jim bullard it is raising the red flag on the yield curve.ysit flat, it is in danger of inversion and could happen as early as september. it is a negative signal for the economy. let's look at a chart that helps us what he is looking at. you know what, kids, i don't know if i can. it is supposed to be the yield curve -- anyway, come back to me. you have got it. thank you. further flattening. you are looking at the spread from 5-30, the white line, down to 26 basis points, the flattest in the whole course of its bull run coming out of the great recession. the two zen tens have also gotten flatter. you can see why he is worried and inverted yield curve. it is a negative signal for the u.s. economy. others have mentioned this. is --d of mester said it loretta mester said it is something she is watching. he was asked about cryptocurrencies because he was a conference here in new york and said it is pushing the u.s. in the wrong direction. multiple currencies have not been good for the u.s. in the past. richard clarida, end line to be , testifiesd

betty: that was jim bullard speaking to kathleen hague.et's talk more about what he just mentioned. interest rates. i want to get perspectives from olly ver. what did you make of his comments? >> number one, he's much smarter nan me. so i'm not going to dice agree with him. >> forward guidance has helped calm markets. it has helped eliminate volatility. we went through very low volumityity to markets. irany you need to make a distinction between being transparent and clear. nay haven't niesely always been clear. i don't see that becoming any better o going forward. >> why not? >> because if you feed the fed statements and we all do. we expect to do this unless happens. that's not exactly clear. you know, in itself that forward guidance that transparency acts almost as a rate hike in itself. it puts the notion out there that we're going to act and do something in the future and given that blarkts and investors are forward thinking mechanisms. that tends to elicit an action without being an action to the fed. >> >> it has been. but hearing h

jim bullard was very dovish yesterday, and today, we heard from others.u think there is a consensus? kathleen: i think so, but there are a couple of other dovish voices outside the consensus. that is look at these two, rob kaplan is confident that the u.s. gdp will rise 2.5 percent this year,. itwe look at the chart, looks at the simple relationship between real gdp growth and the core pce. the core pce is down here, and the the is up here. what we see is that it is kind of broad, how they follow each other. just to show you how strong gdp does not mean strong inflation. the u.s. is at or past full employment and neel kashkari says the three point 9% jobless rate could disguise the fact that there is still some labor market slack. you will see unemployment falling. you don't think there is slack? then why are wages so flat? that is the point that neel kashkari is getting at. he said that manufacturing, a very important gauge of the southeast atlantic region, it surged into latest month. but people are saying that maybe the earth shrugging off trade tensio

betty: again, that was jim bullard speaking exclusively to jim -- it's lucidly -- exclusively to kathleennext, the take on high-level talks ongoing in washington, whether or not we should be hopeful. that's next. this is bloomberg. ♪ betty: this is daybreak asia in new york. david ingles: and i'm david a list in hong kong. he is in washington. joining us understand what we can expect from pham realistically -- from him realistically, we have our guest. generally, what expectation should i have for these next few days? >> i'm pretty optimistic. there's maybe some concrete result that can come out, at least to avert a trade were between china and the u.s.. it is quite clear that senior officials from china coming to america again just after two weeks of intense straight talks in beijing, there's something although they are probably concrete will come out. david: that they are in washington means they are prepared to give concessions to the united states, enough for the u.s. to back away. what do you think those gifts are concessions are? >> concession is probably mutual. both benefit from t

and president jim bullard also learning that such a strategy could cause problems for the u.s.. he is watching that yield curve. kathleen hays here with more. first, talk to us about what they said. >> what we have here to a certain extent is jim bullard against the consensus of the open market committee. a masters spoke first of the global center event in paris in later with francine on bloomberg television, she said that inflation, the goal of 2% has not been fully 2% inen though it touched march and she is concerned that may be some of the change here is temporary due to oil prices. nevertheless, she endorses that steady rate hike path. >> we will see some variation over time. it does not necessarily mean that we will shoot it off here. i don't see that happening. i think it's going to be a gradual process. and therefore, the fed will stay on a gradual upper path of interest rate. >> even cautious and gradual is possibly too much for this u.s. economy. he gave a very important presentation on friday, repeated some of his points on monday today in new york. i will be speaking

let's listen to what bowlers said -- bullard said. jimview, i don't think the fed has to be so aggressive as the get to in inverted yield curve. if inflation is higher than it is today and we were worried about inflation getting away from us then maybe i would go along with it. kathleen: the european central bank is the central bank watching over europe, that might be called upon to take action. that is what everyone is wondering as well. everyone harkening back to 2012 when mario draghi said he would do whatever it takes to support the euro area, keep it together. the really interesting point is if an italian government wants to be bailed out for big bond purchases, they will ask for that. if there is a eurosceptic government in place, i think people are wondering if they would take that step. the situation is equally as complicated for the fed. haidi: thank you so much for that, kathleen hays, global economic and policy editor. let's get more with david. dave, we are watching the fallout from the italian volatility, very much a risk obs

later on we have a nice was an interview with federal bank president jim bullard.his is bloomberg. ♪ ♪ vonnie: live from new york i am vonnie quinn. mark: live from london i am mark barton. let's get to italy. bonds rising for a second day. the company's -- we just learned the italian economist, a leading candidate for the role of finance minister, for more on the ground we go to anne-marie. could the populists get their act together and for to government or not? >> that is what they are potentially trying to do right now. maillot --and the they are in a meeting in the lower house of parliament. they areust learned as meeting is that on the short list it seems like the economist giovanni is up for the job of finance minister. he is currently holding a course on economy of corruption and illegal markets. he is a professor in rome at a university. that is all we know about him. we do not have the finance minister, this economy job is crucial. this is what set things up on sunday when the president vetoed their pick up the finance minister. he callurosceptic the euro

meansarticipants, that there was only jim bullard from the st.ed who does not think that the said to be raising the hikes at all, agreed. coming, it will likely soon be appropriate for the committee to take another step in removing a policy accommodation. temporary inflation hike moderately above 2% could be helpful and anchoring longer run expectations and consistent with that objective. sounds dovish. they are going to say it is helpful having above targets. >> the u.s. government is dramatically rationing up scrutiny of the red hot market. the apartment is a criminal investigation into whether traders are in manipulating the price of bitcoin. they worry that virtual currencies are susceptible to fraud. >> this is a significant moment. the agency involved with working with the justice department is the commodities commission which is not another commission which is already investigating. you have the two capital market agencies and the u.s. both investigating the processes. justicecomes to the probe, they are looking at this additional fraud we

most participants, that means there was probably only jim bullard from the st.is fed who does not think that the fed should be hiking rates at all, agreed or judged the current economic outlook, saying fiscal stimulus coming. it will likely soon be appropriate for the committee to take another step in removing a policy accommodation. it was also noted that a temporary period of inflation modestly above 2% would be consistent with the committee's symmetric inflation objective, could be helpful in anchoring longer run expectations at a level consistent with that objective. sounds dovish, doesn't it? because they are actually going to say it is helpful having above targets. ♪ david: welcome back to "bloomberg best." i am david ingles. this week, bloomberg's erik schatzker sat down with an exclusive interview with wells fargo ceo tim sloan. they talked about the public image of the lender and the challenges sloan sees and markets where wells fargo is -- does its business. tim: there are some markets that we are a little bit concerned about. auto, we have pulled back

most participants, that means there was only jim bullard from the st.ed who does not think that the fed should be hiking rates at all, agreed. fiscal stimulus coming, it will likely soon be appropriate for the committee to take another step in removing a policy accommodation. it was also noted that a temporary period of inflation modestly above 2% would be consistent with the committee's inflation and could be helpful in anchoring longer run expectations and consistent with that objective. sounds dovish. they are going to say it is helpful having above targets. >> the u.s. government is dramatically rationing up digital of the red hot currency market. according to people familiar with the matter, the justice department has opened up a criminal investigation into whether traders are manipulating the price of bitcoin. they worry that virtual currencies are susceptible to fraud for a number of reasons. asked this is a significant moment. and i would point out that the agency involved with working with the u.s. justice department is the commodities commissi

jim bullard tells bloomberg the fomc does not have the push -- to push so aggressively or the curve will invert. leaders agree to stick with the iran deal. believe? we will ask if you today. are inrging markets worse shape than during the global financial crisis of 2008. this is brazil. cutting rates in the real has traded south on that news. the pound is better bid this morning. let's talk about what happened with the markets as we await the start of european trade. we are incredibly flat this morning as you can see. futures telling us we are going nowhere in a hurry. you can see the same thing if you go to your screen on the bloomberg and take a look at your fair values. we are not moving very much this morning. the big story is what is happening with the dollar and the u.s. 10 year. we have a three point one handle. i checked and things are continuing to move. let's take a look at where we are with treasuries. on theies are a little move as you can see. it was a decent move. we will talk to mark about this. 3.11, that is where we are with treasuries. we are pushing higher. this is yie

up next, we are going to talk with jim bullard. 3% and beyond.0 year yield at its highest level since 2011. we will ask him about that. many of the other things we will be able to talk about in this hour. don't miss the exclusive interview. that's at 6:30 p.m. not next per se but later on this afternoon. ♪ 12 minutes into the market session. when we focusing on? let's find out. burberry announcing a big buyback. in line with estimates but below the rate of other luxury rivals. benefiting from the boom in chinese spending. it's very much different new management. trying to kickstart this classic plant -- brand. his first show will be in september and that's what many people are looking forward to for the rest of the year. up nearly 5% this morning. increasing the payout by 40%. this is anticipation to tie up with rivals. saying thislysts also represents a unique global play on the rail market. investors like the idea of that buyback. we watching italian ranks broadly. they are down across the board if you're looking at was happening on the ftse. s

jim bullard tells bloomberg the fomc does not have the push -- to push so aggressively or the curve willders agree to stick with the iran deal.

kashkaristen to your kashkaris or jim bullards. we should feel bad for missing for five years. julia: they are just not going to vocalize it. surely. david: some have been more vocal than others. this goes away, and you worry about inflation now. there has been a lot written about price level targeting. interesting that they allow the overshoot to be priced in, so i think if we were to get an unusually high set of inflation numbers, i think they would fall back on saying, wait a minute, guys. nothing really worked like we 2015,t going into 2014, 2016. we went through 4.5% inflation, now 4%. when we were in the 5% range, we did not get the inflation. the phillips curve did not work. figure out if maybe there is a different story. julia: you said you have been having conversations with people fearful about the situation. that is how we started the story. david: absolutely. that: getting investors are pretty fearful on a daily basis about things like this, and data points. is there something else? david: a lot of folks in this market, they have just have a demon inside that wants

most participants, that means it was probably only jim bullard -- if it not think confirms their economiclook, fiscal stimulus coming, it would likely soon be appropriate for the committee to take another step in policy accommodation. sentence, the one where they are not declaring victory on inflation yet, even though it has touched 2% on the key measure for one month. here is what they's head. it was already noted a temporary period of inflation modestly above 2% could be helpful in thatring consistent with objective. sounds dovish, because they will say it is helpful to have an above target when it has been so long. is dovish. they say jay powell is probably in the three rate hike camp. no mention of emerging markets. seeing turkey have to raise their key rate by 300 basis points. their president opposing these kinds of moves. that is the kind of thing if it were to spread into emerging markets, maybe the fed would take notice. but right now, much more focus on inflation. positive on growth, but no signs the fed is in a hurry to go to three hikes -- from three hikes to four. betty: than

bullard,ined by jim president of the federal reserve bank of st. louis. another special show featuring you. >> thanks again for coming out. t-rex i have to thank you for the very interesting presentation you gave on friday where you signaled caution on monetary policy. five big reasons you think the fed should not continue to hike rates. broadly what are you so concerned about? what is the risk in fed move? rateshink global interest are still low and i think we have to keep that in mind and so what's normal today is lower than what it has been in the past and people have been talking about this for quite a while. we can't lose sight of that. it seems to me of all the cautions the most urgent one is yield curve flattening. you said that it is getting close to crunch time on the yield curve. it could actually invert relatively soon. what is driving it and why is it happening? >> if the effect goes up three times threat the rest of this year you have to ask yourself is the 10-year really going to go up that much in that timeframe. if it doesn't we are going

bullard,echoing jim what he said last week and in a couple of speeches, the look of could flatten byhe end of this year if the fed keeps raising rates. do the math, 50 basis points more, you are going and versus the 10-year note. much ofounding like not an alarm bell, but a little bit of an alarm bell. kathleen, thank you so much. we will stay on that, because investors have been cheering the easing of trade tensions between washington and beijing, that sense the stock market higher and the dollar lower. at the same time, treasuries studied while the safe havens tumbled with the yen and the dollar. brian jacobson is here, from wells fargo. so brian, let's take the headlines first, where he is against the tone of wait and see, we need to see more data. there is still slack in the labor market and perhaps the fed, if they raise rates too quickly, could jeopardize field curve. what do you make of that? >> it is a minority view, but i think it is a reasons view. it is interesting the diversity of opinions you have from the fed officials. you have master, he was there last week talking ab

yvonne: jim, we have to leave it there. james bullard, st. louis fed president and ceo. and, our economics and policy editor, kathleen hays. coming up, masayoshi son hits on the gas as gm's driverless cars join his vision fund. this is bloomberg. ♪ a.m. friday. happy friday in hong kong. we are 30 minutes away from asia's first major market open. msci inclusion day. samsonite reviewing trading from 9:00 a.m. in hong kong, when we learned the ceo ramesh tainwala resigned after facing pressure from seller blue orca. ramy: beautiful morning there, but not a beautiful evening here. rain in the forecast, 7:30 p.m. thursday in new york. the empirelooking at state building like we normally do, a beautiful shot of traffic outside bloomberg headquarters, as people make their way home. i will say happy thursday to you here. i am remy innocence you in new york. yvonne: i am yvonne man in new york -- in hong kong. closest up, america's allies will impose tit-for-tat penalties after the u.s. confirmed tariffs against them. commerce secretary wilbur ross issued duties on steel and alu

jim. we'll see you. >> thank you >>> "squawk on the street" don't miss the cnbc interview with james bullard at 10:30 a.mk. oooh! that had to hurt. aflac?! not that kind of hurt. yeah, aflac paid us cash in just one day to help with our car payments and mortgage. aflac! perfect timing! see how aflac helps cover everyday expenses at aflac.com. >>> welcome back walmart announced they were buying 77% stake in the indian e commerce firm. the biggest ever acquisition now walmart said an ipo should be done evaluation lower than at the time of walmart's investments. >> one last look at the markets that have started in triple digits when we began the show. now 65 points on the dow we had seven straight up sessions. >> 2.3 last week. >> nasdaq is closer than the other to the highs but they're all up for the year. so we bounced off that and retested those correction lows who knows what happens from here on out at least the day looks positive again for the start of the week. there's wti crude up 19 cents. sort of locked at the 70 level and the ten year a lot of these things at 3% level or just under at 2.98. i'll k