chairman powell is dealing with -- if noty is full employment, closer than janet yellen, and that puts you in a certain frame. that was what he was trying to express about policy -- nothing but policy really changed, we just reached a different stage of its implementation. th why the ford guidance that previously said, we are going to keep rates lower than neutral than whatever we mean by that, no, we are not. evolved differently. if it were to falter, i do not think they would stay on this prepackaged path. the next big iteration is to involve the balance sheet adjustment. >> interesting. thank you so much. chief security vice chairman, thank you. spearheaded a movement to an overlooked medical problem for women. it depends on who you ask in the pharmaceutical industry. ownership, herd controversial drug, dubbed the female viagra, is soon to come back on e market. fascinating one. give us the history of the female viagra drug. it was bought and went nowhere far, and now, she bought it back. >> the way back and history story, this was a depression drug. the company that was developing

want to talk about the economy in plain english in ttg away from the academic speak of bernanke and yellen. i think this gives the fed flexibility. now, we'll rates have to wait for a conference meeting. -- we don't have to wait for a confer changes in how they will manage the fed fundsate. if you're not sitting on aadjus. ramy: the big news, up 25 basis point, as expected, and possibly fourmore -- not four more total. [lour global and policy editor kathleen hayes. let's get more at the market reaction to the second fed hike rate - fed rate hike this year. >> baby step or not, it moved the market. treasury yields go to 3%. slide with&p 500 the reth no move, but again a negative. gtvs go to the bloomberg chart. here is the message the fed seems to be giving us. the economy can han3% yield. has been an area of concern. this white mark is gdp. the blue is the fed starter rate. in yelw is where the 10 year yield is. some on wall street believe the yield could go much higher, even 6%. let's go into the big movers of the day. what you saw was a followthrough on the at&t merger with time warner.

stood up more powell will going to be a pers guided by that market more so than bernanke and yellen would have been >> can i -- >> there ione risk discussed here that i think is real a long piod ofime.about this for ths the obsession with 2% inflation. we're now in a situation where there is not -- there's been a huge reduction in income with the consumer we're at about 1.2%, 1.3% inflation for the last three or four years you had a 1% omo positive to discretionary income we're now getting close to even. and i still think the feis making a huge mistake by talking about 2% inflation we should be talking about stable inflationi don't think te trying to inflate the economy particularly when wages are low and having low for ten years that's going to bring consumer consumption down and the consumer has been the one driefing the recession for t last ten years >> bringing it back to the markets, we're near the lows of the day dow down 50 points o fo. can they keep selling off? >> i think you might get some weakness going into the bellows. i don't thino a breakdown. but look, we tested 2800

>> janet yellen was talking about re-examining the inflation target. the economy has not been acting has -- as they expected. , it was 5.4%. ofe, we have no evidence inflation, so i think they realize the economy is not functioning the way that models would suggest. >> there was an interesting story looking at the new york city housing market which is not an easy place to build a lot of regulations. obviously, it is like a red flag. should be fed to be concerned with housing from that perspective? they certainly should. they were worried about the bubble and if the fed was not interested, they just said they will let it lapse. i think they should be on the lookout. i don't see much evidence of a bubble nationwide. that is unfortunate for people in that particular market. >> thank you very much. experts have debated whether they should be destroyed. he with more from boston is bloomberg health care recorder -- reporter. available arey these viruses we are talking about and what did they do to try to combat the risk out there? >> thank you for having me

itself the libyan national army has entered the city of done after weeks of heavy fighting yellen is led by a renegade general. new evacuations have been ordered in guatemala where mount franco volcano has been spewing more lava at least seventy five people have been killed and hundreds of missing after sunday's eruption entire villages have been destroyed. and hawaii's kilauea volcano which has been erupting for weeks has destroyed more homes two entire communities on the big island displaced there are no immediate reports of casualties experts still aren't sure how long this eruption will last trade unions in jordan a leading a nationwide strike as part of demonstrations against a controversial tax proposal king abdullah has called for the tax plan to be reviewed but many want it scrapped entirely he said i'm fairly tall gets the poor and middle classes days of protests forced the prime minister to resign on monday and a short while ago two astronauts and the cosmonaut blasted off heading to the international space station the crew is from the u.s. germany and russia will take thei

you have to think chairel for that -- thank chair yellen for that. powell is quite seamless. he's getting a real sense of continuity there. they believe he wants to hike rates he'not afraid of the markets. puts certainty for greenspan and bernanke, it is less there. 15%al levels below drop in the dow, the fed will come in. of the fedfear stopping rates -- vonnie: what about balance sheet runoff? it's not so much about rates. it's about the dot plot and where they go, whether rates move forward. it's increasingly more about the balance sheet runoff. they are accelerating the pace of it. every quarter, it goes up $10 at will become a much more relevant question for the market , $193 billione issued by the treasury, we know the market has handled it well, we are below 3% the 10 year yield. it looks fine at the moment. as the fed is starting to sell down its holdings, not reinvest them anymore, let them whic mature, it's not just about rates going forward. mark: investors pretty geared up for this one. the qa program will be on the table, ending it. what is the communication chal

a good way and balancing that at the fed has been they've done a good job overall with both chair yellen and now with j.p. paul with regard to interest rates jeffrey the consumer price index came out this week showing that it had the increase the fastest than in six years the fastest pace in six years and overall u.s. retail sales were the best in the past six months how are consumers going to react to interest rate hikes and things like housing where we saw a new construction increases back in april and on other major purchases like automobiles or trucks. well sure what we're going to see bart in the future here in the short term future we're going to see things like mortgages and credit cards and car loans actually start to have to charge more because interest rates are going up and so the current threshold really for construction of new homes really is around six percent we see mortgage rates hit six percent we kind of hit the wall today we're around four and a half percent on a thirty year mortgage and so right now which is kind of a pen prick to the average consumer's pocket as we s

a good way and balancing that at the fed has been they've done a good job overall with both chair yellen and now with j.p. paul with regard to interest rates jeffrey the consumer price index came out this week showing that it had the increase the fastest in in six years the fastest pace in six years and overall u.s. retail sales were the best in the past six months how are consumers going to react to interest rate hikes and things like housing where we saw a new construction increases back in april and on other major purchases like automobiles or trucks. well sure what we're going to see bart in the future here in the short term future we're going to see things like mortgages and credit cards and car loans actually start to have to charge more because interest rates are going up and so the current threshold really for construction of new homes really is around six percent we see mortgage rates had six percent we kind of hit the wall today we're around four and a half percent on a thirty year mortgage and so right now which is kind of a pen prick to the average consumer's pocket as we saw

>> i think that the fed has a big number so behind the scenes, yellen fed put forth this balance sheettion. so this is the most important i think data a coming at us. in september we're supposed to go to 50 build a month of balance sheet reduction. and the current balance sheet reduction has obviously led to emerging market capitulation so a good chance the fed softens their policy path in the future and that will create a great bid. >> clear the way for emerging markets. >> larry, thank you forjoining us we'll continue to watch ge stock. that does it for us on world wide exchange. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. >>> good morning stocks looking to rebound from yesterday's selloff as investors try to decipher mixed messages from the white house over its trade policy >>> and

only, janet yellen --= is that a change for the fed? + i think it is a change for these levels.e aggressive ramping and dollar exchange met across the board, not just in y en. you would also accept it -- expected to change inflation. we're going to see a pretty ugly growth story don't start to see more shop -- signs of concern. for now, given the current state of the u.s. economy and given where we are with u.s. employment and inflation, i think the fat is very domestic in its focus. yousef: john is going to stay with us. rolls-royce soaring to its highest level in three years. we are going to be talking about what is happening. detailing theent financial indications of what it is trying to do at the moment. the market likes what it is hearing in the stock is trading and having one of its best days in three years. we will talk about that next, this is bloomberg. yousef: 23 minutes into the session, let's talk about our stock of the hour. rolls-royce detailing the job .uts and changes it started to give more details to analysts talking about how these changes are going to affect

janet yellen back in 2014 was looking for 3%, by now. >> doesn't mean it won't happen.ust means it hasn't happened yet. what about the pressures on prices now >> a lot of those i think will be absorbed by profit margins. one thing that's interesting, we had record profit margins in the fourth quarter before the tax cuts, and with the tax cuts it was 11% back then, with the tax cuts at a record high of 12% i think some of these pressures can be absorbed in the profit market >> are those declining profit margins figured into your estimates for the s&p? >> we go back to 11% that absorbs it. >> what -- if dimon says we're in the sixth inning. he and buffett were on the bullish.not long ago, pretty >> yeah. >> especially jamie talking about the sixth inf is cycle. that make sense to you >> it does the cycle will end -- how could i gree with those guys >> they're not always right. >> not always right. but jamie buys his stock at an opportune time and doubledis money. >> i think the next bear market occurs when we see signs that we're about to fall into another recession. i do

he talked about incredible demand janet yellen would have said let's wait and see unless they're seeing it very differently than how they're acting right now, he talked about demand through 2019 and '20 and then he talked about the supply side. he also said two things to me that tell you he's a lot more hawkish than this sounded like first of all, he tells you the economy is sounding great and he telgs you labor is scarce, workers are hard to find flatioich is fed'sipe for wage biggest issue. bottom line is if people think this fed is going to go softly, i don't think so this is a guy that thinks this economy deserves much less accommodation. one more thing, mel, sorry he's taking away the toys. he was he's taking away the oioer, we don't need to get into that this is a policy statement i'm going to tell you we're not changing a thing, but i'm changing a lot. >> isn't it exaordinary then the markets really had very little reaction. >> little reaction. wkish than people thought atore the surface? >> no. i k the expectations were in line i don't think he -- he was painting a pic of extrem

i think the good news also is powell is not as committed as bernanke or yellen were to the complete transparency. that will help the market get away - >> why do you say he's not as committed to full transparency >> he said that. he said i don't think transparency is necessary, i forget the exact phrasing, but he said that basically he could cut back from what it was. >> there's also a notion instead of just hiking rates at a meeting where there's a press conference, they might hike rates at a meeting where there isn't a presconference so there is more surprise in the market rafael bostick said that just a couple days ago. we could be in for that surprise as well. but in terms of the push, there's a push/pull going into the back half of the year, it s inerms of earnings growth, you've got the potential impact of a trade war, which could weigh on earnings. and then you have the potential impact of the stimulus actually kicking in in the third or fourth quarter of the year that's a very hard equation to sort of figure out, right? >> it really is. i think the fed is in such an uncomfortable position

he comes from a different andground to janet yellen he is one to have for communication with the marketsanna: there is a new sheriff in town. chris, thank you very much. he stays with us here on the program. , andg up, the ecb unwinds the first formal talks on ending qeutill they set the timetable today in riga? matt: we will pay close attention to that. we will bring you the ecb policy decision live here on bloomberg. no change is expected. 45 minutes after that is when we get to the important stuff. draghi hear from mario ant l th infmation you have been craving. this is bloomberg. ♪ it's 20 pastrning, eight here in riga, latvia, where i'm standing by for the ecb meeting. is when: 20 in the afternoon in singapore. that's go there for the business flash with juliette saly. has made itscast offer, saying the offr valu fox your payment assets at 60 got billion dollars. that tops the previous bid from disney and sets up a bidding war for rupert murdoch's empire. the bid represents a 19% premium over the disney offer. pay a one will billion euro fine imposed by german prosecutors for cheati

he took interviews that the yellens put together where they interview people and videotape them and archived at the university of memphis and he took that firsthand information, woven in with other historical document and created a tremendous book but this book is critical, and the justice. and in cities today, we look at situations going on with the crises in rural areas, we realize it is important, and with this book, everyone recognizes the importance of digging deeper into what dr. king was about the guy the news footage you look at. with him standing in front, i have a dream, it is economic justice, he was about the least of these and the movement continues for poor people, working people, and one that will not stop until there is justice that rolls down like water and righteousness like a mighty stream. i want to ask for any questions, anyone who has a question if you will come to one of the microphones this is being broadcast and we will try to take it from there. you can step to the microphone and -- i was previously introduced, but go ahead, sir. >> for my knowledge could you introd

. >> i would say there is a new sheriff in town, because ben bernanke after the crisis and janet yellen tended to be glass half-empty come in the sense if there was an excuse to pull back and be cautious, they tended to do so, and the paulo fed seems to be a glass half-full type person. german pal fed seems to be a glass half-full type person. alix: our next story is mario draghi, glass half-full, glass half-empty? he has a delicate balance today. he has to upgrade inflation forecast, but not growth, but temper expectations. chief of the ecb has dropped an enormous hand that they are talking about the exit from qe at the meeting today. will they come to a definitive decision and let us know? if you ask 100 people, 50 say yes, 50 say no. do know is qe as currently scheduled is slated to end abruptly in september, and they will want to go on a collide path. the consensus overwhelmingly is that will be done by the end of endyear, qe will end at the of the year and targeting a rate hike by the middle of next year, but the challenge from mario draghi is not to pre-commit too much. they want

wasn't much better than, of course, janet yellen, that was tough, it was like, going to her press conferenceswhen is it over? >> this guy is promising every meeting. >> what's worrying people which makes them think he wants to be more nimble. neil: why? >> typically the major shifts in policy they like to telegraph them. the idea is if i do a press conference every single meeting, giving the opportunity to shift gears quicker. neil: something can happen at every single meeting, usually the one without the press is the one deemed wouldn't be made. trade thing, how is that factoring into this? >> the beige book reports, they talked about it more. three months ago they never really talked about it, now, at the press conferences, the fomc statement, the beige book, we are seeing more and more where the fed is acknowledging that it's a threat, that it's got business owners anxious. that it's got prices misaligned with where they should be. won't impact the decision, i think more importantly you have the producer price index which is what producers take to make the products we buy coming in stronge

powell has to figure out, the fed chairman i think his idea was, i'm going to coast on the janet yellenectry for as long as i can until the facts change and the facts are slowly changing a little higher inflation both yesterday and today in the ppi and the cpi. you have growth rachtcheting up and the underlying questions which alan was getting at is, why is growth higher is it higher because w doing massive fiscal spending and cut taxes, or is it gog to be higher because we're going to change the dna of the economy? and that's really a substantial question here. are we going to have this capital investment boom that will lead to worker productivity that will lead to higher wages and create an upward shift in potential? that's what jay powell wants to know that's what all economists want to know. and that is the sort of thing that will change the outlook for fed rates. a temporary blip the fed is going to ride that out. >> anything in the language of the statement we should be looking for to get a signal for rates? >> it's a close call i think today is not that day where they'll make tha

but janet yellen's was nothing but dovish and she raised rates three times last year.t at all for press conferences and meetings last year. she was setting a precedent for a successor. gradual small increases well telegraphed. central bankers care about precedent, mario draghi has to care about what his successor does. he wants to get the idea on the table the you raise rates slowly. what does a successor have in the toolkit when it comes time to fight recession, the answer is not a lot. they've use their balance sheet, they have tried their experiment with negative deposit rates and it was really a pass on the banking system. so they will hope the euro depreciates as much as possible that is the core engine for financial stimulus. so we need u.s. growth. the ability to influence either european growth or stimulate european inflation is inevitable. despite a 4.5 6 trillion balance sheet. they have thrown everything at it and they are struggling. they've had a bit of growth but it's been very expensive bought growth. vincent reinhart, thank you so much. coming up tomorr