tv Whatd You Miss Bloomberg July 11, 2017 3:30pm-5:00pm EDT
seized diplomatic property. he said, we are closely following the situation. returning -- referring to a 2016 decision to take away the russian embassies country houses outside washington in new york. in retaliation for alleged election hacking. says conditions in gaza are deteriorating quicker than expected. -- life is becoming more and more wretched after blockades and becoming isolated. in 2012, the u.n. said gaza could be unlivable by 2020. president trump is being sued for mocking users critical of him on twitter. the lawsuit filed in new york today says the president's account is a public forum and is against the first amendment to block people from seeing it.
it is affiliated with columbia university. a surprising new study finds a 41% of adults in the united states have experienced some form of online harassment. though much of it is considered harmless, 18% say they were subjected to severe harassment including principal threats and stocking. users say they were harassed strictly for their political views. global news 24 hours a day powered by 2700 journalists. this is bloomberg. ♪ julia: live from bloomberg's world headquarters in new york, i julia chatterley. and i'm joe weisenthal. scarlet fu is on assignment and
we are counting down to the julia: close of trading in the u.s.. u.s. stocks virtually unchanged after a politics related midday blitz. joe: the question is, what did you miss? julia: no rest for the weary. mitch mcconnell canceling the first two weeks of the august recess to tackle the gop's unfinished agenda. have a live interview with mark meadows of the house freedom caucus in the next hour. plus, new details on donald trump junior's emails, the dow jones -- one market is keeping one air open to politics. keeping one ear open to politics. abigail doolittle is standing by. abigail: another day of small moves for the major averages. we are looking at all major averages trading higher. the s&p 500 had been fractionally lower. at nasdaq leading the most
this point, up .4%. it is not tell the complete story of the day. of course, we had the big headline that russia wanted to help the trump campaign. donald trump junior learned this through any mail. headline came out around 11:10 a.m., the dow jones losing 160 .oints in 20 minutes it then gaining back. investors panicked, then cooler minds prevailed and we have the .ow higher nonetheless climbing higher. wheret's take a look at the effect is a little bit more lasting. this was an intraday chart of the bloomberg dollar index and the 10 year yield. been higher until that 11:00 headline and now lower. bond investors now dragging the dollar down.
the dollar is not the only effect from yields falling. although to be fair, the banks have been lower into the headline. of the worst sectors for the s&p 500 today. lower, we had this sector in a big rally mode. it is a wait-and-see mode to see what the trading revenue looks like. bringing numbers lower. down.vision maybe it will be a little bit better. thaterminal suggests donald trump junior email revelation today has had an effect on the trump trade. #btv 2742.
we have the s&p 500 rising. that is the risk rally with stocks. we also have the bloomberg dollar index seeing divergence. that part of the trump trade is on. is saying that today, the divergence had gotten worse. the question is, what will the effect be on the days and weeks ahead? joe: tide calendars working against lawmakers trying to come up with a revised health care bill. earlier today, mitch mcconnell said a new bill will be out shortly. senator mcconnell: we will be on health care next week. it we will be laying out a revised version of the repeal and replace effort. the text of that on thursday morning. a motion to proceed next week. the senate also canceled
the first two weeks of august recess to give themselves more breathing room. and here in new york, bloomberg businessweek editor megan murphy. i want to start with you, bloomberg reporting very that it looks like the tax cut part of the obamacare repeal bill will come out. could that aspect be enough to bring the moderates on board, provided that money has been redeployed helping more people get health insurance? >> that is certainly the key. to appease members like bob corker and susan collins that would question if these taxes should be repealed in a health care bill. it's not all the tax cuts that are going away from this bill. the key ones going the way have very little to do with the cost of health care. tax one the 3.8% aboutment incomes,
$250,000 for families. -- there isey raise a lot he can do with that. the tax credits, provide more opioid treatment money. they can also reduce the size of medicaid cuts. it hits particularly hard. i spoke to john barrasso. it will not be in the revised version. those cuts, do pass what does it mean for the prospects? is that with the senate ops to do?
kevin: there will be upt members that all of these taxes are't going. these are some of the most reviled provisions. people like senator to me. that these facts will go away and the freedom caucus will go away. who will stand up. it is a tough political argument. julia: this is what we should be talking about but we are talking about other things that have clouded the agenda. talk to us about the latest n.l. revelation. want aboutalk all we the prospects going forward.
these revelations that don junior, the president's son, he knew the information he was potentially getting about hillary clinton which he suspected could be damaging, did in fact originate with russian officials. that is really the game changer today that has put the story that has been coming on for a few days now. what a bombshell it is. it's one thing to think you're getting opposition research. it is a different matter indeed when you were told in advance, the providence of that information does come from russian government and russian officials whether you get the information are not. jared kushner and paul manafort were also involved and brought to this meeting. kind of know what information was received or exchanged, but don junior -- this was a whole different question whether or not there was collusion involved between the russian government.
joe: he tweeted that he went to the meeting under the pretext of what he thought would be information from the russian government. whether he got anything is unclear. does it make a difference yeah co does it matter that he thought there was. >> this is a new level of a pointlly -- this is that anyone should've walked away. , it was taking information that they might've known.
but they knew and when did they know it? and the intense issue, where -- it will be looked into much more sensibly. it does do a lot to explain why the president was so active .otentially trying to shut this just the sheer level of carelessness and recklessness putting this kind of thing in any mail. the panic involved with media scrutiny, how much of this was panic echo who releases the
emails on twitter? the lack of legal awareness around this is truly stunning today. this is the president of the united states we are talking about and his son that has been one of his closest advisers. i take your point but at the same time these people are running the country. historically not one of our closest allies. you contact the fbi, you call your lawyers. julia: they did not think donald trump was ever going to be president. even the family didn't believe it. is that any form of defense? >> there is not understanding the rules and there is steamrolling the rules. that is what the trump family has done.
joe: in that time, it obviously wasn't clear whether truck was going to win or not. they asked about regarding contact with, am i correct? >> any foreign government contact. jared kushner says these forms were not filled out properly. whether that was intentional, who knows? julia: what are people saying?
>> the vice president categorically denied several times that he and anyone in the campaign had contact with russians. is where a potential place were maybe there would be some fire emanating. they had conversations with so many different russians. on capitol hill, republican senators are not at all eager to discuss this. they need to focus on health care. it was asked three times the comment on this. each of those times, he ducked and said the intelligence community is reviewing this and
deferred to them. he trusted them to handle the issue. the intelligence shared by richard burr. julia: so great to get your nationalloomberg's political reporter. megan murphy will be staying with us. we will take a short break here, plenty more to come. stay with us. it you are watching bloomberg. ♪
watching yeah co what will you be looking for? toan: the president has speak further on this. he's a bit of a loose cannon on twitter. it's his son. and whether he tries to launch a more robust defense on this, there are legal it issues involved in that. junior, he's, going to go ahead and testify. i think he's on hannity tonight. megan: it is surprising this level of activity given the legal issues involved. i think there are two major things. it we will be looking to see how senior republicans react as this door develops. we see mitch mcconnell and the people trying to sidestep t questions. we see people putting out these statements. but talkingt this, about health care reform, taxes,
the debt ceiling. there are major legislative issues that have very little possibility. joe: which gives us an excuse to show the legislative calendar. i guess we showed it already. a very tight legislative calendar even with the delay of the august recess. it doesn't seem like the white house is ever put that much effort into legislative activity. letting mcconnell and ryan handle most of it. you all these issues make things more difficult? megan: washington is a momentum town and a momentum game. certain issues to give ground on their concern that trump is becoming an albatross they may not be able to get rid of. people, many of them are up for reelection in 2018. that is the issue. if they don't give the cover they need to do, unpopular things like putting poor,
disabled, and elderly people. that becomes a much more difficult political arment for them to make when the administration is so significantly weakened. popularity ratings are reaching lows, only rivaled by chris christie. it is becoming a difficult game for them to play. julia: is that what will be decisive here? how much donald trump new, the chain, and how robert mueller investigates and treats this? megan: we do not know what bob mueller has or what else is out there. it's interesting that these emails exist. there might be other material out there. nobody wants to prejudge that. -- lookg we have always at the level of experience, look at the crimes they are tasked with investigating. mob crime, complex financial prosecutions. this is an a plus team o people dealing with sophisticated
investigations. this is something that has hung over the administration and they can't get clear of it. the more it's out there, the more donald trump gets frustrated. that's why we see the tweets in the morning so much. on the hill and in the halls of congress, they want their agenda to move forward. they are sick to death of having to discuss this and talking about their conservative plan for the future of america. don't underestimate how committed these people are to the ideals and their principles. in some ways, that helps them and in a lot of ways, it hurts them. julia: and where these leaks are coming from. joe: this one is a real mystery. megan murphy, editor-in-chief. thank you for coming on. julia: time for the bloomberg business flash, a look at some of the biggest stories in the news right now. the company has laid off hundreds of employees, months after the boston-based firm had
a buyout of 3000 of its 45,000 employee workforce. they said at the time there were no plans for layoff since the bios were accepted. they released numbers for the second quarter, sales and earnings up. theyand you factoring continuesh weak demand in north america with higher prices. the company put earnings of $1.50 a share that beast estimate -- that beat estimates. and that is your bloomberg business flash. up next, we go to the bloomberg on small business data. if you have a terminal, check out tv . interact with us directly. just go to tv on your terminal. it is the -- joe: future of tv. julia: this is bloomberg. [laughter] ♪
julia: i'm julia chatterley. what did you miss? those of you out there concerned about inflation and whng about disinflationary trends, there is another point here for you to watch. more business activity. cpi.lue line here is u.s. it is a national federation of independent businesses reading of how many businesses are actually raising average selling prices. that is down as you can see from the price of the chart there. obviously, the contours of that appearing to lead the cpi numbers here. they are also giving wage increases. the 24 net percent down 28%. seeingn line what we're in these small and medium-size enterprises. it's a great chart and feeds nicely to my chart which is part of the same overall puzzle. i am also drawn from this morning's data. this blue line is from the nfib.
it the number of small businesses that are filling job openings is the big problem. the blue line is going up. the number one problem is openings. rate inht line is the the manufacturing industry. a percentage of employees that quit every month, typically considered not good for employers. signs of labor market tightness. a difficulty hiring. we think it would feed into wages and feed into inflation. these are the trends that are supposed to of cause accelerating rate -- wages all the time. the two different pieces of the puzzle very nicely encapsulate it from this mornings small business outlook. julia: just not seeing the wage increases yet. joe: yet. next. the market close is let's give you a look at how the market is trading as we head toward the close.
[applause] "what'd you miss?" stocks rebounding. i'm julia shetterly. joe: i'm joe weisenthal. ourant to welcome you to closing bell coverage of every weekday from 4:00 p.m. eastern. plenty give you a look at market action today. suggesting an element of -- dissolution on the campaign from last year. this account stocks closed --
didn't necessarily tip the market any lower. you can see investors buying back into the stock market. there is reason to keep at least on politics in washington, potential implications of that. what we saw today was the financial under pressure, drag of what janet yellen speaking -- that sector now extends. what does this mean for deregulation and the financial sector -- perhaps they would prepare some trading in that sector in particular. you have tech stocks by -- and you have energy sector. oil as well today -- helping the uptick. see lower in the
session. let's look at big movers today. snap losing another 9% in trading today. it broke down below its price of $17. we also had morgan stanley downgraded that stay on all sorts of concerns here, saying they're concerned about come petition from instagram and the ability of snapchat to grow faster than initially expected. was the negotiator on the stock. down gradient -- downgrading it eye paonths after the hurts. -- ipo hurts. the business model has severe challenges, and intensifying competition according to the research group. the price target there, two dollars. i'll add another ouch. they're quite painful. facebook in a 1%.
>> quickly on government bonds markets -- yields lower across the board. 10 year yields dipped earlier in the day with that risk off. 2.36 percent. >> let's look at what's going and currency land. euro-yen here as well. some gains -- yen weakness, very much the story you would expect. japan -- if you are looking at central banks, right at the back of the q4 retracing any form -- pulling back any form of stimulus here. cap -- we have been 95% -- basis point hike, hawkishness from the central bank governor and deputies as well. weakness to talk about. i want to bring intolerable here. just one percentage point now offer unwinding on the end of the years you can see there. right now, a bit of strength
there. biggest story in the year to date performance. gold,commodities, oil and oil of 1.5%. barrel.ve $45 a gold modestly higher, not much action in this market. day,morrow should be a big more in that coming next. those are today's market minutes. julia: today's action showing the market does not come completely deaf -- death to politics. your long-term investor -- we have been chief investment officer -- markets looking like it the best by the united states. welcome to the show. thedo you encompass political shenanigans and policy in your's trading strategy here? to forecasttry assemblereturn, and
portfolios for investors. that's with attractive long-term returns. analyzing the daily ab debate, we political try to tune that out. we do include important policy variables in our expected return forecast. long-termts the -- growth of an economy that feeds into the real level of interest rates and changes in currency that's really the long-term effects of it policy noise than the short-term of the political debate. >> in that vein, have you inputted any positive policy pronouncements from this administration into your future
forecast for the united states? >> know, we haven't seen emerge from the current administration that changes our the outlook for the u.s. economy. muchrivers of the very slower growth that we expect -- over the next decade or two, relave to past decades for the u.s. economy are much more powerful forces than who is in office. mostly, we are talking about today -- demographics with the forces that are driving long-term interest rates , and the growth of the economy much lower. seem to complain about a
2% gdp growth rate in the united states, but we are surprised the able to achieve that level of growth. once we hit full employment, we think the new normal growth rate is likely to bcloser to 1% than 2%. of course, the economy is able to keep growing at 2%, because there is this large pool of ,abor that isn't accounted for or counted, in the unemployment rate. the unemployment rate looks extraordinarily low, but the later force participation rate is also rather modest, and has continued to grow. we are continuing to add labor to the economy. done, one we had true full employment, we will slow back down.
we would forecast a phenomenal return to the u.s. stock market , ande range of 3% investors to adjust their forward looking expectancy accordingly. ,> it will talk more about that but we do have breaking news. we're seeing twitter reporting for a long while now. we'll bring you more on that as we get it. >> let's get back to capitol hill where new questions -- simulators canceling august recess buying more time to work on health care. >> we are here with mark meadows, chairman of the house freemen caucus.
link to moscow -- influencing our 2016 election. was it appropriate for that to happen? >> i'm not on the comer -- committee of jurisdiction. i get to read emails. when we look at this, it's all about making sure we have a special prosecutor, which we do with mueller, to look at this. anytime you could have a nose going back-and-forth that will tell one story -- the broader story may be very different. but i can't say its interference in selections, whether it be russians or the chinese or anybody else, is inappropriate. we have to get to the bottom of that. as we see the same else today, the only good news is that the attorney that came said she has no connection with the russian government. as you read it, certainly they start to look at the steeper, i think it is important for us to get to the bottom of it.
i for one have been calling for that for a long time so i think it will see that. sinceco rubio said that lower territory, to agree with that? >> i think so. anytime you have special counsel it moves to that. there's a number of other -- there is a big difference between having activity and colluding. whatever the evils i looked at of, what was hillary doing with russians? hopefully he can get to the bottom of that. >> congressman, let me respectively rescue on this. the senate unanimously passed a sanction bill on restaurant is a result of the u.s. intelligence committees reports on this. now the sanctions bill is in limbo the house of representatives, does that frustrate you?> >> i think the frustration is
targeting those sanctions. -- overwhelming focus on the senate come i think he will say one on the house floor in the coming days. beiously it's not going to in them baa -- i am on the foreign affairs committee come i know chairman royce is working diligently. we are looking at amendment that may be added to that. businesses that are concerned, but in the interest of our national sovereignty and security, those thisd even interest -- is in trust. we will meet with stakeholders this week. >> you are one of the first members saying -- >> i think you and i talked about that together. >> what to make of this? >> we applauded. here it is, only part of the story. we need to make sure our leadership on the house side follows suit, and then we have
decisive action. are the american people afraid of, and certainly our viewers, they just want something to get done. adding two weeks, as long as we get something done, would be important. >> i want to talk about what it -- this reconciliation process. .9% payroll tax on high-income households. can you have any health-care legislation that includes not repealing those taxes? >> the house freedom caucus took an official position to repeal all taxes. we voted for that. i don't know that it is a non-starter. what me just say this. i try not to answer anything until i say -- i see all of it coming together. as they look at this, it depends on how it fits into the broader context of what we will do on repealing replacement. that being said we have tax reform on the backside. grew to it, then do we address and reconciliation as
well? >> step beyond this and talk about this -- the debts. can the house freedom caucus can abort to raise the debt limit, or does it have to include mandatory spending cuts? where do you see those coming from? >> we have identified over $250 billion in cuts to mandatory spending that could be used to offset it. that's one of the points. we also know you must with a full faith and credit of the united states. we are putting out three different proposals. one would be to have it there and increase it by -- this is the number we have in there. juster it is 15, 16, 17, trying to make sure we have enough room to get markets and stability, so they are not worried about any potential debt limit crisis. that said, we have put some were saying is close to a clean repeal. -- a debt ceiling increase, in that where we are is just -- let's put structural reforms so we don't ever have this question
of defaulting on our debt ever again, and put that in. if they were to put that in, we could -- our caucus could vote for that. >> and a august recess vacation plans? -- inhad plans but anticipation of the second week in august i made the call. >> a lot of other people and reporters. thank you for coming on. back to you in new york. >> didn't seem too upset at that. from new york this is bloomberg. ♪
julia: "what'd you miss?" -- disclaimer bloomberg news -- video partner with twitter. emily chang joining us now from san francisco. what do we know about and single, what is he bringing to twitter? emily: he's a former senior vice resident of finance at intuit. been openosition has since autumn betting, former ceo of twitter left the company last november. anthony know though, the cfo, took on the coo role in addition to his cfo responsibilities. he has been doing both jobs for more than eight months now. anthony noto has been striking new deals -- a video partnership like you mentioned, live video a big part of their strategy. net single is going to have a lot of work to do. last quarter did -- twitter
reported strong user numbers, beating estimates for the first time in a long time. when it came to revenue, they reported their first quarter of a rough -- loss. they were having problems with their advertising revenue. piercing growth in new and resurrected users. they are getting the benefits of political cycle, the fact that president trump is an avid twitter user, certainly has in some ways been to twitter's and fit. -- hasway, this new cfo a lot of work to do. >> what specifically -- sometimes we have a weird idea of what his cfo's mission will be at a company. the ideaabet hired -- is that the company's expenses -- expenses were out of control and that they needed a serious look at which ones made sense. a twitter, we know a lot of the challenges, user growth, advertising. do we have a sense from the
financial side of what needs to be done? >> i think a lot of that remains to be seen. we will interview the former twitter ceo dick costolo on bloomberg technology, about 40 minutes from now you're it we will certainly ask him. -- will that siegel report to jack dorsey. seen the new twitter strategy unfold over the last year or so, with a focus on live video and partnerships. see a big expect to change in strategy, but when it comes to numbers, ned siegel will have to a drought how to make money off the new strategy, how to drive -- drive advertising revenue, attract advertising revenue to these new live video partnerships that they are striking. of course, a lot remains to be seen with the next quarter of twitter earnings. will they keep up user growth? adam bain had revenue -- the teams locked up for a long time with that first quarterly loss.
that was an important warning sign. born to note that twitter has 328 million users. we have talked about snap breaking its ipo price all day long traits not only has 166 million users. big growth challenges ahead, happy not toobably be in the spotlight that it once was, and snape is stealing the heat. twitter shares have been on the rise over the last year, will snap shares of come down. >> thank you for filling us in on this, emily chang. programming note, as emily mentioned, bloomberg technology will be point by-kick solace -- at 5:00 p.m. eastern time. this is bloomberg. ♪ ♪
joe: "what'd you miss?" we are now back with the chief investment officer, research affiliate. last time we talked about the emerging markets anti-potential returns. chris, forery much, staying with us. we were talking earlier in the show about some of the big long-term structural demographic arguments for emerging markets, in the more idiom term, there is a risk that the world's central banks are turning a bit more hawkish, and that's changing a lot of market calculations. how much of a concern is that to you coming to this point, what do like specifically? thatll, there's a reason investors are concerned about potential tightening of monetary policy on the prospects for emerging market investing, particularly the currencies of the emerng markets. particularly if we look back to a famous episode, called the
1994, a verys in aggressive fed tightening to tamp down growth and reduce inflation, which had started to run out of control, caused a really -- currency crisis throughout latin america. companies have borrowed in dollars -- and were going to difficulty repaying -- even countries at that point borrowed in dollars. however, if you look at the history of fed tightening activity since that time, mostly it has been very positive for emerging market currencies, particularly in early stages of the tightening cycle. you have to ask, why is monetary policy turning? >> the reason monetary policy is turning is that there is a
global economic upturn that good forbe very emerging market assets. they are more economically sensitive countries. we have seenhat over the past year, which is the emerging markets outpacing the returns of the developed markets, is entirely what we would expect in the early stages of the tightening cycle, which is just reflecting stronger growth globally. is going to be different this time, we have one heck of an amount of liquidity, qe being unripened -- it staggered sequence. is that not going to make it difference to emerging markets, invade -- even with a larger process of unwinding and expected tightening? the activityct to in the u.s. and europe, where
fairly sanguine. interest rates are likely to rise not very much. -- interesttal rates are much lower now than they used to be. growth andslowing the aging democracy. there really is not much tightening to occur. , and thisremains calm whole issue of unwinding the feds ounce sheet is way overdone. an natural system banks have enormous amount of excess reserves. trading excess reserves over treasury bills or mortgage-backed securities for the central bank, just really is not going to have much of an economic impact. that is really overblown. if you look at what is going on in china, it's a different situation. i would keep my eye more on
bankingoing on with the system in china, if you are looking for a reason for their and. >> great to chat to you. thank you for speaking to us. >> let-up that was an interesting point, this idea -- we think of rate hikes is saving -- bad for e.m.'s. if they are a function of a strong, robust global economy, it's obviously probably good news for those economies. >> they can benefit as well. the question is, what other risks are out there, china being one of them. >> coming up, my bloomberg intelligence analysts six go up for near-term yield curve steepening. this is bloomberg. ♪
mark: i'm mark crumpton, time for first word news. calls are growing for donald trump junior to testify before congress about the criminal connected attorney. in those show trump junior new imaging information he might receive about hillary clinton was coming from the russian government. >> anytime you are in a campaign and get offered from a foreign government to help your campaign, the answer is no. i don't know what the strict trump junior's version of the facts are, definitely has to testify. that you know was disturbing. >> the white house says
president trump only learned of the meeting in the past few days. the president said in a statement that his son is a high-quality person come applauds his transparency. syria's ambassador to the united nations has a deal to quote, genuine partners to help end his country's devastating six year civil war, insisting that such international cooperation must involve bashar al-assad's government. we spoke to reporters after a meeting in geneva with the yuan envoy -- as part of the seven and latest round of indirect peace talks. >> we need the political commitment of everybody to work it out. you can't put that into the war -- only by our self. you need to have genuine partners to combat terrorism. combating terrorism is spinach -- it shouldn't be only exclusively this issue, it is international. syria toldy for
reporters he doesn't expect breakthroughs -- but what he calls incremental progress -- set to run through friday. the uk's brexit secretary to e reco house of lords i should be britain's withdrawal from the block. they said they didn't expect ontain and the eu to agree citizens future rights in the immediate future, but he hoped an agreement in principle could be made. both sides would like to be in place once negotiation so fallen. this negotiating team is -- to begin its first first -- round of talks with the eu's teat -- chief brexit negotiator. global news 24 hours a day, powered by more than 2400 journalists and analysts, in more than 120 countries. i'm mark crumpton, this is bloomberg. >> let's get a recap of.. today's market action.
julia earlier described it as relatively unchanged. going on.ue interestingly, tech leading the way, the only meaningful move, up 2.7%. around 11:00 we got this swoon into the donald trump junior stuff with email, but it didn't have a lasting impact. >> "what'd you miss?" president trump planning to put his first mark on the federal fundve by nominating manager -- former treasury of fictional to be the central bank top bank regulator. why some regulation has not been aggressive enough. >> there are a couple of specific things. -- so forth,ng that were again -- the macro issue is that government should in the financial sector. it should be a referee. >> from nomination, peter coy joins us now. no reaction from the market,
this is pretty much expected. >> we have known for months they would put him up. he is a mainstream kind of guy, he's not going to rock the boat. he is a republican, believes in republican principles of deregulation, believes banks are overregulated. he -- not a low interest rate guide. her up and to the wall street which shest year in was concerned with -- straits causing banks -- to reach for yields and gets into crowded -- e that could blow up on >> what's coming up, what are regulatory issues over which the fed will have to make some decisions that he will potentially be influencing? >> one big one is stress tests. that's already happening. one liberal democrat -- people were quite extreme. they stressed the banks to a high level.
under j paolo replaced -- already turning back up. we can expect more of that. regulatory czar in the federal reserve board. banks have complained not only that they are difficult to pass, but that they are unpredictable. corals would probably add an element of predictability for stress tests. >> we have heard he had been released -- of the regulatory proposal. how much of a really deviate from that if at all? there's legislation then regulation. all he does is implemented. he has nothing to say about what happens to dodd frank. all he can do as say -- that's why the stress tests -- i started with that -- some discretion. there's also various capital standards and so on. that thes to make sure
banks are -- not going to blow up in the faces of the fed. a big responsibility. you don't want to over or under regulate. times, frequently this administration has taken a fairly populist tone when it , deviatingll street from perhaps, republicans in the past, financial matters. is there anything actually, -- nominated or regulations -- >> this is not your populist figure. not -- his wife is the granddaughter of the brother -- the federal reserve building.
wall street law firm, he was a part of carlisle group. >> it's in the family blood. >> seems to be. >> talk about janet yellen -- speaking tomorrow, testified how this monetary policy -- he will respond to recent developments. minutes, the last meeting came out, fed rates interest rates by another quarter point, we have had another fairly drop -- strong jobs are point. unemployment rent -- went up and take but we have 222,000 jobs created. and we had continued low growth in wages. that conundrum of seemingly strong labor market, and yet wage growth has intensified desk she will be asked about that. >> obviously, questions still about janet yellen's future, or
her theoretical replacement. what is the latest on how the white house is approaching what will be a big important decision? insiden't have information. i think probably, she will be asked again thehe want stay on -- she has to for those questions in the past. if she said yes, that would be big news. not saying it will happen. coy, think you very much. and it programming reminder, we will carry fed chair janet yellen's sand -- policy report to congress starting tomorrow at 10:00 a.m. eastern time entry clock p.m. in london. >> our next guest josh bloomberg anelligence progress -- increase in treasury yields by the end of 2018. our analyst this evening, driven by european rates, a flattening on a hawkish federal reserve. joining us now is era -- u.s.
start with the german u.s. rates moving in tandem. we'll pull that up. just explain to us now what we are seeing, pretty significant move. this is to million by mario draghi's word. moveave seen this tandem on many days, especially when european yields have risen quite substantially. if you just take june as an example, from 2:00 in the morning when the german market on -- open the taliban :00 a.m., treasury -- they mocked step. that will likely continued. there were be a lot of focus on the fed with this testimony, but beyond that, we are likely to see mariodriver of treasuries here. >> what else are you looking for in the second half of the year? it's interesting, this idea that mario draghi is calling the shots, boone is in the u.s. --
moving together. what else really has your attention at the moment? other thing is what is going on with economic data. mark's been a question about whether or not his is -- it is exhilarating. if you look at the labor market, you see we had week job numbers for a couple months, and now we have better job numbers. when you look at the aggregate paycheck of the entire u.s. economy, it's growing quite a nice pace, accelerating. that's something we have to look at. it's not only the headline job number, but you have -- have wages and you have a robust labor market. byhink that is being missed, looking at each individual piece of data. it's interesting >> it's interesting on this chart, it's not just that this is -- you have drawn this nice channel. the number is heading the top
here, which nicely visualizes this acceleration you are talking about. so you are saying we can get lost in this -- these earning the numbers, one month to another. there ist look like next operation, but when you combine the total of number people working, the length of the work week, perhaps the pictures brighter. >> i think that's exactly the point of the chart. if you combine everything we look ok, even though wages didn't grow as well. the fact that people are working more hours, that job growth itself was good is all positive. what will janet yellen say? i think she will same testimony that, cumulative improvement is ok and we so want to tighten policy. the questions around that are, how much are they going to tighten? there were a couple of the speakers up today who have said, because inflation is not going up, maybe we won't go as fast as
we originally thought. i think that's an important question that the fed chair has to answer. the question is, how much will the market look through her comments to potentially the next fed chair? >> grade-point actually. there's been comments year -- the fed president as well saying, let's get in the process of reinvestment of these bonds. the market reacts, whether or not we have the right increase. you look at the payroll status you mentioned -- i guess you have to wonder given what we are seeing in terms of wage growth and to inflation here. give us a sense of the timing that you are talking about. how long do you think this candy what wee in light of are getting on the prospects of further rate increases, and the mario draghi, the ecb becomes the driver of u.s. rates, over what time horizon? >> i guess it depends on much in sync they used to be in touch
the fed ultimately gets. i think near-term -- i think we could see a steeper curve until the beginning of october. the bloomberg intelligence we think we will see reinvestment's stop. to reduce theng balance sheet come the fourth quarter. think when that happens you will actually see the front end of the curve not do as well as the back end. that's when you start to see steepening turning into flattening again. >> make sense. yellen share -- chair giving her testimony tomorrow, the thing everyone is saying, with good reason, that the fed is less concerned about traditional dual mandate, and more interested in financial conditions, markets, the level of speculation that they see in stocks. that being said, the inflation side of the mandate is still there. if this doesn't materialize, if we don't get wage picked up that the model suggests, cpi -- will
they be forced to reckon with that in slowdown? >> i think ultimately they well. i think they want the hike. the question is, will the economy be strong enough, and will inflation behind up? the question is, how transitory are the factors you are seeing? whether its telecommunications, some of the other internals within core inflation that have really been a drag. you would think that services would start to pick up. and service prices as wages go up. you haven't seen that. for businesses you have to see compression, or you wind up having to see big productivity gains. some of the data is a little awed in that regard. the federal reserve a think is worried, how will this play out? will we went of seeing productivity increase massively, and not see a lot of inflation/ in which case, we don't have to hike much. that something alan greenspan
talked about in the 1990's, when you went up having high productivity, low-inflation, a federal reserve victims have to do much for number of years. >> great stuff. i were jersey, thank you. -- bitcoin has gotten clobbered his lust few days along with other digital currency. we will look at the risk threatening best -- this is bloomberg. ♪
driving this. though this could be a game -- high stakes game of chicken. this is an ideological divide. can we see two forms a block built?n which bitcoin is it all comes down to the size of transactions you can do on a daily basis. savard has been limited post-tax that have happened the bitcoin. -- we have a thousand transactions a day all the way it350,000 transactions a day payments areg getting too costly as well. both of these two camps want to increase the daily size of transactions -- the question is how you do that. do you funk up the whole bitcoin heads up -- is allowed to work?
to become more of a payment system -- allow smart contracts to be built from it? though this rather controversially means taking some of the data on the network outside of the block chain -- this is where the division starts. >> so one potential way to think about this, some people want bitcoin to be a form of digital gold and others want -- doesn't have much velocity, people don't spend it much, but it has value. others wanted to be more optimized to be a means of cash, something designed for regular daily spend. >> totally. like the likes of the mastercard, visa, go into a shop and use bitcoin. i remember when the assets started, you could buy a christmas tree starting -- is an bitcoin. then it never really quite took off in the way they wanted. now they have -- want to make transactions that much easier. that's the key question, how do you want us to of all?
the key is a competitor which has allowed smart contracts, which has made people more worried at bitcoin. >> this issue of the divide happening within bitcoin, all of having ao currencies, rough few days. >> certainly. the theory once upon a time, split into. -- manypened after hack who used the crypto currency. they decided they would go their separate ways. whether to compensate or not -- it has happened before. the you are right, the selloff is wide -- we are seeing a down 20% -- we are hitting their market territory for a lot of it. in june the jubilation for this market -- excess of $100 billion in terms of market caps for crypto currencies.
fallen off atve $80 billion market caps, the whole crypto currency universe. >> the history of crypto currencies, they're been these big swings before in a way, this is nothing new. the recent run-up has brought in a lot of new people than are familiar with this. bitcoin splitting into. new investors, new traders -- this must be quite a shock, steep learning curve. >> it makes my brain hurt, joe. and pretty sure it's hurting many people's brains hurt. suddenly have to ramp up their withstanding, get to grips what this is. is this a store of value, speculation? most of all, everyone has to come to terms with -- put money in, but they always think it will -- remain study. there are main bulk of those investing in crypto currencies think in the longmost of term, e years, 10 years, these -- 10
simcoe cio's is a latest scandal has caused a shadow on the economic outlook. this is meeting with russian lawyers who claimed to have downed the inflation -- could derail or slow a key administration, like overhauling health care -- tax reform. they also say that could lower production. economic growth. anderson whole foods taken -- the need to cast a shadow over groceries. critics could use plans for an ipo on hold again. the first backs away from its ipo. blueprints lackluster ipo performance is said to be a concern for our century performance up kroger -- also tried and failed to take over whole foods. claims he managed $100 million in his hedge funds, but according to agencies -- he
was running ponzi-like schemes, told to -$.33. prosecutors also claimed he used investors money to buy $10,000 a month for his drug startup. he's known for inflating a potentially life-saving drug price by 5000%. that's your business flash update. tocoming up, what you need know for tomorrow's trading day. this is bloomberg. ♪
julia: lynn jurich and you said to have such 10:00 a.m. eastern beforew, testifying congress. joe: the link of canada announced its decision. we will have live interviews with ceos of expedia and others. >> caps off are "what'd you miss?" , boomer technologies up next with an exclusive interview with
read today by white house deputy press secretary sarah huckabee. the president called his son a high-quality person and said he applauds trump junior is transparency. trump junior also posted emails regarding his meeting with a russian attorney. senate republicans will unveil the latest version of the revised health care bill thursday with a vote planned for next week. that'according to mitch mcconnell, who said he would delay the upper chambers august research -- recessed for two weeks. advisorydent's fraud committee is suspending its request for state voter information. that is after 44 states refused to hand another. it will wait for a federal judge to rule whether those requests violate privacy laws. thousands packed a bronx, new york church in honor of a slain