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Speaker 1: Good morning.

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Speaker 2: I'm Nathan Hager and I'm Karen Moscow. Here are the

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Speaker 2: stories we're following today.

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Speaker 1: We begin with Apple, still dealing with the fallout from

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Speaker 1: China's plans to expand its iPhone ban. The company's shares

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Speaker 1: have dropped more than six percent over the past two days,

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Speaker 1: wiping out one hundred and ninety billion dollars in value.

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Speaker 1: That came after reports China plans to go beyond banning

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Speaker 1: iPhones for government workers to include employees of state owned companies.

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Speaker 1: All this just days before Apple's latest product launch that's

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Speaker 1: coming up on Tuesday, as the iPhone maker looks to

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Speaker 1: reignite slowing smartphone sales. Alec Young is MAP Signals chief

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Speaker 1: investment strategist. He says there's a broader threat spooking investors.

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Speaker 3: There's no question that part of the negative inferences that

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Speaker 3: are swirling around right now is this idea that Apple

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Speaker 3: gets caught up in a nationalist rivalry between the US

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Speaker 3: and China. If iPhones, for example, were to become stigmatized

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Speaker 3: throughout Chinese society over the next few months to the

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Speaker 3: point that it depressed demand, those types of narratives inevitably

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Speaker 3: are popping into investors' minds right now.

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Speaker 1: Alec Young of mapp Signal says, so far the ban

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Speaker 1: only affects a little more than one percent of iPhone

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Speaker 1: units in China, and checking shares of Apple this morning,

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Speaker 1: they are little changed.

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Speaker 4: Man.

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Speaker 2: That's not the only smartphone news coming out of Asia

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Speaker 2: and Nathan. The US government has begun an official probe

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Speaker 2: into an advanced mate in China ship and Huawei's latest smartphone.

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Speaker 2: The Commerce Department says it's we're going to get more

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Speaker 2: information on a purported AS seven and nanimeter processor discovered

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Speaker 2: in the mid sixty pro The chip is made by

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Speaker 2: China's Semiconductor Manufacturing International Corporation, which, like Huawei, is blacklisted

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Speaker 2: in the US. The Biden administration is trying to limit

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Speaker 2: sales of advanced semiconductors to China, and this could prompt

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Speaker 2: the tightening or expanding of existing restrictions.

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Speaker 1: Well, Karen, US China relations do remain chilly. As President

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Speaker 1: Biden heads to the G twenty summit in India to meet.

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Speaker 5: With world leaders.

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Speaker 1: One of the leaders he won't meet with is Chinese

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Speaker 1: Vice Premier Lie Chiang, who is attending the G twenty

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Speaker 1: in place of China's president, she Jenping, she won't be there,

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Speaker 1: neither will Russian President Vladimir Putin. Instead, the Chinese president

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Speaker 1: is hosting the leaders of two heavily indebted nations next week,

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Speaker 1: the presidents of Zambia and Venezuela.

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Speaker 2: Well Nathan joining President Biden in New Delhi. Treasury Secretary

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Speaker 2: Jennet Yellen, she spoke ahead of the summit, saying she's

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Speaker 2: been surprised by the strength of global growth and Yellen

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Speaker 2: also discussed China's recent economic challenges.

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Speaker 6: So see China's growth as slowing over time. That said,

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Speaker 6: China has quite a bit of policy space to address

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Speaker 6: these challenges, so we're monitoring the situation. I don't see

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Speaker 6: it as having very significant direct impact on the United States.

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Speaker 2: Treasury Secretary Jenet Yellen also pledged further financial assistance for

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Speaker 2: Ukraine and says the US we'll look to you strengthen

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Speaker 2: times with India. Yellen will join President Biden at a

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Speaker 2: meeting with Indian Prime Minister and Narendra Mody today.

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Speaker 1: Well, meanwhile, back at home, Karen, we're monitoring FED speak

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Speaker 1: for clues about the path of interest rates. In Florida yesterday,

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Speaker 1: Atlanta Fed President Rafael Bostik said, rate hikes need time

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Speaker 1: to work their way through the economy.

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Speaker 7: I'm grateful to say is that we've seen inflation come down.

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Speaker 7: I feel like we're in restrictive space now and now

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Speaker 7: we just need to let that restriction play out and

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Speaker 7: let it bring inflation, continue to bring inflation down to

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Speaker 7: get back into the range of our target.

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Speaker 1: In addition to Brafielbostik, we heard exclusively from New York

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Speaker 1: FED President John Williams, who discussed monetary policy with Bloomberg's

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Speaker 1: Michael McKee.

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Speaker 8: You know, things are moving in the right direction. We've

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Speaker 8: got policy in a good place, but we're going to

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Speaker 8: need to continue to be data dependent, watch the developments

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Speaker 8: and assess what we need to do.

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Speaker 1: And Fed officials to get a key piece of data

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Speaker 1: next week with the August Consumer Price Index on Wednesday.

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Speaker 1: Listen to our full conversation with New York Fed President

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Speaker 1: John Williams on the Bloomberg Talks podcasts wherever you get

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Speaker 1: your podcasts.

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Speaker 2: Well as the US deals with unprecedented temperatures this summer, Nathan,

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Speaker 2: we're following the heat crisis in the South. It's a

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Speaker 2: US declared to power emergency in Texas, and Bloomberg's d

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Speaker 2: Maxter has the story.

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Speaker 9: The declaration is an attempt to help keep power on

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Speaker 9: midst the brutal heat wave this week. It will allow

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Speaker 9: the grid operator to wave some air pollution limits so

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Speaker 9: generators can produce more power. The Energy Department says the

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Speaker 9: expected loadstress caused by the current extreme heat event threatens

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Speaker 9: to cause loss of power to homes and local businesses

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Speaker 9: in areas that might be affected by kurtailments, presenting a

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Speaker 9: risk to public health and safety. The declaration is in

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Speaker 9: effect until nine local time tonight. I'm at Baxter Bloomberg.

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Speaker 1: Radio, Okay, and thanks on Wall Street. Goldman Sachs maybe

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Speaker 1: planning to dismiss underperforming workers as soon as next month.

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Speaker 1: That's according to the Financial Times. It says it's part

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Speaker 1: of the bank's annual Staff Evalue EI. The sources say

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Speaker 1: reductions will be at the lower end of Goldman's usual

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Speaker 1: range of one to two five percent workforce cuts.

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Speaker 5: Well.

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Speaker 2: Speaking of Goldman and Nathan, the bank's CEO, David Solomon

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Speaker 2: is responding to recent negative news coverage of his leadership

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Speaker 2: style and management of the firm. In a conversation with CNBC,

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Speaker 2: the Goldman CEO said he does not recognize the caricature

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Speaker 2: that's been painted of him in the press. A handful

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Speaker 2: of Goldman partners have left the firm over the past months,

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Speaker 2: with at least five exiting in one week alone this summer.

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Speaker 2: Solomon called the volume of partner exits absolutely typical, and

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Speaker 2: time now for look at some of the other stories

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Speaker 2: making news around the world. For that, we're joined by

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Speaker 2: Bloomberg's Amy Morris say, good morning.

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Speaker 5: Good morning, Karen.

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Speaker 10: About two out of every three Democratic voters say they'd

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Speaker 10: rather see a different nominee than President Biden. This new

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Speaker 10: CNN poll says sixty seven percent of left leaning voters

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Speaker 10: would like the party to nominate someone else.

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Speaker 5: That's up from fifty four percent.

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Speaker 10: In March, FBI Director Christopher Ray sounded off on a

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Speaker 10: number of issues during an event called Spy Chat at

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Speaker 10: the International Spy Museum in Washington, DC. Ray spoke about

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Speaker 10: the future of the FBI's cyber defense capabilities.

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Speaker 4: If you look at our exposure as a country, something

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Speaker 4: like eighty percent of our critical infrastructures in the hands

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Speaker 4: of the private sector. It's our critical infrastructure the bad

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Speaker 4: guys are.

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Speaker 10: After FBI director Christopher Ray says tech companies should try

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Speaker 10: collaborating more with the federal government on security matters. The

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Speaker 10: dissent is growing louder to Senator Tommy Turberville's blockade of

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Speaker 10: military promotions over a Pentagon policy allowing travel for military

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Speaker 10: members seeking abortions or other reproductive healthcare. Bloomberg's Nancy Lyons

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Speaker 10: has the very latest.

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Speaker 11: Senator Tommy Tubberville is brushing off criticisms over his hold

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Speaker 11: on roughly three hundred military promotions.

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Speaker 5: They're already doing the job.

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Speaker 4: It's just they've got interim on their name.

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Speaker 5: There's no threat to readiness.

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Speaker 11: But retired Major General Old Panaro tells Bloomberg sound on Tubberville,

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Speaker 11: who once coached Auburn football, is playing into the hands

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Speaker 11: of the opponent.

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Speaker 3: If his first string quarterback was ready to play, he

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Speaker 3: would not put his four string quarterback in against Alabama.

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Speaker 2: Well, that's what we're doing right now Visa Beachina, North Korea, and.

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Speaker 11: Iran in Washington, Nancy Lyons Bloomberg Radio.

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Speaker 10: The new head of the CDC says COVID nineteen is

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Speaker 10: here to stay. Doctor Mandy Cohen recommends masking social distancing

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Speaker 10: into other measures and says a new booster will be

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Speaker 10: available as soon as next week. Now, a bill to

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Speaker 10: ban federal mask mandates is coming up short in the Senate.

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Speaker 5: Ohio Republican JD.

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Speaker 10: Vance argues that children can't go through another mask mandate.

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Speaker 12: We know that a generation of school children have suffered

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Speaker 12: significant speech and developmental disabilities because this country panicked instead

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Speaker 12: of using its brain and force toddlers and small children

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Speaker 12: to wear masks.

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Speaker 10: Vance attempted to pass that bill by unanimous consent, but

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Speaker 10: the move was blocked by Massachusetts Democrat Ed Markey. Global

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Speaker 10: News twenty four hours a day, powered by more than

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Speaker 10: twenty seven hundred journalists and analysts in more than one

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Speaker 10: hundred twenty countries.

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Speaker 2: I'm Amy Morris. This is Bloomberg Karen. All right, Amy,

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Speaker 2: thank you. It's time now for the Bloomberg Sports updates.

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Speaker 2: And here's John stash Hour, John Karen.

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Speaker 13: Opening night of the NFL, the Lions visiting the Chiefs,

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Speaker 13: whose fans celebrated last year's Super Bowl victory. Detroit finished

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Speaker 13: last season strong, had a ninety one yard touchdown drive,

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Speaker 13: took the lead in the first quarter.

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Speaker 5: Trailed at the half, the game turned in the third

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Speaker 5: quarter Mahomes out of the gun. He's got it. Wants

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Speaker 5: to throw Mahomes back throws it is equal. Please sick off.

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Speaker 1: TikTok by the Alliance five branch with it left side.

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Speaker 13: He's gone, baby, He's doing the house touchdown.

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Speaker 1: Detroit Lyons deflected the air, Branch ran under it.

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Speaker 5: And he took it all the way back.

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Speaker 13: Brion's radio had the call Bryan Branch are rookie playing

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Speaker 13: his first game. When David Montgomery scored midway through the

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Speaker 13: fourth quarter, Detroit top tenans A City in a upset

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Speaker 13: twenty one to twenty.

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Speaker 5: The Chiefs had won their last eight season openers.

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Speaker 13: Latest NFL player to get a mega contract Cincinnati quarterback

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Speaker 13: Joe Burrow on the eve of Week one. Five years, two,

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Speaker 13: one hundred and seventy five million, so fifty five million

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Speaker 13: a year with two hundred and nineteen million guaranteed. He's

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Speaker 13: an Ohio native and has resurrected the Bengals. Team US

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Speaker 13: opened Coco GoF into the women's singles finals.

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Speaker 5: She blew six match points but pulled.

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Speaker 13: Out a victory over Carolina and mohovera six y four

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Speaker 13: seven to five Coco seventeen and one. This summer on

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Speaker 13: hard courts, and in the finals shell Play Arena Sabalanca.

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Speaker 13: She lost the first set to Madison Keys at love,

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Speaker 13: but then won the second and third sets, both in tiebreakers.

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Speaker 5: John Stansh Edward Bloomberg.

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Speaker 4: Sports from coast to coast, from New York to San Francisco,

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Speaker 4: Boston to Washington, DC, nationwide on SIRISXAM, the Bloomberg Business

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Speaker 4: app in Bloomberg dot com. This is Bloomberg Day Break.

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Speaker 5: Good morning. I'm Nathan Hager.

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Speaker 1: What's good for the economy apparently is bad for the market.

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Speaker 1: Strong economic data spooked investors this week with speculation that

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Speaker 1: rates may need to stay higher for longer. Further softening

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Speaker 1: in the US economy leaves the path of rate hikes uncertain.

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Speaker 1: Between now and the next FED meeting, we'll get more

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Speaker 1: data as well as more Fed speak, and we're getting

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Speaker 1: some of that now.

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Speaker 5: In an exclusive.

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Speaker 1: Conversation between Bloomberg's Michael McKee and New York Fed President

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Speaker 1: John Williams, they spoke at a moderated discussion at the

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Speaker 1: Bloomberg Market Forum. Let's go to that conversation.

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Speaker 8: Here's how I see things now. You'll obviously always focused

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Speaker 8: on our dual mandate maximum employment and price stability. Inflation

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Speaker 8: is far too high. But that said, inflation is moving

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Speaker 8: in the right direction. We're seeing the imbalances in the

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Speaker 8: labor market which were really quite pronounced last year. They've

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Speaker 8: been closing job job open have been coming down, the

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Speaker 8: quit rates coming down, the hiring rate in the markets

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Speaker 8: coming down. So we're seeing movement in the right direction

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Speaker 8: of bringing supplying demand back into balance, seeing inflation come

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Speaker 8: back towards our two percent long run goal.

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Speaker 11: And we've done a lot.

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Speaker 8: I think everyone knows you know here in this room,

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Speaker 8: and we raise raised significantly over the last year and

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Speaker 8: a half or so, and we've gotten it to a

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Speaker 8: restrictive stand. So my answer to the question is, right now,

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Speaker 8: I think we've gotten MANTE policy in a very good

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Speaker 8: place in terms of we have a restrictive stance of policy.

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Speaker 8: It is doing having the desired effects of bringing demand

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Speaker 8: and supply more into balance. We're seeing inflation move in

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Speaker 8: the right direction, but we'll have to watch the going forward.

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Speaker 8: We'll have to keep watching the data carefully analyzing all

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Speaker 8: of that and really asking ourselves the question, is this

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Speaker 8: sufficiently restrictive? Do we need to maybe raise rates again?

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Speaker 8: To make sure that we're keeping that steady progress terms

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Speaker 8: of getting imbalances, you know, shrinking balances in the labor

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Speaker 8: market and bring inflation back down. So right now, I think,

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Speaker 8: you know, things are moving in the right direction. We've

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Speaker 8: got policy in a good place, but we're going to

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Speaker 8: need to continue to be data dependent, watch the developments

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Speaker 8: and assess what we.

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Speaker 4: Need to do.

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Speaker 5: How do you know you're restrictive?

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Speaker 14: What metric do you use?

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Speaker 8: Let's see how long did it take to get to

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Speaker 8: our star? Okay, so the you know, I think there's

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Speaker 8: it's there's no right answer to that question. I think

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Speaker 8: you know. The way I think about it is really

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Speaker 8: in terms of real interest rates as a Fed funds

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Speaker 8: rate or more broadly, you know, uh, you know, treasury

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Speaker 8: yields relative to expected inflation. So you know, depending how

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Speaker 8: you measure it, you look at it, real rates are

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Speaker 8: you know, well above zero, you know, moving you know,

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Speaker 8: somewhere between one and two percent, and that seems to

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Speaker 8: be above typical estimates of the long run neutual real

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Speaker 8: interest rate. And I think the other way you see

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Speaker 8: it is a little bit of in what we're seeing

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Speaker 8: in the economy. Right so we are seeing demand and

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Speaker 8: in the labor market come down according to a lot

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Speaker 8: of different measures. We are seeing other kind of signs

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Speaker 8: that the economy is moving imbalance as an economy coming down.

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Speaker 8: So I think the two things. One is kind of

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Speaker 8: like where's our versus our star? That's one way to

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Speaker 8: think of it. But the other is what are we

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Speaker 8: seeing happening in the economy. Now there's a second test.

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Speaker 8: There's kind of the are we restrictive? And the second

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Speaker 8: is are we are we sufficiently restrictive to really make

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Speaker 8: sure that we're bringing inflation sustainably down to two percent

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Speaker 8: and getting the job done? So, you know, I have

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Speaker 8: to I think it's pretty clear we're restrictive. Still an

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Speaker 8: open question as we go forward, and have we got

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Speaker 8: sufficiently restrictive to.

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Speaker 14: Achieve that we'll get to our star when we get

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Speaker 14: to a Tom called it the ecobabble part of our

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Speaker 14: conversation here. But first, you have raise rates eleven times,

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Speaker 14: you've gone up to five and a half percent top range,

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Speaker 14: but unemployment remains extraordinarily low, and we are seeing signs

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Speaker 14: of the economy accelerating. Now, so do you really think

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Speaker 14: you're sufficiently restrictive?

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Speaker 8: Well, you know, I think, first of all, in the

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Speaker 8: unemployment rate has been relatively steady over the last year

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Speaker 8: or so. It's it's fluctuating between three point four and

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Speaker 8: three point eight percent where it is today, and I

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Speaker 8: think it's a signing that well, clearly we're not moving,

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Speaker 8: you know, significantly to more imbalanced and unemployment even lower.

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Speaker 8: Normally have we seen the clear signs of unemployment moving

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Speaker 8: you know, significantly up. But I do think it's a

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Speaker 8: unique time, right because if you look at the unemployment rate,

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Speaker 8: it seems to kind of get to a minimum value

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Speaker 8: of around three point four percent, kind of get there,

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Speaker 8: but then these other indicators have been shifting. So I

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Speaker 8: think what we've seen in the labor market is demand

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Speaker 8: exceed supply. It's not showing up as much in the

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Speaker 8: unemployment rate continuing to go down, but just showing up

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Speaker 8: in these other things like job vacancy, is quit race,

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Speaker 8: things like that. So to me, the things I'm focused

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Speaker 8: on is really are we seeing the demand and caters

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Speaker 8: supply and becares move together. I would expect the unemployment

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Speaker 8: rate to edge up over the next year somewhat, but again,

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Speaker 8: you know, I see positive signs in the sense that

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Speaker 8: the indicators of demand and supplier moving the right direction.

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Speaker 8: The unemployment rate hasn't moved moved as much.

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