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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Daybreak euro podcast. Good morning. It's Thursday, the twenty first

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Speaker 1: of August. I'm Stephen, Carol and London. Coming up today.

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Speaker 1: Federal Reserve Governor Lisa Cook says she won't be bullied

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Speaker 1: into resigning after Donald Trump called for her to quit

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Speaker 1: over allegations of mortgage fraud. The UK's Chancellor, Rachel Reeves

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Speaker 1: considers taxing the sale of high value family homes to

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Speaker 1: plug a multi billion pound budget hole plus running out

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Speaker 1: of puff. New data shows the UK's ban on disposable

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Speaker 1: vapes has driven users to treating refillable devices as throwaway products.

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Speaker 1: Let's start with the roundup of our top stories. Federal

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Speaker 1: Reserve Governor Lisa Cook says she won't be bullied into

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Speaker 1: stepping down after calls by President Trump for her to

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Speaker 1: resign over allegations of mortgage fraud. In a statement, she

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Speaker 1: added that she's gathering accurate information to answer any legitimate

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Speaker 1: questions and provide the facts. That's after Federal Housing Finance

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Speaker 1: Agency Director Bill Pulty urged a Justice Department investigation of

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Speaker 1: Cook's mortgages. Speaking earlier to CNBC, Pulty said, nobody is

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Speaker 1: above the law.

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Speaker 2: We refer people every day criminally for mortgage fraud, and

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Speaker 2: no one is above the law.

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Speaker 3: And in this case, it happens to be a side governor,

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Speaker 3: and I have an obligation to do something about it.

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Speaker 4: So when we receive a tip, this is what we discovered.

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Speaker 1: Pulti told the NBC that the FED governor will either

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Speaker 1: have to resign or be fired if Cook were to

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Speaker 1: exit the position for any reason, it would create another

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Speaker 1: opening for Trump to fill on the Federal Reserves Board.

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Speaker 1: As the President pile's pressure on the Center Bank to

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Speaker 1: lower interest rates. FED officials saw inflation is a bigger

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Speaker 1: threat than job market weakness at their July meeting. According

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Speaker 1: to the latest minutes, the majority of policymakers judge the

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Speaker 1: upside risks to inflation as the greater of these two risks.

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Speaker 1: Bloomberg economist Stuart Paul says there is a lot the

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Speaker 1: Fed minutes that stood out to him.

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Speaker 5: Several officials are concerned about slower real income growth, like

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Speaker 5: that's a little bit of a tip of the hat

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Speaker 5: that the majority that did vote to hold raid steady

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Speaker 5: could have been getting a little bit nervous about the

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Speaker 5: labor market even as they decided to hold Raid steady.

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Speaker 1: Stuart Paul speaking there as fed charger own Powell prepares

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Speaker 1: to deliver a closely watched speech at the Central Bankers

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Speaker 1: gathering in Jackson holl tomorrow. The Last Act declined for

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Speaker 1: a second straight day on Wednesday, with Max seven stocks

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Speaker 1: on their longest losing streak since April. Futures are currently

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Speaker 1: pointing higher for the Tech Heavy index, but this week's

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Speaker 1: dip has raised questions if the rally in the sector

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Speaker 1: has gone too far too fast. For oak Tree Capital

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Speaker 1: Management co founder Howard Marx, us stocks are in the

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Speaker 1: early days of a bubble.

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Speaker 3: I'm not raising an alarm bell, but I do think

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Speaker 3: it's time for some caution. No reason I think there'll

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Speaker 3: be a correction soon. But the point is that things

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Speaker 3: are expensive. They may go on to become more expensive,

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Speaker 3: but the fact that they're expensive it should.

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Speaker 6: Not be lost.

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Speaker 1: Marx aded that some technology stocks are quite highly valued

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Speaker 1: relative to history. Some strategists are warning the extra heavy

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Speaker 1: weighting of tech giants could turn any rotation out of

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Speaker 1: the sector into a broader route. Blomberg has learned that

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Speaker 1: the UK's Chancellor Rachel Reeves is considering taxing the sale

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Speaker 1: of high value family homes as she looks for ways

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Speaker 1: to raise revenue in the upcoming budget. Bloomberg's Euan Parts

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Speaker 1: has the details.

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Speaker 4: Private residence relief for long standing pillar of the tax

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Speaker 4: system saves homeowners thirty two billion pounds a year by

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Speaker 4: exempting primary properties from capital gains tax, which told the

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Speaker 4: underproposals being considered by officials, properties above a specified threshold,

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Speaker 4: potentially one and a half million pounds would be liable

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Speaker 4: for CGT at eighteen or twenty four percent. With the

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Speaker 4: budget months away, the Treasury is looking for ways to

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Speaker 4: raise as much as fifty one billion pounds to patch

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Speaker 4: up the public finances. Any moves to tax primary residencies

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Speaker 4: would likely prove highly controversial in London. I'm uning Pots

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Speaker 4: Blomberg Gray.

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Speaker 1: European leaders are discussing a NATO like security guarantee for Ukraine.

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Speaker 1: The plan is being pushed by Italy's Georgia Maloney and

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Speaker 1: would sign Key's allies up to providing military support if

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Speaker 1: Ukraine is attacked by Russia again. It's one of a

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Speaker 1: range of ideas being pitched by Europe to the White House,

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Speaker 1: which Vice President j. D. Vance says is grappling with

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Speaker 1: a problem.

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Speaker 2: Number one is Ukraine wants to know that it's not

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Speaker 2: going to get invaded again by Russia. Wants to know

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Speaker 2: that it's got territorial integrity long into the future. The

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Speaker 2: Russians want certain pieces of territory, most of which they've occupied,

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Speaker 2: but some of which they haven't, so that is really

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Speaker 2: where the meat of the negotiation is. The Ukrainians want

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Speaker 2: security guarantees, the Russians want a certain amount of territory.

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Speaker 1: Fanca's comments come after a meeting between Donald Trump and

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Speaker 1: European leaders at the White House led to a firmer

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Speaker 1: US commitment to security guarantees. At the same time, Trump

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Speaker 1: ruled out sending soldiers to Ukraine, but said the US

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Speaker 1: might provide air support. And Israel's military says it's taken

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Speaker 1: the first steps of a planned operation to take over

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Speaker 1: Gaza City. The state is calling up sixty thousand reservists

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Speaker 1: to prepare for the offensive, which one official said had

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Speaker 1: effectively already started. More than sixty two thousand Palestinians have

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Speaker 1: been killed in the war in Gaza, according to the

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Speaker 1: Hamas run Health Ministry. Earlier in the week, Camas accepted

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Speaker 1: a ceasefire plan put forward by Katar and Egypt, which

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Speaker 1: Israel has yet to formally respond to. And those are

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Speaker 1: your top stories on the markets. The Mscish Pacific Index

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Speaker 1: just flatter the down side of the moment. Terrostok's fifty

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Speaker 1: futures are down by a tenth of one percent. We're

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Speaker 1: watching NASDAG futures, which are a little higher now after

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Speaker 1: the selloff we've seen in tech shares over the past

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Speaker 1: couple of days. Tenure treasury yield holding steady at four

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Speaker 1: point twenty nine percent ahead of the start at the

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Speaker 1: Jackson Whole meeting. Bloomberg Dollar Spot Index up by a

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Speaker 1: tenth of one percent. In a moment, we'll bring you

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Speaker 1: more on the pressure on the FED from Donald Trump,

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Speaker 1: plus why the UK's ban on disposable vapes doesn't seem

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Speaker 1: to be changing Umer behavior. But first, another story that

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Speaker 1: I've been reading this morning on how visitors to Japan

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Speaker 1: are driving the revival of a fashion brand made famous

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Speaker 1: by the film Killed Bill Blimbergminllions. Grod Redi has been

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Speaker 1: writing about the record sales of an on Ittsuka tiger

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Speaker 1: shoes worn by Uma Thurman's character in bright yellow in

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Speaker 1: the two thousand and three Tarantino film. Now, the more

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Speaker 1: recent spike in popularity has come from visitors to Japan.

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Speaker 1: It's actually doubled revenue for the brand in a year

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Speaker 1: and pushed its owner assets to open shops especially dedicated

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Speaker 1: to this brand in Paris and in the United States.

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Speaker 1: Growd rights that this is the flip side of some

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Speaker 1: of the complaints that have been made in Japan about

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Speaker 1: over tourism. Think about companies like Sanrio, famous for Hello Kitty,

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Speaker 1: that are seeing tourist drive forty percent of its sales

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Speaker 1: in Japan. Now, this is part of a broader popularity

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Speaker 1: of some of these brands that have made success at

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Speaker 1: home thanks to those people who are visiting. Of course,

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Speaker 1: a lot of that related to the weaker yen, but

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Speaker 1: also the broader aspirations that consumers have around a four

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Speaker 1: ability high quality as an esthetic minimalism that consumers are

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Speaker 1: associating with Japan. Think about the likes of Uniclo capitalizing

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Speaker 1: on this globally. Its overseas revenues overtook what it earns

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Speaker 1: in Japan in twenty twenty two. So perhaps the influx

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Speaker 1: of Taurus isn't so bad. After all, the brands are

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Speaker 1: positioned to perhaps benefit over the longer and broader term

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Speaker 1: from this surge in numbers and visitors to Japan, as

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Speaker 1: GROAD really puts it, turning Japan's soft power into hard profits.

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Speaker 1: You can read the piece on Bloomberg dot com and

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Speaker 1: we'll put a link to it in our podcast show

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Speaker 1: notes as well.

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Speaker 6: Well.

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Speaker 1: Let's bring you more now in that meeting of central

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Speaker 1: bankers in Jackson Hall, Wyoming getting underway later on. This

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Speaker 1: comes as the US President has stepped up his attacks

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Speaker 1: on the FED Governor Lisa Cook, on top of his

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Speaker 1: campaign against the FED chair Jerome Powell. Bloomberg opinion columnist

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Speaker 1: Daniel Moss joins me now for more, Daniel, good to

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Speaker 1: talk to you. Is Donald Trump's call for Lisa Cook

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Speaker 1: to resign a major escalation of his attacks on the Fed.

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Speaker 7: Yes, it is, because the implication is that they are

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Speaker 7: prepared to delve into the fine print of the personal

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Speaker 7: affairs financially at least of FOMC officials, and they may

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Speaker 7: go beyond that. The existing vacancy on the board occurred

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Speaker 7: because Adrian Kugler, whose term was to expire in January,

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Speaker 7: announced she would step aside. Now, she had missed the

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Speaker 7: FOMC meeting immediately prior to that, citing personal reasons, So

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Speaker 7: I see this as being something in an altogether different category.

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Speaker 7: This is certainly a new front in the campaign.

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Speaker 1: Now, of course, a lot of this is happening as

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Speaker 1: Sandra Bancos are going to Jackson Holle for or their

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Speaker 1: annual symposium, officially focusing on the US labor market. But

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Speaker 1: with the global casts that's arriving in Wyoming, are they

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Speaker 1: going to be more worried about central bank independence than

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Speaker 1: perhaps some of the economic data.

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Speaker 7: Well, I think they'll be worrying about both. There's no

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Speaker 7: question that journalists, quite justifiably will be asking anyone they

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Speaker 7: run into their opinion on the heavying of the FED

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Speaker 7: by the White House. There's no question about that. What

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Speaker 7: else comes up at Jackson Hole, we'll see. It's not

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Speaker 7: a guarantee that the chair will tip his hand on

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Speaker 7: upcoming FOMC meetings. By the way, just before this conversation,

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Speaker 7: I was refreshing my memory about some famous Jackson Hole

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Speaker 7: addresses by then chairs, some of them that have lived

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Speaker 7: on through the years. We're not about tipping upcoming policy

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Speaker 7: meetings at all. Alan Greenspan was famous for us saying

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Speaker 7: that monetary policy shouldn't be used to prick asset bubbles.

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Speaker 7: I'm sure you're familiar with that line that was said

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Speaker 7: at the nineteen ninety nine Jackson Hole. In the early

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Speaker 7: two thousands, he ruminated on the role of technology and

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Speaker 7: how it was changing the labor force. Ben Bernanke's final

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Speaker 7: Jackson Hole, he didn't even speak, So you know, let's

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Speaker 7: actually see what happens here. The formal topic is the

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Speaker 7: labor market and demographics, and that is a rich vein

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Speaker 7: to mine at the best of times.

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Speaker 1: I mean, this is coming at a time when the

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Speaker 1: data is starting to show them weakness in the labor market.

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Speaker 1: We did just have the meetings of the last Federal

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Speaker 1: as there of meetings showing the policymakers were more worried

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Speaker 1: about inflation than the labor market. Is that the duality

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Speaker 1: that FAD policymakers now need to focus on, and I

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Speaker 1: suppose how much could the balance have shifted since the

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Speaker 1: last meeting.

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Speaker 7: Well, look, it's important to remember that Congress, which created

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Speaker 7: the FED in nineteen thirteen, has given it a dual mandate.

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Speaker 7: Two primary mandates, price stability and the promotion of full employment.

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Speaker 7: Now the it's real employment is really a proxy for

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Speaker 7: economic growth.

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Speaker 4: And you know, the.

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Speaker 7: Last couple of job numbers, whether you contest the process

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Speaker 7: that led to their publication or not, were not good news.

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Speaker 7: They do point to a weakening labor market. And the

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Speaker 7: two FED governors who dissented at the last meeting may

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Speaker 7: clearly that was all about the labor market. The labor

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Speaker 7: market can't be ignored. It's never ignored. It's one of

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Speaker 7: the two pillars by which the FIT is supposed to

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Speaker 7: sit policy.

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Speaker 1: Okay, Daniel Mass, Bloomberg Opinion columnist, thank you very much

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Speaker 1: for joining this and you can read Daniel's latest writings

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Speaker 1: at Bloomberg dot com, Forward Slash Opinion. Stay with us.

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Speaker 1: More from Bloomberg Daybreak Europe coming up after this. Well,

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Speaker 1: let's turn here to the UK now when you figures

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Speaker 1: show that a ban on disposable vapes is failing to

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Speaker 1: limit the environmentally damaging waste from the devices. Data from

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Speaker 1: Nielsen IQ seen by Bloomberg show that consumer behavior doesn't

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Speaker 1: appear to have shifted since the ban came into effect

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Speaker 1: earlier this year. Our reporter Harry Black is here with

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Speaker 1: more on this story, Harry, good morning. Let's start them

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Speaker 1: with what the new data has told us. The ban

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Speaker 1: on disposable vapes came into force in June. What does

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Speaker 1: the data tell us about what's changed since?

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Speaker 8: So this Nielsen IQ data, it's part of why do

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Speaker 8: data set on groceries grocery shopping in the UK and

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Speaker 8: also includes online shops as well. It's a sample size.

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Speaker 8: So if you look at July in June, for example,

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Speaker 8: two months after the ban was introduced, the sales of

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Speaker 8: pods were actually a lot lower than the devices themselves,

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Speaker 8: and you would think post ban that because people are

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Speaker 8: reusing devices, you'd see a lot more pod sales. So

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Speaker 8: if you look at July, there was about seven point

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Speaker 8: eight million kits sold in this sample compared to about

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Speaker 8: five million pods. So not something we expected to see.

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Speaker 1: Yeah, and very interesting to indicate how consumers are responding

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Speaker 1: to that ban undisposable of vapes. What have the companies

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Speaker 1: involved in this, the big tobacco and vape manufacturers said

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Speaker 1: about it.

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Speaker 8: So the legacy big tobacco manufacturers have actually been quite

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Speaker 8: strong in their approach to this issue. They've always been

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Speaker 8: pro regulation with the government since even before the ban

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Speaker 8: was introduced. Imperial Brands actually sent in a letter to

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Speaker 8: DEFRA last month. They said they were looking for stronger

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Speaker 8: guidance from the government and one of the big loopholes

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Speaker 8: that they were trying to challenge was the fact that

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Speaker 8: convenience stores and supermarkets, although they're legally obligated to buy

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Speaker 8: usable vapes, they're not legally obligated to buy the pods

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Speaker 8: that go with them. So a lot of consumers are

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Speaker 8: finding they're buying these reasonable vapes, but they're not being

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Speaker 8: able to buy the pods that go with them, and

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Speaker 8: that's something Imperial saying. They've also said they said they

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Speaker 8: told me that sales for pods is not as big

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Speaker 8: as what they'd expected to see, so that was I

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Speaker 8: think quite striking. And then bat is also saying similar things,

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Speaker 8: and they're pushing on the government for stronger reform and

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Speaker 8: that's probably something we're going to see soon.

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Speaker 1: Well, talk to me about how the UK government has

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Speaker 1: approached this issue and how they've responded to it.

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Speaker 3: Well.

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Speaker 8: The UK Government has said that the disposable vapes ban

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Speaker 8: was part of robust measures to ensure that we tackled

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Speaker 8: youth vaping in the country and to stop the environmental

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Speaker 8: damaging aspects of disposable vapes. Material Focus last year reported

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Speaker 8: that about eight million vapes being disposed of in the

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Speaker 8: wrong way last year, that's about the thirteen every second.

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Speaker 8: Every other day, there's been fires linked to vapes being

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Speaker 8: disposed of incorrectly because of the lithium ion battery. So

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Speaker 8: the government is saying they it was part of robust

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Speaker 8: measures that they took to combat some of these issues.

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Speaker 8: They've put more offices in trading standards to ensure that

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Speaker 8: convenience stores and these new rules are better enforced. But

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Speaker 8: of course everyone is obviously rating on the new Tobacco

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Speaker 8: and Vapes Bill which is going through Parliament at the moment.

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Speaker 1: Well, let's talk about a little bit about that bill

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Speaker 1: as well, currently committee stage at the House of Lords.

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Speaker 1: What could change with consumer behavior in that bill. So

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Speaker 1: the regulation for.

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Speaker 8: This new policy seems to be going to tear speed,

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Speaker 8: if that makes sense. So we had this ban come

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Speaker 8: in in June, but if you went into a vape

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Speaker 8: store or the supermarket, most of the vapes on the

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Speaker 8: shelves looked exactly the same. So what the government is

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Speaker 8: now trying to do with the tobacco and Vapes Bill.

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Speaker 8: It's past of broader legislation that's bringing in new rules

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Speaker 8: on smoking, youth smoking nicotine pouches, but vaping as well.

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Speaker 8: They're also trying to regular the packaging, the design, the taste,

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Speaker 8: the price, all those sorts of things which many people

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Speaker 8: are saying are leading to kids in the country starting

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Speaker 8: to vape. So you've got vape brands in the country

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Speaker 8: now with bright pink colors which are very appealing to children,

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Speaker 8: and that's something the government's trying to combat.

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