The boeing ceo speaks frankly about industry issues. We are going deeper than normal and i think that is good. We encourage that. We need to keep going steady. Plus, facebook reveals the project that goes beyond social. The coo says the company is ready to embrace it. It is all straight ahead on bloomberg best. Welcome, this is bloomberg best, your weekly review of the most important Business News and interviews from Bloomberg Television around the world. Lets start with the day by day look at the top headlines and protests in hong kong continue over the weekend. Hong kongs leader made a rare apology, this after hundreds of thousands of protesters took to the streets in the government suspended the bill saturday, but that did not stop more mass protests, demanding complete withdrawal of he bill. What we have not seen a full withdrawal of the bill, but we have heard from some over the weekend. She says a confession is equivalent to a withdrawal because in a way, they dont have enough time to get this through and a lot are saying this could be a facesaving option for carrie lam as well in a way that she can back down from all of this and basically let this law die a natural death. Policy and policy Interest Rates and measures to contain any side effects remain part of our tools. Ability andwomonth maybe even nudged the governing ouncil in the direction he wants to go which traditionally has been in the direction of more stimulus. It is a very clear message that this talk exists and by the way, you might have to [indiscerniblr] you have france at 0 and the u. S. Tenure hovering just above that level and what you can do here, taking a look at global Interest Rates, now down to 157, the lowest since december 2017. Equities really getting a boost from the idea there is more easing insight. Donald trumps tweet then followed and i dont think it is wrong to say it was widely ridiculed among the central bankers, but now the column comes out and says maybe the move was designed to preempt the rate cut and preempt a list of the euro versus the dollar and that would maybe be the start of the currency wars. The g20 meeting next week in osaka, already the most recent anticipated gathering in years by world leaders. Seeing basically a big rally here. Of course, we had trump saying he will meet with xi jinping. Is it trade, is it the fed . I think it is the trade news. The market rallied and it is probably more post that tweet. Bloomberg has learned that present from explore the legality of the motoring the fed chair, according to people familiar with the matter. The headline came out at 11 23 and the equity market stay calm. Please tell me we are taking this in stride. Trade headlines still seem to very much move the market, but i dont know whether this is seen as much less likely to transpire or it is just the notion that they are convinced that the fed is Strong Enough and that any succession would be enough to tip the Central Banks. Facing pressure from wall street, the fmocs latest decision, rising expectations that the fed will hold Interest Rate steady. The fed doesnt cut rates, but they come close. Eight members of and open Market Committee saw the need for rate cuts this year, one voted to cut today. He majority of the Committee Sees to rate cuts, 50 basis points as appropriate by the end f next year. Some road town policy cuts wrote down policy cuts, and others did not. After deliberations made clear, additional accommodation has strengthened. s message is clearly we are getting more dovish, but at the same time, the fed avoided signaling a july rate cut, so at this point, i dont think it is a done deal. The market is priced at 100 for july and the only thing is whether it is a 25 basis for 50 asis point cut for july. For those type of odds, it wont be pretty. You wonder what the future jay powell my say. I think the law is clear, i have a fouryear term. Jay powell not taking the bait in terms of making the calculations. He feels hes not going to respond in the political context to the president ees criticism or thinking really. Could have been a lot worse in terms of what the fed ultimately oes. It was not ideally what the president wanted, but it couldve been a lot worse. We are waiting for the bank of england. The key rate at 75 basis points. You did not see any dissension today. The fed is talking about using the ecb and the market is pricing and easing into the expectations for the bank of england. That is really what the bank is noting when it talks about the tension. The market is clearly pricing at a much bumpier view and how brexit will develop. The market sees a completely different at the moment and it is putting the bank of england in the context of a Global Economy and a tougher rexit. Tensions between the u. S. And iran escalating, as iran shot down an american spy drone near the persian gulf. The president tweeting out that iran made a big mistake. All eyes are on the white house and the president s witter feed. The iranians insisting this happened over their airspace and the usa and the u. S. Saying it was over international space. The expectation, it will require a more substantial response by the president right now. President donald trump seems o downplay the attack, suggesting that a loose individual may have been responsible. You dont hear them giving the benefit of the doubt, but heres an effort to try to dialback some of the tension that led oil prices to surge on this latest attack. I think the president has, for now at least calm fears that a military strike is imminent. As we hear that closing bell, closing books on another day of gains. You see stocks rallying, but im looking at bond yields. The tenure down 2 . How significant is that . I think the real key will be sort of on the front end because the market is getting far ahead. Every time the fed gives a little bit, the fed pushes further. What is to stop the market from going back again and again . And testing powell . Nothing, unless jay powell says that is enough. Protesters in hong kong eassumed demonstrations today. Thousands gathered outside the city headquarters. What are the chances that because of the protests, carrie lam actually resigns . No indication she has any intention of resigning, and that is not sitting well with many of the protesters here. They not only one carrie lam to resign, but they also want her to withdraw, retract the ontroversial bill. One protester told us the point is to paralyze the government today because they dont respond, but so far, fairly peaceful and police have stayed at bay. In a series of tweets, trump aid when he was told the planned attacks would kill 150 people, he stopped them. You have john bolton and secretary of state mike pompeo who are quite hawkish and believed the u. S. Needed to send a very firm message to iran, but you also have the president , in 2016 in no uncertain terms, he campaigned on the idea that he would not bring the u. S. Into more costly wars. These are all negotiating tactics. What the president wants is a new deal with iran and all of these moves he sees as a way to chieve that. Still ahead as we review the week, interviews with top executives in aviation at the paris air show, plus lackstones Steve Schwarzman and a conversation with Federal Reserve vice chairman. Why are we speaking of cutting Interest Rates . Especially in the last six or eight weeks, there have been elevated uncertainty about the outlook. Coming up, more of the weeks top business headlines, but its governors says dont call us [indiscerniblr] this is bloomberg. This is bloomberg best. Lets continue our global tour of the weeks top business stories in the u k, where a field of conservative contenders to replace theresa may narrow to a final 2. Then there were two. Boris johnson versus jeremy hunt in the title round to be britains next prime minister. They will spend the next month battling for votes. Boris is very much the pick. Pick of the party. Some say the battle was deliberately crafted to give boris an easy ride. All the information we have suggests that boris will be the runaway winner in this contest. It is interesting he had a broad amount of support. His message has been deliberately vague to bring a lot of mps together. Ultimately, i think he will be relatively pleased going up against jeremy hunt. Lets focus on iran now because they may be close to breaking a landmark agreement. That was meant to keep it from developing nuclear weapons. They say they will exceed agreedupon limits on june 27. What part of the agreement is it about to overstep . That it will pass the agreed limits on low enriched uranium. O about 3. 7 pkt. Percent. This is not material that can be used in a nuclear bomb. It could be used in a nuclear reactor. I think a much more provocative step will be if they say theyre going to start seeking to produce highly enriched uranium. That will be a major red flag for the United States and all the partners in the iran nuclear eal. Bloomberg in the us longterm economic forecast. Among the findings, europe will make the fastest transition to renewables with china and the u. S. Playing catchup. That is the main highlight, that europe is well ahead of the pack. What is taking so long for other countries and continents to catch up . Europe has certain things that has given at the lead, namely the price on carbon emissions. In other parts of the world, there are other reasons and china has an enormous amount of coal generated power bill that will be economically competitive four years and in the United States, an enormous amount of natural gas and that will continue to be very price competitive the next several decades. Generally speaking, about two thirds of the country, we see renewables as the lowest cost source when it comes to eagged the next megawatt capacity. Todays bank of japan giving Monetary Policy unchanged, but for the first time in more than two years, a majority of economists predict the Central Banks next policy move will be to increase stimulus. 10year Government Bond yields. The banks governor was not too concerned. There is no need to take an overly strict view on the 0year yield target range. I think it is appropriate to allow a degree of flexibility. With the dollar dropped, the dollaryen, how does that play into what might happen next . People have to realize they sed to be in charge. By delr 5 rvened billion. He is a tactician and an expert on global foreignexchange markets. If the dollaryen rakes 105, the boj is going to have to ease quite significantly. A third Interest Rate hike in september and signaling more to ome. Another major global central bank. Many are talking about easing. You are hiking. Does that worry you . The short answer is no. We follow closely the expectations Going Forward and then the background, a gradual increase is that growth in our economy is unemployment is low and inflation is above the target. Monetary policy in our case is expansionary. The rate is much lower than the neutral rate, normal rate. E are still stimulating the economy and of course, our policy rate and Interest Rates are deathly affected by what is happening internationally. European leaders have abandoned the formal candidate for the next Eu Commission president and will start from scratch. We are back to square one and all the front runners, they are out of the competition. Hey cannot be the Commission President and that was the only agreement and the fundamental issue continues to be the divergeance between the french and german government. Angela merkels continued to thank the parliament and an and a macron thanks it should be a much more open competition and we are back to square one with two weeks to go. The deadline is now seen as july 2, but there will be a summit on june 30. And value so we can be used for everyday transactions. This is huge news this is huge news. Mystical compared to the Global Payments or Foreign Exchange markets. This is facebook taking the technology and the infrastructure from bitcoin and others and applying it to payments. Potentially it has very big consequences. When facebook announced plans this week to logic or to pushed backshington for calls for hearings and demand for oversight and regulation. Facebook chief operating officer Sheryl Sandberg was in france, along with many Global Leaders in the media. In an exclusive conversation with bloombergs caroline hyde, she insisted facebook is not looking to avoid regulatory responsibility or restrictions. We are calling for regulation. Not just saying we will deal with it reluctantly, but we are working with president macron on a coregulatory model. We are working with people around the world on a gdpr that we think would be a good thing. We want to not just be at the table but be noticing and acknowledging Companies Like ours should not make as many decisions as we do. We know that. New rules need to be written for the internet and we went to help make that happen. Do you think realistic rules are being talked about on capitol hill . It feels like the eu has a blueprint, but do you think it will be fit for purpose . The legislative process is never linear. Good. Nk gdpr is we are also not winning for regulation. In the u. S. There is a bill that did not pass. It said that in political elections, you should be able to see who is paying for the ad, how much they spent, who is behind your ad. That bill did not pass but we built the tool. It was up and running for the u. S. Midterms and the people elections. Did gdpr controls. They passed in europe, but we made them available around the world. We are very much trying to usher in the next era. We are trying to work collaboratively with governments to write rules. We will keep working and try to move ahead because we know people need protection. We want to be a part of that. Emma you can find more of that excessive interview at bloomberg. Com. Coming up on bloomberg best, more bigcompany news. Plus, conversations from the paris air show. A ceo struck a tone of optimism. We are making good, solid maxress on bringing the backup. Emma this is bloomberg. Were the slowskys. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Emma welcome back to bloomberg best. I am emma chandra. Aviation executives came together this week for the paris air show, an annual opportunity for aircraft buyers and manufacturers to meet and make deals. The spotlight was on boeing, still reeling from the grounding of its 737 max, and airbus, hoping to take advantage of the setbacks and trade tensions to gain an edge on its u. S. Rival. Bloombergs guy johnson was in paris and spoke to the ceos of both companies. Dennis we are making good, solid progress on bringing the max back up, working through the certification simulation flights this week. We hope to schedule the flight tests shortly and get the airplane back up in the air. All of this is being done through the lens of safety, and we will take whatever time is necessary to make sure it is safe. Guy 2019 . 2020 . Dennis we expect it to happen before the end of the year. We are making good, steady progress. But i wont give you a specific timetable. We will take the time necessary. Guy so 2020 . Dennis we expect it to happen this year. Guy are regulators going deeper then you anticipated . Is this a more thorough examination of the aircraft . Dennis its a very thorough examination, and we expect and encourage it. We are working with regulators around the world. The faa, chinese authorities, brazil, canada. Two weeks ago, the faa hosted a multiregulator network in dallas. We are working around the world, and its important that we do this in a very thorough and disciplined way. Guy you keep emphasizing thorough. Are the regulators getting further in than you would have expected initially . Dennis i think we are going even deeper than normal, and i think thats good. We encourage that. We are looking at every dimension of the software update, not only the airplane itself, but also the training and education materials and the overall endtoend design and certification process. Its a very holistic effort. We have a trade war. We dont know how it is going to be resolved yet. Do you get a sense that we will be seeing more orders coming for airbus aircraft out of china . Again can you see any advantage . , guillaume we have a historical strong relationship with china. In china we have produced more than 400 planes, and this is a very strong commitment to china and to the chinese market. We continue to serve the needs of china, and i think we are perceived as a strong and loyal partner of the chinese airlines. Guy do you see yourself having an advantage . Is President Trump giving you an advantage in china . Guillaume we have a strong product advantage. The a320 is the best successful plane at the moment. It has been a big game changer. This is from feeling the market demand. Guy so politics play a part of it. Guillaume there is always politics in the background. You need to keep going, keeping your eye on the ball. Emma staying with the topic of global trade, blackstone ceo and chairman Stephen Schwarzman has dealt directly with the leaders who will meet next week at the g20 summit to try to jolt u. S. China negotiations out of their stall. He shed insight into what the two sides are looking for on bloomberg surveillance. Stephen i think with the president is looking for and i am not his spokesman, but what hes looking for is the equivalence in terms of open markets and tariffs and trade, and theres not a real desire to entrench the United States in some way. It should be a fair competition. All of these issues that are being used as tactics, if you will, are done to bring people to the table so that you can get to equal. The best products win, the best pr