it's clear jay powell will be assessing data.: more questions about the flattening of the yield curve. give me an indication about what he thinks it means? kathleen: he has evaded it just a little bit, and i do not think the senator would have asked the questions you heard to follow up and pin him down a little bit more. he did say that we are talking a lot about it, and he also said that i guess a flat yield curve and short-term rates above long-term rates, it would be flat, even inverting, could be a sign that policy is tighter than you think, or maybe it is just tight, and then he went on to say this. >> the shape of the curve is something we have talked about quite a lot. people think about it different ways. i think about it as really the question being what is that message from a rate about control rates? -- neutral rates? kathleen: i know what you mean about the neutral rates. that would imply for more rate hike -- four more rate hikes. if the cursor to invert, what impact would that have on monetary policy? even in that s

the 2-10 spread well played jay powell -- will played jay powell -- plague jay powell.z is here with first word news. kailey: even some diehard trump supporters are unhappy with the president's performance at the helsinki summit. newt gingrich call it the most serious mistake of his presidency and said it must be corrected. president trump's suggests he believes vladimir putin's denial that his government meddled in the election. a u.s.a u.s. official says as ms 55 remains will be repatriated from north korea, the first time in 13 years they have directly turnover remains of u.s. soldiers. theresa may's brexit strategy is in turmoil. she has infuriated pro-european members of her conservative party by bowing to pressure from europe and agreeing to rewrite her plan. her majority in parliament has been cut to three votes. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. alix: thank you so much. netflix nosedive, shares plunged in premarket after sec

jay powell repeating his upbeat message on capitol hill. he says a trade war would be a threat, but does not see an eminence recession. --from bloomberg school global headquarters, i am ramy inocencio in new york. google is slapped with a record fine in europe, it is asked to change the way it promotes services on its android devices. morgan stanley is the latest to be a street.

jay powell speaking yesterday. he spoke about the yield curve getting so much bandwidth right now. >> the shape of the curve is something we talk about a lot. different people think about it different ways. some people inc. about it more than others. driveis trying to information about what it would be for neutral rates. away, along with the it isn't hitting .he economy yet they are beginning to question on whether the economy needs contractionary policy. the dot plot might be the most hawkish. marketith a strong job and inflation close to objective, the fomc believes for now the best way forward is to keep gradually raising the federal funds rate. reaction was that the january 2019 futures contract it a record high guild in the aftermath, so the short-term hiking environment got firmed up. that was the major market take away from yesterday. alix: thank you both. a busy morning. primea may is delivering minister's questions in parliament. she has survived by the skin of her teeth, yet again, to have control over br

we have heard jay powell speak over the course of the day.ost of it was pretty optimistic and we knew that that was going to happen based on the documents that came out last week, but looking to trade tensions, we are trying to figure out when these clouds will creep up on us. eric: he was asked a lot of questions about trade, but his answer was generally along the lines of wait and see. i think we have a sense of the directionality of it, but i don't think anyone will argue that trade tensions are good for the economy, but we don't know whatig it will be and over time horizon. ramy: everyone seems to be saying this has been something that happened historically, but the more we talk about it, the more everyone says to forget it. where do you stand on this? eric: i'm not inclined to say forget it. we have never had a recession that was not preceded by an inverted yield curve. but i do think it is reasonable to think that the time lag theeen the inversion of yield curve and recession might be particularly long. an inverted don't curve follows t

federal reserve chairman jay powell returns to capitol hill to talk about the economy. he's got a positive analysis after telling lawmakers years of strong growth in jobs and inflation ahead. a lawsuit filed by mgm resort against shooting victims during outbreaks from survivors and everybody else. u.s. stock index futures looking at a mix on the indexes. the dow up 17, s&p 500 up over one. the nasdaq down two and a quarter. you are watching "fbn:am." ♪ it's single-origin kenyan coffee from the nyeri highlands, 6,000 feet above sea level. but how do you really know that the beans journeyed to the port of mombasa and across the pacific? that you can trust they're 100% authentic? ibm blockchain. a smart way to track every step, ensuring this coffee did indeed come from 6,000 feet above sea level. and not a foot lower. ♪ ♪ too hot to work? nah. this is the gator xuv835. with game-changing heat and air, it's never too anything for anything. where we're changing withs? contemporary make-overs. then, use the ultimate power handshake, the upper hander with a double palm grab. w

jay powell delivering his twice yearly report to congress.ll be an update -- upbeat message, stronger growth, rising inflation underpinning his view more rate hikes are needed this year. the release of the monetary report friday. our economics and policy editor kathleen hays is here with key points. kathleen: this is a very important testimony. under law twice a year the chairman is required to go to congress, the american people and report on the health of the economy, monetary policy, what is expected. having said all that, jay powell will deliver an upbeat report. we know because the fed released the report friday. we get a sense and in fact he is doing this, so congress is prepared to ask smart questions and have it absorbed by time they get there. andeconomy is set to grow accelerate from the 2% in the first quarter. stronger business investment, more jobs, tax cuts, an important part of this. he touches on the impact of the trade war and is clear he and the fed are watching this closely, but it is not taking the economy yet. he presents

very what are we expecting -- jay powell.t are we expecting? andy: it will not be as strong a watchdog as it has been historically. it has worked to ignore inflation long. they help -- they had been ingressive -- aggressive but did not because the economy was week. they are slow at hiking interest rates. we are looking at a real rate of 2%, below the trailing inflation rate. core is running 2.3%. i think investors ought to consider how inflation can improve their portfolio. one of the things i am looking ifwas treasury in tech -- you look at the breakeven rate between nominal bonds and around 2.1%it is but we are running ahead of that. as i look at the sum total of the economy i see more risks to the right side, meaning the more than 2.1% side. unemployment is very low. we see discouraged workers coming back. there is only so far it will take them. other things happening, commodity prices are coming back. we are seeing a strong consumer base, seeing people bidding for homes. all of these things are inflationary. i am much mor

jay powell will be briefing congress on monetary policy beginning on tuesday. pect from his testimony? : hello and good morning. more of the same. of further,idea gradual rate increases. jerome powell has been saying things like the economy is in a good spot and he has been sleeping well at night. he called growth very strong. he seems perfectly content -- he will certainly solidify the idea that there will be one more hike this year and he seems content to keep the idea like that there might be two more. what that goes against neel kashkari is saying. he says there is not much reason for the fed to raise rates much further. what is happening there? : i mean, as they keep raising rates, the question is how much is too much? goals of the fed is to keep the inflation rate at about 2%. overnight, we saw a big fall in oil prices. they are now following commodity prices lower and by some measures, inflation expectations are falling quite a bit now. there is this concern that the neutral,osing in on maybe going to be hiking to quickly. if you follow the narrative thro

what did you get from jay powell for now? anna: he said something to suit the markets.he fed continues to increase rates for now. it seems equity markets went with that. the fx market went with jus teh -- just the start of that. the dollar is hitting a six-month high in the wake of these comments. weakness is coming through in oil prices this week. u.s. crude inventory data showed a surprise increase in the united states. let's get a bloomberg first word news update. juliette: u.s. president donald trump accepts the conclusion by american intelligence agencies that russia interfered in the presidential election. the retreat over comments made earlier came amid a backlash republicans. even with a prepared statement, he introduced doubt, saying the meddling in the 2016 election could be other people also. there is a need for some clarification. just inlike to clarify case it wasn't. a key sentence in my remarks -- i said the word "would" instead of "wouldn't." should haveence been, i don't understand why it wouldn't be russia. e.u. members are being urged to increase oper

it might be tougher for jay powell to do that. david: thank you both very much for being here. you can find all the charts we just used and more by running gt tv on your terminal. coming up, more on the latest development's in the u.s.-china trade war with the u.s.-china business council vice president. live from new york, this is bloomberg. ♪

they are trying to get jay powell to agree of this being a direct result of president trump's policiesl really would not answer the question that was followed up by sherman from california who said, aren't these the policies of president to bobam obama? he's doing his dance there, very normal for these types of hearing. much more in the house than in the senate pardon me. and on the issue of cryptocurrencies, i want to bring you the sound we have. we talked about it earlier where fundamentally jay powell has nothing good to say about cryptocurrencies have a listen. >> cryptocurrencies are great if you're trying to hide money or trying to launder money or if -- we have to be have been conscious of that. and the investors see the asset going up in price and think, this is great, i'll be this. in fact, there's no promise behind that. there's no, it's not really a currency, it's -- it doesn't have intrinsic value so i think the investor consumer protection issues are there as well and another thing i'll say is that we're not looking at this at the fed as something we should be doing, that

has more >> jay powell telling congress that the best way to keep the u.s. ontinue raising interest rates. in his semi-annual testimony before the senate, powell said the job market is strong, unemployment will fall further in the months ahead, and inflation has more or less hit the 2% target. >> i think gradually raising rates is the way for us to extend this expansion. nothing hurts working families and people at the margin of the labor markets more than a recession. >> powell said wages were not rising fast enough yet to cause an inflation concern that was something of a dovish comment. he added there is room for wages to grow without sparking inflation. powell said it was too soon for the tax cuts from last year to be helping wages now the ultimate affects of the fiscal policy will be hard to gauge. overall he said the tax cuts have had a positive impact on the economy. powell tried to steer clear of direct comments on the trade controversy because he likes to stay away from politics, he offered a generic warning. >> in general, countries that have remain

jay powell takes questions on capitol hill. >> he noted very little about the biggest issues chasing wall street. shery: trade tensions could be trouble for investors. >> clients are worsening the -- questioning the whole foundation of international investing and that is the foundation of globalization. shery: and donald trump's campaign manager claims of the media slanted against his candidate. >> their employees have bias. those decisions go into every line of code they write and everything they do. shery: all straight ahead on "bloomberg best" ♪ shery: hello and welcome, i'm shery ahn. this is "bloomberg best," from bloomberg television around the world. the week began with a summit meeting in finland between donald trump and vladimir putin. after it concluded, the reaction was decidedly mixed. ♪ >> a good start in helsinki, that is how president trump described his meeting with vladimir putin, but members of his own party have different words for it. shameful, disgraceful, bizarre. flat out wrong. president trump sparked a republican backlash suggesting he equally trust vladimir

traders expects -- fx will be watching out for what jay powell has to say.the report in washington and in the u.k. we have employment and wage data due later this morning. have mark carney presenting see financial stability report. delivering of financial stability report. there is a little bit more about the foreign exchange market. great to have you with us. what is next for the dollar, we know what trumps geopolitics frenzy is at the moment, we are waiting to hear from powell. i am wondering, we are up 7% on the dollar since april. we are going into a powell testimony. ?s the dollar near-term peak are we all priced for a powell gradualist speech? we -- we are not expecting much new of powell. i would the surprised if we get a further boost. he has everything said already. he is very bullish on the economy and there is a risk of a trade war but that is not with the current focus is on and the fed is positive effects on the u.s. dollar going forward for now. anna: you are in a mood to seek havens, are you looking for havens from a trade war, and the dollar

this is something jay powell will surely be asked about.as flattened more quickly at any time since it has in 2017. this chart will show you, what is the risk? it could invert and cause a recession. we've seen many times, those red bars are recession, the white bars show you how the yield curve is. that will be another important question. when it comes to trade, if you are worried about tit-for-tat tariffs and what it could do for emerging markets, some of the more sophisticated people in congress may ask about that. well.l -- about that as rishaad: thank you. jay powell's testimony in congress. more hikes. also, we will be looking at a big win for airbus. that and more. this is bloomberg. ♪ air asia may be set to seal a block esther deal with airbus -- blockbuster deal with airbus. bloomberg asia transportation reporter joining us from singapore, this is a pretty huge deal. >> yes, it is. asia comes from a market that is really growing very fast. economy booming. more people earning more money. middle-class growing. so, it's a formula made

i think what jay powell communicated to us is large. to me, what he's saying is, i'm going to keep doing what i think is right if the yield curve starts to act crazy, most likely, that will be his neutral rate then he'll monitor it going forward to see if he can slip more rate increases in that's my take i think it is the take jay powell might agree with. back to you. >> rick, a lot to talk about as the week comes to a close here this afternoon rick santelli in chicago >>> dow is up 43 qup up almost 3.5. "sawk alley" is back in a couple of minutes. you always pay your insurance on time. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ >>> is it time for the fed to be doing what hst doiit is doing?

jay powell repeating his upbeat message on capitol hill. he says a trade war would be a threat, but does not see an eminence recession. --from bloomberg school global headquarters, i am ramy inocencio in new york. google is slapped with a record fine in europe, it is asked to change the way it promotes services on its android devices. morgan stanley is the latest to be a street. most u.s. banks surpassed estimates in the second quarter. haidi, good morning again to you and to our viewers in the asia-pacific and around the world. taking stock of what happened in the u.s. today. it was mostly positive, to the upside here. we did get support out of the bank earnings, morgan stanley the latest to beat the street. jay powell pretty positive, but we expected that, because of his testimony on capitol hill. all in all, that is overweighting tensions on global trade and tariffs we have been talking about. haidi: in the absence of a negative headlines or negative tweets, it seems it is a natural course trajectory from the markets. it is just a little

fed chair jay powell testifies before congress.e have a bunch of earnings, including goldman sachs. still with me is oksana aronov, joe higgins, and matt toms. i want to start out with china's gdp. we have seen a bit of deterioration in chinese corporate bonds, particularly denominated in dollars. i am wondering, joe, are you concerned at all about some of the weakness we have seen, or are you starting to see the time to buy? joe: certainly weakness in china has implications for em, and risk sentiment globally. it is very important. we remain generally somewhat concerned about the weakness in the renminbi. what happens with further dollar strength? it is something to incorporate in your asia play. lisa: matt, how much are you paying attention to chinese gdp and the efficacy of the controlled slow down in that country? matt: the controlled slow down is the key. they are trying to slow it down. the good news is the markets are assuming u.s. strength will offset that. it is happening in an environment where the market sees a safety ne

jay powell is said gradual rate hikes will continue for now. mostly concerned the economy and not making way for the markets. he noted very little about the biggest issues facing wall street and didn't say much about the yield curve other band they are watching it. a lot of talk about ranking regulation. the new bill that passed earlier this year that likened some regulation on smaller banks, powell said they are trying to implement that as quickly and carefully as possible. he took hints from elizabeth warren and other popular democrats for the stress test they conducted this year in which morgan stanley and goldman sachs came up short but were allowed to pay out dividends anyway. like hepoint, it looks satisfied most of the critics on capitol hill without doing anything to upset financial markets. ♪ >> a rare oval office about face, president trump reversing course after intense outcry on capitol hill including rob some usual loyalist. he walked back some of his comments in helsinki. he now says he accepts his vision by dekes -- he excepts u.

[laughter] up, more oning chairman jay powell's testimony today.emocrat on the financial services committee, maxine waters of california. whitetake you back to the house press briefing with sarah huckabee sanders. she said she believed that trump administration believes that tosia still poses a threat --. from new york, this is bloomberg. ♪ yesterday, with the president's revision, he said there could have been others as well. thers as well. >> it is 3:00 p.m. in new york. . am lisa abramowicz escrow it: i am scarlet fu. welcome to "bloomberg markets." ♪ scarlet: we're live over the next hour from bloomberg headquarters in new york. edging higher, u.s. stocks rising as financials and industrial companies such as airlines climb after a strong round of second order -- second quarter reports. congresswoman maxine waters, a ranking democrat, giving tribute for the fed chairman testimony. the threat russia poses to u.s. politics and much more. away from ther close of trading. they edging higher because nasdaq was leading yesterday but it is unchanged ri

better earnings and jay powell's testimony moved the markets. he was a big hit with the markets. powell talked about gradually raising rates for now. the market took for now to mean if things go bad, something goes sour, i'm going to stop raising rates. they like this talk about 2% inflation. very small numbers there they like that as well finally, the president is talking about the dollar and a little bit about europe. when you're dealing with foreign exchange, there's an enumerator and a denominator. the economy in europe is weaker than the economy in the united states, number one number two, there's a lot more political issues over there, particularly with italy. i certainly would expect the euro to be weaker against the dollar right now things seem to be unfolding well right here i understand the president's desire for lower interest rates. >> here is the question that i had when this first crossed. i read that. i saw the sound bite and i thought you know what? what if the fed laid off on raising rates, would that be welcomed by the market or the market sell off on it? the not

the president's tweets this fry way -- friday have had more impact than what is happening with jay powelln congress. what is happening with the treasury curve? it has been flat and then all of a sudden we get steepness during the week. bob: there are a couple things going on. certainly there is a belief the fed is going to stick to its rate path, that we will see increases every other meeting for now. great set of words, but i think also there has been some news out of japan that the bank of japan may tinker with its optimal yield curve control. so they may let the long end go a bit and be supported by market forces. jonathan: lisa, perception is absolutely everything. considering every single word, if it wasn't under a close watchful eye of the market, it is going to be much more so now for chairman powell. does chairman powell's job get more difficult because of the president, regardless of what you think he will or won't do? lisa: i agree with bob. i think the fed will continue on with its independence. chairman powell has a path that he is going to follow, and i don't think that chang

based on what the president says jay powell will do what jay powell wants to do and what he thinks ishe right thing to do, no >> yes that's right and that's what we certainly believe or most economists believe. very strong credentials and dependence but, you know, the president has a tendency to not let thing goes look at the pressure he's put on his attorney general over the russia investigations. he's got it under his skin he wants these agencies to work for him. independence, you know, in trump world doesn't seem to matter the way it has for other presidents. he looked at the federal government as his to control and he's got a fed chairman who is forecasted what he's going to do two more hikes by the end of the year he doesn't like it. >> now we have kudlow elaborating a little bit saying the chinese and the u.s. haven't had discussions in weeks that they've offered no options on ip theft or tech transfers. there have been some holding out hope we were going to get a face-saving comprise ahead of the midterms does the market need to get used to the idea it may likely not happen >>

federal reserve chairman jay powell ishea is headed to capitl today. today and the house tomorrow. futures this morning looking lower. we are expecting a lower opening for the broader averages, just a fractional move. the dow jones industrial average doubt 14 points, the nasdaq is off by 10.5. yesterday the major indices finished mixed but little changed. the dow jones industrial average was up 45 points at the close. in europe, markets near the flat line. they are negative. fq100 down a fraction, the cac down a third of a percent and the dax index in germany down 16. in asia overnight, mixed performance as well. japan was the best performer, up one half of 1%. horror in hawaii. a lava bomb crashes through the roof of a tour boat, injuring dozens of people. more on the dramatic footage coming up. a study says urgent care clinics are over-prescribing antibiotics. the concerning side effects later this hour. keeping your children safe, we'll tell you about a school district in america that's installing pepper spray canisters. the new safety measures comi

i support what jay powell is doing. i'm just saying i believethe new management of the fed is -- does understand that by itself economic growth, particularly what i call supply side growth, where you're increasing the economy's potential. more capital spending, more productivity. >> right. >> that's not inflationary. >> why raise lock step if the truth is we're just beginning to get to certain part the of this country to get some of the workers more money it's happening now the last three quarters. >> i agree i think, you know, again, i don't want to spend a lot of time critiquing the fed because i agree with what they're doing. >> is the 10-year wrong? >> i think their gradual approach is good i do i think it's very good i think that approach, by the way, will get things done rather more quickly instead of holding it out regarding the spread, actually, we're reading the spread wrong this is an interesting point i want to give a hat tip to my friend and colleague and former anchor ron insana. i love the guy ron wrote a

but that is not jay powell's fault, that's because pretty much every congressman was into the political aspects of the economy. he was playing it straight he's a steward of the economy with two pillars, maximum employment and stable prices most of the questions were about things outside his jurisdiction, where they want the fed to be a nudger because congress lost all their teeth. they don't like what the president does they don't like what the fed does they're not crazy about the supreme court picks because they don't use their own power. i thought the most enlightening thing about this was how pragmatic jay powell was and how, i don't know, off the wheels most of the questions were >> it's true he was pressed repeatedly about elements on wages, mike, that fed has no power over. he said you hold the keys. >> i think we can remember a similar line of questioning at janet yellen yellen would spend a lot of time acknowledging the pain that goes along with a stagnant wage economy. but not -- also not give a satisfying answer. you know, powell just said not my area. honestly, we don't have

jay powell said last week that the policy path we are on now is appropriate for now.pen to the door to rethinking. maybe because of trade or maybe because of this chart. it is a bloomberg chart that shows how the yield curve has flattened so much. the last little bit, you can see a little re-steepening. many people are concerned about what this means, especially if it goes down and goes negative. are you sure the fed is going to toe all the reasons to go more times, especially if the trade war bites the economy if it could? bill: if we get into a full such trade war and see the flattening of the yield curve even get inverted, then all bets are off, but i think presently the path of the fed is to more increases. i would think it would take a lot to get off of that, but i learned to say a long time ago nothing is impossible. kathleen: i want to move onto a piece you wrote a month ago, beware emerging-market storm clouds. obviously the trade war is a storm cloud. is that the biggest one, and how bad could that storm get? into you have to take account a lot of countries o

. ♪ jpl -- jay powell set to testify before the senate banking committee.et's get straight to capitol hill next. >> there are no surprises in the written testimony. the yield curve. very little on tax and trade. it is difficult to predict the impact of either of the economy. as for monetary policy, the fed will continue in powell's words, gradually raising the fed fun rate in order to avoid overheating or weakening the economy or creating asset bubbles. winding down the balance sheet, he said, is going smoothly, offering no hint to the pace may change. has been, upbeat on a solid pace of growth. finally on target. from consumer spending and a healthy level of business investment. that should all continue given he says areand what favorable interest rates and financial conditions. while there are great uncertainties in parts of the world, economic growth abroad remains solid. inflation finally reaching the fed's 2% target, it is encouraging. the challenge is in keeping it there. headline inflation has been driven largely by higher oil prices. one thing not b

we saw movement today based on jay powell's testimony.here anything in there that changes the narrative? he sort of signaled some level of flexibility on the part of the fed. >> we moved into a regime where the new communication around the fed is tiny adjustments around the trend where we know we are getting the quarterly rate hikes. i don't think there was anything dramatic. easy to basis sports here and there. -- basis points here and there. a lot of investors are looking further ahead. quite a few are talking about the recession 2020. the yield curve is having a slow because of the expectation. is we going to get data that going to be strong enough to really say, that's prediction is too early and could lead to the yield curve steepening. essentially the whole curve shifting higher. that is a debate going on right now. if we have stronger data, the narrative will happily push into the background. julie: as we get the various data points, it seems jay powell is trying to be as transparent as possible. he gave an interview which is fairl

jay powell has spoken out against trade tariffs saying they would be good for the economy.second day of testimony, he said he opposed protectionism and wouldn't want to see trade uncertainty offset economic momentum. he remained upbeat about the u.s. economy saying there is no indication a recession is imminent. google says it will appeal a record $5 billion antitrust fine imposed by the european union for the way it parts search and web browser apps onto android mobile devices. it is being told to change the way it operates and given until mid-october to stop what brussels calls illegal practices. >> google has used android as a vehicle to cement its dominance as a search engine. they havetices, denied rivals a chance to innovate and to compete on the merits. they have denied european consumers of the benefit of effective competition in a very important mobile space. tom: reports from jerusalem is a israel has passed a controversial nationstate bill that allows the establishment of communities for jews only. critics fear the lawful rican deposition of israeli arabs by down

the dow up .2% following fed chairman jay powell's comments on capitol hill. will continue to gradually raise rates, for now, he says. the s&p 500 up half of 1%, paring back earlier declines. pose interesting to see was not that only materials were leading gains, but the tech turkey has also bounced back after starting the day lower on disappointing results from netflix. take a look at the chart on the g tv library. because of the run-up in u.s. stocks, it has been incredible compared to the rest of the world, for the last three months, the s&p's relative performance against the rest of the world has gone straight up to a record high. areof course, there concerns about the state of the u.s. economy and where it is headed. flatten. curve could >> absolutely. pretty strong signals in the bond market right now as we look at what is happening with to it 10 year treasuries, and specifically these spreads. we take a look at the yield spreads between these, near its tightest level of the entire economic cycle with growing talk of an inverted yield curve, sending

alix: that leads us to tomorrow and jay powell's testimony.at he said for the marketplace interview last thursday. he said the administration says what it's trying to achieve is a lower tariff. if it works out that way that will be good for our economy. if it works out that we line of having high tariffs that can be negative for our economy. he said i sleep great at night the economy is doing well. you want to buy some etf's or high yields? how do you deal with the fed chair who will say something like that? nick: when you look at it, he is right. the clarity any of us have on trade just is not there. in a sense you will see what comes out. when you look at what has been announced so far, the direct impact on gdp actually is fairly miniscule. probably the greater impact comes through the business conference -- business confidence, consumer confidence angle. we got the first signs of that. it is by no means widespread. risk you want to be taking on when jay powell is saying things are great that there's a big but there. nick: it depends on wher

taking the pulse of the labor market, the fed chief jay powell says the u.s.ay not have reached full employment yet is the concentration of power having an impact on wages? jay powell wrapped up two days of testimony on capitol hill and made it clear to lawmakers he ands to stay "in his lane" out of politics. but the chair did issue multiple warnings about the protection of trade policies, reminding lawmakers that his trade was under their authority. here with more is our economics and policy correspondent michael mckee. thank you for helping us sift this testimony p or was the takeaway indeed that he threat?rade is the >> he did his best to be inoffensive about it. not a particular number or effect on the company, and spoke in generalities, and economic theory that when you have higher tariffs, they grow at a slower rate and you can get inflation and that is not good for a country. however, directly address the administration buses tariffs, dancing away from it every time they ask about it. joe: on the question of inflation, over the course of two days, did w

take it away. >> this is my chart. , i am college advantage so interested in this because jay powellresident trump have both been talking about how much of an advantage high skilled workers have in this economy and how education is the key. this chart demonstrates that clearly. population fore college graduates versus high school graduates. it has moved up sharply since the recession. it stayed elevated. college-educated workers have a huge advantage in the job market relative to their counterparts. vonnie: that is a fascinating and useful chart. something you know but good to have the data. michael mckee? trump has been talking about the dollar and its impact on u.s. trade. it has been too high and that hurts us. the trade weighted dollar in-flight has been going up -- in white, has been going up before the fed raised interest rates and when they started raising rates, the dollar plateaued and started going down. because the economy was getting stronger. over for ait healed little bit and they small growth for a while and it started growing again and that is sending the trade weight

yesterday we heard from jay powell me says he sees several good years ahead of us.you see? >> yeah. i would actually agree with that i think the u.s. economy is going well there's nothing negative out there today. so for us, you know, we're just trying to find different places we could invest. >> different places meaning different than the united states >> different than the united states when we look, we're putting money today out in asia. we're still investing in europe. one of the new things we're doing is here in the u.s., we're doing impact investing so it's one of the -- we're finding that there's huge opportunities there especially on the credit side where most people are doing impact on the equity side. >> what would you be looking for? >> so it's mainly where we're lending money. it's more of a direct lending approach and you're generating about 10%, 15% returns. because there seems to be this real niche out there for that. there aren't that many people doing it >> when you say impact investing, you're talking about companies that you feel good investing in

give us highlights of your conversation. >> i first want to back up a little bit where jay powell didyou are trading desk, that matters. that will continue its gradual pace and not necessarily stop or speed things up. he also went on to say that trade is not having a major impact on the fat at the moment but that no nation has done a good job dealing with trade wars and that open trade has served nations well. that is where he comes in. ustold me the models show that we are not going to have a major macroeconomic impact from the trade wars we have seen so far but it could get worse if people think it will get worse. here is what he had to say. medium firm enterprises, looking at making some investments, are now saying at least through survey work and interviews, we may hold off on these and see how things shake out. if enough of that happens and we lose those spirits, then i think we have an issue. it's a self-fulfilling prophecy. if everyone believes they will have a larger impact than they may have, then it will have a larger impact. collects the feeling is, maybe these animal spiri

portfolios on make sense to me >> can we look at the macro side of thing we have comments from jay powellars president trump perhaps saying russia did not meddle in our elections. all of these things are working around is that the kind of environment where investors should still feel like they should be invested or is this a time to rethink about putting more in cash >> it's hard to be anti-market now when the economy is thrusting on all cylinders i think there's a chance that we'll started hearing the fed back off of the idea of another two rate hikes this year maybe they won't want to invert the yield curve. it's still a friendly market for investors, but if we get break through on the trade war stuff, any sounding of reconciliation or making a deal, we can get a melt up in the market. the reason we've been range bound is because of the trade war fears. >> all right ken, thanks for joining us >> thank you >>> all right. your big individual stock stories now include ford the automaker agreed to a 2$299 million so-called economic loss settlement covering at least 6 million u.s. cars with

testimony from jay powell tuesday and wednesday of next week. for more, let's bring in our matt who covers the fed. no huge market reaction now but there were one or two items that stood out, globalists include the intensification of trade tensions. on the might of the fed board of governors. >> yes, this report accompanies jay powell's testimony before congress next week and we will get his speech next week. the monetary policy report is not to make too much news and upstage the fed chairman's remarks. interesting is the extra sections that chris condon was talking about in the report. labor force participation rate is interesting because there has been a big question on how can and yetment be so low inflation is not going up? one way to square the circle is to say we are seeing increase in labor force participation rate and people are being drawn in from outside the job market who may have left. was on interesting box the balance sheet and interest on reserve. something people in interest rate markets have been paying attention to as the red f

. >> excellent jay powell, his pragmatism is so refreshing had some bull points in some of his talksr both sides of the aisle tuesday and wednesday. and one thing caught my eye. he said the u.s. economy needs to grow faster than debt alls i could think of was is that the dynamic or is the dynamic the u.s. economy needs to grow faster than congress spends i think it is an important distinction as we try to handicap whether tax cuts are a good or bad thing. your final thoughts. >> jay powell is a financial guy, and he understands it is the debt service capability that's the driver. if the economy grows faster than debt, ability of the u.s. economy to handle that debt is more manageable. i don't think he is endorsing long term deficit spending >> i got you always interesting to hear your insights thank you for joining me jon fortt, iisllou. t a yrs >>> tesla getting a downgrade this morning the analyst joins us next. >>> tesla overvalued despite falling more than 16% from its all-time high from a year ago. joining us now is the man behind the call thanks for being here. >> thank you >>

i don't think jay powell is want to pay much attention to this.rea, does it application for the dollar? as an investor, you're looking at a president who doesn't want a summer dollar. guess what a stronger dollar. seema: you have to pay attention to it. strong -- he was against a strong dollar policy. that didn't stop the dollar from strengthening in the first half of this year. we have to look at the growth dynamics. all of that is pointing to a strong dollar. alix: what does that wind up doing to asset allocation? for small caps, they had had a really good run. analysts are now downgrading their forecast. how do you position for that? looks toward international equities. it is upset by the stronger growth numbers coming out of the u.s. area thatis the one if you want to insulate your portfolio from the trade tensions, u.s. small-cap is a way forward. it may be that a lot of people are starting to think that trade is not to have such a significant impact on global growth. leaves.ading the tea seema shah, thank you so much. michael mckee, good to