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tv   Whatd You Miss  Bloomberg  September 26, 2018 3:30pm-5:00pm EDT

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goldilocks way. we will hit the goldilocks but we don't know where it is. the heart of the matter away from the math that you are truly experts on, you're either out front or you are exposed in back. sorry, what i heard was an powell, he is going to wait to see what the data is. >> yeah, of course. the fed is conducting monetary policy very gradual. they are not going to get in front of anything, and yes, there are concerns around inflation, but there is nothing that says the concerns are manifesting and that is what the data says. the issue will be the longest variable lags and if that is a misreading of the structural issues, misread. this is the eighth consecutive
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quarter where the federal reserve is upgrading it's level of growth. the federal reserve has consistently gotten the forecast wrong. they get it wrong when the high, so i would should we expect the forecast of the forecast to be right and not a problem down the road? tom: the market moved when he talked about the dream of getting out front which is a fiction as diane said. want to mention quickly that president trump is currently meeting with theresa may, this is that the un's general assembly meetings. you can watch their meeting on the bloomberg at live go. we want to go back to our panel. scott, you mentioned something that nobody asked any questions about the fed balance sheet, why not? scott: what is the fed balance sheet? so far this year, we have sold
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h oft $150 billion wort securities and next year, $500 billion. the sudden acceleration in the shrinking of the balance sheet is going to be -- put a lot of supplies back into the market on top of a trillion dollar deficit. we have one point $5 trillion worth of securities and i can economy that is generating $600 billion to a trillion dollars worth of savings that she was going to buy the securities? the chinese? i do not think so. tom: are michael me -- our michael mckee in washington, i thought he was going to be xed out of the room with his rude question. what did you interpret as the dynamics that chairman powell will face in 2019 and 2020? michael: the farther out you get, the dynamics our hearts of -- hard to forecast.
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-- dynamics are hard to forecast. he do not know what the economy is going to do in jay powell works really hard to say that. accommodative was dropped because it no longer meets the buts needs to say that, they say we are still accommodative. where do you become neutral, he does not really know and he was to say- at pains that but as diane was saying, this was a very political statement that jay powell is convincing the american people that they are doing what they are supposed to do and not hurting the economy. scarlet: michael mckee asked a great question about financial conditions to which jay powell said, it is something we look --what -- look at what look at but we do not have any control. what point does it start to catch up?
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diane: we do not know, that was the answer. but one of the things to adopt -- dovetail, yes they are reacting, but there is the risk of a overshoot and by the time the economy finally slows, they have to ease in. there is a risk they are going to overshoot implicit in this despite all of the caution. goldilocks,even in they had to have hot and cold porridge to know. scarlet: it is all relative, thoughts?r final >> powell got out without any difficult issues, but it was a madee point that he reference to the accommodations to the longer-term. there is a subtle distinction to where we think the longer-term neutral rate is and where it is
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today. that is the issue for the market. they may be tighter today for and note economy is necessarily judging it off the near neutral rate. tom: victory lap for you scott, the outside factors that could affect the fed versus the inside realities of all of the math and models. you are not a big fan of the math and models? >> no, not really. they are useful tools but at the end of the day, the federal reserve has continued to raise rates historically until they kill the economy. into this where we are pretty well set on a preset path that we are going to raise rates until we get an exogenous event or by the time the economy shows weakness -- because clearly, we are looking in the rearview mirror at the data. we are not going to be anticipatory. that is what powell told us, so
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we will start to reduce rates after we see signs that the economy is slowing down and that may be too late. scarlet: scott, thank you, diane, thank you. and jeff rosenberg, thank you. and michael mckee in washington as well. we have a guest. tom: this is narayana kocherlakota, the president of the minneapolis fed and the university of rochester. i would like to go back to your phd professor which is more than mathy -- are we getting to mathy right now? are we hearing in the recent hours and what we heard in that press conference, we have got to do a little less mass and a little more observation of the economy? narayana: thanks for having me on. d, i amatteste
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amassed guy myself. what the fed is trying to do with using things with r star and u star is a way to try to summarize where we think the economy is going to be going, s really an attempt to summarize a huge amount of information that is been taken on board in the making the policy in the forecasts of the economy into the two numbers that everyone knows has uncertainty about it. would you please discuss how you pulled fiscal dynamics into monetary policy? deficit asa greater chairman powell said, i do not want to step on cbo, but what is out there is a rising interest expense with rising rates for the government. the that matter to a governor and a president like you? it is morecherlakota
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-- narayana: it is more longer-term issue. when you are making dow longer-term policy, your horizon is more one or two years out. arestructural issues that very real for the budget deficit are things that i think are going to be really material 10 years out. the fed at that time will probably have to be thinking about them and the with them more, but to really right now, the issue on the fiscal policy front is that there has been a demand stimulus, supply stimulus , which one is going to be more material? are we going to you with to get growth without having inflationary pressures -- that would be fantastic and something the fed should be a little more relaxed about possibly the inflationary side to maybe let the growth come from the supply side. chairmanprofessor, powell was very unclear about how much uncertainty -- very
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clear about how much uncertainty is going forward. we know that the former chair of ben bernanke had called for a moment, do you buy that and if so, does the fed have the tools to deal with that? narayana: there are a lot of possible risks out there. downside risks for i agree completely with chair powell's assessment of the economy right now. we are a little shorter of maximum employment than i would like us to be, so there is more room to run, but there are downside risks. those downside risks should make you be a little bit more reticent about raising rates. when the next shot comes, it is going to be facing a shortage of tools, we would like to be able to cut rates by 500 basis points, and maybe we only have 300 basis points to do
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it. how effective was that anyways? i think if you are worried about the shortage of tools on the shock comes, we should be doing it's very gradual raising to give the economy as strong and healthy as you possibly can. scarlet: among the tools that it has at its disposal, would be to move on interest rates and adjust or go back to qe. what about adjusting the balance sheet because right now it is reducing it. -- how much room does the fed have to adjust that plan and will it have an effect on the markets and economy? narayana: the second part of your question is very much up for debate about how much did effective kiwi have on the economy -- qe have on the economy. there is a lot of debate about that question.
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the fed would have the ability to go out and buy more assets, but i think the discussion about waseffect of qe, as it ineffective in 2010 were markets were pared, maybe qe is not as important or effective. if i was sitting on the fomc i would not be thinking, i can just buy more assets. i would have a lot of worries about that tool. tom: we have to get the 2019. it is not a linear function. therestarts away and and becomes a force to higher interest rates. are we there yet to the point be when rate increases have a true impact on the american economy? narayana: rate increases have been having an impact on the economy since 2015, tom. raisingcan say, we are
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rates and it is helping the economy -- when you raise rates, it is for one purpose. to put a drag on the economy, that is why you are doing it. and you do it to keep inflation from rising too much. the question that chairman powell put exactly right in his press conferences, you should always be asking, suppose the fed did not raise rates, what would the economy look like? would have slightly higher inflation, that what it means to have a flat phillips curve. already having the impact of interest rates on the economy. ,carlet: narayana kocherlakota former federal reserve of minneapolis president, think you for your time. --: we have two general two gentleman with us that we could have talked to us. chart first,to the
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it is a really momentous point going back to the shock and all of 2007. we have a positive fed funds target rate. nevertheless,t the rate of chairman powell adjusted for inflation is positive. what is the significance. little bit positive, and the fact that this is true, the real funds rate is little bit positive, and they are moved the whole section about policy being accommodative, this is an acknowledgment of that. the accommodation languages meaningful because the fact that they think it policy is not as accommodative means that maybe this is the time they can pause. getting rid of that statement was the first act of them at knowledge and that we are closer to the end than we are the beginning of the hiking cycle. scarlet: carl, what stuck out at you? the accommodative
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language out to not mean that policy is not accommodative and powell made that clear during the press conference. if we look at where rates are now and where the fed expects, the best majority of the dot well below are still that. had a greatr powell way of conflict avoidance. way, it is a meaningful, tubing. .- it is too at somebe signaling level that they expect this to and not soon and they are going to hike through 2019, but at some point, they are going to stop hikes. the stocks have given up their gains and turned negative for the s&p and thedow. me -- for me in the press conference, we rolled over
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to the kevin warsh article. there is the s&p down and the negative territory, but bring up the wall street journal. this is been the theme of the hour. been pushed beyond its practical utility and a boom is not a time for triumphalism. discuss. >> this means we do not know where our star is. tom: we do not know where we are. >> it is not decision to use this as a meaningful guidepost. useful academic exercise but not meaningful. >> you heard it reiterated. >> this is the challenge of trying to go to a rules-based system. members of congress always ask the fed chair, when are we going to have a role system and you cannot because of what carl said.
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tom: this president trump want a rules-based system. >> well. [laughter] >> if anyone who watched "superman iii" know the danger of turning policy over to computer. scarlet: there is a whole different question in terms of what president trump wants. my nextrings with question, chair powell is very politically savvy. he was able to knowledge a lot without answering. totwo it -- acknoweldge a lot without answering. is trying to minimize the amount of the senate because we have gone through many meetings now without dissent which raises the hurdle for dissenters in future meetings. .> he is a consensus builder guests.hanks to our
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tom, thanks for standing up late. that does for fed asides, bloomberg marks the closes up next. ts the closes up next.
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♪ >> this is the countdown to the close. i'm caroline hyde. >> i am am scarlet fu and with us is joe weisenthal. southtocks now turning after jay powell wrapped up his news conference. joe: he seemed to like about dropping of the accommodative language in the text of the statement, but chairman powell downplayed that a little bit and throughout the course of the press conference, people sounded more hawkish.
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caroline: it is risk off in terms of stocks but not in terms of bonds. joe: that is the surprising part that we are not seeing higher rates on the move so 10-year yield is down to 3.05 today. thelet: i am looking at three major indexes and they were kind of positive, it was modest gains leading up to the news conference and they did get a boost initially after the statements, but there is a drop off in the afternoon over the last 20 minutes. it looks deeper than it actually is because it is fairly narrow, we are off by 3/10 of 1% for the s&p and dow and 2/10 of 1% for the nasdaq, but if you look at the industry performance here, industry groups, real estate, financials leading to the client -- leading the decline. it is only by 4/10 of 1%. caroline: back in vogue again. scarlet: and as you are mentioning, there is the 10-year yield, the yield comes down, down, down and it is at 3.05
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6%. we are moments away from the close, let's dive deeper into the action. what you watching? >> i am looking at papa john's. this morning, it was up as much as 11% at the highs and's is all about deal and private equity speculation. there were reports out that previous ceo john schnatter is reaching out the private equity team to see if they would up with him for a buyout deal. a spokesman did come out and say, no. this is not true. shares bits butter but they come back up but is up about 8.4%. if you look at the s&p 500 restaurant industry index, you can see it is now at record highs. it is not just pop at john's leading to the industry, -- papa john's, leading the industry
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higher. take a look at the bed bath & beyond, shares of the home retailer popping higher. they have reversed at the high, they had been up 2.2% and to now just moments ago, dropping to the downside to half of her percent. inestors looking for 50% adjusted earnings in him was $2.96 billion in revenue, and the story here is big the clients -- big declines in year-over-year growth. investors nervous because there is been uneven performance this year. than 13% onown more the year and the piece of this has to deal with the comp story. back in 2015, we had some positive comps, but more recently, we have had five quarters and a row of down comps and the big expectation is an up comp of 4/10 of 1%. if that happens, may be shares
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will pop higher, bed bath & beyond trading lower into its quarterly report after the bell. >> i've been watching go pro , the shares were up at one point, and a lot of this coming because oppenheimer upgrading the stock, but then it laid out that the company's new products would finally reinvigorate growth. they are saying that if the company can give a products out, market them properly, we could see them return to growth and 2019. growth is not the whole story and the next chart is going to tell you why. growth has been erratic. that is what scared investors away from the stock. now it has been back down for the past two quarters and investors want to see some consistency. the share is still up about 5% theo, but well, well below
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$24 ipo price four years ago and less than a 10th of their value from their peak in 2014. caroline: romain, a great breakdown. now, let's return to the macro. the federal reserve raising interest rates for the third time this year. policymakers dropping the description of monetary policy as accommodative. and addressing the changeling with at his news conference. >> likely noticed that the committee dropped a sense that the monetary policy remains accommodative. changed does not signal any change in the likelihood of policy. that policyed is perceiving and our expectations. he went to further and said we are accommodative. >> financial conditions are accommodative. caroline: exactly. i wonder if this is a
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reaction to the fed at all. maybe it just reflects a passage of the venture risk in the markets are doing what they were going to do anyway. this quarter has seen very strong gains in equity market fixed income so as we approach the end of the quarter, maybe we are seeing some pension rebalancing, selling stocks, and buying bonds. joe: in terms of looking at the market reaction today, you are hesitant to try to connect any real dots. or the hesitance between the dots. [laughter] >> from a speculative perspective, perhaps the fixed income reaction reflects positioning. i've been thinking that rates would go up for most of the last year, but even i over the last week or so have thought that
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maybe we had gone as far as we probably should have and the risk was squeezing positions. we almostear note, touched 3%, not quite touched 3%. we will look at the projections, we will go a little lower of 3% over the next couple of years, but you could probably argue that if it is at 3%, you might make money on a holding maturity basis. very,t: the fed chair was he was very consistent in stressing and the took pains to make the point that they are data dependent. they make our kind of out there, very uncertain, they do not control a lot of things. datae fed is so dependent, the market is going to be. do you think the fed will be looking at what data to see the hint of where the winds blow?
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he laid out the issue of job gains and if the labor market starts to weaken, they'll be something he looks at. even before that, he mentioned financial markets and if there were is a deep financial market correction that lasted, that is something they would look at. on the upside, inflation is an issue but that is going to be tricky because we know that theffs are going to hit price of consumer goods certainly for this quarter and perhaps more significantly, i am really referring to q4, and perhaps morsi mcginley and q1 of next year, but how will they be able to distinguish and consumer prices that reflect tariffs versus one that reflects supply constraints? and itoing to be tricky is easy to say now when you are not staring at in the face that
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they will be a will to look through higher inflation and write it down to a t ariffs, but if we start printing, are they going to do with a look at that. we want stick with us, to bring in jason brady. he is the bloomberg investment investmentburg management president. what did you hear, jason that you thought moved the >> the idea around accommodative, paying attention to that work, no one should. that is like paying attention to the kids in the back seat saying are we there yet. was chairman powell looking at how do i communicate that the economy is strong but within some of the other communications that there are constraints?
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becausel end up at 3% that will be the long-term expectation. that.going to raise above they are constrained in a lot of ways and i think it is important investors understand those constraints are looking at the statement and the dots. caroline: the markets close and it seems to be the banks selling off. scarlet: we should mention as well, the s&p 500 is down for a fourth straight day. when i look at the industry groups, financial is off one and a quarter percent. utility declining 1.1% as well. best performing group, communication services, only up for tenths of 1%. things took a turn in the late afternoon. cameron pointed out it is not dramatic or tied to powell. we got a bit of a
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spike after the statement. you can see we are ending red. jasonne: let's bring bakken in terms of portfolio, does anything happening today mean you look away? we see financial do well in anticipation of the rate hikes. today they are down. james: you see things like recent utilities. if you saw higher rates, that would help financials. if you saw lower rates, that would generally help utilities, yet it is all over the place. you take the statement for what it is. i do not think it is a dovish statement. i think it is reasonably hawkish. what we look at is long-term. financials are interesting from a valuation perspective. these balance sheets still look good, and the fed will keep moving at a rate, in my mind, is too slow -- that is too slow. joe: looking beyond this year
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into 2019 2020, how do you see things playing out with the fed? >> i think they will do what they say they will do, three rate hikes. i would be surprised if we got much more than that. policy is going to be moving from a strong tailwind to at least neutral or potentially a headwind. if the rate of growth in the rate of economy has not gotten below 2%, that is market downturn for deceleration in the real-time run rate of activity. if they are right about the level of neutral policy as they go restrictive, i'll be at things move with flag, monetary policy will also move her mattel went to a headwind -- from a tailwind to a headwind.
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is the issue of the election and what that means. that will inject uncertainty given the impact the president has had on business conferences -- confidence. if you might lose, maybe business confidence will take a hit. that's will be reflected in the data and should be reflected in policy. caroline: i'm looking at how financial conditions have not been hit by the rate hikes we have seen. they are some of the loosest financial conditions we have seen this cycle. even though powell says they are taking into consideration the conditions. do you see rate hikes going higher if we see this? james: one thing that concerns me is that the fed has moved from hands off the stock market assets and stocks as an indicator of success for
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their policies. it feels as though financial conditions, and one big input is stock prices, continuing to be ok means they have room. as aare acting clearly countercyclical factor or trying to. i'm a little bit concerned about that that can be data dependent or coincident. worry you willi need forward-looking thought and this fed is not interested in that. scarlet: does china trade tensions, do emg to show up in financial conditions? with that move the fed? -- would that move the fed? james: in some yes and some no. i think the chairman said that to they look at conditions in emerging markets as a
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consequence of how it may affect u.s. conditions or u.s. employment. they are looking at it and i think they see well that's some parts of the market are not in balance. i would call things like private equity and credit, some of the sectors allen talked about after the statement was released on your program. those are indicators to me. at the end of the day, the fed has to do what they have to do around their mandate. it is appropriate to look more broadly. joe: cameron, one thing you noted on the blog is that the powell puts list referring to the idea that if we got a be the, then that would type of thing the fed would be inclined to respond to. usually, those things do not happen in a vacuum.
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they are associated with something. what is his articulation of the point mean. .> i thought it was interesting i can't recall the dingdong highs of a fed chair saying the market does poorly and that's will impact policy and we might cuts rates. that will impact policy and we might cut rates. i love that. the dingdong highs. cameron crise, and james, thank you. that does it for the closing bell and mean. romaine bostick is stepping in for "what'd you miss?" where we look at brett kavanaugh's latest accusation of sexual assault ahead of the persecutors testimony -- of the first accuser's testimony tomorrow. this is bloomberg. ♪ this is bloomberg. ♪
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caroline: live from the world headquarters in new york, i am caroline hyde. here's a snapshot of how u.s. stocks closed. in the red today. particularly the banks. joe: the question is, "what'd you miss?" caroline: the fed is raising rates for the third time this year and updating a dot plot to a fourth rate hike in december. trouble is swirling for brett kavanaugh as a new allegation hearing.s senate incentives andng
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tapping volunteers to meet its delivery targets by the end of the term. moment.ularly bright jay powell gave an upbeat assessment earlier this afternoon. they raise rates for the third time that's raised rates for the third time and reaffirmed the outlook. expects -- at any given time, it inflation may be above or below 2%. >> things are great right now and the fed is reacting to that. there is undercurrent building from the uncertainty of trade. >> financial conditions have not tightened enough for the fed to become trouble that he can stop raising interest rates. >> stock prices remain high. >> we have had many episodes throughout the tuckey -- summer from turkey and the fed has not flinched. as long as we don't see any
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contagion back to the u.s., the fed will keep hiking rates. >> the dollar is at the same level it has been. >> what will hold back the fed is flattening yield curve, stronger dollar. yields are up, are they high? no. -- the: we have achieved of a u.s. economist company here. what changed in the fed statement today in your view? >> almost nothing. [laughter] u.s. economy is strong. when they met in june, the economy was doing well. if anything, marginally better. thewas clear taking up sentence with accommodative and it made no difference. the economy is strong, if it stays that way, we keep hiking. romaine: i felt like there were
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and the mixed signals posts are moving or they don't know where the goal posts are. seth: jenny young was fond of referring to the fed as data dependent. on one level, that has to be the case. on the other hand, if the outlook for the economy changes, their monetary policy response has to change with it. the economy is strong, if they get their forecast, they keep hiking. joe: what was said during the press conference that may have given things more of a hawkish turn than what people originally interpreted? seth: i'm not sure that was the case. i'm not sure a hawkish read was the best read. showing awas released drift having tendencies were stocks to rise. this tightening cycle might need a post fomc downdraft.
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we do one leg lower in one leg lower. that has been the pattern for this tightening cycle. looking at 10 year yield and real rates, i don't know if you ever get the message anywhere that this is hawkish. caroline: what did you make of the fact that we were selling in the bond market, and we did hear about concerns of an inflation surprise. seth: trade and inflation will almost certainly push inflation higher. we are not going to be concerned about a rise and sustained inflation but there will be some short-term affect. joe: luke, you mentioned there is not much you can infer from market action to the press conference. based on what he said, going forward, what now will market participants be watching for in terms of figuring out what the fed is going to do. luke: before, there was this
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idea that the fed might pause a couple more hikes. next year, i think we should be throwing that out completely. the dot plot shows two camps. one that we will hike up to an estimate of neutral. that implies three hikes next year. caroline: it is so wide. luke: and there is one group that said we stay there and go maybe a little more and there is another group saying we need to accelerate. i think we will need to hear a lot more talk about what is the short-term neutral rate and how it differs from the long-term neutral rate and, is there a need for restrictive policy. -- waya fair way of blow below on employment. presumably thes interest rate that is neither
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accelerating the economy nor pulling it back. what is critical here in this debate about pausing, i agree we should throw all of that out of the window if they get the forecast they think. for us, we are concerned about, and the fed signaled about this, is tariffs and the trade war. we think the trade war will have an adverse effect on the economy than the fed is currently thinking. they are thinking of it as a risk, but not to the baseline view. if they are surprised and the tariffs hit much harder, they could do a skip in december. not because they are getting too neutral, but because they are trying to figure out what is going on. romaine: isn't there a big risk for surprise when you have a fed declaring there is going to be less anticipatory and much more data dependent. these things do not show up in
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the data immediately. they are slow learn -- slower and much more drawn out. i don't know that there is that much of a difference. the economy is very different now than it was before when the --ir was previously being talking about being data dependent. , about a yearoser and a half away from the peak going to be more tentative because you have to understand what you are doing. there's: you're saying a much bigger trade shot. luke, it's quite shocking to hear jay powell say, stock market, we had your back. luke: i do not think that is surprising. market were to slide -- >> but he needs to annunciate it. luke: i think any material
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selloff in stocks would apply that imply a to tear your --look in forward earnings imply a deteriorate outlook in forward earnings. in a a central banker business of long and variable lag, you have to weigh the two. the data is one thing but the stock market is your forward outlook. joe: what happens if inflation does not pick up? andlast report was cool there is no guarantee it will go higher. what if we get a string of ones where it does not pick up like they expect? >> i think they hike up little bit less than anticipated. there are two sided risks here. thet were not for all of drag we see coming from the trade war, if we could assume that the way entirely, we would be optimistic about the economy. it thinks do better than anticipated, we will hike more, but if things continue to run
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along at a reasonable clip with no sign of inflation, they can take their time. that means the economy is more productive, in which case they will keep raising rates higher. caroline: zach -- sex up carpenter -- seth carpenter. thank you. the next stock is down 10 percentage point. they are falling well below expectations. comparative sales in the second quarter is down. the estimate had been a growth. said they are seeing traffic declines in the face high competition and market shift towards online players. we will watch that stock moved significantly compared to the 9% gain on the s&p 500 so far this year. this is bloomberg. ♪
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caroline: world leaders are gathering in new york city for the general assembly today. trump met with theresa may saying they were discussing trade and security. bloomberg's chief white house correspondent spoke with a democrat congressman and got his take on the address. >> he was laughed at. that is embarrassing. that should be embarrassing for every american. we ought to be proud of our country, proud of our leaders. we deserve leaders who have earned our trust, and we do not have that in our current commander and chief. policywatched foreign
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the president had laid out yesterday, particularly with withdrawing from the iran deal, do you agree with that? >> like his own secretary of defense that i served under, i disagree with pulling out of the deal. it is not a perfect a deal but far better than pulling out. we lose a lot of control and intelligence over the situation. >> and we are seven and a half weeks away from the midterm elections. what to do you think is going to happen given the pullout of washington this week whether it is brett kavanaugh, rod rosenstein, what is the most important issue that you hear from voters? >> we're not just fundraising. we are finding great candidates. we are looking for people who can change our policy. what i hear voters
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talking about. they want to understand how to get things done by working across the aisle, how to stand up for the rights of health care and afford health care. a lot of americans cannot afford health care. they are not sure they will have a job a few months from now so they are not sure our country is strong and secure. these are the things people are talking about across the country. we are not getting answers from our current administration. >> i covered in southwestern pennsylvania the election of conor lamb. he was perceived as a centered democrat. then we watched what happened in new york city with the elected congresswoman. she is being perceived as much more progressive. are we in the media making too much of this or what direction do you think the democratic party should go? >> extracts one a democrat that
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fit their district -- districts want a democrat that can fit their district. we can be a narrow party in the middle or far left, but we will not win. if we want to win, we have to embrace more views that represent the majority. >> that comes at a time or many folks think the balance of power is hanging in the balance. critical of nancy pelosi. speaker, not run for but the time for a new generation of leadership is here. >> what does that mean? >> we need a generation with a vision of the future and not talk about how terrible trumpets. we need leaders who will bring our party together and embrace diversity. and, we need leaders to build the bench rather than clear it.
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that is what i'm looking for in the next speaker. >> you said we need leaders that are not just anti-trump. on an economic agenda, what does that mean? >> trump is telling us we will solve our problems by kinky count immigrants and going back into the coal mines. reality islt -- the that people are not losing their jobs to immigrants, they lose them to robots. >> particularly on automation and through the lens of how the president has been negotiating somewhat an that is issue among democrats. where are you on these trade deals? >> the trade deals are not perfect. let's take china for example, they are stealing our intellectual property. starting a trade war with them, without support of our allies, is not the way to solve this problem. we need a smarter approach than
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what is being delivered. and you see they are targeting key sectors of the u.s. economy. friend thano better the u.s. marines. our allies are our greatest strengths and we have worked decades to build the partnerships. we are disparaging our allies. a dangerous course for our future and national security. it does not help when we are trying to negotiate better trade deals. >> so much going on with judge kavanaugh. what do you think? >> i think we ought to have a supreme court justice we can trust. that is the biggest thing. i want to know he has basic integrity. there are a lot of questions about that now. we all deserve an answer and we deserve to know if we can trust someone we will be stuck with for life. >> final question, you have been
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spending some time in new , some folks would say eyeing the presidential run. >> i'm not running for president, i am supporting people across the country. i'm working to support candidates in key districts to restore the balance of power in washington. caroline: that was the democratic congressman from massachusetts. --'s stick with kamman kavanaugh. it third accusation against him. the shocking assignations -- allegations come one day before the first act user is set to testify. kavanaugh has continued to deny more involvement. let's bring in our reporter. do they think he will get through on capitol hill? >> it is a very chaotic day. the third accusation against morningh landed this
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and has led everyone to scurry and figure out what is going on with this nomination. tomorrow is the ring -- is the hearing with christine blasey ford. himself will be there to defend himself. the plan for republicans was to and torward on friday make him a sipping court justice in the full senate by early next week. that is in question. they do not have 50 votes to confirm him. a lot depends on the hearing. joe: are this prospects -- other prospects on hearing from the new accuser today? sahil: i spoke to the number two republican and he told me the senate judiciary committee has asked michael avenatti, the lawyer of this woman making accusations, to produce her for an interview under oath so they
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can examine these claims. i have reached out to avenatti and have not heard back. they have made some effort to try to contact her. what happens next is uncertain. democrats say it is not enough for the committee to interview her. they want an fbi investigation into these allegations before a nomination is done. sense that there any they will delay the vote even longer, particularly that we are getting closer to the next election? sahil: if they have the votes, they will vote and confirm him. if they do not have the votes, they will delay until they get to a point where they can decide if you can be confirmed or find a way to withdraw them a nomination -- the nomination. we are less than six weeks away from the midterm election. i have spoken to a number of conservatives is worried that if kavanaugh falls, they will not
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be able to get another justice on the court by the time -- by the end of the year. democrats could win back the senate next year. they would have the power to decide if any trump nominee gets a vote. caroline: a very busy time for you. we also look ahead to the rosenstein discussion tomorrow as well. thank you. let's catch up with your first word news. mark: bloomberg has learned deputy general rod rosenstein now is inclined to stay in his job which includes overseeing special counsel robert mueller's pressure probe. it all comes down to how president trump acts in a pivotal meeting on thursday. a white house aide said the president would have reason to keep rosenstein in the job. the president's top political advisers are reportedly underscoring the political risks if he were to fire rosenstein before november's midterms. as president trump continues to
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theort and battle nomination of supreme court nominee brett kavanaugh, they are looking at new accusations of sexual misconduct. according to a document avenatti posted on twitter, a woman said she witnessed kavanaugh engage in excessive drinking and inappropriate content with a sexual nature with women in the 1980's. he has two other accusations of sexual misconduct and he is denying this one. held aocratic senators news conference to accept and reveal a letter signed by over 14 hundred men and women who attended school in the greater washington dc area to show support and solidarity with christine blasey ford. the signatories include former students of blase ford and brett kavanaugh's high school on the
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monitor. one of the signatories went to a school of the holy child, and elite washington d c private school. >> we understand victims of sexual salt do not report their attackers because of the fear of being disbelieved, shamed, and ostracized. dr. ford's allegations are serious and credible. we stand with her and we are humbled by her bravery. we will not allow her to be silent. mark: judge kavanaugh has desired -- denied the accusations including the one revealed today. kavanaugh called the latest accusation something from the twilight zone adding "it's never happened." -- it never happened." south koreans president is praising miraculous moves toward peace as negotiators try to settle a decade old -- long nuclear standoff with north korea. moon jae-in told kim jong-un --
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told reporters kim jong-un is nucleard to ending the weapons program as soon as possible and focusing on economic development. it is there to to respond to efforts. we are sure chairman kim he has made the right decision to committing to denuclearization. --must trump issident scheduled to hold a news conference at 5 p.m. new york time. bloomberg television will have live coverage. the president is accusing china of trying to interfere in the upcoming midterms. the president made the accusations during a security council briefing today. mr. trump also issued a warning to iran which he called "the
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world's leading sponsor of terror." tough sanctions are due to to can -- to kick in against iran there would be severe consequences for any nation that divide them -- defied them. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. caroline? caroline: more than 80% of american adults have used online payment platform strike -- st ripe. the startup is now valued at $20 billion. i spoke with the cfo about the future of their company today. now three decades into the consumer internet and only 3% of global gdp is online. our mission is to grow with the gdp on the internet.
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this financing is about doubling down. caroline: where are we talking? asia? >> there are 500 million people in india and southeast asia coming online in the next three years. there is also are of infrastructure hurdles related to expanding into new countries. bringing focused on that online. theline: other hurdles for fact that at a time to talk about globalizing payments, we see globalization get a knock when it comes to geopolitical -- deal politics how that affected politics. how has that affected you? william: the internet was designed without borders in mind. they don't have borders or countries written into them. as soon as you bring money into
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the equation, all of the borders come back. borders matter a great deal to currencies and banks, and regulators. that arengs like gdpr new challenges for the users and makes us even more helpful to them. we started years ago serving small companies and helping them go faster. years, we haveew seen larger and larger companies turning to us as well. we are excited to announced uber, spotify, and others. they are finding the same problems that smaller companies are facing. caroline: what about your competition? serve some of these clients as well. are you poaching them from them or both serving them? william: there is a huge amount of head room for growth. our product is deeply integrated technology. allowing these
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companies to expand faster and solve the hardest problems with the click of a checkbox or single parameter. caroline: interestingly, they did go public. you are raising money from the private market and we are at near record highs. why have you not gone public? william: we have a lot on our plates already. we have fully launched in 25 countries and a few more in private beta. there are more than a hundred countries we're not in with -- in today. we have plenty to do. stripe was the first major payments company to support transactions five years ago. we found it was not really solving problems for our users. it was late last year that we deprecated support for bitcoin. we are very interested in what is happening in that space and we are closely tracking it. the stat you give us
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at the start, only 3% of all commerce is online. how quickly will we start to see the majority of commerce online? i feel everyone is on their smart phone whether it is here in the u.s. or in india, or china. william: we are a few decades and. global commerce is only 1.5 trillion and global gdp is something like 70 trillion. that is where the 3% come from -- comes from. over the next few years, we look at something like 5%. -- growth but if we do our job right, we will go there. --oline: amazon just reads reached $1 trillion, where do you think your company will go? a thrive capital. william: it is an opportunity.
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expectations are very high. we don't these 20 billion -- we don't see 20 billion is anywhere near the end. breaking news coming from the imf disbursement on argentina. the economy minister says they are getting more money. they're getting $7 billion more get the imf fund and will $19 billion of that during the rest of 2018 and the 2019. argentina is ditching its and is goinggeting to control consumer pricing. they're saying high market fall agility is caused for depreciation of the argentinian peso. they are saying argentina has the flexibility of an extent rate and not a floating rate to manage turbulence. there are no surprises here that argentina is getting an advancement of funds.
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a quick check of the latest business flash headlines for you. the founder of papa john's denies a report he is seeking funding to take them private. he said he has not contacted private equity firms or anyone else. he owns about 40% of the country -- company. hostility with him and the board members have boiled over in the recent months. the largest movie train -- chain is on track to post best this was a response to movie pass which originally attracted millions of customers. the co-ceo of private equity firm -- he says they have been powered by any credible tech boom and global trade. they're looking ahead for the
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future and there are three things that concern him. >> three days. the first tee is trade which is at the bottom of my list. the second t is technology. there's a lot of talk of how technology is affecting the soul cycle -- societal flows. the one i most worried about his trust. caroline: that is your business flash update. breaking news from argentina, they will have a collectible exchange rate, and they get more imf funds. more on that. this is bloomberg. ♪
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romaine: elon musk and tesla is offering an incentive to tap into an army of volunteers to boost sales and deliveries
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before the quarter comes to an end. is bloomberg's detroit euro chief. chief --- euro bureau chief. hemakes me wonder how much has things under control getting to the end of this period. . >> when you look at the context of it, elon promised this would be a great quarter. he said the company would be cash flow positive because that is when they get model three production up and running. when he is offering incentives, as small as they are, to get people to buy the cars and needing volunteers to get them into the hands of people, it makes you wonder if the 400,000 people waiting for a model three , are they all stepping up and distraction -- and his production really there.
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he has to reestablish his credibility. joe: it sounds like the story is changing because it sounded like in past quarters to they have the infrastructure in place, the manufacturing capabilities to produce cars at the level that they want. now it sounds more like a demand or logistics delivery quit. >> i think it is more distribution and the retail infrastructure they have. elon has said they want from production hell to distribution hell or retail hell something like that. we have the soon to retire ceo of autonation saying he should have at a franchise network. he is just getting a plant running. you have analysts saying they will do about 50,000 cars in the quarter. maybe production is starting to slow bit. hehas this issue where does not have a good retail
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network. he cannot book the revenue until he does that. romaine: help me understand, what are the logistics of trying to get the cars to people? i would think that would be the easier part of the process. >> when you do not have a big dealer network, even in the states he is allowed to sell, you don't have a lot of inventory there. if you think about buying a chevrolet or honda, there are .ealers in every town there is no problem getting cars to people. they have these car haulers getting the cars from the plans to the dealerships or the retail stores themselves. he has an issue there as well. you are talking about the 100,000making just over or 150,000 cars. very small numbers compared to
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what the big car companies do. to go to something like a model three where you build 50,000 in a quarter and have to deliver them, in terms of getting the cars there, and people at the place process the sales. there's a lot of things that go into it. dealerships have a big infrastructure to do that. it does not sound like has light is ending that -- handling that smoothly. they are bringing in volunteers. caroline: we have had quite about's best quite a bout in the shares. elon musk seems to be in a stress point when he was doing things on twitter or joining comedians on their -- on air. >> it was a tough quarter for e line. i'm not sure people totally put
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it behind them. the stock did hit lows. you might have had buying opportunities with the shares up a bit. the production is maybe better this quarter, and is some investors may be betting on that. for us, you start to get revenue up and the financials will go better. where theys gambling say this will be the quarter were we finally get production of four 5000 -- four 5000 -- 4000 orof cars 5000 production of cars. we're still waiting on to see what the production does and the financial result as a consequence. you.ine: thank a quick update on the argentinian headlines because we know the argentina said it will
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move to a flexible exchange rate. it will no longer be floating. they get more money from the imf. the imf lead said they stand by argentina. the new argentinian deal has significant frontloading and the deal should help restore confidence across the markets. we will see how the markets react tomorrow. this is bloomberg. ♪
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caroline: we take you back to another big conversation from the big this -- bigness -- business forum. bringing talk about more mainstream. >> there was 25 million assets falling to this exposure. the task force says this is how we should do this. now it is 100 trillion.
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three quarters of the global stomach bank, major sovereign wealth funds, looking for this type of information. now i think what happens is the private sector does what it does best. companies are starting to disclose the providers of capital. they focus on what is useful and you get the cycle of better and better disclosure, better capital disclosure. >> what are the frictions you are feeling people do not want to disclose? companies the best have fought a range of geographies. part of what came out today is a survey of the top countries -- companies around the world. all of those companies, or the vast majority, are disclosing some asset of climate risk.
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this is a process of learning by doing. i will come back to what is material and what is useful. dollarsthat 100 turin -- trillion dollars want to make the capital allocation. the key thing we see now on top youtatic disclosure is that are getting boards and management more involved and thinking about how this affects strategy. caroline: what a great lineup. those mark speaking with us. its booksis opening for the first time. filed for an ipo today in hong kong. for more, let's bring in shery ahn. that the am amazed stock market is taking a beating. we don't know the details, but sources told
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bloomberg they could try to raise about $3 billion with this ipo. they are not the only ones. we know canada and their rivals are also prepared to -- pursuing a hong kong ipo. joe: prior to the filing, we did not know the details. it was like nymex increase in revenue and tenant's increase in revenue -- income. there is almost 60% return on equity. they have about 900 million in cryptocurrency. $2.8 billion in revenue for the first half. we have even heard from the financial times that they are raising money privately pre-ipo and that should be about $1 billion as well. romaine: the keyword was last year. when we see what has happened to crypto this year, is this the only toent where not bring this to market but to make
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this a long-term bet? shery: that is a big question. route and$600 billion we have a nice little chart to see all of the cryptocurrencies that have been taking a beating. not to mention, as caroline said, the hunting index has fallen about 16%. it might not be the best timing to do so. it seems the founders are willing to do that. one companyd from that they want to branch out. joe: they don't want to stay in crypto. shery: they want to branch out into artificial intelligence. they think it will play a huge role. of estimate as much as 40% this main revenue will come from ai chips within five years. rivals are saying this could be too ambitious. caroline: interesting times. we will have to see how the demand continues to be sustained and if they can come to the market. joe: incredible growth.
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caroline: shery ahn thank you. miss this, you're looking at live pictures of president trump's news conference coming up at 5 p.m. eastern time. joe: i will be watching economic data out at eight 30 a.m. tomorrow -- 8:30 a.m. tomorrow. romaine: and the numbers for the u.s. gdp come out at 8 a.m. eastern as well. caroline: that is all for "what'd you miss?" romaine: "bloomberg technology" is next. joe: have a great evening. this is bloomberg. ♪ ♪
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mark: president trump is in the city and has been holding bilateral talks with world leaders. he is speaking to the press. let's join the conference live. >> they were not willing for years to talk trade, and now they are willing to talk trade. i'm sure we will make a good deal. we just concluded, two days ago, we signed a deal with south korea. a tremendous trade deal. it means a lot of business for our farmers. ourre opening up for farmers and opening up for a lot of different groups. we will be able to sell much
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more than double the number of automobiles we were allowed under a deal that was totally defective before. with that. happy that deal has concluded. we are along the way with mexico. with canada, we will see what happens. they are charging us 300% tariffs on dairy products. we cannot have that. with china, we put out an announcement today. they would like to see me lose the election because they have never been challenged like this. i want to open up china to our farmers and industrialists and companies. china is not open, but we are open to them. they charge us 25, 35, 55% for things and we charge them nothing in terms of coming into the country. 2%s are 25% and we are at and do not collected -- collect it but we do now. we are doing very well in our
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situation with china on trade. i have a great relationship with the president of china. street -- bea to e a two way street. four years, it was not. trillions of dollars was taken out of the united states for the benefit of china. we cannot have that. we have to make it fair. now inat $250 billion terrace and a lot of money is coming into our coffers. it has had no impact on our -- absolutely no impact on our economy. like i said it would not. steel is the hottest industry there is. we are charging a 25% tariff for the dumpers. they dump the steel and what the

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