the terms. he was in the house of commons. >> we cannot allow parliament to instruct government on what steps to take for international negotiations. it would be constitutionally unprecedented. mark: he added an amendment to give a final sammy amendment. a final compromise this week with rebels within her party who supported the move. her office has not released its version of the payment. two weeks after being elected in no serious challengers, sworn in a new government. members took the oath of office today and cairo. in that governing body including replacing the country's defense minister. have approved the fire -- final reforms mandated.

expected to emerge from its third and final bailout on august 20 after eight years of relying on emergency loans from international predators. the parliament voted to approve a list of reforms on several issues. the bill was the last step greece was required to make ahead of next years -- next week's meeting from the 19 nation euro zone. house majority whip steve scalise is expected to wear a u.s. capitol police cap at the annual congressional baseball game tonight in honor of the two officers who returned fire when louisiana congressman and four others were shot in the gop inctice a year ago alexandria, virginia. he was badly wanted and needed nine surgeries. he said today he still has some limitations but will be starting tonight at second base. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

i am mark crumpton. this is bloomberg. ♪ julia: live, i am julia chatterley. scarlet: i am scarlet fu p joe: i am joe weisenthal. julia: the nasdaq is a record .igh meyer jogging manages the market once again. joe: the question is what did you miss? scarlet: the end of an era for the central bank. it is ending the bond program posing extraordinary financial -- in europe. a tear up getting a boost from the fcc. as they are not subject to these roles. central banking for the masses. we speak to a professor who makes the case for giving the general public the option to

open personal accounts at the federal reserve. julia: coming to a close after a decade of quantitative easing. the european central bank is ending its bond buying program. ecb president mario draghi said that the euro area economy is moving in a healthy direction. progress towards a sustained adjustment has been substantial so far. the bank opened the possibility of extending for a short of expectations. bring in karo, great to have you with us. you ended qe and that was well telegraphed. managing them -- managing this a lot europe to fall. 1.5% on the dollar.

that is substantial. yellow,ario draghi in very successful not having these dramatic moves in the market. he has been less fortunate on days where he is speaking. by qe ends but later.it increases to >> did you say unfortunate or fortunate. >> i think they had to had offset, countermand doing comments for signals today. that is why we saw the move. when you says been qe, -- it was successful in that regard. >> a line of argument that the primary transmission mechanism is that it is a mechanism about delaying rate hikes longer.

it raises the question, if you and qe but then make a strong statement about how you will not do this for a year, you do not at all? >> you haven't really. looking further at what happened maine euro, that is the driver of the currency pair between the euro and the dollar, the expectation of central bank policy. interest rate increases or balancing policy. we can see a further diversions between the fed and the bank today. >> what is it doing with its template >>t as a one has not been particularly successful.

hopefully avoid that in the future. secondly, shifting gears from ending qe. to the see if they get plan. andt is not looking great neither the u.k. or in continental europe, industrial production, but the lesson is just as we shift from qe in to rate hikes, the fed ultimately moves much more slowly than what was telegraphed. the fed can be true for the east be. qualitative standpoint, it is a little different from the fed qe because it has different bonds in different credit risks. some marginal credit risk. >> maybes., it is

there is a little more impact in a credit market and in europe relative to the u.s. your turning on a large electromagnets. depressing volatility and interest rates levels as well as exchange rates. >> the exchange rate mechanism is much more important than the overall.n exports >> there are a number of elements that if you look in isolation, they are quite concerning. cost, and we look longer-term on the inflation forecast, we have got an inflation forecast of 1.7%. mario draghi said it will continue to rise but on the face of it, particularly given the data right now, the credibility

of that. >> it is a little hard to see inflation accelerating with both the u.s. and europe when we look at the gdp profiles, each year is weaker than the year before it. there is a growth deceleration and we will have to see if it results in inflation. the profilelieve in are pointing to shrinking output gaps in the u.s. and europe and that should push inflation higher. looking at slower growth, it will be less inflationary. >> what is accounting for what seems to be a rollover and growth? is it just strength of the euro as of late that has driven that? i think a strong euro is significant weighing on the economy but it is beyond just experts. if you are a multinational company deciding whether to source production in one region

or another, in a high or expensive currency region, you're likely to pull out of source production elsewhere. you see it in europe as well. >> the big question, a very different philosophy may be continuity. >> more hawkish? that problem lingering in the background could contribute to ,hat we already talked about the transition from ending qe to hiking rates could take a lot longer than you envisioned. >> the same way as the fed, it is important to have the advisement. there is a group involved here.

>> expectations in the u.s. are starting to flirt with the notion of the recession is, maybe the fed can steer clear but growth is slowing and it is tightening. all of these issues. it is just about the time europe is starting to talk about the rate increases. more fuel is being added to the concerns. >> a really great point. trying hard. >> i suspect you will have him on a lot earlier. hikes beforerate we see the ecb trying to raise rates. that is a really long time. >> in the fed might be saying, time to pause. >> yes. a real problem then. scarlet: thank you so much. coming up, could law-enforcement be coming through your family tree for a cold killer? how can genetic testing

companies raise new and important questions about police investigations and user privacy? ♪

serial criminal. locked up for more than three decades. a cold case without a match until last month when police finally made an arrest after identifying the killers dna using a new technique that is exciting law enforcement and concerning privacy advocates. theeditor's here with story. you are referring to online genetic data that people have put out there and may not be

aware is now available to law enforcement. >> that is right. wasway the guy was caught investigators were sifting through data on a website where, say you have gone to 23 and me or a company like that to find or if my ancestors irish that sort of thing, you can take a data that you get from them in a raw form and upload it to another website in the hopes that if a family member of euros for someone on your family tree used a competing service, this can put you to together using the raw data. so the police were able to that this site can also be used to look for criminals themselves. the type of dna and data is very rich. much more comprehensive -- comprehensive and the stuff you can get. >> people who want to find other

genealogy, they think they will get a little thing back in their excited, the police decided they can actually use this dna data. if they ask? >> they did not and they did not tell a people who ran the website that they are using the data. the website is public and is an open source font of information. >> but this is not 23 and me using the data. the users are putting their own data out there. >> that is the users themselves put out their own data. were they aware of who could see it? and these 23 and me terms of service, they say, we will protect your data from any sort of third party, though they reserve the right -- take this outside, other things could happen to it. >> law-enforcement might have a warrant for the data?

>> it is conceivable and you would have a conversation between the company not unlike what we saw with apple and iphone a few years ago. >> basically -- clear question of whether they should have had access. it was a cold case that was ultimately found. there are privacy questions here. what are legalities and was ultimately the future with protection of meaning to be in place, what do they look like? >> that is the argument. people say there need to be greater protections. the law so far, judges have said fourth amendment protection against unreasonable search and caesar, genetic data is not protected that. it is akin to fingerprints. >> it took four months to go through the data. the cost is really high. >> in that is a great point.

does the cost change as more law enforcement start using this as a resource? >> it is a good question. it could hear it as more data becomes available in what they are doing with this stuff, they may develop methods overtime to bring down the cost and make it easier. more basis for comparison. other searches have been run and they can compare different things. but we are not there yet. >> it is fascinating. and sobering. timothy, thank you. page.s part of our new the cure's of tomorrow and the financial forces behind them all. you can find this on bloomberg.com. now it is time for a look at some of the biggest business news stories today. apple nearing a deal turn a animated movie. they are in talks with island cartoons, oscar-nominated

animation studio. it would be the latest push into the booming of the video market. this is not yet been made and the deal could still fall apart. fund will be available only in canada, run by joel, who previously had it beat not -- for 30 years. canada operates independently of the u.s. funds giant. millionaires control half of the world's personal wealth up from about 45% in 2012. the report shows global wealth hit $201.9 trillion last year. that is a lot. thanks to currency strengths against the u.s. dollar. the 12% gain is also the strongest annual pace in five years. fortunes increased 19%.

that is your bloomberg is this flash. tooket: president trump aim at opec yesterday and criticized exporting companies for the steep prices. the global commodities derivatives research head to get his take. >> we will find out the details next week in vienna. today, it is all about starting a world cup. probably kicked off a couple of weeks ago. clear. it is pretty we expect a 1.2 million really -- barrel from here until the end of 2019. that is the baseline. that playingrease the market into a better balance. we're growing inventories probably passed the rate.

>> interesting is 1.2. here's what mr. putin said a few weeks ago. he said we are not interested in the endless drive price of energy and oil. i would say we are perfectly happy with $60 per barrel. whatever's of affect him lead to problems for consumers which is also not good producers. does that get him his $60? >> probably not. our baseline for next year is we will have $75 per barrel on the brand. even if you bring 1.2 million market, to to the extend the increase and run a from four core players, roughly 1.8 million barrels per day, the it's you back in the low to mid 60's. aroundl probably stay $75. while this is going on, we're listing venezuela and we can also lose a fair amount of iranian output as sanctions kick in in november.

these are all key factors. increasee talk about and spare capacity, they continue to grind lower. a chart can show that to you. what do they do about that criticism? away fromhey take that production? >> exactly. it is a key point. we spoke about how they could anchor long dated crisis. we talked about it back in april. we have had an increase in the long-term price of oil. i am sure they're looking at this carefully and saying, how do we deal with this issue? multiple things can happen next week. we can see a large capitals announcement plan to start ramping up capacity again among all the key players. , sanctions kick in and around the end of the year. >> the anchor the bottom at one price and in the front and will do it. >> a great way to put it.

the other things they will do is look at probably term structure and volatility and all the metrics to get a complete picture of the market. they have been very focused on just getting back to the five-year average. based on the amount of coverage, it is a much better metric and we think rather than looking at price levels, they should just look at the structure. to lookmuch greener way at whether the market is balanced or imbalanced. scarlet: coming up next, chatbots up on more than double digits and now sitting at a record high. we dig into it at the stock of the hour. julie hyman has the answer. this is bloomberg. ♪

a recent ipo quietly sneaking up on people. you go down the list and it is all up here >> saying it is fine now but the israeli discrimination in terms of performance. >> in the case of dropbox, it is actually doing pretty well. it had its profit report, it would double estimates and sales rep. in the pantheon, this one actually makes money. all right. thank you so much. the market closes next. we have major indexes. little changed for the dow. it is mixed. the nasdaq is higher. this is bloomberg. ♪

♪ u.s. equities for

once again, the tech stocks outperformed and financials lag. i am julia chatterley. .carlet: i'm scarlet fu joe: i am joe weisenthal. we begin with our markets, u.s. stocks coming off their best levels of the session and closing mixed. the dow is negative, and tech continues to power the nasdaq higher. if you look at the different financials, and industrials -- energy also in the red. ata, the headline news that came out early this

week, retail sales -- joe: they were really good. julia: -- scarlet: anticlimatic. joe: i agree. scarlet: retails rising for the month of may. yesterday, comcast made a $65 billion bid for the first century fox's entertainment assets. it was expected after the courts ruled in favor of at&t and time warner. the next move is to wait for disney to respond. we are keeping an eye on etsy that climbed after announcing it is raising the cut it takes from each sale. rail caribbean adding more than 5% agreeing to buy a 6 -- 67%

stake. take a look at the government's markets because there is lots of interesting stuff. two-year yields in the u.s., unchanged. that is largely driven by short-term fed policy and that was announced yesterday. long-term, remember yesterday briefly after the announcement, above the percent on the 10 year, but we fell back by the end of the day, and then -- by this morning, actually -- and then we got a further decline from the dovish draghi press conference. that was what you saw a really ripple through european sovereign debt markets. you see lower rates, but i picked two -- french five-year

yields going back into negative territory. austrian five-year yields also going into negative. significant because while it is qee that the ecb ended their program, they are placed it with a commitment to not to raise rates. fed could raise rates four to five times before the ecb gets cracking. tokey said he did not want i said heok d -- dragh over anticipate the outlook. a sense ofe you the move, a company coming out saying they could see a 10 in the wake 1

of a dovish ecb. just take a look at what is going on in my bloomberg in terms of world currency. argentinian peso reaching a new low in the session, weakening past the u.s. dollar. country's drhe ivers beginning a one day strike. joe: commodities, oil, gold, and silver.oil gaining a little bit today. it is still pretty weak. gains today slight and in the precious metals being bid a little bit in the dovish euro silver was having a nice day. scarlet: for more on today's

market action, let's bring in the chief u.s. macro strategist. michael, we got the fed and the ecb out of the way. tech stocks keep rallying. nothing can stop these guys. >> it is a different story. the macro story focused on the divergence between the fed and the ecb. powell said things were great. draghi, not so much. we think it is appropriate for the ecb to be more cautious. things weresaid good but he also stressed he was not ready to declare victory on inflation. it is hard to see -- they are not particularly hawkish. >> they took a hike from 2020 and put one more in. they are not any tighter as you forecast, but

they are hiking additional time in this year and effectively next year. they are going above neutral before the end of next year. the market had a very hard time pricing the fed being above neutral. julia: what does that mean for the euro-dollar? you got a four to five hike from the federal reserve, when the ecb is still sitting on its hands, what does that mean in your mind for euro-dollar? >> the broader trend is towards dollar weakness. structurally. for the reasons you just talked about, the divergence trade is favoring the dollar. you have hawkish fed, and somewhat dovish ecb. joe: what are the factors you are talking about? >> a couple.

the dollar was overvalued for a time so some corrections. and some policies on the fiscal side that will ultimately involve a weaker dollar. once we get past the near-term moves in the market in terms of the relative story, you have a lot more runway for the ecb to tighten then you do for the fed. months andford, 18 beyond, you will see the euro outperform. thea: assuming it gets chance of they are not trying to tie into a u.s. slowdown. >> that is all fair. scarlet: a 2021 recession is percolating and it is a story that gets a lot of attention. thatorried are you about and how worried do you think the fed is? >> is a real concern. recession happen. recessions happen.

you want to beif real bearish, but 2020 or 2021 -- it may be a particularly challenging political environment. the last time we had that happen, we had a debt downgrade. that is not a conducive environment for strong growth. you are in the early stages of the global removal of qe that some of people have been worried about. interesting one that is not on people's radar, if you look back at the last hour many business cycles in the u.s., you see a boom in bank lending, over lending leading into every cycle. right now, we have a pretty big favorableds a more environment on the regulatory front for banks. this is one of those catalysts. scarlet: it all kind of convergence. julia: exactly. joe: the data is really good.

the data retail sales report was really strong and people did not talk about it that much. we know that is noisy and probably the numbers are really solid. i think it is great to anticipate the what those recession scarlet: indicators are, right now we are looking solid. >> one thing that gets us nervous is the yield curve. it is continually flattening and that has people concerned. there is a big question for the fed about if they can do a thing about it and whether they should do anything about it. fed officials have felt differently. julia: jay powell talked about this and he said, how and to what extent does this play in told what they choose to do as far as policy is concerned and the kind of guidance they have given us at this stage.

there are others that say, it is part of the structural issues that are shaping it. how closely and how much do they care? >> they watch it. there is a range of views over to what extent it might actually have some causal story. there is a bank lending story that people tell. there is a sentiment channel that you could tell, but as you point out, we are in a qe environment. it is unusual and has taken duration out of the market. it is going to be a flatter curve. one of the interesting questions as you get further down the road , there are going to be some factors that would have the fed to wind down its wind down sooner than we think. the other one of courses the big of how the fed is affected to dress up the range, made because reserves are getting withdrawn more quickly and the fed may have to address it. none of that is on the agenda in the next couple of months. 2019,ear, anticipating

2020, people get more worried about i flatten deals and the fed will have to address it. julia: michael, great to chat with you. michael hansen. thank you. relief.p, regulatory this time we will be telling you what crypto investors are getting excited about today. this is bloomberg. ♪

♪ i am mark crumpton with first word news. during a senate confirmation hearing today, retired admiral, the nominee to be the next ambassador to south korea kumal

is asked to give his assessment of north korea's nuclear capabilities. >> do you think we no longer need to worry about north korea's nuclear threat? >> i think we must continue to worry about the nuclear threat. >> i appreciate that because i know the president said that after single -- after singapore, oh we no longer have to worry. >> the admiral also told the committee that president trump's proposal to suspend military drills with south korea would affect, "a new landscape for korea." the international monetary fund warns that public spending hikes are increasing risks to the global economy by boosting debt, and pushing the dollar higher. againsts also warning u.s. tariffs.

>> our recommendation is to incur is the united states to work constructively with its trading partners to resolve trade and investment disagreements without resorting tarriffsposition of with a view to restoring fair and mutually beneficial trade. a so called driven by reciprocal increases in import tariffs gives no winner and we find generally losers on both sides was the added quote. of thewon the opening world cup by crushing saudi arabia 5-0. russian' next big test is against egypt on june 19. new jersey governor kicked off a new forof gambling in the state

those to bet on sports legally. murphy made his wager that a counter inside mom-and-pop when the a month ago u.s. supreme court cleared the way for all 50 states to legally bet on sports. global news, 24 hours a day powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton, this is bloomberg. scarlet: thanks, mark. i am not ready for the devils of stanley cup winner. breaking news, qualcomm is cutting jobs. 241 jobsny eliminating at its design center in raleigh, north carolina. 43 in california. this according to notices filed with those states. willotal number of cuts

represent up to half of the service unit employees. this is according to a person familiar with the matter. we will keep you posted to. -- posted. sec says the second-most valuable cryptocurrency is not a security. directorng in research for crypto research. how do youus peter, determine whether or not this is a security and why is this important for investors? peter: thanks for having me. you determine if it is for security and buy it, we are talking about any kind of open block token i am presuming, there is a flexible court determined standard called the howie test. .et the meet the four prompots

it is reliance on the efforts of a third party promoter. you look at all of these things out and crypto land whether it is bitcoin or whatever and you see and you ask, was there a ommon enterprise, etc. that may be unsatisfying to some of your viewers and lawyers because that is a flexible standard. you do not get a clear answer. it is a court applied standard. the news today which came from -- the head of the division of corporate finance which sets policy here -- was really key. it gave us insight into how they view that test. sec has previously

signaled that it did not consider bitcoin a security either. that isthe process going to have to take for every digital coin here on out? peter: when things are new, determinations are brought. -- are fraught. gradually, norms are built up in communities and then we all come to expect certain things. you think, did i build my thing m or a theor -- ethereu bitcoin. , but the get easier early days are always difficult. joe: in a speech, they also laid out some things that definitely would qualify a digital currency as a security. is there an entity promoting this or an entity that is held on to a lot of the token

expecting to make more money on it, or the purchasers deemed to be investors, do the purchasers have governing rights? community isereum happy about the news, are there other major projects that should see the same speech as a warning? mean, i do not think it is a surprise. these things are the same factors we have all been looking at. for projects that do worry that maybe they are not actually decentralized, or maybe their token is not useful -- because a combination of two things -- they have to do something and it has to be powered by the centralized network. if you build something that does not fit that criteria, those questions have been on your radar. hopefully you have already been in contact with the sec and if not, you may be concerned.

there was a line in the speech that says, simply labeling a digital asset a utility token does not turn in the asset into something that is a security. it might be judged as a security. peter: exactly. that foras always said security, and privileges function over form. if you just label it a cryptocurrency, or you label it a utility, it is not going to be sufficient. when you talk about function rather than form and our world, in the cryptocurrency world, what you are talking about is how successful were you at this goal of building a decentralized network. that want to replace cloud storage providers is not to become a new amazon s3

provider of cloud storage, it is to put them out of business by building a network of persons that provide that service. if you have the as your goal and you achieve it, it is interesting, you fall out of the test for securities. i think that is right. and it isld something being run by multiple people developing the software around the world and multiple people running the software or mining the blockchain, there is no issue or promoter who is going to register with the sec and do the disclosures to address investor asymmetry. if you for someone to do that, it would be sham disclosure. some randomup think person in the massive ecosystem to do that. all good points and we appreciate you.

research director for coin center, thanks a lot. julia: we'll compare when we get him next on. scarlet: coming up, president trump cracking down saying his next trade announcement could make china upset. this is bloomberg. ♪

♪ etches upnt trump trade rhetoric. this was in an interview with fox news yesterday. the administration is set to announce its latest round of tarriffs. sarah mcgregor joins us now. great to have you with us. anything be softened in the next 24 hours?

i can only imagine where this would leave trade negotiations between china and united states in the face of the response from china. the white house spokesperson confirmed an hour ago that trump did have a meeting over trade today and she said, we are not ready to make any announcement over trade. what we do know is the final list of import targets by the u.s. on chinese goods is due tomorrow. the big question is, what is on this list? it is going to be a refined or from april.st the big question now is best boundless -- honed from april. plan to dominate in some high-tech industries. i think the u.s. want to go pretty hard on that while minimizing pain for consumers. at one point, the u.s. said they

had out the rhythm to try and determine what is on the list and what is not. they've had some public hearings and heard a lot of feedback, so they are going to refine. joe: just to be clear, i feel like there is some new list of tariffs. in ais for real for real way that those others have not been? >> by what we know, this is the real list. this whole process for tariffs for china has been a part of our process known as the 301 investigation, so this is the process set forth under that. administration announced june 15 as the big reveal. you asked a good question about when would they be implemented -- we do not expect but we could be surprised, but we do not expect the tariffs will go right into effect tomorrow.

either the trump administration administration will give us a date in the future that they expect to firmly put the mights in place, or they leave it open ended whether they try to continue trade talks with china. scarlet: china has indicated it would also slap tariffs on u.s. goods. it is not going to be a surprise if and when these tariffs are announced. of anythingknown else that might come up? released their list and there is soybeans, airplanes, these are some of the biggest exports that the u.s. has to china. it mightok at boeing, not account for a whole lot of their sales, but it is a gesture. option, butis one the bigger threat that china has that they will not

deliver on a single commitment on the u.s. that they have made on these talks for the past month and a half. this would torpedo the talks that china and the u.s. are having to avert a larger trade war. -- no one expects them to have a huge economic impact. they could ripple through the economy here or there, but everyone is worried about tensions getting out of control and there being a much wider trade war. if these tariffs take place, that is the uncertainty. rocking -- sins a yeah, sends they were rocking signal. thank you sarah mcgregor. let's get to a first word news update with mark crumpton. >> julia, thank you. onse leaders today commented reports that families and trying to cross the southern u.s. border illegally are being separated. pelosiy leader nancy

said, "this is not what america is, but this is the policy of the trump administration." thesenk of the stress of children. they take a baby away from the nursing mother. they take the baby and them in a car seat, and drive them away. this is not normal. it is barbaric, it has to stop. >> oc said the white house could stop the practice, but house speaker wro ryan says a legislative solution is needed. >> we believe it should be addressed in immigration legislation. the separation of parents and children is because of a court ruling. that is why legislation is necessary. mark: votes on immigration bills could be held as soon as next week, although the speaker says he "won't guarantee passage of missedsure." theresa may

an unofficial 5:00 p.m. local time deadline to release content -- heragreement with agreement on brexit. folks want an insurance policy in case the government reneges on its promise to give lawmakers more power to influence terms of the divorce. they asked the house of lords to propose the amendment that the rebels were sent to vote for this week before may cost promise of concessions. u.n. human rights council is calling for an independent international investigation into reports of of rights violations in kashmir. andcouncil blamed india pakistan for civilian deaths and injuries. the report says the decades-old ofpute is robbing millions basic human rights. india and pakistan have a history of bitter relations over kashmir, which they both claim. global news 24 hours per day,

powered by more than 2700 journalists and analysts in over 120 countries, i am mark crumpton. this is bloomberg. scarlet: a recap of the market action, the nasdaq powers higher , at a fresh record high, up 9/10 of 1%. the s&p 500 gaining a quarter of 1% and the dow lower by 26 points. in terms of economic data come all systems go. retail sales were strong in may. data got overshadowed by the ecb announcement and ongoing digestion of yesterday's news. scarlet: the dollar hitting an 11 month high. up, a radical idea from a former obama official that could revolutionize the way americans manage money. we will talk to the co-author of the report. he says the federal reserve should get into banking for individuals.

a reminder to subscribe to our weekly podcast on itunes, called what you miss this week. joe can't live without it. joe: friday and saturday and sunday, i listen. julia: this is bloomberg. ♪

scarlet: one company is using technological innovation to star -- to solve feeding and urban population in a sustainable way. a series of discussions with ach entrepreneurs involved

cofounder and ceo of an indoor farming startup. i asked him how his company aims to solve the problem. >> part of what we are doing is restoring the level of confidence and trust in transparency -- and transparency in the food we are growing. we can hand you our product and show you absolutely everything that has happened from the moment we planted the seed all the way until it is ready to be harvested. >> is this organic? organicr farming can be . it is not something we focused on, not because it is unattainable but because for us, we are focused on democratizing access to high-quality, fresh food. organic was a very positive step forward for farming. it is a more sustainable practice compared to large-scale industrial farming. what is great about what we are doing, it is the next step forward from organic. people don't realize organic farming uses pesticides.

they are organic pesticides, but they are still pesticides. there are issues and challenges that can come outside in an organic farm and we are able to alleviate those, giving us a higher quality product. scarlet: how does this produce get from here in your indoor farm to customers? >> by our big green truck. scarlet: the genius is how you shortened delivery time. >> that's right. what is interesting is, people say this is an amazing innovation around farming. there is no question, this is a new way of farming but it is more broadly and innovation on the fresh food supply chain. hows rethinking not only you grow fresh fruit, but how it is delivered to a point of sale or point of consumption in a more efficient way. if you are getting food from traditional methods, your food is anywhere from a few weeks old

to a few months old. scarlet: what kind of food? >> people are shocked by the statistics. i ask people how old the average apple is in the grocery store. four months? one-month iesco -- one-month? 10 to 14 months. that is the supply chain. i am not knocking it in the sense that it allows us to have apples year-round, and we like apples. there is a better way to do this. what we are able to do with indoor farming is rethink the supply chain. we are locating farms close to where consumption is happening. by relocating the point of production close to consumption, it is about one day from harvest to when the product reaches the shelves. ,t is fresher, more nutritious it lasts longer on a store shelf or your refrigerator. instead of throwing things out two days after you take it home, to an to have weeks later, our

packages going to -- our package is going to look and taste good. scarlet: it doesn't seem right that it would sit in your refrigerator for -- >> by the time it reaches you, it is already a few weeks old. scarlet: you grow 100 different kinds of crops. and you grow things that normally you wouldn't grow in the united states, that is only available in asia? >> absolutely. people areething surprised by. you can grow anything indoors. everything is not going to make economic sense, but you can grow anything hydroponically. hydroponiceally cool pineapple and other things. , commercially now come on leafy greens and herbs. 100 varietiesover outside those categories. when we look at the market, we see it's -- a substantial market

of attractive candidates for indoor farming. we won't grow everything, but i said the other day, technology has an interesting way of surprising us. things i don't think will grow, who knows. one of my favorite things we grow is a was sabe -- wasabi arugula. it is fantastic. plant.n arugula wasabi is a root. scarlet: did you crossbreed it? plant,must be a franken- but it is not. it is naturally occurring but it is incredibly difficult to grow. because we have a mnuchin control of the -- a minute control of the environment, we can grow it consistently. scarlet: that was bauer he farming's ceo.ry

a look at the biggest business stories right now, the new york yankees are said to be -- interested in regaining the yes network. they gave up control for years back.e right to buy it on wednesday, comcast made a $65 billion bid for fox's assets. the network could be worth more than $4 billion. booz allen says the u.s. could fall behind china in ai without a strategy. the u.s.'s edge on china is at risk without a coordinated approach between public and private sectors. china has made it a priority to increase ai tenfold. google has bought 173 acres in the netherlands as it continued -- considers building more data centers. they bought land in denmark,

luxembourg and sweden. google wants to have the option its presence in europe. a decision is requested soon. that is your business flash update. joe: "what'd you miss?" the best exchange from the chairman's press conference. our reporter asked this to the chairman. the median moved unemployment forecast for 2020 down to 3.5%. it is 4.5% today. you are forecasting a moderate overshoot on the fed funds rate beyond the longer run value. how will you get unemployment up to that 4.5%? joe: for more on this, let's talk to chris, chief economist. what about this issue, the unemployment rate is low but they see the long-term unemployment rate strikes at the

heart of what is going on? >> this was the best question, because it elicited the best answer. that was, powell saying, very much echoing his former colleague that we ought to be careful about using these variables that we can't measure in our policymaking. whether it is the natural rate of unemployment or interest, they are not real. at best, you can approximate them. basically aswas, we get closer to where we think the rule is, we don't know where it is. maybe we see inflation, we don't have to hike as much. joe: the idea that there is a level of unemployment beneath which inflation really starts to take off is kind of like a bedrock concept in monetary policy. the only problem is, it never

seems to show up in the data. >> there was a terrific study done by bank of england .conomists they think it was 23 different episodes across different economies, where the unemployment rate got really low and inflation failed to take off. the classic example is japan. they have had a low unemployment rate for decades, and no inflation problem. even in the u.s., the last time we were down at these levels, 3.8%, late 1990's, greenspan's experiments, let's see what happen if we let the economy run . this is where things get interesting. the phillips curve, the concept that the low unemployment rate fuels inflation, works really well for wages. we had great wage growth in the late 1990's. it got up to 5.5%. at that time, inflation, core inflation was running between

1.2 5% and 1.5%, the same as it is now. joe: could the answer you heard from powell open the door to economists really revisiting this question? is,view right now is, it nehru may be lower than we think. dismissaybe willing to it. >> alan greenspan was recently here at bloomberg talking to tom keene and explained the reason it doesn't work as an inflation predictor is because of productivity. at the end of a cycle, when it is hard to find workers, that is when it makes sense for companies to invest in technology, and you get terrific productivity growth that allows company -- companies to do more with fewer people. it worked then. he is confident it will work now. we will haveutely, this experiment whether we want

to or not. the unemployment rate is low. joe: we think of productivity often in the discussion as being, maybe sometimes something like the internet coming along and we get more productive, then we wait for the next big thing. as you describe it, it is cyclical. imp how mainstream you think that view is, that unemployment predictableity is in the cycle as companies invest. --: i can tell you >> i can tell you john williams, i saw him answer a question about this, has no faith in it. he says my productivity forecast is a trailing five-year average. the issue is, macroeconomists don't have any way to model productivity, but micro economists do. vice-chairman,w assuming the full senate follows the committee's recommendation , he approachesn

macro policy through a micro lens. when i say it makes sense from a micro standpoint, think about an individual company. what company spends money on something they don't need? nobody. when you need it, that is when you spend on it. we are seeing a surge in investment by companies investing in new equipment, and we are hearing about it in the beige book investing and training. they need the productivity growth. joe: so it is pro--- it is plausible that if the fed doesn't tighten very fast, we could see unemployment drops significantly from here. inflation remains muted, and we productivity spurt that people just wait around for but never seems to happen. >> exactly. i would say we are already there in terms of the unemployment rate. low, and the year momentum is still downward. i think it will go lower still.

as for productivity, you see survey evidence, both large businesses like the roundtable survey am aware companies are talking about business investment in terms they haven't 15% growth in the 1990's. also, small businesses, the small business surveys are picking up that it is the best time to expand since the early 1980's. i think it -- you will see productivity growth, as long as the confidence remains high. joe: we are going to get the experiment one way or the other, so it will be interesting to see what happens. , thank you very much. very interesting topic. >> thank you. scarlet: every radical new idea from a former obama official could revolutionize the way americans manage money. we will call -- we will talk to the co-author of a report. this is bloomberg. ♪

scarlet: "what'd you miss?" a new report co-authored by two former treasury department veterans say americans should have bank accounts at the federal reserve. here to explain is morgan. he is a former policy adviser at the treasury department, current law professor at vanderbilt law school. professor morgan, great to meet you. explain why a central bank should be a source of banking services for ordinary americans. fed,e central bank, the has bank account liabilities like ordinary banks, 2.5 trillion, more than jpmorgan. right now, they can only be held by banks. they are great.

,hey pay almost 2% interest five basis points below as of today, roughly 2% interest. they have real-time settlement of payments between accounts. they are sovereign and non-default-able. no $250,000 deposit. the fed supplies physical currency to the general public, and the question is whether account money shouldn't also be a public service. scarlet: what problem would it solve? unexpected of problems. we have a large on banked population -- un-banked population. you could put them on and they could treat this as public infrastructure. you could have, real-time payments. in the u.s., we are painfully slow compared to the rest of the it comes fit -- when to slow payments. macroeconomic stability, a

source of instability is runnable short-term debt of the financial sector. we think this would crowd out runnable debt. there are other benefits. be an would there overdraft facility? >> we would not allow overdrafts. the idea is to supply credit. non-overdraft-able bank account. julia: how does this fit with commercial banking sectors we have now? in many ways, you are putting them in direct competition with the central banks. >> banks' funding costs are subsidized today. they are crew large subsidies from the public, various kinds of backstops. this is a way of recovering some of that for the public. there would be competition, but that would be a good thing. joe: we seem to be experience at -- and -- experiencing a rethink

about this. is the eagerness to see post offices become post -- become banks, like they have in japan, and in the wake of wells fargo, people want a place to utrt their money witho worrying about this. what about bank accounts in post offices? >> we are philosophically harmonious with them in terms of treating the un-banked. this is a method for doing that. we think there are other benefits that come with fed accounts that would not be matched by postal banking. banksre thing, postal would have to be run by a backend bank. most proposals contemplate a partnership. it might as well be the fed. you think of a big institution like this serving retail clients. one objection will be, can they do customer service?

can they build a good website? is not modernite looking. how do you address that? the user interface is more than the actual dollars. >> that would be the challenge, building a retail interface. thousands of banks do it successfully today, but this would be one of the larger challenges, building the infrastructure. the federal government interfaces with the general public in all sorts of ways, through social security checks and whatnot, so it is not unprecedented for federal government agencies to have a retail interface of some sort, but it is a legitimate challenge. julia: this could be amazing for sabres. the high rate of interest that the central bank pays to banks could be paid to individuals. there is a cost implication, but i think in terms of the competition for the ordinary banks having to compete on that level with the high rate of interest, lobbyists for the banks will go crazy. is the political effort

being considered? >> political circumstances can change. that is one of the lessons of the last few years. it is hard to know what to expect. people are looking for alternatives in the banking sector. this would be eligible for business accounts. i would think google and apple would want accounts for the fed -- with the fed. it would be convenient. the political dynamics at this moment are difficult, but it could open up over time. joe: they will put up a fight. are a transaction costs critical issue. >> that's right. ,ulia: thanks so much morgan law professor at vanderbilt. scarlet: breaking news from at&t . the u.s. government and at&t agreed to end the waiting. to close the deal on time warner. at&t will manage time -- turner networks as a separate unit. at&t and the u.s. filed a motion

to modify the u.s. court order on closing terms. all systems indicate they will go ahead with the deal. at&t has given the go-ahead -- has been given the go-ahead by the judge to purchase time warner because the judge ruled against the department of justice, saying it didn't harm competition. if you look at the after-hours trade, are there any moves? julia: very little. scarlet: up 1% from the close. coming up, don't miss this. the bank of japan announces its june monetary policy decision with a news conference. a busy week for banks around the world. joe: there is more economic data tomorrow. university of miss it -- michigan consumer data with a spending and other measures, we will see if that continues. julia: don't miss this, the eu antitrust authority will decide on comcast's bid. what a week it has been for the

telecom sector. so littlech news and stock market follow tilde d. -- volatility. scarlet: that does it for "what'd you miss?" joe: have a great evening. this is bloomberg. ♪

emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up, the pressure is on. disney is under the gun to respond to comcast' $65 billion bid for 21st century foxs. following the greenlight for at&t-time warner, what is the appetite for more media and and a in 2018? of payment funding circle outlined their ipo after a stri