eastern time, kathleen hays will have an exclusive interview with jim bullard. joins us now from st. louis with a preview. james bullard is known for being a little bit of an outlier. what do you anticipate he might tell you about inflation today? kathleen: well, he is certainly -- it is great for being here and face for hosting a very special show. simulcasting this line. -- live. inflation is the biggest one. inflation has not moved closer to the fed's 2% target. it is pulling further away. jim bullard had been saying, i don't think we need any rate hikes right now. we are in a new regime in economy. growth is stuck at 2%. just a couple days ago, he said, no, the level of rates are appropriate. this is where they should state. that is one of the big topics i want to dig into.inflation has become a global problem. vonnie: i am pulling up a chart, kathleen. 884111 is the chart you can look at. how in fact will they start to pan off some of those securities? kathleen: he has pretty much been pretty clear. they have given us the outline for how they will start thi

he spoke to bloomberg's kathleen hays at jackson hole in wyoming.in europe, inflation rates are actually close to their target. close to 2%. in japan, the inflation rate is still 0.5%, far from our 2% target. betweensome difference u.s., europe, and japan. waves are not rising so fast. that is true. .ut prices are not rising there's some kind of .eflationary mindset strong among business leaders. to be cautious in raising prices. what companies are doing is, investing in laborsaving equipment and so forth, and they are changing the laborss model to reduce content. increase,me wage ,abor cost has not been rising so they are not required to raise the prices. >> but they are doing well. gdp growth of six quarters in a row. you are succeeding on growth. maybe something has changed. does inflation matter so much? japanese households like low inflation. >> two things. one, 4% growth is good, but i don't think 4% growth can be sustained. around 2% growth, we can obtain this fiscal year, and even in the next fiscal year, growth to 2% may be possible to obta

now is kathleen hays. thank you for staying up silly. -- staying up so late. expecting? i love that bingo card story. it is clever and delightful. when of the cards would have to be inflation. it is a been conundrum. -- it is a big conundrum. people were probably hoping that janet yellen might -- that would be of boosting inflation, but instead the topic is going to be financial stability. financial stability and raising this question could be raising the question that jacob frenkel raised. j.p. the chairman of morgan chief international. he said rates have been so low for so long, you run the risk of excesses in financial markets. a chair told us that he -- that if you were back at the fed, he would not be voting to raise rates now. there is clear evidence that inflation is starting to rise again. if janet yellen sent any signal that could be connecting the dots of risk of financial instability to some sense of a reason that, even with inflation low, the fed to be considering one more rate increase this year. we shall see. anna: it'll be interesting to see whether it is

i'm kathleen hays in new york.d quarter, matching forecasts. a tick down from the previous three months. our next guest has a bearish view on the gdp growth for 2018, so let's find out why as we bring in young-sun kwon, a senior economist. thisally, your take on 2.7% number, we know they were looking at 2.8% gdp growth in 2017. it looks like they are on target with exports rising. are you more bearish on the economy next year, or is it now? you don't believe these numbers? these numbers are posted by private consumption, but don't forget that over the last --r and a half, south korean contributed to more than half of gdp. over the next 1.5 years, i expect the government to announce tough measures on the housing market. we believe the housing market will go into a housing slump. the other one is the north korea risk. because of the concern about north korea, actually the financial conditions are getting tighter. the construction sector to is tied to financial conditions. chinese choice to believeth korea, but we tha

rishaad: the boj governor haruhiko kuroda speaking exclusively with kathleen hays. america's stronger storm for years. we will assess the impact on the oil and gas business with ubs wealth management next. ♪ ♪ haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. rishaad: i am rishaad salamat in hong kong, looking at the business flash headlines. china's state owned air lines slowing expansion to focus on the domestic market. china eastern and china southern added international seats for the first half, but less than half the rate from it year ago. investors watching domestic yields wind carries are out with earnings this week come expecting 28% profit just for china eastern. haidi: the latest index in australia does not track stocks, bonds, or currencies. assess an algorithm to the tone of the rba governor's words. they see if rate statements show any clear bias and the results correlate positively with rate moves and show it may be finally turning hawkish. another u.s. retailer filed for bankruptcy as americans turned away in favor of online shopping

kathleen hays is standing by. good to see you this morning. g. -- and janet yellen. they all have it similar problem. -- had a similar problem. kathleen: if you think about coming into jackson hole, we can see around the world, i am going to speak about growth. persistently weak inflation and the central banks have this question of the ventral reduction. how are they going to go about it? we can put governor kuroda to one side. he has made it clear he doesn't want to talk about the exit. japan is so far from its inflation target. attending jackson hole every year. let's take a look at janet yellen. at the beginning of the year, who would have thought the fed chair would have to be thinking twice about raising interest rates one more time this year? as inflation started falling away from target, it has put officials on the defensive. people would love to hear when she speaks her latest sense of inflation. is the weakness transitory or is she giving it more weight and offense that maybe this would slow her down -- and a sense that maybe this woul

speaking to kathleen hays exclusively at jackson hole. fantastic interview.'s change gears to excuse the pun. uber is recording a new ceo. according to people familiar ofh the matter, the x ceo expedia will take the top job. he will replace the pound -- the founder who was forced to resign. let's get to bloomberg tech reporter that joins us out of tokyo. questions jumpck straight to mind. what does this mean for uber? i haven't even heard this name on the list. ay are we now talking about person that nobody expected? process we have seen, how did this happen? in terms of what this means in terms of timing, this really is the end of a certain phase for uber. the end of a period of hyper aggressive growth at all costs, massive fund-raising. now we are looking at this as a sort of a transition into a period where they will consolidate and stabilize things , but prepare for uber as a big mature company. dara, he is not unknown within the tech circles. the first thing to note is, he is coming from the travel industry. and uber is trying to disrupt the transportati

kathleen hays is here with more. job numbers are very closely watched. chatter right now? kathleen: let's remind people why it is so closely watched. it is the first number that covers the entire country, all industries. it is a broad sense of what is happening in the u.s. economy. what is happening now. that is why the fed is watching and waiting. i will show you a conundrum on g #btv 189. that is why the fed is watching and waiting. unemployment is falling, wages are not rising. unemployment is supposed to get down 4.4% to 4.3%. wages have peaked 2.5%. that is not what the fed wants to see. in terms of specific numbers, you said 180,000 numbers. the whisper is $185,000. --mployment is supposed us fall to 4.3%. supposed to fall to 2.4%, year-over-year. fed officials speaking yesterday, one saying she thinks full employment is not 5%, but 4.75%. fed hawks say that should be boosting inflation. let's look at one more chart, g #btv 49. this gets to the bait. if it is below full employment, if it goes to 4.3%, does it have to push inflation around? inflation

kathleen hays is standing by for us. a scenic backdrop indeed.t question are central bankers trying to answer? arehe big question they trying to answer and everyone would like them to find an answer to is why is it that many of economies have picked up and are in recovery, labor markets tighter, and yet inflation is not heading towards target. it is a conundrum of our times for central banks. earlier we spoke to the president of the federal reserve bank of dallas and ask him about this. he talked about different factors affecting this, but even though he can see it is moving slowly and urges patience, he up on theven eventuality that inflation will move higher. faith thatt lost inflation may well get back to its 2% target. you have to understand the historic cyclical forces and andls what they suggested that they are being offset by new forces that we can understand by looking at industries, companies, and talking to ceos, and those are having a muting effect on inflation. >> you will hear another view from the former vice chair of the federal re

haidi: that was the bank of japan governor speaking with kathleen hays. australia. this is bloomberg. ♪ ♪ haidi: breaking lines on a story we have been tracking, the commonwealth bank of australia facing another difference in the culture. they will hold an inquiry to the governor's counter accountability after the fall of from this money laundering allegation. this scandal continues to widen, saying the australian community's trust in the banking community has been integrated. degraded. this comes on the back of other regulatory bodies saying it is investigating the bank for a money-laundering scandal and regulatory agency. these investigations into the breaches of money-laundering and terrorism, combined cash deposits of $25 million. they investigated here. and last week, one of the law firms, lawrence blackburn, launching a class of shareholders, given that have fallen in response to the scandal. toty: certainly not adding the reputation at all for australian banks. what happened here at the commonwealth bank of australia, the public sentiment against t

i want to get straight to kathleen hays here, who has the latest job numbers crossing the bloomberg on. kathleen. kathleen: all these numbers are for the month of july. jobless rates coming in at forecast. afghan ratio, which has been rising again, comes in spot on with the forecast, up from 1.51. there are 1.5% opening for everyone worker in japan. what is weaker than forecast by a longshot is overall household spending. the year-over-year number coming in at -0.2%. that is down sharply from up to .3% in june. the survey was looking for 0.7% year-over-year, and we do know that one thing that has been going on with spending is auto sales. they slipped in june and broke a five-month record of increases. on the layer market and one on spending. people have been wondering if this tighter labor market -- we are starting to see some increase in wages even. there was a sub and services. the producer price data increase in july. 0.5% year-over-year in the latest reading when you look at the core number. rise in inflation eating into people's pocketbooks and making them cautious on spending? t

and thanks to kathleen hays.big four banks showing the government's drive to get -- against bad loan seems to be paying off. this is bloomberg. ♪ yvonne: this is "bloomberg daybreak: asia." betty: a quick check of the latest business flash headlines. second-quarter revenue beating the average analyst estimate by $13 million. the china-based travel booker had third-quarter sales jumping from a year earlier. they account for about 40% of global online travel booking. yvonne: apple waiting into the memory chips. memoryepends on flash from toshiba in iphone and ipod and wants to continue supplies and not dependent on rival samsung. china state on -- state on carrier boosting profit in the first half. china has air benefited from a pickup and investing business travel but reported a 4% fall in net income, due in part to losses at cathay pacific. air china says competition is increasing rapidly. banks: china's biggest forecast beating earnings for the second quarter. busted leveraging campaign. let's get to our china c

,. -- bring in kathleen hays. kathleen: bullard made it clear that inflation is too weak. here is what he said earlier today. "recent inflation data has called into question the idea that u.s. inflation is reliably returning to target. the current level will remain appropriate over the near-term." jim bullard went on to say that he sees little relationship between inflation and on employment, so even if unemployment falls and the economy is going along, he does not see that boosting inflation much. he does think it is time to look at the balance sheet. able toe going to be get going on this process. it is going to be very slow. i do not think there will be a lot of impact on markets, but i think it is the right thing to do and i would support getting going on this process. kathleen: he says it should start in september. the president of the minneapolis voter, basically agreed that inflation is still weak. it matters because it has to do with fed credibility. he said if it should boost inflation, it should do it. h

kathleen hays look at the bank of korea decision today. being stuck the rba between a rock and a hard place, but you do not envy governor lee. >> exactly. it was already a rock and a hard place when it comes to the korean economy. to gdp ratio very high, real income stalled, but as they decide to keep that key rate steady, 1.25%, unanimous in a bloomberg survey. risks comes from the north. these missiles, the question of what will happen, we can't even imagine how important it is to the people of korea, let alone the central bank governor. it has rattled markets. the bank of korea cited geopolitical risks as one of the biggest uncertainty right now over the economy. governor lee will be speaking at a press conference in less than an hour from now and people will be waiting to see what he says about north korea, the impact on the economy. forecasting been gdp a 2.8%, which is pretty good. anything, next year will be a rate hike. this is 8437. the white line, debt to gdp, turquoise line real average income, meaning adjusted for inflation. it

i'm kathleen hays life at the st. louis fed with president jim bullard. just to recap some of that conversation she had with jim bullard, the president, ceo of the st. louis fed, jubilant saying i think we have a ways to notefore we -- he said i optimistic we will have inflation high -- high inflation by the end of the year. that the balance sheet, as well as we have a plan from the federal reserve about unwinding that balance sheet. he said he wanted that to start before the fed began to raise rates. he said the plane and rates now is a good land, in his words called it a prudent, he called it so incremental and so moving it's almost nothing preachy asked him about dollar dynamics and also asked him about who might make a good fit share when janet yellen's tenure expires in february. he said he would favor a phd economist but emphasize this would be president trump's decision. president trump is on a working vacation in new jersey. that has not stopped him from working on filling key appointments in washington. the president poised to nominate a longtime

mario draghi is taking center stage so let's get to kathleen hays for all the headlines. kathleen? julie, mario draghi took this occasion not to deliver a policy message. not to signal with the ecp does or does not do next, or when. he took this as an occasion to talk about what the big challenges are globally. he's especially concerned about openness. protectionism. he's concerned about how to make multilateral cooperation sustainable. it fair and equitable. but when it comes to currency, what you can take away is either mario draghi is not concerned about the euro because he didn't explicitly single it out. he's not worried. mario draghi will wait for the next ecb meeting. of the bull by indicating they will try to slow them down. , mario draghi gave an interesting speech. he talked about the nice regulation. echoing janet yellen just a bit. it's clear he's holding his fire until the next opportunity to speak and send a message. 4 reporting from -- julie: reporting from jackson hole, wyoming. we appreciate it, kathleen. joining us from our washington bureau, good to see you. than

scarlet: that was haruhiko kuroda speaking with kathleen hays.global central bank policy, including the prospect of regime change at the fed when we speak with christian ramani. you want to catch that interview at 4:00 p.m. eastern on "what'd you miss? " york, this isw bloomberg. ♪ . . julia: it's 3 p.m. in new york, 12:00 p.m. in san francisco and 8 p.m. in london. i'm julia chatterley. scarlet: and i'm scarlet fu. welcome to bloomberg markets. julia: we are live from bloomberg world headquarters in new york. here are the top stories we are covering on the bloomberg and around the world. be on the social cost, the potential economic and security catastrophe -- damages growing larger by the hour as an unusually large number of people do not own insurance. president trump set for news conference this hour, one of the many events taking the focus away from what was supposed to be a big week on taxes. speaking of challenges -- it is a long list for the expedia star 's he takes the job of uber ceo. he said to be the favorite as the decision goes near

kathleen hays, thank you as well. n's exclusive interview with haruhiko kuroda ahead on the list hour of daybreak asia -- the next hour of daybreak asia. it will hear about the yield curve at 8:30 a.m. in hong kong, 8:30 p.m. in new york. this is bloomberg. ♪ betty: breaking news, the uber meeting minus the ceo. according to the new york times, the board is set to vote on the new ceo. they want to announce the decision first to their employees and then publicly. hass like yvonne, the board voted. it will replace the founder and former ceo. [please stand by] they could be seeing news in the next hour when the markets open. this is bloomberg. ♪ ♪ 8:00 a.m. in hong kong. we are live from bloomberg's asia headquarters. the top stories this monday, headlines from jackson hole. central banks on to verging paths. jay y. lee to appeal his sentence, the corruption verdict with implications beyond samsung. >> welcome to "daybreak asia" from bloomberg's global headquarters. it is just after 8:00 p.m., gasoline surges as harvey s,

kathleen hays interview with jim bullard is live tomorrow 6:00 p.m.ondon time. >> republicans are discussing a when it comes to overhauling the tax system. they are trying to change the tax code without adding to the federal deficit. president plans to wait at least a week before the trade investigation of china. it officials say the white house is still concerned about possible chinese violations of intellectual property laws. south africa's main aftertion filed a motion -- credit card to has passed what they were in 2008. >> thanks a lot. ining up, jumping $2000 china deepens cuts. you know what is next. this is bloomberg. ando my from new york london, on vonnie quinn. >> this is bloomberg markets. to $2000.ping joining us now, brought battle -- further hashow much a golf for the short-term? >> that is a real good question. as a trading vehicle, it could keep rally. when you talk about a global commodity, you talked about demand. demand has seemed to rally in the longer term. may should have started cutting these illegals. remember, china is still a

kathleen hays here with more. set the stage here with janet yellen.pare the markets are what seems like a song -- a long time coming, higher rates. >> how much will she? people are waiting to see. this is jackson hole, this is the annual symposium. the fed chair, whoever that may a who kicks off -- there is thursday night dinner, friday morning 8:00 mountain time, 10:00 eastern. .0:00 at night in asia she will deliver a talk about anything she wants. the topic of the seminar of the conferences here is burned global growth. the dynamics. her topic specifically, so far we know is financial stability. what does that mean? isn't she going to talk about inflation missing its target with about she -- for the balance sheet? lessig look at the bloomberg chart. has -- look at the down byyou can see 1.4%. missing the target and moving in the wrong direction. why is the fed not taking any direction on balance sheet or interest rate? the minutes from the last meeting had a small bit about financial stability. people are wondering if there is a system -- systemic

the president's chat with kathleen hays, talking about lower inflation may be weighing on yields fromf quality has stayed moderate at best. this could be a directional change for where year notes -- yields are going to go. betty: let's get the first word news with roslyn. jumped.iwi dollar governor graham wheeler says worries remain about gdp growth, which was lower than it in the march quarter. remain forlicy will a considerable time. >> inflation is likely to decline as the effect of higher prices dissipates. monetary policy were main accommodative -- will remain accommodative for a consum a considerable period. >> a four-year loss of aussie dollar's with an underlying pretax loss of 3.7 million. it is forecasting improvement on a year and the first quarter. the airline is part owned by age and a -- agent a. considering a shakeup of the hotel units as part of an overhaul of the following group. wonder hotel made by the equity interest of wonder culture travel group in a deal worth 940 million dollars, reorganizing after coming under officials scrutiny. it agreed to sell its assets f

coming up tomorrow, kathleen hays will be interviewing james bullard.e know he is a dove, but we want to get into details on his call on inflation. this is bloomberg. ♪ emma: this is "bloomberg daybreak." i'm emma chandra with your bloomberg business flash. billionaire business investor bill ackman has taken his next step in the fight to shakeup adp. he has nominated three people to the board including himself. he says he will hold a public webcast next week to discuss ways of unlocking value at adp. and south africa, the parliament votes today on the motion of no-confidence in president jacob zuma. ballot will be a secret decision, increasing the chances of his ouster. the main opposition filed a no-confidence motion after he fired finance minister cap and gordon. -- catherine gordon. david: for more on that important south african vote, we our reporter in the johannesburg bureau. ?s he going to win or lose arabile: that's exactly what everyone is wondering coul. 201 votes are needed. equations have been put through and 50 members from the ruling afric

kathleen hays, thank you.estor concerns after debt rose to a record, saying oil spill payments for the rest of the year and bonds and asset sales will ease the burden. second-quarter net income beat estimates. oil and gas was 10% higher. is cashsaid bp breakeven at below $50 a barrel, forecasting prices next year between $45 and $55. profitsiotinto net surge to more than $4 billion, up from 1.5 billion korean a year ago. they are expected to under pitt prices peaked at $95 a time earlier this year. yvonne: india's biggest steel producer had the first profit drop in six quarters. net income fell 44% in three months through june, compared to the record profit of $175 million a year earlier. they reported is a private gauge of output slid to an eight year low. betty: you can get a roundup of that story and more to get your day going in today's edition of daybreak. subscribers go to dayb on your terminal. it is available on mobile. you can customize your settings to only get the news on the industries and ass

coming up next hour, kathleen hays-- next, our kathleen will interview james bullard. that is coming up at 1:00 p.m. eastern time. we will set the stage, next. this is bloomberg. ♪ this is "bloomberg markets." i'm vonnie quinn. we are halfway to a great busy week for the federal reserve and the u.s. economy, of course. today at 1:00 p.m. eastern time, jim bullard will speak exclusively with bloomberg. tomorrow, we will have the new york fed president bill dudley. we will also get the u.s. july pbi. on friday, the last month's cpi data. probably the most important date of the week. for a little bit of an idea what this will mean, i want to bring in jewel cracjoel. all eyes really on the cpi data for the most part on friday, right? joel: that's right. maybe a little context or background on this. earlier this year, measures of inflation softened. we know there were factors behind that softening. unlimited data plans introduced by a major carrier, some prescription drugs coming off of a patent, and the prices being brought down by generics, but there was a softening in pr

kathleen hays is here with a preview.t is not just today, the bond a move, butaked in we are looking at future signals. >> absolutely. if you are a bond trader, you are ready to buy more. if you don't get the signal, that could put a lid on the rally. if you look at a bloomberg , looking for a 25 basis point cut. inflation in india is falling steadily. btv 5079, the reserve bank of india's reverse repo rate, almost their key rate. is 6%, cut by 25 basis points at the last meeting. it has been holding steady. inflation has been steadily falling, and not just the headline. there has been a steady drop in signale cpi, seen as a not just of fluctuations in food prices or feel prices, but actual demand. also, a wider output gap. cpi's in 48, 3 core energy, food and energy, light prices, another food, fuel, gold, and silver. they all tell the same story, falling from 5%, so quite a move. the question isn't just will the reserve bank of india cut its but will itr sig,, signal more rate hikes ahead? >> there will team more forwar

kathleen hays joined in the conversation. or to come on bloomberg daybreak australia.s is bloomberg. ♪ betty: a check on the latest headlines, toshiba has taken i stab at western digital saying they had no right to do chip production crucial to both companies. the latest active concerns a new facility. to shiva said it will be built with no input from western digital cutting the company all from new technology. they had a stake in the venture when they bought to shiva partner sandisk. is beginning to reap the benefits of a five-year $3.7 billion investment in technology. the biggest bank is seeing significant savings because new customers -- acquiring new customers did surely is cheaper. he admits that alibaba is a competitor. >> our culture is becoming a little more startup like. there are formidable competitors. one of the advantages that we have, any of the platform companies of the world have, is that the cost of customer acquisition is low. you are sitting on a massive full of hundreds of millions of customers who will who knew that phones would start doing everyt

kathleen hays has more. let's start with the fed. what has been going on to make these rate hike? reseed >> it is inflation far below target. one reason it is up for discussion is twofold to one, , andate hike keep slipping the benchmark has dropped to the lowest yield level in a year this week. people are saying north korea missiles, but bloomberg news, our fixed income team, saying, guess what? yes, north korea is an issue, but it is all about inflation and rate hike expectations. with me.irp no chance the fed moves. the third number from the top left, the december meeting, the odds are 29%, and had been over 60%. you can see the pullback in inflation has made a difference in what people expect. thated has made it clear they would like to hike rates one more time this year. two big bang numbers this week. payrolls on friday is a big one. thursday might be bigger. that is when we get the fed key inflation gauge, the pce, forecast not to head back to 2% from 1.5 percent, but forecast to fall by 0.1% to 1.4%. payrolls potentially take a backseat because a gain of 180,000 is fi

this book with kathleen hays a jackson hole.nk global trade is an opportunity for the united states. a lot of the locations we have seen in the u.s., 10-15-20 years ago might have been because of globalization. today it's much are likely that they are incurring because of does touch technology and disruption and structural factors going on. i think as well as cultural, where many young people to live in urban areas, including having access to health care. bigger drivers and globalization. my own concern is if we commit some of these problems to globalization, will make poor decisions. publicly, and our trade relationship with mexico 70% of u.s. imports over the last number of years based on research are intermediate goods. these are groups that back and forth across the border at a quarter, logistic supply chain management, that allows u.s. companies to be more competitive. if we didn't have those arrangerments, you might see the u.s. lose jobs -- arrangements, you might see the u.s. lose jobs. i think we will do very well. i un

kathleen hays here with the numbers.r: i was a current account surplus did shrink, however, it has been in surplus for 36 months in a row. some ups and downs, but definitely staying in the black. important for an export dependent country. -- thisttribute to this to a stronger economy and the quality of products attracting foreign buyers. the current numbers are a broad measure of trade. on the broadest measure, it fell to ¥934.6 billion from 1.6 5 in may. when you adjust the current account surplus for payments on interest payments having to do with currencies that need to be purchased, then you get the trillion, ¥1.52 slightly beating forecasts. surplus stood at 518.5 billion yen in june, versus a deficit in may. exports are up 9% to more than ¥6 trillion. imports of 15%, up to 5.8 trillion.en -- ¥5.8 overseas investments are paying off nicely. the chinese surplus totaled billion.07 let's look at this chart to put this in perspective. you can see that for the recent time, at the far right-hand side, you can see how the

kathleen hays brought that question to the bank of america governor haruhiko kuroda. in the u.s.lation rate actually close to the target. the inflation rate in japan is still far away from our target. between some difference u.s. and europe and japan. rates are not rising so fast, prices are notut rising. here, there is some kind of deflation mindset. leaders.ong they tend to be cautious in gauging prices. investingare heavily andr, savings and so on also they are changing the -- as to reduce labor costs. ,espite some wage increase labor rates have not been rising so they are not wired to raise the prices. >> but they are doing well. that hasn't happened in japan in years. they are succeeding on growth and maybe something is changed. does inflation matter so much? 4% growth is good, but i don't think it can be a thing. growth can bed 2% obtained this fiscal year. even in the next fiscal year, close to that. 4% growth is somewhat unusual. i'm quite sure about this 1.5% to 2% growth in the coming year. the second point, prices -- if we are satisfied with lower , the economytion may

kathleen hays in new york as we count you down to that all-important job support -- report.l, coming up, squeezing the middle as credit conditions for chinese smes falls to a record low. midsized technology companies say they risk english fell there it we will tell you why. but next, is mark carney caught in a catch 22? the challenges facing the boe. this is bloomberg. ♪ ♪ rishaad: you are back with bloomberg markets. i am rishaad salamat. the latest business flash headlines, toyota and trusted a tie up with monster comes submitting a proposal to the board friday. the nikkei news saying each would take a 5% in the other. the deal could pave the way for a joint production plant in the united states. we are expecting an announcement. toyota reporting earnings friday. shares the highest in six months. toshiba to build a new flash memory chip plant without western digital, spending $1.8 billion expanding its center in western japan. toshiba owns the land and buildings. until now, it was occupied by sandisk. softbank continues to invest, $250 million into on lined lender kabbage.

he elaborated on that with our kathleen hays. ♪ kathleen: is one more rate hike this year a problem?d by inflation coming into the downside during the spring here, and not by a tiny amounts. really by a large amount compared to the progress that we made in 2015 and 2016. so if you look at the chart, we were creeping up towards 2%, altering 2015-2016, then in 2017 most of that progress has been undone. i think that is, at least in my mind, leading to a reevaluation of our story about whether our policy is leading inflation back towards target or not, so we will have to see how the data comes in for the second half of the year on that. >> so are you saying let us wait for the data and then when it is stronger, i would be in favor of a rate hike? james of course, we are always : data dependent. i am not too optimistic that we will have higher inflation measured on a year-over-year basis by the end of the year. if you look at the sep, we are still predicting a 1.6% for core inflation by the end of the year. we would still be well below target and not too far from where we have been in th

from bloomberg's global headquarters, i am kathleen hays.storm harvey drenched texas but could have a much wider impact. the u.s. economy is expected to take a hit. strictly

he elaborated on that with our kathleen hays? >> one more rate hike this year, is it probable?en we surprised by inflation, coming in for the downside during the spring, and not by a tiny amount, but really by a large amount, compared to the progress that we made in 2015 and 2016. if you look at the chart, we were creeping up towards 2%, altering 2015 and 2016, then in 2017 was of that progress has been undone. i think that is, at least in my mind, leading to a reevaluation of our story about whether our leading inflation back towards target or not, so we will have to see how the data comes in for the second half of the year. >> so are you saying, let us wait for the data, before we do a rate hike? >> of course, we are always data dependent, and i am not too optimistic that we will have year, yearation in a basis, but the end of the year. aere are still predicting 1.6% for core inflation by the end of the year. we would still be well below target, not too far from where we have been in the last couple of years. so i think we have a ways to go here on inflation. >> if inflation

vonnie: that was the dallas that will reserve chairman robert kaplan speaking with kathleen hays. a brexit backer going into more of thejohnson, significant climbed out of the league campaign. as is bloomberg. ♪ ♪ vonnie: live from bloomberg world headquarters in new york, i am vonnie quinn. mark: i am mark barton with the european close eight minutes away. boris johnson softening his brexit. another brexit supported making acknowledging the u.k. will have to pay to leave the eu. he said we will meet obligations and keep in mind that this -- after saying the bill was extortion. chief is here.au >> he said the eu could go whistle if it thought it would get any money from the u.k. with brexit. he said today, he really meant they wanted 100 billion euros. he is falling into line. it was a silent summer for him. we were wondering what he was thinking. saying that a transition would be ok, others were saying but he was silent. we do not know if he was planning a leadership bid. he said a transition of one year, two years, three years is fine. united?e cabinet is >> to an extent, chance

don't forget, kathleen hays with james bullard later this afternoon.rtant time for the fed with james bullard. stay with us through the morning. this is bloomberg. ♪ got you outnumbered. the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. find your awesome with the xfinity stream app. included with xfinity tv. more to stream to every screen. alix: north korea threatens guam and president trump warns of fire and fury. equities drop. fixed jumps. safety ofs into goals. disney cuts ties with netflix and embrace of cord cutter. welcome to bloomberg daybreak. i'm alix steel alongside david westin. today.n ferro is off it is your safety check of the day. s&p futures off by eight points. a nice boost. dollar-yen down .4% and gold getting a slight bit up by six dollars an ounce. david: the war of words between united states and north korea escalated yesterday with trump warning the north koreans of dire consequences if they kept up their threats. >> north kor

in an interview, kuroda told kathleen hays that yield curve control is working well., welled introduced last september has been working quite well. rates inide interest europe and the united states, japanese interest rate has been .ery flat around 0% control has been well. second point, of course, the major channel of monetary easing lower interestgh rates. targety -- quantitative ago.troduced as qe4 years we are starting to reach adduce -- to reduce interest rates substantially. after four years of our experience, we found that it may be better to directly target long-term interest rates instead of excessunt purchase. stick to the target. -- now the signal coming out clearly from the board and more important he the backers of uber is that it is time for a more period wheree bloomberg can consolidate its business model, if expansion and prepares for an ipo. stevenson there for us in tokyo talking about the new uber ceo. from over we go to french politics. manuel mccrone -- emmanuel macron will attempt a push to stall the refugee crisis, bringing together heads and lea

julia: thank you, covering the fed for bloomberg mirrors -- news and kathleen hays. get a check of the headlines with mark crumpton. astronauts onboard the international space station got this dramatic look at hurricane harvey as the storm bears down on the texas coast. it's expected to hit late tonight or early tomorrow. the storm is now officially a meaning three hurricane maximum sustained winds are 115 miles an hour. galveston, texas, is expected to get hit hard. voluntary evacuations are in place. heavy rain is preceding harvey. the storm surge could be eight feet high and possibly 20 inches of rain with higher tides expected to begin saturday morning. there are reports of at least 14 civilian deaths after a saudi -- coalition of fighter jets the bombing was the latest in the escalation of the coalition air campaign. just northere killed of the capital. yemen's foreign minister tweeted that the airstrikes should be investigated. more active in stopping weapons from getting to terrorists. >> there is a massive flow of illegal weapons to has bola -- hezbollah smug

speakingmes bullard with kathleen hays.rk, this is bloomberg. ♪ scarlet: "what'd you miss?" the s&p 500 has put in 30 closing record highs this year. are there more ahead? abigail doolittle is standing by. guest isthat special erik walden, great to have you here as always. you have been bullish, even calling pullback. you told me something earlier today that the s&p 500 is in pullback season? >> we are still bullish. will getng dynamics difficult because seasonally, the s&p is in its worst performing two-month period of the year. pullback, expecting a -- here is a chart of the s&p 500 with the 50 day moving average. we are expecting minimal downside risk here. that support level is 2450. the more important level coming at that or is on to yellow line right at 2400. that was where we started to break out in may and tested it in the summertime period. downside risk is limited. that is a 3% decline. a lot of the clients i talked to can't time that or position that. our message is to stay invested. use it. chart, whatthis level

bullardsident james speaking to kathleen hays. fedsu think the credibility is on the line here? mark: i think it is a bit harsh to save the credibility is on the line. a lot of people have said the credibility is down the line for a couple of years. the comments were quite dovish thethe ranbaxy left expectations for a december hike. the market is more focused on the balance sheet unwind and dudley is speaking later. he might be a hawkish surprise seethe fed seems to want to good news. there is an easier risk reward surprise on a site perception of hawkishness than the business and that is why you have not seen much reaction from bullard yet. policy, has ity reached its limits? there are a lot of central banks that are unable to reach their inflation target. mark: i am a massive lever we need to re-examine the policy framework. i am not convinced inflation targeting is such a great idea. you can get good growth without inflation, romania, poland, israel, they had sharp deflation but strong growth and even some developed countries like the u.s. and japan, they still had reasonable

coming up, kathleen hays will be talking with st. louis fed president james bullard at 1:00 eastern time today. live from new york, this is bloomberg. ♪ david: this is bloomberg. i'm david westin. disney reported revenue slightly below forecast and earnings slightly above. the stock moved down over 3% on the news. netflix shares traded off substantially. maybe because of the other announcement that at long last disney is going to go over the top. this may prove more important for the company. they will have direct streaming services not only of espn but also of disney product. potential he bypassing cable providers altogether. him just after his earnings yesterday and how the cable companies would respond. >> we will continue to distribute the espn linear channels. they have been good partners of hours over the years and we have managed to create a highly profitable business. the distributors and the programmers alike have been experiencing the disruption that the whole market is seeing an multiple businesses are seeing from advances

. >> kathleen hays, thank you.ion we will get from the fed, whether it is wanting the balance sheet -- let's get to our chief economics correspondent. who is under threat? >> one of the big ambitions in asia is construction. we had three popular leaders in indonesia and the philippines had massive spending incomes for areas, roads and bridges. that is all fine as long as it can be paid for. at the same time, these counts are coming under some degree of pressure. the worry is as a fed trace its balance sheet, we haven't experienced this before. it is a feeling that it would become more expensive for these companies to become foreign capital leaders from the infrastructure. they do not have it online, they will rely, that will become more expensive. we have to talk about how some of these economies are different. this is what we saw. they building up the fx reserves. day, 20 years and ago. remains veryowth good. the scale of these ambitions once 7% of gdp what this. the worry is that most of that money is similar, it

kathleen hays has more. let's start with the idea we may get a rate hike.: the fed has clear they will start balance sheet normalization, letting the proceeds were loss. the rate hikes, a lot of people are holding out hope the economy picks up enough to push inflation up or stop it from falling. it is interesting because we have seen a rally in the government bond market, the 10 year bench mark -- benchmark is down. all -- a lot of people saying, it is mainly about the fed. that is an interesting point. let me pull up an interest-rate projection. as you may recall, faithful viewers of bloomberg television, the odds of a december hike are down to 29%. then 60%. two numbers that are falling short of targets, inflation, when you look at pce inflation and the core. this week we are getting inflation and jobs. thursday we get them pce. the headline number is supposed to come down 1/10 of 1%. 0.1% to 1.4%. it is not on this chart. we are talking about a number released on thursday. be the bigt used to number of the month, payroll is supposed to rise in august, no

kathleen hays is here with a look. we did not see such a big backup in the treasury yields. idn't, and i think that is because even though this looks like a healthier of and jobs growth is supporting the idea that growth will keep going, maybe one key part is wages and inflation. we will talk about some of the numbers that point to strength, because payrolls rose in july. let's bring up the chart, because it will help us see what is going on. see payrollscan rose. this is the three-month moving average, and it is up to $186,000. and it got better. low --yment, the 16 year let's get everyone straightened out. we have a 16 year low. that is all very good, however enough to makeng the kind of growth that donald trump would like to see. our intelligence team knows it is signaling this level of growth is consistent with gdp growing 2.5% in the second half of the year. let's look at another chart because i want to dwell on this point about jobs. if you look at this chart,2528, this is payrolls growth. 1986 when you had well over 5% gdp and inflation at 4%. gdp has dipped down. jobs

kathleen hays joining us with what to watch. let's look at, what the fed said about inflation.d the u.s. economy because so goes the fed, so goes the dollar, so go other currencies. the three fed hawks are on the fed reserve forward, the fomc, so they have a voice, and they all see inflation as transitory and see it coming act, snap that -- snap back. john williams sees one more rate hike this year and said at 4.4% unemployment that the u.s. is above full employment. you haveeconomists say to have wage pressures and more inflation. the boston fed sees some reasonable risks that unemployment falls below 4% in the next two years. he told this to the wall street journal. the cleveland fed sees inflation back at 2%, but once to see more data before deciding on the support for a september rate hike. this40 coming you can see is what these guys are looking at and have to answer. look at how low we have unemployment. you can see it is where it was before the great recession. the turquoise is average hourly earnings has fallen down below 2.5%. to havee line seems plateaued, so this is

francine: kathleen hays joins us from jackson hole. let's start with janet yellen's speech. thleen: it depends on how clearly she wants to make a statement about where the fed is in terms of inflation interest rates and how much she wants to sit back. she has been saying for some pullback is probably transitory, although the last couple of months she has a little more room to say maybe this isn't quite what i thought. also, remember she is speaking about financial stability. to speak about financial stability is not like talking about a broken phillips curve. , on how determined she still is to try to lead the fed towards one more interest rate increases your. we knew the fed is going to start its balance sheet reduction in september. they have told us that in more than one way. could leadtability janet yellen to talk about this question of keeping rates too low to long. -- too long. that would lead investors to push up stocks. frenkelrenkel -- jacob was arguing today on bloomberg television that it is time for the fed to start raising rates now. he says there is inflation in