5.5 months. at the moment, i think the market is saying it is doing a good job. caroline: john sculley, great to get your opinion. former c.e.o. of apple and now vice-chairman of lantern credit. thank you very much for joining us. speaking of tech and finance, bank of america has named the new head of technology banking. the man who announced his retirement last month. he has been with bank of america since 1996. .e helped close deals up, the mobile game maker eisen ipo. how plans to stay above the competition.

we will hear from the myspace cofounder next. this is bloomberg. ♪

caroline: googles artificial intelligence technology is moving on to the next challenge. the deep mind ai software will take on the chinese player in may in a formal rematch between the man and the machine. last year, the program had a lopsided victory over the south korean master. the experts but it would take as much as a decade before ai could be top-ranked professional players at the game. the mobile game maker is getting set to release a new name this spring. it would seem including a "family guy" game will be

available at the end of the month. the county will have five additional platforms launching this year. joining us is chris dewolfe, founder of myspace. tell us about the new games. it is an interesting tactic you use. seems nod in l.a., it surprise you would join entertainment with technology. >> we have been very successful developing our own titles. about two years ago, half the new games we develop come from third-party i.p. living in los angeles makes it really interesting because there are so many great storytellers. i think what we do particularly well as a company is we are able to interpret that brand or intellectual property from a television show or movie into the format of a mobile game. keeping the humor

behind "family guy" and trying to replicate it in a game must be hard. are you monetizing the business at the right pace for your enthusiasm? >> i think so. we have grown at an average of about 100% a year over the last five years. our growth topline and bottom line have been phenomenal. we have been profitable for many years. we are running our own race. we have had several seminal moments in our history. million raised $130 from korean strategic. last year, we bought a san francisco company that got us into the intellectual property market. they did the original "family guy" game. they have a marble game. about half of our employees are currently in san francisco. caroline: is m&a where does that? let remain in your playbook going forward? >> we are going -- growing

organically. we have a long history of doing a great job with m&a. so id my company to fox understand it on both ends. as we get into new genres, we will do that mostly through m&a because the mobile gaming market is consolidating in a huge way. there are only a handful of big companies left. caroline: consolidating. prey or dover bee you aim to be independent? >> an ipo is a natural great ending to a great start up or a natural beginning, as it were. we will see what happens. we will keep our options open. ipo is interesting to me. caroline: this year? >> i think it will probably be sometime next year if we end up doing it. caroline: why play it slow and steady when you're seeing the

window wide open? snap did well in the beginning. >> i never believed in timing things like ipo's. as long as your profitable, you don't have to worry about it. we don't have to raise money. we don't have to do an ipo if we don't want to. we wait until we are ready. we will have had four years of increasing profitability kind us. six or seven years of topline growth behind us. we will be very ready. we want to make sure there are no stumbles after we do it. caroline: looking at some of the gaming companies that have gone , there is always the age-old question of, when are you going to have another hit? off that kindel of stress that you have to keep on bringing these winning formulas to the fore?

>> the hit games we built three or four years ago are continuing to all-time highs in revenues. for example, cookie jim has done over half $1 billion in revenue. we released back in 2014. panda pop has $259 in revenue. we released that about three years ago. the key is to keep these things fresh and new. so the new levels, players in the games never want to leave because there is always something new and fresh. every year, you launch new games. we arear, launching six new games which will be incredible. those revenues and profits stack on top of the gains we have launched over the last three years. you have a lot of diversity in your revenue streams and a lot of durability, almost in evergreen nature to the revenue streams. caroline: what about your diversity and durability in tech?

you have a couple of u.s. sites but also one in blue saris. how are you able to find the right talent in the u.s.? are the travel bans concerning you as the leader of a business? >> basis are -- visas are always tough. the majority of our employees are in san francisco. aboutn those two, we have three and 75 in san diego. diego.hree and 75 in san we try to spread our talent along the coast to make it easy to hop from town to town to see what is going on. there is a great talent based on the west coast as well as in buenos aires. we are really happy with how things are going. caroline: it has been great having you stop by making your tour of the west coast. we hope to have you on again soon. c.e.o. and founder of jam city. this wednesday, a conversation

with christine lagarde live from brussels. catch that conversation wednesday at 6:30 a.m. in new york. coming up, comcast is looking to take on netflix and amazon. we will bring you their plans for an online video service next. this is bloomberg. ♪

caroline: a bloomberg scoop. comcast is taking on netflix and cbs. the company plans to introduce an online video service in the next 12 to 18 months. comcast is still determining many details including whether it will have a live feed of the broadcast network and if it will include sports. there are plenty more details lucas shawigest with who broke the great story for us. you and alex got together and broke this element of news.

is it netflix and amazon they are gunning for? >> if you are a traditional media company, comcast, cbs, time warner, fox, or disney, you have watched as netflix and amazon have attracted huge audiences with their on-demand services. at the same time, you're seeing viewership for live, traditional tv down. what can i do about this? we are still making billions from our tv networks but clearly need to do something for the future, come up with some new service. cbs has tried with a couple of services. time warner has one with hbo now. comcast has done a couple of salt -- small ones. they have a service for comedy fans. this would be a much bigger endeavor pulling together programming from across the comcast universe. cable networks and sports as well. caroline: advertisers could love this because they have a certain

demographic which perhaps are younger than the rest of them. >> yes. cbs has a product in the marketplace called all access. it is online. you get a live feed on demand. they made a point of saying the average viewer for that is significantly lower than for cbs. if you look at the trends in tv viewership, it is only getting older for live tv. most young people are not watching as much live tv. if you want to reach them and not sacrifice that demographic to facebook and so on and netflix, you have to come up with something of your own. caroline: something of their own. it breaks my heart because i am a fan of jay-z and he decided to pull his music from spotify. i will have to get title. is that what? >> it is the only reason i can come up with. he pulled his whole catalog from

spotify with the exception of two records he made with r. kelly a long time ago. about half of his catalog is off of apple music. if you want to listen to classic items, you cannot get it or song byt tidal song on youtube or pandora. the timing confuses me because universal music group which has a deal with jesse -- jay-z just made a big deal with spotify last week. he is clearly trying to send some kind of message. maybe he is trying to give some boost to tidal. it would be lpful if someone from his camp would give me a call back. caroline: tidal is his rival streaming music company he bought. it was a european-based company. it was not a huge success as the businessman might have liked to have seen. >> the big attention getter for them has been exclusive windows or getting an early chance to release new music from several

of jay-z's friends, partners, so on. most analysts think it has got three or 4 million subscribers which would make it the third or fourth paid streaming service but way behind apple and spotify. the owners did manage to sell a stake in tidal earlier this year. caroline: i will have to go back to my c.d. collection of jay-z. thank you very much. a great scoop. that does it for this edition of "bloomberg technology." oftuesday, the cofounder elevation partners joins us. do not miss it. this is bloomberg. ♪

♪ announcer: from our studios in new york city, this is "charlie rose." evening we begin this with syria. last night, president donald trump announced the u.s. carried out a missile strike in syria. the move follows the chemical weapons attack on tuesday which targeted civilians. president trump: tonight, i ordered a targeted military strike on the airfield in syria from where the chemical attack was launched. vital national security interest of the united states to