mike mckee, what do you know? much and the key thing is that we don't know much at this point. so much has been said about terrorism and about crime and gun control but we have no idea what brought this on, who did it or why. the reports are that a rifle was used and the suspect was wounded and has been taken into custody. five people were shocked, including representatives the least -- representative scali se, the number three republican in the house of representatives. he was transported apparently by helicopter to the hospital. we don't have any reports on anyone's condition at this point. nor have we seen reports on what is happening at the capital but you would expect it to go into a higher state of security at this point while they try to figure out what is going on. to your point, this will throw the congressional agenda into disarray for a while until they can get a better handle on what is going on. they are running out of time to get a lot of things accomplished. this could be a major development, politic

david: joining us now from washington is kevin cirilli and isomberg's own mike mckee here with me in start with you. mr. mnuchin says they are meeting every day with the house and the senate and they have something they thinking get passed by the end of this year. kevin: house speaker paul ryan is set to give an address about tax policy reform. he says this is a once-in-a-lifetime opportunity in order to enact the type of tax reform that he has been pushing for for quite some time. there are some differences amongst the republican caucus, including revenue neutrality and the border adjustment tax. last week, i interviewed the has freedom chairman, leader of the ultraconservative wing of the republican party in the house and they are putting together their own plan that they hope to release as a sort of principle plan to negotiate with people like speaker ryan. they all want to get this done sometime within the summer, but it remains to be seen in the house whether or not can get this done ahead of the august recess. they insist they can do that. david: mike mckee, maybe this is the w

mike mckee still with us on set in new york. anything that's caught your eye? as we gone to the conversation, she does seem to be talking more about inflation and how to doesn't want to avoid making too low inflation ingrained habit is kind of comments. mike: she's finally getting to the good stuff, the things that wall street wanted to hear. she is saying the fed is going to continue its policies, it does not believe the phillips curve is broken. as long as unemployment continues to go down, the odds are inflation will rise and also, that upon implement falls farther below the national rate it --l employment, then the inflation rate will rise faster, and that's not necessarily a bad thing for the time being. she does say the fed is concerned about how the markets are reacting to what they are doing, but she reiterates the idea that they are going to raise rates very slowly and very gradually, and that they have communicated that well they think to the markets. the nothing think there's been any adverse reaction. the hasn't been, in the markets, to the idea of

mike mckee brought up some fantastic points. have the jgb market, the boone market sitting at 33 basis points. that is creating some constraints over what the fed is able to do. the fed will probably move twice in 2017, and then they will see what happens as they begin to roll securities off the balance sheet. they will target the next couple trillions the mid-2 makes sense. be immaterialy to investment constraints at investors need to manage around. they need to be global and active and multifaceted as well. david: steve wood will be sticking with us. we will be joined by julian emanuel when we come back, talking about the financial sector was julian and with steve. live from new york, "bloomberg daybreak." -- live from new york, this is bloomberg. ♪ jonathan: janet yellen suggested weak readings on inflation. financials,t to setting the fed to its highest level in about three must. financials received some added help from treasury secretary steve mnuchin when he said he wants to unlock burdensome wreck -- burdensome regulation

joining us is mike mckee, the bloomberg international correspondent. almost becoming an annual event. what is different this time? it appears they're leaning in the direction of including them. chinese shares are listed in their emerging market index if shore intraded on foreign denominated currencies or in hong kong or adr. they represent 28% of the index. there wouldn't be that many a shares included, but they would raise the waiting to 40 3%, having portfolio managers with a new benchmark against the index having to increase portfolio allocations by $2 trillion. in the msci, there are others. vonnie: we have a chart showing the difference between the onshore and offshore. which ones would be included. the potential inclusions, and you can see the hang shining the green. the shanghai in the blue. i want to ask what changed. this is the for the fourth year this is being considered. the next couple of allocations have not been met. potentially they have been met, but this is definitely a judgment call. >> msci took the criticism to heart for the last t

for more insight into trump's critical week ahead, let's bring in mike mckee. hi, mike. as kevin was saying earlier, this isn't new as far as the aviation control hybridization is concerned. -- privatization is concerned. the legislation was produced last year. the problem is, it failed in the senate. why does this have more possibility now? michael: you do have a republican president now in office who in here he could push to get this through. one of the problems with the bill passed or was it remove oversight for the money, appropriations for the faa, because it was a semi private corporation, and the cardinals in the senate, the committee chairs who appropriate the money , do not want to lose control. it does not look like they have support for this. it is very personal because the idea of having some nonprofit corporation -- the once you think about our amtrak and the postal service, and they are not anybody's idea of great successes. how this is structured and would thisead, hard to see at point. at least this is a fully formed plan. none of the rest of it really is

joining us now is mike mckee. great to have you on. s a big run-up in share prices -- than the share prices selloff. mike: they have failed so many times as msci has now modify the process such that they will only have a small section of the number of listed shares -- the impact will not be that great. they have 448 stocks, but they will only include 169 in the beginning. that would be one half of 1% of waiting in the emerging markets index. estimates theics rebalancing that would be undertaken by portfolio managers would only amount to about $8 billion. it is a $2 trillion index. julia: there's plenty of other chinese companies already included in the msci index. you have a shares and b shares and red chips and gdr's of u.s. companies. are tradeddr's around the world and about a big impact on emerging market index. chinese stocks account for 28 of that emerging market index right now. you're talking companies like alibaba and tencent. people are only getting the exposure to chinese equities that they probably want. the symbolism is rea

joining as is our international economics and policy respondent mike mckee. ade in india" in a positive sense? mike: it is not clear. i am not sure how much romance there will actually be. some things have been talked about. the u.s. would like to sell defense agreement to the indians, who would like to buy it. there is talk of putting an assembly line in india. that is not create jobs in the united states. so it is not clear whether that is wishing on a star or not. the indians would like to make it easier to sell generic drugs in the u.s. they may be able to work out some sort of deal in return for changing some intellectual property laws. india blocked a lot of u.s. intellectual property work in the legal area, and that might be grounds for cooperation. at this point, there is not a lot of solid ground for deals. it is more the hope that if they get along, they can cooperate in the future. thelet: and lurking in background is what to do with work visas. mike: india does rely and those because they end up getting remittances for people that work there are th

is mike mckee. i will start with you, mike. quarrels, this is the position supervising things. on the fed? mike: he is not a fan of heavy regulation. he would take a much lighter hand to fed supervision of big banks. as far as monetary policy, he has advocated rules like the taylor rule, which could be an interesting development. to this point, very few fed officials have advocated rules as opposed to discretionary monetary policymaking. david: how about marvin? mike: he is a rules-based guy. the feeling on wall street among some people is this may be gary cohn's invisible hand. it would be easier for wall street to understand what the fed is going to do. doing that takes away their discretion to react to unforeseen events in the economy. if you look at the taylor rule, and i brought along the model we have on the bloomberg, this would have the interest rate at 2.7%. whether that's acceptable to the administration not, we don't know. jonathan: let's put the theory to practice. how difficult would it be to introduce a rules-based federal reserve? charles: mike, it was good to he

alix: great stuff, mike mckee, joining us from boston. michael o'rourke, you are sticking with us. be on tuesday. tune in to bloomberg on july 4, 8 p.m. eastern. we will be cohosting the boston pops fireworks spectacular live from the esplanade, the second-most watched fireworks spectacular in the u.s. well, let's make sure i don't trip first, but join us, it will be a lot of fun. this is bloomberg. alix: 22 a higher open early in the morning, but earlier it was still down. yesterday we saw a big tech selloff. the question is, is it widespread? the nasdaq 100, equal weight on the blueline, yellow line tells you that this is a broad-based selloff. the nasdaq 100 is a large company as well, all rolling over. joining us on the phone's brian wieser. , where areide tech we seeing the billy guest selloff and risk? brian: it's bigger on business risk than anything else, as the sectors have traded up and up and up. it's not that these are not good businesses, not that they are not doing fine. but to support the growth of the stock requires unless -- unrealistic expectations or willful igno

internationalour economics and policy correspondent, mike mckee.e specifics of the development. >> it gives us a broader market. the chinese had been cutting but on treasury purchases, it's an interesting development at a time when the federal reserve is talking about starting to cut back on treasuries. china has been trying to stabilize capital flight out of the country and has been weakening the currency. by november you saw the biggest drop in chinese holdings since 2000. then reversed starting at the beginning of the year. the chinese yuan dropped, but is up this year, and they are already buying more treasuries. obviously it's good news for the treasury market, and it signals a change in chinese currency policy. david: that has real ramifications for the bond market, but what does it tell us about what china is feeling about the yuan these days? they were selling the treasuries because they needed to support the yuan. >> italy, this suggests -- in a way, that suggests they feel the yuan is out of danger. i brought along a terminal chart that s

mckee tong in mike talk about that. either through private initiatives acting on their own or through states and other municipalities, will that negate the effect of this? mike: it will. we are seeing states and cities adopting stringent environmental regulations. we see it in new york where the buses run on natural gas and the taxes are being converted to high-energy fleets. you see this in practice already. have noted,anny mayor bloomberg has written a book that suggests we can reach the targets without federal government cooperation. you can see what it's happening. the president based his argument on one study that has been criticized as extremely flawed, that we would lose 2.7 million jobs by 2025. the problem with that study is it did not account for jobs that would be created i these new industries looking for environmental relief. the coal industry has been losing jobs for years and years as the price of natural gas is gone down. rapidlydustries are gaining jobs. there are more people working in solar than coal.

mckee from bloomberg. do you see the reflation in the day that? mike: you do a little bit. it's hard to take anything out of one month. the energy prices are out of the european numbers. inflation rose from the prior month. you can see it in the energy numbers. and only 4.6% in may 1.9% in june. you have an energy influenced number. it's not a huge change, but it does tell you there is some underlying thing going there. joanathan: does draghi likes what he sees this morning? >> i think we are at a reflection point in the eurozone. we doubted if it was debt a few weeks ago. it's coming back alive. it is in europe. it's not from commodities. it is from credit coming back to the economy. banks are starting to lend again. it's very slowly from wage increases. morning's to be done on that front in germany where wages are very low. i think the trend has become sustainable. you can see the leading indicator from bank lending, confidence at the business level. how quickly will we realize it for a few days ago the board will split. we have seen a more clear push toward recognizing t