seema shah.ust to get you a bit of a recap as the line comes in, the chinese government making it clear they are going to sanction u.s. officials in retaliation. we are getting meat on the bone. they are sanctioning senators rubio and cruz. we're seeing the offshore yuan dropping a little on the sanctions plant. that is across the board, beginning to recalibrate. we will get into the action and implications shortly. this is bloomberg. ♪ ♪ yousef: economic finance politics, this is bloomberg surveillance. i'm yousef gamal el-din in dubai. let's get back to the breaking mind that came in the last few minutes. china is sanctioning u.s. officials. the response is firm. it includes senators marco rubio and ted cruz and it comes hours after hong kong police arrested the media tycoon and democracy activist jimmy lai. for more on the national security law fallout with karen light, bloomberg's china government ever -- editor. is this the beginning of a bigger china response? this is al, you know, day hong

seema shah is still with us, do you think the -- is sustainable? do i by banks?hat is your outlook? i think it is sustainable where it is. do i think there is going to be significant steepening? probably not. -- spoke, our expectation was inflation was not going to be really present for the next two years. 1 -- -- once recovery is in play, there will be easy positivity, there would be some inflationary --. yesterday's decision, it changes. it improves the outlook a little for inflation, but it is not groundbreaking. the fed is still going to be dealing with the issue of technology. globalization. all of the issues that have put down the pressure inflation. i am not sure a much steeper yield curve is on the way. mike: kailey: our bonds -- kailey: our bonds still useful hedge? >> great question. 60-40, does it make sense? there is risk associated with assuming that bonds can play that role. when you have got the fed making very clear that rates are simply going to be close to zero for the foreseeable future, that provides reassurance. unfortunately, it simply does

we talk with seema shah.hat is happening with the markets right now as we head toward the end of the week, it has been a very positive week for u.s. equities. european equities having i think the best month as we continue to wrap up here. the u.k. is closed on monday. that is where we are now. up on s&p, but only just. ♪ guy: live from london, i am guy johnson. kailey leinz in new york. alix steel is back monday. we are counting down to the european close. here's what you need to know about europe. speaking of the virtual jackson hole event, andrew bailey, governor of the bank of england says negative rates remain on the table. there are times, he says, when you need to go big and you need to go fast. angela merkel, german chancellor calling on germans to avoid virus at parts of the world like united states. from a press conference, she said there is still a long road ahead. the dutch government has extended its buyers wage support scheme by nine months, continuing what we have seen in germany, but not signif