i guess former fed chair ben bernanke knows that. he said guess what? the fed is not raising rates any time soon. our own ashley webster with the details on that and what it means for your ability to invest in this market. what it means for this election cycle and what it means for the future of all of us as we still confront a challenging economic environment. see you back here in two. (announcer vo) you can go straight home. (howard stern on radio) welcome to show business. (announcer vo) or you can hear the rest of howard. bababooey! (announcer vo) sorry, confused neighbors, howard's on. siriusxm. road happy. across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. let us help grow your company's tomorrow- today at business.ny.gov for your retirement, you wanted to celebrate the little t

the next guest says she may take a page book from ben bernanke's playbook. good to see you. i want to get your sense of what you expect from janet yellen friday. i think of the role in this conference. she was not there last year and the euro for was a very academic-performance she gave. >> i do not think she will provide that kind of fixed with it guidance. part of the strategy right now is not to give guidance like that. every meeting is life, and if the data comes in stronger, then the fed will hike. i think that is the kind of framework they are operating under. they are operating under a challenge where i think the case for raising rates the sheer is growing. the unemployment situation is growing. labor markets are healthy. time, the fed does not have much tightening to do in the longer run. i think yellen will speak more about that. when i say ben bernanke's playbook, what i mean is the recent blog post where he talked about declining neutral interest rates. about thealking strength of the dollar and how that impacts monetary policy and the globalized world that we are

what the central banks are doing everything's ben bernanke is trying to rates?investors into riskier assets by making safer assets useless to invest in. he has succeeded in that and so more people will be pushed into stocks to look for you. >> i like you had to look at your tie. >> i have ben bernanke on my tie today. >> ahead of this jobs report tomorrow, i'm looking at what my favorite charts i like to check. it is a chart going back three decades. the unemployment rate in blue against gdpeficit in white spirit that is reversed so the lower unemployment late -- this becauseted in a part donald trump came out and said he wanted spend a lot more to prime the pump with more deficit spending, which of course would be a break from orthodox because most people do not talk about deficit spending especially when the economy is doing ok. but it is interesting how much the deficit is a cyclical phenomenon. we talk about policy. to spend more, spend less or cut spending or raise taxes. but ultimately what drives the deficit is the economic cycle, the business cycle. when

ben bernanke's name has been tossed out a couple of times. he made the excellent point that much of the cold war, when defense spending was 6% to 10% of gdp, defense had a default science -- we do not think of it trying to build our future domestic economy, and americans surely did not want to have to pick winners, but implicitly, we put a lot of money into our long-term economic foundations, which spilled over into the domestic economy. but if defense is only 3% of gdp, you do not have the same magnitude of effect. have to think about science and infrastructure strategies deserve more attention directly focused on them, because they are not getting it from spillover in the defense sector that they were before. that was the theme of the conversation for a while. so we will go to the front. gentleman the third row and then the fifth. >> i am a union officer, and i think the real problem is getting stuff through congress. even when you talk about infrastructure, there was a story today on npr about gas consumption being the highest ever, becaus

twice ben bernanke weighed out desolate out policy -- laid out policy. is she will not say much. she will preserve for options. the fed was to see the economic data before it has to make a decision at its next meeting, september 21. sam fisher and the bill dudley suggest the september meeting is live. yellen might say that but whether or not she suggests the fed is close to an interest rate increase is something we will find out on friday. michael mckee, bloomberg, jackson hole, wyoming. michael mckee, primed and ready at jackson hole. the symposium where we will hear from a host of that officials, dennis lockhart. some big names on the agenda. that spring into the , tapan datta. there is an expectation she might give us clues. there is something you hear from investors. megan greene said we should not expect too much. on a few occasions that we've had clues as to the very near direction of interest rates. tapan: the date should be put to rest. we should not expect singles from wyoming to tell us very much. this'll emphasis of the wyoming gathering is to

, making -- perry has been critical of ben bernanke, making some of the same points that william jennings bryan was making a century ago. >> the legacy of that debate was the federal reserve system. we got off the gold standard eventually in the early 1930's. what people on that side wanted was a more flexible money supply. in hard times, interest rates would go down and more money would be in circulation. in prosperous times, they would go up. it is kind of like the fed today. at the time, it was seen as a great reform. of course, when we get in economic trouble like we're now, people look for a panacea, going back to the gold standard, for example. as an historian, one of the reasons we have been able to avoid serious economic downturn between the great depression and now is because we have had a flexible money supply that has been able to take charge when necessary. >> one of the big issues that william jennings bryan was trying to confront with the silver issue and the gold standard was the great contraction of the american economy. we have lived through a similar contraction recently

this is something that ben bernanke did not countenance nor did her predecessors.se speeches are sending out mixed signals but there is a movement towards being hawkish. u.s. economic recovery is very .uch on solid ground overall data seems supportive of it raising rates. sometimes, the fed can also rein in the exuberance. u.s.quity markets for the are at an all-time high. corporate bonds are doing very well. -- therecial markets seems to be a little bit of a bubble. the way to control that is to have some hawkish talk. real, clear direction. yousef: is it one hike? >> we are in the camp of one december. perhaps in september would be too soon. you back onill get the show and see if your call interior lysis. still to come, more investment secrets revealed about the giants of the tokyo stock market. we will have all of the details ahead for you next. this is bloomberg. ♪ yousef: welcome back. investors in tokyo having to deal with a new well. japan's $1.3 trillion pension fund has become the top owner of honda, mitsubishi, and more than 100 other listed tokyo compani

i blame ben bernanke. before that, jackson hole was for academics. guidance at jackson hole. i would give the most boring speech you can in the world. they don't really know what is going on. tom: market gilbert, i want to congratulate you on your recent columns which really synthesize the cacophony of ideas we are working in. i know you're already working on sunday and monday. what are you focused on? what will you be thinking about getting to the column on monday? mark: i am worried the expectations for fiscal stimulus -- tom: well, yeah. mark: that is gotten out of control. tom: i think that is brilliant. do we need an extended runway at heathrow? definitely need to reset public policy. i think on the west side, you guys all admit that you have third world infrastructure and politics that don't want to give these roads maintenance. i think that is a massive, massive task with a face. how to persuade both houses you need to fund your economy. tom: mark gilbert, thank you very much. francine, this is fun. this is exciting. i will be looking at the j

ben bernanke suggests you follow the data.ssay that did not quite track with what other people are thinking except for the idea that the fed should do a re-think of what is going on. francine: i had a great conversation about that very thing with harrison, the used to be chief of staff of osborne. they looked at this. they look at whether mark carney should look at nominal gdp or inflation target and it was unclear, to him what would work better. michael: it never felt that either would work better, but his if what raised we are doing now is not working, we should try something new. he says the neutral rate has come down so far, he is at about zero with his estimates, that you cannot cut rates if you have another slump low enough to try to get inflation up, so you might as well try something different. the next and we have a slump, you are in trouble otherwise. tom: where is our belief in wage growth right now? michael: it is starting to pick up. that has been an article of faith of the fed that it is going to keep happening.

ben bernanke came out here twice and laid out policy and move the markets. janet yellen will be kicking off your conference. the markets are expecting something from her. do you want this to be a place where the fed is making policy pronouncements for the markets? the chair decides what she will address. i don't know what her remarks are for tomorrow, so we will all stay tuned to what she says. has the conference gotten a little too important to the markets, in terms of short-term movements, as opposed to what it was originally designed for? i think it is a function of the time, a lot of attention on central banks generally, and certainly on the federal reserve. i look forward to a time when that is not the key focus. the purpose of our conference is not a policy platform. that is what the fomc is for. we will continue to keep our focus on issues that we think are important to central banks. that is my goal for the symposium. david: that was esther george, the host of the symposium. we will have more coverage at the economic symposium throughout the day toda

mike: in the past, only ben bernanke has used jackson hole as a springboard to talk about future monetarynet yellen want to do that? we do not know. by tradition, she gives a keynote address, but will the markets push her into doing it? a week from friday, everyone will be glued to their bloomberg terminals and television at 10:00 eastern time. .rancine: thank you michael mckee with insight into the minutes. it seems after their two hawkish statements, already the market repricing. with us. "bloomberg surveillance" is next. inwill talk to ivan chu about 15 minutes. this is what your markets are looking like. markets areseems followinges, with oil after the hawkish comments from the fed officials. gold declining. the one thing you will need to watch for is the pound. that is out 1.306. this is bloomberg. ♪ ♪ francine: anything is possible. even a hike in september, says the hike'sbadudley. will the minutes back him. the u.k. jobs market shows surprising strength. swings.ay it misses analyst estimates. we speak to its ceo. this is "bloomberg surveillance ." i am francine lacqua in london. t

since ben bernanke in 2009, calling for fiscal stimulus.certainly never got it on a global basis. i think that would be the first step. i think that would push back on yield curves globally. always leavest and signs of weakness in credit, what are the equity bulls saying? >> we have seen investment grade from 70 basis points to 77 basis points, a small move, but in the wrong direction. you have the energy sector, anything in the energy sector is drifting wider as oil prices going down. given that were near the all-time highs, keep an eye on the spread and then decide. it the perception that central banks are tapped out or done with their own bond buying that is filtering through to the corporate side? >> the issuance was going down, you're not seeing big sovereign debt issuance, at the same time, qe is taking supply out. the ecb specifically targeted corporate bonds. and a lot of these cases, everyone loads up a balance sheets in anticipation of this, then theretighter, is not as much money on the sidelines as people think. as the supply ke

derek: and the ben bernanke trip to tokyo fueled talk of something bigger. not know if it is from a theological point of view, is there merit in governor kuroda not giving the market what it wants? there has been a lot of speculation that what janet yellen's getting wrong issue follows the market too much. degree but is to a would ultimately have to come down on the side of, there is very little left for the boj to do and therefore they need to work with as much as possible. this reassessment of the monetary stance. i think it could drag on much beyond september. i am not convinced we are going to get something in september. there could be another message from kuroda and perhaps october when they get the updated projections on the economy. the question i have asked them is what are they going to do? they could eat out another chunk ,n terms of qe on jgb purchases going to deeper on negative rates, but in the world we are in today and will not have any dramatic impact. francine: what is this policy review? governor kuroda keeps getting asked about this policy

we are still early the cycle when it comes to normalizing interest rate spend then bernanke -- ben bernankeective, policy sounding agnostic and disinclined to offer guidance. fed watchers will see less benefit and parsing statements and speeches and more from paying close attention to the and coming data, so how does this disappointing productivity data shift the debate within the fmoc. q2 data will be seen as transitory. , their estimate, the tracking estimate of gdp and q3 as almost 4%, so it's going to be a lot better. the fed will say some of the productivity weakness in q2 will bounce back. to be honest, i think they will a more attention to the payrolls than to anything else. there is a big question now, how strong are the payrolls, two great months one after the other, will we get a third? matt: i know you guys change your call for rate hikes. where do you stand now? >> the payroll support our view rate rises are coming to it i think the market is complacent and the election will stop the fed. i don't think that is a consideration. scarlet: you're sticking with september? >> septembe

ben bernanke you to repeatedly remind people this is not going on forever and you have got a lot -- largeff. today, no one be -- would be surprised if they raised it later this year. be the not seem to factor weighing on yields. instead, what needs to change is better growth and inflation such hikes look like the right thing to do, or the global back from you to change. we are in an environment in one month window, we could see easing from the ecb and the boj. it is difficult to get a lot higher interest rate and that needs to change. >> september is looking like a jampacked challenger because that aside, we have all of these events, boj and bank of england, all kinds of stuff is going on. saying that u.s. yields are so effective, it should be important for people to keep an eye on the meetings. >> yes, probably the ecb and the boj are bigger than what the fed decides to do in a september meeting. they may very well hike in september, but it will probably be packaged in a dovish way. it is global drivers that are more critical at this point. technical things like hedging costs, term premi

statement from bank of america zynga jackson hole has been a big market mover only 2010 when ben in bernanked a lot about quantitative easing. what are you expecting? will we get any big signals? if this would be the much more academic event? simon: certainly, we got the agenda overnight, real focused on those negative interest rates. this morning, new monetary framework trying to look at whether the widespread use of inflation targets will go forward. but i think you are right. that the only real market moving elements of the whole day will be janet yellen's speech. the problem she has is the communication of what is very clearly a very divided fmoc. and you have a very hawkish statement, we knew that. and those comments from stanley fischer last weekend, but then much more cautious messages, recent history from the chair herself, but also robert kaplan, and that is for traders in a situation you cannot really know where janet yellen will sit. i think she will look to focus on the labor market, the degree to which she can get wage inflation in her model over the next year to anna: 18 months

if you go back to the way ben bernanke east of -- used to run the fed, he put reliance on tools.ever understood it all. it sound like talking the market into thinking what they wanted it to think. i'm not sure the janet yellen has gone on the road of tools.ng can vacation francine: you have hawkish members. it impacts the dollar. hold on, they do not have a voting. it is dovish members we have to listen to. i don't know who to believe. have had very inconsistent messages in the last 12 months. going into every meeting, there is uncertainty which is very different than yellen said she was going to make things. she wanted to have transparency. it is bad. i don't think she wanted. i think she has been a victim to it this victim of circumstance. she has been impacted by brexit, slowdown in china. they were minded to hike in may and june and then a week jobs .umber and brexit it is difficult to see how they are going to hike in december. they want to stress this is a live meeting. they are worried that a week u.s. dollar creates problems in japan and eurozone. i don't think she wants

ben bernanke has hinted when it comes to any more tools you're relegated to negative rates, as of lateative rates are getting a bad reputation, so that basically leaves qe, but qe doesn't have to be limited as we have learned, to government securities. if you talk to japan, they can purchase a lot of things, if you talk to mr. carney, he's not performing corporates. draghi is currently looking to renovate so the point of this is tell me only at help employment, looking to help growth, looking to raise prices, is going to do so by jumping into the fray and maybe a fray created by speculators and investors alike, shadow boxing the direction of central bankers, so buying corporate securities, i just -- i'm remiss to think that, first of all these entities like mario draghi, like mr. carney, they have to choose which corporate securities to buy. in their choice is already a conflict of interest. just think about brussels. if brussels wanted to make the arrangements that they are supposed to be working on shortly, when brexit triggered with respect with regard to the uk, maybe the corporate

ben bernanke then signaling more qe.are down today, looking like they will finish the week higher. to is the biggest provider of high security mobile phone and bank card chips. it reported an increase in first-half profits. today.up 7% vivendi, the french media company, posted earnings in the second quarter that missed estimates. cost by 300reduce million euros. shares down by 5%. big piece of macro data today, excluding u.k. gdp, japan inflation. consumer prices falling for a fifth consecutive, excluding fresh food. prices falling 0.5%. it is a long way away from the boj target. francine: thank you so much, mark barton. with me this morning for our weekly "brexit: what's next" special show, simon woodruff. thank you for staying with us. politics,lking about brexit, and you said something that struck me. maybe we should give a chance to entrepreneurs. i think you mentioned richard branson. also mentioned elon musk. what is wrong in politics today? we see it a little i guess with the trump phenomenon and brexit here. simo

forme chairman ben bernanke came out. happenn't want it to again. second, if they have to consider what's happening outside the u.s., and on he's basically saying, while they are very achievingsays, to both employment and inflation objectives in the u.s., what's happening exactly s not ideal. demand has been far -- has slowly.owing very the recovery from the global crisis has been rather disappointing. seeing that e play out right now when you look at what's happening across currency in the especially emerging markets. there is a lot of money out of the dollar back into the -- a look, ean, have have a look at the peso. what the markets are seeing, given the gdp report that we saw on friday, we're going to be looking at lower rates for longer. dollar index, there is your massive drop. steady een kept because of the drop in the japanese yen. ave a look at 10 year yields 1. .5% on the u.s. 10 year. on that note here, from he said, don't underestimate the probability that the fed can rates.y raise we're looking at three more meetings. have a look at the

the secretary of the treasury and ben bernanke of the federal reserve carved out a strategy of support. from bailing out subprime mortgage lenders and rescuing the market itself with a massive troubled asset relief program, bush deserves credit for taking some serious action. it was a remarkable achievement and probably saved the world's economy and when they failed to rescue lehman brothers, that was also thanks to bush. i haven't said much about his personal life. he was always an early riser and got up early in the morning, still good does he goes to bed shortly before 10, he's a physical fitness buff and exercise for two hours a day in the white house jim but he was in a detail man. he wrote short descriptions and brief memos. he and laura were close and they kept entertaining to the minimum. laura was a major source for the president and took her responsibility seriously and did not seek the limelight. she usually accompanied bush on his trips abroad and provided great comfort for him. paul's are being, the long serving senator from maryland, as you know a staunch democrat said he

then -- ben bernanke's name has been tossed out a couple of times. he made the excellent point that much of the cold for -- cold war, when defense spending was 6% to 10% of gdp, defense had a default science -- we do not think of it trying to build our future domestic economy, and americans surely to pickwant to have winners, but implicitly, we put a lot of money into our long-term economic foundations, which spilled -- spilled over into the domestic economy. but if defense is only 3% of gdp, you do not have the same magnitude of effect. have to think about science and infrastructure strategies deserve more attention directly focused on them, because they are not getting it from spillover in the defense sector that they were before. was the theme of the conversation for a while. so we will go to the front. germany the third row and then the fifth. i am a union officer, and i think the real problem is getting stuff through congress. even when you talk about infrastructure, there was a gasy today on npr about consumption being the highest ever because

mind, would the past decade jackson hole has only matter to the markets wants and that was when ben bernanke indicated more qe could would yellen teske. would yellen -- would yellen --? >> i am not so sure. -- she did at yellen not use exit hole to deliver a strong message. i'm not sure what she wants to do. -- butl probably discuss more the longer term outlook in terms of monetary policy framework. which really is -- jackson hole. can see how much the u.s. treasury curve has moved. we have seen yields come down on the backend. slightlyeen it move up . at the short end, what do you expect? your are advocating for a go to flat -- you are advocating for a go to flat. vincent: we have seen a lot of flooding already. that's a lot of flattening already. -- a lot of flattening already. the long end, i think, will be kept in check, because if the fed is more hawkish, risk asset will only be less buoyant. it depends on international conditions in the bond market. yields in japan and europe remain very low, then that tends to protect the long end of the curve. manus: vincent, i'm going to blow this u

there was an interesting article by ben bernanke on his blog the other week, pointing to the idea that with the slow rate of productivity, the uncertainty about the future, the best bet to make, perhaps, was to keep interest rates unchanged rather than a hawkish position. yellen, i suspect, will be lesch less hawkish. there is still time to wait and see. hsbc says they won't raise rates until next year, rather than this year. manus: it's interesting that fischer talks about the drag of the strong dollar, dissipating. i find that really curious, that refer to the dollar in terms of its drag. i cut up with -- she was this a vociferous. the dollar is quite prescient. >> the dollar is stronger than the federal reserve expected. nothing to do with monetary policy, everything with the rest of the world. a global policy, currency war story. will was that the rest of the world was exporting its deflation to the u.s. as that happened there was stronger dollar, you ended up with lower growth, lower inflation, and that meant that the fed's own forecast hasn't proved to be correct. the fed had a w

ben bernanke did a couple of times, but jackson hole is not a place you traditionally layout monetary- will she be forced to in the markets? she said this was not the right occasion, and they have the jobs report coming out a week after she speaks, so maybe she wants to hold her fire, which will only frustrate wall street more. sure janet yellen is watching and saying that the markets have no clue, she has to make a statement. >> the problem i have is that the data is not clear. there are some good numbers and not so good numbers. francine: what are the not so good numbers? i mean more widely, particularly, the world economy is in a questionable place. that is what is making heard decision difficult. the other thing is they are starting the rate so close to the floor that there is a risk. it is all well to say that you take a punch bowl away, but if you get your timing wrong, you have to cut the rates, but they cannot do that. on the sideerring of waiting until they are sure. tom: a former fed governor wrote a brilliant short book. is how alanat greenspan actually operated. do we know

we had ben bernanke come over from the u.s. to tokyo and there was a lot of chatter about helicopter money around that. we have come to the point where the markets correctly realize that the whole abenomics optimism has unraveled completely. the five-year inflation went from slightly negative when he came to power, shot up to 2% and is down more now than ever. tom: i think that is a great insight. let's go to the chart. we are talking some first and second derivative brutality. this is a zoom in of the corroded chart we have been doing for now months -- of the kuroda chart we have been doing for now months. yen does a 100 print on mean for the japanese economy? it has got to have an effect really across all of their gdp calculation. a valuation perspective, i would argue that we are actually just around fair value. i do not think the level itself has a hugely such damaging impact on real gdp growth. but of course you are right in saying that part of the story with the devaluation up to one tourism has surged in japan and there

ben bernanke did that long ago. in their view, they have done all they can. the big problem in terms of monetary policy, not just with the fed but the doj and bank of that they simply believe the old model of interest rates and elevating asset prices will eventually flow into the real economy. to be fair, 2% gdp level over the past several years is not attractive, but certainly is above zero. similarly, in terms of european countries. so it has salvaged a semblance of growth. would argue, and this becomes subjective as opposed to objective, because there is no real trial in terms of a scientific method that suggests low or negative interest rates are a hindrance to growth as opposed to a positive. they will continue to believe in this. that is part of the problem. the other part is fiscal responsibility has been advocated by most governments, and we need some good old keynesian stimulus. i do want to make clear i did not mean to suggest janet yellen and anyone else in the fed was in favor of negative interest rates. i think they have made fairly clear the fed

>> ron paul has talked about the federal reserve and even governor perry has been critical of ben bernanke. so to the point of what he was talking about a century ago. >> the gold and silver standard, the legacy of that debate was among other things a federal reserve system, also getting off the gold standard eventualitily, but what bride withdrawn really wanted and those on his side was a more flexible money supply. they wanted in hard times interest rates to be able to go down and more money in circulation, prosperous times, they were happy to have it go up, the kind of thing the fed does today, actually. at the time now, of course we get into economic trouble like we are now, people look for panaceas, you might say, going back to the gold standard, for example. i think in many ways one of the ways we've been able to avoid economic downturns is because we've had a flexible money supply and the fed has been ability to take charge. one of the big issues was the great contraction of the major economy. we've lived through a similar contraction, and so i think it's not surprising that some of

even governor perry has been critical of ben bernanke making some pretty sharp comments about him. to the caller's point and to what william jennings bryan was talking about a century ago. >> the gold and silver standard, the legacy of of that debate i think was, among other things, the federal reserve system. it was also getting off the gold standard eventually in the early 1930s. but what bryan really wanted and what those on his side in the debate wanted was a more flexible money supply. they wanted in hard times interest rates to go down, more money in circulation. in prosperous times they were happy to have them go up. the kind of thing the fed does today actually. at the time a lot of america was of great reform. today people look for panaceas, going back to the gold standard, for example. but as a historian i think in many ways one reason we've avoided serious economic todow downturns and the great depression is because the fed has been able to take charge when necessary. will might have a different point of view. >> i think one of the big issues bryan was trying to confront

so he was part of the triumvirate of hank paulson, ben bernanke and the new york fed president, tim geithnerthat triumvirate is the one that really charted out the course , soresponding to the crisis there was an unusual element of continuity in the stewardship of the response to the crisis. it has to be regarded as one of the most effective government responses in the history of economic policymaking. to underscore that, josh, in his typically modest has not stated as starkly as i think it was. i think you made a key point about one president at a time. in this case, with the economic crisis and not a security crisis, our country truly looked into the abyss of what likely hadd have been a depression that transition not been handled inthe way it was outlined term of the bush administration and obama administration coming in. it was seamless. not have had full agreement on every issue, but it was absolutely crucial at the time to avoid, in my judgment, what likely would have been pressure to restore stability and order. for that matter, the world economy was a beneficiary of that. i do think

i just would like to see the fmoc listen to ben bernanke and rates would be higher already. the fact of the matter they're not. it's important to listen to what they have to say because they're confusing themselves and talking them out of a situation where they're told by the american public and by their statute that they should be letting rates rise and they have not allowed that to happen. as far as the employment cost index, that's a pretty tight measure on what's being paid out. but again, trying to measure the productivity on the service index i think i need to call into question the people that are doing the measuring. it's not that simple a game. >> nobody said transparency wasn't messy. it certainly has become that with the fed. thank you. appreciate it. >> thank you. >> welcome back, rick. see you later. 48 minutes left in the trading session here. the dow down 5. it was higher earlier and the s&p. down a fraction. the nasdaq holding on to the gains today. >>> the travel nightmare for delta airlines passengers still not over. a leading aviation expert discusses tech

perspective, the jackson hole event has not been a market moving event since two thousand 10 when ben bernanketive 2.sing t the question is are they going to give a more concrete assessment of the possibility of a september rate hike? more importantly what is their assessment of the tools they have left to ignite growth? do they think they are out of ammunition? are they thinking of an additional round of quantitative easing? where are they in the growth story? and your chart showing the inflation expectations versus the five year -- the market price versus where the fed was, this differential cannot last. it is a problem the fed really has to address in order to support credibility. alix: not really expecting the fed to do much of anything. what does that mean for a dollar yen that really needs that weaker yen to move? guest: one of the problems with the dollar yen story is when you fed speak saying we want to normalize but and make gradual path, what that means is the yield curve is going to stay flat for a long time. the desperation and retail to step into the space to start spending money,

. >> ben bernanke and janet yellen have both gone before congress and begged for them to take the ball and run with it and provide an alternative form of stimulus. or provide a regulatory framework in which businesses can grow more freely. they're not getting any help, so they're the only game in town. >> and i hear what you're saying. the fed may turn out to be right. they may be right. they may be crazy, but it just might be a lunatic you're looking for. because we don't know. to your point, we have never been here before. >> no, not since the '30s. >> with change and productivity, and ultimately, bill, including the smartest minds in the world are guessing because nobody knows how it's going to go. in the past when the bond market got frustrated by the fed, to quote another song, they went their own way, right? and they were the bond vigilantes. where is the bond market now? is it an impotent bond market? >> it's been killed. >> well, let me address your point about the fed guessing. and the fed doesn't like to guess. the fed likes to model and to use as ron has suggested old models

ben bernanke, 2007, housing crisis was contained. that's one of a multitude.eir forecasting is terrible. >> everybody makes mistakes. we are not saying that humans don't make mistakes. what we're saying is knowing they do why do we give them so much latitude. >> the whole thing if you listen, i listened to every word carney said in the press conference, he wanted to be preemptive to get ahead. he wanted to have preventative medicine but that's wrong because they want to compare this to lehman. this is not lehman. first of all, interest rates are 50 basis points. >> post-brexit i don't know what he's being preemptive about. there's still many initiations to come but the issues aren't going to be changed by buying 10 billion in corporates, 60 billion in quantitative easing and i doubt if anything will change what 25 basis points lower, but the message of all that is, central bankers think they have the world under control and they don't. >> no. they don't want to let the markets react and tell them. how about a market reaction function rather than the fed reacti

ben bernanke he came out here twice and laid out policy and moved the market. yellen will be kicking off your conference. the markets are expecting something from her. do you want this to be a place where the fed is making policy pronouncements? esther: the chair decides what she will address. i don't know what her remarks are for tomorrow. we will all be staying tuned. mike: has the conference gotten a little too important to the markets in terms of short-term movement? esther: this is a function of the time we are in. i look forward to a time when that is not the key focus. the purpose of our conference here is not a policy platform. that is what the fomc is for. we will continue to keep our focus on issues we think are important to central banks. that was our morning must watch with esther george. hear it from every single central banker. they wanted so bad to be boring. it just is not boring. participants, it has been dead boring, but certainly, we anticipate something come friday. should it be all about that? she comes along and delivers a speech and it mo

injections, revisit all of that work that janet yellen did as she headed the subcommittee under ben bernankebe? william: absolutely, that is one of the powerful tools that that has, guarding the markets where they are going. given these structural headwinds, they are saying, don't expect a radical ramp-up in rates. that is the message edition. forcing, here are the conditions that let us raise rates. here are the conditions that are straining us. be clear and what you are looking at. don't just say you are data dependent. .ive us a sense of analytics what are the analytics behind the data dependency and how is it that you are going to move? alix: this brings up what will happen in the next recession. with a largerut asset scale purchase plan with rates still low, we can mitigate any kind of recession risk in most circumstances. is that true? william: the man who wrote the paper, i must say, he is one of the best model drivers out there. what he did was simulate a model conditions,rrent but to wear rates were slightly higher. if we had the room to move, we could help the economy recover. the

jonathan: ben bernanke wrote about this earlier this week.lled lower. is that the story right now? the story they are emphasizing. if you're growth is less than you think it is, you're getting close to the full capacity faster than you think you are. wherever your equilibrium rate is, you are going to get there faster. that is lost in the discussion. alix: it's hard for the fed to know what that rate actually is? it's hard for them to compare with the rate is now as compared to what it's going to be. i would contrast that with the other rule. you can argue that inflation is observable. the unemployment rate is observable. you know exactly what you are doing. what fed officials talk about in a dynamicate context, they should give a confidence interval. how wrong it might they be? it is a mile wide. alix: do we want more information from the fed? it's communication they really don't know. alix: we've got to leave it there. thank you so much for coming in. david: coming up at the top of the next hour, it's going to be bloomberg markets. great gu

former fed chair ben bernanke says fed watchers should focus on economic data and less on commentarycy makers. he says the nid now sees rate normalization playing out over a longer time frame than previously thought. >>> and gap posting a smaller than expected drop in quarterly sales but july comps did come in below street estimates. results have been popularly weak at gap's banana republic unit. shares down 3.5% in the premarket. >>> and opec is planning to hold informal talks next month amid recent weakness in oil prices. those talks will take place on the sidelines of an international energy forum event that's taking place in algeria. there have been mentions this week of a possible output freeze by the cartel. but so far nothing official has materialized. >>> we're psyched for our next guest here. he is known for az acting, rapping, and hosting "america's got talent." and when nick cannon is not performing, he's running incredible entertainment as well as being the chief creative officer of radio shack. but beyond business and the stage, he's also very involved in politics. and t

and if i'm janet or ben bernanke and thinking what should i be doing right now, i can't say that i'mdent that this economy is on a strong trajectory. so that's the reason that they haven't done it. but unfortunately given that posture from the past, we're sitting in a position right now where we should not be at this point in the business cycle. >> we got to go, i guess. the only thing i was going to ask is is it really a 4.9% job market or is it a 60% participation rate job market? >> right. yeah. i think that the unemployment rate overstates the strength of the labor market. i'd say we're closer to the high five percentage range. the key number is to look at the employment rate. the employment rate is 59.7%. that's way down from where it should be. even if we correct for demographics. >> i know. >> so you know we're not quite there. >> i agree. all right. thank you. i thought you might say that. thanks, ed. >> thank you, joe. good to talk with you. >>> coming up when we return, betting on europe. we'll tell you what david herro is finding opportunity abroad. next. welcome to opport

>> joe says maybe muskovitz can borrow bernanke's helicopter. >> i don't think ben has a helicopter.nymore. he left it -- that was property of the fed. he left it for yellin who's been using the helicopter -- >> maybe the helicopter we used to drop the cash out, maybe he can use that one. >> you guys. it is funny, the political divisions, though. isn't it weird that the krugmans, the left, they all want zero interest rates, and then there's me and other people that -- that seems to be -- how are interest rates somehow a political, you know, litmus test? because they are. so many things are a litmus test. i don't know who to blame all this division on. i don't know. i really don't, the media. the divider in chief that we have in -- i don't know. anyway. still to come, tennis goes high-tech. the u.s. open will be featuring smart courts for players. a closer look at the technology is straight ahead. check out the futures at this hour. (speaking japanese) oh watson, youjase isery good. thk you. (speing japane) exactl i can dersnd nua ntext d idiom sen lanagesapane) top companies all over

it is clear that ben bernanke has used communication as his tool and she does not want to, or it is more complicated than it used to be? steven: she does not want to promise a raked hike -- rate hike but wants to signal that september is live. numbers are on payrolls because you you look at previous minutes, the fed has been nervous about a deterioration in payrolls. the data is coming out the other way around. if you look at the three-month outreach on payrolls, the last meeting was a hundred 50,000. we think when they meet in september it will have risen to 250,000. that is a big turnaround for the fed because the bottom line here is they are biased toward tightening. the reason they would not tighten as if they saw a downside risk to the u.s. economy or global concerns. without those we think they go ahead and move. tom: a go to the surveillance wall as we show the bloomberg terminal, and it is nothing more than strong dollar. for those of you viewing at home , dollars strength, we have had that move. can janet yellen move the dollar on friday? you have done a lot of dollars study. wh