♪ >> if you look at everything we have been through, it is not clear we have been through a recession, so it is not clear we are going into a recovery. >> monetary policy is getting more rational, and the economy is likely to remain strong. >> the path of least resistance continues to be higher. >> the big problem if we don't start tapering, whether it is in october or november or december, is the pressure of inflation. >> i would watch the debt ceiling. i think you've got to fear the debt ceiling. september is going to be a white knuckle event. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. jonathan ferro, lisa abramowicz, and tom keene, on radio, on television. it is a friday of federal reserve and economics. we will have full coverage through the morning. jon ferro off. taylor riggs in this morning.

lisa, it is a big day. lisa: it's a big day, and i think arguably the biggest aspect of it is the reaction to what jay powell says. he's expected to signal some sort of timeframe for the taper discussion. tom: do you think he is actually going to come out with a month, a date, and our? lisa: -- a date, an hour? lisa: of course not. going forward, there is a question about the response and bond markets. i think jim caron nailed it earlier, when he said that if they announce a faster taper eventually, that will actually meet to lower long-term yields. this is what a lot of other people are saying. tom: it gets out to the terminal yield. to the mathiness of that, there's the four ideas that make up the yield, and to me, the immovable force is the

microeconomics, the liquidity wall, which means price up, yield down. taylor: except that in the credit market, it is going the other way. we just came off of seven straight weeks of rising high-yield credit spreads. that is the longest streak since 2013. interestingly enough, in the afternoon, guests have been coming on and saying it is a buying opportunity. you do wonder when some of the economics fold through with an investment grade, within the high-yield, and the squishing this with spreads -- the squishiness with spreads rising. tom: we go to abramowitz on high-yield. this is your yield house -- your wheelhouse. is rates right -- is rigs right -- is riggs right? lisa: yes, executor right. tom: so junk oil paper goes price down, yield up. is that how it works? lisa: well, the opposite.

you are doing great. i think the bigger picture here is that so far, it has been considered a tactical play that has to do with issuance. corporations are doing phenomenally well. that seems to be the feeling across the board, and yet the fundamental economy still has some pretty big potholes. that is sort of the needle that fed chair powell has to thread this morning. tom: we will see. michael mckee will have a terrific set of presidents of the fed. i am thrilled to say he will begin strong was mr. bostic of atlanta. mr. bostic on fire this morning with comments about the math forward for the presidents and governors, and indeed, the leadership of the fed. let me do a data check right now and allow lisa to get in the golf cart and get over to the wall. dow futures up 86. the vix, 17.85. the yield coming in a little bit from one point 36%. some real angst in the market

yesterday after tragedy in kabul. 1.3 4% on the 10-year gilts. brent crude gets my attention. gold wandering near $1800 an counts. the euro --an ounce. the euro, $1.1759. lisa: fed chair powell is going to take the stage at 10:00 a.m. to give his speech. i really want to get to this point of the dual economic recoveries. it really goes to this feeling we are getting in markets that everything is rooming, that companies cannot or enough money , and they are absolutely raking in the cash, whereas there still is quite a bit of pain both in the labor market and beyond, particularly with respect to higher consumer prices that are definitely bleeding into sentiment. how does he cross-reference these two? what is the relationship between markets and the real economy,

and which one is he focused on more? 8:30 am, we get personal income and spending data. we expect income for go up because of the child tax credits that came in. how much does spending on services decline as people cancel restaurant reservations or trips because of the delta variant? frankly, we are not in jackson hole right now, enjoying the burger you keep talking about, tom, because it was canceled because of the delta variant. at the clock a.m., i really want to harbor on this particular data point. university of michigan sentiment data comes out. this to me is going to be really important. how much does sentiment continue to deteriorate? how much are people getting used to the idea that the delta variant is a crimp in the recovery, but we are getting there? how much do people shrug off higher consumer prices as transitory? those are really key factors, sentiment driving a lot of what is to come. tom: the rollover and consumer

sentiment, you saw that with southwest air, with two tranches of fewer flights to be flown into the ottoman into the winter. anastasia amoroso is with i capital network she is viscerally hardwired -- with icapital network. she is viscerally hardwired in. she provides great perspective on economics, but into what people actually do with their money. i want to go to the surprise of your research note. you say it is 2006. there's a desperation out there for yield, and the reality is people are looking anywhere they can for yield. private lending, direct lending, private credit, whatever. is it 2006? anastasia: good morning, tom. it is certainly reminiscent of it, but to go back to your yield question, lisa

characterized some of the high-yield environment. the reality is spreads a really tight in the publicly traded high-yield market, and there's still 4.6% on u.s. high-yield, which is really near record lows. this is why we are thinking about what are the other opportunities outside the publicly traded high-yield market, and we are looking to private credit. when you think about private credit, most of it, the reason i think this is a very interesting opportunity right now, the fed does not taper at jackson hole. maybe they don't even hit in december. but we know that tapering is inevitable. after tapering comes the rate increases. the consensus right now is not really baking in any sort of meaningful measurable rate hikes until sometime in 2023. the thing i worry about is if this economy continues to pick up and if inflation continues to stay well above 2%, in fact well

above 3%, than the fed is going to have to move sooner and perhaps more on rate increases than the markets are currently pricing in. this is why we are looking to the private credit market, where i can get that for an rate exposure and yield that is libor plus 500 to 800 basis points over. tom: oh, come on. i was sitting with afterthought at dinner last night, and afterthought is talking to me like anastasia about libor plus 300. come on. libor plus 500? lisa: very frequent conversation about the increase in allowance. there's a question about what dental consequent is there are for maintaining these policies for a prolonged time, with some of the easiest financial conditions and history during a boom economy. i wonder, moving away from the technicals and 500 over libor, the idea of the use of proceeds, what you're seeing in the private credit world, the public high-yield debt markets, is there starting to appear a sign

of froth in terms of why companies are borrowing and how they are using the money? anastasia: just definitely been a record amount of fundraising, a record amount of liquidity, whether you look at the private equity market powder, but this is an economy that is on very solid footing, and this is an economy where innovation is coming. so there's dry powder that is chasing the increase in innovation. the other thing i would point to , you talk about record corporate profitability, corporate's are in great shape. leverage ratios are down in both sectors. you had net margins that are at record levels. so if this was not the case, i would maybe say i'm worried a little bit about froth, but that is the case. speaking of liquidity, corporate's have authorized a record amount of buybacks year to date, over $600 billion, and

they are slowly executing that. this is an environment where liquidity is abundant, and until something unpredictable tips us into a much more economic environment, i think this market , whether it is in the public or private market, i think it goes on. taylor: is the taper tantrum behind us? anastasia: i think it is, taylor. if the fed does actually taper, i think it is going to shock no one. what was so shocking in 2013 is that it really did seem to come out of nowhere, not to mention that they may actually taper back purchases. we have been talking about tapering for the bulk of the summer, so i think it is going to shock no one. the other thing i go back to his what robert kaplan said about what the qe purchases are actually meant to do. they are meant to stimulate demand in the economy that was recovering from the covid stock. we do not have a demand problem

in the economy right now. we have supply bottleneck problems. so i think the markets would actually take that in stride, the fact that we are pulling back the purchases as demand is strong. tom: anastasia amoroso, greatly appreciate it. all my radar is up on coming up to credit, going out to get another hundred basis point of yield. i think i've seen it before. lisa: yes, triple cash? when you start going into credit, that will be the top. just let us know. taylor: i heavy comfort -- tom: i heavy comfort with the triple leveraged all-cash fund. michael mckee up in a bit. this is bloomberg area good morning. -- bloomberg. good morning. ♪ ritika: with the first word news, i'm ritika gupta. president biden is

telling terrorists the u.s. will hunt them down. bombings outside the kabul airport killed at least a dozen u.s. service members. a divided u.s. supreme court has lifted divided administration's moratorium -- the biden administration's moratorium on evictions. that affects the millions of people who fell behind on the rent during the pandemic. they said the cdc lacked the authority to impose the eviction moratorium. moderate and progressive democrats are on a collision course over how to pay for president biden's economic agenda. the president has proposed tax hikes on wealthy households and corporations to pay for trillions in new spending. progressive's are actually seeking more, but moderates want fewer tax hikes and are hesitating on some of the spending. that's where the fight will come in, starting next month. china reportedly is taking steps that could support the ambitions of tech firms that want to list abroad. dow jones reports the government plans to ban companies with

large amounts of consumer data from going public in the u.s. a victory for apple over critics who say the company has too much power. apple has settled a wide-ranging class-action lawsuit with u.s. at makers, but without agreeing to major changes to its policies. apple will pay $100 million in settlements to developers. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

♪ pres. biden: we will not be deterred by terrorists. we will not let them stop our mission.

we will continue the evacuation. i will also order my commanders to develop operational plans to strike isis-k leadership and facilities. we will respond with force and precision at our time, in the place we choose, at the moment of our choosing. tom: the president of the united states speaking on yesterday's most difficult day for the white house and for all of america. good morning to all of you. taylor riggs in for jon ferro come up with lisa abramowicz. they're focused on the chairman's speech at 10:00 a.m., but right now we focus across the north lawn of the white house to a most difficult friday for the president. our annmarie hordern is at the north lawn. i looked it up, charles dickens visiting that north lawn in 1842 said there was no confusion or disorder. measure the confusion and the disorder at the white house this morning. annmarie: as you said, yesterday was a very difficult day. you really heard that in the

president's speech. he said he is both outraged and heartbroken. that was the tone, quite emotional at one point, getting red, talking about how these decisions weigh heavy on him, but completely outraged, saying we will find you, we will hunt you down. this morning he will be assembling with his national security team at 8:00 a.m. what is so difficult going forward, we heard from general mackenzie, we heard from the president that these threats of these attacks still exist. they have a few days to evacuate everyone at the same time, making sure they are thwarting off more suicide bombers or i.e.d.'s. tom: leon panetta on cnn goes the other way and says this will extend our stay. is that a point of discussion this morning? annmarie: we do know the president had directed the departing of defense and the state department to drop contingency plans, but we heard -- to draft contingency plans, but we heard he is not extending

that deadline. right after that, there is a briefing with his press secretary press psaki -- press secretary jen psaki, and she said that because of isis-k, that is who they assessed conducted suicide bombing yesterday, that is the reason why they must get out as soon physically possible. lisa: what is sentiment like among military commanders right now? annmarie: it is a bit mixed. some saying they should get out as soon as possible because of what we had yesterday, and of courts -- and of course, the tragedy of the 13 servicemembers who were there in a humanitarian effort to make sure they could evacuate american citizens and afghan allies. others, many say we should have stayed in afghanistan for years to come. it was a security force in the region. it was also a way that you can even ion pakistan desk even ion -- keep an eye on pakistan and

its military program. the president did say with the drawdown, he grouped up everyone tactically, and the military did say that they would not need bagram airbase to get out. i thought that was something interesting, and a part of the story we learned yesterday. lisa: how much pushback has there been from fellow democrats to president biden in how he has handled this? annmarie: pushback from both sides of the aisle, obviously. the democrats are still in support of the president, but there is pushback in the sense that they want briefings and a complete hot wash to see what went wrong, and terms of intelligence, policy, why you had kabul falling as quickly as it did. many assess that kabul could fall and potentially months, some said years, but you continuously hear that many did not think it could fall just any weekend. the expedient-ness of how it

fell, this is why democrats are pushing for that. republicans are calling for everything from the president taking the 25th, meant and resigning -- 25th amendment and resigning, as well as impeachment. taylor: it is not if, but how, the way in which this occurred. we heard from general mackenzie yesterday and the 3:00 p.m. our that we are now sharing intelligence data with the taliban. we have given over biometric streaming -- biometric screening , fingerprints of everyone who has helped us. how are we ensuring that the taliban doesn't go hunt those people down? anastasia: general --annmarie: general mackenzie was saying they didn't give all information to the taliban, but enough that so at the security checkpoints, they can make sure people are able to enter. it is very unnerving for many americans to hear that, given the fact that the taliban's where the -- the taliban were the ones how bring -- the ones harboring al qaeda and osama bin laden.

we just heard them say yesterday that there's no evidence that bin laden was the one responsible for the 9/11 terror attacks. but the taliban right now is the security outside the airport, where u.s. troops are now present. general mackenzie said it is because it is mutually beneficial for them. the taliban want us out, but no one in the white house, the pentagon, the state department trust the taliban. tom: they've got to get to the sunday talk shows. who will be the voice for the president? who will represent the president as america considers this across network sunday morning? annmarie: it is a good question. i don't know what the plan is in terms of the communication, the public relations of this on sunday. i imagine it would be secretary of state anthony blinken, especially as they want to continue pushing the fact that afghans are leaving. they are now at these lily pads in doha or other places around the world, going to america or

germany or denmark, the united kingdom. and potentially, from a security point of view, you could see his national security advisor jake sullivan. we just don't know yet. also, they will all be working this weekend. how much time they will have to go, this is an incredibly precarious, dangerous situation right now because they have made it clear that they are expecting more attacks. tom: annmarie, thank you so much. annmarie hordern on the north lawn of the white house this morning. look at this as an overlay, and the pandemic is an overlay. it is just interesting, that august is so different. lisa: the images out of the dules airport -- the dulles airport, a lot of afghan refugees have gone through that airport. you can see pictures of planes backed up, not being allowed to leave yet. somewhere there for 12 hours or more, and they were getting

various things like diapers, slippers because people came on the planes without shoes because they were rushing out, just trying to exit before the taliban took over. but there are such human stories in the fear that has overtaken so many people in their haste to leave. some heartbreaking images. tom: what have you seen in your reading over the last day that really bears fruit? taylor: anger and tone deafness. you have nancy pelosi frolicking in san francisco. tom: tell us about that. this is your neck of the woods. what does it signal that speaker pelosi is frolicking, as you say? taylor: either ignoring the issue or hoping it will go away. i've heard a lot of people asking why they haven't been called back and gotten briefings on what is going on. call it back from recess are some of the calls that i hear. tom: taylor riggs in for jonathan ferro today. we hope jonathan is well. what is this, a three week sabbatical? lisa: let him take some time

off. i endorse it. i hear taking time off is really great. tom: really? i wouldn't know. lisa: i want to try it out. tom: the chairman of the federal reserve at 10:00 a.m., on radio, on television. good morning. ♪

tom: "bloomberg surveillance." good morning, everyone. taylor has our data. taylor: i do. two days ago i did not have the data, and romaine bostick said we need a data check before my data check, so here we are with the double dose. take a look at it lift up in the futures as we push forward not only to jackson hole, which is the big news of the day, but some of the geopolitical concerns that we had yesterday, when you had a bigger selloff, and of course, a lift up today, recovering from some of that. you see a lot of stability within the bond market at 1.34%, really well behaved here. that carries through today as we push forward to the chairman's speech at 10:00 a.m. you are really seeing stability within the safe havens as well. typically when we talk about

some of these geopolitical events, we are thinking about the swissie, the yen. there was little movement yesterday, little movement today. you get a lot of calm in cross i set areas. there was no calm in peloton, now $1400 cheaper than it was yesterday. tom: remain -- romaine has a peloton in every floor of the house. romaine: i tried to ride that thing into work. it doesn't work that way. [laughter] we had these earnings last night. taylor was there. she saw what happened. you can't sugarcoat this. they did eat on some of the topline numbers, but the real concern was a company that had a lot of potholes ahead of it here. the guidance on revenue for the current quarter is coming in at about 20% low street consensus. a big christ -- a big price cut here about 25%, 26%.

you add in material weaknesses in some of the accounting practices surrounding inventory. that is why you are seeing shares down around 9%. peloton, this was they second-best performing the nasdaq 100. as of yesterday, it was the third worst performer. eight and percent drop today certainly not going to make adders any better here. keep an eye on the installment loan fintech company here. peloton is its biggest customer. it gets about 18% to 25% of its revenue from peloton, so shares are weaker in the premarket. that company has talked about the idea it is trying to diversify a little bit away from peloton. cap -- gap to the upside here. a lot of that riven by the

athleta brand, not necessarily old navy and banana republic. all of the focus is going to be on jackson hole and that 10:00 a.m. speech by jay powell. some of the potential movers could be a lot of those bank stocks, a lot of what is going to feed into this is reaction that we see in the yield space. we seen a lot of buy and come into some of these fixed income etf's. a lot of people making a bet that there's not going to be any real change here. we could see a move higher or lower in some of the bank stocks. some of the tech stocks have valuations aided by the moving gold. tom: a look this afternoon at the close. we begin our economic coverage of the morning's estimate he's, we start strong with stephen strongly -- with stephen stanley

of amherst pierpont. what kind of american economy will greet the chairman this morning? stephen: i think the economy is a little off the boil relative to where it may have been a couple of months ago, but still very strong. i think the bottom line, big narrative continues to be that demand is outstripping supply, so you've got all these supply constraints, and that means strong growth, but not as strong as it may be could be, and it also means a lot of inflation pressures. tom: the history of befit is the idea that central bankers love to keep their choice set wide, their options open, and the messiness -- the mathiness is they want many degrees of freedom. how degrees does this chairman have? stephen: markets like certainty, so the markets have been looking forward to this speech for weeks. they want chairman powell to

tell them exact they what he's going to do and when he is going to do it. that is just not going to happen. i think what you're going to hear, the fed has told us they were going to give us advance notice before announcing a paper, and i would argue they have pretty much done that. you look at the statement from july, and the further discussion of what happened at that last meeting in the minutes, and the fed has basically told us they intend to taper before the end of the year. to me that is fair warning. the question is really the three meetings between now and the end of the year, which one is it. they are very data dependent, and would not expect chairman powell to lock himself into anything before he sees the next employment report. taylor: then there is the question of the -- lisa: and there is the question of the market response. we are dealing with the easiest financial conditions in history, if you take a look at the goldman sachs financed a conditions index. how much will those financial conditions tightening if the fed

starts to taper? stephen: we only have one data point to look back to, which is the tapering that occurred last time around, 2014. there really wasn't a dramatic impact, so that doesn't mean it is going to be smooth sailing this time around. but the bottom line is the fed is incredibly easy, and one tapering step in and of itself doesn't really change that fact. the big question for the markets is not so much what the pace of tapering is going to be over in tapering is going to end. it is when we start to see rate hikes. what happened back in the prior decade is when the fed started talking about tapering, market participants jumped to the idea that we would start to see rate hikes pretty soon, and the fed worked very hard to try to divorce those to come but in reality, they are linked to some degree. lisa: keep in conditions where

they are, how much does it actually help the labor market? stephen: i don't think asset purchases are doing anything to help the economy at this point area the economy is failing to keep track with demand. . demand is already too strong for the economy to match. you've got material and labor shortages, and at this point, the fed continuing to buy assets is just piling onto that, in addition to creating more and more froth in the asset markets, as you suggested. financial conditions are as easy as they have ever been, and that is really just not appropriate at a time when the economy is very strong. taylor: they said despite the variant risk, financial risks led to the unexpected hike. are we starting to take cues from other central banks, saying

that financial bubbles might outweigh the risk of a delta variant? stephen: i think the opinion on that probably varies from fomc member to member. you might have heard the more hawkish movers talking about that in the last few days, so there are people around the table who do feel that way. i think at the end of the day, it doesn't really matter whether you're looking at financial or economic conditions. if you were to take a fresh look at this and say what should we be doing right now, there's literally no argument that the fed should be buying assets at this point. the economy is way too strong. financial conditions are way too easy. the fed is kind of stuck with the policy they put in place before. the question is how they get out of it in a graceful and least disruptive way. taylor: just to pinpoint it, there's nothing that $100 billion a month is doing that $80 billion couldn't do, right? stephen: the economy just doesn't need it. we could go to zero tomorrow,

and there would be a big shock in the financial markets, but at the end of the day, i don't think it would mean very much to the economy. tom: thank you so much for getting us started. headlines coming out, and michael mckee will really talk a lot about it. what is so great is michael mckee, with all of his earned prestige, is really lined up -- has a really lined up an eclectic list of warm bodies. lisa: you put it so nicely, some warm bodies to come and talk with us. tom: these guys are not going to say the normal blah blah, are they? lisa: coming up at 8:30, atlanta fed president raphael bostic, later patrick harker, and dallas fed president robert kaplan. you said you were interested to hear what raphael bostic had to say. he was interviewed by reuters

and actually said he did think it would be appropriate to start tapering in october, should the labor market continued to hold in. so a little bit of a hawkish tilt there. i guess the question is how much does it matter. is it really the big three driving the boat? tom: keep this up. this is really important. on radio, we are showing images of raphael bostic. you've been down to the jp morgan house on madison avenue authority fourth, and in that room, he saved america. out of the outcome of the panic of 2007 is we need to have a central bank, except the other cities don't trust new york. we need fed members spread around the country. that is really what this is about. taylor: to go back on lisa's comments, the note i have in my inbox is now a voting number says let's get started.

we are for for for. rafael bostic saying it's do this as quick as possible. you had kaplan, bullard, george yesterday saying, let's do this. let's do this now. tom: nonvoting members are people that have decaf chai tea. you know. taylor: i am the token warm body today, tom. tom: well, the token warm body switched. taylor riggs with us today, and we value that. get off her case. stay with us on a friday. your swissie right now -- euro-swissie now, one point 10572. this is bloomberg -- 1.10572. this is bloomberg. ritika: the deadly attack in kabul has shaken the exit

strategy. a pair of bombings code at least 13 u.s. service members and 60 afghans, and renewed criticism from allies and lawmakers about the way the u.s. is pulling out. president has vowed to go after the terrorist. he is also pledging to stick to the august 31 withdrawal date. the two are expected to discuss their divergent approaches on iran. the u.s. favors a diplomatic agreement to stop iran's nuclear program. they said they may use secret attacks. there's a chance that audi could bill card that could build cars in the u.s. they spoke about the chances. >> discussions on possible production in the u.s. are ongoing, but we don't know what the result will be. but we do have factories where we produce platforms that audi

also uses, so it is an important point. u.s. markets are super important , and the likelihood of us to sing is there. lisa: out he has also said ash ritika: audi has also -- ritika: audi hoses that it will stop producing hybrid cars. authorities spelled out how the so-called 996 practice is illegal, workers working from 9:00 to 6:00 p.m. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg.

>> we have been talking about this for several days. it is going to manifest itself

with an actual attack. we believe it is their desire to continue those attacks, and we expect those attacks to continue, and we are doing everything we can to be prepared for those attacks. tom: the general from alabama, general mackenzie speaking yesterday on the horror in kabul , leading the charge for the central command. right now, lisa abramowicz, taylor riggs, and i speak to general commit, former secretary of state for the bush administration. you had to wander out to camp stanley in korea which is wasn't a hollywood tv set, but was the real deal back in 1954, with real danger. we face real danger today in kabul. how do we adapt and adjust on this friday afternoon in afghanistan? >> i think there are two issues. one of the near term issues, we

tighten up the security, we push up the perimeter so that the screening is done further out by fewer people, and candidly, we quit asking permission of the taliban to protect our troops. in the long term, we've got to understand the implications of the kabul bombing and that that is a recruiting poster for every terrorist outfit in the world, and we better start getting ready to adapt to this new pre-9/11 period we are going to be going through. tom: i have to ask the difficult question which alludes to section 60 at arlington cemetery. how do we defend people like you against suicide attack? gen. kimmitt: the most important issue is how we defend america, and that is to continue the policies had, which is

unflinching offensive operations . don't wait for them to come to us. lisa: going forward, how concerned are you about the strategic importance of afghanistan and the u.s. not having a footprint there at the time of increasing chaos? gen. kimmitt: i don't think we have strategic interest in afghanistan except prevent it from becoming yet again a safe haven and sanctuary for terrorism, as it had been pre-9/11. we are already seeing indications that everybody is now coming back to this space and suiting up, for lack of a better word. we need to not have the pre-9/11 view of just keeping an eye on things there, but as we see these terrorist training camps and we see these activities and hear these activities being planned, we got to take action against these camps through airstrikes, and candidly, sometimes we have to put our people on the ground to make

sure these people never have a chance to achieve a critical mass to attack us again because they look at what is happening in kabul and the sadist time to look at the americans again. we can't show weakness going forward. lisa: is there political capital to do that at a time when most people in the united states were for withdrawing the troops, and when most people don't trust the commitment to go in and have their backs? gen. kimmitt: first of all, i don't want to talk about political capital. the fact remains that most americans agreed with the withdrawal, but they have not agreed with this debacle we are seeing over the last couple of weeks. those of us that i watch this for a long time have had policy positions focused on this believe that we should have done this at a longer pace during the winter, not the fighting season, and we should have left commitment on the ground to continue to put some backbone into the afghan army. the sloppy way we did it, the

shambolic way we did it, i think is directly demonstrated by what happened yesterday. taylor: and as of yesterday, what do you think of asking terrorists to support us in fighting the other terrorists? general mackenzie yesterday said the taliban is our front line of security. somehow, that suicide bomber got through to the u.s. forces as that second line of security. unfortunately, the suicide bomb went off, but fortunately did not get on the airplane. are we trusting the taliban enough to stop those suicide bombers from getting through to american forces? gen. kimmitt: we shouldn't be trusting the taliban at all. they have demonstrated their unwillingness to abide by any commitment they have made. this is a hostage situation. we are not doing an evacuation. we are asking the taliban to release these hostages. i don't know who is kidding who, but the taliban can't be trusted, shouldn't be trusted,

and the strategic communications campaign seems to have a lot of people fooled. tom: we had a lot of academics on, and they really emphasize the tribal nature of society among sunni and shieh. you are truly expert tribal tensions all the way over east into afghanistan and into pakistan. what is the relationship america will have with a fractured pakistan? gen. kimmitt: this is left about the sunni/shia divide and more about tribal politics, and candidly about pakistan's supposed national security concerns, where they want to use afghanistan a sort of a border between them in india. they don't want to be surrounded.

even though pakistan is expressing grief and star of -- and sorrow for what happened yesterday, we know the pakistani finger print is all over support of the taliban, and candidly could very well be there support for isis-k. this is a country that harbored osama bin laden for years, and the relationship we have with them is somewhat questionable. we certainly don't want to have their government overturned and taken over by a bunch of tribal types inside of pakistan. lisa: before we let you go, you were talking about the messiness of the operation. i want to talk about the strategy. what would the rationale be for abandoning the bagram airbase and focusing resources on the kabul airport? gen. kimmitt: i'm a little bit conflicted about that issue with bagram airport. it is more secure, but it is also much further out, and the taliban would have set up check

for anybody to get to the bagram airfield, so i think it is a convenient excuse, but bagram, while easier to defend, it would have been harder for people to evacuate to because it is so far away from the city of kabul. tom: what do you tell the man or woman coming out of the class of 2021 at west point? gen. kimmitt: this was a long war. it has been going on since 9/11, and it is not going to stop anytime soon. you need to look at what your predecessors from the last 20 years have done to defend this country, and you better be ready to defend it as well. tom: we look forward to speaking to you again. our retired brigadier general, working with the bush of adminstration as the deputy assistant director of defense for the middle east. just ask ordinary comments thereby someone informed. lisa: the idea that going

forward, this is not going to end anytime soon, is a key point. tom: the 8:00 hour upon us. two hours away from the speech of the chairman. this is bloomberg. good morning. ♪

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>> but i would like to see out of jackson hole is for the central bankers to say this is an emergency policy response. >> a sense of their long-term views on employment i think it's our ghibli the most important thing to focus on -- is arguably the most important thing to focus on. >> i thought is that fed tapering is not going to start at this meeting. >> powell is going to try not to make big waves. >> the earlier the fed tapers and the more aggressive they are in tapering, 10 year probably will not rise that much. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa

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