caroline: the new york fed president bill dudley.h the trade war appearing to take a new turn every day, emerging-market investors are getting more cautious. and, together again. 10 years after splitting, tobacco giants phillip morris are in talks to reunite. joe: the story of the day, bill dudley coming out of retirement to make headlines. the former new york fed president: on the fomc -- fomc tot calling on the resist trump calling for trade cuts. -- tote, a choice to can continue enabling the administration down a path, or send a signal that the administration will bear the risks, including of losing the election. fed spokeswoman shel smith saying the policy decisions are guarded solely by the mandates for price stability and maximum employment. bloombergscuss is opinion columnist carl smith in bloomberg -- in washington, d.c. and, someone from employee america in new york. carl, what was your first reaction? carl: i was in shock. it was a little bit unbelievable. he said that perhaps they should try to get rid of trump because tr

bill dudley. comments through widespread criticism. a spokeswoman for the central bank saying political considerations play absolutely no role in decision-making. an opportunity to restart brexit talks with the eu after prime to boris johnson's meetings last week with his german and french counterparts. theyofficial told us intend to relax their language on the need for the irish backstop. bank is concerned it has tax research -- tax returns from the house democrats related to financial information on president trump and his family. but? ? exactly whose returns are they it is still a mystery. a younger brother of saudi arabia's crown prince is in washington this week. the visit comes days after trump signals his openness to talks with iran. while the treatment have been planned well in advance, analyst say there is no doubt that will be on the agenda now. secretary of state mike pompeo is set to meet the princes afternoon. set presidentnaro macron must apologize for so-called insults before he wil

. ♪ anna: dudley's bombshell. former fed official draws criticism after suggesting the central bank hold back on stimulus that would help donald trump's trade policy and reelection. the president's deadline. italy's political leaders meet today seeking agreements on new government. failure could mean a new elections as soon as november. bp exits alaska. they sell their business in the state for $5.6 billion saying it is no longer a competitive investment. good morning. matt: good morning. we are looking at bund yields down to -70 basis points right now. take a look at the three-day trade. yields continue to follow how lower -- fall lower and lower. for the most part, futures are pointing to a negative open right now. we have futures down just marginally on dax futures and ftse futures. futuresowing -- cac falling more significantly. anna: we look at europe versus the u.s.. we will see how that levels itself out. i have a mixed picture coming through in the asian session. a bit weaker over in the chinese markets. t

matt: dudley is a bombshell. the former fed official draws criticism after suggesting the central bank hold back on stimulus to thwart donald trump's reelection bid. deadline day in rome, the president gets five-star and the -- and givesrty five-star at the democratic party if unchecked -- a final chance. and bp exits alaska to the tune of $5.6 billion, saying it is no longer competitive. welcome to "bloomberg surveillance." i am in for francine lacqua. let's check in on the markets and get a quick look at what is going on. yield see an all-new low on the u.s. 30 year bond. the long bond came down to one point -- 1.90%. it has bounced back, but still, that paper is weighing on the yield. you can see that across the curve. brent crude is rising. the nymex wti is as well. it has been a rally for oil as as u.s. stockpiles came up better than anticipated. and gold, coming off of its highs just a little bit but very little change to the bottom. 1541.64 as u.s. 10 year yields are negative, making gold more attractive.

dudley says the fed shouldn't enable donald trump. >> i agree with that first of all, if you look at what is happening to manufacturing sector, all the uncertainty there derives from trump policy and the concerns about supply chains and where you locate your production facilities and so on have nothing to do with federal reserve policy and if they were to cut by 50 basis points, which i do not believe they will, it wouldn't have any effect whatsoever on that uncertainty so, why would you spend a quarter point or 50 basis points when you don't have to given that consumption is still running very strong. one of you mentioned earlier that consumer confidence peaks just before recession. of course that's the case because over 70% of our economy driven by consumption. 11% is driven by manufacturing i don't think the fed should move i don't think they should do anything at all in september if they do, 50 basis points is just a suggestion. i think it would scare the hell out of the market. it would indicate that we're really deeply worried about the economy. >> dudley makes these arguments,

dudley was new york fed president until last year.p the fed could encouraging trump to escalate the trade war further. engineer haser been released on a $2 million bail after pleading not guilty to charges of stealing driverless vehicle technology from alphabets waymo unit. the indictment adds a new criminal charges of the saga of trade secret theft against uber. surrendered to the authorities and faces up to 10 years in prison if convicted. >> the fbi will not tolerate the theft of trade secrets. i want to be clear on what we consider trade secrets. these are the crown jewels of companies. ritika: the brazilian president says he will only accept g7 aid to fight the worst ever fires in the amazon if you first wins an apology from emmanuel macron. the two have been feuding since he accused both in our about lying about his commitment to fight climate change. bolsonaro's chief of staff says he is in no position to lecture brazil. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analys

well the clash between the fed and president trump escalating as ex-fed official bill dudley urges the central bank not to bail out an administration that keeps making in his words "bad choices" on trade policy in an op-ed, he says in part odd there's even an argue am that the election itself falls within the fed's perview. after all, trump's relationship arguably presents a threat to the u.s. and global economy to the fed's independence and its ability to achieve its employment and inflation objectives. fed officials should consider how their decisions will effect the political outcome in 2020. steve, that shocked even me and i thought i'd seen it all from the fed. what did you make of this? >> obviously his mindset is in 2016 when the fbi, cia, brennan and others try to manipulate the 2016 election that's why we got to get that report out by the way from attorney general barr and others on how they try to manipulate that election, and they're trying to do the same thing. he wants the fed to do the same thing. absolutely outrageous, un contusion all he should be sent to north i'm not

. >> he's back from jackson hole, back from a little fishing you missed the dudley op-ed. >> i didn't miss it. >> you couldn't miss it. >> you were at ground zero for that >> in an undisclosed location i read the dudley op-ed. >> you missed your opportunity to talk about it on this program. tell me where we're at. >> i think bill had two points one was that the fed should not enable the tariffs i think there's an argument around that. >> yeah, but you think he went too far? >> on the second point, which is that the fed should work to have an influence on the election, i think he's as off base as any former or current fed official can be, and you know, i hope you guys ran this, but here's like the fed's statement -- >> we ran it >> disavowed it almost immediately. >> we had richard fisher on. >> dpieded solely by its con depression that will mandate to main -- >> richard, look, he agreed with some of what dudley was saying but thought he went too far. >> right i think -- look, i think twhwhas the right way to say it? emotions are running high. after the president essentially says the f

dudley is saying the bankers' judgment should replace the will of the voter.to his actions at the fed in september 2012. did william dudley help evening near bawmple getting re-elected by an some fire hydrant of fed help? in september 2012, the fed said yes, qe3. we'll keep rates exceptionally low for three or four more years. >> he needs to be questioned more on this. liz: i think mitt romney should ask about this. >> when you look at the fed trying to manipulate short-term economic outlook. that's sometimes stlets politicians off the hook for their bad decisions. but the compounded effect of that is slower growth. the fed injected trillions of dollars into two sectors they wanted to bolster up it has aloud our politicians to kick the can to future generations. liz: one economist said the former fed official, please be quite, even the fed was quick to say no to dudley. political considerations play no role. why is dudley oh panicked about political pressure? it has been going on at the fed since 1913. they devalue the dollar, finance wars. why is he having th

reading thee, dudley essay and digesting it for us.rk fed. coming up at 10:00, a timely conversation, i doubt i will talk china trade war with mario but there is a lot of talk about on value, investing. we will touch on media and just possibly, we will look at the fall season of cbs. this is bloomberg. ♪ viviana: you are watching "bloomberg surveillance," with the bloomberg business flash/ max customer has sued boeing. order forto cancel an 35 planes. it wants $115 million in damages. no response from boeing. deutsche bank cutting thousands of jobs around the world but hiring in india. investment.ing more the indian operation hiring 140 people, boosting the retail banking and wealth management operation. described as a landmark figure in an automotive history, the grandson of the designer of the volkswagen beetle has died. the world's into largest automaker and was influential in the design of iconic cars such as the porsche 911. he was 82. that is the bloomberg business flash. that is all 356c, you need to know. his aesthetic was abso

it is hard to argue right now that what dudley says is plausibly true.of being true. i do not think that is on the table. we are in a global slowdown. why would you think that china to respond with stimulus to a global slowdown what hurt? you may worry about people's risk behavior, but the central thing is you stop the economy changing. alix: great to get your perspective. danny blanchflower of dartmouth. still with us on set is art hogan of national securities. what did you make of that, that it could do more harm than good? the other angle is even if they cut five times it will not do any good. art: i think there is some truth in both of those. looking at how the fed feel sitting around the table. in terms of economic theory and economic policy, everyone sitting around the committee as opposed to tariffs. whether you say that out loud and keep that yourself and focus on your dual mandate, there is no one on federal reserve saying i think a great way to your a --de is the use of tariffs to negotiate trade is the use of tariffs. if we look at financial c

. >>> later, diving into former new york fed president dudley's controversial op-ed on fed policy, aormer new york fed official who worked with dudley tells us why the central bank should resist the urge to get political. as we head to break, here's a check on the data tracker today. second reading of q-2 gdp at 2% matching expectations but down from the first reading initial jobless claims did rise by 4,000 last week but still a pretty historically low. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country. - when i see obstacles, i create opportunities. (soft music) - when i see adversity, i find a way. - when i hear never, i say now. - [announcer] southern new hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. (cheering) - so when i face barriers, i can break through. - [announcer] breakthrough at snhu.edu. for farmers here, this is ou

michael, this is a very interesting piece because, in a sense, bill dudley is putting a question out there that wasn't out there. we had the fed being called upon by president trump to lower rates, but the fed wasn't suggesting that it mitigates any problems that might come up in the economy from the trade war, was it? michael: the fed has been talking about mitigating the damages from the trade war because that is what they are supposed to do. the question dudley raises is should the fed not do that because they want donald trump to know it is his mistake hurting the economy. saidowell in jackson hole that setting trade policy is the business of congress and the administration, not that of the fed. our assignment is to use monetary policy to foster our statutory goals, which are maximum employment and stable prices. powell and the fed are going to stay on their course and stay out of politics because there's no way for them to win this battle. if we put them in the middle of the political fray, they wouldn't necessarily get much support from democrats, who do want something done abo

the president to escalate trade tensions and in an unprecedented move for a former fed official, dudleyral bank could send a clear signal it quote won't bailout the administration and that president trump will quote own the consequences of his actions including the risk of losing the 2020 election so that story gaining a huge amount of traction yesterday twitter in an up roar reacting to dudley's comments and the unprecedented statement from the fed spokesperson in reaction to his op-ed. let's take a look at the u.s. yield curve. the u.s. yield curve inversion deepened with the ten year rate at the lowest level against the two year since the financial crisis meanwhile, the 30 year yield hit a fresh record low and is now further below the three month bill as i mentioned in the open, european markets and the weakness we have seen today come through. a lot of this has come back on the back of the warning signal we got yesterday driving losses for wall street. well let's get back to our conversation with the chief economist. let's pick up there on the comments from dudley as i just mentione

and i think the point is a very, very important one, and i -- bill dudley is a friend.d many things he has done over time, but here i think he was way off base and i think the least he owes is to make clear that this was entirely his own thinking and that it bears no resemblance to his knowledge or he has no basis for believing that any of the kinds of things he is thinking about are being considered or debated or are anywhere in the fed's reflection process >> mr. summers, as for the fed itself, by the way, worth pointing out a body that you were close to potentially running, people may forget that you were almost fed chairman, what do you think the response should be from chairman powell right now, a, to the trade war in terms of how he thinks about data dependency, and b, to the constant attacks he is receiving via twitter from the president on an almost daily basis >> i think jay is doing the only thing he can do, which is to say that we're going to make the best decisions we can on the economy and we are going to tune out the politics and tune out the political noi

dudley's bloomberg -- dudley is a berkeley phd -- the op-ed is the worst case of real donald trump derangements too remember the uproar in 1964. it's seven days in may at the federal reserve. has the world gone mad? be thedley's op-ed might least responsible statement by a former financial official in decades. what were the parts of what bill dudley said that mattered, away from 2020? andrew: the most important part of that statement is the idea that the fed needs to think about when it is providing accommodation, is it creating a moral hazard by providing that? this is something we have heard the ecb think a lot about, usually in the context of fiscal stimulus provided by governments. if you provide more monetary stimulus, does that make it easier for the government to provide less fiscal stimulus which is the more powerful tool? that is a well-known problem in central banking that goes back decades, so it is not surprising to see a highlighting of that trade-off. a central bank should be actively participating in democratic politics, that is where people have some issues and face criticism.

bill dudley.d not cut interest rates because if it did, that would help the president in 2020. that's a direct political statement from someone who should not be making political statements. what's your take on this? >> i think this is dangerous ground to tread on here. dangerous waters, if you will. the central bank, you know, what is the central bank? what should it do, stuart? i think it should be limited to providing liquidity when you do have a liquidity crisis. so a lender of last resort. that's the role the fed played from say mid 2007 through 2008. beyond that, we venture into the line of the political. this is just another example of it. but you can put things, you know, like quantitative easing, that has a fiscal sense to it, a political sense to it. i think that is what central banking has gone too far, when they try to move from just providing liquidity to trying to steer the economy and now the political situation. i find that dangerous. stuart: okay. thanks very much, jeffrey. the pr

fed should they be doing that, and if so, how does that play into the global outlook >> that's the dudley >> yes. >> former new york fed president causing quite a stir, saying to the fed yesterday don't enable the trade war. >> we're starting to see companies more and more reacting to this global trade uncertainty. we heard from both autodesk and hp enterprise. we're going to hear from the ceos later in the program. both talking about the uncertainty not so much from how it affected the quarter they reported but how it's affecting the outlook. how do you expect that kind of i guess fear about what might happen to affect these markets going forward? >> you're quite right. indeed we expect this increase in uncertainty to cap equities, and as a result we have decided to modestly derisk our portfolios the uncertainty stemming from disruption to supply chains and also to investment plans of ceos and cfos, but it's a very modest reduction in risk. we are neutral u.s. equities and are underweight in expressed development countries outside the u.s. as well as emerging equities which are more the

-- former fed president bill dudley.rg. ♪ viviana: this is "bloomberg daybreak." papa john's has named a fast food executive as its new ceo. arby's president rob lynch will replace steve ritchie, the biggest shakeup since activist shareholder starboard valley set its sights on the pizza company. a ruling in an oklahoma court case on opioids. johnson & johnson must pay 572 million dollars for helping fuel the crisis. that wasn't as high as feared. lawyers for state and local government see it as a green light for more lawsuits. the ruling affirmed the high-risk strategy of using public nuisance laws to punish predatory drug marketing. executive carlos ghosn reportedly ran a parallel business as a technology investor in silicon valley. according to "the wall street journal," he used billions of dollars from the nissan business partner in oman. he wasar in japan, arrested in a wide-ranging financial crimes investigation. ghosn is denying any wrongdoing. that is your bloomberg business flash. alix: thank you so much. as we d

dudley thinks is doing such harm to the u.s. economy >> well, thanks so much for quoting him. i read him very closely because he comes closest to what i can find as a reliable report of government thinking, chinese government thinking. for example, as president trump has been saying, there had been phone calls from the chinese to restart the trade talks, he says that hasn't happened at all. i think that the dudley message is an important one because you have to assume that it reflects pretty clely what j lclosely wh is thinking and his three reasons why one should be worried about this is that if you actually called the president out, first of all, you'd regain the independence of the fed and right now there is a real plolitical fight between te fed president and the president of the united states even if the fed president doesn't want to say that the last quarter of a percent cut wouldn't have been necessary if it had not been for the president's trade policies second part, you want to deescalate the trade war and he feels that another half point cut would props enable the pr

dudley in any other news day i think dudley should have been the focus from start to finish but whenou have rates and when you have headlines on trade that kind of gets lost in the shuffle and been covering it quite well but that to me is something spectacular as a former fed official talking in those terms. that should be a knee jerk reaction to the marketplace. how divisive this has become and almost trump against the fed but realize boit realize both of them on the same side of the u.s. >> same objectives it is getting chatter and we'll continue to talk about it. also, hard to find a lot of people siding with dudley on this as far as i could tell in this particular point he made. >> out in the open. >> yeah. >> it was odd to me to go on the record and say this. this seems like a little bit of suicide on a personality or a character assessment. >> contributes to the debate of the politicization of the fed. >> correct you want to think it's an independent body, thinks for itself and goes on just what's best for economic conditions and it has a totally different agenda but the feel f

let's come back to united states where there is some controversy brewing about a post by bill dudleyho says -- officials could status was a the central bank will not bailout an administration that keeps making bad choices on trade policy, making it abundantly clear trump will own the consequences of his actions. we have for -- we have a fair number of commentaries saying this was over the line in the fed cannot be taken into account. how is this received in washington? isaac: it is important to say this. this is not normal. this is abnormal to have a headcted head -- former call for using the monetary process is a political tool. we have entered another new phase and uncharted waters. it has been roundly rejected and the only thing i can come up with as a justification for this op-ed is perhaps dudley is arguing through some sort of modified socratic method that politicizing the federal reserve and the monetary policy function can cut both ways politically, which underlies its absolute absurdity in our current structure. david: at the same time, abnormal without a doubt, but at the s

is this just bill dudley?ite an op-ed without passing it to his colleagues, and i'm surprised no one stopped him. this plays into the trump conspiracy stories that there is agreement within the top of the house and the fed that trump has to be stopped. that will be dangerous. tom: how does the academic richard clarida to reassert independence? what does the professor from columbia do? david: very easy. the fed has to make a much stronger statement than it did. it made a statement about being a political but it has to distance itself in no uncertain terms from dudley, who made such a serious misstep he should be completely outside the circle of central bankers. must have been positioning for a job in the next administration, and we need a very strong statement from the fed that this is not the way to think about this, or we will seriously jeopardize the independence of that institution. that will be a loss of unimaginable proportions. nejra: have these developments made it difficult for the fed to except to do

shery: do your point about the fed mandate, bill dudley pushes back on that. he says the goal of monetary policy is to achieve the best economic outcome. he says the fed should consider how concision -- how decisions will affect the political outcome in 2020. that is going pretty far. no wonder we are getting pushback. michael: he is basically telling the fed they should take a political position. the fed has avoided that over the years. the farthest they have gone is to say we could use fiscal stimulus to the economy in slow periods. they do not say what kind. they say that is up to congress. the one time that happened was alan greenspan saying maybe we should have a tax cut in 2001, a stance he ended up regretting. kevin: thanks to bloombergs michael mckee for breaking that down. now for the latest on where trade talks stand. let'we miss you in washington, . what is the latest on the trade front? sarah: the latest we are reporting is a question left unanswered over the weekend at the g7. how is china reacting to trump's back-and-forth on whether he is taking

it is a little bit akin to what dudley was saying yesterday in that opinion piece. not exactly, but people are throwing out the idea of a non-trump presidency the next time around. tom: in fact, that is something we sent out to our clients yesterday. there's actually quite a lot of constituents cheering for a market crash. democrats kind of want that. short-sellers kind of want that. europe is cheering for it, and a strange way. anybody who hates trump wants the market to crash. the reality is that an equity crash, which is really related to trade at the moment, is actually supportive of someone who is against trump. or in other words, it is almost political that if someone wants the market to rally, and is -- to rally, it is almost a pro trump view. vonnie: ok. if that is the case, won't president trump do anything and everything to ensure that doesn't happen? tom: yes, and i think that's why of highlighting and spotlighting the fed because i think he needs the said to be supportive. the fed has done their job, and i think at the moment, it is really trade visibili

i don't understand bill dudley saying that. tino him well and he's a very solid person.shouldn't have written something like that. it's inappropriate. they should do the job they are supposed to do, what is good for the economy. my standpoint is the discount rate they charge member banks for borrowing should be well below the five-year t-bond yield. and it's not. it's about of. and it should be way below it. i think the fed should cut interest rates, and i think that's the right thing to do whether trurm is president or he's not president. the interest rate they have is way too high. god forbid they should get into politics. liz: this blows the cover off all that. the federal reserve held itself to be apolitical and outside the political. maximum employment, not you election? really? not you fed -- it's clear the fed is not apolitical it's a political creature. your take on that. >> it's hard not to read it that way. it's hard. i think bill dudley should apologize for that and change his email and say he was wrong in saying that. the feds should say we are disregarding t

dudley is suggesting that the fed shouldn't react to any economic crisis in order to teach presidente fed of course that created trillions of dollars out of thin air to save banks crumbling under the weight of their own greed and their own mismanagement would allow main street to go up in flames. jay powell and company have come out and rebuked the op-ed but i have to wonder how many of dudley's old colleagues are allowing personal feelings to influence monetary policy. i want to bring in dan d'ammico. dan, thanks for joining us. >> my pleasure. thanks for having me, charles. charles: your reaction was one of the very first i saw yesterday after this op-ed was out. glad you're joining us. share it with the audience, please. >> listen, basically it's like hey, folks, look who's politicizing the fed now. here we have the former president of the new york fed, one of the most important branches, and somebody who served as vice-chair for almost ten years of the fed coming out and basically saying you should undermine the electability of this president in 2020. now, if that's not scandalou

let's start with bill dudley, that one time seem to be a rational individual. and now calling on the fed to inject itself into presidential politics, where is the cry of federal reserve independence, we heard a lot about the president calling for lower interest rates, why do we get the statement from the fed when bill dudley makes a fool of himself? >> it's incredible. we know so many people who have done this and seemed like they were rational actors before donald trump was elected president and now everything has to be about the resistance buried this is not uncommon in places like new york or cross-country were a lot of folks have been currently elites or former elites, we need to use the department of justice, the attorney general, we need to use every power that we have two bring down this president. , using intelligence services. lou: that has already been tried and did not work out. >> the president one. it makes you think, how effective are these intelligence agencies that they could be co-opted to work against a duly elected president of the united sta

>> well, bill dudley is a private citizen now. he can say whatever he wishes.he fed disassociated itself very quickly from those comments and i think richard claret's reaction to steve out in jackson hole represents kind of the message discipline that you should expect and i fully expect from the fed going forward, that is they're not going to comment. they're not going to be political and get involved in you know a political back and forth and just stay on the message of their mandated objectives, blah blah blah >> i mean, maybe the president has damaged the fed to some extent, i guess, if terms of its objectivity and independence, but i mean this is the same kind -- kwoeng i don't think we should have quid pro quo i think this totally damages people's viewpoint of what might be going on behind people's doors in there there is no reason to think there is anyone past bill dudley having one, shoung he -- how lo is he on the fed before that -- >> he ran the open market operation there the fork fed >> it's whether to put it into context, right trump called powell

. >>> we're joined by louise dudley, a global equities portfolio manager. thank you very much for being with us. president trump has repeatedly said the u.s. treasury is making billions of dollars from china thanks to these tariffs. this delay, it is not just a blatanted admission that u.s. consumers have been feeling the heat and will feel the heat from these tariffs? >> i think for the first time he has admitted that as a statement. the fact that he pulled back tariffs on some items and not others appears he's softening a bit, but aligned to his usual stance of going in hard and putting things back and trying to weigh on what sentiment is back home in the u.s., given next year's election coming up >> this all leads to volatility for the indefinite future? >> volatility, uncertainty for businesses we're already seeing pulling back in terms of the fixed asset investment because of that businesses if they don't know what they're doing or changing on a day-to-day basis, they say let's look at the probabilities, let's pull back on some of those decisions, let'

vonnie: the question dudley asks, and i know you don't want to comment on a specific opinion piece, but what is the fed accommodation encourages the president to escalate the trade war further? is that something fomc officials should consider? andrew: well, i think there's actually a bigger issue, which is the effect on financial conditions. i think this is a part that other members of the committee have made. do you risk creating a market mentality that whatever happens to the s&p 500, the fed will ride to the rescue and support the market? that potentially over cells the fed or any central bank's ability to do that >> do you create more -- potentially oversells the fed or any central bank's ability to do that. i think that is another challenge that the fed faces. they've indicated that they are going to ease policy. the markets already priced in easing policy aggressively further. how does the fed manage those expectations? in my view, i think the market expects too much of the fed's ability to be able to get rid of any volatility and support the market at any level. vonnie: what were

dudley may have a point in the sense that the fed does face a dilemma. cut rates in order to offset the trade tensions, it could encourage president trump to go at it harder. what are your initial thoughts to this column? >> he is certainly throwing the cat amongst the pigeons, no doubt. jerome powell and the fed have gone to strenuous efforts to try to depoliticize some of the recent commentary, and he seems to take it up a notch. it is surprising from a former head of the new york fed, but perhaps there are some valid points. amber: jerome powell seems to have drawn the line in the sand on friday speech in jackson hole, where he said basically monetary policy cannot fix trade uncertainty. line as as close to the you think rome, will get in firing back at donald trump and his constant arrives and request for lower rates? neil: he has been very considered in his response. what he is correct in is we are moving away from a world where it's been dominated by central bankers, 21 where politicians will have more of an impact -- on where politicians will have

doctrine, that they are not going along with dudley.t is worth noting, this is going to give ammunition to trump and critics of the fed who say, here is evidence there is a deep state. this is going to be a distraction that powell does not need or want to deal with. >> boris johnson asking the queen to suspend u.k. parliament from the week of september 9 until october 14. politicians are due to return from recess next week. this would significantly squeeze the amount of time lawmakers have to make a brexit happen. >> mr. johnson has thrown this into the plans to prevent his idea of taking britain out, do or die, by the end of october. it is not unusual to suspend parliament for a new agenda. normally, two or three days, it is announced, so five weeks, fairly extraordinary. what is it going to end in? maybe we are more likely to get this vote of no-confidence. then we will be in the grounds of a new general election. >> boris johnson sparking a controversy with plans to suspend parliament for five weeks. the queen has approved this suspe

>>santa barbara county district attorney joyce dudley says it's not a matter of if. which is why she says several months ago a commercial person fire defenses spf 3,000 clear >>white and her. >>i was immediately concerned that this was a predatory company trying to take advantage of our communities justifiable fear dudley is filing an enforcement action against sunseeker enterprises which operates on fire defense along with owner james mosley the defendants are violated. >>the false advertising law. the california green washing long. and the unfair competition law doubly and her team obtained a sample of the product in question. >>and have a 3rd party engineering firm run tests the suit alleges the company made false and misleading advertising claims about effectiveness of the product. >>how long it lasts once it's on your home. the toxicity and hazardous miss of the product as well as on the different types of substrates on which is effectively. the company says se a 3,000 can provide protection. >>against he an and up to 3,000 degrees 5 years developed in collabora

a scathing op-ed came from bill dudley. in it, dudley says the fed should not enable trump's trade war and should ignore his calls for rate cuts writing, "this manufactured disaster in the making presents the federal reserve with a dilemma. should it mitigate the damage by providing offsetting stimulus or refuse to act along? the timing of the column is interesting with a new round of tariffs scheduled to kick in on sunday. the fed rejected dudley's statement and suggestions. a spokesperson for the fed told "the new york times" that political considerations play absolutely no role in the fed's policy decisions. the white house decline today to comment. remark -- declined to comment. remarkable that someone who is so important in the world of the fed, former fed president, saying don't take the president's bait, let him suffer into the election. don't let him get elected -- >> is it the fed's job to minimize the president's trade war? >> we've never been here before. >> right. >> the fed's job is to keep inflation at its tar

. >> and there's been pressure on the fed to respond to that bill dudley wrote earlier this week they should basically let the president take the political hits that come from that larry summers was on our air responding forcefully to what mr. duddley, the former new york fed president said >> for a trusted former official of the fed whose thinking is inevitably going to be tied to the fed, to recommend that they raise interest rates so as to subvert the economy and influence a presidential election is grossly irresponsible and is an abuse of the privilege of being a former fed official >> and, greg, this was so striking because larry summers is no big fan of the president so his criticism carries a lot of weight here, doesn't it >> i think the op ed by dudley was not only misguided but very naive. having, at this juncture, a statement saying that the fed should influence the elections by essentially going along with the trump trade tensions and accommodating these increases in tariffs is completely misguided. i think the argument that trump would react differently if the fed were to

trump's latest attack on the central bank came after this scathing op-ed from bill dudley.suggests the fed should not enable trump's trade war and should ignore his calls for a rate cut writing, "this manufactured disaster in the making presents the federal reserve with a dilemma. should it mitigate the damage by providing sdwrauf offsetting stimulus, cutting rates, should the fed refuse to play along, the timing of the column is interesting with new tariffs kicking in on sunday. a spokeswoman for the fed rejected dudley's opinion, telling "the new york times" a political consideration -- that political considerations play absolutely no role in the faepsd policy decisions. the white house declined to comment on bill dudley's suggestions that the -- basically the fed should let the economy fall off a cliff to prevent trump from being re-elected so that the fed could maintain its independence and pick up the pieces after. >> is it their job to minimize the damage. the president's trade war? >> if the president's trade war then damages employment growth and inflation pictures

what bill dudley did yesterday hurt the institution he's trying to defend.s to know that. i didn't know him as the dud-muffin but he's a smart guy. >> i'm surprised he did this. they were surprised and bothered at the fed about this. >> it threw the fed into a political argument that they don't want to be in. neil: but this news that some of them secretly agree? you think some of them secretly agree? >> i think that some of them are frustrated with this president. by all means. but when they say they don't want to get involved in politics -- i think it's about the framing. the argument bill dudley is making from an economic perspective makes complete sense. if you are saying this thing is being taken by the president to extremes and the fed is enabling that, the fed should not be an enabler. that's his entire argument. that actually makes sense. now, it's being twisted a bit to say we don't want to help president trump because president trump's a bad guy. but that wasn't the argument. >> imagine if it was, if the shoe was on the other foot and this was being

dudley was new york fed president until last year and said by appeasing the white house, the fed couldrage trump to escalate the trade war further. on brexit, u.k. government sees a chance of restarting brexit negotiations after boris johnson's talk last week in berlin and paris. sources say germany and france appeared to relax their tone on the agreement and the need for a backstop on the irish border. meanwhile, the leaders of the u.k. opposition party held a closed-door meeting. talks on a new coalition in italy stumbled with the democratic party and the five-star movement blaming each other for the threat of an early election. the harsh words suggested even if a deal is reached, a coalition would be hobbled by him i think -- infighting. he said he would only support a andition if -- was approved a vote would take place next week. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. david: thank you. we are two thirds into the reporting season. they will get very busy the next 48 hours. look at o

let's remember who bill dudley is. he was resident of the federal reserve bank of new york and before that ran their markets. before that he was chief economist at goldman sachs. he has spent a long time watching and analyzing the fed and actually being a fed official. so let's take a look at some of the things he said in this piece, which you can find on bloomberg.com or find it on the terminal if you want to read it yourself. he's talking about the fed going further than just saying the trade war is having an impact on fed policy. officials have said explicitly that the central bank won't bailout an administration that keeps making bad choices on trade policy, making it abundantly clear that trump will on the consequences of his actions. discourage further escalation of the trade war and it would reassert the fed's independence by distancing it from the administration's policies and it would conserve much needed ammunition along the fed to avoid further interest rate cuts at a time when rates are already very low by

we go back to the exchange of doubly. -- of dudley.nding the signal they fight between the president in the fed could be damaging, that fight will be something that consumers will notice. alix: what is the reaction function/lag of corporations. nonresidential fixed investment down .6% in the first quarter. maybe it will be noisy. at some point you have corporate profits, and if they get squeezed what is the timeline for them laying off workers? investment,rts are which can be pretty responsive, especially to increases in uncertainty. you always want to wait before you make a big commitment if you are not sure how things will turn out. in the labor market, that will be driven by supply and demand. when firms are having trouble getting new workers, when workers are leaving to take other jobs, they will have to start offering more. that will be response to what is going on in the labor market. changes in the labor market does happen with a lag. if there is a shot, i would look for a response first in investment. david: we have to be mindf

that was not in the cards prior to dudley. i think they have now, they'd have to prothey're they're not against trump and they aren't a political body or agency so i think it opens up 50 basis points if it happens, bill, trump has cover to kind of wait until the new year until we're closer to the election to get a deal done. so while you could see softening headlines on trade, he doesn't need it necessarily, need a deal before the year is over. if we get a deal before the year is over, you could see 3,000 in the s&p very easily. we're right there. you could see 3100 i've looked at some technical retracement levels that gets me to b about 3085. that would really steal the heart of bears which has alread been stolen. >> so machiavellian. >> and then that's right, i try to add something for you, kelly. it's very highbrow for you and bill so i have to be on my toes ch. >> as well you should. >> steve, thanks very much let's get over to the bond market now where rick santelli can weigh in with action at the cme. rick >> i tell you

>>santa barbara county district attorney joyce dudley says it's not a matter of if. which is why she says several months ago a commercial person fire defenses spf 3,000 clear >>white and her. >>i was immediately concerned that this was a predatory company trying to take advantage of our communities justifiable fear dudley is filing an enforcement action against sunseeker enterprises which operates on fire defense along with owner james mosley the defendants are violated. >>the false advertising law. the california green washing law and the unfair competition law doubly and her team obtained a sample of the product in question. >>and have a 3rd party engineering firm run tests the suit alleges the company made false and misleading advertising clfims about effectiveness of the product. >>how long it lasts once it's on your home. the toxicity and hazardous miss of the product as well as on the different types of substrates on which is effectively. the company says se a 3,000 can provide protection. >>against heat and embers up to 3,000 5 years developed in collaboration

it gets tricky and i've seen reference the last 24 hours to the article that my old colleague bill dudley wrote. i think bill is right on this. to be essentially responding to structural bad policies from the government is in itself making it trickier. but that said, i quickly turn to supporting jay powell because they have a mandate from congress which links to growth and inflation. if the economy is weakening and inflation softening, then the fed has to respond but if i were in his shoes, i would highlight that perhaps markets should have somehow tried to put in more optionality to what the outlook may be in the next 12 to 24 months because i do think the current pricing of the euro/dollar futures could turn out to be very wrong. but that would have to be dependent on trump abandoning this almost kamikaze strategy that he's embarked on. >> you mentioned the dudley op ed which has gotten a lot of talk over the last 24 hours. it's not exactly the fed's job to decide which policies it likes and which ones it doesn't, and which it should react to and which it shouldn't. >> i agree with that

has to do with the federal reserve, former president of the new york fed, bill dudley pushing back inop-ed for president trump, calling for the federal reserve to be part of the resistance. this has a lot of people worked up. not just people who are supporters of the president by any stretch. saying federal reserve would have impact on elections. your take on this? >> i think the fed has hard enough job doing the tasks it was assigned to do. this is really astonishing to me, coming from a man that has worked at the federal reserve and knows the system. think the answer to politicize the fed like this, first of all, now as our editorial today points out, now sort of casts some doubt on his own actions in positions back when he was at the fed itself. how political it is. this is really a terrible thing. it just shows you how the trump derangement can take people that are otherwise sane and put them into really, really terrible places. connell: yeah, there was a lot of pushback on both sides. >> a lot of people think that. very few people are dumb enough to write it the way he did. conne

>>santa barbara county district attorney joyce dudley says it's not a matter of if. which is why she says several months ago a commercial person fire defenses spf3,000 clear >>frightened her. >>i was immediately concerned that this was a predatory company trying to take advantage of our communities justifiable fear. >>dudley is filing an enforcement action against sunseeker enterprises which operates on fire defense along with owner james mosley the defendants are violated. >>the false advertising law. the california green washing law. and the unfair competition law doubly and her team obtained a sample of the product in question. >>and have a 3rd party engineering firm run tests the suit alleges the company made false and misleading advertising claims about effectiveness of the product. >>how long it lasts once it's on your home. the toxicity and hazardous miss of the products as well as on the different types of substrates on which is effectively. the company says se a 3,000 can provide protection. >>against heat and embers up to 3,000 degrees. 5 years. >>developed

this is bill dudley, who wrote this, charles. he is the formal don't knock former vice. fed while the people who still work there are trying to get precedent trump off their back. >> charles: it is so despicable what he said and so shocking. they created out of thin air $4 trillion to save big banks have mismanaged and gambled themselves and the entire country to the precipice of collapse. so it was okay to rescue these banks with trillions of dollars. would he saying to his ex-colleagues, "with the economy collapsed potentially. let mainstreet suffer because we don't like the way president trump is doing his job. the postcode it's really scary stuff. >> dagen: that policy that popped up president obama's economy, that was one of the reasons, one of the only reasons, that we can recover from the 2008 financial crisis. bill dudley wrote in this -- by the way, germany's economy is contracting, so i don't know what president trump is talking about and that to reach. the economy is negative along with interest rates. trump's reelection arguably presents a threat to the u.s.

i get what dudley is doing. he is defending the fed because the fed will city publicly neutral.t is very dangerous to suggest that any fed should play politics. the fed is. trump has been outside of his lane of the fed is being urged to -- if everyone stayed in their own lanes you don't have these problems. the fed should not get involved in president trump's -- >> enough trouble worrying about price stability, maximum employment. charles: and everything else they're worried about these things. >> it is unfortunate he would take that tact. to his point i think the biggest problem the fed has they need a communications director because they don't go out with a clear message. powell has one thing. we do something, we cut rates, over next several weeks a parade of fed heads walking out there, walking back, talking their own book. they need to speak with onepaul, sell high, we've been under pressure for four weeks. have buy something. charles: yeah. that's your job. >> we started lightening up on bonds. tlt, we started doing some selling. gdx, gold stocks we are very close to sellin