Why . Because of comments out of the delayed speech. Mark carney seemingly talking of holding off weight kite rate and weaknesses in domestic inflation pressure. This affects the u. K. Yield, so bonds are rallying. Up about. 1, but not seeing that correlation we usually see with the british pound. That seems to have broken down and barclays, down. 25. Four former executives charged of conspiracy to commit fraud. We will be taken that further as we go on. We have had a weaker day for the pound. This is on the back of england government saying they are worried about the impact of brexit on the economy and mark carney signaled they will not be rushing to raise Interest Rates. Given the mixed signals on Business Investment and Consumer Spending, and the inflationary pressures that are subdued and anemic wage growth, now is not yet a time to begin that adjustment. Francine joining us is , and they willr give us their take, simon, it seems as though from philip view,ds points of finances really matter. Beenthink that has always the case, whether he has been. Ble to voice it as he did ultimately, it might not be for him to decide. Certainly, another take from Philip Hammond over the past week on the softer brexit emerging from the treasury if he gets his way if it gets its way within the government. Francine talk to us about the ongoing caroline talk about this on coming direct this oncoming diversity. How much will the key negotiator be listening this time . It is probably not leadership by Philip Hammond but a display of strength. It is hard to explain why because as hammond would say, he is only saying what is in the manifesto. Everyone has always said they want brexit to be good for the economy, but there is an internal shift, so in theresa may was running the show on her own, it was about immigration and hammond was locked in the cupboard. He is found the key, and saying, you have got to think about jobs, thinking, investment banking, investments, and that brexit is because they are worried that if you get brexit wrong and it costs and that is because they are worried that if you get brexit wrong, that will hurt the party. Simon, explain who was in charge of the brexit negotiations. I listen to what mr. Hammond had to say, and i did not hear him refer to theresa may or the government. They sounded like he was in charge. Simon this is what you hear as a complaint. Who is in charge of the government . Was davidthe problem davis might be the first to negotiate to identify is the and the othersr have a freelance on brexit. After the election, theresa may not quite the powerful Prime Minister she was thought to be before the election, and they all seem to be chipping in with their view of what brexit should be. Reason towe have any believe david davis is shifting away more toward growth, more toward jobs, and more toward the Financial Community over london . Simon this is all in the manifesto, which is a piece of work where everything can come from brexit, this great deal of promise. It is which sends the focus on within that document . David davis has played what we call a straight that at the moment straight ba att the moment. And endallents points to a hard brexit. Those of the negotiation stick with forll a wild. This would not be a thing that changed overnight. It will be a matter of time. Caroline a little bit of cricket analogy from the british. Thank you rob hutton and simon kennedy. David thank you. Markets have reacted strongly after mr. Carney spoke to read the pound weekend to spoke. The pound weakened. Ning us now when you absorb or try to absorb what is going on , how does it affect your decisions on whether to invest in europe, england, what are the likely ramifications of the marketplace . I think the most important thing is to try to identify what the bigger factors pushing things are going to be and while brexit has to be hammered out, the truth is the u. K. Unemployment rate is the lowest it has been in over 40 years, the inflation rate has been rising, and even though we were hearing this Forward Guidance that no, it is in time to raise rates, we will not be tightening, the dividends show was not goingit on, that would be something on the table given where we are and i think we cannot avoid those fundamentals much longer while this continues to get worked out. David michael, where are you on this . Listening to these speeches, you hear about to get investment going. Is this something new or hasnt been going on but not much has been done about it . Michael this has been going on for a wild. The numbers are shocking. Now, we are around. 25 and they say this is the product growth do notice you normally associate with the economy and people are keeping an eye on the bank of england and how that might frame the introductory of Interest Rates. Problem. K. , it is a big and determines how fast the care grow. Y could the problem is we have had this external shockva significanti shot via Significant Exchange rate and this is pushing on the u. K. Economy. It seems strange to me that the bank of england got the numbers wrong on the way down and looks like they are getting their numbers wrong on the back 9, as well. They have this 2 growth rate, which they have trend. They moved a little bit in may for those to converge to some extent, but if you look at incoming data, it is posting a stagnation rate picture. Caroline all the sporting analogies. Is the focusesting on Financial Services. At the same time, we have another cloud being surrounded around the nikkei Financial System when you have barclays in the headlines. Stories,henomenal ripples does that send across the Financial Services in the u. K. . They save the u. K. Is in danger of becoming the Hong Kong Office shores of europe. I think the reality of the situation is if you look at institutions better gold plating a lot of those legislation and emanating out of the European Union, and many regulators, we know post u. K. Referendum, are lobbying hard the city of london and saying, you would not have to labor under those ranks if howwould shift them, but you played that in the public sphere, it doesnt look good. Postcgfe, lots of regulations have been rolled out, but the timing is horrible. Caroline timing is horrible. I want to get your take on some tanks we have got. This chart is on the correlation of ftse and the pound. I want to take you back to equities, not just barclays, and how we have seen the british pound take another leg lower. Why are we seeing that . We are seeing four year lows when you look at correlations. If you look at how you would arrive at those numbers one of the things, if you decide you seee ftse if them a six have regained the brand they lost post u. K. Referendum, which, if you think about how these macro numbers are coming in to where the consumer is and where they might be headed, that is a surprise. I take on markets globally have risen from 12 months ago, so this is a manager of relative value trading, but i think that looks punchy. Basketld into the export rally up roughly 30 , that is why you have seen the ftse reach successive alltime highs. I think you are now in a situation where you had before double bubble and now you might not get anything at all, so some of these cyclical plays, resource plays look vulnerable. And we know the consumer into u. K. Is looking formidable. We make it a declining pound. We may get a declining pound. David you will both be staying with us. Coming up, david gura will speak with Steve Mnuchin. This is bloomberg. David i am david westin. I am in new york. Caroline hyde is in london today. Two said president s spoke yesterday and gave two different takes. Charlie evans said he would like to see more data showing inflation before the fed continues on their rate hike path. If we took the next six months to look at how the data role in, maybe make an action on the Balance Sheet, get to the end of the year, then we see, three,wo rate increases, maybe four if things are better. I do not want to see inflation move up. I would not want to continue going backwards. David the same day, will dudley said he was confident inflation dudley said hell was confident inflation is coming. Saying inflation is lower than we would like but it the labor market continues to tighten, wages so gradually pick up and we will see inflation get back to 2 . Marketith us is strategist for bcg partners. Michael, we have this disagreement, forget within the fed, but particularly the two the markets on the one hand in the fed on the other. Agree incally 2017, but the market is not fine with the fed is selling in 2018. What is going on . The proof is in the pudding and data for inflation is not there yet. Other Economic Data we have seen for the month of may have been disappointing, so those things are really what is behind this next set of expectations. While the fed is saying they will raise rates further, forthing it has been saying a long time, it has been slow to do so and the numbers on forecast that been lower. Last week, the fed members own forecast, the mean of the expectations for 2017, 2018 and 2019 come all three were that were, so the meeting expectations they have for the fed funds rate for the and were all lower. For the end worked all lower and it is hard to be hawkish at this point given the fact other Central Banks are likely to be tightening their Monetary Policy, as well, and the fact that fed has a cautiously optimistic view on where theyre going to push rates. David doesnt depend on part with the fed is trying to do . They are so david dependent. They are so they dont dependent. On the other hand, we may be really affecting allocation of capital. Is it possible they are worried about Financial Stability and not just inflation . Jason i think both statements are true. On one hand, i think winfax change, they changed their mind when facts change, they change their mind. On the other side of the coin, you have this situation where they are trying to respond but not too much. I think they are trying to strike that balance that if the data is not there, they do not want to go to early. They do not want to be behind the curve either, but it is difficult to make the argument that there is a lot of inflation out there and this has been some sort of reinflation trade. There isote, i think also the reason you have seen responses in the equity market is there is still a lot of money out there sloshing around and Monetary Policy is quite loose, and this has been affecting Financial Markets and will continue to affect Financial Markets as they try to get out and extricate themselves from a rare situation. Caroline monday sloshing around money sloshing around and im looking at the lack of stress indicators. They are at record lows. Is that going to continue while we see a continuation of Monetary Policy . As long as markets do not believe the fed rhetoric, we will continue to see risk measures greater. It is across assets. From the move index u. S. Treasury that worries me because that is the epicenter of the debate. Going back to what your colleagues say back in the u. S. , i agree with that, but i think the reaction function of the fed has changed. If you look at the surprise indices in terms of the broader macro and inflation, there is no reason for them to be coming out with this hawkish rhetoric. It is not only about rate hikes but Balance Sheet reduction. It is clear to me they are worried about the impact that all this base money is having on the Global Economy, u. S. Economy. I argued two years ago on this show that they should be hiking rates than in order to deal with that and i think the chickens are coming home to roost now. We have these seven years of inflation famine, if you like, it is understandable. The market takes it with a piece of salts, but if the reaction function has changed, the market is horribly unprepared for that. Caroline maybe they are listening this time. Thank you. Gentlemen, you are staying with us. Coming up, and into buick Sheryl Sandberg. How the an exclusive interview with Sheryl Sandberg. This is bloomberg. Caroline you are watching daybreak america is, and some of the biggest names in tech gathered at the white house on monday. Missing from action was facebook but i managed to speak with Sheryl Sandberg in an exclusive interview. Sandberg says facebook has a duty to help create new jobs, which means reaching out to new businesses is a priority. The social network now highs almost 2 billion users. About the we talked lot. Humanare making a big resource investment, we are the have researchers and experts who work and facebook, but we are ouring that, as well as human review capacity. We have about 4500 people around the world to remove inappropriate content, so we are growing that by a significant investment. We are working with nonprofits, governments, other companies around the world to make sure we all Work Together to make sure that this content is not on our platforms for brand platforms. Tools tos, we offer make sure they know that facebook is a Safe Community for them. Caroline you say that you are working with nonprofits and governments, how have you in europe been talking with governments . Are you worried about the talk about encryption and some of the fines that have been raised . We are in constant conversation with governments on issues of security and on issues that affect all of us working together. We have worked with governments to talk about initiatives, so online content initiatives, where governments cannot just make sure terrorism is prevented , but try to get positive measures out there that stop people from doing things that obviously hurt so many people. We also work with Law Enforcement officials all over the world to make sure that if there is anything we can do to support their work on, we are able to do it in this area. Caroline that was Sheryl Sandberg, facebook coo. Quite amazing we are hearing them speak out about what they need to be able to do to tackle this global problem. David their platform is so universal and it could be used for ill and good, and let the responsibility they have to governments and advertisers because advertisers get nervous about this. Caroline they do, so that is why when they are all gathered this week, Sheryl Sandberg is going out to talk to friends to show how they can remain safe on the platform. David she has done a remarkable job. Coming up, the European Union says President Trump could be ning up a pandoras box could be opening up pandoras box. York, london and washington, this is bloomberg. David this is bloomberg daybreak. I am david westin. Caroline hyde quote bring gusts up to speed on markets. Will bring gusts up to speed on markets. Caroline heavy gains today, Risk Appetite remaining. It seems to have been the tech leading the search in the u. S. On the laggard, it is oil and lower, 5100 turning flat. It was higher after we saw a drop down in the pound, but barclays up by. 4. Why . The bank and four former executives charged with conspiracy to commit fraud. Look at the next set of assets. I am looking at a story continuing, the pound continuing to go lower. The reason, brexit in the concerns of mark carney speaking , weaknesses in the economy, which growth, and domestic inflation pressures. Saying, now is not the time to begin that rate adjustment. We are looking at the u. K. 10 year yield. Meanwhile, oil on the downside. Lets get an update on headlines outside the business world. Here is emma chandra. Emma in georgia, it makes her out to be the most expensive race ever. They will decide today between jon ossoff and karen handel in a race that could preview the Midterm Elections with handel maintaining distance from President Trump. The campaign could end up costing more than 50 million. Student died after being evacuated from north korea last week. He spent more than one year in prison there and returned with severe brain damage. Three other americans are still in jail in north korea. Has putammond protecting Financial Services at the heart of his plan for brexit. He said breaking up Financial Services would hurt the u. K. And the eu. This marks a shift in the brexit government focus. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am emma chandra. This is bloomberg. David thanks. Talked with wilbur ross about the ongoing review of whether imports pose a National Security threat. 161 trade placed cases, which have put either antidumping or ailing duties on Steel Products from about 37 different countries, so this has been a big problem. The problem of global overcapacity. More importantly, global overproduction. So, the report will address those issues, will address them in the context of national section, to find a way 232 defines it, which is a pretty broad definition, including very strong reference to the needs of the economy. David after interview, Bloomberg News talked with the European Union trade commissioner for her views. She was emphatic. She said that is opening a pandoras box. Many other countries with may be referred to security and because of that, do a lot of protectionist measures. We will retaliate, of course. Joining us now is the managing director o