louis fed, spirited conversation with michael mckee.ee talking to charles evans of chicago later today. he is at the rocky mountain summit, about 30 miles southwest of jackson hole. a preview to jackson hole. this is a joy. there are so many negative stories about asset management, woe is me. it is nice to talk about a huge success. own a piece of the rock. you know it from prudential, their iconic effort since 1875. out of that it has become pgim. erik schatzker with the spirited conversation with the ceo taking a victory lap at pgim. erik: absolutely. that ceo is david hunt. always a delight to have you with us on bloomberg television and bloomberg radio. david: good morning. right to be back with you. erik: we heard it from jay powell and no doubt he will say the same today. too early to pull back on monetary stimulus. let's translate what that means for investors for monetary markets as someone who speaks for $1.5 trillion. is now still a good time to be taking a risk or is now time to get cautious? david: first a few comments on th

romaine: michael mckee out there in beautiful idaho. are you just going to stay out there until jackson hole yucca michael: i'm going to quarantine out here i think. romaine: smart man. michael mckee, our chief economic correspondent cared coming up, we are going back to the conversation joe had with the u.s. deputy secretary of the treasury. this is bloomberg. ♪ joe: i spoke earlier today with the u.s. deputy treasury secretary. talked about the economy, jobs and inflation. >> because we lack supply in some places, we have seen prices go up. we think this is temporary and transitory. we are continuing to think about what we can do to make sure we can grow the economy, invest in ways that create jobs and ensure we expend the potential of the economy going forward. joe: what does that look like specifically? you say we are looking at the next round of investment planned for later in the year. what does that look like to expand the potential supply-side capacity of the economy? >> it comes down to investing in two areas. one is infrastruct

this afternoon will be a snooze fest until michael mckee asked his question.n: are we doing breakfast at 10:00? lisa: i will come to breakfast. jonathan: you want to be part of this were an extra hour? lisa: maybe i will take a nap. jonathan: coming up on the open, bob michele of jp morgan. tom: we have canadian breakfast. jonathan: i'm not going back to that place unless they have bloomberg. i was not impressed. we walk in, it is not on the tv we walked back out. if there watching now, good. from new york, this is bloomberg. laura: i am laura wright. the house committee investigating the attack on the capital can subpoena former president trump stop allies. in the first public hearing members of the panel made it clear that the former president activities are a central focus of their probe. yesterday they heard dramatic testimony from four police officers who helped to defend the capital. congress is going to back the masks. reimposed a mask wearing requirement for all lawmakers while they were on the house floor. two house members and several staffers have t

with the headlines here is michael mckee. hairman powell breaks no new ground in his opening statement, offering an upbeat assessment of the economic recovery while maintaining it is still too early to begin talking about cutting back on monetary policy support. the economy is on track for its strongest growth in decades, powell says, but taking a line from the latest fed statement, adds "we continue to expect it will be appropriate to maintain the current target fund range for the federal funds rate until the fed reaches its goal of maximum employment." while he does not refer to yesterday's unexpectedly high cpi readings, he does say inflation has increased notably and will likely remain elevated before moderating. most inflation pressures, he says, are coming to the reopening of the economy from base effects and supply chain challenges. they should start to fade. what is important is measures of inflation expectations have moved up from there pandemic low and are in a range the fed considers consistent with the fomc longer

let's get the data from michael mckee. michael: i'm afraid it shows us more confusion because on friday we had existing home sales that went up. everybody was talking about inflation and housing prices. now we have a decline in new-home sales, down 6.6% in the month of june to a 600 70,000 annual rate, down from a 700 24,000 annual rate, so disappointment in terms of new-home sales. prices dropped, and we haven't seen that in a while. the new-home sales average median home price, $306,000, is lower than the $374,000 we saw the prior month. the one thing that is consistent is the number of new homes for sale goes up. so more supply coming to market. people worried about how much supply there is, and that is having a depressing effect it appears on the price of new homes. we will see how this goes and how it translates. new-home sales have been an important component of gdp up to this point. we will see if that continues. alix: in brooklyn, prices are coming down a tiny bit. bloomberg's michael mckee, thank you very much. one

louis fed president speaking with our michael mckee.ws can differ on whether fed tapering should begin now but he said the real argument is whether now is the time to announce a taper plan that will only begin months in the future. a chief u.s. economist joins us now. great to have you with us. when do you expect the fed to come out and lay out a plan for tapering? >> i think they would be foolhardy not to do it in july. and i think they will. the whole argument of whether or not it is tied to take -- time to taper, you can make the argument there are a lot of twists and turns between now and then but there's certainly nothing that says the fed can't say -- look, the fed never gave the promise that it's going to get easier policy as the economy expands. it just made the promise -- for them to begin to talk about tapering, given the reduction in the size of the deficit, they are making financial conditions even easier by continuing to provide indiscriminately, meaning they are just taking it in. it's time for the fed to come out and say,

jonathan: michael mckee, the data still not out. run me through what you're looking for. we are looking for a slight decline in retail sales. retail sales are always difficult to forecast because they get adjusted and revised quite often. only half the data is in by the time they put this report together. we will look not only for the monthly number but the revised number. here they are. retail sales up .6%, that is much better than the .3% anticipated. it looks like this month we had a strong showing by the american consumer. retail sales ex autos up 1.3%. autos has been a tough spot because the availability of cars has been very small. you look at the control group. i do not have that out yet. there we go. 1.1%. that is the number that feeds into gdp. that is better than the .4% expected and better than the decline of .7% we saw last month. a very good report on retail sales that adds to the debate about what the fed should do. this is better than expected. all of the data coming in stronger as the economy reopens. this is not a month where people got stimulus checks. p

thank you, michael mckee. europe, the spread of the delta variant potentially looking like it could react summer infant -- wreck summer plans. france is one a residents about vacationing in spain. is looking like the delta variant wrecking plans in the u.s. as well. what do we make of this? the rates of change on the delta variant seem to be accelerating. drew: we have something that is worrisome, but unsurprising, where it is the summer and people are beginning to travel more, especially as restrictions get lifted. as people travel more, you see more human interaction, and with that tends to come more cases. obviously come of the delta variant is providing accelerant to that, that is why we see these numbers in the u.k., in spain, portugal and france, as well as the u.s. and other places. i think the main question will be, for folks who are making travel decisions, how safe do they personally feel because of their level of protection and vaccination, and the level of risk they are willing to accept, and how m

maybe michael mckee will be rude enough to begin that with that question.han: last time we had that i think was september 2020, on the communication. they were on the same side. tom: i thought we had dissent in the last commercial break. jonathan: we often do on this program, as you know. coming up, joseph stiglitz, prize-winning economist at columbia university, professor of a can,. from new york city this morning -- of economics. from new york city this morning, good morning. this is bloomberg. ♪ laura: with the first word news, i'm laura wright. a house committee investigating the attack at the capitol could subpoena former president trump's top allies. members of the panel made it clear that the former president's activities on january 6 are a central focus of their probe. yesterday, they heard dramatic testimony from four police officers who helped defend the capitol. congress is going back to the masks. they have reimposed mask wearing requirements for all lawmakers and others on the house floor. violators can be fined. several staffers have tested po

mike mckee, the market is doing the same thing. futures up 12%. michaelsort of report that tells you things are getting better, but they are not getting better at a hugely improved pace. one thing the fed has been looking at is minority unemployment. we are looking at employment of black americans at 9.2%. hispanic americans, 7.4%. that is a pickup. they follow the general rate higher. not as much improvement there but more jobs created than expected. that is good because over the longer run we are headed in the right direction. average hours dropped. that is a bit of a problem because it takes earnings out of the economy, the money you would have earned for the extra hours. we have to keep an ion that as well. lisa: i want to go to the point you raised that the unemployment rate kicked higher as more people came back into the labor market. do we have a sense of what the character of those re entrants was? michael: hiring was in leisure and hospitality and retail. retail and services rising. it does show the lower end is coming back. some jobs are getting

we are joined by bloomberg's international economics and policy correspondent michael mckee. takeaways of what we've learned about this agreement over infrastructure? michael: we do not have a lot of details about the pay-fors. we know what they want to do with the money in the amount of money they are going to spend. it is a question of whether you raise taxes and on whom and what other gimmicks they might stick in. there will be gimmicks that do not matter to anyone except that they get them over the line. that will be the question, and whether or not those gimmicks are acceptable to everybody. now that they have this bipartisan group with a sink of get number of republicans. if they have all of the democrats on board, as annmarie hordern was talking about, they can bring the bill to the floor and perhaps next week pass it and that moves us closer to getting a little bit more stimulus for the economy. alix: just so viewers know, mike covered d.c. for many years so he understands all of these machinations and innerworkings. the s&p not moving at all. does this make jay powel

michael mckee talk to him about tapering and said the decision was made in the context of an emergencycing the potential of a depression. he had one concern, we don't want to rock the markets too much. i am paraphrasing, but that was basically it. mark, when you hear what your peers have to say, there is nothing to worry about, get on with it. mark: liquidity is abundant, and it will get even larger in the couple months ahead, due to ongoing fed qe, the decline of the treasuries. cash balances there will be about a trillion by the end of october, assuming that resolution. this dynamic of very easy financial conditions is likely going to persist, barring some type of significant external shock and growth. in this context, with incredibly easy financial conditions, it makes a lot of sense for the fed to march down that path to taper. you are right, the way they arrive at the $120 billion a month in treasuries and mortgage purchases was almost by experiment. they initially needed to do a lot to stabilize the market and then withdrew to the point where they believed the markets could funct

here is michael mckee. michael: good morning. we have some inflation. a lot more than anticipated.n a month over month basis the cpi rises .9%. the forecast was for .5%. the poor rate up .9% -- the core rate up .9%. we had 5.4% for the cpi and the core at 4.5%. significant increases this last month. let's take a look at some of the ones we have. in terms of the change, food is up .8%. energy up 1.5%. that includes a 2.6% rise in gasoline prices, which is going to be a problem. gasoline continues to rise. used car prices still contributing to this, up 10.5%. apparel prices up .7%. those have been rising. services up .4%. we are seeing significant moves. we are also seeing a big move in shelter, up .5%. that was only .3% the prior month. broader based inflation than before but we need to go through all the numbers. the headline number, 5.4%, a lot of people will be worried about that. jonathan: that is the data. the interesting part of the story was going to be how the market responds. the height yields are the front end towards the belly of the curve. not lasting long. yields are up

with the data, here is michael mckee. we have a .8% increase in durable goods orders which tells us we are not adding to stocks as quickly as they thought possible because the estimate was for 2.2%. last month was 2.3%. the standard caution is durable goods orders are very lumpy. durables ex transportation up only .3%. i am guessing transportation equipment was the big push for what we did get. capital goods -- that is the compilation of business orders that going to gdp. that is much better than the prior month. we just got the revision, it was .5%. basically no change. two months in a row of half a percent in capital goods. shipments up when 8%. -- shipments up .8%. overall capital goods up at a reasonable pace. the problem is we expected more. tom: durable goods durably followed my foot and hurt. does this data signal to you the shift from a goods sector to the service sector? michael: it could. it is hard without looking at the entire breakdown to know, but we do expect that in terms of consumer spending, that is happ

here is michael mckee. michael: we see 419,000 initial jobless claims filed last week.rom 360,000, which is a change from the previous week. we have not gotten a revision yet, but it does go the wrong way. 350,000 was the anticipated number. 3,000,200 36,000 continuing claims. that is little bit lower than last week. not a lot of changes. basically in increase of 51,000 from the previous week. the interesting thing is it was the survey week for payrolls. we will see that figure into somebody's estimates as we go forward. tom: we are constrained with time because of christine lagarde. i have been screening this elegant chart. with this data point it is not relevant -- it is not elegant. a little bit of movement from the constructive trend. will the politician see that in washington? michael: no. they will argue the way they want to. economists will say the data is lumpy. i would not worry too much about it overall. the total number of claims, 12,573,000 for july 3 is down by a little under one million. significant progress made towards getting people off the roles. jonat

bloomberg's michael mckee. also details from the opec meeting.as some recommendations for gradual oil output increase, talking about 400,000 barrels a day. that will take place on a sequential monthly basis from august through september, and they're recommending extending the deal to the end of 2022. the market was looking for more, looking for around 550. we did not get that. we only got 400. taylor: and pivot to some of those oil conversations to any sg conversations. activist investor engine number one to promote activism. the ceo joins us next. this is bloomberg. ♪ ritika: coming up, ellen wald, atlantic council senior fellow. this is bloomberg. guy: oil prices sharply higher today. let's talk about another aspect of the oil sector. it has been challenge after challenge for exxon. as we learned today it got stung by a filming operation. the company apologizing or comments drawn on camera by one of the oil giant lobbyist, the lobbyist saying the carbon tax exxon has promoted is unlikely to happen. excellent deeply apologetic. this comes on the

want to talk to michael mckee about the details. michael: we may be constrained in where we can go. housing starts are always very volatile if you have a pendant recession. the kind go away, then you have weather affect -- then you have weather effects. there's a lot of demand out there for housing. the bad news is in the building permits, or at least it appears to possibly be bad news, because building permits went the other way. building permits fell to an estimated 6 million annualized rate. that is the lowest since october. what's going on there? is housing peeking out? maybe not. the problem may be, we don't have enough construction materials because of costs or don't have enough construction workers. take a look at the number of civil family homes. it is skyrocketing. builders apparently have a very large backlog to work off before they can even start on another round of newly permitted homes. it still looks like good news for the housing sector, although prices with these shortages of house available going up. alix: thank you very much. let's talk about the other action in th

michael mckee is watching the numbers. michael: existing home sales day. we are seeing an increase in home sales over the last month. not quite as much is expected. we are at 5,860,000 annual pace, about 40,000 less than had been forecast, but it is up from last month's revised 5.7 8 million. that tells you we are still seeing strong home sales. the existing home sales on a percentage basis went up 1.4% after falling 1.2% last month. the other numbers out right now, the index of leading indicators also strong, up 0.7%. that is a little bit less than anticipated, but still good news. earlier this morning we got the bit of bad news, that initial jobless claims rose last week, which unfortunately was the week of the payrolls survey. goes up to 419,000 from 368,000. no particular explanation given, but we know those numbers can be volatile. some good news on the economy on the demand side, but the labor supply side not so good. alix: thanks very much. the continuing claims rising, like you mentioned. another top story, the ecb is going to continue its loose mo

let's bring in our bloomberg international policy and economics correspondent, michael mckee. at are you going to be looking at? michael: we expect some mention of when they're going to taper because jay powell said we were talking about talking about taper, but do they go seclude as to what happens and when? this was june 18, so it was three weeks ago, and things were different then. 10 year treasury yields are going down, and you can see that in the blue line. look at the white line. this is the fed funds futures for december 2022, when people thought maybe they had to pull forward some of their bets on the fed tightening, but now that has rolled over, and the red dot, that is when the fed met. so something happened between when the fed met andy dot plot change coming out that we are bringing down these numbers. let's take a look at what the market once to look for in the minutes today. any mention of when a taper begins is probably going to be sometime in the future. so is there going to be new news? don't know. do they do the mbs first? because the housing market doesn't re

let's turn to michael mckee. the wrong kind of upside surprise on jobless claims. not much of one. about a 2000 increase over the prior week because that was revised higher. 300 73,000 jobless claims filed in the last week. that is more than a survey of 350,000. still a much lower level than we were during the pandemic. the average of the five years before that was 230,000. we are getting there. it is taking longer. the real question is not the initial claims being filed but - claims. ]ÑÑ$cpñ1gv÷■that is 14 million t is the number you want to see as people move into the labor force and try to get jobs. we are keeping an ion that. some of the states where we saw the end the unemployment benefits early, alaska and iowa saw jobless claims drop during the month, mississippi sought jobless claims drop by 8000 in new hampshire saw jobless claims rise by 3000. is there evidence we are seeing people go back into jobs because they cannot get extended benefits? not conclusive yet. tom: there is a weekly data point. i want you to save us as we look at the yield market and the

louis fed president james bullard speaking to bloomberg's michael mckee.hicago fed, charles evans, and while inflation has picked up more than expected, next year will be more number -- normal. >> so here we are now in a strong rebound, the economy is recovering very strongly and growing very well. in fact, the numbers are so large, i have a hard time keeping them in my head. i'm expecting real gdp growth is going to be extraordinary number. and when you take an economy that's 75% and take it to 100% or more, that comes with growing pains. but growth has been good, 7% this year, looking for 3% next year, which is a very good level of growth. the kind of numbers i find more transparent in terms of naturalness or the unemployment rate numbers, even those are subject to a lot of interpretation given labor force . i'm looking for unemployment rate at the end of 2021 to be about 4.5%. we're five point 9% unemployment right now and come down dramatically -- 5.9% unemployment right now and come down dramatically, which is good. i'm still optimistic that's the cas

bloomberg's michael is back in the house, no longer in a field -- michael mckee is back in the house, no longer in a field somewhere. michael: we have some housing data for you. the u.s. homebuilder sentiment index falls to a seven-month low, 80 from 81. however, you can see by the charts this is still among the highest readings ever for this series. homebuilders remaining extra nearly confident -- remaining extraordinarily confident. lower than it has been, but still high. the homebuilders today, tomorrow we get housing starts and permits, and on thursday, existing home sales. one of the reasons we have seen sales struggle is supply bottlenecks. that is something that the homebuilders are talking about. they are complaining about oriented strand board. i know that would get alix excited as a commodity. you can see oriented strand board as kind of a problem there. in this graph we are showing the trend. the confidence that home sales will rise is up this month. that's the one thing in the homebuilders index that rose. the building permits have been falling. when we get the starts numb

kailey: bloomberg international economics and policy correspondent michael mckee is with us now. michael: there is still some less than expected numbers in this jobs report, 850,000 jobs were stored, but the unemployment rate goes up. 5.9% is the unemployment rate for june, and that is because more people reported that they lost jobs. the average hourly earnings up 3.6%. banks out with expectations, but that is a compositional effect. we can't really make too much of it. the unemployment participation rate rises to 61.6%. let me show you here, if we have this chart, what happened with the unemployment rate and why we saw it go the way it did. this is the number of people, the net of the people who lost jobs. we will leave that one. but basically, you can see what happened there. we will move it on back to you, kailey, this, as you said, does not move the needle for the fed. no reason for them to pull things forward even though it was relatively good news. guy: mike mckee, thank you very much, indeed. we need to talk about what is happening with the virgin galactic story. the stock

tom: i know michael mckee, that was his analysis as we ended the show yesterday. what i see within the week of back and forth, the 10-year gilts, 1.27% -- the 10 year yield, 1.27%. there's just some angst out there, the vix 25 -- out there of vix 25, right now 17.5. jonathan: didi global, let's frame this. didi global now posited by 16.9% after surging 30% of the back of a dow jones story that indicated the company was considering going private. then the company itself coming out and saying no, that's not true. this stock has been all over the place, and it has been the poster child for what is developing in beijing. tom: i don't have a lot of wisdom to put in here other than clearly, as lisa mentioned in the last hour, chinese authorities have stepped in the last two days and begin to -- and began to ruffle, as government officials do. lisa: perhaps chinese officials won't go too far with their regulatory measures to pair back some of the more aggressive tech areas. again, it highlights how uncertain the field is for data. there's a fight for data. chinese govern

with michael mckee. jonathan: looking forward to that. tom: i'm sorry, i'm fired up.onathan: we've had hot ppi. we have a federal reserve chairman talking the same game. lisa: i just want to cite mohamed el-erian, talking about exactly this, the hot cpi and ppi data that came in. he was speaking in a bloomberg opinion column that came out about an hour ago. he said this goes against the often repeated conviction that inflation is transitory, especially now that the base effect have mostly played themselves out. this is a growing idea. how do you explain the 10 year? that can only be explained with a fed reaction function that does eventually have to kick in. jonathan: do you think that is a shift in the reaction function or just a shift in the data? they've got their forecasts wrong. that is the belief of some people. they set up the reaction function. that probably won't change. but how they respond if the data is coming in hotter than maybe they anticipated, and i think they even acknowledge that there's upside risk to their forecast on inflation. lisa: but do they

tom: i do not thanks we will hear it with jim bullard or michael mckee, but john, -- jon you wonder where the voices are will say let us go. tom: the extreme -- jonathan: extreme accommodation is one thing and positioning for rate hikes is another. the reason some fed officials are not keen on the former, this is where people start to run towards the latter. the sequencing of this is important. if you start tapering then you and i will have a conversation about lift off. only some people on the fed wanted to happen. tom: it is this tantrum, everyone agrees to that. is it feasible with our lack of knowledge that a central bank can accommodate a society and system without tantrum? that is unproven. jonathan: anthony roth joins us. why are yields lower and why is curve flatter? anthony: i wish i knew the answer to the question, and i think we do not see the forest for the trees, we need to step back from a lot of the gyrations we see recently and project where the 10 year will be, on labor day at the ee -- or at the year and we believe it will be higher through the year. inflation is going t

jon: that was robert kaplan, the dallas fed president catching up with michael mckee on bloomberg tvnd radio. good morning, tom keene, lisa abramowicz, jonathan ferro. before i turn to price action, can we talk about what counts as a hawk over at the federal reserve these days? this is what we call the chief talk, the fed president, and -- hawk, the fed president, and he is talking about taking it off of the accelerator. that tells you the world we are in right now. this is a different world. tom: it's a really important distinction. i back to the work of john b taylor out of stanford university on the gaps and range if you will around 2%. we have not discovered the high-end of the range in years. the hawks are practicing being hawks. it is a work in progress. jon: do you think coast-to-coast one the argument all of those years ago? tom: i think the gentleman from the university of rochester in minneapolis did very well on that. it is all 2020 hindsight. i'm gentle with the inflation east does and someone like paul has a respect for theories they had even though they fought with him

bloomberg's international economic than policy correspondent michael mckee has been paying attention this. we'll get those details of tapering and when it might start? dani: they will talk about -- michael: they will talk about tapering, but they won't give us much in a way of details. jay powell hoping that just before the u.s. close, everyone is focused on earnings again rather than with the fed is going to do. they are not ready to make changes to their policies. they are going to have to make changes to their statement. this is what they said in june. progress on vaccinations has reduced the spread of covid-19 in the u.s.. inflation has risen, largely reflect in transitory factors. then you take a look at what has actually been happening, and the story is not very good. you can see that covid cases are starting to rise significantly again, and inflation is going up after them anticipated, so expect some knowledge went of that in the statement today. the question is, do they really put downside risk on the covid cases? will that slow the economy? interesting to see what they think

it is like a room full of michael mckees. it is going to be interesting. i like that you have done this and not me. you are talking about the quality of the ecb press conference. tom: it is not going to be a snooze fest. jonathan: i hope not. tom keene, jonathan ferro, kailey leinz this morning. lisa back with us on monday. the s a b .1% -- the s&p advancing 0.1%. the ecb decision moments away. this is bloomberg. laura: with the first word news, i'm laura wright. it is almost as if the pandemic and long tariffs between the u.s. and china never happened. the two countries are shifting against each other at the past a space in years. china is buying more of american farm goods and u.s. imports are described as being through the roof, but the trade deficit hasn't shrunk, and there haven't been negotiations over other economic issues. china is pushing back against the world health organization's call for another probe in the coronavirus' origin. the who was to know if the virus could have leaked from a chinese lab. beijing says there's no evidence for that the

we'll go to michael mckee at bloomberg tv. >> chairman, i wanted to ask you a little bit about your tapereline in the sense that you said you want a couple more months of data, and the statement says that the fed is going to evaluate the developments in two markets, in jobs and inflation, in coming meetings. does that suggest that we wouldn't see anything before september or november in your meetings? i know a lot of people on wall street have basically felt you're going to lay out your taper plans at jackson hole. is that the plan or are we not going to see anything until the fall? >> we haven't made any decisions about the timing. and i did not, if i said we're looking at one, a couple more months of data. i'm not meaning to suggest anything about a particular time at which we might taper, because we really have not made that decision. all i'm saying is that we're not at substantial further progress. there's a range of views on what timing will be appropriate, and those views ultimately track back to people's views about the economy and what will happen as we make progress towards our g

with your data, here is mike mckee. michaeldownward surprise, better-than-expected jobless claims numbers. 364,000. that is a decrease of 51,000 from the previous week's revised levels of 415,000. it is much lower than the 388,000 that was forecast. what we also are looking at is continuing claims because we want to know how soon people are coming off these roles. 3,469,000, that is higher. that number is delayed by a week. it is not as good news on an ongoing basis. we do see progress being made. jonathan: s&p 500 futures up for present, advancing .1%. yields where we were. 1.47 on the 10 year. is there any read on this from claims of last couple of weeks going into payrolls tomorrow? michael: not a lot. these are people not working who are getting claims who are no longer getting claims it could be working. it does not tell us necessarily they did get jobs. that is the dichotomy between the number of those who are looking for work and those who are offering work. we will have to wait until tomorrow to see what progress has be

inspected with bloomberg's international and -- international economics and policy correspondent mike mckee. michael: for those who are visual learners, you can see what is happening with the chart i brought along here. when we went into the pandemic, we were seeing inventories head of sales, and they dropped way below as people bought up what there was an companies stopped making things. but that has reversed now. we are starting to see the inventories rise above the sales numbers, and that does suggest that some price pressures are going to start to be relieved as supply bottlenecks wind down. how long that will take, we don't know. this is the bloomberg economist survey for july on what is going to happen with inflation. as you can see, the economists we surveyed this month see inflation in this quarter come of the next quarter, and for the year higher than they did in june. in places, psychology is beginning to set in. this is going to be a very busy week next week on prices. you not only have cpi, you have ppi and import prices. all of those come before jay powell testifies on capitol hill in h

mckee. what do we make of all of this data heading into a fed decision day tomorrow? reporter: -- michael: none of this is really going to influence the fed all that much. they are more interested in the pce price index on thursday. as we look at the numbers from the conference board, we can see that not only did the present situation go up, but the expectations index also rose as americans grew more confident about the economy, and this probably has a lot to do with the labor market reopening in the country as a whole reopening. the present situation goes up to 160 from 159.6, and expectations up to 108 -- actually, it is unchanged at 108.4, because that is revised higher. it looks like people are feeling a lot better about it. the other number we wanted to look at is the inflation expectations, a little bit different than the university of michigan ones. they look at what people think it is going to be for the next year, and it falls to 6.6% from 6.7%. so if anything influences the fed, it might be that. durable goods you did mention up 0.8%. put them together, you've got a good two mon

mckee, bloomberg economic and policy correspondent, joining us from idaho. first of all, the data. what are you expecting will come from powell? michaelhe might get a little bit more specific, but for jay powell, given the data, it is a bit like standing outside, listening to the weatherman tell you the sun is coming out while you are standing in a dilute of rain -- in a deluge of rain. you get these ppi numbers today on a year-over-year basis, up at 7.3%. that is the strongest ever in this data series. the numbers of congress who are going to be questioning jay powell are going to be saying, really? there is no inflation to worry about? powell's argument is that it is the reopening of the economy, the shortages of things held up in the supply chains, and these are things that are going to slowly dissipate as the bank of canada sees happening as well. so powell tells the members of congress that yes, inflation is going to hit. he says inflation has increased notably and will likely remain elevated in coming months before moderating, but goes on to say that the most important thing is inflation expectations. that is what the fed is wat

mckee is our international economics and policy correspondent. the michigan number i think is really interesting. what do you make of that downward revision we are seeing for the consumer? michaelit just shows how lumpy and difficult it is to read the data these days. we got the 0.6% rise in overall retail sales. everybody cheered. then you look and see the main number was revised -- the may number was revised down. core sales up 1.1%, but the 0.7% decline in may was revised down to a -1.4%. this is the problem with retail sales, only about half of the retailers have reported by the time they put this preliminary number out, which is why they call it the advanced number. so we don't get a clean read. that is the trouble for the fed because they do believe the consumer is hanging in, but they can't put enormous faith in it. i believe the number everybody is going to look at today is that inflation expectations from the university of michigan, 4.8%. the fed has been worried about, and fed chair powell made a big deal about inflation expectations, and that they want to keep them anchored. this doesn't look anchored to me. alix: not at all. thanks a lot. really appreciate it. the b