And potentially we have a deal. What about the irish border . At one point it was that a twomonth high, 5 10 of a percent. And we are talking about 58 basis points, modestly steeper by a basis points as you had supplied coming from the front end earlier this week. Bitcoin, 10,000. Jonathan about the happen again. Alix 11,000 call . David it just keeps going. Extraordinary. We want to get some news outside of the business world. First word news. Emma good morning. Breaking news, matt lauer we understand has been fired, according to the new york times. More on that story as it crosses. On capitol hill, republican plans to push a tax bill through by the end of the year picking up steam. There was a closeddoor session, called somewhat of a lovefest. The Budget Committee looking to send the tax bill for a vote as early as tomorrow. And north korea warns that the latest missile can deliver a Nuclear Warhead anywhere on the u. S. Mainland. The regime conducted its first missile test in two months. President trump responded, we will take care of the situation. They are meeting today on the matter. And the u. K. And European Union have agreed on an outline deal for what britain will pay when it leaves the bloc. The irish border is the last obstacle. The Financial Times says they have accepted liabilities of 21 billion and aims to pay half of it and spread it out over many years. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. David thank you. President trumps nominated chair of the Federal Reserve has d a confirmation hearing yesterday and it satellite janet yellen was speaking. He talks about gradually reducing the Balance Sheet, about normalizing Interest Rates, and not raising rates at the next meeting in december. We will be shaking the Balance Sheet by allowing securities, as they mature, to roloff passively. And that should take about 34 years before we reach our new sort of stable level of the Balance Sheet. Now the economy is strong, unemployment is low, and it even appears to be picking up, so it is time for us to be normalizing Interest Rates and the size of the Balance Sheet, as well. I will say, senator, i think the case for raising Interest Rates at the next meeting is coming together. David to tell us what we learned yesterday, we welcome our International Economics correspondent mike mckee. What did we learn . Mike we learned that policy right now is on a set course. The fed has already said just a they will raise rates in december and Jerome Powell is fine with that. He is fine with looking at policy the same way she did going into 2018, but what happens if something changes, the economywhat if alters the trajectory perhaps the tax bill, that will be the question. The focus today will be on the economy and the outlook. And what Monetary Policy program she is leaving for him. David as journalists, we are always looking for something surprising. But we were disappointed. We did learn two things. He was very poised in professional and would answer the questions. And number two, he will be the next chair. I interviewed sherrod brown, the Ranking Member yesterday, and he had nothing but to say. The only question was, will donald trump leave him alone . Mike no question he will be the next chair. He is very practiced at addressing congress, but in a very different way from janet yellen. The most interesting thing, which might carry over today and make news, was he avoided as much as possible any comments on the tax bill, except when asked by one senator. If you added 2. 2 trillion to the national debt, what would it do to the economy . That is what they have been talking about. He said it would be bad because it would push Interest Rates and crowd out private investment. This is a guy that wants Senate Support for his job, but janet yellen has nothing to lose and in the past she has commented about the debt. If she gets added today, she could have harsh things to say. David look for janet yellen today, but his testimony yesterday on fiscal policy, he could have a path, we have not seen it yet, but we say we are always concerned about the fiscal situation. He is laying the groundwork. Mike has the fed model this . I mean, they of the most powerful economic models in the United States and you have to figure that they have a pretty good idea of what they think would happen. David thank you so much. Jonathan to summarize, dovish on the job market and hawkish on december. They are looking at continuity with the fed and stirring a rally in financials with the biggest banks in their biggest moves in months. We have a Jpmorgan Investment manager at the desk. And we have the chief economist. Vince, what did we learn yesterday . That there will be no change to the fed . Vince he will be janet yellen 2. 0, the same policy that she delivered in 2017, not the janet 2015 andat delayed in 2016 and put out tightening as long as possible. So i think that Jerome Powell will deliver the dots. That is more hawkish. Jonathan i think the takeaway for a lot of people this morning tell us about the takeaway for a lot of people this morning . Not an obvious catalyst. You have the chair discussion, which was swung toward the continuity candidate. You have the Balance Sheet underway and the paint drying in the background. You have a rate hike for december that is slowly priced. Rhetoric back into the direction of concern on inflation. What is the catalyst that gets you higher bond yields as a result of perception of tighter policy . Im not sure what it is. Alix we have spoken on how he was dovish on unemployment. This is what he focused on, the precipitous a patient the participation of prime age male. You could see an economy that is going to go below 4 unemployment. Vincent, that does not sound to me like somebody who wants to stay with a three rate hike scenario next year. The Federal Reserve is going to do its job, maximum employment and a stable prices. If it turns out that there is slack much, there is more than we think and inflation does not rise as in the forecast, they will deliver a less hawkish policy. But that is not their forecast. He was basically given the game plan. They will do their job. If it turns out that inflation is softer, he expects they will not tighten as much. But do not think that is what he expects. Alix so for a market participant, whether we want to do today that we did not want to do yesterday . What is the trade . Ben as a market participant, you have decided, we will start from the premise you decided to lean toward the risk in your portfolio, how do you do that . Are you overweight on equities or credit . Are you betting on bond yields going up or are you underweight on cash . It tells you we do not see a lot of obvious catalyst pushing the bond yields up, so maybe you are overweight in equities and go underweight on duration. Jonathan you are staying with us. Later today, for coverage of Janet Yellens turn, as she testifies before the Economic Committee in washington. That will be attack that a. M. Eastern time right here on bloomberg. Coming up, just around the corner, one of the Critical Senate votes in the Budget Committee. Textare pushing the ultimate next stage. We will have an exclusive interview with senator ron johnson. Futures a little bit firmer now. This is bloomberg. Emma this is your Bloomberg Business flash. a shake of this morning, nbc news has fired matt lauer. According to the network, it was informed that he was involved in an appropriate workplace behavior. The today show announced the dismissal a few minutes ago. Tiffany posted thirdquarter earnings that beat estimates. Comparable sales were flat, but better than expected. Tiffany maintained sales and Earnings Guidance for the full year. The Cap Investment banker at barclays is warning that staff is at risk of having bonuses cut this year. They say that he said that they will boost pace for top performance and cut those consistently ranked in the bottom half. That is your Bloomberg Business flash. David when senator ron johnson talks about taxes for Small Businesses, he knows what he is talking about, he ran a Small Business in wisconsin, so it is no surprise he has been front and center as they sort out how the Corporate Tax cuts they are proposing will affect Small Businesses not incorporated. We welcome senator johnson from the capital. Thank you for being here. Sen. Johnson good morning. David as we went into the Budget Committee meeting, we were on tenterhooks about how you would vote, for or against. You voted for it, so does that mean youre can firmly you are firmly set on a yes for friday . Sen. Johnson we still have work to do cabo President Trump made a good case and we have been working with Senate Leadership and we are making Real Progress. Bob corker, i am sympathetic with his concerns on the deficit. He made progress. We both thought there was progress to be made to really use the Committee Process to move this thing along in the right way so that we do not so we will be more focused on the process, so sort of a want ish vote yesterday, but i think will make it easier in terms of passing this. David it is obviously going to affect a lot of peoples lives. Lets get into some of that wonkishness. What language will it take to get you to vote on an actual bill . Sen. Johnson let me talk about the businesses i have been defending. We have so many manufacturers in wisconsin, it would devastate the community is the employer ran into trouble and went bankrupt. These are owner operated, run by people who have a longterm view, multigeneration and they want to pass it on to kids and grandkids. I have nothing against big business, but they are run by hired guns, shortterm thinkers, fiveyear stock price, and when they cash out the stock they have a different mentality so the problem in the house and senate bill is so much of the tax relief, is directed toward those big corporations which is only 4 of american businesses, so they are getting some are between 70 80 5 of the tax benefit and it is simply not equitable. 70 80 5 of the tax benefit and it is simply not equitable. It is imperative we make our businesses competitive, but we need to maintain the balance between the passthroughs and the sea corpse c corps. Everybody knowledges it is a problem. The president said it is going to get fixed. So it gave me the confidence to help us proceed to the committee. David it is important to light all of that out, but lets get to the brass tacks. There is a 17. 4 deduction right now for the passthrough situation, do you need it to go to 20 to support the bill . Sen. Johnson i will not say where we are going to get to. Prior to obamacare, differential waseen passthroughs and 3. 6 . With obamacare, it went to 8. 4 . If you are a trust, it goes up to 22 . The problem with that is a mix those businesses less competitive. It makes them less competitive internationally, because Companies Get territorial treatment and passthroughs do not, so there are so many aspects of this matter making passthroughs less competitive and a lot of my colleagues say that have them turn into c. Co rps, but rather than being taxed at 30 , it is 18. 5 and the revenue loss for the federal government will be massive. Ive been arguing with my colleagues, that we are better off spending the money to bring down the rate, to close the 8. 4 rential, get closer to i would like to get to a. 4 , i would like to honor the commitment of the framework of a 25 passthrough rate, but we are constrained by the 1. 5 trillion so there is a lot of demand on those dollars, so we are trying to manage this is much as possible, but i think we realize that we want to narrow the gap as much as possible so we do not have the flood of passthroughs converting. There are enormous amounts of revenue or let them stay in a competitive position. David i want to pin this down. As of now, youre not a yes, but you think you are moving in that direction, is that fair . Sen. Johnson yes, there has been a Real Progress made over the past couple days and you get closer to the deadlines and that the was true president came and gave the peptalk, talked about how important it was for the economy. The American Economy is not even close to realizing as folk potential full potential. We have to have progrowth tax reform. Now we are in the legislative process, the sausage making, it is not pretty sometimes but we are committed to achieving success. David you mentioned the progrowth desire of the senate to get this done, let me talk about senator corker that you report to. It you explain to us why would make sense to have a situation where you would raise taxes, if growth was disappointing . Normally that is the reverse way. Sen. Johnson it is a concern. From my standpoint, there is one reason i am fighting for the pastor. For the passthrough. If we pass a progrowth tax package, we should not have to worry about that trigger. Hopefully it will be designed that it just slightly increases everybodys taxes across the board, does not really attack one sector of the economy. But as a fallback in terms of added deficit. I share the concern. The last thing you want to do is when you hit hard times is raise peoples taxes. David thank you for being with us. Alix coming up, bitcoin was the topic of the day at the consensus conference. The biggest question, is it a bubble and when will it pop . We will dig into the next. This has become the biggest bubble of our lifetimes by a long shot. I want the record to show i did not say that. [laughter] mostly because it is so global. Alix now we are on 11,000 watch, bitcoin up 55 since october, over 800 so far this year, and of the bubble calls are multiplying. Bitcoin is undoubtedly a bubble, but the only problem with anybody, you have cash in a bubble, you have no idea if it will double before it halves. It could go way back down, but between now and then it could hit 20,000 pretty quickly. You cannot short it. Witht with bitcoin but block chain, it is fair to say that going in today is a bubble, very clearly, but we do not know the Market Driver beyond this price valuation. There is a lot of fraud mixed in. A lot of fraud is in anything as exciting as this, so i think it will become the biggest bubble of our lifetime by a long shot, mostly because it is global. I want the record to say i did not say that. Mostly because it is so global. Bitcoin is successful only because of its potential for circumvention, the lack of oversight. It seems to me it should be outlawed. Alix joining us from london is ed robinson who reports on bitcoin. Ed, walk us through how bitcoin will be classified. Is it a currency or commodity . We do not know how to identify it. Ed i think right now it is everything at once. To be serious, it really cannot be used as a currency in the present moment, because it is appreciating too quickly, why would you spend bitcoin on a couple of coffee or a book, when it could go up 17 by the time you complete the transaction . For those that say it is an asset, that makes more sense at the present moment. Of course, it was designed as a currency, so perhaps it will eventually fill that role at some point. Jonathan is it digital gold . For most people it has way too much volatility to be a stored value. What are your thoughts . Vince the end of the day it will be how governments get involved. We hold currency because we can pay our taxes with it, we are willing to put dollars in the bank because the government gives us tax repayment and transfers. At some point the government is going to have to say, we accept this as value. When that happens, it will be legitimized. Until then, it is an asset. It is tradable, you could just as well be trading baseball cards. Jonathan isnt that the point . The value is because the government is not involved, and to some extent that is a doubleedged sword, because when they do get involved it will make it less valuable . How do you get around that dilemma . Ed i think that is right. The original purpose was a decentralized currency that does not need a central bank. I think it will be a long, long time before Central Banks ever move into any kind of action that would mainstream or legitimize the currency. I think that they will be the last parties to come to this. Where you want to look now is big ecommerce merchants, that may develop apps that say we will accept bitcoin and exchange it for yen or dollar sterling, or whatever. That is the next frontier. Alix when we have bitcoin features listed, then you can short. You have banks looking at it, they are rejecting current platforms. How does this advance the conversation . I think there is a big question, is the demand outstripping the infrastructure that is coming into place around it . You see that with the announcement of futures. There is probably an etf down the road in the first quarter. Will there be enough Capital Market for structure there to support, demand liquidity, the ability to borrow shares to short sell all of those are in the air, even as demand is soaring. Jonathan great to catch up with you. I imagine you will be back on the program very shortly. And vincent reinhart, you will be staying with us. Coming up, a brexit break