tv Bloomberg Best Bloomberg July 15, 2017 2:00am-3:00am EDT
>> coming up on bloomberg best, the stories that shaped the week in business around the world. and e-mail trail raises questions for the white house. janet yellen takes questions on capitol hill. big banks with earnings reports. >> it is almost an embarrassment listening to the stupid --we have to deal with in this country. >> central bank officials share exclusive insights into monetary policy. >> at that low level you would have seen more inflation pressures. we are not. >> we will implement the accurate policy. >> big names in finance tell us
where they see markets moving. >> we want to see interest rates continue to rise. >> we remain comfortable. with our holdings in china bank. >> the valuation between the u.s. and europe is actually growing. >> i think we are in much more of a political crisis than americans feel at the moment. >> the brightest minds in business drive the conversation in sun valley. >> we should get over the notion of the politics of repeal, and onto the notion of fixing the aca. >> the industry, there is a lot of energy around making net neutrality work. >> it is all straight ahead on bloomberg best. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org >> hello and welcome. this is bloomberg best. your weekly review of the most important business news, analysis, and interviews. from bloomberg television around the world. let's start with a look at the top headlines. on monday, economic data from
china. >> supplies gains holding up in june. signaling that the demand in the economy there could remain robust in the face of regulatory curbs. steady is the message from here. >> it is a positive headline. factory profits are heading in the right direction. as long as ppi stays positive, that is not a bad thing. but at the same time, we are a long way from the peak in ebruary when we were 7.8%. we are not seeing any real correlation with the p.p.i. story and consumer prices remain tepid. may be a one-off restocking of inventories by companies, which is what skewed that number. t is probably headed downwards or the rest of the year.
>> russia wanted to aid the rump campaign. it is official. donald trump jr. was told in an email that he would receive damaging information about hillary clinton at a meeting with the kremlin connected awyer from russia. the e-mail says the russian government was trying to help his father's election bid. is it obvious in the crime has been committed here? >> not yet. i am sure everybody, including us in the news bureau are trying to figure out what the legal definition of collusion s. there are election law issues. you're not allowed to take anything of value from a foreign government. regardless, it is not good for mr. trump's son. >> they wanted to get this information out as quickly as possible, all in one swipe so to speak. they feel they did not do
anything legally wrong. the attorney statement suggests as much. this is bad. politics really could cloud any progress on policy issues republicans want to move forward ahead on like health care. >> mitch mcconnell has announced that the senate will delay the start of the august recess by two weeks. he said after the senate finishes it's worth -- work on health care they can turn to the national defense authorization act, and a series of nominations from president trump that mcconnell said democrats have been obstructing. it is a significant response to the pressure he was feeling from members of his own party, saying we have not gotten nearly enough done to go home to our constituents. >> janet yellen before congress, saying the u.s. economy should continue to expand over the next two years.
she stressed the fed continues to monitor inflation closely. >> we are very focused on trying to achieve our 2% inflation targets. it is not a subject of discussion. >> you have a lot of members eager to see the multitrillion dollar balance sheet, be wound down, to be investing in reasury bonds. from that standpoint, a lot of good news. >> he said it is an evolution, not a revolution. the market didn't care. they seem to be incredibly optimistic here. >> i think so. overall there is a tendency, we are more comfortable with higher rates than we have been. here is a bit of a fall-back there. we are more comfortable with higher rates than we have ever
been. it is more of an evolution. >> the senate republicans have released an updated draft of the health care bill. for the most part we knew what was going to be in here. what are the compromise that were not on the original plan? >> $70 billion to stabilize the insurance markets. or the obama care exchange. the is in addition to the $112 billion that was already in the original version. it would keep in place the taxes from the affordable care act. there is increased opioid ddiction spending. in terms of more broadly speaking, we were talking whether the majority leader would try to peel off support from democrats. take a look at this bill can no democrats are going to support this. flex rand paul has, against the bill, and susan: -- susan collins will not vote for it. do you expect a vote next eek? >> that is an excellent
question. if we have lost two, we can't lose any others. we have to have 50. we will wait and see. >> jpmorgan and wells fargo kicking off second quarter for banks. investors are getting a sense . how wall street fared each bank did better in some units than the bank had forecast, which was an nteresting turn. > the big thing people focus on is trading. we had the bank significantly lower expectations. nd, jpmorgan coming in in line with those lowered expectations. equities trading worse, but fixed income much more
important. >> jamie dimon has some things on his mind, doesn't he? >> we have become one of the most bureaucratic, litigious society's on the planet. t is almost an embarrassment being an american citizen traveling around the world and listening to the stupid [beep] we have to deal with in this country. we have to get our act together. >> jamie dimon is consistent calling for a tax reform, and how he thinks that can benefit the economy. we have been hearing from this consistently. but he is perhaps exceeding expectations with his enthusiasm on the subject and his sort of his impassioned plea for actions to be done. >> still to come, as we review the week, the leader of france essential bank offers insight into the e.c.b.'s policy path. into the ecb. robert kaplan shares his views on what is ahead for the fed. and u.s. health care reform and other hot topics. and more of the weeks top business headlines.
>> this is bloomberg best. let's continue with news from washington dc. president trump made plans to fill a key regulatory post at the federal reserve. >> donald trump is going to be nominating randall quarrels, who served in the george w. bush administration. he will be nominated 0 to be the federal reserve's chief banking regulator. quarrels would play a pivotal
role carrying out president trump's pledge to ease regulatory restraints put on banks after the ago trey banks off the 2008 financial crisis. this is a big move to the street, this supervisory position. what will it do for banks? >> it should mean less regulation for banks, and more profit. how much can quarrels get done on his own? a lot of dodd-frank is written into the legislation. what changes he makes has to get through the fed board of governors and the comptroller of the currency and the fdic head to try to standardize regulations across the industry. it would do things like have the volcker rule lined up. he doesn't want to see banks broken up, doesn't like the resolution authority they have put in place to wind down banks if they are failing. he thinks capital standards are too high. he says that causes banks to raise separates to increase their profits.
he does think there are some good things about dodd-frank. he is not going to take a meat axe to everything. but he doesn't want to make changes. another possible one islighten up on some of the stress test regulations. >> abu dhabi's company says they are considering selling shares and seeking nternational partners. international partners as the producer of the most crude and the united arab emirates tries to expand operations. >> this is hot on the heels of the planned flotation. it does not intend to sell a slice of the entire company at the holding level. it is going to sell minority stakes in its services business. this is still a big deal for a company that was basically synonymous with the abu dhabi government and with the abu dhabi ruling elite. it comes as many gulf economies are trying to reconsider their strategies in face of lower oil
prices. saudi arabia isn't the only one. we have seen oman. there is speculation of kuwaiti energy companies as well. > abercrombie & fitch, dashing >> abercrombie & fitch, dashing -- terp naturing talks with potential acquirers, dashing hopes of potential investors. it doesn't have many stores left. what does it have? >> it is a brand that is tarnished at this point. part of the reason, if you take a look at the revenue and the net income of this company, it is a pretty stark downturn. estimates are even worse on both ends. you come into this and you say all right, abercrombie need new strategy. that was part of the idea. let's try to talk to american eagle. and maybe take this company private. abercrombie went through the process and found from the
buyer perspective there wasn't anyone there. it was a public company, so they need to offer a certain price. >> chies authorities betances to stop the use of vpns. that is a plan to get through the loopholes. in is the so-called freight fire wall hole of china. war they trying to do? >> they are a form of private technology people, businesses, use to tunnel through the great fire wall and access sites that o.t.a.'s china. on the new york times, to google, facebook, instagram. in wide range of sites unblocked. the government has taken an ad hoc approach to targeting individual vpns for shutdown. o.t.a.'s china. the new move would take a more comprehensive and aggressive approach by asking china's major state owned telecoms to block traffic that appears to
be vpns. virtually everyone in china gets on to the internet through one of these telecoms. >> saudi arabia says the anti-terror pact signed between qatar and the u.s. is not enough to end doha's diplomatic isolation. the agreement was kept secret until it was leaked to the media on tuesday. the hand written document barred qatar and other gulf nations from supporting opposition in terror groups. accusations that it is violating the agreement are false. >> they are going to go to kuwait, get some ideas, they signed a deal, and this memorandum of understanding around terrorism financing would possibly unlock some doors when they go and sit down with the saudi led block later in the day. as we go into thursday now,
the responses we got speak to a picture that is insufficient from the qatari side. understanding more needs to be done. and throwing the prospect of an immediate resolution for the moment into cold water. >> getting some jobs data out of the u.k.. consumers seeing their spending power eroded by feeble wage increases and the rising cost of living. despite unemployment falling to a 40 tier low. well behind the rate of inflation last month. inflation up by 2.9% year on year. you have to say these figures underscore the dilemma that split the bank of england over whether to raise interest rates. the bank of england governor is not ready to call for higher rates, though he sees the pressures to do so. he says there is reason to see the committee moving in the
direction, but there are still a lot of imponderables, he described, making the decision a little bit tricky at the moment. >> the bank of england should be forward-looking. the rise in inflation is squeezing real wages. as long as wage inflation doesn't pick up the bank of england will be hitting their arget going forward. >> i think the bank of england, recognizing domestic inflation remaining high and the global inflation story is not within its control. it is your turn, it is fiscal policy, it is the direction of travel that now needs to be the eal focus. stock climbed in the wake of another successful day. amazon isn't revealing exact numbers, but it generated about $1 billion in revenue.
>> the biggest day in sales they have ever had. hey did a billion dollars in revenue in $2.5 billion gross merchandise volume. which was a pretty fast growth for them, for the small businesses selling on prime day. they added the most prime members in a single day in the history of the company. prime is the biggest driver of the retail businesses growth ver the long-term. >> the brazilian president had the support to defeat congressional motions that would put him on trial for alleged corruption. the case comes as the former president sentenced to nine and a half years for money laundering. let teal with lula first of all. the market reacted positively to this news. is that because they don't expect him to run in 2018? >> that is exactly it. that is a very good point.
we are talking about someone with a very, very strong political influence in brazil. any indication he may not be able to run for president next year is a good indication for he market. he is known as someone, all of the reforms are being implemented now in brazil including the pension system reform just voted this week. the markets have given a clear message here. any bad news for lula is good ews for investors. >> theresa may's government unveiled a landmark law that will remove written from the european union, the repeal bill is aimed at transferring eu laws onto the british statute ook when the brexit takes place in march of -- brexit takes place. they would have two years through a fast-track process.
>> is this something that could turn into a vote of confidence on brexit? >> absolutely. it could turn into a vote of confidence on the government. party vice and labor opposition want brexit, but they want different forms of brexit. if you are jeremy corbin, the labor leader, you think this is a way you can get into government, if you sent the government by drawing rebels over with the amendments you are planning to add to the bill. it is a litmus test to push legislation through. ♪
how the ecb will change its stimulus settings. in member of the blacks governing council discussed with bloomberg television. here is the bank of france governor speaking with us. >> our target is midterm inflation. self-sustained, of around 2%, close to 2%. we will implement the recommended policy. what we have to do, what we started to do is to adapt the intensity to the progress owards our inflation target, owards recovery in europe. hat we did last march, when we
produce qe from 80 to 60, we announced one month ago that clearly we wouldn't reduce interest rates. n the future, this will be our decision, we will go one adapting monetary policy. >> do you think the discussion hould move quicker though? do you think the markets are expecting them to be more quickly? >> i think we have been extremely clear about the predictability of our monetary strategy. as far as last december, till december 17, we will see what appens after that. no impatience please. i don't say it especially for the financial markets. e are independent. meaning being independent from
political pressures, and from uch market impatience. >> are you also waiting for the political risk? you mentioned that protectionist policies are a threat to global growth. are you waiting to see how the political risks involved for the rest of this year? >> this is an important characteristic. if you remember, what was said one year ago after brexit, 2017 was supposed to be a very dangerous year for the eurozone, with much turmoil expected, a weak rivera, yeats. we have seen exactly the contrary. our recovery is solid because disdomestic driven. there are political risks, but there are more outside the
eurozone. so brexit reorganization is a real challenge. there are concerns about the new american policies. this is a very important stake of the g-20 summit happening in hamburg is to go on with policy with sbeble rules -- international rules for regulation. these are the best solution for global growth and these are the best solution for inequalities. >> coming up, we will get a read on the fode. an exclusive conversation with the dallas federal reserve captain. energy policy makes francine energy advocate see red. investors around the globe lend perspective on the markets. a heavy hitter in m&a says he sees no signs that credit is contracting.
>> talks in switzerland on reuniting the country did not produce an outcome, but will offer the beginning of the process. when you think about moving the economy forward, have you built-in expectation we would see reunification? >> it is regrettable. it was a major effort. it failed to deliver results. it takes two to tango. we still have to see tangible steps which will match the words. >> that was the finance
minister of cyprus speaking with bloomberg's guy johnson. we visit more of the week's top interviews. we start with this. billionaire investor and clean energy advocate tom steyer has criticized the trump administration's decision to pull out of the paris climate accord, leading to speculation he might be prepared to run for olitical office. >> the polling says americans of every stripe across the country, including republicans, know that we have to deal with climate change, are willing to deal with it, and are up for it. but the second thing you should know is this. the studies that we have done together with hank paulson, a republican, and mike bloomberg, an independent, have shown that if we moved to clean energy, our economy will grow faster, costs will be lower, and americans will be better aid. so the whole
republican lie that moving to clean energy is bad for our conomy is just that. they have no justification for it. it doesn't happen to be true. >> you are clearly frustrated with this administration. >> you think? >> a little bit. everything i have read says you have a choice, continue to be an environmental activist, but clearly you feel passionately not just about the environment, something far bigger about washington and what is going on there, is a time to run for governor of california? >> let me say this, i think we are in more of a political crisis than americans feel, and we don't feel it because the economy is pretty good, but in the political sphere, we are seeing true crisis. we need to be at the grassroots. we are trying hard to change the way americans see ssues. we feel as if between going
door to door, enabling americans to learn the facts and talk to each other, that is how we can reframe the issue. >> what does it to you about where we are in the credit cycle? >> everybody would say we are in the later innings, and yet, when you look at our backlogs and the levels of activity, it does not show it subsiding anytime soon. >> really? >> it really doesn't? >> you do not see a turn in the credit cycle? >> it doesn't feel like it. >> how is this possible? >> i say that every day. you have to remember that we had a severe correction with 2009, and if you look back through history, it takes a longer time to recover through that. it is something we think about lot all the time,
absolutely. it feels like it is getting very late. having said that, if you look at data and client behavior, it does not. >> is something will precipitate a credit contraction, what will it be? >> most likely a geopolitical shock of some kind. that feels the most likely. >> when that comes, would you expect to see it in the terms to private commitments or public bond spreads? >> public bond spreads. contraction, what will it be? >> most likely a geopolitical the public markets react very quickly. the private markets react in a more measured fashion historically. >> treasury yields just backed up by 25 basis points in 10 ays. would you look at that and say it is a healthy reprising, or does it represent something
else? >> i'm not sure which of those two answers, options i would picket this point. again, our view speaking from an insurance company investing perspective is we want to see interest rates rise. our in-house forecast has been 2.75% on the 10 year by the end of the year. i will admit, until a few weeks o i was starting to doubt if we could get there. but the last few weeks, maybe we can get there. i look at a couple of things perhaps driving it. there are a number of factors cited by experts, but two things stand out. there was a lot of central-bank narrative around that time about rising rates, the prospect of rising rates, and removing accommodation from the markets. that got the market going. at the same time, we see reasonably strong growth statistics, particularly in urope.
i mention europe. you were talking about u.s. rates, but that is important because for the last 5-6 years, we have an talking about global capital flows, and we see rates increasing in europe, we might capital flows starting to move a little. >> we are cautiously optimistic in terms of the economic growth outlook globally. we are looking for decent growth in the u.s., europe, and china, but what makes us more cautious is valuations, the likelihood that global liquidity may tighten, and the inevitable political risks. >> one of your areas of investing has been nonbanking financial services. how will you go on with that? and does it mean you are going to reduce your exposure to chinese banks? >> we remain comfortable with our holdings, and china more generally, first, china has the
the room both in terms of time and policy space to bring about the rebalancing of its economy over time. so that we think will allow a move to a slightly slower but safer growth in the medium-term. in terms of allocation within china, we remain comfortable with our bank holdings, but changed the focus towards some of the more innovative areas in china. when you look at the shift in consumption, you can see a shift towards some of the services area, and that offers pportunities for us. >> how is starting a new position in europe today different than 2016? >> i think the difference is that there is more stability in terms of the growth profile of those companies.
a few years ago, growth was anemic in those countries. today, we are seeing inflation nd growth pick up, and the evaluation disconnect between europe and the u.s. growing. so we see that as opportunity and continue to find europe a strong alternative. >> is it easy to find unloved companies in the early stages of flirtation like europe? or when we are nearing the peak like in the u.s.? the key with europe and to some degree the u.s. is small-cap companies which we follow our under followed and underresearched, so that creates a great opportunity. in today's market, everything is being traded on omentum, algorithms, and money flows. you are getting the undervalued stocks pushed ever lower, momentum stocks pushed ever higher, so we see opportunity
in the values, but there is a strategic initiative that needs to take place to get value out of those companies, so it is difficult to do. it takes governance and management changes, longer time frames. t is not a trade per se. you have to bring a specific skill set to the situation. there is a lot of equity value you can acquire. >> on the heels of janet yellen's testimony to the house financial services committee, dallas federal reserve president robert kaplan spoke with tom keene in another exclusive onversation. >> at 4.4% unemployment and relatively low labor slack, and look at u6, and that is still not far away from the re-recession levels.
it is 8.6%. at that low level of unemployment, you would historically see inflation pressures. we are not. arch was weak, april and may stronger, and i believe strongly this some of this is .rance tore -- trance torii there are some one-time factors in the march numbers but some is not transitory. technology enabled disruption, workers replaced by technology, shoppers can use technology and have pricing power, businesses have far less pricing power than at any time in my lifetime. because of that phenomenon as well as to some extent globalization and that goods and services are being competed or globally, i think we need to accept that some of this muted inflation is the fact we are in a different economy den 5-10 years ago. >> that's brilliant. michael dell, you say he will
see wage growth. when will he see it? >> i think, i have to tell you in my conversation with business leaders throughout the 11th district and the country and in our surveys, we are seeing wage pressure for skilled workers, but now seeing wage pressure for unskilled workers. ompanies talk about churn, unskilled workers are leaving for higher wages and realize they will have to pay more to keep those workers, so with a lag, you will start to see more wage pressure i believe in the months ahead. ♪
>> you are watching "bloomberg best." titans of media and tech gathered for the conference of allen and company to lay the groundwork for megadeals. this year, politics and policy were among the main topics of discussion. david gura caught up with a few of the big-name attendees. >> here we are with the aca that could fall apart. our view is we have got to fix it. there are a host of changes, some recommended already i the other side of the aisle, i partisan bills introduced. i think those are important and we should consider. we should get over the notion of the politics of repeal and fix the aca and get to the other agenda items more mportant for the done down
this bill. >> how engaged with this process you want to be? the white house is eager to fly that. what is the quality of the conversation between you, the administration, congress about what needs to change? >> we are very engaged and have proposals on the table to make it better. we do need a re-insurance mechanism as we build a bigger market. we need to continue medicaid expansion. we should expect in medicaid expansion that by 2024 that we ought to see costs go down. this happened with medicare advantage. we were at 114 prlings of edicare fee for service in 2008, and we are at $100 p.s.a. because we agreed if we are investing in this population, the costs should come down. the way we are talking about it is politically oriented. instead, if 2024, if we have not invested properly and costs
don't go down, we have made a mistake, so we have to hold everybody accountable including insurance agencies and private industry to say what are we going to do to make all square own. >> you have pulled out of some exchanges. what would it take to get you back in? is that a positive step included in that line of legislation? >> i think this re-insurance model, costs reductions, flattening the curve, very important so they don't drop off precipitously, which they o. if we could get that under way we can stabilize what we have, we are ready to enter when we have a stable market that is predictable. >> do you see this same problems with the health care system that the president does? he talks about it being in crisis, or obama care failing. is that rhetoric measured? does it reflect the way health care looks to you from where you sit as the head of an
insurer? >> we have been very successful. we just added four new states and expand those already. we went from 500,000 to one million and will increase that in 2018, so a very successful program. >> what is it about your approach that makes it a success for your company? how are you doing things differently than the other major insurers? >> the right net work. the network is structured to deal with them. the pricing is right. 90% is subsidize, so they can afford it. they are learning how to use insurance, and it is turning out well. those who move off medicaid are able to move into the exchange and continue with the same network. it has been very uccessful. >> let's talk about the policy deficits. if you were to list the top 2-3
things you think should change, what would they be? >> we are dealing with the most vulnerable population in the country. i agree with -- some are very dependent on this. what we have been recommending is to take the expansion down to 100% of the federal poverty level, but put in place the change with subsidies to 350%. i think there is some chance they will move in that direction. direction. >> here we have the senate debating now the republican plan to repeal and replace the aca. what is the role you see yourself playing out here speaking out and how optimistic are you that it will make it through the senate? >> i am optimistic, but not blind. i realize the political pressure to switch and support a terrible idea, to roll back coverage on 23 million people
primarily to provide a tax cut to the richest 1.2% of americans, most of whom don't want or need a tax cut. they are not asking for it. it is a political promise and political transaction that will leave, a harvard study said several hundred thousand people would die, a lot of downside. i have been working with john kasich and getting some republicans like governor sandoval and governor ducey to work with democratic governors, you know it has to be mproved. >> that me ask you about cybersecurity watch last month. i have to wait into these waters. >> we were one of the victims, the collateral damage. >> what happened?
will you take steps to prevent it from happening again? >> it was a piece of software, tax filing software in the ukraine, we have a number of subsidiaries in the ukraine, and it infiltrated into our system. could we have stopped it? we are advised no. there were lots of major companies, partners, ibm, microsoft, and many others -- could we have stopped it? o. other companies, mondolez, maersk it has caused a lot of issues for us, but we are sorting through it. probably affected 50% to 60% of the company. we are two thirds of the way there to having caught our arms around all the problems, but it was unpleasant. could we have stopped it? it is difficult to be 100% certain.
you can't be 100% certain. this area is becoming more sophisticated, the hackers becoming more sophisticated, but there are simple things you an and do, which we have done, but other things will have to do in the future. we will have to invest ore. >> there is focus on net neutrality, in particular regulatory change in washington. what does that landscape look like to you from your vantage point now? >> at a macro level from the industry, there is energy around making net neutrality work. hen you zoom into verizon, will johnson put out a clear statement that said, look, verizon supports net neutrality. congress should pass laws around it and cement it.
there is a day of action organized, and all of those hings are really positive. the u.s. government, companies, and consumers have a chance to cement the net neutrality situation of people like, and it will go from something that was crafted quickly years ago into something that will hopefully give the country and our industry a big advantage if t is done correctly. i feel good about our stance on it, and all of our brands have their own stances, which i think everyone is leaning towards net neutrality, which is good news, so it is now up to the government and congress to make sure it gets cemented. ♪
>> the bloomberg has a model. these are the inputs into the taylor rule model you have to fill in. how do you know which is the right one? these are different taylor rule models. you can see the blue line, how the interest rate would go up if you use that model. if you use the aggressive model, he goes up even more. >> there are 30,000 functions on the bloomberg, and we always enjoyed showing you our favorites here it may be they will become your favorites. here is another function you will find useful. quic would take you to quick takes for news and insight into timely topics. here is a quick take from this week. >> china's president has a dream, or a pet project. he wants to revive china's ancient silk road along a 2000-year-old route. via a network of railways,
ports, appliance and highways. the project is supposed to deepen economic ties across asia, but critics see it as a way for china to spread influence west. so here's the situation. the original silk road began as a trade route from central china to europe. silk, spices, and porcelain were transported to the est. today, president xi jinping wants to use steel from over producing factories, to improve infrastructure along the route. typical development of ports or highways, to help bankroll the dream, also known as the one belt, one road initiative, china created the $40 billion silk road fund. xi said 30 countries have signed agreements and 20 more were cooperating on rail and nuclear power. the partner nations are
weighing economic benefits against increasing demand. a project in thailand fell through because according to thailand, there were strings attached, mainly china demanding property rights. here's the argument. china says the silk road initiative is a way to boost zrillization in the areas between east and west. economists agree it has the potential to stimulate asian and global economic growth, but there are risks, like funds not going where they are supposed to and developments turning into white elephants. there is concern about china's increasingly assertive military, particularly in asia's waters. >> that was just one of the many quick takes you can find on the bloomberg. you can find them at bloomberg.com along with the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week. thank you for watching.
♪ jonathan: from new york city for our viewers worldwide, i'm jonathan ferro for 30 minutes dedicated to fixed income. this is "bloomberg real yield." ♪ jonathan: coming up, the u.s. economy showing signs of losing more momentum. retail sales fade and inflation rolls over. -- fed chair janet yellen the fed says it is transitory, janet yellen says it is premature, with the trend falling short. loading up on risky assets. dominating the recent junk-bond issues. we begin with a big issue, inflation data injects some doubt