Have a deal with the dmes holding them up. More on this is timothy obrien, the executive editor of bloomberg gadfly. Never a dominant. Why would he be calling out these guys . They are supposed to be natural allies, he needs these people. He cannot help himself, this is traditional donald trump. During his Business Career and down in his political career, he has never been good at building allies. Often, at his own expense, strategically and personally. We saw this in new york back in the late 1980s, early 1990s, these epic roles with the then mayor of new york city, ed koch. He needed support to get zoning approval and other big projects. Rather than nurture a relationship, he went to war with him. Ultimately, he lost huge Business Opportunities because of that. Now you see with Mitch Mcconnell, who runs the ,epublican party in the senate trump slapping him around on a regular basis rather than cultivating him. Julia why is the question, why can he help themselves, why doesnt he put the desire to attack these people before results . It appears to be irrational. If you are judging him based on getting legislative accomplishments through the pipeline. I dont think that is the first thing that motivates donald trump. I think he is primarily motivated by appearing to be a winner. And being centerstage. ,e will go to war with anyone if he feels it threatens this notion that he has come up short. Julia also joined by margaret talev. He also mentioned the fact that we should have tied this Veterans Affairs act to debt ceiling, then we would have got it done. Because the act was signed yesterday, but does he have a valid point on this . It is an argument that could be made, it is one scenario that white house officials , but it is a path that would have had some different political implications in terms of frustrating an important segment of the Republican Base that wants to have a discussion about the debt ceiling that attaches spending cuts to it rather than having it forced through. This is a group that President Trump wants to have an alliance with. These other issues heading into the fall, having an alliance on the health care fight and such. Strategically for the white house, it wouldve been a difficult decision as they pursue that route. It may well have imperiled speaker ryans ability to hang onto his position, all kinds of political implications for the Republican Leadership in congress and the white house. , it is true, to some extent, to say this is something the white house wanted on some level, but it is much more simplistic than the complexities that actually surrounded the debate. Julia that is what tim is alluding to hear. He made the mess worse this week i saying even if we need to have a shutdown, im getting funding for the wall. Even if we look at that example, that impact on markets, we have seen auction yields rising. Investors are starting to look at this and say this is a potential possibility. Is it right to be more concerned after the events of the last few days, in light of what we are hearing of the tension in the gop . The discussion about whether to have a shutdown, discussion about going over the fiscal cliff in terms of the debt ceiling are, at this point, two different discussions. If they become one discussion, there will be more cause for concern and you may see that reflected in the Way Investors feel. I think one unanswered question is does the president really want to have the shutdown fight, or does he want to use this negotiation to try to bring the Republican Leadership to heal . Been having a buildup for it these last few months, while many in his base want that, its also true you can make the case that some of his folks would make the case that there is great progress on immigration issues in terms of apprehensions of the border, a lot of the stuff the general kelly did while he was secretary of dhs, that the president himself is now touting. The wallng for construction is key to being able to say you have concrete progress on immigration issues. Maybe not. This is a debate not just in the Republican Party but in the trump white house. Julia we were talking about the desire, what equates to success compared trumps eyes, to the ultimate outcome based on his actions. What do you think success looks like to him on that point . Going back to when margaret said, using this as an opportunity for leverage. He is very focused on conveying personal strength and strong leadership. He defines that in his own, unique way, which is a eventually essentially running roughshod over the legislative process or not brooking dissent from people in the congress, other congress members. That is how he defines it. I dont think it is a useful definition, because at the end of the day, he came into this administration promising a tax cut, regulatory overhaul, dealing with immigration, and repealing obamacare. He is in danger of getting that of those things because of the way he leads. It is time for a course correction. Whether he is capable of that is another thing. Julia what about the tax reform . Behind the scenes, a lot of people say the chaos we see in the white house makes tensor for more likely now because it is down to political survival that they get something done. Are we being overenthusiastic there . That could be true, it may not be true. [laughter] look, here is what we dont know yet. We dont know whether the house and the senate can get on board at this stage with a unified plan, whether the white house can lead, whether the white house would do better to sit back and let congressional leaders see what they can get first before putting their thumb on the scale. There has been this dance where the republicans in leadership house, congress say we want tax reform, we want a tax cut. But precisely what that looks like, precisely what President Trump is willing to double down on, is not clear. For him its about getting something done. To the extent these tensions are swirling around the shutdown, debt ceiling debate, and the president s own treatment of some of these republicans he wants to step out and walk the line for him, it will complicate the precise answer to what tax reform can look like. Julia the gop doing a dance. Something tells me that the steps will get quicker and the music will be getting louder. Margaret, great to chat with you. You can read timothys article on the bloomberg. Lets get a check on where markets stand. Abigail doolittle has the latest. Today has been a wishywashy day for the markets, small gains and losses for major averages. Right now we have small declines for the dow, s p, and nasdaq. A decent amount of intraday volatility. The nasdaq had been up. 4 , down. 5 . Some uncertainty ahead of jackson hole and janet yellen speaking tomorrow. We have another source of anxiety, oil, down 2. 5 . This has to do with harvey, according to the storms in according to a commodity strategist here at bloomberg. With the refineries closed it means lower demand for oil and more supply, helping to explain why the price is going down. In the meantime, the demand for gasoline is going higher. We still need to use gasoline in the real world, and that is helping some of the refineries. Valero Energy Among Others trading sharply higher. Is going higher and that is the difference between the input price for oil, which is going down, and the out what, gasoline. As that widens, that means more profits. Helping to explain why these refiners are trading higher on the session. Finally, oil is turning into a rough month. This is showing the monthly change for oil in blue to the upside, gains in orange to the downside. We see oil is down 6 on the month, on pace for its worst month since march. Right now six out of eight months are to the downside, on pace to match what we saw in 2015. L having a rough road despite the fact that the dollar has been in decline as well. Julia thank you. Coming up, President Trump may have been having a pretty rocky relationship with ceos recently but the gop is courting Corporate Support for a tax overhaul. Details new york. This is bloomberg. Julia this is Bloomberg Markets the trump economy. I am julia chatterley. Lets get a check on the first word news with mark crumpton. Residents along the texas gulf coast are bracing for what could be catastrophic flooding. Tropical storm harvey could drop as much as 20 inches of rain on the region and forecasters say harvey is on track to strike texas late friday with Hurricane Force winds and lifethreatening flooding from Corpus Christi to houston. Texas has not been hit by a hurricane since 2008. Senate majority says he has reservations about President Trumps comments on trade. He spoke at a breakfast in louisville sponsored by the Kentucky Farm bureau. Im a little concerned about some of the trade rhetoric, not only by the president who succeeded, but by the people who are running. We still have a selling job to point out to most americans that trade is a winner for america. The president has been posting tweets, criticizing leader mcconnell for failing to repeal and replace Affordable Care law. Jens secretarygeneral stoltenberg says despite challenges facing the alliance, terrorism should not be accepted as what he calls the new normal. He then put attacks in barcelona, nice, london in historic context. The 1980s,70s, in , the ira, theps red brigades were responsible for far more deaths than we see today. Mark he added those challenges seemed impossible to overcome but we did, and we can do it again. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Julia ceos may be shutting photo op with president donald not stoppingt is Republican Leaders from making the rounds to companies in efforts to rally support for massive tax overhauls. Paul ryan spoke at boeing in the last hour. Here with more is matt townsend. Right to have you on. Mutual interest on both sides, whether it is companies that want to see a reform of the tax extrump. For the gop, matt there is definitely a rift between this Corporate Counsel which fell apart last week, america come and administration. The gop has tried to be the party of big business. Will not be invited to boeing or intel to do public events, paul ryan is still pushing the agenda, willing to get ceos to do these big events, something the president would have trouble doing now. Julia these events were organized prior to what happened in charlottesville, we should make that point. Yes, but in general there has been a rift going on publicly. Julia i love that you have reiterated that there is a public rift going on. Donald trump made these comments. The rally he had in arizona this last week, to lets listen to his relationship with the country ceos. Little heatot a with allies from the media, they said we will take a pass. Not all, but some of them. I remember those that did. But people are now calling me. , like, wet have been will take a pass. Can we get together for lunch . Lets do it privately instead of getting together on a council. These people just dont get it. They are calling. How about getting together privately . Why should they be on a council . Exactly. That is what we heard talking to a lot of people, lobby is, people working for companies. Course, public announcement with the president is not what we want to do. Julia pretty toxic especially if you have shareholders. He also said to these ceos, i will remember the ones. We have a bit of a difference here between intel and boeing. Intel put out a statement in support of the manufacturing counsel. They were one of the first to pull the plug on the council. Does that matter . Matt at the end of the day, the president is still the president. These companies will still engage in the white house. Saying, president is they want to do a meeting privately, i think that is probably spot on. Lobbying, influencing the white house is still a part of corporate agendas, especially with tax reform and deregulation going on. I dont expect any sort of white house meeting with a bunch of ceos. Julia boeing is the countrys largest exporter. Defense contracts. There is a lot on the line for these companies. Continued to keep up the debate, lobbying, the talks with the administration is the right thing to do. Matt it is. With the congress in a stalemate, not much happening, what can be done . Executive orders, deregulation. Those all go through the administration. You still have to play nice with the white house, just maybe behind the scenes. Julia do you think theres an element of frustration for the ceos here . We saw it in light of the charlottesville comments, the concerns, but obviously, for those who have shareholders, limited partners coming to them and saying we cannot cope with this, you need to take action, do you think there is frustration they have been put in this position . Do you just go with the flow . Matt there is definitely frustration. , heceo of fedex, fred smith was not a part of the council, but i wrote a story earlier that he was so frustrated but what was happening with the tax overhaul debate he was coming up with his own plan. He did not see things going anywhere. Julia and yet, there are those who believe this chaos makes tax reform more likely because it is absolutely critical now for this administration to get something done. Matt that is one way to look at it. This is something that everyone is on board with. Big parts of the American Public support this. Julia i keep trying with this but im not sensing your optimism. Great to chat with you, matt. Still ahead, the u. S. Is preparing another round of sanctions to punish venezuelas governments. We will have the latest next. This is bloomberg. Julia this is Bloomberg Markets the trump economy. Im julia chatterley. U. S. Is repairing another round of sanctions to punish the governments of venezuela. One potential tulowitzkis trading in the countrys debt. Here is the managing editor for latin american governments vivian rodriguez. The me a sense of what details are, what is being talked about in terms of the bond market . They are planning and discussing a new round of sanctions. Instead of targeting individuals, they actually may. Arget Debt Securities also by the state oil company, which is very popular, widely traded throughout the world. Julia i am a bit confused here, how does this impact the venezuelans in the shortterm if they dont need to raise cash versus impacting those that want to prepare for an event in the market . Those that trade our own these bonds . The strategy of the u. S. Government has been to cut access to funding or the government. Most of the sanctions have been targeted to get access to cash more difficult. And punish the government. It really adds pressure. If they target the Debt Securities and we suspect may be a block of some sort is being discussed, if you are a bondholder, that is very risky because you cannot prepare for an event. You could be holding the securities during a major event. Even talking about this could create the kind of increase in yields, dramatic pressure on the government to give them a taste of what it would look like, if things got really hairy. The probability of some of these bonds is already skyhigh. Im confused about how this is going to work. You are right, the bond has been suffering as sanctions keep ramping up, piling on top of each other. There is big coupon payments coming, 3. 5 billion worth it to me now and and of november. The government is running out of money, so suddenly you are a bondholder, and maybe you may not be able to trade the security you are holding. Definitely a risky proposition. Julia the venezuelan treasury is going to get a lot of angry phone calls from people. What about the probability of this versus Oil Sanctions . We were talking about the possibility of seeing direct sanctions on the oil or. Is this more easy for the united states, if that is the appropriate word, to enact, rather than something that has such a critical impact on the economy like Oil Sanctions . Blocking oil imports is a dramatic, needed impact. The u. S. Government has said that they are really mindful of the impact that such actions could have on venezuela. For example, this will definitely strangle venezuela quickly. This is the main source of income the country has. Julia Goldman Sachs came under fire for owning venezuelan bond. Venezuela debt is becoming a bit radioactive, has at least established a bad rap with traders. Julia thank you for bringing us that information here and we will see if they are enacted. Up next, we speak about the growing divide between the president and republicans like Mitch Mcconnell. Former minnesota governor tim pawlenty will weigh in. He is also the ceo of the Financial Services roundtable. From new york, this is bloomberg. Julia this is Bloomberg Markets the trump economy. Im julia chatterley. Assignment. S on lets start with the headlines on the first word news with mark crumpton. Harvey is now a hurricane. The National Hurricane center says the storm off the texas gulf coast has strengthened to Hurricane Force and is packing wind of 80 mile per hour. Harvey could drop as much as 20 inches of rain on the region. Its forecast to strengthen even more as it approaches the coast. U. S. Troop increase in afghanistan is underway. The commander of u. S. And nato forces there says the influx of american soldiers will continue over the next few months. Most of the new troops will be used to Train Afghan Security forces. This 26th anniversary of ukraines independence from president Petro Poroshenko met with u. S. Defense secretary james mattis in kiev today. Secretary mattis was blunted his criticism of russia and said the u. S. Is committed to ukraines sovereignty. Mattis accused russia of menacing europe and suggested he favors dividing ukraine with defenses and leave the weapons. The winner of last nights Powerball Lottery was introduced at a press conference in massachusetts. She lives in the area. Was 758 million dollars. She is 53 years old and is a hospital care worker. She said she will be quitting her job. She says she picked the numbers at random. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Julia you are very excited there. Would remain at bloomberg, even if he won. Back to President Trumps legislative agenda following his relationship with key republicans and his threat to shut down the government if he does not get funding for a border wall. Me now is tim pawlenty, former governor of minnesota and former president ial candidate. He is the ceo of the Financial Services roundtable. Thank you for coming on. The markets are starting to react to the concerns of a shut down in the fall. How serious is this concern in your mind . The chance is not zero but very low. The consensus in washington among policymakers is they cannot default, they have to adjust the debt ceiling to accommodate authorized spending. It will be on the but most believe it will get done. Julia probability was at 50 to 75 . Goldman sachs saying 50 50 as well. Why are they overreacting in your mind . I think there is a perception that there is more tension between the congress and white house than previously thought. Even within the Republican Party, even though they have a majority of the house and senate, there is a subgroup within that Majority Party in the congress that is very disinclined to vote for these things which usually signals you need democrats, and its not clear they will be democratic votes for this. Julia you think there is an over exaggeration over the tension. What about the likes of paul ryan, Mitch Mcconnell . President trump was tweeting negative comments about them today, reports that they have not spoken for weeks. An exaggeration in your mind . There appears to be some tension there but they need each other. None of them can succeed without the other. This debt ceiling is going to get raised, not because they love each other, but because it has to. Julia do they need to be friends in order to get this done, doesnt have an impact on enacting reforms, tax reform, for example . As with most of life, relationships matter. It can be helpful, i wish it were better. Perhaps in the future it will be, but right now, they are facing a legal deadline back by a crisis. I think they all are committed to get it done. I think the odds are actually higher than you mentioned. Julia pragmatism wins through. Usually. Julia i want to talk about tax reform. You have talked about it as the political holy grail, the low hanging fruit for the gop. Others say it is a result of the chaos we have seen, the likelihood is high or that they will get something done because its about political survival. If they dont manage to get this done, do you believe congress, the gop is at risk in the midterms, isnt that bad . Im very bullish that tax reform can and should get done for this reason. Publicans control the congress. They have been running around for a decade telling their supporters and benefactors, if we get in control, we will do this. Intellectually and politically, it is the holy grail of the party. For them not to do it would be a terrific failure. I believe they will because its a matter of clinical necessity. And its a good idea, projobs, proinvestment. It makes good economic and policy sense as well. Julia does failure to enact this cost the gop or the senate . Could it be that important for them . I dont know if it rises to that level but if you have a failure on repealing and replacing obamacare and you fail to address the tax issues, and you dont to infrastructure, and the economy stays in the nick, and you have these distractions the sensekground, that things in washington are worse than ever, if thats possible, that would be prevalent. Republicans have a favorable map in 2018, but even sometimes that cannot save you. Julia i want to ask you about plans for deregulation. Analysts believe the government deregulation we are talking about now could add 27 billion of gross profits to the largest six u. S. Banks. They could ultimately then return an additional 63 billion to shareholders if they choose to do so. Do you think that is a good outcome or a bad one, both for deregulation and the cash potentially going to shareholders . I think the rationale for common sense adjustments to the current regulatory structure is not so banks can make more money. That is an interesting side note. The real reason to do it is because of the vital role that banks play in a lending and thereby growing and stimulating the economy through the Critical Role they play in that function. It is nice, i suppose, for shareholders that they will do better, but that is not the reason to do it. You doing to get the economy moving. Julia how do you make sure this regulation is good and actually benefits the consumers, in addition perhaps to shareholders . That is a great point. You need smart people who are. Nformed and fair and balanced we need to protect consumers and taxpayers but we dont want to go so far in that regard that we and thee lending circulation and flow of capital aggregation, deployment of capital that is needed to grow the economy. It is a balancing act. Most people would say some reasonable adjustment are in order. Julia the pendulum has swung too far . A little bit, yes. Onia we had a risk advisor the show and he said the regulation may add icing to the cake in good time that also blood in the water in bad times. Do you think he is wrong on that point . Optically, this is tough to sell for an ordinary american. It depends how you do it. If you say to Community Banks and small banks, even if they fail, are not systemically going to take down the economy, some relief is in order for them. Most people would say thats a good idea. We probably over baked a cake with respect to them. If you want to say we want to have the ability to have a andker rule so that banks other institutions are not engaged in speculative actions with depositors money, people could agree on that. But the volcker rule that got needsred and doddfrank to be streamlined. There is a reasonable in between point where you can do both, have protections for consumers and taxpayers and not subjugate the economy. Julia tim pawlenty, former governor of minnesota, ceo of the Financial Services roundtable. He is staying with us. A change of heart on wall street. Why some like Lloyd Blankfein supported cutting taxes now back President Trump. This is bloomberg. Julia this is Bloomberg Markets the trump economy. Im julia chatterley. Trumpsresident election, ceos of the thighs biggest u. S. Banks joined a campaign called fix the debt which supported higher taxes if necessary. Now some of the same ceos are cheering for the president s proposed tax cuts. Max abelson writes about it in the new issue of business week. Max joins us here in new york. Back with us in washington is tim pawlenty, former governor of minnesota, former president ial candidate. Here swerve here. Was we willebt, it raise taxes if necessary but as long as they are deficit neutral. Max it is not that the ceos no matterfix the debt what happens. They had their ideas of how to do it. The difference right now is that trump as an outline of what he wants to do with tax cuts, it has to do with cutting personal taxes, Corporate Taxes, and then getting rid of the alternate minimum tax, estate tax. Even conservative estimate say it will cost of future lien dollars. What i read about in next weeks business week, bankers are really excited about it. It is hard to blame them. If the taxes you pay and the Company Taxes that you pay are cut, that is a cool thing. On the other hand, some of these people a few years ago talked about how much the deficit mattered. Julia quickly, have you spoken last 10 days,he how are peoples perceptions of the likelihood of tax reform shifting or not in light of what we have seen . Max when you are working for a magazine like business week, things happened during the week where you have to think about, maybe i should go back to ask about. One of those people is mr. Tim pawlenty. There are not many people in america who know both wall street and washington but he does. I circled back to him and others. Although we did not quote him in the story, he and others said, if anything, tax reform is even more important now because republicans are going to have to get something done. Tax reform seems to be one of those things where they may be able to deliver. It will not be easy 10 can speak for himself but i think he is someone who says, if they can step up and do something, tax reform maybe it julia . We have heard paul ryan talk about the lack of competitiveness. He called the u. S. Corporate system the least competitive in the world. Is more easily executed, personal tax, Corporate Tax reform, how do they combined the two and make it deficit neutral . There is a question for you. There is strong sentiment that this cannot just be about c corporations, the larger publicly held companies. It also has to be the passthrough entities, america smaller businesses, familyowned businesses, and that is were the bulk of the new job growth comes from. It also has to include some relief and reduction for middle income taxpayers personally. Important. E are the idea that it will be just corporate relief is not politically wise or sustainable. Julia how are you going to finance this . To bring it back to the discussion of the deficit and debt levels, does it matter if you add 1 trillion, 5 trillion to the deficit . It is like entitlements, for example, which are such a huge part of the government spending. You are looking at the thin end of the wedge here. The other thing is to look at the fork in the road as to whose numbers congress believes. A bunch of conservatives in Congress Still say, in the end, this will be revenue neutral. They will sunset some of the tax cuts in your nine to make it work. But there are also some conservatives who are saying now, the cbo is all messed up, their numbers are wrong, we will assume more growth. Even though it is not technically even though the cbo says it is not in the red we are going to say its in the green. Watch you gets to be the umpire in terms of the numbers here. Max when i was speaking to bankers and chief executives, i would say to them, lets say at the end of the day, this will cost 2 trillion over the decade. They say, you have to take dynamic scoring into account. Maybe there will be so much growth those trillions of dollars will go away. But the truth is some of the modeling that says this will cost trillions of dollars is dynamic scoring. The ballsts to call and strikes here, whoever gets to decide how much growth we will have, how much it will cost, they are the ones with the power. I think we will see more cdo insults being flung around. They will be more important than ever before. Tim, i want to ask you about Corporate Taxes. Paul ryan saying average Corporate Tax rates are closer to 35 . For some of the big corporate scum out of, facebook, apple, they can go to europe and pay peanuts, avoid paying taxes legally in other countries. Even if you are reducing your tax rate by 10 , does it really matter . I think it does. President trump has had 50 on the corporate rate. The current sticker rate is 35, so that would be a dramatic drop that would matter. Others in congress are saying they be in need to be realistically in the 20s, low 20s. I know the administration does not want to start there. It matters a lot. We have the highest Corporate Tax rate of any developed country in the world, it is anticompetitive, it hurts americas economy, hurts american families, lack of economic growth. It is important. Julia thank you so much. Thanks to tim pawlenty, ceo of the Financial Services roundtable. Here in new york, max abelson. You can read his full story in the latest issue of business week now available on newsstands and online. Balls to the lowest level in almost two years after reporting earnings that missed estimates. Oliver renick joins us now. Tell us whats going on. They did miss earnings, not where they wanted to be with the bottom line but also not where they wanted to be with the outlook. This is weighing on their peers. This company has a lot of things going on. At the end of the day, it is one of these consumer staples. They dont typically trade at higher valuations, often a safety play. Focusing on the fundamentals today, lets look at the disappointment. Earnings history here. A bit of a changing story. The stock had a pretty nice run until 2016, and has come off significantly from its highs. Look at the past earnings results. This is what we are looking at in terms of the beats or misses. There was a lot of green in 2016. This is now the Fourth Quarter they have missed an here on a price reactions. Down. Investors are not liking this. Part of it may be a temporary thing, talking about their home Food Products having some trouble. At the end of the day, they have one of the higher margins. Some of that is starting to taper a little bit. Julia if they have higher margins, what is going on with the product costs . Coffee was one that you are looking at earlier. Oliver they have coffee, the dinner meals, the basics, smokers, jelly. What is happening now, a bit of a margin page going on. Expense price volatility in the pork belly trim market. Thisgive you an idea is segmentation for the product line. I want to jump back in a terminal 2 look at how the margins can affect this company. What im looking at here today is a few things. Look at where they rank in terms of valuation next to their peers. 92nd percentile next to their 50 peers. Trading at a trailing 12month earnings of 20. That is pretty high. Here are the margins. That is good when you see them in the higher percentile, but the problem is earnings. Trailing 12month earnings, really bad in this situation. If they lose those margins, that is the value add on the products that will make this uphill possible. Julia how do you improve upon that . The direction tends to be down. Tough one. Get a previewwill of a big event tomorrow at jackson hole with janet yellen and ecb president mario draghi scheduled to speak. From new york, this is bloomberg. Julia this is Bloomberg Markets the trump economy. Im julia chatterley. The main event for the fed jackson hole event comes tomorrow with the janet yellen and ecb president mario draghi scheduled to speak. Joining us now from jackson hole is mike mckee, our International Economics and policy correspondent. What a beautiful backdrop. Talk about who is the more important banker here in terms of markets, janet yellen, and what she could hint about Balance Sheet retraction and a possible rate hike, or is it mario draghi and his prospects for qe . He had an impact on the markets last month when he talked about the possible ending of qe. If i knew what they were going to say, i could give you an answer. Development ofe policy. They will have an impact on markets, but both have a chance to avoid that. Janet yellen talking about financial stability, could say stocks are overvalued, the fed is concerned about that, or she could say lets talk about doddfrank and how we can make really qatari life easier, make things run more smoothly. Meyer draghi could talk about what theyre going to do next on qe one more likely he will repeat the comments he made that were not so controversial, that it is time to start thinking about withdrawing stimulus because we have done a lot and cannot keep going in the same direction. Neither one expected to get into the kind of specifics that would change peoples thinking in the markets, but as a wise man said yesterday, it is not what they say, it is what the markets here that matters. Julia i feel like we have been there and done that and bought the tshirt when it comes to valuation. Stanley fischer mentioned it, janet yellen. The market cared for 48 hours, and then it decided to rally again. What about the prospects of further tightening . Weh the fed hike last time, said it was a free hike. Financial conditions were loose, they were not reacting. Now we are seeing financial conditions at least tightened slightly. Does that have an impact on asset prices talking about these two things . Mike probably not at this point, unless it keeps going. We are seeing a little bit of tightening in reaction to whats been happening with the dollar lately. It has to continue, has to be bigger. The Financial Conditions Index shows we are still quite loose in terms of policy. According to the fed people we thatbeen talking to, justifies another move by the fed sometime this year. It is not imminent, they will go with the Balance Sheet reduction in september, but it looks by december they could be on track for another rate move. Julia great to talk to you, mike mckee. I want to quickly bring you some breaking news. Amazon says whole foods will cut some prices starting monday. This, in light of their decision to purchase whole foods. Already the changes are being made. Whole foods set to cut some prices. Up, one collectible will have fans racing to the auction original daytona watch. We will speak to the watch director at phillips to see what kind of bidding frenzy we can expect. From new york, this is bloomberg. Scarlet its 2 00 in new york, 7 00 in san francisco. Welcome to Bloomberg Markets. We are life in bloomberg World Headquarters in new york over the next hour. Here is next stories we are covering. In debt ceiling blame game washington. President donald trump blamed majority Mitch Mcconnell and paul ryan for failing to avoid, what he calls, a miss. All street slang different hits on the federal debt. The ceos of big banks who want higher taxes to drive down debt texas arelds in bracing for landfall. Some platforms in the gulf of have category three storms, what winds of 125 miles per hour. U. S. Markets close in two hours. Lets