Broadcasting live to New York Bloomberg eleventh, Rio to Washington, d C. Bloomberg to Boston, Bloomberg, Well Under to San Francisco, Bloomberg nine to the Country, Joey's Exam General one nine and around the globe the Bloomberg Radio plus Dappen Bloomberg got Gone. This is taking stock. I'm Kathleen Hayes along with Pim Fox. Janet Yellen, the Fed Chair, wraps up two days of testimony. It is clear that the Fed Chair is no longer certain that rate hike rate hikes
are inevitable this year. Uh And having said that, she also suggests that maybe we'll get lucky in the economy and the labor market will show a little rebound. Pim, We're going to talk to a guy who says he thinks maybe there's a little too much hope in Janet Ellen's outlook. Yes, that's John Herman, director of an interest rate strategy at Mitsubishi e u f J Securities. He says that the hope is not a strategy. I'm gonna find out what he means by that. I remember that
as being a book by Rick pay Salesmanship. We'll find out more right now, let's find out all about news with Charlie Pellett of the Bloomberg News, and I thank you him Fox sant Kikathleen Hayes that Dow is lower SMP NEZZAC advancing the ten ure of five thirty seconds looking at the yield of one point six eight percent. The pound fluctuating amid speculation over whether the UK will
vote to leave the European Union. Oil slipping below forty nine dollars of barrel right now though w T I is at forty nine eleven, it is down one and a half percent, dropping seventy three cents. Brent by comparison, down two point three percent forty four right now on Brent and again w e t I at forty nine twelve. Tobias Lefkovitch, chief US equity strategist at City Group Global Markets, was interviewed this morning on Bloomberg Television. Here's what he
had to say about uncertainty in the market. One of the things that I've been fascinated by is this uh constant reference to uncertainty. Um, they'll we have very high degrees of uncertainty today. We've always had high degrees of insert and date we probably get it a little bit more in terms of the instantaneous technology feeds of that news flow. But I can't remember a time in my
career that there wasn't uncertainty. And you know, if you talk to people who grew up in the sixties and the fifties who were told to hide under their desks in case the Russians attacked UM with a nuclear barrage, there's always uncertainty. And again recapping, we do have a mixed picture for stocks. The SMP up two points now at two thousand ninety one on the SMP five hundred. In next sense, the game of point one percent, the Dow down ten, a drop there of one tenth of
one percent to thirty two on Wall Street. Now, let's take a look at other news from around the world on Bloomberg Radio. Thank you, Charlie from the Bloomberg News Room. I'm Rainey in a cen co. This news update is brought to you by land Rover Manhattan, where New York Goes for luxury, conveniently located at and eleventh Avenue and
online at land Rover Manhattan dot com. Land Rover Manhattan is at your service house Democrats, stage of protests on the House floor over gun control, forcing the House into recess. About thirty Democrats, led by George's John Lewis, are demanding a vote on measures to expand background checks and block gun purchases by some suspected terrorists. They want House Speaker Paul Ryan to keep the House in session through its planned weeklong recess next week to debate and vote on
gun legislation. Which presidential candidate would be better for your portfolio? That is the basis of a new national poll Bloomberg S Michael Barr has more when it comes to investor cabinets, and new Bloomberg poll shows more voters with money in the stock market say Donald Trump would be better as president for their portfolios than Hillary Clinton. Bloomberg Morning Consult National polls shows voters with money in the market picked
Trump over Clinton tote. The poll also shows nearly eight out of ten Republicans say Trump would be better for their holdings, while about six out of ten Democrats say Clinton would. As for independent voters, the polls shows they are twice as likely to big Trump as better for the report folios. Michael Barr Bloomberg Radio, New York's Attorney General says that Jimmy John Sandwich Chain has agreed to stop including non compete agreements in hiring packets used for
low wage workers. Eric Schneiderman says such agreements quote bully workers into staying under threat of being sued, and companies should stop using them for minimum wage employees. Global News twenty four hours a day, powered by more than journalists and analysts in more than one under twenty countries. From the Bloomberg News Room. I'm Rainy in Essensio. This is Bloomberg, Charlie, and we thank you, and again recapping S and P five index higher a little change right now, up one
point at two thousand ninety eight. That is a gain of less than point one percent. I'm Charlie Pollock, and that's a Bloomberg business flash. Is taking stock The FED in Focus on Bloomberg Radio, The Fed in Focus. Our next guest says that Chair Janet Yellen's current outlook is entirely based upon hope, and he goes on to add that it is never ever a strategy. Here to tell us more about this is John Herman. He's the director of rate Strategy at Mitsubishi u f J Securities. John
always a pleasure. So go ahead, explain what you mean by this. Gave him So you and you and Kathleen and I go way way back a couple of decades at this point. So let's just you know, we have to really fess up on a couple of things. One um, you know, she all the issues, just just you know, a few weeks ago, four weeks ago, she was telling everyone, get prepared for rate high, get prepared for rate high.
But basically, the john market has lost a lot of momentum very rapidly over the last five or six months, and that totally caught them off guard. And up until this point, she's been saying things that, you know, there's a couple of head winds that the economy faces, and she expects them to fade over time and for rates to go back up and you know, growth to go back up and flash. And now she's basically thing, you know, maybe those head winds are really only going to slowly
fade over time, and we're really uncertain over it. So she's had a major about faith and she's listed and now an enormous list of headwinds. It used to be just a couple of headwinds. It used to be just oh there's some weak productivity goes, household formation rates amongst millennials, not where we wanted to be. We've got some overseas economic and financial developments were concerned about. Now we've got
a whole laundry list of stuff. And she said today at the beginning with the House testiment, she said, you know, I don't want to send a message of pessimism on economy. That's the exact quote from her. I don't want to say so. She doesn't want to delivers. But the thing is she has to. She has to tell people what is really going on so that maybe policy makers can do something about it. And that's my issue. But go ahead, okay, which I think we gotta put a couple of things
on the table. Yeah. Number one, Uh, there is no conclusive evidence that we're heading into her session. You see recession signs, people are looking for them, because once the economy peaks and you know, yields bottom and job has claims bottom, the next move is frequently towards recession. There's
no definitive sign of that right now. And there are even people people number one and number two, people uh would criticize her like crazy you want the FED chair to come out and go, yeah, I think maybe recession. Oh probably not. There'd be one headline, I think we might have a recession and you see stocks creater O. Let's go through, Kathany, and let's go through it. So if you're right for this year, we don't see a
recession this year. She doesn't see it. We don't see it, and most other people in the business don't see it. But when you look out past this year, uh, you know, and you look in twenty you know, towards the twenty end of the labor fourth has a very strong bias to contract after the year eighteen. It's it's even assuming a hundred percent participation rate amongst millennials, were biased to contract every month, every quarter every year from twenty end through.
So this is is you know, the likelihood of a of a major slowdown at that point is going to be you know, very high. So that's as as a very basic but the other things, you know, even in the nearer turn, there's there's some things to concern people, which is that you know, business profits and basically started to roll over for the last three quarters. So that is a leading indicator of slowing activity, and and more cautious business investment, more cautious hiring and so on, and
potentially some layoffs. And as this stuff starts to work, potentially work at Swains and Country, then you would see the spill over to consumer spending and the like and risk taking and so on. So you know, we're not out of the clear by any stretching imagination. She's now seems to be more open and receptive to these risks, and now she's guiding us that she's gonna really really
raising rates very gradually, very slowly. And the next rate hike isn't really even on the table just right now because you can't she can't even convincingly argue right now when the next hike is coming. So that's so she's done a big about face. But there's a ton, uh, you know, a ton of issues here, and and what's amazing to me is that, you know, she has to really be pushed. You know, the the Senate Q and A was fairly collegial and polite and a lot of
niceties and so on. But the House, both sides were you know, you know, much more harsh in their criticism of the policy and the questioning and so on and so there was she was more disclosing of what some of her concerns really are. And and suddenly there's like this long list of things everything from again like the millennials in their situation, the formation rates, their their indebtedness, etcetera.
These big strains in the income and wealth gaps in the US, especially between you know, educated whites versus you know, less educated uh, you know, minorities. I mean, there is huge things. And and then the questions about what that does to the local communities where people reside and so on. I mean, these are very big issues. The things about uh, you know, productivity being weak and protest it has been weak for seven years now, business capex has been weak
for eight years now. I mean, it's a whole bunching, the hollowing out the middle class. She said, you know, this has been going on, you know for years and decades and decades, and you know, and now she's more
disclosing on that. And and and you know, the regulation, the excessive regulation that's being burdened on community banks and on businesses more generally, the high corporate tax rates more generally, all these things are just starting to you know, to come out in her testimony, but she has to really be pushed by, you know, a fairly contentious group of representatives to get it out, all right, John German, thank
you so very much. Director of Interest Rate Strategy Mitsubishi U s J Securities UH saying Jenna Ellen is not being negative enough on the economy. He sees the session signs and at least he says she has backed off on her course of interest rates. Kathleen Hayes, pim Fox Tavy stuff we've been radio. The FED in Focus is brought to you by Willoughby since eighteen ninety eight, New York City's boutique camera store for precision crafted, hazel blot and like a cameras, plus a full selection of go
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