♪ >> from the fox studios in new york city, this is maria bart bartiromo's "wall street." maria: and happy weekend, everybody. thanks so much for joining us. welcome to the program that analyzes the week that was and helps position you for the week ahead. i'm maria bartiromo. we are happy you are with us this weekend. in just a few moments, i'll be speaking with the president and ceo of the dallas federal reserve. robert kaplan is here to talk about 2021 and beyond. but first, a look back at some of the week's big talkers with newsmakers on "mornings with maria," this edition of the week's talkers. watch. ♪ if. maria: how does de blasio get

away with blaming this on the coronavirus when we know that the entire bail reform was changed -- >> he basically what's taken the largest city in america, and now we're challenging chicago as a killing field. it's a tragedy. the man is a disgrace. maria: crime is surging in our largest city. new york city saw a a violent fourth of july weekend, 44 shootings, don. >> i saw weekend statistics, i thought i was looking at one of the second quarter statistics. i couldn't believe the damage of one weekend of activity. maria: should states and cities be reaching out to the federal government for help in terms of these spikes in crimes? >> absolutely. and the president's been very clear about that, that localities and states, if they need assistance, then they should certainly call on the federal government. maria: broadly speaking, whether it's china or tech or sectors, tell me where you want to allocate capital today. >> i think it's time to start adding a little more defense to

the portfolio now that we've already seen the market rebound 42% now that the covid news getting -- is changing. maria: is there a screaming buy to you right now, art? you seemed cautious earlier. >> this has been a tech-led rally, tech and health care companies have led for most of this rally, and i would not be surprised to see some transition over to cyclical stocks. maria: is there truth that there's censorship? >> i think they are censoring. i don't think they believe they are, and i don't know that they would ever admit that they are. maria: and, of course, then there is china. the crackdown and focus this week, the white house is looking to banning chinese apps like tiktok over concerns and how they handle user data. fbi director christopher wray, meanwhile, gave a speech detailing the threat of communist china expect concerns over corporate espionage, the theft of intellectual property and your perm data. joining me now to talk more

about that is the founder of the atlas foundation, author of "china's vision of victory," dr. jonathan ward. jonathan, thanks very much for joining us. a lot of movement this week on china by the administration. your thoughts on sanctions being put into place on any chinese official who is involved in the human rights abuses over the uighur community. there are, what, a million and a half weeinger's locked up -- uighurs locked up in camps right now? >> hi, maria, it's great to be back. that's right. i think you see u.s. government coming together across a series of departments, and this is very important because, you know, earlier there'd been an adjustment, let's say in the pentagon or at the state department, but you're starting to see the departments work together whether it's commerce, treasury, state. you know, there were comments from the state department to the sec this past week saying that, you know, that essential essentially the s rule that allows foreign companies to list on u.s. exchanges without

abiding by sec regulations, that should be eliminated. the imposition of sanctions on china's senior officials involved in the human rights abuses and atrocities a major step. it includes one politt are burrow member, so this is about as high up as officials have ever been sanctioned. and you're talking about a turning point in the u.s./china relationship where our government is starting to find its footing on a new strategy towards china. maria: yeah. well, i mean, it definitely is -- [inaudible conversations] if yeah. yeah, it's definitely a consistent message now coming out of this administration. we've heard from secretary pompei owe, we've heard from a.g. bill barr who sat down and talked with me about this. he says this is theft of our children and our grandchildren because they're actually stealing our technology, military data, medicine data. so christopher wray this week said this: china as led by the chinese communist party going to

continue to try to misappropriate our ideas, influence, our policymakers, manipulate our public opinion and steal our data. they will use all tools and all sectors approach, and that demands our own all-tools and our own all-sectors approach in response. jonathan, it feels like the administration is pointing directly at the corporate sector to say, stop looking at profits over long-term impact to national security. that is exactly what a.g. barr told me in hi my exclusive interview that companies want to sell their widgets to 1.4 billion people, and they're forgetting that the chinese communist party is stealing and has all this theft of intellectual property, and they are getting ahead of us in some of these important industries. your response. >> well, that's right. we're in an existential contest with china, and this is just getting started. this is not going to blow over. it's just the beginning. so c suite withs need to rethink their china strategy, their global strategy, they need to understand how they fit at the

intersection of u.s. government response and sort of, you know, china's advances not only in the china market, but worldwide. and then institutional investors and portfolio strategists need to start looking at their exposures. really everybody needs to do a comprehensive risk assessment and understand how they're positioned in this situation. maria: meanwhile, the president continues to encourage investors and things like the railroad, 401(k)s, the railroad workers' 401(k)s not to invest in chinese companies. the chinese stock market has been on fire. in an 8-day period, the shanghai composite was up 17% probably because the chinese communist party told its citizens we want the bull market in place because that's going to be part of our recovery, and as soon as they said that, like in seconds, in minutes millions of chinese

citizens went and opened retail stock market accounts. and, of course, at the end of the week the chinese communist party said, well, maybe it's getting ahead of itself, and then the market ended lower. it's amazing the way it's so top-down there. your reaction to what has taken place in terms of investing in chinese companies. >> the party is able to move markets and, essentially, whether they're allocating capital to strategic industries and technologies or simply, you know, participating in their own stock market, it's not the same as how it works over here. i think part of, you know, what is coming is a review of china's access to our capital markets and strategically the united states is going to have to stem the tide of capital to china. so i think when you look at the bills in congress that have to do with delisting chinese companies, when you look at the sort of interplay between government departments talking about this issue, i think this is coming, and i think the chinese government is preparing to have a different approach to capital markets. maria: jonathan ward, great with insights as always. appreciate your time this

weekend. thank you, sir. we will see you soon. >> thank you, maria. maria: don't go anywhere, we've got the head of the dallas federal reserve, robert kaplan, the president and ceo. he's up next. ♪ if. ♪ ♪ looks like they picked the wrong getaway driver. they're going to be paying for this for a long time. they will, but with accident forgiveness allstate won't raise your rates just because of an accident, even if it's your fault. cut! sonny. was that good? line! the desert never lies. isn't that what i said? no you were talking about allstate and insurance. i just... when i... let's try again. everybody back to one. accident forgiveness from allstate. click or call for a quote today.

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♪ ♪ maria: welcome back. well, the second half of the year, the state of the economy in focus. while there has been signs the recovery is in full swing, concerns over the rising cases of coronavirus nationwide have some predicting the growth will be limited in the third quarter. what part of that, another round of stimulus plays, also among the conversation. joining me right now i to talk

about all of that and more is the president of the dallas federal reserve, robert kaplan. robert, it's great to have you this weekend. thank you so much for being here. let me kick it off with getting your state of play here. how would you assess where we are in terms of this recovery because we saw good retail sales numbers recently, pretty good jobs numbers for two months in a row. should we assume the recovery has begun? >> yes, we saw a weaver contraction in the second -- we saw a severe contraction in the second quarter, but it's my view we started to grow out of that in may. we've been growing in june. that's consistent with the strong jobs numbers, strong retail sales, strong consumer. the issue is the recent resurgence in cases may mute the growth from here. we still believe at the dallas fed we'll grow in the third quarter, and we'll grow in the fourth quarter. the question how fast.

if we saw better control of the virus, we'd grow faster. and if this resurgence continues, we're going to grow slower than we would. but we still think recovery, and it's just a question at what rate. maria: so how does it feel to you there in texas, you know, a lot of conversation recently about the hot spots of the country, and that's florida, texas, arizona, california seeing spikes. do you feel those spikes? has that slowed the reopening plans substantially in texas? >> yeah, it has, in my opinion. and i literally spend every day talking to small businesses, medium-sized businesses, big businesses. i walk around every day and try to understand and talk to people what's going on. and, yeah, we saw pretty healthy growth, as i mentioned, in i may and in june. and in the last couple, three weeks you can see traffic is

somewhat less. some people that were going in to work have decided to stay home. restaurants are less crowded. you see a little weaker price of oil. and so, yeah, it, it feels to us looking at the mobility if data and talking to people out there it's slowing. and i'm most worried about the small businesses who weathered the shutdown, many of them did a ppp loan, they paid it back, the loan got forgiven, they brought their people back, and now they're slowing again. and they don't have access to a second round of ppp loans, and they're struggling now to figure out where they go from here. and it's the small businesses in particular if i'm very worried about as we see this growth slowing. more yeah, for sure. and there will be structural changes, i know, to this economy which we want to get to in the next block. but let me get this from you. on "mornings with maria" you

joined me this week, and we were talking about masks. you said the more people wear masks, the growth will rise. so you're looking at masks as a very important part of this recovery then. >> yes. and this is based on lots of conversations with epidemiologists, infectious disease experts, local as well as national. and the one piece of advice i've gotten consistently from all of them is if people broadly wore masks in the country, transmission would slow substantially. and it's not just to protect yourself, it's to protect others. and if people wore masks probably -- broadly, we'd grow faster. so you heard me say monetary policy and fiscal policy have a role to play, but probably at the forefront of economic policy in this country right now is following these health care protocols. that's the vehicle to growing faster. maria: i want to take a short break. when we come back, i know you

and your colleagues are thrown a lot of stimulus at this economy. it is the reason we're expecting growth in the second half of the year, but there's been criticism about that as well. i want to get your take on what jim grant had to say in a recent wall street op-ed, get your take on the criticism of the federal reserve when we come right back. stay with us, more with robert cap hand when we come back. -- kaplan when we come back. ♪ ♪ my money should work as hard as i do. that's why i use my freedom unlimited card every time i get gas. give me a little slack! with freedom unlimited, you're always earning. i said i need some slack on pump three! but what if you could stdo better than that?k.

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>> interest rates no longer are prt reliably direct investment flows, and interest rates are the artificial constructs of the fed doing its best to step in

and make something happen in the absence of economic activity as we used to know it. maria: and that was the founder of grant's interest rate observer, jim grant, talking to me this past week. talk about this recent "wall street journal" op-ed on the dangers of rock bottom interest rates. i'm with robert kaplan this weekend. it has been a massive amount of stimulus, robert. what is your reaction to what jim grant just told us in terms of the negative implications of these rock bottom rates? >> i think it's good to be mindful of these concerns and that in a crisis, which we're in, i personally think it's been quite necessary to drop the fed funds rate to zero, to do a number of these programs that we've instituted to help stabilize the functioning of the financial markets, corporate bonds, municipal bonds, a whole range of money markets, etc.

however, as we go through this crisis -- and, hopefully, move past this virus -- the challenge will be how to withdraw and sunset some of these programs and also be mindful that undue awe comation -- this is, again, in the future -- can have distorting effects on markets. we're not to that point yet, in my opinion. i think we're right in the teeth of the crisis right now. but i think these concerns, for me, are worth keeping in mind in the future as we, as we move through this. and i think showing some restraint as we go through this will be appropriate. we're not to that point yet in that we're still in the middle of this crisis. maria: right. >> but i think it's good to be mindful of these concerns. maria: yeah. >> i certainly am. maria: well, especially since this has really dictated behavior on the part of investors. when you don't get any yield from fixed income, you've got

rock bottom rates, you're going to put your money somewhere else, and maybe it's going to be into stocks like tesla which it has no end to going if up with the momentum in the nasdaq. jim grant writes this: ground-scraping interest rates turn savers into speculators. they facilitate overborrowing, suppress market signals, misdirect investment dollars and promote the dubious business of turning well-financed public if companies into heavily-indebted private ones. so i guess the issue here is what would it be to turn your feeling about rates to start thinking, well, it is time to start normalizing? i mean, what are you looking for in terms of understanding when to actually normalize rates? i know jay powell has said rates will be near these levels until 2023. >> yeah. so we need to, we need to be

making progress in growing gdp, getting down the unemployment rate so that the official unemployment rate is 11 and a fraction percent. u6, the broader measure of slack which includes discouraged workers, people who work part time that want to work full time, that's at 18% now. this is why i've said, ooh i've been very vocal the last number of weeks about the health care protocols. if we wear masks broadly, we do a good job on the health care protocols and we grow faster, it means we won't have to do as much monetary and fiscal policy. if i -- i would very much want that. to the extent we don't do a good job on the health care protocols and we grow more slowly, we're going to be in a longer period of requiring more monetary and fiscal policy. maria: robert, how close hi are you watching the rest of the world? there is this, i would say, economic cold war underway with china. 150 bills in congress trying to

keep china accountable. you've got issues from the uighurs in camps to companies that trade on u.s. exchanges and they don't follow the psalm accounting rules -- same accounting rules to covid-19 and everything else. is this going to impact global growth? >> yeah, it is, it's having a negative effect on global growth. and we're watching and studying very carefully here at the dallas fed. my team broadly at the fed, countries around the world and what they're doing to combat the virus, their own incidence, how they're responding in terms of growth. and a number of them have, are right now having better experiences in muting the spread of the virus although they have some resurgences, but they're modest relative to ours. and i worry a little bit about the divergence between u.s. performance regarding the virus and many other countries, and that's probably the number one issue i'm watching. maria: and real quick, robert,

before you go, are you seeing a change in cap-x? if are businesses starting to loosen up the pursestrings and start investing in capital expenditures at this point? >> not really, is the answer. maria: okay. >>ing and i think there's so much uncertainty, most ceos i talk to broadly are taking a wait and see approach. they're being relatively cautious. cap-x in the oil sector is going to be down as much as 50% this year. so you're going to see -- maria: wow. >> very weak cap-x. the extent we get more visibility and certainty, you'll see better capx. maria: robert, it's great to see you this weekend, thank you, sir. robert kaplan, president and ceo of the dallas federal reserve. thank you, sir. don't go anywhere, more "wall street" right after this. ♪ ♪

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have a great rest of the weekend, everybody. thank you so much for joining me. we'll see you again next time. ♪ ♪ ♪ >> hello e and welcome to the "wall street journal" at large i'm james freeman filling in for jerry baker. lower covid-19 fatality rates nationwide should be cause for celebration, but a rise in cases has the lockdown color race once again raising restrictions. their claim is after the shutdown spring, reopening has been deadly. atlanta mayor ceesh a shah bottoms put the blame squarely on tho