kathleen's daughter caitlin came to durham to see it happen. >> reporter: and of course kathleen's sister candace was there. she ran into michael's chief defender outside the courthouse. >> oh david, good to see you today. pleading guilty. pleading guilty. thank you that's what i've always wanted. >> actually we're not pleading guilty. >> you're pleading guilty. alford schmalford. guilt. >> michael peterson, he'd like to walk around and proclaim his innocence, but he can't. he can play with words but he can't play with the facts. >> reporter: the courtroom was eerily reminiscent of the 2003 trial, packed with tv cameras. >> everybody's a little bit older, but there's so much that's the same. the emotion, the tension, the anger, all of it was still there. >> how does mr. peterson plead to charge of voluntary manslaughter? >> he enters a plea of guilty pursuant to alford. >> mr. peterson you're pleading guilty to voluntary manslaughter. that's a class d felony. do you understand, sir? >> yes, sir. >> and do you now personally plead guilty pursuant to the alford case? >> yes, sir. that's --

kathleen: i am kathleen hays. sophie: i'm sophie kamaruddin. we are counting down to asia's major market open. paul: here are the top stories in the next hour. hong kong street protests taking a new term. -- turn. they fire police guess. taking stock of of the new tech board aims to persuade the next tencent or alibaba to list at home in hong kong. engle ini am stephen tokyo. shinzo abe wins the upper house vote but failed to secure a super majority. we will have results and reaction. kathleen: market action into asian trading, we have to take a look at u.s. trading first. the stock market was on its way to a modest gain, mixed results on earnings reports, microsoft with a great report, netflix not so great looking over the course of the week. friday it was news late in the day iran's revolutionary guard seized a british oil tanker in the strait of hormuz. as you can see at the close we had the dow jones down a quarter-point, 68 point decline. at .75 percent loss. it is just after 6:00 in the u.s., so futures are looking to decline on the s&p 5

kathleen: i am kathleen hays. japanese prime minister shinzo abe claims victory in the upper house elections but falls short of a super authority to let him push for his revised constitution. stephen engle is in tokyo. shinzo abe is on track to be the longest serving prime minister. super majority or not, he is in a strong position. stephen: that is right. again, nearlydate seven years in power as prime electionand five victories, national election victories in a row. he has some strength but didn't get the super majority in the upper house that would enable him eventually to push for the national referendum on a change to the pacifist institution. let's get more reaction with the american chamber -- you have been in the diplomatic space, and j.p.s. ambassador, morgan chairman. what is your take on the election results? not a super majority. >> i don't know if your audience can see, but it is hazy in tokyo and it is a metaphor the results of the election because they provide a mixed message. on one hand the prime

kathleen: and... lemonis: ingredients. kathleen: ...is 12 cents. lemonis: so at $1.29, it's still sitting in chicago. max: yeah. lemonis: where's the next place it goes? max: dallas. lemonis: okay. what does it cost to get it to dallas? max: 50 cents a bottle. lemonis: max may not realize it, but this little pit stop in dallas for the product is costing the company a heck of a lot of business. murchison products are made in chicago, then transported to dallas and then shipped out from there. to get 'em to dallas adds another 50 cents of cost to each individual unit. but keep in mind, murchison-hume, like any wholesaler, sells to retailers at twice its cost, meaning that the 50 cents turns into $1 by the time it gets to the retailer. then the retailer adds its markup. and that dollar becomes $2. and now an extra $2 has been tacked on to the retail price just because of dallas. and what do customers do when they see that inflated price? well, you take a guess. they walk away. walk me through this. max: so, we used to have a text-heavy label. i wanted

[laughter] kathleen: is mr. trump right that the fed should be cutting rates and weaken the currency, then? eisuke: i think the relationship between mr. trump and the fed has somewhat improved. and was not that we are your go, but -- it was not that we are year ago, but i think both sides have accommodated the other. kathleen: let us say the u.s. does intervene, if we think back to when it was active currency market intervention, what kind of moves should we be looking for? should you be looking for the u.s. getting ready to change? eisuke: in order to intervene between the dollar and the yen come but you need to get agreement from the other side. 1996,rvened in 1995 and was our agreement from -- with agreement from the u.s. side, larry summers was the secretary at the time. every time i intervened, i called him up for his agreement. trumpon't know what mr. needs. [laughter] this he intervenes, he needs to get the consent of the japanese government. kathleen: this is a time when we have the question of japanese-

kathleen: what about the federal reserve? if they come up with a dovish statement, what if they come out with less or slightly hawkish? now, similar to the boj, the consensus and markets is the fed will cut and the statement surrounding that decision is more dovish. some people could take this positively. if they come out with a more hawkish tone to their statement and post their decision wednesday, the fed could book market. there are multiple cuts priced in before the end of the year, not just this week. in their view, the economy is hanging in there and they are not expected to do much at all. a third: you expect consecutive quarter of earlier declines but you have coming up a more positive view. >> part of the characterization -- characterization the boj has conveyed to the market is similar to our own. the economy has been growing sense kiwi began this time around. or 12% larger than in 2012 and deflation has turned into mild inflation and corporate profits have more than doubled and the stock market has more than double

jay powell did mention it and kathleen mentioned it a moment ago as well. what is happening to the phillips curve? is it flatlining? is it time to pull the plug on that piece of economic theory? >> it could be. it certainly has not been nearly as useful recently as it was in the more distant past. i will not get into a long academic explanation. for me, the real reason that relationship is breaking down is that over a long time, the fed established credibility for keeping inflation down. now, the issue is really the opposite. we have been inflation target that came into being in 2012, and recently, that has been for a number of readings. the fed, in fact i think needs to put that front and center. i think they will drop the rate at the july meeting and offer a rationale. there will be some economic justifications for it, but i hope they will highlight more than they have to date the persistently weak inflation as the main reason. very quickly, it is worth pointing out, that goes to the fed's mandate. price stability, keeping inflation stable and steady and

jon: thank you very much, kathleen bostjancic. bloomberg television will have coverage of the fed decision and chairman powell's news conference tomorrow starting at 2:00 p.m. eastern. a senior hacker responsible for 100 million people's data breach in the u.s., another 6 million in canada. she admitted to collecting social security numbers, names, dates of birth from capital one customers. she emailed the banks, notifying them of the data breach. for more, let's welcome in our guest. this is really concerning. if the tipster had not told capital one, perhaps this breach would have never been found. >> great point. the banks all have different programs, they are called bounty programs, where they encourage hackers around the country to breach the system to find vulnerabilities. it looks like in this case, it worked out and they were able to figure out what the hacker had found, traced it back. piece. very interesting it was another hacker who exposed the malfeasance. there are so many of these data breaches we talk about now. what

let's go over to kathleen hays. kathleen? >> thanks very much. i am joined by mitsubishi senior market economist naomi muguruma here in tokyo. i want to ask you. your recent pace, you talk about central banks signaling their easing. not know what the fed will do tomorrow. how devilish will their signal be? -- a dovish weather signal be? do they have to stay in step without dovish the other banks are? naomi: i don't think so. the market has already priced in the 25 basis point cut by the fed. i think there is no need for the to accelerate monetary easing policies. kathleen: with they change any of their forecasts -- will they change any of their forecasts? will that send any signal that influences the bond market? naomi: there is a chance the boj will extend guidance. i don't think that is necessary at this moment. nobody expects the boj would start hiking rates next spring. there is no need for the boj to change the wording. will iteratekuroda that if necessary, the boj will consider additional easing. kathleen: on june 10, i had the opportunity

kathleen: his message has not wavered. the bank of japan is ready to maintain monetary policy easing, no letting up. like many central bankers around the world, he is focusing on global uncertainty, trade war impact. let's listen to what he have to say at the imf today. >> uncertainties regarding the global economy have been heightened. some nervousness has been seen in global financial markets. the bank needs the peg what -- pay attention to the economic activity. kathleen: this is in keeping with what the bank of japan has been looking at for some time now. keep that monetary policy easing, very powerful, in place. keep inflation moving towards the 2% target. this is why they will probably have a lot of conversation about the potential of a fed rate cut. the dollar weakens. stronger yen makes it tougher for japanese exporters to sell their goods overseas. by the way, in terms of prices, a stronger yen is going to make import prices weaker and that is not going to help inflation. bottom line -- here is what the boj govern

kathleen: it certainly was strong. the consensus is now, the fed may be going to the aggressive 50 basis point rate cut. henry mcveigh, the head of was onmacro at kkr, bloomberg television earlier. this is what he said when asked about it. >> i think the market got too dovish on the fed. the idea they would do 50 basis point in terms of easing in july is too optimistic. ultimately, the fed sees low-inflation and i think they see slowing growth. the prudent thing to do is 25 basis points. kathleen: our bloomberg team did a survey. i like to focus on the head of global rates strategy for td securities. she is saying go long treasuries because the structural reason for fate that kites -- fed rate cuts are still there. it is not just a trade war. you still have what happens with brexit. the iran-u.s. tensions that shery was talking about with the u.s. congressman. we have a tariffs. an impact on those on businesses and consumers as well. we have seen manufacturing weakest around the world. inflation expectations are low in

kathleen: absolutely. the thing about the fed minutes is they have certain kind of fed speak words like many. when the fed says many members, you have to listen because what many members saw was stronger as localincreasing risks increase too. several alsonutes, saw, several is not as many as many. push possible shocks, echoing what jim bullard said. i am sure it will be a big debate given that mr. powell put his imprint on this now, many people think he has been pretty good at marshaling census. another reason why people are looking for a 25 basis point cut in about three weeks. paul: all right. you for hays, thank interpreting the language of the federal reserve. our next guest says investors must turn their focus to how powell positions the rate cuts. let's bring in rob. looks like july cuts are pretty much now baked in. fore is also the potential 50 basis points by the end of the year. do you see that being credible? rob: i think it is credible but i do not think that is the most important question. i t

kathleen: europe's economy was weakening. the purchasing managers were coming off of that before the trade war even got heated up, and in fact, after draghi said that, he went on to say pretty clearly that they are getting ready not just to cut rates, but to potentially start on purchases again, maybe even intensify their forward guidance. let's listen. environment, inflationary pressures remain muted, and indicators of inflation expectations have declined. a significant degree of monetary stimulus continues to be necessary to ensure that financial conditions remain very favorable and support the euro area expansion. kathleen: hard to imagine what would stop mario draghi now. perhaps signs that these numbers are starting to pick up in germany and across europe. shery: we have numbers picking up in the u.s. as well. traders pricing in the rate cut next week. kathleen: first, it was consumer spending. today, we see the u.s. business equipment orders jumped by the most in 2018. our corporations somehow -- are corporations invest

kathleen: that's pretty much all there is to say. institute -- felt ,fo institute, well-respected well known for their service and what we saw is business expectation tumbling to the lowest levels since 2009. where were you in 2009? we were in a financial crisis, a great recession. the head of the institute saying that the business climate indicator went into freefall in july with more than 80% of the factors in contraction. that's that turquoise blue line. you can see that this just underscores that you could not have the whole question of worse and worse being better book ended by the pmi and now the ifo index today. the institute saying if this continues it could push germany into recession. we have now seen the impact on the bond markets. european markets selling off, not translating into the u.s. as well. kathleen: which is interesting because when this first came bonds started going up. then when draghi started speaking, people could see he was talking about rate cuts in the future. he said it is hard to be gloomy. he is not wo

kathleen: they have a lot of, some would say unequivocal forces. they are not seeing cutting just yet. let's look at the bloomberg library to see what their inflation rate is doing. you can see that turquoise line. it was as low as 0.2% year on rate far below 1%, one hike last year, then a cut. what happens for them? they have a lot of to cut rates. exports have contracted. 70% of their gdp is exports. the impact on the chinese economy could hurt their gdp. oil prices have been softer. they are a big oil exporter. it hurts the exporters. it hurts the government budget revenues. surveyed.erg 21 of 24 said they are going to hold steady. some economists say may be bank negara wants to wait and see what we all want to see. does the fed cut on july 31? is it 25 basis points? is it stronger? do they signal they are going to do more? guess they will be watching on wednesday as well when jay powell talks to congress. yvonne: kathleen hays, thank you. joining us now is david stubbs. he joins us here in hong kong. good to have you. what are you expecting to

kathleen: because it never really went away. there was this basic sense, not just in economics, but it seems intuitive. unemployment is low, okay, i will buy more, that will fuel inflation. jay powell says it doesn't work that way. inflation can barely get to target. -- let me start all over, paulo was dovish. dovish.powell was the cpi we have on the bloomberg index. see that number on the far right hand screen? up 0.3%. this number takes up food and energy. jumped over 1% after falling sharply for two months. their uglys rear head. we saw an outsize gain in furniture and related items. now on to the bloomberg library. this is the chart that will show you core cpi, which moved up to 2.1% year-over-year. the one that is key is the turquoise line. that is the fed preferred index. look how far below 2% it is. it is at 1.6% year-over-year. that is why the fed is concerned. bloomberg economics takeaway is the core cpi got stronger, but it won't stop the fed from cutting the rate at the end of july, and they expect another at in the f

heard kathleen talk about all of this pushback against the fed. how the uss the fed's actions, given that we have a strong domestic economic environment, but also potential global ? adwinds >> i would say the action today was pretty much as expected. they cut 25 basis points like everybody wanted. i think the only little thing that was a bit different than in june, they said they would closely monitor the situation. today, they just said they will monitor the situation. they took away the "closely," which typically means they will do something next time. maybe that is a signal that the next rate cut may not come in september. things are good, but there are downside risks that we need to be proactive. it's not the easiest thing to understand for laypeople or investors, but i think they have three quarters of a point there. shery: they actually said they would halt the balance sheet runoff earlier than expected, something that president trump seemed to like. does that make a big difference? >> no, it does not make any difference. first of all, the f

paul: all right, kathleen. president trump wishes he has the powers president erdogan struck, firing the financial chief. clip that backfire, though? kathleen: -- could that backfire, though? kathleen: it could already be backfiring, when we see what is happening with the turkish lira. he said he was going to fire the central bank chief, because he will not cut interest rates. surprisedmething that many people, because number one, the central bank chief has already been, in 2018, floating raise rates, inflation was rising, there was a crisis in the lira. so hard and so quickly that he got it up to 24%, as we show you in another chart, you can see how that rate came down. excuse me, the inflation rates come down with the type policy. the other thing that is really odd about this is the central for effect, and everybody thought there would be a rate cut anyway. that is why, if we move on, we can take a look at the lira's behavior, taking quite a hit since saturday. sharp moves lower by fewer and fewer dollars. yo

kathleen: that appears to be the consensus among bond bulls. we know global quantitative tightening, reducing those balance sheets, stop buying bonds -- that is coming to an end because central banks around the world are all getting in that global march towards lower rates. the head of the reserve is excited to jump on as well. europe is getting ready to see its first negative yield on 10 year corporate bonds ever. this is one more sign that with the central banks moving in, concerned about growth, that seems to be the direction for bonds. although, shery, if we do get some progress on trade, all of a sudden -- that start looking up and stocks rally and confidence comes back, this could be a big directional change for bonds as well. we shall see because it may take more than that to turn the tide. shery: thank you so much for that. our global economics and policy editor. coming up next, british business as a warning for boris johnson. we will discuss challenges ahead for the new prime minister and the u.k. economy. this is bloomberg. ♪ paul:

shery: kathleen hays, thanks for that. now to bloomberg exclusive, john micklethwait has been speaking to the new mexican president in mexico city. he discussed his countries relationship with the u.s.. cripes he is an ally. we are not betting on politics or authoritarianism. we think the solution to problems should not be through coercion. we think of cooperation for development. that is our thought. it is indispensable to have a good understanding with our neighbor, with the united states , because of matters related to friendship, culture, trade, ,ommerce, the economy as well and geopolitical relations as well. we have 3180 kilometers of border with the united states. if we were in any european country or south american country, perhaps we could try to have a different type of relationship with the united states. however, we are neighbors, and this neighborhood makes it mandatory for us to understand each other, and there is nothing , that'shan politics what politics was invented for, to avoid confrontation. it is reall

yvonne: kathleen hays, thank you. joining us now is jpmorgan asset management global multi-asset data just -- strategist. marking the 50th anniversary of the moon landing, we will tie it to the fed. what will happen at the end of the men -- month? a small step for a giant leap like 50 basis points? >> i like what you are doing. we are in the small step camp at this point. yvonne: how so? we heard the comments from clarida and williams, it sounded like they were willing to take a step further. >> one thing you have to realize are reassessing about how they think about their policy framework and that makes it for us in the market that much harder to predict what they are going to do themselves. you can see it doesn't always play well with the communications, as we saw overnight but i think at the moment, it is more about risk that isnt for them and clear, rather than the actual view of the economy. we've seen the u.s. economic data bouncing back in the last week or two. about managing the downside risk from trade and th

kathleen hays the story. let's start with powell. did he veer from the message that a rate cut is coming? kathleen: i do not think he veered from it at all. he repeated what he said in day one. the trade war uncertainty helping to cause a global slowdown threatening u.s. growth. length betweene low unemployment and rising inflation is broken. he said it turns out after all the fed said in the past year or more, the fed may not have been as accommodative in stimulating the economy as it thought. let's listen to jay powell earlier -- >> the neutral interest rate is lower than we thought. the natural rate of unemployment is lower than we thought. monetary policy is not as accommodative as we thought. we are learning all those things. at the end of the day there has to be a connection, higher wages will drive inflation, but we have not reached that point. the connection between the two is quite small these days. kathleen: consider the number three man at the fed, john williams, president of the new york fed speaking today said, the argum

let's get back to kathleen and europe. ecb getting a strong rate cut signal today from the euro zone. any chance they are going to move? kathleen: that is a bit more of a debate than you would have thought before this number on germany's manufacturing pmi coming out this morning. let's go to the bloomberg library. it was weaker than expected. if you look at this turco's blue tne, -- this turco is b -- urquoise blue line. this is more export dependent than china. you can see how deeply it hits them. the number is down to 43.1. anything below 50 means contraction. you can see the number for france is at 50. could it fall below? spain'shave manufacturing pmi also falling below 50. --y strong negative singles signals heading directly to the ecb on this. there has been debate heating up among watchers. a very strong rally in the jew man -- the german market. in my last chart, world interest rate ejections for the euro zone. suddenly you can see not that suddenly people -- vc that 38.7 probability of a cut on july 25? not that t

kathleen: let's look at this chart. the blue line is what we were talking about, global growth cut to 3.5% from 3.2%. the white line, advanced economies, they are forecast at 1.9%. emerging markets will take a hit to about 4.1%. if you look at the bloomberg economics global growth tracker, it is suggesting 2.1% at this point in time. trade is so important, because the imf really slashed its forecast for global trade. nine percentage points to 2.1%. where does this play into a couple of things? global central bankers, the bank of japan governor talked about the heightened uncertainties because of the global factors. isir domestic economy meeting next week. and will probably change forward guidance to be even more risk-averse o and ready to do somethin. they are talking about the fact that the domestic fund is fine, it is the global threat, global slowdowns. one more thing that feeds into it is the global march towards lower rates, even towards negative rates. look now for the first ever 10 year european corporate bond in

paul: kathleen hays, thank you for that. we have a lot more on the fed coming up, ubs asset management head of fixed income and anderson joins us. shery: on daybreak australia, president trump warns iran to be careful as it scales up iranian -- uranium enrichment. this is bloomberg. ♪ ♪ paul: the strong u.s. jobs report is pushing trade, the fed will lower rates by a half point when it meets at the end of the month. there are still bets for rate cuts. the stifel make the chairman's testimony to congress -- this shift will make the german testimony -- head of fixed income and investment solutions area thanks for joining us today. i will start by bringing up this chart. it refers to what i mentioned, the jobs report, strong rebound, nice problem for the fed to have but it is a problem. what does jerome powell do now? i think the testimony will be crucial around the evolution of the u.s. economy. monthly to look at data. clearly,average it out u.s. jobs growth has decelerated and we are not seeing as we saw friday night gro

kathleen hays is here with a preview. so the markets ready for a cut. is mr. powell? kathleen: that is the question. we hope that will be answered when he prepares his testimony. the monetary policy report put out twice a year by the federal reserve to present to the house financial services committee on wednesday. the senate banking committee on thursday. after the june meeting, we saw the market committee was evenly split between those who were ready to cut rates in the second half of 2019 one. twice, and just as many said we want a halt -- to hold rates steady. jump into the bloomberg with me. payrolls have contributed to this sense of uncertainty. if we look at the far right-hand side, see what happens in may. payrolls were up 70,000. they rebounded 224,000. this rebound will support the camp at the july meeting, saying we still do not see a need for rate cut. the data dependent. we have to get more clues. let's move on. it is very important thing to watch. one of the things they are looking at is the yield curve because it is sending a very strong signal. jump in

kathleen: what would happen if they don't? i don't know if that part is important because it seems like they will cut rates and everyone will say how much more and bond investors have to say do i keep wanting bonds or is the rally just about done? dan: you don't know the answer. weeks,s is thatin two they will cut rates by a quarter. i would say the odds are very low but you never know. then they will stop and wait and talk about things waiting to happen. our rates are still high relative to the other major reserve currencies. it is not that we are the lowest, but in practical matters, we're already below the level that we would normally be worryon-external situation. if we only worried about the stop, we would not be at this level. kathleen: i cannot resist because we have one of the bond kings onset with us. dovish world, another chart. yielding below zero. $12.2 trillion record. you have been doing this for many decades. what does this signal about the world? is that how you are going to make money, pushing yields down unti

our kathleen hays is here with a preview. would this question have been easier to answer if last week's job data had not been so strong? kathleen: we can only assume that is the case because then we would have seen two months in a row, may and june, where payrolls were far shorter than recent averages. putting the pressure on jay powell and his colleagues to say no doubt about it, we have to cut the rate now. he's testifying to the house financial services committee on the economy and the appropriate monetary policy given its condition. speaking of this, let's remember at the june meeting, the fed, this powell-led fed made a historic shift. first, they took rate hikes off the table. next thing you know, about half of them are saying it is time to have rates lower. what these dots show you, eight represents the thoughts of eight fomc members. at least one, if not two rate cuts this year. another eight say they are not ready to see any rate cuts in 2019. the outlier, the person who sees one rate increase. nonetheless, what it b

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former health and human services secretary kathleen sebelius who was responsible for implementing the affordable care act and currently the president and ceo of strategic advice firm sebelius resources. governor and secretary, thank you for being with us. as pete said, this may not be resolved until almost a year from now, which, again, contributes to the uncertainty that so many people who defend on the affordable care act require. what is your sense of where we are right now with this case? >> well, ali, i never like to predict what courts may or may not do. been wrong way too many times. but i would tell you that virtually everyone conservative and more progressive, judicial watchers were really shocked by the decision out of texas. the fact that a texas judge said if, indeed, the individual mandate doesn't stand, if congress, in fact, and, frankly, they didn't eliminate it. they took the penalty to zero but mandate is still part of the framework of the law. congress could change that at any point. what he said is the whole law goes. nothing should stand. i think that ruling seems

paul: context, very important, kathleen. the sense of a clear message from the fed did get amplified after richard clarida also talked about the danger of waiting too long to cut rates. it does kind of look like a team effort. kathleen: hard to escape that conclusion. the head of the federal reserve just sent the same messages. saying you cannot wait to cut rates and see that the economy is clearly on the rocks, clearly faltering. you need to move and keep it on an even keel. you do not need to wait until things get so bad. we need to make decisions on where the economy is heading and where the risks to the economy are lined up. interesting after these two speeches. basis pointf a 50 rate cut at the july meeting has been entire. it is not 100% yet. maybe 40 basis points. this has moved the needle. michelldman sachs, mr. e saying he thinks the 10 year treasury yield is heading to zero because central banks around the world will keep cutting rates. he has been right on the rally in risk assets. maybe he is right on this. shery

kathleen: this now becomes the question. because jay powell has said it over and over and over, the fed chair, his mantra -- we want to sustain the economic expansion. the question is how much will be needed to do that? right now, a lot of talk about insurance rate cut. the idea that the economy needs a little backup in clay global risk materializes and hits manufacturing investment harder. a lot of other things to look solid. jobs are growing and you have had pretty good consumer spending numbers but now enter once again president donald trump. he wants a big rate cut. he says these a small rate cuts that could becoming are not enough. he is not impressed with consumer spending going up in the second quarter. maybe he is looking at business investment which actually turned negative. recently, a half-dozen fed officials, alan greenspan to janet yellen are saying they cut is needed. the insurance cut but probably the fed is not likely going to need anymore right now. the global economy, the trade war is the answer to what the

paul: global economics and polity editor, kathleen hays. the two cutst is in camp, and sees a 25 basis point move this month. singapore and ig asian strategist. , is this cutting in july addenda -- a done deal? what are you expecting? morning, paul. thank you for having me. with regard to the fed, the fed preempted, dovishness coming through. i think they will go through with a 25 basis point kind in the july meeting. we might be seeing, from the congress by powell, is first his economy outlook. what we are seeing from last week, the surprise in the jobs report may undermine a little bit in terms of how much he could allude to. a mixed picture. cut, he of insurance might still position that we could be seeing risk coming through, so there may be a need .o react to these changes coming through in july, but perhaps a little less positioning for further cuts thereafter. perhaps just watching the economy. paul: the fed, data-driven, we hear that all the time. political pressure has been building up. this week tweeting, the fed does -- a clue.cl

kathleen hold a doctorate from yale university and spent a decade or so working on this book. when i first encountered your book i thought what a timely moment to explore a contemporary history of this movement but by the time you finish it you realize the timeliness was the same 5 years ago or 10 years ago or 30 years ago and you've told a much longer history here well before charlottesville became shorthand for anything. first off, i am curious to know how you decided to embark on this research. >> i wanted to do something on truth and reconciliation commission. we have a long complex history of racial inequality in the united states, much is the history of racial violence and yet we haven't seen a sustained public dialogue around race the way many other countries have that kind of history have. it took me to the trc process in north carolina, including 2005 with the book's research. what they are trying to do is figure out the legacy of an event that happened on november 3, 1979, when a group of clan and neo-nazi protesters opened fire on leftist protests against the clan a

rishaad: thanks, kathleen. policy editor kathleen hays. ecb pretty about the much all morning and certainly in the u.s. enough, but things are getting worse on a daily basis. surely she has been getting head of it. >> absolutely. the big worry now is you will get a disappointment because. everyone is hyped the central banks. are going to take out insurance. in japan, it has been more calm. if the yen were to spike up, the bank of japan will move. levels,en holds current i don't think there is any sense of urgency for the boj could do something. you say they might move to read in what form will the move comes in? the most likely thing is to extend out the duration of the yield cap. as you know, the bank of japan is capping the 10 year bond yield at a maximum of 10 basis points, moving that from the 10 year to the 15 or 20 are part of the curve. that certainly is one option. , you said you were worried about the dollar dynamics right now but we have seen the dollar -- it still appreciates when there is uncertainty and when we get better data

kathleen is a staff writer there and joins us on the phone to cover a couple aspects of the story. first, on the legislation that got teed up last night that will be voted on the floor today to condemn the president's tweets and statements, can you talk us through whha

kathleen: usually seems the boj plans this carefully. the ecb signaled stimulus is coming september, etc., the fed probably going to cut but how dovish? they don't know. terrific interview by our tv team in asia. said in japan there does not seem to be the same kind of urgency. >> in interest -- it is interesting because it is more calm. people are looking at the exchange rate. if the yen were to step -- were to spike up, it will move. if it holds current levels, i don't think there is any sense of urgency for the boj to do something. if there were to be a change, what the boj might do is a polite -- is apply yield curve control keeping it to the 15 year note as well. even so bloomberg economics says they will not change policy framework until 2021. japan's economy is still growing. even though sports are weak and asia demand is waning, 947 economists surveyed see some kind of tweak, making it clear the stimulus will last maybe even longer than people thought but the bloomberg news team here also reporting last week people at the boj are

kathleen hays is here. could this mean the be ok gets a reprieve and does not have to raise rates next month? kathleen: it would have to be an awfully big rebound for something like that to happen. korea is an export-dependent nation. it hits way above its weight, 11th biggest economy in the world, fourth biggest exporter. when you see exports getting hit, when you see a trade war that seems to be taking a bigger toll month by month, you figure they've got to be worried about gdp no matter what the rebound is today. let's go to the bloomberg library and take a look at a really nice, simple chart. it shows you the latest month, 13% year on year. seven months in a row of these a very exports, and interesting way to look at this is first of all, two things endangered our semiconductor exports. are also at risk. bloomberg intelligence did a really interesting look at some of the main things that are hurting south korea when it comes to exports and a trade war. is notde war means china exporting as much to the u

kathleen: the door is as wide open as ever. jay powell spoke to the he is concerned about a global growth slowdown. in large part because of uncertainty caused by the trade war. the link between unemployment and inflation appears to be broken. all these different factors, particularly around interest rates and expectations, maybe the fed has inadvertently kept policy too tight. >> the neutral interest rate is lower than we thought. i think we are learning the natural rate of unemployment is lower than we thought. monetary policy hasn't been as accommodating. we are learning all of those things. at the end of the day there has to be a connection. low unemployment will drive wages up and they will drive inflation. we haven't reached that point. of then: this is one linchpins for jay powell's arguments. cutting interest rates in july could be warranted. the fed president, john williams in a speech said the argument for easy policy has strengthened. again, backing up the fed chair. two other fed bank presidents indicate they are no

kathleen brooks is with me. let's start off with the pound because it is on a fairly steady downward trajectory. you could argue it has been for the last three yea rs. it has been for the last three years. brexit is kryptonite for the pound and it has been for three yea rs pound and it has been for three years and when we get these flare—ups, real concerns this week about a hard brexit and potentially an election, that has caused the pound to fall. it has had a little bit of respite early on thursday morning but what we are seeing is it is struggling to recover. we have retail sales data out of the uk soon and if that is strong we might see another rise in the pound but the trajectory seems to be lower. we think even economic data does not matter with brexit uncertainty. think even economic data does not matter with brexit uncertaintym the wider context, there does appear to bea the wider context, there does appear to be a sentiment that investors are taking their money off the table. a lot of things seem to b

paul: kathleen hays, thanks for joining us. still to come, president trump is targeting china again, threatening more tariffs despite promising to wall off on any additional duties last month. this is bloomberg. ♪ shery: this is "daybreak asia." i am shery ahn in new york. paul: i am paul allen in sydney. president trump has given us a reminder that the trade war is far from over. saying he could impose additional tariffs on chinese goods at any time if he wishes. pres. trump: we have a long way to go as far as tariffs with china is concerned if we want. we have another 325 ilion dollars that we can -- $325 billion we can put a tariff on if we want. i wish they did not break the deal we had. the threat comes one day after stephen mnuchin said talks with beijing would likely resume this week. joining us now is a senior research fellow, christine make them you -- mcdaniel. christine, thanks for joining us. we just heard president trump there reiterating a threat. if this visit by stephen mnuchin and lighthizer to china goes ahe

paul: global economics and policy editor kathleen hays, thank you. ceo's of seven major tech companies paid a visit to the white house on monday to discuss economy and the status of the u.s. ban on huawei equipment sales. bloomberg technology executive editor tom giles joins us now from san francisco. tom, what was the outcome of that meeting? house said there was a constructive meeting between the ceo's and the trump administration. according to the white house, the ceo's of the companies expressed support for national security restrictions on business with huawei. they also asked for timely decisions on when they would be exceptions to that band. to recap, the u.s. impose really strict restrictions on what u.s. companies can and cannot do business with, with huawei. later, the trump administration came out and said we will make ,xceptions in certain instances but not when there is a national security implications. today's meeting was aimed at flushing that out, seeing what that looks like. do not know how the companies and the trump administration

that is what we will see at the end of the month. >> kathleen hays out of new york. are stepping on the gas, not really. to fuel business. their outlook for the chip sector. we will engage the results of the japan korea. talking more on earnings. a taiwanese chipmaker reporting second-quarter results. the results and future outlook will be closely watched. they saw the biggest sales drop in almost a decade. the biggest contracted chipmakers, they are seen as the bellwether. >> investors especially have almost everything riding in the company. have a look at the pie chart. inher they are part of that, about 10%. they have no skin in the game. this is where we come with this data across several companies that do derive their data has -- company from from the itself. certainly very important. our next guest has and underperform rating. now, an investment analyst. it is all about the guidance this time around. view of a more bearish the stock. do you see any signs of revival? >> yes. incredible seasonality. second half is always better than the first half. revenue, direc

my name is kathleen wells. i'm a united states constitutional practitioner and a national executive entrepreneur. my request is unique and unusual. i have requested a half a million dollar budget to fully implement all of the legal groundwork i have laid here in the united states of america. specifically, i'm looking to collect and receive on a united states constitutional judgment demand and lien placed on the united states currency presses. let me say that. i exercise my united states constitutional right that this moment to exercise freedom of speech and freedom of the press. first amendment, united states constitution. what i need to do -- and i don't have the time now -- is to talk to each one of you to educate you on how this city can move forward now and receive currency funds rather than cutting the budgets for all of your honorable agencies. again, my name is kathleen wells and i am the national executive entrepreneur. thank you for your attention. >> supervisor fewer: next speaker, please. >> good mor

kathleen hays with us. deepening into domestic growth. aware is jay powell leaning -- where is jay powell leaning? domestic not just the economy, talking about rising tensions. the fed watching that closely. inflation not only failed to meet the 2% target, it moved further away. with theaid, compared june meeting, since then, manufacturing, trade, business investment have all weekend -- weakened. he talked about the labor market. he was asked the question in this context, representative carolyn maloney of new york who asked. >> did the june jobs report change your outlook for whether an appropriate -- a reduction is appropriate? what's the straight answer is no. globalertainties around growth and trade continue to weigh on the outlook. inflation continues to be muted. place.hings are still in >> jay powell says the market looks good. why will that not cause inflation? tightwe have a hot, market? to call something hot, you need to see heat. we hear lots of reports of companies having a hard time finding qualified labor. we don't see wages.

kathleen, everyone sees a cut this week. the key question is will the fed be hawkish or dovish when it comes to a future potential cut? about thewhat it sees economy, definitely, we're going to be watching those things very closely. watching the central bank, watching the feds cents. another question is this the beginning of an easing cycle, of a series of rate cuts? a couple of weeks ago jim bullard answer question of mine at a press conference, president of the st. louis fed. he would not say that the fed is on a preset course. does not think that is what is happening at all. but the fed's mantra, jay powell's mantra, is sustaining the economic expansion. and this is a question. how much will be needed? in the latest gdp report, consumer spending surged over 4% annualized, and help gdp growth above 2%, while business investment turned negative. so, what is the complication here? can you just sit and wait and let the fed be independent? not if you are president trump. answering reporters questions yesterday he said he wants

because then operators will have very little choice and that is the opposite of diversity. 0k, rory kathleen jones, thank you for bringing us that breaking news. let's catch up with the weather now and susan powell has the forecast. good evening, it is all about the heat. it will peak on thursday where temperatures could reach record—breaking levels and we could have some record—breaking nights as overnight lows full no lower than the mid 20s in some spots. 30 degrees across the south—east on monday. hotspot in london forming on tuesday, shifting into east anglia on wednesday and increasingly widespread on wednesday. mid 30 temperatures, 30 degrees across england and wales, high 20s. and and northern ireland. thursday we could top thejuly record of 37 degrees recorded at heathrow in 2015. a certainly muggy night ahead turning misty and murky across southern england and parts of wales and for northern england. the rain finally clears in the far north—west of scotland. these are the overnight lows in many places and they will not dip this far, we are talking about the high teens, are p

the sturgeon fish are imported in fertilized egg form from russia kept in kathleen monitored conditions in a lake that said almost 1500 meters above sea level. or lake as a very very pure water fed only by rain water was no industry or commercial activities in the surrounding area we also produce that the shooter fresh products from madagascar are all natural so the fish are extremely healthy. malagasy caviar production still has a long way to go with only one tonne produced last year in a world market of 340 tons but the entrepreneurs behind the project are ambitious they want to increase their production 5 fold this year. to a story now of an airplane that flew from capetown to cairo but this was no ordinary plane and it was flown by some extraordinary pilots this plane was built by 20 high school students 6 of them have a pilot's license and they learned that in cairo on monday it was the last stop on a 12000 kilometer journey from south africa they made stop seeing the media. yeah zanzibar times and and uganda given what's a very small talk's for teenagers along the way one of the p

in in force and also before and there may be other surprises in store over the next months from now kathleen curnow is concentrating on unlocking the chemical secrets of rembrandt's color spectrum. now germany is celebrating the 200th anniversary of the birth of to head off on tom he was a journalist and author most probably best known for effie breeched just one of many novels featuring strong female characters form tama is also known here in germany as the pioneer of travel guide publishing many volumes about his journeys through parts of the state of brandenburg which surrounds my colleague adrian kennedy has been tracing his steps. we begin at the end here at the french cemetery in berlin light the mortal remains of. the great writer is buried alongside his deal wife media. fontana traveled frew his beloved brandenburg mostly by train and coach i've got myself settled up with an e-book to follow the front cycle path trails our journey takes us away from berlin and to. the town in which the writer was. by having lunch appointment with a man who knows all about sport. ate and drank. this i

kathleen just summed it up very well in her summary of the day's activity. i would say we are back to where we were nine months ago and when it comes to markets, markets a lot more than we can reasonably expect. paul: let's talk about that more. if we take a look at the interest rate rob ability after this decision, markets are already doing as you have described. 61.4% chance of another cut at the next meeting. are they getting ahead of themselves? are, butt know if they you have an interesting question about a rate cut now. mortgages will get refinanced because of this? not very much. what is going to happen to the cost of financing a car? not very much. how many borrowers are borrowing , if we had bank borrowing that was robust, we wouldn't have excess reserves being parked at the fed at 2.10. therein lies another thing. you notice the excess reserve rate was not adjusted lower. 2.25, 2.1 isge is the floor. correctthe fed has to to get to a corridor. at least they stopped shrinking the balance sheet. they were trying to do two things at months -- at once