WEBVTT - Fed's Powell Speech at Jackson Hole; Meta Poaches Apple AI Executive

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

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<v Speaker 2>Good morning, I'm Nathan Hager and I'm Lisa Matteo. Here

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<v Speaker 2>are the top stories we're following today.

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<v Speaker 3>Lisa, we are just hours away from the key event.

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<v Speaker 4>Wall Street has been waiting for the speech from FED

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<v Speaker 4>chair j Powell at Jackson Hall. The White House has

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<v Speaker 4>been pressuring Powell to cut rates for months amid a

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<v Speaker 4>weakening labor market, but questions remain about the impact tariffs

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<v Speaker 4>will have on inflation. Bloomberg's Michael McKee is in Jackson

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<v Speaker 4>Hall covering Powell and the annual FED conference.

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<v Speaker 5>Last year, Chairman Powell said that he thought it was

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<v Speaker 5>time the interest rates started to go down, and then

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<v Speaker 5>he delivered in September when they made a fifty basis

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<v Speaker 5>point cut. He's not expected to say that here this year.

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<v Speaker 5>He's expected to talk about the fact that the economy

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<v Speaker 5>is slowing on the employment side, but there are some

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<v Speaker 5>worrying signs of inflation, and since those were require two

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<v Speaker 5>different ways of responding by monetary policy, the FED would

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<v Speaker 5>prefer to wait and get as much data and information

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<v Speaker 5>as possible, which means they'll wait till after the next

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<v Speaker 5>employment report and the next CPI report before settling on

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<v Speaker 5>the best course of action.

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<v Speaker 4>Bloomberg's Michael McKee part of our special Jackson Hole coverage.

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<v Speaker 4>He'll join Tom Keen and Lisa Abromowitz for a special

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<v Speaker 4>edition of Bloomberg Surveillance this morning at nine am Eastern Time,

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<v Speaker 4>and they will bring you FED share Jpowell speech live

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<v Speaker 4>that happens at ten am, and you can catch it

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<v Speaker 4>all on Bloomberg Radio, Bloomberg Television, and the Bloomberg Podcast

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<v Speaker 4>channel on YouTube.

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<v Speaker 2>Well Nathan. Several former FED officials are weighing into the

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<v Speaker 2>Fed's next move. Robert Kaplan is the former Dallas FED

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<v Speaker 2>president and vice chairman of Goldman Sachs.

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<v Speaker 6>If the job market were stronger, I think it would

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<v Speaker 6>be clearer to be more be patient and wait to

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<v Speaker 6>see how the inflation is going to unfold, and be

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<v Speaker 6>more patient to see a trend for further down toward target.

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<v Speaker 6>But I think with this weekending the labor markets, it's

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<v Speaker 6>going to push the FED I think to be more

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<v Speaker 6>forward leading and maybe do an adjustment in September. But

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<v Speaker 6>the caution I would give if they do move in September,

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<v Speaker 6>I don't think that's the start of a cycle.

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<v Speaker 2>I was former Dallas FED President Robert Kaplan. Now the

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<v Speaker 2>interest rate market shows about a seventy percent chance of

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<v Speaker 2>a quarter point cut at the September meeting and close

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<v Speaker 2>to fifty basis points of easing for the entire year.

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<v Speaker 4>Oh well, we wait to see whether those bets get refined.

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<v Speaker 4>Following Chairman Powell speech, Lisa pressure is building on one

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<v Speaker 4>of the Fed's board members. Federal Housing Finance Agency Director

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<v Speaker 4>Bill Poulti says he will make a new statement on

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<v Speaker 4>new evidence against FED Governor Lisa Cook this morning at

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<v Speaker 4>nine thirty am Wall Street Time. Paulty announced that on

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<v Speaker 4>x this morning, a day after the Justice Department urged

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<v Speaker 4>Powell to remove Governor Cook from the board as it

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<v Speaker 4>signals plans to investigate her for alleged mortgage fraud. Poulty

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<v Speaker 4>tells Bloomberg he referred to Cook's case to the DOJ

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<v Speaker 4>is part of a broader crackdown on the issue.

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<v Speaker 7>We refer people almost every day. I refer people every

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<v Speaker 7>week on a minimum, to the Department of Justice for

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<v Speaker 7>mortgage fraud. This is literally what I am required to

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<v Speaker 7>do underneath the Housing and Economic Recovery Act of two

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<v Speaker 7>thousand and eight, which is to ensure the safety and

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<v Speaker 7>soundness of the mortgage market.

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<v Speaker 4>You can watch our full conversation with FHFA director Bill

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<v Speaker 4>Polti on the Bloomberg Podcast YouTube channel.

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<v Speaker 3>Now Bloomberg has reached out to Governor Cook.

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<v Speaker 4>She has declined our requests for an interview, but in

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<v Speaker 4>a statement, she says she won't be bullied into stepping down,

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<v Speaker 4>but intends to take questions about her financial history seriously.

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<v Speaker 2>Talks continue at the White House Nathan on taking a

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<v Speaker 2>ten percent stake in Intel to shore up the struggling

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<v Speaker 2>US chip maker. Now Bloomberg News has learned that Trump

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<v Speaker 2>administration will not pursue equity stakes and other semiconductor manufacturers

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<v Speaker 2>that are boosting investment in the US, like Micron Technology

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<v Speaker 2>and Taiwan's Semiconductor. Now fill moves in the White House

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<v Speaker 2>to take a cut of Nvidia chip sales in China

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<v Speaker 2>and to pursue a so called golden share in US steel.

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<v Speaker 2>Former Vice President Mike Penn says President Trump should reconsider

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<v Speaker 2>the whole strategy.

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<v Speaker 8>State owned enterprise is not the American way. Free enterprise

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<v Speaker 8>is the American way, and a refereed private sector with

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<v Speaker 8>less taxes and less regulation has created the most prosperous

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<v Speaker 8>economy in the history of the world, and if we

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<v Speaker 8>stay on that path, that'll always be true.

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<v Speaker 2>Former Vice President Mike Pence with a guest on Bloomberg's

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<v Speaker 2>Balance of Power. You can also get that full conversation

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<v Speaker 2>on the Bloomberg Podcast YouTube channel.

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<v Speaker 4>Well Staying in the chip texter Lisa In, Nvidia reportedly

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<v Speaker 4>told its component suppliers to halt production of its H

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<v Speaker 4>twenty AI chip that's designed for the Chinese market. According

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<v Speaker 4>to the Information, in Vidia issued that order this week

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<v Speaker 4>after Beijing urged local firms to avoid using those Nvidia chips.

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<v Speaker 4>CEO Jensen Wong says his company is in talks with

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<v Speaker 4>Beijing US government.

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<v Speaker 9>The Trump administration has approved of licenses for US to

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<v Speaker 9>export age.

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<v Speaker 3>Toities to China.

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<v Speaker 10>Recently, China asked some questions about some.

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<v Speaker 3>Security back doors in our ships.

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<v Speaker 6>We have made it very clear and put to rest

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<v Speaker 6>that H twenty has no security backdoors.

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<v Speaker 3>That was Nvidia CEO Jensen Wong.

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<v Speaker 4>The Age twenty is a less powerful version of the

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<v Speaker 4>company's cutting edge AI accelerators. It was designed to comply

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<v Speaker 4>with US export controls.

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<v Speaker 2>Well well Mark News has learned two tech behemoths are

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<v Speaker 2>hooking up on an artificial intelligence related deal. Let's get

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<v Speaker 2>the very re lated from Bloomberg's John Tucker. Good Morning, John,

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<v Speaker 2>and Lisa.

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<v Speaker 11>Meta Platforms has agreed to a deal with alphabetz Google

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<v Speaker 11>for cloud computing services. That's the first major cloud computing

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<v Speaker 11>deal between Meta and Google. Meta CEO Mark Zuckerberg has

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<v Speaker 11>pledged to spend hundreds of billions of dollars on AI

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<v Speaker 11>and the infrastructure needed to support howard It, the Facebook

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<v Speaker 11>and Instagram parent company, will pay a minimum of ten

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<v Speaker 11>billion dollars over six years to use Google's cloud servers

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<v Speaker 11>and storage, and an effort to quickly bring online more

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<v Speaker 11>computing power as it competes in the race to offer

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<v Speaker 11>users AI tools. Zuckerberg is seeking to amass the most

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<v Speaker 11>computing power per AI researcher, and he wants to do

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<v Speaker 11>it quickly. You know you, York, Come John Tucker, Bloomberg Radio.

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<v Speaker 4>Okay, John, thank you. Mark Zuckerberg was almost involved in

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<v Speaker 4>another big deal. According to a court filing, Elon Musk

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<v Speaker 4>tried to enlist the Meta CEO for his unsolicited bid

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<v Speaker 4>for Open Ai this year. Zuckerberg was one of the

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<v Speaker 4>people with whom must communicate it about potentially financing a

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<v Speaker 4>deal to purchase the maker of Chat GPT. In the filing,

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<v Speaker 4>OpenAI says neither Zuckerberg nor Meta signed the letter of

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<v Speaker 4>intent or participated in the ninety seven billion dollar bid.

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<v Speaker 2>Well more news out of Meta this morning, Nathan the

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<v Speaker 2>company is hiring another key Apple artificial intelligence executive, and

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<v Speaker 2>this is even as the social networking company prepares a

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<v Speaker 2>slow wits recruitment. In a Bloomberg exclusive, sources a Frank Chu,

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<v Speaker 2>who has led Apple AI teams focused on cloud infrastructure,

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<v Speaker 2>will be joining Meta super Intelligence Labs, and the executive

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<v Speaker 2>is following several of his colleagues to Meta, which also

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<v Speaker 2>hired the head of Apple's AI models team.

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<v Speaker 4>Meantime, Lisa China is accusing the US of quote threatening

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<v Speaker 4>world peace before it hosts a gathering of global leaders.

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<v Speaker 4>More than twenty of them are set to attend the

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<v Speaker 4>annual summit of the Shanghai Cooperation Organization, which is a

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<v Speaker 4>block of countries led by Russia and China. Chinese Assistant

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<v Speaker 4>Foreign Minister Liu Binn framed the gathering as a break

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<v Speaker 4>with the ethos of a quote certain country that quote

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<v Speaker 4>seeks to put its national interest above the interest of others.

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<v Speaker 4>US was never invited to be part of the group

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<v Speaker 4>that was initially seen in the West as a China

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<v Speaker 4>backed Eastern counterweight to NATO.

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<v Speaker 2>It is time now for a look at some of

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<v Speaker 2>the other stories making news in New York and around

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<v Speaker 2>the world. For that, we're joined by Bloomberg's Michael bar

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<v Speaker 2>Good morning, Michael.

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<v Speaker 12>Good morning, Lisa. Governor Phil Murphy says a state of

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<v Speaker 12>emergency remains for New Jersey as Hurricane Erin battered coastal

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<v Speaker 12>communities with strong winds, waves, and life threatening rip currents.

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<v Speaker 12>Governor Murphy says absolutely no one should be in the

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<v Speaker 12>coastal waters today. Aaron flooded streets and eroded beaches in

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<v Speaker 12>parts of the Jersey Shore and Long Island. High serve

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<v Speaker 12>advisories for five to seven feet are in effect. Bloomberg

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<v Speaker 12>Meeting religious Craig Allen has more.

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<v Speaker 13>Erin is now about five hundred miles away from Halifax,

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<v Speaker 13>Nova Scotia, but still has hurricane force winds one hundred

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<v Speaker 13>five miles outside of the center and tropical storm force

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<v Speaker 13>winds three hundred and twenty miles from the center, and

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<v Speaker 13>so the ocean continues to be very roughed up, and

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<v Speaker 13>I would bet that there will continue to be red

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<v Speaker 13>flags flying right through the day today, even though the

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<v Speaker 13>weather itself is going to be pretty nice.

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<v Speaker 12>Bloomberg Meeting religious Craig Allen, one of the two Menendez brothers,

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<v Speaker 12>was denied parole on Thursday from murdering his parents thirty

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<v Speaker 12>six years ago in California. It is keeping Eric Menndez

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<v Speaker 12>behind bars for at least another three years. Today, Lyle

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<v Speaker 12>Menendez will appear before the parole board. President Trump visited

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<v Speaker 12>with police and National Guard units that are patrolling Washington, DC.

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<v Speaker 10>Well, I just want to thank everybody very much for

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<v Speaker 10>being here. I wanted to do this. We've had some

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<v Speaker 10>incredible results and results have come out, and it's like

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<v Speaker 10>a different place. It's like a different city. It's the capital.

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<v Speaker 10>It's going to be the best in the world.

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<v Speaker 12>In a radio interview earlier Thursday, President Trump said he

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<v Speaker 12>would be going out tonight with the law enforcement and military,

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<v Speaker 12>but he returned to the White House after the visit

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<v Speaker 12>to the facility. Global News twenty four hours a day

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<v Speaker 12>and whenever you want it with Bloomberg News. Now, michae L.

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<v Speaker 3>Barn this is Bloomberg Time.

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<v Speaker 4>Now for our Bloomberg Sports update, and for that we

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<v Speaker 4>bring in John Stashauwer, Thanks Nathan.

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<v Speaker 14>Tour Championship Golf Underwagh in Atlanta. Of the thirty players

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<v Speaker 14>going for the ten million dollar first place prize, nobody

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<v Speaker 14>played like Russell Henley seven birdies and eagle, no bogies,

0:10:11.960 --> 0:10:14.480
<v Speaker 14>a nine under sixty one and a two shot lead

0:10:14.520 --> 0:10:18.040
<v Speaker 14>on Scottie Scheffler. Five others trail by three. Rory McElroy

0:10:18.280 --> 0:10:22.080
<v Speaker 14>trails by five. Dodgers and Padres both won ALA at Colorado.

0:10:22.080 --> 0:10:24.800
<v Speaker 14>Clayton Chrishall went to eight and two. San Diego beat

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<v Speaker 14>the Giants Justin Verlanderfelder one and ten. Dodgers leave the

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<v Speaker 14>NL West by one game. That's your Bloomberg Sports Update.

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<v Speaker 3>Stay with us. More from Bloomberg Daybreak coming up after.

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<v Speaker 1>This Coast to coast on Bloomberg Radio, nationwide on Serious

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<v Speaker 1>Exam and around the world on Bloomberg dot Com and

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<v Speaker 1>the Bloomberg Business opp This is Bloomberg Daybreak.

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<v Speaker 4>Good morning, I'm Nathan Hager with the countdown on to J.

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<v Speaker 4>Powell's speech at the FED Symposium in Jackson Hole, Wyoming.

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<v Speaker 4>His chance to give clues on the policy path for

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<v Speaker 4>his final nine months as chair to cement his legacy

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<v Speaker 4>as he continues to face relentless criticism from the White

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<v Speaker 4>House over interest rates. Ahead of the keynote address, we're

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<v Speaker 4>very pleased to be joined this morning by Sarah House,

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<v Speaker 4>senior economists at Wells Fargo. Sarah, it's great to have

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<v Speaker 4>you with us on Jackson Hole Day. Do you expect

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<v Speaker 4>Chairman pal either to give more clues on the policy

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<v Speaker 4>path or to address that pressure he's under.

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<v Speaker 3>Good morning, Good morning, Nathan.

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<v Speaker 9>So we're not expecting an explicit hint that what the

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<v Speaker 9>FED will do at the September meeting. So this is

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<v Speaker 9>not like last year where I think there was pretty

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<v Speaker 9>broad consensus that the Fed was needing to pivot. So

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<v Speaker 9>the committee still remains very split, as we saw within

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<v Speaker 9>the minutes, but also just some of the recent FED speak,

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<v Speaker 9>and then I think the recent data we had even

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<v Speaker 9>since the minutes, it didn't resolve that split. So yes,

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<v Speaker 9>you had the much weaker payrolls numbers, but then you

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<v Speaker 9>also had signed of inflation being more persistent, just based

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<v Speaker 9>on the mix of the recent inflation readings. So I

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<v Speaker 9>think going to want to keep his options open where

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<v Speaker 9>we still have another month's worth of data before that

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<v Speaker 9>September meeting.

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<v Speaker 4>Could there be some addressing of that split? As you say,

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<v Speaker 4>we have seen a very divergent view starting to come

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<v Speaker 4>out now on where the policy path should go.

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<v Speaker 9>I'm not sure. I think you could see it in

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<v Speaker 9>terms of him laying out just the difficulty of the moment.

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<v Speaker 9>So you do have the said Candid's intention where the

0:12:24.800 --> 0:12:27.439
<v Speaker 9>labor market is living some momentum, but if you look

0:12:27.440 --> 0:12:30.960
<v Speaker 9>at certain indicators like the unemployment rate, it's still looking

0:12:31.000 --> 0:12:34.320
<v Speaker 9>like it's roughly imbound. But at the same time, you

0:12:34.400 --> 0:12:38.160
<v Speaker 9>have inflation that's actually moving back up, so it's moving

0:12:38.160 --> 0:12:41.320
<v Speaker 9>in the wrong direction when we've been above target for

0:12:41.360 --> 0:12:44.080
<v Speaker 9>almost four and a half years now. So I think

0:12:44.320 --> 0:12:49.240
<v Speaker 9>discussing those dueling directions and the different risks that the

0:12:49.280 --> 0:12:51.679
<v Speaker 9>set is facing, I think we'll get to just some

0:12:51.840 --> 0:12:53.840
<v Speaker 9>of that split and why the committee is so divided

0:12:53.880 --> 0:12:55.040
<v Speaker 9>at this particular moment.

0:12:55.640 --> 0:12:57.679
<v Speaker 4>If we do see a chairman Palace sort of keep

0:12:57.720 --> 0:12:59.640
<v Speaker 4>his cards close to his vest, how do you expect

0:12:59.640 --> 0:13:00.319
<v Speaker 4>the market to.

0:13:00.280 --> 0:13:00.880
<v Speaker 3>React to that?

0:13:01.559 --> 0:13:05.400
<v Speaker 9>Yeah, So it seems like markets were pretty much anticipating

0:13:05.400 --> 0:13:08.119
<v Speaker 9>that we would get that clear cut signal that September

0:13:08.240 --> 0:13:11.959
<v Speaker 9>is likely, but I think those expectations have been paired

0:13:11.960 --> 0:13:15.520
<v Speaker 9>back in recent days. Is again, we've had some commentary

0:13:15.559 --> 0:13:18.920
<v Speaker 9>from some of the various regional FED presidents and even

0:13:19.000 --> 0:13:21.960
<v Speaker 9>just some of the recent inflation data which showed a

0:13:21.960 --> 0:13:25.240
<v Speaker 9>lot of their recent strength driven by services, not necessarily

0:13:25.280 --> 0:13:28.000
<v Speaker 9>it being all tariff induce which I think would have

0:13:28.040 --> 0:13:31.439
<v Speaker 9>made it easier for the FED to look through. So

0:13:31.559 --> 0:13:35.040
<v Speaker 9>I think if he doesn't signal that clear hint in September,

0:13:35.400 --> 0:13:38.040
<v Speaker 9>and it'll still probably be viewed as hackish, but I

0:13:38.080 --> 0:13:41.080
<v Speaker 9>think markets have kind of shifted that way anyway, anticipating

0:13:41.800 --> 0:13:45.120
<v Speaker 9>they won't get that clear, clear green light for September.

0:13:45.640 --> 0:13:48.120
<v Speaker 4>I think there is some anticipation that Chairman pal is

0:13:48.160 --> 0:13:51.280
<v Speaker 4>going to talk about changes to the Fed's framework for

0:13:51.640 --> 0:13:54.960
<v Speaker 4>addressing inflation and weakness and the labor market. What do

0:13:55.000 --> 0:13:57.760
<v Speaker 4>you expect there and the market reaction to that. We've

0:13:57.760 --> 0:13:59.559
<v Speaker 4>got about a minute left, sure.

0:13:59.400 --> 0:14:02.240
<v Speaker 9>So we are expecting that they'll announce the new framework,

0:14:02.320 --> 0:14:04.360
<v Speaker 9>and I think what we'll see is a more symmetric

0:14:04.800 --> 0:14:08.960
<v Speaker 9>approach to that, so formally ditching FATE. So that was

0:14:08.960 --> 0:14:11.320
<v Speaker 9>the flexible average inflation target where they said they would

0:14:11.320 --> 0:14:13.920
<v Speaker 9>make up for pass undershoot, so just returning to that

0:14:14.000 --> 0:14:16.960
<v Speaker 9>simple two percent target, but also taking a more symmetric

0:14:17.360 --> 0:14:21.160
<v Speaker 9>approach to its maximum employment side, so not focusing on

0:14:21.400 --> 0:14:25.360
<v Speaker 9>only short falls but instead rather any deviation. So I

0:14:25.360 --> 0:14:28.600
<v Speaker 9>think this could be interpreted as a more hawkish reaction

0:14:28.720 --> 0:14:32.480
<v Speaker 9>function than the prior framework. But importantly, the feeders already

0:14:32.520 --> 0:14:36.000
<v Speaker 9>shifted to this so even if it hasn't been formalized yet,

0:14:36.040 --> 0:14:38.560
<v Speaker 9>so I don't think it changes the new term course

0:14:38.600 --> 0:14:40.960
<v Speaker 9>of policy, although I think it will shine a light

0:14:41.080 --> 0:14:43.200
<v Speaker 9>on just how difficult it is the set for the

0:14:43.200 --> 0:14:46.200
<v Speaker 9>Fed to cut in this moment where core PC inflation

0:14:46.400 --> 0:14:48.360
<v Speaker 9>is likely to be three percent in August.

0:14:50.080 --> 0:14:53.080
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