Have seen them at schools with problems, the teachers love their students and the students love their teachers. Talented. Hers are with weaponry and with guns. They feel safe. I would rather have somebody that loves their students and wants to protect their students than somebody standing outside that does not know anybody or does not know the students. And for whatever reason decided not to go in even though he heard shots fired inside. The teachers and the coaches and other people in the building, the dean, assistant dean, they love their people and want to protect the kids. And thistter with that may be 10 or 20 of the population of teachers. Not all of them. You would have a lot. You would tell people that they are inside. It is concealed so nobody would see it, unless they needed it. It is concealed. This crazy man would not know who it is that has them. That is good. A teacher what have shot the hell out of him before he knew what happened. [applause] they love their students. Remember that. They love their students. I am telling you that that would work because we need offensive capability, we cannot say it is a gun free school. Then, what happens outside . Students leave school and you have 1000 students they are standing outside. The teachers are out there. , the samen comes problem but outside of the school or they drive cars, a lot of things can happen. I want to stop it and it is controversial to say but since i started this two days ago, people were up close to it agreed to it. Vonnie that is President Trump speaking at cpac. One third of the way through his speech and he has gone off script. Ministeralian prime pushed back. He is talking about issues, including the aca and many of his achievements in the first year of office. He talked about john mccains with the repeal of the aca and talked about the midterms. Seems to be on top of his mind. Breaking news, the feds semiannual Monetary Policy report has come out. The fedthe headlines is saying the labor market is near or beyond the length one. Full employment. Wage gains are moderate held down by low productivity. Two major portions of the Monetary Policy report that we and the market will want to concentrate on is the banks, u. S. Banks wellcapitalized, significant liquidity. Stops concern about liquidity in the system. Lets get context on the Monetary Policy report under our new president of the fed, the new fed chair, Jerome Powell. In theg in the context of what we have heard over the last couple of days from fed officials and the fomc minutes, what strikes you about the headlines i just read . Isone thing to keep in mind it is dated because the policy report and the testimony we will get next week is focused on conditions as they were at the end of january at the last fomc meeting and february has been an eventful between volatility in the markets and high wage and price numbers. You put the do emphasis on in the last couple of days . More dovish talk from a couple of said officials in the last couple of days. It would seem to not jive with the fomc minutes. The fed is largely on track for the gradual policy rate hike approach they have had since the end of 2016. Moves andfor three some people in the fed looking for less. A few looking for more but a strong consensus around be three dot approach. Is there more of a risk that we get four or two moves this year. I think we will get four. More private Sector Economists are moving in that direction. The fed a knowledge acknowledged we are beyond full employment and at risk of the economy overheating. I think we have seen plenty of evidence in recent months that wages are starting to pick up finally and we will see a pickup in inflation. The fed may feel motivated to get more aggressive. Reflected in to be the long end of the curve if you look at the 30 year yield. When the 10 year yield gets to 3 and whether it sustains about it. Will it . I think that people for the First Time Since before the crisis started in the market are starting to think about the possibility of inflation accelerating. Not to the extent it did in the 1970s but we may see inflation of around or possibly above 2 . I think we will get there. 2018. End of i think that is weighing on the long end of the market. Andfed themselves participants are assuming we will not get a lot of tightening. Not beyond this year. The concern in the markets, some people are wondering if it is falling behind the curve. Vonnie we have the treasury secretary saying we could get wage Growth Without inflation. Some not sure what that means for bond yields. We have the fed saying we see serious labor shortages. Low inflation still. 2017 was a mystery in terms of wages and prices. Perhaps begin where reading and average Hourly Earnings and core cpi may suggest the mystery is unwinding. The fed has noted inflation in 2017 falling was probably was because of transitory factors, Janet Yellens mantra last year, that is bearing out in the data. One month does not make a trend but the way we started the year would suggest that this year may be different on the wage and price front. Vonnie this is the Monetary Policy report under and Jerome Powell will answer questions next tuesday before the house. That will be an important testimony. His first as fed chair. Is if you are a congressperson, what would you ask . I would want to get a sense of where try to get a sense of his own views. His written testimony will be a reflection of what the committee was thinking as of january. We have a good sense of that from the statement in the minutes. It may be hard but i would love , is hee where he said dovish as janet yellen, or more in the middle of the committee or does he have use that are off the consensus . Or will he be straight down the middle . Nejra are you satisfied with what the fed has been saying so far about financial conditions . It is interesting. There is a certain level of irritation. , in thecember, january fact the fed has been raising rates steadily and yet financial conditions have done, up until a few weeks ago, nothing but it easier. I was a little bit surprised that there was not more agitation in the minutes that were released this week from the january meeting. I think there is some concern. I think it will be interesting to see Jerome Powell, so much more clued into the Financial Markets than some of the previous chairs. Interesting to see what direction the Committee TakesGoing Forward with someone who is operated in the Financial Markets at the helm. Vonnie markets are reacting to a couple of things, the donald trump speech and the Monetary Policy report under new fed chair Jerome Powell. Thank you. Look at the market reaction. Here is abigail doolittle. Bullish action for the major averages. Dow, s p 500, nasdaq up more than 6 10 of 1 , near session highs. If its a pattern we have seen all week with peoples out in the morning and then with the bulls out in the morning. Lets see whether the fate happens. Helping stocks, the 10 year yield down for basis points four basis points. When rates go up, stocks seemed to go lower with Small Movement yesterday across a generation. Today, we lookt at the bloomberg and see the rebound rally over the last weekend i have out of the big selling pressure week and a half out of the big selling pressure not that great. Above thehe numbers 50 Day Moving Average and the s p 500 is below the 50 Day Moving Average and says the nearterm buyers are not feeling great about the current situation. 40 of the s p 500 members above the 50 Day Moving Average, suggesting there could be a reason to think we could see some more selling action. Perhaps the late day fed fade we have seen each day this week. Nejra and the u. S. , President Donald Trump speaking at cpac. A lot of headlines out of the fed with markets not reacting much to that in the u. S. In the immediate term and in europe. Still steady on the stoxx 600 with the dax higher and the cac 40 up. Livex in spain is down 6 10 of 1 . Ibex in spain is down 6 10 of 1 . Stoxx 600 with not much direction either way and on the week is flat when it comes to european equities at the moment as we are about 20 minutes away from the close of equity trading. Based, Swedish Krona one of the worst performers. Cable is steady at 1. 3966. A drop of 60 and one minute earlier in the session. Europe,oving lower in tracking the 10 year treasury yield lower by about four or five basis points. Metals on the london metal exchange. Cable is flat. This shows that sterling is failing to escape a trend channel as the relative strength index pointing slightly lower. A technical chart we are looking at. Is it time to retreat . Taking a look at euroyen, one of the pros look at. Euroyen above the 200 Day Moving Average, the last time it dropped below it was in april of 2017. Vonnie the president is still speaking at cpac, the conservative Political Action conference in maryland. He called the nra great people and patriots. He says the nation needs to strengthen background checks for guns, which brings us back to the beginning of his speech where he said nobody would take away their Second Amendment rights. He said that several times. Now gone on much longer than anticipated, he would have been meeting the australian Prime Minister at before 11 00 at the white house but he is getting the crowd whipped up at cpac. We will continue to monitor and follow these beat on the bloomberg. This is the speech on the bloomberg. Amnie live from new york, i vonnie quinn. Nejra live from london, miami nejra cehic counting you down to countingam nejra cehic down to the european close. Vonnie the market not reacting to what the president is saying at cpac and a monetary report from the fed but some light relief from team usa. Ralph lauren has solidified its place in fashion and the latest design is a 2500 hightech parka that offers 11 hours of heat through batterypowered carbon. Did this help the u. S. . To tell us when we can afford one is david lauren . Thank you for joining us and for wearing your wonderful parka. Is it heated . Not right now, it is warm. Nejra did ralph lauren help with the gold medals . The athletes were fantastic and if you help them if it helps them, you have to ask them. Nejra a great vonnie a great start for ralph lauren, when will you make wearables more of your collection . It is about understanding the consumer. We knew the place needed something to keep them warm on the global stage in freezing environments. The athletes needed something to keep them warm on the global stage in freezing environments and hope to have something for consumers this fall. Vonnie a hint of what it may be . The jacket technology is cutting edge, silver and carbon fiber that heeds at it heats and it is conductive, a new way to take her consumers. Vonnie well that come when your collection come later in the year . It will be a cool jacket in the mix of a lot of Different Things we do. We will celebrate our 50th anniversary and will look at all parts of the company to make sure we are innovated and telling our story with consumers. Vonnie will you have wearables as part of your collection . Yes, our goal is a jacket like this to consumers. Vonnie what about fashion week . A lot of variety in different styles. , how plaguing every brand to keep innovating and being new when the consumer seems to be jaded. At least pockets. Fashion is always changing and consumers are always looking for something new. Ralph lauren has proven for 50 years that it can evolve because it understands the culture, it understands what consumers love. That is a unique position to be in. Vonnie our partnerships increasingly the only way to stay relevant our partnerships increasingly the only way to stay relevant . Do you need to find your next set of athletes . Consumerrtners are the and we are constantly working with them to make a better product. To make sure we are representing what america is about and what the world is about. In terms of partnerships, it depends on the brand and what helps them tell their story in a unique way. Vonnie what are you working at in your Innovation Laboratory . We are having a great time, we have developed cool products. We are focused on a customization project we have at our store in new york and in london and online. You can customize hats and sweaters and shirts. Vonnie you have one. A team usa hat. We are having a good time with new ideas and building on a long history and rich history of innovation. Vonnie another 50 years . Absolutely. Vonnie the stock price is doing nicely and investors are happy. Thank you for joining us on this busy friday. Congratulations on your success at the olympics. That is the chief innovation officer at ralph lauren. President trump still speaking at cpac, he is going way off script. He should have been back at the white house to meet the australian delegation a half hour ago. Still talking to the fired up crowd. There was a protester but he said that it was just one. Byis appealing to the crowd listing his achievements, including judges on the Circuit Court and a Supreme Court justice nomination. He talked about another seven years and mentioned the stock market up 37 since he became president and had been getting embarrassing until the correction. We will continue to monitor the speech. There are important announcements coming up and we will analyze it and bring it to you. This is bloomberg. Vonnie this is President Trump speaking at feedback. Cpac. He has gone off script and taken it longer than we expected, talking about a lot of things about the midterms and his first year and have it is important for his supporters not to get tired. Good for winning the midterms. He gave the crowd a lesson on how a president has a tough time with the midterms following the presidency because it is a fight to win the presidency. It has made people exhausted. He tried to get support for continuing with the midterms in States Hillary clinton did not visit or did not do well. There will be some important announcements in the speech. Nejra european markets are trading as we head to the closed, we see the stoxx 600 into positive territory. Ftse 100 is flat and the dax and cac 40 slightly higher with the xx 600 eight not changed unchanged on the week and the fxbased, a little bit of euro weakness. Euro lower against the dollar by 3 10 of 1 and cable below 140. This is bloomberg. Show me the olympic winter games like ive never seen before. Xfinity x1, yeah, i always know the scor. Triple corks in 4k. Lookin so sick. Stream live on every screen, every win, every trick. 2000 hours of coverage, get your mind blown. 50 olympic channels, yup, youre in the zone. And if theres something that you want to see, pick up that voice remote and just say show me. Experience nbcuniversals coverage of the olympic winter games like never before with xfinity. Proud partner of team usa. Ra from bloombergs girl european equities headquarters. Equities unchanged for a lot of the session. Across the region, a mixed picture with the dax higher and the cac 40. Ftse up. Ibex in spain down 6 10 of 1 in the ftse 100 in the u. K. Off by a 10th of 1 . A mixed picture across the region. On a headline level, stoxx 600 overall has squeezed out some gains on the upside but unchanged for a lot of the session with a flat last five days. Comes toicture when it the Industry Groups with materials and Consumer Discretionary underperforming on the downside and some of the defensive sectors outperforming, telecom and utilities are higher by more than 1. 8 . Model, a measurement of a way to get value with stocks versus bonds. The u. S. Stock advantage over bonds, the white line, has been narrowing, the s p 500 has been narrowing, the dax versus the 10 year bund yield, coming up a little bit. Interesting for investors looking at europe versus the u. S. When looking at the fed model. With sterling, interesting this pits in it dropped 64 one minute but quickly recovered and was trading flat. Not it is higher, up 2 10 of 1 but below 140. 1. 390. Brexit may have something to do with it. Vonnie breaking news, the president has stopped his speech but left the headline for last. He talked about imposing the heaviest sanctions on north korea. This is new information. The heaviest sanctions on north korea even as members of the administration and his circle are in north korea for the livex olympics. Kevin cirilli is at the Convention Center for cpac and saw the speech. Heaviests this, sanctions on north korea . He Just Announced the sanctions and calling it the strongest sanctions ever. Later this morning, cabinet level officials and Administration Officials will discuss this, cutting off revenue portrayed businesses and shipping company assisting the north koreans. The speech was largely vintage campaign trail donald trump where he discussed a wall, made fun of his hair, walked off to you cant always get what you want. Good, whenta is no nafta negotiations are coming to a finish and some republicans on capitol hill including Chuck Grassley urging him to stay in nafta. But will largely dominate the mainstream cycle is his support of arming schools and saying gun free zones in schools are no good at putting children at risk. The conversation continues around gun control, even as the gamesig games olympic get ready to wrap, more sanctions. Vonnie talk about the midterms, a freakish amount. These people will try to raise money and continue the effort for the gop to not have seats overturned. Sanctions, it look like there may be a small bit of a detente between south korea and north korea. Will this may might throw this into jeopardy . Kevin when you talk to National Security officials, they tell you that south korea and north korea, any type of communication is a good thing and largely with the olympic games, there is skepticism among the National Security community that the north koreans are really trying to develop some type of talking with south korea. There is skepticism. Any negotiation will have to involve the chinese. North koreas number one trading partner. These are tough sanctions welltimed as the president s Senior Adviser and first daughter is overseas with Sarah Huckabee sanders, his communication director. Developmenttype of i think the administration is signaling and i think they will put pressure on them. On the midterm elections, covering that speech, i felt i was on the campaign trail. He wants to get back on the 2018 campaign trail, pointing to the state of michigan, ohio, florida, pennsylvania, he said earlier this week that Pennsylvania Republicans could challenge the district redistricting to the Supreme Court. Midterms on the minds of the republicans and the president at cpac. Vonnie his comments on the Second Amendment and he said they would never repeal them and the crowd went wild. How does this fit in with what he said this week about florida and the florida shooting, the meetings yesterday in the white house with survivors families. Actually took an impromptu stronghold and asked the audience to cheer louder for whether or not they like tax cuts or the Second Amendment. He said the crowd wanted Second Amendment. I covered the head of the nra yesterday, he spoke very much using the same terms President Trump did in the sense of arming schools. The president says he does not want every teacher to have a weapon but believes the same way a bank is protected, a school should be protected. A nonstarter for democrats, and some republicans, including marco rubio. Lawmakers return from recess next week and will agree on raising the limit on purchasing , andearm from 18 to 21 bolstering National Background checks and Mental Health system. Trump alluded to it but in line with the National Rifle association, they were a key supporter of donald trump as a candidate, donating 20 million to his campaign. Vonnie thank you all wrapping up the speech at cpac. You have breaking news. Bloomberg, ang the stake worth 9 billion sold in daimler. 10 stake in the german carmaker. Days. Sing the stake in this is bloomberg reporting the news. A billionaire would become the biggest investor in daimler. Geely could disclose the 10 stake in the german firm in the coming days. It has been building, 10 through purchases of shares in the stock market in recent weeks. People have asked not to be named. A spokesperson for daimler has declined to comment and representatives at geely could not be reached outside the Business Hours in asia. This stake, the mercedesbenz their stakefurther in the automotive market. Geely already owns volva. The refreshed lineup of vehicles have made it a popular alternative to luxury german stalwarts. The chinese manufacturer geely acquiring a stake of almost 7. 5 billion euros, 9. 2 billion in daimler. Becoming the largest stakeholder in the german automaker. Vonnie lets get to the first word news with taylor riggs. Gates willport rick plead guilty in the rush investigation and will cooperate. Abc news says he wrote a letter to his friends and family says he will plead guilty today. Robert mueller has put pressure on him and Paul Manafort with dozens of new charges. President trump took a victory lap and spoke of his accomplishments to an admiring crowd at a conservative crowd outside of washington. He pointed to the stock market. President trump the stock market, since election day, it is up 37 . 37 . [applause] it did a little bit of a correction. Taylor President Trump meets with the australian Prime Minister at the white house today. Use partexpecting to of the us writing pension pool to unlock funding for the president s public works plan. Says hernor of missouri made a mistake but did not commit a crime, he is indicted for felony invasion of privacy allegedly having taken a copper picture compromising of a woman he had a relationship with. Europeans citizens looking to live and work in britain is falling ahead of brexit, figures showed net migration, the difference between those coming in and out of britain and the European Union is less than 100,000 for the First Time Since 2013. Vonnie straight to the treasury secretary Steven Mnuchin on those korea sanctions. Those who are working on north koreas behalf, sanctioning 27 entities, 28 vessels, one individual, all involved in sanctions of asian schemes. Evasion schemes. We will hinder north koreas ability to conduct evasive maritime activities that facilitate, licit, coal and fuel transports and limit the regimes ability to ship goods through international waters. Our actions are part of the ongoing maximum Economic Pressure Campaign to cut off sources of revenue that this regime derives from United Nations and United States prohibited trade to fund its nuclear and Ballistic Missile programs. We are also issuing a Global Shipping advisory in conjunction with the coast guard and the state department to put everyone on notice of north koreas illicit maritime tactics and underscore be significant sanctions risk of engagings and maritime business with north korea. We are releasing new imagery of the deceptive shipping practices used by goes to help and profit from Illicit Trade with north korea. These images from december of 2017 reveal ship to ship transfers of fuel and other products destined for north korea in an attempt to evade sanctions. On theine a spotlight practices employed by the government of north korea to falsify identifying information on ships and concealed illicit cargo. Are prohibited by United NationsSecurity Council resolutions and are fully committed to shutting down those who engage in trade with them. Through these actions, we are putting companies and countries across the world on notice that this administration is complied with you in an u. S. Sanctions United Nations and u. S. Sanctions and those who trade with north korea do so at their own peril. The United States will leverage our economic strength to enforce President Trumps directed that any company that chooses to help north korea fund its nuclear and Ballistic Missile programs will not be allowed to do business with anyone in the United States. Kim jonguns Nuclear Program serves one goal, to keep him in power as his people starve and suffer. The United States will not sit by while he threatens American Allies in territories. And territories. We are committed to full and irreversible and permanent denuclearization of the Korean Peninsula and our actions today against those who fueled this rogue regime amplifies our strong results to achieve that end. I am happy to answer questions. Recent weeks, a little bit of between south korea and north korea with not a missile test in recent weeks. Why these sanctions and why now when it look like an opening . Mnuchin while we appreciate the fact there have not been test, not a good standard of what we are applying. It is clear this is a is a directive this is a directive the president issued going back to his time with United Nations and when he Vice President made it clear we were working on these sanctions. There is a huge process that preparing that goes into preparing these sanction type edges and when they were ready, we release them today. , you mention Nuclear Weapons do we have specific examples of this being used to enhance their Nuclear Program . Specific examples of where they have breached trade to do that . Between a linkage speech the president may last week when he said we will be so far ahead of everyone else in was heoes that talking about north korea . Steve mnuchin those are independent issues, our capabilities surpass the rest of the world. I will not comment on direct the source of funds but i can make sure you know that he is diverting money from the people of the country to support his programs. You. Ank this targets 27 entities and 27 vessels and ship to ship, give , is that aor context small portion of the ships involved . Is it a larger portion . Middle . How impactful is going after these 27 and disease and 28 27 entities and 28 vessels . And we willtactful monitor impactful and we will monitor activities Going Forward and do new sanctions as needed Going Forward. This is a significant action, along with the advisory the coast guard has worked on with us that we think will be impactful. Do you expect ship to ship transfers to eventually be eliminated . Steven mnuchin we will do everything we can to stop them. You said we will do everything to stop these, we have intelligence to identify them, this feels like the economic equivalent of a blockade. Is that the next step, a military blockade to block these ship to ship transfers if the sanctions are not effective . Steven mnuchin we will not announced in advance anything we may do in the future on military actions. We are nowing using the full power of the United States economically and working with our allies. That is the priority of the maximum Pressure Campaign at the moment. An economic blockade . Not comechin i will from that but we are using all of our sanction capabilities and will continue to do say to economically cut off illicit activities. Is it the number of vessels and entities . Steven mnuchin it is the largest in number we have ever done against them and impactful. I would say that this brings up sanctionsto over 450 we have on north korea. Approximately half of those have been done in the last year. We have been having sanctions since 2005, and half had been done in the last year under President Trump. Banks who have done hundreds , theseions of dollars are more impactful than actions on chinese entities . Steve mnuchin we will look at them like everyone else. We expect people to follow through on the obligations of the United Nations sanctions and our sanctions. Is russia helping north korea . Steven mnuchin i will not comment specifically other than to say that russia and china are two countries that have traded with them and we are working actively with both of those. What indicators will you use to measure whether or not these sanctions are successful . Steven mnuchin we have classified and nonclassified indicators that we monitor as to the success. We believe that the economic sanctions are beginning to have a Significant Impact on their ability to fund their programs. The unclassified indicators you use, Steve Mnuchin i will not go to the difference between nonclassified and classified. Why not blacklist russian ships . Steven mnuchin we are prepared to blacklist russian ships to the extent there are russian ships. Whether they are russian or chinese, we do not care, if we have intelligence that people are doing things, we will put sanctions on them and go forward with that. On timing, this is when the electric only the games are you games only th trying to set a record 80 message by rolling these out today . President trumps daughter has been briefed and she had dinner with president moon, they have a private discussion in advance of this and this has been an interagency process. As i said, when the Vice President went over there, he announced these sanctions were not ready but if they were, we would have released them and there is a big amount of work being done with the Intel Community to get where we are today. What if this does not work . Steve mnuchin we will not make comment on options in the future. As we seentinue things that need sanctions and rule rollout new sanctions. This is an evolving process and that we do not comment on future sanctions, we have the largest team ever dedicated in the treasury to focus on north korea illicit activity. If there are more actions that need to be sanctioned, we will do that in the future. Could you go into more detail about the ivank briefing ivanka briefing . That she had the appropriate clearance . Steven mnuchin yes. Welby action will be action be military or economic . Steve mnuchin i will not comment on military but the economic sanctions are working. You should not interpret that. Peoplerding north korean under the sanctions. A minister from north korea is coming to the closing ceremonies. Position . E u. S. Steven mnuchin that is for south korea to decide. Our actions are not against the people of north korea. They are against the leadership of north korea and the illicit activities, and our commitment to have safety and security on the peninsula. Can you rule out the united ships . And affecting the Steve Mnuchin i cannot, with the United Nations sanctions with the consent of state flags, there are rights we and other countries have and i do not rule anything out. A north korean ship is make mnuchin i will not comments on what the military may or may not do, under the United Nations sanctions, we have the right with the consent of the state flag. We will actively and we expect states that as we give them information, they de flag the ships. Do you believe the sanctions will insight north korea to have a change of heart . I will notin speculate what their change of heart will or will not be. We believe the sanctions work. Iran, the unified sanctions is what brought them to the table. We believe that the economic might of the United States and our allies, cutting them off will limit their ability to continue their programs. What about companies with no exposure in the u. S. . We can do primary sanctions and secondary sanctions. If the copies are doing business in other places in the world and that is facilitated, we have the ability to cut out the Banking System in other parts of the world. We will look at that seriously. Consideringctively any further designations in the patriot act and terms of banks or Financial Institutions . Steve mnuchin i will not give policy about what we are considering. We are reviewing information as it associates with banks that are doing illicit activities. Last time you were here, supposed to be a calculator on the treasury website where people could figure it out. Battle between the treasury and irs on how to deal with regulations on the tax code, is this rollout going smoothly . Steve mnuchin yes. The calculator is on track and i think being released next week. Week being released next and we will give the press a demonstration. I would emphasize, the rollout of the tax plan, we have had close coordination between the irs and our team at the treasury and the white house and the office of management and budget. There have been articles about a memorandum of understanding that treasury has had 430 years with for 30 years with omb. Mick mulvaney and i are working closely with each other and we are doing work there. The president s of past administrations when talking about the debt have let it go to hell. Yet projections are still close to 1 trillion deficits in the future years. Is the administration comment,chin let me the debt has gone from 10 trillion to 20 trillion over the last eight years and the president is concerned. A big component was spent in the middle east as war on wars. The president has been clear that getting more money for the military was a major priority of his. That is something that was achieved. As part of that, the democrats required us to raise nonmilitary money. Given the importance of what the president wanted to do with the toitary, that was critical get it done and we will look at the issue of budget deficits knowing forward. Going forward. Where is the ministries and on the idea of a . 25 rise in gas tax . The president has suggested Steve Mnuchin something being considered but no decision. During my testimony, the president is focused on the idea of an Internet Sales tax. This is not a new tax. Most states have a sales or use tax. The president wants to make sure the state are getting the money they deserve and they can spend on infrastructure. Would it be economically harmful to raise it on an inflation adjusted basis as some suggest it would be necessary . Steve mnuchin we have not had an increase in the death tax and a longtime and it is one of the issues we have not made any decisions on. Whether it would be economically harmful . Nothing wehin are prepared to decide on right now. Can you update on the monetary of the china and north fora that is the lifeline north korea, not monitored by any international organization. Steve mnuchin i will not comment on what ability we have to monitor things but i can assure you that we have a lot of capabilities. Youhe Prime Minister quoted as saying 70 of the benefits of the tax cuts are two workers, a similar worker back home in australia, what about the flow through being there for workers . Youh korean sanctions, do expect to have strong support from australia . Steve mnuchin i hope so. I have known the Prime Minister for a long time and he is focusing on a similar economic agenda to what we have done and it went to me how he has lowered the worker tax rate on the small and Mediumsized Companies and is focused to do it on bigger companies. He congratulated us on our success and hopefully that will show the success for him. We have talked about this statistic in the past and believe a major part of the burden of corporate taxes are on the workers. We had a productive discussion on north korea and he is supportive. We have encouraged him to work with us. It was a productive discussion and he is looking forward to seeing the president. The 70 that goes to workers you mentioned to Malcolm Turnbull yesterday, is that all in wage growth or some in dividend . Steve mnuchin mostly in wage growth. I will take a couple of questions, you have not asked me , we are working on russia sanctions and i assure you it is in the process. I will be back within the next several weeks to talk about that. I want to emphasize under we delivered the unclassified and classified report. As i said, we are working on sanctions as a followup to that. The last question