Interest rates to 7 . Thats at that 25 basis point increase. There was one member of the policy making committee who voted to leave the rate unchanged. So not a unanimous decision but nevertheless mexico lifting its Interest Rate, benchmark Interest Rate for a seventh straight time to kesh some of that rising inflation. And also to anchor inflation expectationings. We do know that additional rate increases had been expected from economists as well. Julia and in a ties to what were seeing in the markets. The mexico peso stronger by. 8 going into this decision. Actually it is slightly softer as a result of that. But im talking marginal. Right now dollar in mexico down by some. 7 as scarlet said. This decision was expected. The question of course is whether or not they decide to hike once more this year. Because thats what the market is anticipating that they see rates go to 7. 25 terminal rate by the end of this year. Scarlet so were definitely near the end of this tightening cycle. But nevertheless, seven straight Interest Rate increases. The rising inflation from the weakening peso over the last couple of months certainly the big driver here. Julia yeah. And the rates, been since 2009. The question is, at what point do they bring them back and perhaps boost the economy . We did hear from the mexican finance minister yesterday, who spoke to us exclusively about the banks path on rate hikes. Listen in. Policy wise, the inflation expectations, and the markets are seeing potentially another couple of increases this year. But theyre starting to predict that the Interest Rate could start going down as early as the end of this year. Nd i think theyre rate. Scarlet Senate Republicans unveiled their proposal to replace obamacare. The outcome of the bill is far from certain. President donald trump, though, praised the draft of the bill. President Trump Obamacare is a disaster. Its dead. Totally dead. And were putting in a plan today thats going to be negotiated. Would love to have some democrat support but theyre obstructionist and never support and we wont get one no matter how good it is. But we will hopefully get something done. And it will be something with heart and very meaningful. Scarlet here to break it all for us now, blerk Bloomberg Sahil kapur. Lets start with you, and some reaction on capitol hill first. Bus we did get some breaking news moments ago that there are a couple of senators, republican senators who are not in favor of the bill as its currently written. Sahil thats right, scarlet. Just moments ago, a group of four republican senators put out a joint statement saying theyre not ready to vote for this bill as written. Theyre complaining that it does not perform to task that they say are important to them and promise they would do. One is repeal obamacare and the second is Lower Health Care costs. The senators are rand paul, ted cruz and ron johnson. Three of them at least among the most conservative senators in the chamber. Now, Mitch Mcconnell can only afford to lose three republican senators. And this bill is dead. If he loses these four this bill does not stand a chance of passage. This is a huge blow to the discussion thats put forward. These senators are not necessarily ruling out supporting this bill. With some amendments. But its clear they want some changes or and if they dont get it looks like this bill will be a very heavy lift and other republicans who say they are concerned about the depth of some of the cuts in this. Especially to medicaid. They include dean houer of nevada, a republican senator up for reelection next year and Susan Collins put out a vague statement saying she is concerned with some provisions of the bill but ready to review it. Julia they dont have the votes at this stage it looks pretty clear. But this was always going to be a starting point. I think and it was going to be tinkering afterward. Spell it out and how does this differ from what we saw from the house and their version of this bill . Sahil there are more similarities than not to the house bill. The basic shape is the same. Steep cuts to medicaid. It caps the amount that it would spend per person and ratchets back the sbome care tax subsidies and includes a bunch of tax cuts. Essentially eliminating the tax hikes on Health Industry groups and on upper earners in the Affordable Care act. It does differ from the house version in some significant ways. One of them is that one of the provisions that states will not be allowed to wave is the guarantee of the ban on Insurance Companies charging more to people on the basis of their Health Status and not going to be able to get out of that requirement. The bill deals with medicaid in a bit of a different way and allows states to have the option of a per capita cap. In other words, a fixed amount per person or a block grant like the house bill. But it unwinds it over unwinds the Medicaid Expansion over three years starting in 2020. And by 2025 it includes a steeper cut. Essentially indexes the rate of inflation to a much lower growth rate which wont keep up with medical inflation. So starting in 2025 the program is going to face some pretty steep cuts. Julia so give us a sense financially if you can and i know its early days. Does this look financially more sound or less sound than the house bill . And if were looking at it as you were talking about there, this staggered phaseout of medicaid, and that not beginning until 2021, could we make any kind of read across when we get the c. B. O. Scoring . Ive seen a couple of people make comments here and say, ah, this is actually going to make the c. B. O. At this stage suggest that fewer than those 23 Million People are going to be uninsured by 2026. As the c. B. Porks said before. C. B. O. Said before. As a snapshot it looks better. Sahil right. So the c. B. O. Has said in a statement that it intends to release the score next week on this bill and we dont know the answer to your question, julia, right now. Because that are going to have to evaluate these and come to conclusions how it would impact coverage, how it would Impact Health care costs and what it would mean in the near term. The medium term and the out years. So i think thats going to be a major point of consideration for Senate Republicans depending on what it says. I think whether the coverage loss is 24 million or 23 million or 20 million or perhaps less than that. Democrats are going to say the same thing. Theyre going to say this is a mean, heartless bill that throws a lot of poor and sick people off their coverage in order to give a tax cut for wealthy people and theyre saying that across the board. One important thing to keep in mind is the reconciliation instructions just procedurally for Senate Republicans say that they have to save at least as much money as the house bill does. That again thats not an easy target to meet and thats why youre seeing things like delaying the cadillac tax to 2025. And putting medicaid cuts into out years. That makes a great point. Reconciliation. Sahil , great to get your wisdom here, sahil safl. The industry reaction to this proposed bill lets bring in Bloomberg Health care reporter anna edne yefment. Great to have you on. What weve seen from the Market Reaction is that the Health Care Stocks are rallying here. The farmers are also rallying here. They clearly see benefits. And i guess the standout for me is the lack of anything on the drug pricing which of course was something that trump did promise to tackle. Yes. Certainly the pharmaceutical companies are kind of on edge at this point. And any Health Care Legislation coming forward, wondering what might be done on high drug prices. And this time, you know, as you just mentioned, theres nothing in the senate bill that would really affect them. So their stocks are doing well. Because they basically were able to skirt any kind of anything yet that would affect how they have to handle pricing. Scarlet we see gains in insurers. Cigna up by three quarters of one percent. How is this bill from the Senate Good News for Health Insurers . Its got a few things in it that might be positive for the health Insurance Companies. One, if repeals a tax on on the companies that obamacare used to help pay for the legislation. It also has a 50 billion fund that is to go to help stabilize the insurance market. And thats something that the Insurance Companies have been asking for for a long time. Theyve asked for stability in the market. Its why a lot of them have left the obamacare market. And so this could be a way to maybe stem some of that. They also are going to get payments from the government for what are called cost sharing reduction subsidies. Those go to help Lower Health Care costs for low income americans. Its been unclear if the Trump Administration would keep paying those subsidies and now it looks like at least be funded in this bill through 2019. Julia its interesting. Anthem in the last 24 hours pulling individual plans from Insurance Markets in or most of them in wisconsin and indiana and that was precisely one of the things that they cited that the cost sharing reduction subsidies. But as you pointed out its only to 2019 and if you look across the broad array of changes that theyre making here, some of those are going to go some of those are going to be challenged by the democrats. Can you sense already just by looking at this what you think is most vulnerable . In the legislation itself, certainly there are going to be some challenges that will come from democrats or from sort of the parliament aaron. One of those things thats been under discussion and that people are wondering if well have to be taken out eventually is a ban on giving subsidies for premiums to any Health Care Plans that cover abortion unless its to save the life of the mother or in the case of rape or incest. Another provision that could be taken out and kind of this parliamentary game is theyve talked about being able to give states waivers from certain consumer protections. These are the essential Health Benefits that obamacare required that plans cover. And theres a possibility that those just might not make it through all the way. Julia yeah. Theres going to be a lot of work. Bloombergs anna edney thank you for your insight. Well have more on the policy implications of the Health Care Proposal and obama architects john nanne gruber joins us Jonathan Gruber joins us. And we have mark crumpton. Mark President Trump ended weeks of speculation today and said he does not have tapes of his conversations with then f. B. I. Director james comey. The president tweeted that he did not make or have any recordings. Mr. Trump himself raised the question of whether he was taping his oval Office Conversations when days after firing mr. Comey in may, president sent out a series of tweets suggesting the existence of tapes. As we have been reporting, is in the republicans have unveiled their bill to replace obamacare. It includes a longer transition period than a bill already passed by the house. And it could lead to major cuts in medicaid for low income americans. The Senate Democratic leader Chuck Schumer blafmented the legislation. Senator schumer in three short years under the senate bill, republicans will kick millions off their medicaid coverage. Mark Senate Majority leader Mitch Mcconnell is pushing for a vote next week. But its not clear if there are much votes to pass it. And senators like rand paul of kentucky are already voicing their opposition. The british home secretary amber rudd told Parliament Today an independent review will be done into how authorities handle the recent attacks in the u. K. Rudd says the assessment will be done to see if lessons can be learned in the wake of attacks in the u. K. And brussels, police have detained four people in raids linked to the failed bombing at the citys central train station. Authorities have released few other details. On tuesday, a man blew up a device that failed to fully explode. He was shot dead by soldiers. Global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Scarlet . Scarlet thanks so much, mark. Coming up, American Airlines c. E. O. Calling the outreach by Qatar Airways puzzling. Well get perspective on the surprise twist to an industry feud. From new york, this is bloomberg. Julia this is Bloomberg Markets im julia chatterley. Scarlet and im scarlet fu. In Corporate NewsAmerican Airlines today announcing Qatar Airways wants to buy a 10 stake. Now, just this hour, in a letter to employees, American Airlines c. E. O. Doug parker said, quote, we arent particularly excited about qatars outreach. We find it puzzling given our extremely public stance on the illegal subsidies that qatar, emirates have all received over the years from their governments. Bloombergs mike stasso from atlanta. Puzzling one way to put it because of the arguments that the persian gulf airliners have received unfair advantages. But also because the president just weeks ago had accused qatar of funding terrorism. Mike yeah. Its kind of puzzling all around. Although recently some of the state department have called into question some of the moves by the other gulf nations including saudi arabia and United Arab Emirates asking them to explain why they have this embargo. So the state department at least has backed off a little bit. But yes. It is puzzling. Because there has been some bad blood between american and all the u. S. Airlines including delta and united. And Qatar Airways and two other middle eastern middle Eastern Airlines over concerns that the middle Eastern Airlines are flooding the u. S. With cheap subsidized flights. Julia this is the point, isnt it . The c. E. O. Of American Airlines hash incredibly vocal. We can put all the politics. Two countries aside at this point with the open skies agreement that was supposed to promote better competition. American airlines outraged by the fact that the likes of Qatar Airways is encroaching on their air space as well with the cheaper flights that they can provide. So when would the board ever approve this . At what price does it have to be before it becomes so lucrative that American Airlines goes ok, we have to think about this . Michael well, ive seen some analysts snotes suggesting that maybe its not such a good move. There are some Tax Implications if the american board were to do this. Potentially american could lose some tax credits and such that they get from some of their pafment losses. And then theres some other implications about whether american would want the influence of a qatar on its operations. On its board and what not. So i dont know that its as much of a winwin for american as some might think. Scarlet when you talk about the price and the valuation of the company, whats interesting here is that american shares are near the highest since the u. S. Company emerged from bankruptcy in 2013. Ive got on the bloomberg terminal chart of americans share price. The line is in blue. Thats juckspobesed against a market value of Berkshire Hathaway holdings. Berkshire hathaway another big investor in the company. Michael, its kind of hard to make the case that this isnt political if qatar is coming in to buy when their stock price is so high. Michael yeah. Well, although qatar has made some similar moves. It could be seen as operational. Theyve made an investment in Latam Airways which is a big airline in south america. They have a 20 stake of i. A. G. Which is the owner of british airways. So they have a history of making investments. And they could be seen as could be beneficial to them in terms of getting an ally. Also, they as you said it there may be some politics at stake. Theyve got some issues with their neighbors and again, the United Arab Emirates and such. And they may feel like cozying up to the u. S. Government, cozying up to a u. S. Airline is in their interests. Geo politically at the moment. Julia good luck with that. They can make a passive stance initially. They a acquire what 4. 75 of the shares without actually having to get board approval. So if they want to start acquiring them, they can. Is that right . Michael that is correct. The regulation, Regulatory Filings said they could acqu