The economy faces new threats. Jay powell is going to be facing the Senate Banking committee for his confirmation at 10 00 wall street time on tuesday to be the next chair. I want to bring into half for some reaction. That wes speculation might hear something different. Kathleen this is a 2. 5page statement. The testimony is tomorrow at 10 00 wall street time or 5 00 here in new york. You can see the Senate Banking committee decided to put this out on the table. Lets just run through. As part of our fed team, i received these under embargo. Ive had a chance to look at this. Powell is expecting Interest Rates to rise somewhat further and the size of the Balance Sheet to gradually shrink. Is this a surprise . No. We know this is the path the fed is on. Theres nothing in here about inflation and the fact that it has fallen short of the feds target. The fed must retain flexibility to adjust policy in response to the economy. Subtle, nuanced way for jay powell to make it clear, as fed chair, i will be watching the economy, conferring with my colleagues . I will not be looking to the white house. I will not be looking to congress to decide what to do. He makes it clear that this is the duty of the fed. About thelks Financial System of course, everyone is wondering if he will be on board with deregulation he says, the economy is stronger and more resilient than it was a decade ago. He also about the Financial System of course, everyone is says, higher bank capital and other steps the fed has taken leave the fed better able to deal with any risks that may come up in the u. S. Economy in the Financial System, and he said that the fed will look to burdens fair enough, that is what a lot of republicans want to do, and President Trump while preserving core reforms, like higher bain capital higher stress tests. He is echoing this tack that is,t yellen took, where it yes, regulations may be eased up, but it is more important to have a safer, sound or Banking System in place. How will he differ from yellen . We dont know yet. Betty he is likely going to be facing a pretty friendly audience among republicans. What kind of questions might they ask . Kathleen i wouldnt assume the audience will be entirely friendly. There are a lot of conservative republicans who would have liked to have seen someone like john taylor chosen to be the next fed there because he thinks should be some Monetary Policy place. Some people are rooting for an economist, not someone who is a banking expert. Here are some of the questions that we can all agree he is going to be asked when going before the banking committee. Is he going to be yellen 2. 0 . Will he be setting on his own path . If he open to communication or rolling back doddfrank . Will he be independent of trump . He served the fed for five years, but its a republican to run the fed now. These are the kinds of things he is going to get asked. You anticipated my question, but i have another 1 it says the fed must respond decisively if the economy faces new threats. Do you expect Jerome Powell to identify any new threats . Kathleen that is a great question. Think a flate yield curve portends concerns about a recession. When it comes to acting decisively, there was a lot of criticism, more from the republican side of the aisle, about purchases, quantitative easing. Some people thought it was a bad idea in the first place. They are unwinding the Balance Sheet now. Maybe part of the thought behind that is, if we face another downturn, if there is some kind of shock, Interest Rates are not that high to restimulate the cuts,y with Interest Rate and in fact, janet yellen and others have said that bond purchases are now a tool in the feds Monetary Policy kit. Perhaps that is something jay powell is opening the door to an presumably it will be something he, will be asked tomorrow. Paul kathleen hays, thank you for joining us. Please stay with us as we unpack this a little bit more. Joining us on set is su keenan for more on the market and reaction to these headlines. Su if we look at the way we closed, which was relatively flat, there wasnt that much action in the major movers in terms of the market snapshot. The dollar, first gain in five sessions. Near 58. Lets see if we have seen any. Ajor moves as kathleen mentioned, powell is expected to be a bit more hawkish. Hes expected to be a bit more decisive. The big question is what the fed makeup will be. There are likely to be a lot more changes in the bench strength. That will have a lot to do in terms of shaping the way we see rates. Let me take a look at big movers on the day. Moves, evenstock though we had a lower session, what you are seeing are some of the bigger moves. 200 year to date, and analysts said, perhaps a lot of the profit is baked in the cake. A case seal, part of the seal group, also moving lower. Lets take a look at amazon. Big cyber monday deals. Paul joining us on the phone from new york is stephen stanley, and kathleen is still with us. Hopefully, you have had a few minutes to take a look at some of those embargoed lines from Jerome Powells testimony we have had break across the bloomberg. If i can get your initial reaction to those . Stephen these nomination hearing testimonies tend to be boilerplate, and for the most part, this one will huge to that. Kathleen said, in terms of Monetary Policy, he said the fed will respond decisively and with appropriate force. To me,d of exactly the more meaningful comments are the ones he made around banking regulation. Weve heard hes arguing for a loosening of financial banking rules, and that may have been one of the reasons President Trump chose to choose him. He says they will look to tailor regulation. He said they would look for ways to ease regulatory burdens while preserving core reforms. Betty what are you learning so far from just these early headlines in this testimony . Stephen think about the experience we have seen with Supreme Court justices when they go in front of a senate committee. They are looking to get in and out without creating controversial news headlines, and i think it is the same thing for governor powell. I think he feels like probably his nomination should be nottively easy, but he is looking to say anything or do anything that is going to add any headaches to that process. This testimony is well within the framework of what you would expect. Betty i appreciate you sayingbetty i think a lot of what we are seeing so far in this 2. 5 pages he will repeat live tomorrow before the Senate Banking committee, he is going to preserve the independence of the fed. In feding to follow tradition. Am i being overly nervous for jay powell . If he comes in, inflation isnt rising, and he takes over, and its his turn to look and god policy, everyone is assuming he is janet yellen 2. 0 what if he says, im concerned about the yield curve . Everyone is going to say, its because he is a republican. Knowing what i know about jay powell, that seems unfair, but it seems like it could put him in a difficult position, especially if he decides inflation is too weak and the economy is not strong enough. Stephen that is always a concern, and there is always talk about that. For example, greenspan, when he came in, he was thought to be course,itical, and of his reputation definitely changed. I think that is a legitimate fear for him. He comes in at a time when things could go in a number of different ways. Because he is not a phd is that oney guess of the main characteristics of his term as chair is going to be that he is going to be a consensus builder and someone who looks to gather the votes gather the votes around the table and coalesce a decision, but i dont think he is going to be driving the boat as forcefully as bernanke or yellen. Direction, itthat becomes more difficult to criticize him as being political or driving the process to help the president. Hes going to have the bulk of the committee behind him and supporting his decisions. Paul he doesnt have a phd in economics, and he is a republican nominee. Democrat, where are you going to pressure Jerome Powell . Stephen i suspect democrats are going to want to talk about banking regulation. Just as republicans would like to see that lightning up, democrats are afraid they are going to go too far in the other direction. Aboutent trump has talked easing up on regulation, and a lot of appointees are pushing in that direction. Democrats are going to want to try to pin Jerome Powell down on the idea that he is going to protect the Financial Stability of the Banking System by doing the right thing, in their minds. I would imagine that is going to be one of the main topics. Betty so much of the speculation about jay powell is, how much is he going to be like janet yellen . Is he going to stay the course of what janet yellen has mapped out . Is there a risk at all for powell to stay the course, to be a janet yellen 2. 0 . Is there a risk to that . Stephen maybe less so now. Yellen hass, janet made things very smooth for her successor. She got the Balance Sheet reduction process underway. Unlike in 2015 and 2016 when the fed was telling us that they were going to move three or four times in the year and didnt, in 2017, they more or less have followed the plan, and we know what the plan is going forward. Dothe extent that they something close to that, it feels like it should be quite a bit of continuity going forward, and part of that is because of the decisions that were made in 2017 to set the stage for that. Betty one of the things that comes into the mix in the last few days, it isnt that inflation is at 1. 3 , far from 2 , at that janet yellen gave a speech last week and acknowledged the dangers of inflation being low. Inflation expectations may be pulling back, even though she thinks the tight labor market is going to work its magic, and then the November Fomc minutes show that the doves seem convinced on growth but less convinced on inflation. In august, what mr. Powell said about this question of inflation missing the target, its a mystery, and he said, i think what it gives us is the ability for us to be patient. Is that a tiny hint along the lines of, maybe hes not quite as convinced as janet yellen, hes more willing to wait and see in 2018 if inflation doesnt start rising . Stephen i think he is leaving his options open, which he has done a good job of. He was usually very much hewing to the company line in terms of his views of Monetary Policy. Because he is not very i think powell a littleo this agnostic when it comes to economic models and more willing to take the temperature of the basic economy. What you are seeing is, even though people are frustrated about inflation staying too low, at the same time, it feels like people on the committee are getting nervous about the unemployment rate, about the possibility of overshooting, and also about the possibility of an, overheating financial asset prices. You saw that from dallas fed president kaplan who i would argue is in the middle of the committee, maybe on the dovish side. He wrote an essay that i thought sounded pretty hawkish. I dont think powell is going to say, stomp his foot and this is the way we are going to do things. I think he is going to listen and guide things in a direction rather than forcefully tried to command the decision. Betty weve got one viewer question for you someone has written in a question that they have for you on janet yellen do you think that yellen was didntal given that she start to truly raise rates until donald trump was elected, even though there was no change in the inflation outlook . Stephen thats an interesting question. I think you could make the case. Political,nk she was but i think she is ideological. I think she leans to the left in terms of ideology, and that affects her economic views. I think it affected her views about regulation in the postcrisis world. You could look at decisions she made and say, this was informed by her view of the world. She was keeping rates low to protect president obama, and i dont think she is raising rates to inflict pain on President Trump, but i think peoples beliefs matter. I think we will look back in a few years and say, jay powell was little bit different in the way he looked at things than janet yellen. Paul stephen stanley, we are going to leave it there, chief economist joining us live to help us understand those Jerome Powell headlines that broke at the top of the hour. Our u. S. Viewers will join bloomberg technology, which is already in progress. It certainly is a Trading Platform right now. We see a lot of these industryspecific notions of cryptocurrency. They might have more functionality, not least of which because of the know your customer rules. Our guest was on just a week ago and talked about raising a 500 million fund to invest purely in cryptocurrency. Listen to what he had to say. We end of the year at 10,000 in bitcoin. We will seep your predictions , i think ultimately the use cases are going to be a lot more interesting. Emily that will be the subject of our next conversation about this. Cory johnson, bloomberg editor at large, thanks so much. Meredith agrees to buy time inc. Million 1. 8 billion cash in a deal backed by the Koch Brothers. We will have all of the deals next. Details next. Emily speculation over disney ceo bob igers successor has narrowed down to one candidate. Bob k pack, the head of disneys parks and resorts division, is the top contender. He helped oversee the launch of shanghai disneyland, which went on to exceed 11 million visitors in its first year. Iger is scheduled to retire in 2019, leaving 19 months to complete a transition for the top job. After years of struggling in the print world, time ink is being sold to meredith, paying 18 and . 15 a share. Deal, mediahe Company Meredith received a 650 million injection from koch equity development, giving them a large stake in the brand. Can the Company Become a more formidable competitor to facebook and google thanks to the larger audience this deal of fords . Lets bring in at a hammond in new york. Talk to us about the Koch Brothers strategy. What do they want out of this . Ed primarily, they just want to get money out of this. Everything that has been said about this by meredith is that this is a purely Financial Investment for them to her they are not going to have any board seats. They arent going to have any influence apparently over the editorial direction of time. On paper come it looks like this is something where the Koch Brothers said, this is a good financial opportunity. Its a slight departure from what they have done historically. Trucking. Ne stuff in they have done some telecom stuff, but this is their first play in this kind of media. One thing that is really fascinating is the role of byron troff. Hes an exgoldman guy. He does quite a lot of investing. He is advising meredith on this. He has done investments with the Koch Brothers in the past. I would be sure that he has a significant role in bringing these parties together and potentially getting the Koch Brothers involved in a way that facilitated this deal. Times obviously, th Digital Strategy has been struggling. What kind of impact could this have . Just generally, meredith has done a much better job at weathering this secular change in terms of digital spend, not to offsetng enough declines in other print media. Time has been on the other end of that. I think meredith taking them in, a, they have figured out how to manage the digital spend, but also, you are bringing time into an already successful media product. You can plug that into what is going on in tv and some of merediths local media platforms. The idea would be to improve and otherwise struggling brand. They also said they are going to get 400 million in synergies in the first few years. Just about 30 seconds left what will this mean for some of the more iconic brands . For now, they are going to stay exactly where they are, and meredith came out with a statement saying they werent under any pressure to divest anything. Over time, you will see them at the very least explore possible sales of assets, because this is a valuable asset. Some job come through cuts, but you can also expect them to make some quite serious asset sales, as well. Emily ed hammond in new york, thank you for that update. Coming up, we take a closer look at the juggernaut that is amazon on cyber monday and what competitors need to do to get your attention. This is bloomberg. Im Alisa Parenti in washington. Check on yourth a first word news. Mick mulvaney has assumed control of the Consumer Financial protection bureau. President trump placed mulvaney in charge of the cfpb even though outgoing director Richard Cordray named Leandra English as steppeddirector when he down. Senate democrats Chuck Schumer met withbeth warner english after she asked a federal judge to issue a temporary restraining order to block mulvaney from taking over the bureau. Both english and mold sony sent out memos using the title acting director. President trump took a jab at massachusetts senator Elizabeth Warren with a raciallycharged nickname. You are very special people. You were here long before any of although we have a representative in congress who they say was here a long time ago. They call her pocahontas, but you know what . I like you because you are special. You are special people. You are really incredible people. the president calls on war and pocahontas as a jab at her self identification as having some native american ancestry. Warren did talk with bloomberg trumps comments disgusting. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im Alisa Parenti. Its just after 5 30 here in washington. We are joined by bloombergs Sophie Kamaruddin with a look at the markets. Good morning. Sophie good morning. Quite a few things to look out for in the asian session. Techy, we are watching shares closely after Morgan Stanleys downgrade on samsung, and Morgan Stanley is pushing a wine back on korean equities. Taking a look at futures in sydney and tokyo, we are seeing a downside. We are seeing a slight uptick in the dollar, while the yen is looking little changed. Gold is flirting with 1300. Oil is sinking ahead of the november 30 opec meeting. In hong kong, im Sophie Kamaruddin. Next, more bloomberg technology. Emily this is bloomberg technology. I am emily chang peered cyber monday will be the Biggest Online shopping day in u. S. History. Adobe predicts that deal watchers will hit up retailers for more than 6. 6 billion dollars in sales after black fridays spending topped 5 billion for the first time. Amazon is expected to take a big chunk of those sales. Shares of the company crossed 1200 a share earlier in the session. Can other retailers compete . Joining us from austin, michael osborne, smarter hq ceo. His company focuses on behavioral marketing. Bh insights estimated that on friday, amazon captured about 50 of all online black friday sales, and yet you guys have a study out that is showing some weakness around amazon. Please explain. Michael amazons breath of catalog and expansive nature of all the products they offer for sale online can lead to a lack of personalization and a lack of feeling that they have a perspective on the consumer. We are seeing retailers do very well competing against amazon i taking that approach and applying the data they have about their customers to analyzing that behavior and predicting that behavior to provide a better experience for their consumers. Emily how do theemily strategies of other big retailers like walmart or target or jet factor in the . Think all of those capabilities that jet brought to walmart are interesting for walmart as a brand. One that has grown up as a large bigbox infrastructure company, the think all of those capabilities that jet brought to ability to put a store in touch with 90 of the u. S. Population, 10 miles or less, that capability is amazing. Those capabilities that a jet would bring to walmart can help walmart in competing against amazon, and i think they are doing a good job of that. Another example is walmart acquiring bonobos as an onlineonly brand that moved into shoeviewing. Buy thednt actually product there. By buying that brand, they are able to put that in all of those walmart locations and take over apparel retailer and turn it into a player overnight. Emily what about Smaller Companies and how they thrive over this Holiday Shopping season . J. Crew, i got a torn if i dollar the mail for free, no strings attached. How does that say about Companies Like j. Crew are doing . Michael in general, when you see those blankettype promotions, particularly ones that seem too good to be true, from a brand,25 it can smell like desperation. If they know what you like and are showing you something that is specific to your browsing characteristics or purchasing behavior in relation to that brand, that can be very effective. In the case of blanket promoting and allowing for steep discounts, it just hurts their bottom line, and that can be something that is a sign of weakness. Emily where do you smell desperation, and which smaller retailers do you think are doing well . Michael thats interesting. I think folks sending out the 25 free gift cards, that has got to be a sign of tougher times. About sears,dy jcpenney, the year over year samestore declines in those stores, but even some of the ones doing will digitally, they may be having some trouble offline. There are up and coming small brands that are doing very well. Mattress,k at casper they get rave reviews, and they have turned things a bit differently for the way you buy a mattress. Smaller brands have a very strong point of view and perspective on what their customers want, and of a stick to that. Thats a lesson that even larger retailers can use because they understand their consumer. They can use that perspective to drive a strong point of view and have their philosophy be one of listening to the customer, understanding what they want, and delivering the right messaging at the right time. Emily speaking of that messaging, what are consumers responding to . Is it discounts . Is it free shipping. Michael it depends on the brand. It depends on the situation. Consumers are responding to personalized messaging, messaging that speaks to them about what they want, what they have looked at. They are certainly responding to promotions, but the right ones. Your example was perfect. If you werent going to buy anything at j. Crew, you werent going to buy anything, but you might if they sent a message specifically to you. The way retailers use promotions and the way they target consumers specifically can lead to those optimizations that allow for higher margin and higher loyalty and consumer satisfaction. Emily ive got until january to use it. We will see. Michael osborne, smarter hq ceo joining us from austin thank you for stopping by. Washington, the white house may ban its employees from atng personal phones while work. The proposed ban is driven by cybersecurity concerns with too many devices connected to the campus wireless network. Coming up, they use to be fierce rivals in the race to dominate chinas uberlike tracking app. This is bloomberg. Emily one of the four people accused of hacking yahoo you mail account has changed his not guilty plea. The 22yearold canadian is charged with helping Russian Security services with a massive breach of yahoo accounts. He could face 10 years in prison on charges that include computer fraud, abuse, and aggravated identity theft. The founder and ceo of shopi has rejoinedi thef ranksy the shopify of ceo of billionaires. Shopify shares spiked after the Company Recorded record black friday sales this year. Billionmassive 753 Trucking Industry may have seen the birth of a new giant. Two of the countrys biggest like uberlike Truck Services are emerging to create a company that could rule that sector. The new entity is valued at more than 2 billion. The deal ands bitter feud that saw the companys accusing each other of foul play just months ago. Lulu, this sounds very familiar. It reminds me of a merger we saw a while back. What similarities and differences are there . It is absolutely one of those ridesharing companys merging together after a cashburning battle. Weve seen some frosty battles between these two companies, but now they have merged, according to our sources. The companies are already starting to seek new funding for expansion. The most interesting part is the person they picked as ceo. He was an early investor in one of the companies, but he is also of didi, the company that beat uber out of china. Emily the truck market in china is fascinating. 80 of cargo in china is carried by truck. Many trucks spend hours at a time simply standing empty. What is the potential for disruption . Trucksof the time, these are standing empty, and that is where these trucks came into play. They provide service, maintenance service, like truck repairing, and also, hassling providing for these companies and across china. With the new money they are going to raise, they are going to build out more Service Maintenance sectors and build out their i. T. Infrastructure. Emily what do we know about how the new company is going to work . Will it be one app, one name . Its unclear, but if history had is any guidance, what we have seen is when companies merge, when one Company Takes over, not only in terms of personnel but the app and the traffic resources, that will be redirected to one of the platforms. They dont immediately kill out the other one, but there will be a focus, a shift. Emily obviously, the chinese domestic market is huge, but what does this say about the companys International Ambitions . So far, the companies have remained focused on the china market. We have seen companies in Southeast Asia running out of hong kong, but these are more intercity companies. There is potential for them to go into Southeast Asia and other regions in the world because there is demand their. Emily thanks so much for stopping by. Up, are Tech Companies responding to the challenge of policing their Online Platforms . What needs to be done . We will hear from an industry veteran next. Stay tuned this tuesday for coverage of fed chair nominee jay powells Senate Banking committee testimony. This is bloomberg. Emily nowemily to a story we have been following, the responsibility of big tech when it comes to policing their Online Platforms. Google, twitter, and facebook continue to look for steps to mitigate actions like hate speech and fake news. Facebook announced a new rules recently. Nathan, i know these are the kinds of issues you are going to give a lot of thought to. Im curious where you believe their responsibilities start and stop when it comes to these issues. I think we have an evolution of what has happened online. The early days of the internet, people type to whatever they wanted to, and there was no money involved. That worked out about as well as it did. Now you have a situation where social media makes billions of dollars a year for these companies. Advertisements also do. They are having to do something they didnt do before, which is look inside what they are making those billions of dollars on. I think it is unreasonable to expect that they have no level of responsibility. Historically, other forms of media have cared. They have checked to make sure that ads are basically truthful and fair, at least to a minimum level standard. Nathan, what do you think these companies should actually do . Their answer is, we are Tech Companies. Not media cu how much further should they go . If you are charging for ads and those ads come from the russian government or somebody else and that matters in that context, sorry, you are charging for the ads. It is your responsibility to look into it to some degree. With respect to the individual speech of people who post things to their Facebook Page or tweet them or whatever, there is always a First Amendment issue. People want to be able to be heard. Of course, i support the freedom of speech, but saying they are not Media Companies doesnt really sound right to me. Are making a tremendous amount of money on sharing that content very broadly. They are not paying for the content, the content comes from average citizens, and i think they have some responsibility. Emily talking about your former stomping ground, i recently sat down with sasha dela, and we talked about regulation. A threat of more regulation in the united states. Take a listen to what he told me about how impending regulation should Impact Company regulations operations. I think the most important thing for Tech Companies is not to worry about any impending regulation. Emily how big of a threat do you think increased regulation is on potentially putting up boundaries around these companies . You have the iron need that many big Tech Companies make billions of dollars on information that its users share with them. They are very paranoid about anything that would stop that from occurring or would increase their costs. To some degree, that is because it used to be really cheap and free. They think, why should we add isra costs now . Some of it whining, just to be blunt. Some of it is more in the nature allow thisboy, if we little step to occur, they might actually killed the goose that is laying the golden nag for us. Emily before i let you go, you have a new cookbook out about modern bread. You have been fascinated by Food Technology for a long time. What do we need to know about the Technology Behind bread today . Bread is one of the oldest foods of mankind. It is full of enormous lore and legend. Correct, other things arent. For example, you must knead your bread. It turns out you dont need to knead. A lot of the other traditional ideas about bread turn out not to be true. That is what we filled the 2600 pages of this book with, history, science, and recipes. Emily any interesting high tech or lowtech food trends this Holiday Season . Morethink there will be sous vide in turkey and sous vide other things. Some of these modern cooking techniques are penetrating out peoplemous numbers of with the ageold question with turkey is, how do you keep the breast from drying out and still have the dark meat cooked well, and the best way is to separate them. Dont cook them together. Emily i am hungry already. Nathan miramonte, cofounder of intellectual ventures and author of modernist bread. That does it for this edition of bloomberg technology. Tune in this tuesday for my conversation with outgoing hpe ceo meg whitman. That is all for now. This is bloomberg. 7 00 a. M. In hong kong. Live from bloombergs asian headquarters, i am yvonne man. Welcome to bloomberg daybreak asia. Trumps pick faces a confirmation hearing later. To gut theged building and refine the regulatory building. Betty im am betty liu in new york where it is just after 6 00 p. M. Bob igers