by the fed.he fed is meeting in a few weeks and expected to raise rates again. we should expect to hear from the president more about that then and president trump is taking aim at social media companies like twitter and facebook saying it's dangerous for these companies to self-regulate this is interesting relation to this record bull market that's happening, if the market doesn't have a huge drop today, a lot of the credit goes to the tech companies like facebook, netflix. facebook with a 350% gain since it went public in 2012 >> susan mcginnis, thank you very much. >>> let's get more to the president's comments and everything happening now, joining us now is art hogan. unconventional president, art, doing something rather unconventional, going after the fed. the market reacting a bit to the news, particularly on the dollar side what do you make of this there's not thrilled and then there's "i'm not thrilled. >> yeah. i don't know why we get surprised when something unusual comes out of the pre

during and after the crisis, fed fed officials -- broadcasted a message. there were a lot of officials in the room and lots of time for discussion. now, we are more toward normal policy and there is less of a need to have that venue. vonnie: thank you to you all. that is david kohl joining us nna.jea and then we have michael mckee who is reporting for us. >> lucky, mike. abigail doolittle has more with the market. abigail dolan -- abigail: let's look at the major averages. we have seen gains where we have had lined -- aligned markets. let's break down the reaction market by market to fed chair powell's comments, a more dovish tone. --s is the nasdaq and we see when the fed chair says gradual heights word likely needed if , weeconomy remained healthy see the markets climbed a little bit about 2/10 of 1%. when we take a look at the 10 year yield on an intraday basis, this is an interesting chart because it shows fed heads talking amongst each other. when you look at the intraday chart, we will see that ahead of the cleveland fed, messner indicated said her n

you saw previous fed do.aine: i sort of wonder why we didn't hear a little more about fiscal stimulus, more about trade, and some of the other issues pushing the economy to a point that some people feel could leave to an error. ira: part of that i think is what the speech and tone of jackson hole is. if this was more of a humphrey hawkins, senate manual monetary policy testimony -- semi annual monetary policy testimony, you would hear more from chair powell. at noon today there will be a panel to talk about changes in bank regulations, arc its structures, and things like that -- market structures, and things like that. than hisck me more talk about growth is that he did not talk about quantitative tightening and saw the fed touchedsheet -- he briefly but not as much detail as i would have expected. vonnie: thanks to ira jersey of bloomberg intelligence. romaine: president trump is looking to help some of his friends in europe. trump told the of my -- italian prime minister the u.s. could buy italian sovereign

the fed funds rate?hat is the most important part of the curve they get you the most information on what they should be doing? rob: they are very correlated, but we have reached new flat levels today. if they continue with their steady rate increase, we would expect that to continue to flatten. subadra: i think the market with 5 3 either two ten's or 0's. it has generally been a good indicator of whether it will be a slowdown in growth. matt: there is an interesting study out a couple months back 's the fed said the two ten is not the best leading indicator. you were supposed to be looking at the front end of the yield curve. that does better job of foreshadowing the next recession. at the end of the day, the yield curves are correlated. we should be watching everything. jonathan: it seems there is correlation you can't deny. he is trying to say i don't quite believe in the causation. there seems to be debate over that. matt: absolutely. it is listening to kaplan speech. he emphasized the long end of the

matt: there is an interesting fed study out a couple months back to the fed said the two ten's part ofhe yield curve is not the best leading indicator. you are supposed to be looking at the front -- your school to be looking at the front end of the year -- the yield curve. at the end of the day as rob are, these yield curves correlated so we should be watching everything. jonathan: it seems there is correlation you can't deny. for the federal reserve chairman at the moment, he is trying to say i don't quite believe in the causation. there seems to be debate over that. matt: absolutely. it is interesting listening to the kaplan speech. he emphasized the long end of the curve is telling them growth is going to slow. look at what the fed is doing, hiking interest rates. of course the market is going to think growth is going to slow. it is amazing to me that they missed this fundamental point about hiking rates leads to lower growth in the long run. jonathan: you keep the flattener on? subadra: yes, for the foreseeable future. i think it is here to stay for the foreseeable future. there is

we are counting down to the fed fed decision at the top of the hour. this after the u.s.asury unveiled its latest refunding plans with a total of $78 billion in sales. -- 3% for the first time since mid-june. ,e are bringing in lacy hunt thank you for your time. let's start with breaking news, sarah sanders coming out and saying they will update us on those chinese tariffs. we have heard the possibility they could tariffs -- could double the tariff rate to $200 billion worth of chinese goods. monetary the macro environment, what is the threat of inflation with more tariffs potentially on the way? well, there's the first round effect, then there is a knockoff effect. as people have studied econ 101 all other things being constant, you raise tariffs and increase inflation. but the knockoff effect are more serious. they serve to reduce trade flows, capital flows, and produce a retaliatory process that weakens economic activity. when you take it all together, the net result is that economies have less vibrancy and lower inflation. there's been great concern about an version o

but the fed looks at the general part of the curve. that has been a good indicator of whether there is going to be a slow-down in growth a year after the curve flatenses. >> there was an interesting fed study out saying the 2's 10's part of the curve is not the best cator to look at. you are supposed to be looking at the front end of the yield curve because that does a better job of foreshadowing the next recession. but at the end of the day, these yield curves are core late, so we should be watching everything. >> it seems there is correlation there that you can't deny, but for the federal reserve chairman, he is saying i don't believe in the causation, and there seems to be a debate over that. >> absolutely. listening to kaplan speak at jackson hole, he emphasized the idea that the long end of the curve is telling them that growth is going to slow. look at what the fed is doing. they are higing interest rates. of course the market is going to think that growth is going to slow. it is amazing to me they have ssed this fundamental rate

anna: doesn't that require an assertive fed versus a quiet fed?atrick: you don't want someone to be in the back pocket of the administration, basically. in the long-term you need that credibility of the fed. you want the dollar to be reserve currency and long-term, everyone wants a credible fed. credibility is much more important. anna: we will see what we get from jackson hole over the weekend. patrick armstrong, thank you. we will bring you that interview with the kansas city fed president, esther george. that's at 12:30 p.m. u.k. time today. , new u.s.-china terrace just come into effect this morning, in the last hour, even as trade talks resume in washington. how optimistic or pessimistic should we be about trade? this is bloomberg. ♪ anna: good morning, everybody. this is "bloomberg daybreak: europe." 6:16 here in the british capital. s&p futures suggesting we will be a little weaker at the start of trade. talkingmoves we are about, given the scale of political drama in the u.s.. the president tweeting this hours saying there no solution -- h

we begin with the fed summit at jackson hole fed chairman jay powell wrapping up his speech.an is there live in wyoming, joins us with his reaction good morning, steve. >> reporter: good morning, jon, thanks very much fed chairman jerome powell in his first speech as fed chairman at the famed enclave in jackson hole, put on by kansas city federal reserve. striking a dovish tone, that's the way the market has taken i want to lead with market reaction, the 210 spread down below 20 basis points. last one was 19.7, 19.9, below 20 basis points first time since 2007 as the ten year fell down i have a 282 reading a few moments ago. what did he say that the market took as dovish, is the market right here i'm going to get to a hawkish comment he made at the end first, let's look at the comments the market is focusing on doesn't seem to be risk of overheating. that's the comment that's -- we're going to get to that full screen later, risk to the economy. he says doesn't seem to be risk of overheating second, says the u.s. economy strengthened substantially and most people that want a j

the nature of the criticism for the fed.hat he told donors was he expected jerome powell to be a cheaper money guy, somebody who would want to keep the rates low. this is coming against the backdrop of expectations that next month powell will raise rates, and the fed has projected another two for the rest of this year. shery: we should note that he was president trump's pick, instead of janet yellen who could have led the fed again. who was present at the fundraising? >> there were a lot of billionaires, ceos there, members of the administration including steve mnuchin, wilbur ross, and donald trump's own chief of staff, john kelly come also attending. it was in the hamptons over the weekend. david: i want to ask you to get inside the president's mind and tell us what he really meant, but talk about the three groups he could be talking to. the people who are there, they like cheap money as it were. the fed itself, and finally the voters, who might be voting for president trump where his candidate. how will those three react?

continues to do that we look at fed and say a number of participants at the last fed meeting suggestedde risk from inflation i think you're right that 4.1 for gdp for the second quarter, when you look through those details, 4% of it was consumer spending. outside of that nothing happened that's the negative way to look at that. enyou lo it was effectively zero growth i think the fed sees it as a risk, but you don't step in front or change policy from the base case of what's going on for a risk that's going on that's the problem the fed has there are some that are wary, it's not just something you can do much aboutyet >> the inflation mystery also seems to be disappearing if the trade war kicks into full gear and we have had the threat of a 25% tariff on 2$200 billion of chinese goods, not 10%. that was bad enough this would be a full trade war with effects going through to the consumer level. this would have a change for inflation surely and that would cause the central bank to perhaps act. >> it's a stagflation shock. the fed sees it that way in some ways it's almost similar to some o

louis fed president , as well as the dallas fed president and the atlanta fed president.. do not forget to watch "commodities edge" at 1:00 p.m. eastern. david: this is bloomberg. ♪ >> from new york city, i'm jonathan ferro. this is the countdown to the open. coming up, the united states and china imposing tariffs on each other's goods just as trade talks resume in washington. federal reserve preparing to raise interest rates again. the internal debate over hikes intensifying. saudi aramco's ipo delayed. remaining just there. well out of reach. in the markets, 30 minutes away from the opening bell. a classic old-school morning. price action nowhere to be seen. futures, dead flat. bond market, dead fat. fx market, just a little bit of dollar strength. at 115.74. through the week, federal annual get-together on the heels of the release of minutes from their july meeting. little doubt that the chairman plans to lend the benchmark lending rate next month. >> we will be focusing

in terms of this important question on fed independence, first,wer is twofold, the fed's independence is guaranteed, but the first point is that president trump has the ability to make his own appointments to the fed board. i suspect he will make appointments which are sympathetic to his views on interest rates. there is a risk of fed independence gets eroded over time, over the next year. fed independence is not threatened today, but it is something we need to watch carefully. the second answer to your question, if fed independence is threatened, you will see a bond market reaction, and that will be negative. anna: we are not seeing that yet . the dollar is weaker. does it power higher from here? bob: first of all, we have a situation where fx market volatility has been low, and will stay low. the exception has been the emerging-market currencies that are under pressure. if we look at dollar euro, dollar-yen, it has been low. i think volatility will stay low. my theory is it probably trades we are at there moment for the next few months. as we go into 2019, the trend of dollar streng

coming up, the fed is in focus. said to speak tomorrow and we break down what policies. joe: and, get involved in the conversation. send me a tweet. page and ick out my tweet links, charts, and pictures of my food sometimes. scarlet: like the profile pic. joe: like my profile pic. this is bloomberg. ♪ joe: "what'd you miss?" central bankers are gathering in wyoming today and tomorrow to talk about all things economic policy including exploring the relationship between businesses and others. i find this topic fascinating. this will not be a market moving discussion. >> i'm so happy you find it fascinating. joe: this is like the deep stuff that will really matter in the cycle and next. the idea that productivity growth is slow and we don't have as many new businesses as we used to, what is going on there? it feels like we talk about startups all the time. >> the data from the bureau of labor statistics shows jobs are created by expending companies and not by companies entering the market. i brought a chart with me and

typically it happens when the fed moves the fed funds target rate above the 2-year yield, currently 2.6% the fed has a little more room to move before they sound too aggressive. >> 2.6%, thank you >>> cue the western music, because we thought this would be the perfect time for a bull market rodeo here's how this is going to work i'm going to give you a stock, let's use amazon as an example if you think it's going higher, you say, keep riding and you'll hear and see this if you think it's going lower, say get thrown off and you'll hear and see that let's play grasso, let's kick it off with you on amazon. >> keep on riding or get thrown off? >> keep on riding. >> i've been consistent on this. >> there you go. >> i've been bullish on this, it dropped the last digit off of this, it's evening, retail cloud space, tech space. everything you want to be in it's the new tech. this is a marketplace and index unto itself. >> i agree with that, i have to push back and say, we get all that for the last three years, and it's been -- since the bull market -- >> that's the last 3,000%. >> are amazon's b

we begin with the fed summit at jackson hole fed chairman jay powell wrapping up his speech.ing, joins us with his reaction good morning, steve. >> reporter: good morning, jon, thanks very much fed chairman jerome powell in his first speech as fed chairman

power to appoint a fed chair.he wants. >> he could, but i think there will be apolitical support on this i think there's huge tradition and people understand the value of keeping the fed independence. >> to your point about j. powell and how he sets things up here, look i think the facts of look where we are, the next move is going to be pretty much evident. what happens into next year when perhaps it's not so obvious, perhaps given the data of what's going on in the world is he going to tilt one way or the other based on some of the perceived pressure >> look, i mean he's preparing for this he's trying to say we're the federal reserve, we're human beings, we don't know all the answers. i don't think it's -- there are going to be moments when the data is going to be difficult. it's never that easy but i think by sort of taking it down a notch, and it's like that thing in game of thrones, oh, these are the wizards of finance. if you look at the way i mean janet yellin, ben bernanke, allen greenstroke spoke, i don't

jessica: president trump is said to fed chairman dave powell -- that fed chairman jay powell hasn't beenolicy maker he is expected. he made the remarks at a fundraiser. the fed has hiked five times since the president took office, including twice this year. he criticized powell saying he was not thrilled with rate increases. plannedng trade wars for the coming years. beijing slapped a tariff on american employees. that's bringing prices down and compelling farmers to lower harvest. the bank says that could mean a fall production of 7% over the next four years. the council disagrees with that view. strengthen -- yuan strengthened for the third day back of an the weakening dollar. the yuan's recent advance follows a slump of 6.6%. policymakers are seeking to limit outflows as liquidity tightens. sentiment toward corporate bonds has nosedived. of fund managers says a proportion of those with 20%ish outlooks has gone to from 63%. ofrs are at 63 percent respondents, more than double the number in july. there may be trouble after a recent five-week fizzling in the credit market. global news 24

there was fed talk between two fed heads, the cleveland fed head around 8:00 talked with a 3% neutralimply 4 rate hikes this year. close close to after that, the fed chair jay powell gave those comments that were perceived to be more dovish even though on the course. we still have the 10 year yield. you can see much -- you could say much ado about nothing. stocks for the commodity silver is on pace .or its best day cover also higher. a bit of relief for this area which has been troubled. -- touchingenter down into correction territory. top stocks on the day, the winners, netflix of more than 5%. suntrust boosting to a buy. seeing some buying of these high-quality names, autodesk getting all-time high after beat and boostg quarter. could these gains continue? let's jump into the bloomberg. a powerful chart worth taking a look at more than once. in january that was the last all-time high prior to that -- prior to this week. at 90. anything over 70 is overbought. near correction, then this week record high. today the rsi below 70. that might suggest there is more room to run for stocks.

it is to do with china, also the fed. a celebration of a steady fed. a slow and steady fed. some anticipated or feared. the chinese currency flat right now. general strength of the chinese currency is something we talked about friday. the pboc has reintroduced a tool to make many people think they are moving towards a stronger currency. trade tensions, even though we have achieved little in negotiations, perhaps this sets us up for something more positive that will go down at the white house. aat does this mean about market let economy in china? we also put on a currency note, the u.s. dollar moving against the mexican peso. as we said in are headlines, there is nafta news. a nafta deal between mexico and the united states could come as soon as today. they may bring canada back in as well. back to china. good morning. manus: we had a lovely eid break. is the pboc trying to strengthen the yuan? the pboc and jay powell both come together to create this. and magnificent correlation coefficient. the 40 day rolling correlation between the yuan and commodities. the yuan and equiti

the fed is the wildcard.will hear more from jerome powell today what are you listening for what do you think the possible snafr scenarios are? >> bostic has been clear saying we will not go out of our way to invert the yield curve kaplan and kashkari have been saying we are not going to go too fast i'm looking for anything that says that december is not a sure thing. right now we're counting on a rate hike on september and december we have two more rate hikes next year our forecast we have stronger gdp growth in 2019 than we do in 2018 that would say there's more of a risk that the fed may have to do more i really lock to see if there's any change in the rhetoric saying maybe we do need to be a bit more careful about intentionally inverting the yield curve. >> paul, you're talking about the -- even though we're not calling it a sugar high, you said it is a sugar high and it will wear off next year, then it will run into headwinds. what headwinds are those >> i don't think it definitely will you have a window

we will keep an eye on brexit and the fed, trump versus the fed.nt donald trump said he expected jay powell to be a cheap money chairman. the dollar moved lower on the comments, and the president nominates the fed chairman, but it is independent and has historically frustrated presidents by ignoring politics. james athey ofis aberdeen asset management and kallum pickering. has frustrated presidents in the past. >> there is a long list of presidents who have had things somey and have had physical interactions as well. there was the story of one fed chairman being thrown against the wall by a present. we have to remember the fed is independent within government, not independent of government. we say it is operationally independent. there needs to be democratic accountability and legitimacy. it is fairly standard for the president to have things to say. that doesn't mean it is the wrong thing. the questionuess is, in modern history, i have never seen a president say it openly. does it, at the margins, impact with the fed does? do they want to be seen

when i look at fed policy we wonder who is the tail and who is the dog it's always been the fed as theveryone else as the tail think about how distorted the ten year rates are in japan and more so in europe. japan is fighting with inflation. europe is starting to see a reasonable semblance of it no question to me -- i think the boj we are held hostage to jgb right now. >> is it as simple that if i live in japan and suddenly i can get more interest at home why would i buy in the u.s. anymore? >> it's part of the demand question with everybody else has rock bottom rates that suppresses u.s. rates when everyone starts showing they might let them go up it might have implications for us. >> how high can it go. if the trajectory continues to be step up through 2019. >> i think we get four more. september, december, march, and june and then they stop at neutral. half of that will feed into the ten year from 3% up to 3.5. given low inflation and low yields i would be a buyer at 3.5 of the ten year. i don't think we have that much further to go but a bit further to go. it's recognizing that it'

it is 50 basis points below what the fed itself say it is the likely outcome.nly three dots in that plot that are below what the market is currently pricing that's most likely outcome. and the market is pricing a one in 12 probability that the fed does what they say they're going to do in the plot. so it's quite remarkable that and maybe it's a function of the fact that inflation hasn't taken off and the fed has made it clear. yes, we have this symmetric inflation target. and i think people have also taken to some extent the jackson hole speech from j. powell as defish, alan greenspan had this view of the new economy and we don't need to high grade as much as traditional models would sexug the model has taken that as -- where goldman-sachs came out and said that's the wrong expectation. what he's saying is not the specific episode of the late 1990's but more a function of hey, ordinary docksed models don't -- they're very, very uncertain and they're not reliable in real time. so this idea that wages that can remain low or that inflation is going to remain low o

now insiders from the fed that i have talked with believe that the fed wants to get the federal funds rate up a little bit in order to weather the next recession. they want to do it during the good economy. so they are continuing on the course it seeps with the statement we have here. trish. trish: thank you very much, edward lawrence. see how the markets are reacting, we're off the lows of the session. adam shapiro on the floor of the nyse. hey, adam. >> trish, 10-year treasury yield touched 3% but fell back. we had fallen a little back the yield from 3% just before edward started to report what was going on with the fed. the dow is off 84 points right now. this morning we were trading in positive territory for the first two hours. we have been down since then. seems if the motivation to sell off is picking up a little bit since we got the fed report. trish. trish: adam shapiro thank you very much. joining me with more reaction, "bullseye brief" publisher and founder adam johnson and our own kristina partsinevelos and moody's mark zandi. been a while. good to see you. >> trish, good

federal reserve has left its key lending rate on hold for now after its regular policy meeting the fed was upbeat about the economy citing strong consumer spending and business investment a strong jobs market and inflation may its two percent target that probably puts the fed on calls for a september rate hike ofter its next meeting fed chair jerome towle said at the start of the year that interest rates would continue to be raised in small moderate steps they now stand in a range of one point seven five to two percent off for a small hike in june he was president donald trump has ruled against further hikes fearing it could slow down economic growth. and earlier i spoke to a wall street correspondent so if you should months can also and she had any sense that the fed is taking trump's concerns on board. i wouldn't say so first of all helena monetary policy and anything concerning the fact that it's usually not anything for the president to comment on the independency off the fed has been has high and last years and decades so it could be freed from the whims of politics now trumbull o

because he went directly after the fed chairman he appointed to the job, saying that the fed shoulde more wages somehim as he battles on trade and everything else. wasng the campaign trump complaining that the fed with keeping rates too low and it was creating a bubble economy, but now that he is in office, he seeing that the rates are rising , although frankly more slowly than they do typically in a recovery that were end, given the fact that inflation remains low. so he has called it up a notch in terms of trying to put pressure on the fed to prevent them from raising interest rates. this pressure is nontraditional, at least for the last few decades. how much of an impact might this actually have on the fed? fairly well is insulated from outside influence. the chair and members of the board are appointed for a set term, so it's not really a situation where he can hire and fire. they do live in the real world, they do here the political atmosphere are feeling around them, but that said, in the past, fed chairman and the federal reserve in general has moved at its own pace, despite

the fed doesn't?ot have inflation taking off the way one would expect with low employment? what is the fed missing? ishan: the bond market remembering where we have been over the past five to seven years. has thrown a lot of stimulus at the economy, and the economy has been lackluster. the fed feels the economy has turned the corner, and now things are accelerating and away we haven't seen recently -- in away with haven't seen recently. 2018 or 2019 different than 2013 and 2014? that remains to be seen. alix: it goes to structural changes. for the 10 year treasury market, the yellow line are short positions spiking and the curve continues to flatten is the blue line. shorts, to cover the and it is flatter. highlightss chart that the bond market is not unanimous. there are many investors out there and in the hedge fund community that are expecting rates to rise. ratesave been expecting to rise for several years, and it has not happened yet. maybe tension in the hedge funds and the real money in the bon

goingen: i think we are to hear a lot more questions from the fed on this as fed officials are talkingal rate and why they will not go too far. ramy: two rate hikes closer if that goes ahead. looking to india, the reserve bank of india's rate hike was not a surprise to most. on the governor warning exchange rate was more unexpected. kathleen: key rate of 25 voices -- basis point, the second hike since late april. this is a study move towards rates. it is well above target. the worst-performing asian currency right now, down 7% year to date. he had thiseting, to say about why he is concerned, in fact laying the groundwork for maybe more rate hikes. >> we have already had a few months of cuts behind us. that this islike likely to continue. for how long, i do not know. skirmishes evolved into tariff wars, and now we are possibly at the beginning of currency wars. kathleen: i think that is strong words for the central bank. they speak very carefully. it is important they maintain a neutral stance, but with the door open. yvonne: of course a rate hike expected at the bank of england today a

lisa: is this the fed's fault? priya: i think there is a fed component.cb, boj, they are retreating. you have this liquidity that is coming out of the system. when you have them giving you more than 2%, you should reprice yours premium elsewhere. even the rate market reaction to e.m. has changed. earlier on, a was being viewed as idiosyncratic. the markets are saying, maybe the fed can't hike that much. is saying thist is more than argentina or turkey, this is systemic. this has the potential of slowing the fed hiking cycle. lisa: this is contagion, problematic. i want to get your thoughts. you said you see opportunities and need to dig in there. and do fundamental research. what are you doing with your portfolio? are you buying mexican bonds and bonds of other places? if so, corporate debt, severance, what are you doing? iain: we are looking for the areas we liked her we like areas like mexico. we have been adding areas like that in the portfolio we have yields up a high of the year. obviously it has rallied a lot since nafta talks. it seems to have stab

maria: . >> so not first time he talked about fed i spoke with vice

people on the fed, leaders on the fed used to say they were data dependent, but models would sway them otherwise. for jay powell, if the data changes he will change with the data. that is all he is saying. there was something very interesting in the minutes, residential housing was brought up first time. that was a dovish insertion and i would look to see if his remarks bring up any potential weakening in the economy come friday morning. cheryl: you know, because we have actually seen weakness in home sales, in particular new home sales. that helps retailers, home depot or lowe's. people are like if i stay in my home i will improve it. that is not interest rate story. because interest rates are historically low. to back to 1982, my parents paid 16% interest rate on their mortgage. we don't have that. >> i would say the consumer is strong expected by target earnings. that is demand side issue, not a supply issue. because they don't have the rightly-priced homes. lower-priced homes. >> by the same token affordability is at the lowest level of this entire cycle. cheryl: we need to see wag

from both following and not following the fed.ck to my friends at the people's bank of china. they didn't try to follow what the fed it was doing. and this is really a ramification what's going on today. he got very publicç with the worry about the whole rate thing. it's can it hurt our countries. it was a u.s. european construct. it was supposed to represent the major currencies of the world. it included the euro which would've been the french frank. the criticisms that were made against the policy. it goes back to what i saw in that room that day in 2015. i saw a lot of central bankers from around the world that weren't particularly public about whether their country was being hurt. in economic problems throughout the world. what they believed have to be done was more of a unified approach outside of the g7 to trading with each other to developing other currency relationships and so forth. it was a shift because of money. it was to reduce the risk that another u.s. financial crisis the world. when interest rates rise too quickl

i think the fed is going to do with the fed has to do.nd the thing that they did not raise these rates is just a sign that they keep doing what they were planning to do anyway. it does not imply that they actually listened to the president. helena: and let's face it, the fed has rather a lot on its plate right now. the fed warning against steps towards a full-blown trade war. also hearing rumors at the same time that trump will raise further tariffs against china. so, what are investors making of that? sophie: well, marcus were slightly negative -- markets were slightly negative on wednesday. but investors are focusing on how companies are performing. that said, it seems to me this new round of tariffs would be part of a negotiating strategy. the trump administration is trying to force officials back to the negotiating table through the threat of even higher tariffs. but china said on wednesday that blackmail would not work, and that they would retaliate on their side. helena: sophie scimansky for us in new york. good as ever to talk to y

the fed president's of st. louis, dallas, cleveland, atlanta. first, i first word -- a first word. >> in australia, the treasurer scott morrison will be sworn in as the country's prime minister after ruling liberal lawmakers voted to oust malcolm turnbull. he will consider appointments to his cabinet over the weekend as the government attempts to boost it lagging poll numbers ahead of an election due by may. >> our team needs to look after the event of this weekend how that is impacted on them. they are going back to their families and will listen and bring things back to us. where there needs to be changes, they will be made. where there needs to be continuity, that will be maintained. u.s.-china negotiations have wrapped up with no age or progress, setting the stage for further escalation of the trade war. cameonclusion of talks hours after beijing and washington rolled out their latest round of tit-for-tat tariffs. bloomberg understands no further meeting has been scheduled, while chinese officials raised the possibility negotiations could no

louis fed president. with mike later this morning who will be interviewing jason furman, harvard university kennedy school professor and former white house economic adviser chairman. that will, betty 30: -- that will, -- that will coming up at 8:30 this morning. two sentiment continue to support the bulls -- will sentiment continue to support the bulls. we will discuss. this is bloomberg. ♪ ♪ >> this is "bloomberg daybreak." transaction and energy business. purchase agreed to deal valued at $3.8 billion. owns pipeline systems. t-mobile u.s. is warning customers about a hack that may have compromised personal data such as phone numbers any no addresses. the cybersecurity team of the country's third wireless carriers shut down the breach on monday. t-mobile says no financial data or social security numbers were involved. asiantigroup predicts it equity business will post its best results of the financial crisis. revenue increased 33% from a year ago, the building is asia business. and that is your bloomberg

fed and i think we're talking about interest rates we sure are brant the u.s. federal reserve desiring to leave its key lending rate on hold for now now after its regular policy meeting the fed was upbeat about the economy citing strong consumer spending and business investment a strong jobs market and inflation near its two percent target that probably puts the fed of course for a september rate hike off to its next meeting now fed chair german powell said at the start of the year that interest rates would continue to be raised in small order it steps they now stand in a range of one point seven five to two percent off a small hike in june president donald trump has warned against further hikes fearing it could slow economic growth. let's go straight over to our financial correspondent so fisherman skiis on wall street for us sophie trump seemingly intervening there in central bank policy is there any sense that the fed actually listened to him took his concerns on board. i wouldn't say so first of all monetary policy in anything concerning the fed is usually

biggest issue is essentially trade wars and fed pour say now when it comes to fed policy the message from jackson hole from any of the fed by his will simply be that the fed is not trying to spoil the u.s. or global swing through its interest rate hikes it simply trying too much the renewed strength when it comes to trade well that's an easy one to economists hate trade wars it raises prices for no reason so it will be probably a warning that if the u.s. continues to push for trade wars that will worsen economic conditions both at home in the u.s. and abroad well let's stick to u.s. trade and foreign policy because for example fresh sanctions again iran prompted several global players to pull out of the country including british airways how much pressure is there from the white house. what it really links to the u.s. economy the u.s. is still the biggest and most important economy in the world to assume a certain extent we all have to dance to the u.s. is chewed the trade issue is much bigger than the sanctions issue we worry over here in europe a lot about trade wars of course we're

can anything stop the fed, i doubt it.hink there is things around the edges that will be important particularly as they get on to the end of the year. our economics editor kathleen hays in tokyo with the latest out of the fed. let's deep dive and bring in evan brown, the ubs asset ourmanager, and used to work oe new york fed open market desk. good to see you. in terms of the question that you wish we were able to speak, if this were a live session, what would you want to know, because this is only five paragraph? >> certainly questions about the in -- the yield curve and inversion and if it will make them pause. i don't think the chairman would respond in that way and suggest a pause, but that is something the markets focus on. be curious to hear how he is thinking about it. also i would like to think about , i would like to see what they are thinking about trade risk. tariffs are interesting because not only are they hurtful for growth, but they boost inflation. it is curious how the fed might respond. maybe inflation is

but that's not part of the fed's mandate, the fed doesn't -- isn't there to help the president on trade agenda, it's there to control inflation, inflation is right at 2%. dagen: possible that the president's open comments in public about the federal reserve about jay powell actually have the opposite effect rather than pushing him to keep interest rates low because he's new in the job, relatively, he's going to be more aggressive in terms of raising interest rates because, again, according to wall street journal report, president trump picked jay powell because he thought he would be more malleable in taking direction out of the white house and i will point to history that the consequences of recklessmont -- reckless monetary policy, nixon putting pressure on them, that led to run away inflation of 1970's and that stumped not just because of disco but because of the inflation situation. jon: dagen is absolutely right, when the fed is allowed to be pushed by the president -- maria: now more expectation that the fed raises more rates next month. i'm just saying does powell feel even more

a new look for the fed.will look for that later on this week when we are watching what's going on in wyoming, jackson hole. a quick line on the energy company out of south africa. we mentioned their earnings. we may have run the graphic with the dividend. there is a correction, so apologies. 79090 rand in terms of -- rand. investors are scratching their heads over the price of gold. why has the alloy metal been falling for weeks straight? this is bloomberg. ♪ anna: good morning everybody. 6:30 here in london. a: 30 if you're in mecca. mecca -- you are in 8:30 if you are in mecca. eastts a class the middle are closed -- across the middle east are closed this time of year for the pilgrimage. is get back to the main story. nejra cehic has it for us. >> we have seen some gains in the session only in the msci asia-pacific index. a touch of weakness coming through on the nikkei. we are pretty much unchanged on kospi.st be -- p it is a fairly big week. traders are so trying to assess what is going to come of the u.