janet yellen will speak on friday.nancial conditions easing and stock prices continue to rise to new records, is that a reason to continue raising interest rates? do you have a concern about the level of asset prices? >> i think the qe undertaken over the last 10 years aimed at boosting asset values. when you see we have made four rate moves since december 2015 and financial conditions have eased, i think that points to the idea that we need to adjust the balance sheets. that is a tool we have not had experience with. i think that is an important that, to be looking at that. michael: let me ask you, are investors to complacent these days? >> i don't know. i think you will have to see where that comes out. as i said, we need set conditions that have had easy monetary policy for a long time, the incentives to reach for yield, the committee signals it will be gradual could feed into that. those asset values carefully, but i'm not sure there's anything you can target specifically when it comes to setting policy. michael: t

♪ anna: janet yellen and mario draghi.he central bank's inflation target is that it will be met. >> to low inflation is dangerous. that was probably the think in taking the 2% target. japan's core consumer prices inch higher, lagging behind the gains in economic growth. harvey sentane gasoline surging. -- sends gasoline surging. manus: judgment day. heir prepares to receive his fate. we are live in seoul. ♪ anna: a welcome to "bloomberg daybreak: europe." there is an old saying which is around and around she goes, where she settles, nobody knows. where will be dollar and tonight at 8:00 p.m. in the united states of america? the positioning is so stretched. there is something that has crept into the psyche of the market. rally like this and we are heading for the first monthly gain on the dollar. the question for markets is according to networks. investors are undermining the prospects of federal reserve tightening. anna: we are seeing dollar pools adding to the positioning. not everybody is bullish. there is a survey showi

and we got that double dose of central bank speak janet yellen and draghi. euro firmer, little movement there. the pound, weaker again for the week it's at 1.2815, this is the fourth week in a row we're seeing pound declines. it's helping the ftse 100 trading near the highs of the week >> the pound at an eight-year low against the euro earlier in the week gold prices, which have not done much this week not doing much today flat at 1292 >>> on today's wall street agenda just one piece of economic date ta to wrap up the week economists are looking for a drop in orders for big ticket items like heavy appliances, aircraft and construction quip sgloo equipment. >>> wall street will be watching janet yellen today delivering her speech at jackson hole fed watchers will be looking for yellen to give clues on winding down the balance sheet which we expect to come this year, potentially as early as the meeting in september also from ecb president mario draghi, we'll have live coverage on cnbc. interviews with cleveland fed president, loretta mester and one of the gove

we heard from janet yellen. mike mckee said it was the boring janet yellen. will point out one comment, she said they have been making progress towards the federal objectives ofic unemployment and price stability. you are looking at general broad-based rally on the s&p, mostly all green previously and telik medications index is leading that, up six tens of 1%, at&t and verizon leading those gains. they are big dividend stocks. we are looking at oil as hurricane harvey touches down later today or early tomorrow morning. -- shutting down already some oil refineries that make up half of the nation's refinery, oil and oil stocks a little bit supply-demand dynamic mismatch with less supply and that pushes up prices on the demand side. homebuilders -- home improvement store stocks higher, home depot, u.s. tractors, going to get supplies to board up the windows. mark: great stuff. said substantial progress had been made on the federal mandate with the dollar going down on the comments. the speech does not offer substantial direction on the economy or changes in mark

janet yellen is not there yet.hey will start reducing the balance sheet in september, maybe she wants to keep inflation a chance to rise and see what it does by december. we know the majority would like to raise one more time this year. we will see what janet yellen says. if she starts linking financial the fed doeswhat on rates, that would have an impact. manus: that would be the jackson hole bingo. you would get three points, kathleen. you get three points if she mentions potential to move, baubles -- what am i talking about? our story with jackson hole bingo. go get some sleep. thank you for staying up late in jackson hole. let's see what it does for markets. just a couple of lines coming through from samsung. matt, rosalind and myself are talking about what might happen next. go to top life go -- top live go. there is a lawyer for jay y. lee that may appeal the verdict. he has been handed down a sentence of five years. so request was for 12 years, less than 50% of what they thought was going to come through. hi

janet yellen offers a broad view of the rules and they look at the height of concerns over the u.s.ebt ceiling. we begin with a big issue in jackson hole, little about yellen and maybe more about draghi. >> i'll be paying more attention to mario draghi. >> investors should be paying more attention to draghi, not yellen. >> he was walking on eggshells. >> everything to gain is so dependent. obviously if the euro zone was to show any signs of rolling over, core inflation drifts back down. it may be very difficult for them to announce anything at all but certainly the market is looking for some clarity. >> the central bankers want to be very gradual, very careful in both signaling and implementing the withdrawal of this extraordinary accommodation they put in place the last few years. >> how do you exit in a careful way where you don't signal too much you're exiting and still give time for the economies to do well and still give time for the inflation to come up and i think he will at jack hole go -- at jackson hole go carefully forward. >> the economy there is more fragile than the u.

federal reserve chair janet yellen said any rollback will be quote, modest.tially putting her at odds with the trump administration. still with us, martin haggerty from black rock and matt thomas from voice and i write years he -- ira yersey. martin, why don't we get a bid and we put the emphasis on the bid after the speech from the treasury market? martin: the bar for yellen's speech was really low and very little expected to come out of it and she definitely did not disappoint. where there was potentially some small hope she may bring in the current level of financial conditions and how that may play into monetary policy, but she barely brushed on the topic and talked predominantly about regulation as you referred to, and we had a couple basis point rally and a couple basis points lower and the dollar is weaker. jonathan: let's talk about the financial condition story and the tension between loose retention and elevated market pricing and that between ultimately soft inflation after soft inflation after soft inflation. how is the fed meant to calibrate mone

expected yellen, maybe embraceable.ario draghi refusing to talk about the euro or the next policy decisions. in asia a bit of a mixed start. here is a look at trading in new zealand were that is underway. we see the kiwi dollar 72.42. the u.s. dollar certainly quite a bit of weakness against the euro in reaction to the non-comments from mario draghi. up, the aussie dollar 7936 -- 79.36. we are watching the empires when it comes to particular the aussie dollar. first word news with haslinda amin. haslinda: good morning. these two people have been -- ed [no audio] speaking about harvey to shutting down oil production, and we will get you some more headlines. that is a developing story on .hat looking at the united states and issues of with geopolitics, they still want to talk with north korea despite the provocative firing of three short-range missiles. rex tillerson's the -- saying washington would maintain pressure with china and other allies to move kim jong-un to negotiation. tillerson had praised north korea for show

one from yellen. up by basis point. >> the biggest producer sees a global deficit that really helps with the complex. still a three year high. the vix really steady. the downside down pretty much flat. by two little bit up dollars. coming up what is this week p president trump will address the nation laying out his plans for afghanistan. tomorrow, we hold a rally in arizona. his first visit since elected. a special shareholders meeting , seven point billion dollar takeover acquisition by amazon. by thursday, they hosted the annual jackson hole economic symposium page you yellen and mario draghi are on the schedule for friday. as president trump seeks to turn over a new page, the question is whether we will see turbulence died down now that steve bannon has left the white house. are things going to settle down for the white house? >> that is progress. i expect tonight regardless of is, he willuation opt for the military option but we will see what happens tonight. weit might be an indication have been

janet yellen speaking today.with the fed the tightening with seen financial conditions are still getting looser and that justifies a rate increase. robert: so, the thing that i -- and i've spent my life in the markets. i'm not a phd economist. i'm a business person. -- low cap rates for business, what i am looking for is debt buildup associated with those high valuations and that is what i'm watching for. i think a market valuation or real estate valuation will not .reate a systemic risk i think it might be healthy. but i'm looking for debt buildup associated with it. so far, i don't see that, but i am watching for it. one of the reasons i have not seen it, we have very strong measures for banks. debt am more focused on hold up and other excesses than the ua shin. but we should get higher creditons and tighter spreads. it tends to encourage people to reach for liquid assets. are there other asset classes? i am watching for excess debt buildup or people in asset classes that look liquid, but prices become illiquid

the federal chair janet yellen speaks at jackson hole.says any rollback financial reform should be, quote unquote, modest. plus, it's not always easy to outdo your boss. we look at double lines. hurricane harvey strengthens as it heads towards landfall in texas. the price of gasoline rallies as the storm threatens to wreak havoc on the heart of america upon synergy sector. let's get a quick check of the markets first, as janet yellen spoke earlier today and jackson hole and we are waiting for mario draghi. the tao of 54 points, 1/4 of

this is the boring janet yellen. her speech largely a recitation of the history of the financial crisis and regulatory failures and how things have improved since then. she praises the swift u.s. regulatory response to the great recession, particularly changes in liquidity and capital requirements that have made banks safer, she says. "the evidence shows that reforms since the crisis have made the financial system substantially safer." she says that is reflected in the credit default swap pricing. investors see the same sort of progress that he fancies. -- tha n the fed sees. there is a jamie dimon section because she pushes back on the idea that regulation has put a cap on lending in the u.s.. she she says there is a bit of an effect on less credit with the followers, but research confirms "sizable net benefits to economic growth from higher capital standards." he also pushes back on some complaints from wall street that there are significant liquidity issues in the market while dealers have cut back on inventory, s

yellen speaks in an hour gary tells the fte he is staying in his job and harvey makes land fall tonight moderate gains in europe >>> plus texas bracing for hurricane harvey the strongest hurricane to hit the u.s. in more than a decade. >> the e-commerce giant said to slash prices in whole foods as soon as monday investors though will focus their attention on jackson hole wyoming and the kansas city fed symposium. yellen will speak in about an hour from now while draghi will address the gathderring this afternoon. 3:00 p.m. eastern time powell is somewhere in there around 220 but the conference title is about synchronized global growth which some argue is a different, will mean jackson hole will be different this year. >> it seems different. they're trying to drain the drama out of it whether they suck said in that or not i don't know. >> it became something never intended but it finds the markets in an interesting position of being overly comfortable with what they think is going to happen here. not believing the fed is going to normalize in a rapid way thinking that the run off in sept

janetahead, more on yellen and mario draghi.look at what investors are hoping to hear with bank of america merrill lynch. haidi: plus, we analyze the inest incremental tick up japanese inflation, painfully slow still. this is bloomberg. ♪ ♪ haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. rishaad: i am rishaad salamat in the hong kong. policy makers meeting in jackson hole, most major currency pairs little changed. sees the dollar correcting higher, possibly against the euro. great to see you. what gives you this idea? something i have noticed, a change in sentiment towards dollar strength. what would be the foundation? >> if you think about the terminal fed funds rate, where it will be when it finishes its tightening cycle. that is low, peak pessimism around the u.s. the majority of the people thought it would be around 2.5%, incredibly low compared to the eurozone. that is the foundation. look at quantitative and positioning metrics, it does scream out that dollar positioning is extreme. rishaad: we have see

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. thanks for joining us. you put out a note earlier today that said it was possible that mario draghi would make some sort of last-minute tweak to his remarks that would indicate he wasn't necessarily supportive of the euro strengthening. that didn't seem to happen. we saw quite the opposite effect in the market. do you think that was the rational reaction to what draghi had to say? >> i think coming into jackson hole, what we wrote and what others have said is that draghi was going to try to stay away from the policy decisions. try to avoid taking on the euro question head-on. cooling things down by staying medium-term. waiting to address these issues. making some kind of last-minute question to see if they can give a green light to the euro. the advis

janet yellen did not mention anything on that.o draghi had to say about the euro. will he be ok with the strength continuing? he did not talk about that, but mentioned caution ahead. you look at the gm and function, china's industrial profits rising, coming up. the csi 300 at the highest level since december 2015. we push higher the shanghai composite, also breaking that new record on friday. some downside pressure in commodities, not surprising given that we saw iron ore surged to a four-month high, retreating in the session. we are seeing the asx 200 pull back a little bit. the biggestials drag on the asx 200 for the equities market. the biggest lender, commonwealth of australia, facing widening scandal charges. we are seeing brent and crude oil, wti down, but brent gaining. the korean won surging. a mixed picture when it comes to bond markets, but the news flow right now, what is happening in texas and the u.s., also what we heard from janet yellen and mario draghi from jackson hole. we will discuss that more, but it is th

tomorrow janet yellen and mario draghi >> joining us from london is peter spiegel.ood morning to you. thanks for joining us. i suppose we already heard from mario draghi this week what did we learn from that? what can we expect from his keynote tomorrow >> he kept his powder dry thus far. what everyone is watching for is from both yellen and draghi is how will they deal with economic growth and unemployment going down to sort of pre-crisis loads, yet no inflation, no rising wages, no rise in prices, and a market and a corporate sector that has become used to free money how do they balance those two things as we saw when the ecb will their own version of jackson hole in portugal, every utterance that touched on tightening and a move away from qe, markets reacted badly to it. how do janet yellen and draghi communicate the unraveling of qe without spooking the markets also there's conflict within the boards of the fed and the ecb about what these economic numbers mean some have been focusing on the low employment and high growth areas, saying we need to tighten. you ha

he is likely to be more dovish than janet yellen, and that is saying something, because janet yellenne of the most dovish people on the fed for a long time. the regulation side, he seems to have made anti-reagan vision, before, and the federal reserve has 2 mandates. tionnti-regula comics before, and the federal .eserve has 2 mandates tankerpresident trump on regulation come he is not for it. on monetary policy, do we know whether he would be dovish or hawkish? in the past yes made comments critical of the size of the fed balance sheet but it looks like the fed will start the process of reducing the balance sheet before the next fed chair takes office regardless. and other comments of the president have been looser, like you shouldn't raise rates. gary cohn impact was critical of janet yellen a few years ago, saying that until inflation is over 2%, there is no point in raising rates. that shows you that the president is a little bit dovish, and gary cohn certainly has the ability to be dovish as well. david: there is a fair amount of expression of interest on the republican side of t

janet yellen fails to give anything away on interest rate plans.his is bloomberg. ♪ >> just hours after china -- said it would take all necessary means against the was trade, the chief has weighed in on the protection of the dates. this book with kathleen hays a jackson hole. think 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 mana

janet yellen will be discussing the summit on friday.his is a moment for which we were getting revved up until we heard mario draghi was not going to drop policy bombs on us. is janet yellen going to tell us something special? >> probably not either. it's quite funny we are focused on jackson hole this week. markets are quite today and will probably quite for the rest of this week. the whole world waits from something from jackson hole, not because we expect something, but we have a history that is surprising. another janet yellen nor mario draghi will announce anything new. the markets might be priced in about the euro. that's where we will see the real price action. manus: cracking piece on the bloomberg this weekend. this is the language he used. volatility. we are a ways away. in talking about the euro? i doubt that very much. financial stability could be a bigger conversation that yellen puts to the marketplace. perhaps we are underpricing that. >> that is a fair point to make. the most recent bed mentioned they were pushing back ag

draghit yellen and mario seem to avoid it. yellen said she does not want a big rollback in financial regulations. who is talking about that? president trump. she made it clear that having to makes moreapital resistance to another crisis. she did not mention policy at all in her speech. be a draghi said now would dangerous time to ease regulations because economies face risks when it comes to growth. and, in the queue and a after his luncheon speech, was asked about qe. he said, yes, it is working well, but we have to be very said monetary accommodation is still warranted. this is very, very important. it seems even though the world was waiting to see mario draghi -- that is a great shot, the three top central bankers in the --ld having a cup of coffee but the one signal mario draghi said is he is not ready to announce anything on tapering. my question would be, is he waiting to see inflation go higher, right? his feet, oro drag does he not want to send a signal like this in jackson hole? is he going to wait for one of these me

let's start with janet yellen's speech.athleen: 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 i

janet yellen and mario draghi meet in wyoming.e begin with the big issue, europe monster debt issuance and amazon joins in. >> that is really the elephant in the room for us. where are they going to be tomorrow? it's a little bit of a leap of faith here. >> it's a little concerning. from a credit perspective, you have kind of an opaque business model here. you don't have a lot of disclosure to the markets. that make it tough for us. youhis is a dynamic really see across the market. even after we are into the fed hiking cycle, the borrowing cost for the u.s. corporate and european corporate are near the lowest that they have ever been. this remains a very good time from a cost perspective for corporate to borrow money. >> this still is demand for yield. the fed is going through this process of slow balance sheet adjustment and policy normalization. they're still image store a demand. -- an extraordinary demand. >> their issuing long bonds a very tight spreads. the very corporate market overall has expended quite a bit -- extended q

but yellen should refuse the appointment.ted "being appointed by trump means that at least implicitly that you approve of his goals for the u.s. i am lucky enough to know yellen well and i know her vision for america is highly distinct from that of trump's. accepting the fed chair from him would send a signal she would regret and possibly deeply." he suggests a new alternative which is that yellen announce she's going to retire. i called the fed, no comment from the fed i think yellen would like to be reappointed but a reappointment from donald trump would be a complicating factor. >> but steve when we talk about this moral duty or whatever else and you weigh that against the point of being in the room, having the ability to influence the future direction of a country you massively care about, with gary cohn, with janet yellen, that's very different from being on a business grouping that met twice in eight months. >> i think that's right but i also think that, you know, janet yellen would have to stand next to donald trump du

counting down to jackson hole janet yellen and ecb president , mario draghi meet in wyoming.begin with a big issue, a day of -- and amazon joins in. >> that is the elephant in the room for us, what are they going to be tomorrow? >> it is concerning, but from a credit perspective you have an opaque business model. you don't have a lot of disclosure to the markets and that makes it tough for us. >> this is eyed at amec you see dynamic you see across the market, still after we are well into a fed hiking cycle, the borrowing costs are still near the lowest they have ever been. it remains a good time for corporations to borrow money. >> there is an ongoing demand for yield. you think about it, the fed has gone through a process of slowing downward shoot adjustment. it's happening at a glacial pace. there is an extraordinary demand. >> all of the companies have taken advantage of huge demand so they are issuing long bond at tight spreads. so, the corporate market has extended quite a bit. >> central banks around the world have brought $60 trillion worth of assets. private investors

jonathan: who is at jackson hole next year, chair yellen or chair cohen?ohn. >> gary cohn. >> gary cohn. jonathan: that was an easy one. it has been great to have you on the program. thank you very much. from new york, that will do it for us. we will see you next friday. 5:00 p.m. in london. for our viewers worldwide, you are watching "bloomberg real yield." ♪ ♪ best, theon bloomberg stories that shape the week in business around the world. ceos turn on president trump who lashes back. >> ceos are going to be reluctant to get too close to trump. who knows when the next outburst to get this was not enough you to withdraw, what would be echo -- be? from europe and japan surprised the city upside.

jonathan: who is at jackson hole next year, chair yellen or chair cohen?n. >> gary cohn. >> gary cohn. jonathan: that was an easy one. it has been great to have you on the program. thank you very much. from new york, that will do it for us. we will see you next friday. 5:00 p.m. in london. for our viewers worldwide, you are watching "bloomberg real yield." ♪ ♪ emily: he was tapped to be heir to the softbank empire. arora was raised the son of an indian air force officer and he came to the u.s. for grad school. in 2004 he got the job of a lifetime. larry page and sergey brin hired arora to help move google into an online ad powerhouse, making him one of the most sought after tech execs in the world. a decade later he was named softbank president with a plan to eventually make him ceo. but as son's retirement approached, arora said it became

janet yellen will speak on friday.financial conditions easing and stock prices continuing to rise to new records, is that a reason to continue raising interest rates? do you have a concern about the level of asset prices? that washe qe undertaken over the last 10 years aimed at boosting asset value. when you see that we've made four rate moves and financial conditions have eased, that, i think, points to the idea that we need to adjust the balance sheets. that is eight tool we haven't had experience with. that is an important next step to be looking at. mike: are investors to complacent these days? esther: i don't know. you will have to see where that comes out. when you set conditions that have had easing monetary policy for a long time, the incentive to reach for yield, the committee signals that it will be gradual could feed into that. i watch those asset values carefully, but i'm not sure there's anything you can target specifically when it comes to setting policy. mike: the balance sheet taper, wall street is bett

what is the risk and reward for janet yellen? to a balance sheet reduction, we've got that. the transitory nation of inflation. asset values, she has her concerns. she said it at the british academy in the u.k. i decided to check those three, put it together with triple c rated paper. i haven't been to belarus, but mongolia, belarus and ukraine, this is the quantitative easing around the world and to reach for yield. there are summary in signs. if these governments are able to borrow at sub 6%, i think we should be worried. i agree, but i also think 100 year bonds are an interesting phenomena because we know in the u.k. our perpetual's have only done one thing and lose capital overtime. qamar two things i would disagree with. not bek inflation may transitional. it has all been about oil but inlook outputs are tight but the u.s. and japan, the labor markets are changing to a point or they should be wage inflation beginning to return. only in europe do we have low employment in the countries you can see the economy can grow further

we have the injury in janet yellen and mario draghi. -- the injury in janet yellen.len is a stronger bull story for the dollar. how do you expect fed policy to evolve? if you came from the start of the year and the fed would lead the market, and they did, but the take away the most recent minutes was this was a confused federal reserve. we think they will hold up on rates to the end of the year and maybe longer. should we be paying attention to the most recent comments from mr. dudley? mohamed: i think the fed will hold itself on markets for a while. if there was a hike, it was going to be in december, not september. they will wait and get react.tion and also on the qe side, they will try to make a reduction in the balance sheet as boring as it can be. look at the fed, not to want to make headlines more news, just developments and hold out the possibility of a december hike. numbers,me breaking fortescue models has released its-- metals has released reserve. $2.9 billion, looking for $2.2 billion. the final dividend for the four-year post share was $25 -- $.25 aussie

that is what janet yellen did. she is basically saying if she does not get nominated, she is ok with that, so i have to say that the probability has precipitously, but i think probabilities today have to be lower rather than hire. -- higher. joe: it seems like it is always a game. maybe i should not call it again .let's imagine what the economy is going to do, and then the common imagine what the fed people do and then imagine the policy. now there is a new wrinkle because they have to forecast a theoretical she they do not know. i will point you expect they see the unaffected see where markets start pricing in different federal regime? krishna: i think that is a really good question because while the initial policy initiative under, let's say, a cohn administration and a yellen administration are working to be relatively the same, the risk of inflation are going to be substantially higher in a cohn administration. curve steepening risk is higher if there is a regime change. worrying about that is important. i do n

draghi takes the stage and earlier we had janet yelling yellen earlier. great to have you on the show. it is more about what she did not say and i wanted to ask about as it price valuations. you think it is time now for the fed to be talking more about the concerns about valuations, do you believe it is time to raise rates in order to offset that irrespective of where inflation is? >> it is good to be with you. it was interesting, janet's speech was, quite routine in many ways. ground,not break new mostly congratulated the fed on there were done but a lot of things left unsaid and there is a great debate going on about the role of financial stability and how it interacts with monetary policy. and whether monetary policy should be constrained by financial stability issues, whether it causes financial instability, and how these things interact. she missed the opportunity to tech more about that and that gets to the question you are raising about what role should the fed have been thinking about as it of various kinds? we've come to expect much from jackson

yellen faces the same issues going in.on is this, our estimations of the fed's rate hikes versus the estimations of rate hikes are deeply divided, should they get on and continue to raise rates? the conundrum is around inflation. inflation has remained benign and consequently even though employment is low, and coming down in europe as well, we have not seen that inflation pick up in wages. that is internal debate they will be having. we talked on this program recently, is the phillips curve weken, does that mean should -- we should revisit how we are looking at unemployment? is it basically a group of the ofkforce but now are outside s markete say the job and they have been taken out because they do not have the skills to perform in today's environment. anna: thank you very much. more about the u.k. we have had a look at u.k. stocks and some of those that have presented problems for investors over the last few weeks. we will talk more about that and where we are on the [inaudible] this is bloomberg. ♪ manus: it has gone 8:

yellen would be secnd term. how do you look at this? of all, is it too soon to talk about who could replace janet yellen? >> we are only five to six months away. i don't think it is too soon. we are already looking up what 18.d policy might be in 20 like we said before the break, just one rate hike put in. can anybody who comes within gary cohn the more dovish? i'll think it is so much the dovishness or hawkishness. gary cohn, you think of a very dovish. the announcement will come as a surprise. , think from our point of view i think the fed, whoever will be the chair will be driven by data. in that sense, i think we have a big impact on the markets, but we don't know when it is going to be, so it is difficult to assess. reporter: i hate to disagree, isk ise r there. you look at some of the people on that list, look more to and theyn that list, have a more mechanical approach. they might will choose financial stability or other factors within the economic infrastructure with which to guide rates. that is the risk for the market. francin

getting ready for a speech from janet yellen.ng me, someone who has been here for 33 years in a row. the former governor of the bank of israel. jacob, you are concerned about being too long. -- too low for too long. do you agree or think they should? >> i believe they should raise rates. everyone expected it to happen. fors on the journey normalization. an excessively long delay. while we are keeping rates as low as they are there are issues in the financial markets and other distortions that get accumulated. the normalization is called for. improvingy is significantly. markets have not been as well behaved as they have been recently. the duration of unemployment has declined. even inflation on a medium-term perspective is towards the target. i would not hesitate at all. hike.d put for a not a single move. we are talking about a journey. the journey is response -- restore normalization. this will be several hikes. this journey is going to be slow but consistent. there will be quite a few rate hikes. moderating in 2018. we should

the big ones to watch ourjanet yellen and mario draghi.et yellen of the federal reserve, will they reduce the amount of assets they have lost tonight all the bonds they have been buying in the bonds they have been buying in the last few years, all stuck in a vault somewhere. that's how i like to think of it. it's been ten years since the crisis, starting to reduce that will have an effect on the market, specifically longer term government bonds in the us. they suggested that they would do it so slowly and other such a long period of time, some of the bonds will mature and disappear anyway so we will not even notice. that's a bit ofan will not even notice. that's a bit of an overstatement and i think we will notice in the market. we will see yields and interest rates over the longer ten or 30 year bonds will go the longer ten or 30 year bonds will 9° up the longer ten or 30 year bonds will go up because there is less demand from the big buyer, the federal reserve , from the big buyer, the federal reserve, buying them up over the last ten ye

janet yellen did not echo that. prices at whole foods by 50%. is that good or bad? how does the fed look at something like that. mike: the general feeling is this is kind of what we have been seeing, and it is a small part of the overall price dynamic. but it is going to continue. people are looking for lower prices. his 2% reasonable? is the inflation dynamic we have looked at for many years still in place? those are questions central bankers will debate for some time. jonathan: i wonder on the demand side of the equation, we will continue to see low inflation as a demand-side problem. why the acca mike: -- why? mike: what has changed his hidden dynamics, so they will stay what they had -- they will stay with what they have while they figure out what is going on. when you talk to central bankers, they say we have several explanations for parts of it but cannot come up with a unified theory for why inflation does not respond. jonathan: we know what is happening and we have several explanations for it. alix: but that

would he imagine anything different from janet yellen?kely candidate, but anything is possible. how do you handicap that? have you been able to predict anything this president has done so far? david: i have not. gershon: so did we get someone more hawkish -- who knows. very hard to say. jonathan: have you establish towards market bias is either candidate? what janet yellen and another term would mean versus terry cohen. when larry summers was in the running, he was seen as the hawk and yellen was the dove. market hasthink the gotten comfortable with yellen as the fed chair. it is difficult to say if the market is expecting something different, but i think the unknown unnerves markets a little. credit isunnerve going to be the end in best a reaction. we have shaken off so many things. you can point to so many events, starting with brexit to the trump election to the turmoil today, the question is shouldn't have markets reacted negatively? and they have not. the question is what will spook the end investor. david: let's talk about speaking

counterpart janet yellen made no reference to monetary policy.s a result the euro spiked to a three year high against the dollar around 10:00 a.m. eastern to 118 against the greenback in corporate news. amazon due to close its acquisition of whole foods on monday and start slashing prices of several grocery products. in europe take a look at dutch supermarket operator a patient of food lion and stop and shop tesco under pressure number one retailer in the uk. some economic news i want to talk about in france consumer confidence falling for a second consecutive month a tick lower in august to a reading of 103 confidence had jumped to 108 in june following victory of president macron since then it's dropped. households are losing confidence in their financial situation keep in mind macron's popularity has suffered a nose dive down 20 points from may according to a harris poll. french stock market pulling back from its may highs as well but with a month to go before elections in germany, chancellor angela merkel is on track to win a fourth term in o

the federal chair janet yellen speaks at jackson hole. ae says any rollback financial reform should be, quote unquote, modest. plus, it's not always easy to outdo your boss. we look at double lines. hurricane harvey strengthens as it heads towards landfall in texas. the price of gasoline rallies as the storm threatens to wreak havoc on the heart of america upon synergy sector. let's get a quick check of the markets first, as janet yellen spoke earlier today and jackson hole and we are waiting for mario draghi. the tao of 54 points, 1/4 of 1%. the s&p 500 up 7 points. the nasdaq really unchanged, just down about 2 points. the dollar was where we saw a bit of a move, it went lower by 1/2 ofd 1%. mark crumpton is here with more. >mark: the governor of texas, greg abbott, is urging people directly in the path of harvey to leave all there is still time treaties activated 700 members of the national guard in preparation for the storm which could be the first hurricane to make landfall on the texas coast since 2008. president trump tweeted he sp

yellen, probably some timetable as far as the reduction of the fed's balance sheet. hoping there's very little i'm hoping for boredom boredom is far better for me as far as i'm concerned >> going back to monetary policy there's been a put underneath the market that has attributed to this. if you mroef the pyou remove thu don't get the fiscal policy initiatives, can we act in continuance for seeing asset appreciation >> one would have doubts i think the major precursor, the major fundamental behind the driving prices of stock going higher from the lower left to the upper right have been the monetary authorities being extremely expansionary in policies the monetary base in the united states expanded four fold. the ecb three fold without that increase in the monetary aggregates, there's probably not that much fundamentally in the economies of the world to allow stock prices to be where they are. if they slowed down, at some point if they begin to allow the monetary aggregates to decline, that's going to be deleterious to stock prices. so the market will stop when it sto

the focus will be on fed chair janet yellen, mario dragy on friday. while we've been told to expect no surprises from dragy, they will unwind a timetable for the ucc's tibuying program. the two banks have been at a big issue for a while now on where the central banks are going now. it also ends an era of easy money and possibly, possibly janet yellen's tenure as the fed chair. the feds face a dilemma right now, because even though the unemployment rate is at a 16-year low, inflation is barely budging. if yellen expresses any bit of confidence that inflation will pick up in the next few months, despite the energy and retail prices, the market could be in for a little bit of a surprise. bill dudley, who is a close ally of yellen, said just last week that he still favors a third rate hike this year and expects to see firmer wage gains push inflation up toward the feds' 2% objective. the other big question mark is the possibility of a u.s. government shutdown. president donald trump's comment about building a wall even if it means shutting the government

stanley fischer mentioned it, janet yellen.t cared for 48 hours, and then it decided to rally again. what about the prospects of further tightening? weh the fed hike last time, said it was a free hike. financial conditions were loose, they were not reacting. now we are seeing financial conditions at least tightened slightly. does that have an impact on asset prices talking about these two things? mike: probably not at this point, unless it keeps going. we are seeing a little bit of tightening in reaction to what's been happening with the dollar lately. it has to continue, has to be bigger. the financial conditions index shows we are still quite loose in terms of policy. according to the fed people we thatbeen talking to, justifies another move by the fed sometime this year. it is not imminent, they will go with the balance sheet reduction in september, but it looks by december they could be on track for another rate move. julia: great to talk to you, mike mckee. i want to quickly bring you some breaking news. amazon says whole

>> well, let me just comment on -- i had breakfast with the fed chair yellen this morning. we meet on a weekly basis as have previous treasury secretaries in the fed and we have a very constructive dialogue on a lot of issues including regulation and one of the areas we are focused on working on with the fed is fixing the volker rule. you've seen the treasury put out a report on what we believe are regulatory changes i would say 70% or 80% of them we can work with the regulators. we have a working group on we're going to use congressional support for. we believe in proper regulation. but we also believe we need to make sure that banks can lend, particularly community banks and regional banks >> so there aren't differences now between the federal reserve leadership as it is now and the treasury or the administration on regulate sorry reform >> again, i would say that we are working on a lot of things together with the fed and see many aspects of this the same way. >> i assume you're involved in this process of the decision over a new fed chair could you tell us where the pro

yellen in jackson hole.kets ahead of the federal reserve chair speech, the meeting of central bankers, it could be her last appearance at the retreat. european central bank chief mario draghi will speak this afternoon. joining us this morning, riddler, politics editor ron meyer, good to see you. one of the big questions is we still don't know if donald trump is going to ask yellen to stick around for a second term which expires in january. >> there has been a lot of speculation whether she will make the case on why she should stick around, she won't address it directly but will she talk about her legacy and what policy to put in place and make the case what she has done is worth. there is a lot of skeptics that the you can't just keep to quantitative easing or printing trillions of dollars and have no consequences but we did call this printing but trying to ease out of that and this will create stability. if we print all the money we printed and still stay stable it will be a model going forward but a lot of

yellen could be more interesting. there are a number of key issues floating around. she has used the jackson hole symposium to make major statements before. but i think are a couple restraining issues one is the debt ceiling deadline coming up at the end of september, mid-october that could disrupt markets i don't know if you want to make strong statements going into that so i suspect she's more likely to focus on what the topic of her speech is, which is financial stability and perhaps -- what i'll be interested to see is whether she weighs in on this debate of deregulation of financial institutions, which the trump administration is starting to push that clearly has big implications for the fed >> would that be a major mover for the dollar the market is waiting for further clues when it comes to the reduction of the balance sheet or another rate hike in december currently the market is pricing in 42% when it comes to the december hike. financial deregulation doesn't sound as sexy as the reduction of the balance sheet does it >> no. no absolutely so i suspect, you k

janet yellen and mario draghi will be there.uld be doing. one of the things that will be on janet yellen's be doing. one of the things that will be onjanet yellen's mind is the weak dollar? that is right, and how it feeds into inflation expectations. we have seen some softening in inflation. the rate has been risen three times in recent months. that hasn't been felt on the us dollar. we talked about nafta at the start of the programme. and clearly, president trump's threats to scrap it entirely. it will be interesting, given what we have also heard this morning, that the chinese great wall motor company are asking for a meeting with fiat chrysler, will trump be happy about this? well, i don't know, is trump happy about anything at the moment? you would have to say not. this is another thing he will want to try to protect, the great us manufacturing economy. it is about the headline. not necessarily the intricacies of the deal. the psychological element? another chinese corporate raider coming inforan another chinese corporate ra