Stocks are up, all of that to do with powell. The dollar weakness also to do with powell. Real trends in the euro and the pound. Tom no question about that. Right now our first word news in new york city, here is riddick gupta. A Ritika Ritika the longestserving Prime Minister in japans history is resigning after eight years because of health reasons. The government has provided few details. News reports that he has been undergoing treatment for a chronic digestive condition. He plans to stay on the job until his party picks a successor. President trump made his case for a second term and last nights Republican National convention. He promised to cut taxes, and create 10 million jobs in 10 months and turn the u. S. Into a manufacturing superpower. In the new term as president , we will again build the greatest economy in history, quickly returning to full employment, soaring incomes and record prosperity. Ritika the president also warned that joe biden cant be trusted to deal with the coronavirus pandemic or heal the nations racial divisions. Chair Jerome Powell of the fed says the fed will allow inflation to run above the 2 target. But the fed has to confront multiple forces that are holding down inflation. And hurricane laura left chemical fires, wrecked buildings and flooded roads in its wake in louisiana. There could be more than 50 billion in insured losses. 700,000 customers were left without electricity. The hurricane has now been downgraded to a tropical depression and will through arkansas overnight. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika good. This is ritika gupta. This is bloomberg. Tom thank you so much. Equities are up. Nice lift as you would expect. The dollar is weaker. , as you would expect. In the young space, it is simple nominal yield is up. Real yield, inflationadjusted speed. S on that shows the dynamic of nominal yield and Inflation Expectations. Now a story that has been front and center after four days of the rnc. Here is the president of the United States. Years, wee next four will make america into the manufacturing superpower of the world. We will expand opportunity zones thank you, tim scott bring home our medical supply chains, bad things, we will go right after china. We will continue to reduce taxes and regulations at levels not seen before. We will create 10 million jobs thehe next 10 months president of the United States. Kevin cirilli, off eight days of conventions. He is with us this morning. Kevin this week and we are anticipating President Trump will go to the gulf coast to tour the damage with regards to hurricane laura. I am hearing from my sources that hurricane laura could provide more intensive for republicans and democrats to get to a deal on what has been an elusive fiscal stimulus. Meanwhile in the shortterm, all the talk on the sunday shows, i am told by several sources on the left, are going to be related to kenosha, wisconsin and racial inequality in america. I was saying this last night, honestly, i think more of an impact on this race in the past two weeks has been hurricane and kenosha. Anna why the hurricanes . Why is that going to have an impact on the race, kevin . I am fascinated by what did not appear yesterday. The virus did not seem to be talked about at all. There was an enormous audience for President Trump speaking. Why do you think the attention has been taken off that into other areas . Kevin i think the ratings decline from both conventions. In terms of how americans are consuming these two political conventions, they have suddenly lost their muster as it relates to conventions of yesteryear. To your point about the crowd in the audience at the white house last night, it was completely in contrast to the images that we saw with democrats one week prior in which they were in parking lots and flashing their blinkers and be much more socially distant than what we had seen. I think it really speaks to a tale of different competing ideological narratives. Why i think the hurricane and Race Relations will have more of an impact is because this has been brimming under the surface for some time, especially for some of the lawmakers and the locations on the gulf coast, they might flip and support fiscal spending right now because of the hurricane. Question, fox, playing it only two seconds the senator for kentucky, walking last night walking the streets, accosted by protesters with the protection of the washington police. This has to be played by both parties it goes to the attention of kenosha, in the attention of the law and order message from the president as well. How will that play for the weekend . Kevin i think it is going to continue to play. Anecdotally speaking here in washington, d. C. , mayor bowser had to come out and urge that there be peaceful protests because of there were some protesters who were captured via social media who were screaming at patrons in restaurants, so i think the mayor here in washington, d. C. , mayor muriel dynamicis aware of that. Even the Biden Campaign had to come out a couple of days ago to urge useful protesting. So i think it is a new intensity to the Race Relations conversation in this country. Tom kevin cirilli, thank you so much for your work in the last two weeks. It has been extraordinary. Our chief convention correspondent. Right now, Bloomberg Contributor at iona college, jeannie joins us. I am fascinated by the ron paul video and the memories back to 1968. Of this lee, there are no parallels including the lack of smokefilled rooms, but tell me how law and order is addressed by both parties in the coming days. It was a fascinating view. A trump speakingnk and in the background you could hear bullhorns and sirens. And after senator paul spoke, there was that video you referenced. It goes along with what we have been seeing at the convention all four days, which has been grappling with the unrest going on particularly now from wisconsin. With protests around the country. Republicans have talked an awful lot about it the last four days, we heard the president talk about it last night and it will continue. I think what struck me was the very different realities, kevin reference to this a moment ago, from the democrats versus the republicans. It was almost like they are worlds,n two different not just about the issues going on in wisconsin and the unrest, but also about the pandemic. It was stunning to see a gathering of 1500, 2000 people in the park, very few masks. Contrast that with what the democrats were doing just a week ago, it was the most as if the pandemic is, as larry kudlow suggested a few days ago, something in the Rearview Mirror for republicans. Quite a stark contrast between the two parties. At anna stark contrast. Good morning to you. What about what we are hearing, conversation with the professor in the last few hours who was saying, previously, the conventions used to be about the economy and now we need to replace that and make it about the culture. Is it about the culture this time around . Jeanne it is still about the economy, but culture is doing big the economy is doing well. You heard President Trump trumpeting his economic successes, but that was all precovid. He kept saying, we will restore the economy once again. I suspect the president will try to have a vaccine in place before the election or at least by the end of the year, then he said he will be working much more on the economy. Absolutely, we have high unemployment, all the things we talk about everyday, they are really focused on these culture wars. And republicans field that the social unrest is something that the people in the suburbs, who they desperately want to vote for them, are getting tired of. That they were sympathetic and butthetic to george floyd, they are also not concerned about the violence and the rioting. Republicans want to make the case that if joe biden is elected it will be more of the same, but that ignores the reality that donald trump is president and has been for three and a half years. So what happened in wisconsin tom final question. Your new book is brutal. Do the democrats know how to be brutal, can they toughen up against a president who love to be tied off, tough, tough . Jeanne so glad you asked that. I was sitting there last night thinking this was going to be a brutal 60plus days as we move into november. Yet. t know we heard joe biden saying he will be out on the campaign trail despite covid. Yesterday Kamala Harris and joe biden, out trying to contrast the response to the messages coming from republicans. An hour lastr over night with the president who threw everything at them including the kitchen sink. It is a lot to respond to and i think the area to see how they i think we are yet to see how they will do that. Anna thank you, Jeannie Zaino for your contribution. Really good to speak to you today. Let me take you to some lines coming through from germany. Chancellor Angela Merkel speaking right now, has been speaking for more than half an hour. She is saying the crisis is a challenge for german financial capacity. That is the headline across the bloomberg. Interesting, because of all the European Countries that have fiscal capacity, germany is usually described as up there and able to cope. Interesting to see what she means by this line. She also says we dont need to change our policy toward russia, another line that stood out to me earlier on. This is bloomberg. This is bloomberg. Statement indicates that we will seek to achieve inflation that averages 2 . Parentse, following when inflation is running below 2 , through Monetary Policy, we will likely aim to achieve inflation moderately above 2 for some time. Tom bloomberg surveillance. Good morning, everyone. Anna edwards is in from francine lacqua. And i am tom keene. One of the most important speeches in my lifetime. I want to go to. Stanley before we bring in matthew luzzetti. Here is standing in a scathing note. An incredible shift fed policymakers have fully embraced the prevailing economic views of the 1960s that eventually brought us the great inflation of the 1970s. This all is the approach leads to what monetary historians call stopgo policies. The fed has moved to freelunch economics. Eventually we are all likely to pay for it. Speaking, i was thinking of the giant of ucla economics and the battle over huge inflation of the 1960s. Do we risk a walter inflation . Matthew thanks for having me. It does raise questions. We have seen an historic shift in the fed, telling us they are actually trying to engineer and overshoot inflation and also telling us they are only responding to short calls on the employment mandate. It is certainly not going to preempt any inflationary measures by tightening as we have seen in the past. There are certainly challenges to what we saw in the 1950s. This fed benefits from going through the volcker era, having anchored Inflation Expectations on the past several decades, having gained the credibility of that experience. Also, looking back to the 1960s, you had Health Changes which led to a big surge in health inflation. I do think that there is a shift. But there are differences between the 1960s and now. Tom i agree, there are clear differences. One of them is the mystery of effect. Nology do you and your team look at the technological revolution of the last 15 years as something that diminished growth and diminished productive labor where we have a new labor economy, in you slowgrowing economy that everyone has to adapt to . Matthew certainly, we do have lower potential growth going forward, that is one of the key elements powell raised yesterday as one of the key things at jackson hole. That is leading to a lower neutral rate, which is causing problems for the fed and giving them less monetary ammunition. In addition, it is having disinflationary pressures. It continues to weigh in and will continue to weigh on a going forward. Will theuestion is, fed be able to achieve it . I am worried about that than i am abou worried about refuting the 1950s and 1960s. Anna are you think it will, matthew . Voices have been critical about a lack of detail as to how they will get to the problems they describe. What you might do if you have inflation, or what you might do if you see a tight labor market . But we dont have inflation nor a tight labor market right now. Matthew what we heard yesterday was nothing about what they will do to achieve it. We have certainly heard from john lehman and other fed officials in the past that they need to use deeds, not just words. We anticipate you will see policy action to prove this commitment. In september, i think you will get enhanced forward guidance, i think you get some shift in their policy, likely extending duration of purchases. I think it is an open question whether they will be able to achieve their new higher inflation mandate. If you look back over 2019, we had unemployment a weak dollar, leading to inflation, and we were not even able to get the 2 inflation, so there are monetary factors in play. Anna we have very little the us we had very low unemployment in the last few years and we did not manage to great inflation. When you look back at the last 10 years and the inability to generate inflation by central banks, are we looking the wrong place . Has this got to be more about the fiscal side, and what are your expectations o there . Matthew it has to be about the fiscal side. From historical experience, if you do have both monetary expansion,nd fiscal that continues as the labor market tightens and the economy tightens and that can produce inflationary pressures. That is the key question going forward. I think those that have been looking for this as being an inflationary shock, are expected to continue to see significant fiscal stimulus even as the employment rate falls. The breakdown in fiscal talks is challenging that narrative a little bit. Tom matthew luzzetti, thank you very much. Features are futures are down. Dow futures are up. Dollar is weaker. Coming up, as we spoke to mr. Bullard of st. Louis yesterday, Ronald Kaplan of dallas at the 8 00 hour. This is bloomberg. Ritika this is bloomberg surveillance. I am ritika gupta. Lets get you Bloomberg Business flash. Credit suisse has dismissed is europebased banker, said to have forged documentation on an overthecounter for african with management. Bloomberg learned that lead to a loss of about 1 billion for credit suisse. Softbank will so 12. 5 billion asshares in it japanese unit part of recent asset sales that have helped boost the conglomerates stock. In addition to selling assets, son has been buying back softbank shares. It is a sign of Strong Demand for personal computers for both students and workers during the pandemic. Both dell and hp beat estimates. Dells quarterly revenue jumped 18 . Meanwhile, hp said it shifted a cs in 18 million ip the third quarter. But is it for your Bloomberg Business flash. Anna thank you very much. European markets have been fluctuating all morning. 600. 5 on the stoxx a lot of reaction coming through to chairman powells statement yesterday. Anticipation of a steeper curve. All banking stocks in europe are one. R apart from just we see strength coming through from the euro and the pound. And a lot of dollar weakness. Tom hugely important insight from anna edwards, the European Bank stocks are up off their hugely discounted value. You wonder if financials pickup in the u. S. , what that will do to the equity markets, right now cap six points on the spx, 34 91. Showing vix, more agitation and volatility versus where we have been. The dollar is weaker than the euro, 118. 89. David rubenstein is next. This is bloomberg. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Where you can find games, news and highlights. All in one place, right on your tv. The xfinity sports zone. Use your voice to search every stat and score. Follow the teams you love. And, even get notifications with breaking news alerts and more. With the xfinity sports zone everybody wins. Now thats simple, easy, awesome. Say xfinity sports zone into your voice remote today. Tom bloomberg surveillance. Good morning. Extraordinary news flow here. Anna edwards in london, thrilled to have you with us. Joining us now is David Rubenstein from carlyle group, author of a new book, how to lead. Testament toing the quality of his interviews. I cant say enough about interviewtointerview the way David Rubenstein approaches it. This book is a triumph of cutting to the chase. There is a lack of media blather and an immense amount of direct questioning of people successful. Mr. Rubenstein, i must start with my favorite interview you have ever done with the always mysterious jeff bezos. What did you learn from mr. Bezos . David jeff is an unusual person, he has built one of the most valuable companies in the world in an enormously short. Of time. He makes no decisions before 10 00 a. M. He doesnt like to make decisions late in the afternoon. He likes eight hours of sleep, he thinks if he doesnt get eight hours, he cant focus well. He wants to make certain that he hears ideas from other people, he doesnt think all his ideas are necessarily the best ones. Relatively speaking compared to what he has accomplished, his demeanor is quite modest and he has an incredible sense of humor. Tom this is so important, and i say it with immense respect to for your philanthropy to america. There has been criticism, including marc benioff on bloomberg the other day, over the philanthropy of these tech giants. Right now bezos is a pinata, over 15 an hour, 20 an hour, 30 an hour. The you advise some of these voices in your box to get more like