The Unemployment Rate held steady at 5. 8 . Economic data here in the u. S. 8 30 we have retail sales. I will be watching that. Initial jobless claims, the weekly number on the jobless claims. Comfortnsumer index. Earnings before the bell, lululemon, scarlet, did they ever fix the pants . Bring me up to date. They did. And they made comments that were not flattering, so people kind of moved on. Do you wear lululemon . I have a couple of pairs. I have them in distress. Who are you wearing this morning . This is karen millen. I think she is british. I cannot keep up with you guys. And you your alpaca with your british designers. Bushe Herbert Walker turning 90 years old today, tom. That is really something. This is bush sr. , of course, one of the euros of midway. Iconic image of the submarine pulling up and literally pulling the young bush out of the water. Happy birthday, mr. President. Nba finals, game four tonight between miami heat and san antonio spurs. And as we are talking about the world cup, first game is today brazil, croatia, 4 00 in brazil. We will get a data check. A look at equities, bonds, currencies, commodities. Moving, eurodollar where they were, nymex crude, this of , brentn oil, 1. 06 crude, lets move onto the next screen, brent crude really moving in the last hour. We will hit a 1. 12. 1. 1186. There is brent crude, 1. 90 now. Pagesur the front this morning. Here is scarlet fu. We do not have to go far because an al qaeda offshoot is making more gains in iraq, raising the prospect of civil war in the country after they captured the city. Forces have moved into a city 80 miles northwest of baghdad, which is actually the birthplace of Saddam Hussein. Remember that image when they said we got him and they pulled Saddam Hussein out of that hole in the ground . That is the past. Here is a chart of the past from 2008. Here is the iraq invasion, we go to problems, down we go challenges, up we go again. You can see inching up here towards 1. 12. This is just a mess to break out above that. Technical analysis. Very good. There is our range trade. That is very good. Fancy. But there is oil from the advent of the iraq war. What is impressive here is the white house has yet to respond to requests last month from the iraq his to bomb militant training areas in iraq. The president is reluctant with what i would suggest if youre on the front praises of everything i would suggest that you are on the front pages of everything, it is about one, im guessing 2 00 p. M. In baghdad right now, and this is a story happening in realtime. And they are waiting for the white house to respond as all re we all. The cocoo is the first to step down as to whether the french bank violated u. S. Sanctions. He bangs that he is leaving of his own request. You will be retiring. Apparently he was supposed to retire soon anyway, but he has move that up. Wasyork Bank Regulator looking for his dismissal along with 12 other bm people employees. But the others are still there for now. The others are still there for now. But this is the first senior guy stepping down. They are still negotiating the record criminal guilty. The last count was about 10 billion. And that was one of the subjects of conversation between president hollande and obama. Is this a front page story or a frontpage section it is a story that will not go away because they cannot figure out a solution. And it is gumming up everything in the meantime as well. Lets stick with friends because our third front rate story is General Electric sending another lobbying push, 17 billion for Alstom Energy. And water its power unit, and also ges lead negotiator, john flattering. We already know that Germanys Siemens may potentially team up to make a joint offer for out some energy assets. This is another topic of conversations between the two president s, the french president and the u. S. President , but president s are talking about Companies Like bp and ge, but they are. Those are frontpage stories. Breaking news that just crossed the wire in the last five minutes dvr and Blackstone Blackstone continued to plow money into real estate here. Cash is free, right . There is our front page. Our guest host this hour, neil macro renaissance research. Were also thrilled to bring you anthony punter oh. O. He is kneedeep in the world cup. Feifa. He will give us a terrific perspective. With you. Me start women fed meeting june 18. I know scarlet wants to talk about jobs. What would you guess care yellen is focused on on this thursday morning . I think she is focused on wage growth. She is focused on how viable the Unemployment Rate is as a signal of labor market health. Is it a viable signal . I think so. And i think it is a very good question to ask whether it is reasonable to type Monetary Policy for lagging indicators of the economy like duration of unemployment, longterm joblessness, and it is also a question, look, we are generating a lot of jobs. Over the last 12 months, 70 of the time, the employment numbers coming above 200,000, yet Monetary Policy has gotten easier. Where is the playbook for that . Where is the playbook for leading indicators . What is the leading indicator she should look at . She should look at things like jobless claims. But it is really about the outlook. Right now the bond market in the u. S. Is basically telling us that there is no positive growth impulse from the headwinds we have seen over the last five years. There is nothing good that will come from the fact that state and local governments are no longer retrenching. Nothing good coming from the fact that households are no longer deleveraging. To havethe fed is going a communication challenge on its hands, particularly once the taper is over. There also seems to be a moving of the goal post. Chair evans saying six out of the eight of the last month, it has been above 200,000, but it may not be good enough. If you go back to Charlie Evans back in 2013, he specifically said a good labor market would be 200,000 for a few months in a row. Now that we have got it, of course, the labor market is weak. Consistency is not his strong suit. But here is the thing if were generating this kind of employment, at some point you will see wages rise. My guess is the on employment rate gets toward 6 . That is going to begin a discussion. It is not mean the fed is behind the curve, but it starts a discussion, and i think it will be absolutely appropriate to be talking about rate hikes in the Second Quarter of next year. We cannot ignore the stability. They have changed it in language, but they have not changed it in timing whatsoever. So the market thing, come hell or high water the fed is going to go in late 2015 i am not so sure that is going to be the case. The media as well what we will be keep an eye on. We want to welcome the former marketing writer for anheuserbusch. Anheuserbusch has been a sponsor of the world cup since 1986. You negotiated a deal with fee back in 2002. That was a long time ago. The way you message has changed a lot and that. Period. And really have. I left athens to go to zurich. At that time, it became a big deal. Million to 100 million for a sponsorship in of time. Od it is the Largest Sporting event. Sponsors, six other partners, sponsors. Your establishing yourself as a global entity. Who is the bigger venue for the world cup in the u. S. . Espn or univision . Univision will actually get bigger numbers, and they actually pay more money. Theyre broadcasting is better. If you listen to the playbyplay, it is actually fighting but adam johnson you might not understand it, but it is great. Goal that will wake you up. Ok. That was world cup coverage you just saw. Adam johnson with a world cup call. And i wouldve company news scarlet fu. Wife that was impressive. Impressive. As investigating how General Motors responded to the switch defect. Gm investigated 13 deaths which led to the recall of 7 million vehicles, and they have fired 15 people. Among the States Running their own investigations florida, connecticut, and illinois. Boeing may be the other big loser in the eric cantor election dispute. The House Majority leader has been a big supporter of the export import. Month, boeing said the import bank with the port 10 million in sales. The founder of lululemon voted against the rail action of the man who succeeded him as terrell and. Chip wilson says the yield aware companys board has been too concerned with shortterm results, which is why he voted against michael casey. Still, casey was reelected at lululemons annual meeting regardless. That is todays company news. All right, scar, he said forget lululemon, what are you buying now . Sweaty betty a supposedly didnt hot thing. All right, you heard it from scarlet fu. Now that cancer is out, some sweat. We will go to washington. Is out, someantor sweat. We will go to peter cook in washington. We will be right back. This is bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. Coming up on the program, football,yna, nyc rather, nycfc, i should say. Joining us in the federal clocktower. This is bloomberg surveillance. I am tom keene. Congressman eric cantor said he will set down after losing a he will step down as House Majority leader after a stunning upset. Republicaneshape leaders about the party scribbles to replace it. We will target with peter cook, our chief washington correspondent, right now. Peter, what is the likelihood that infighting will take a toll and really put republicans in a bad position heading into 2016 . Leadershipthis scramble will be a real battle. It will be quick. It will happen over the next week or so. 219, a week from today, they will be picking a new House Majority leader. I could trigger if you will a domino effect down the line in terms of other positions that could open up. It represents the struggle that eric cantor faced. More conservative factions of the party, particularly those worried about immigration and perhaps more moderate aspects of the party. Watch for that battle to play out over the next week or so, and scarlet, this is an appetizer for an even bigger battle to come in november when they like people for the next term in congress. How do you buy a vote in congress in 2014 . How does one of these new leaders go get the congresswoman from nebraska to get them a vote . Well, two things. First of all, you have to make friends with these people to begin with. You have to have contributed money to their campaigns, which is what a lot of these guys have done, including Kevin Mccarthy, who is eric cantors pick to place them as House Majority leader. The other thing, tom, as you invite them to be part of your team. You asked them to serve as one of your tenants. One of the handpicked political positions as opposed to an elected positions. That is how you move up the leadership ranks. Peter, i want to share with musty morning read from alan murray writing in the wall street journal. The percentage of americans would here too liberal or conservative views has doubled since 1994 to 21 . Ideologicalin wings remain a marty, they are much more likely to work or vote on campaigns. They described eric cantor as effectively a guy in the center, and negotiator who can make things happen. Is there anybody left in the center who can make things is vocal in washington, peter . Peopleve got a lot of who can work on things like immigration . They see the results and say i cannot take this risk to be clear about my political future, at least not at this moment. Very hard to get anything done right now in its current environment. Nothing will get done between now and midterm elections except maybe a couple of spending bills. That is about it. Of that is the reality politics in washington right now. Peter, i read i think 15 48icles in the last hours, and things are moving so quickly. Simply, how is washington, how is the pentagon, and how is the white house responding . I think it is pretty clear that they did not see this coming, either. At least certainly not the speed with which the government would be losing control of major cities. That is the second biggest city areraq, tom, and there questions about what this administration is prepared to do, what can they do to help the government . There is talk about airstrikes over iraq. That is a big deal for this president who got troops out of iraq. I do not see that happening in the short term. Tricky situation for the president in a second term, who does not have a lot of political ammunition at his disposal. Is front and center with the turk hostages in the last 48 hours including three children. What is our relationship right now with turkey, and then that fractious relationship with Northern Iraq and kurdistan . Areell, the politics here so complicated, the relationships, the diplomacy. Turkey we have got a Good Relationship with turkey, but there have been challenges there as well, tom. Challenges for the turkish leadership. This is really complicated. This is a president who just know that his views on Foreign Policy going forward. The use of u. S. Force. He is looking to a lot of people in the region to solve this problem, not the United States. All right, peter cook, thank you so much. Peter cook is our chief washington or is wanted. And this conversation on the drama, whether it is eric cantor, whether it is iraq, it is not over yet. Because in our next hour of surveillance, our guest host will be robert wolf, former chairman of ubs americas. He was president obamas council. The word today is complexity. It is so complex. And speed. This is bloomberg surveillance. We will be right back. Good morning, everyone. It very busy day here in iraq. Lets get right to the top headlines with adam johnson. Most americans say the country is headed in the wrong direction. According to a new bloomberg 26 say poll, only the u. S. Is headed in the right direction. More than half of those surveyed say we are moving closer on their own goals for careers and financials. Im not sure what to make a back, but nonetheless the less, there you have it. Here in manhattan, a new report rentthe median monthly in may 2 3300. Wouldbe buyers are in the rental market. And hockey, new york rangers keep the stanley cup hopes alive. Is why scarlet fu is so tired this morning. She was up very late. They beat the Los Angeles Kings 21. Games. Gs lead 31 eyeso words soft because the puck did not cross the line. Morning mustread very quickly on an uber and london. Really straightforward. Mark champion writing for Bloomberg View this is a smart, smart essay with both sides represented. I think mark did a great job of signaling that taxicab drivers have to learn 25,000 streets. I think they call it the knowledge with a capital k. And young guys go around with maps, and their training to be cabdrivers. With uber, you have the gps. That is a great essay. I urge everyone to read it. Coming up, we are less than one week away from the next fed decision. What happens next . Host, neal dutta, writes about it. This is bloomberg surveillance. On Bloomberg Television, streaming on your tablet, your smartphone, and bloomberg. Com. Aj, and i will be right back with more. Good morning, everyone. Bloomberg surveillance. Our twitter question of the day, and we go to brazil of course what will be the big story during this years world cup . What will be the big story during this years world cup . That is out bsurveillance. Let me get to a data check. There is exactly one statistic that matters. Im not willing to say because of iraq, but you have got to believe that, oil advances west texas, 1. 0611. Right now on1199 brent crude. Youve got to watch oil also the afternoon on iraq. The next fomc meeting is wednesday, june 18. Economists are all over the map on a, who will win the world cup, and b, what matters to janet yellen . Neal dutta is head of economics at renaissance capital. We talked about this before. Lets start with the basics. When the chair says flack, what does that word mean . The level of at activity in the labor market. Basically the on implement rate relative to where the limit rate should be to generate inflation. Help me. The gloom crew has been quieted. A splash of Goldman Sachs earlier this week with a more optimistic view. Which is it . Of opinions. L where is the center tendency . I think just from all else, the consensus right now the earth quarter was a throwaway. For all. Reasons, technical economists may be downgrading be First Quarter even more. But if were generating over 200,000 jobs a month, what difference does it make . There is not a class in productivity. We know that from the earnings numbers. Is verydata noisy. I think were generating solid job growth as we have been, it is only a matter of time before wages began to pick up. Speaking about 200 thousand jobs a month number, that seems to be pivotal for nonfarm payroll. You have a talk that you brought in for us you have a chart that you brought in for us. More than 60 of the time in the last 12 months, why is this significant, and why is the fed not responding to this . It is significant because if you listen to the reactions on wall street after the jobs numbers, you see headlines like knows the price here, snoozer surprise here, snoozer. I think that is just ingenuous. Admittedly we are coming off of a deeper hole, but it is not right to say there has been no acceleration. There has been. Running at 250,000 this year, we were at 190 thousand or so last year, a little bit less than that the year before that. It is not very difficult to detect a pattern. And while all of this is happening, fed policy is actually getting more accommodative. Jim bullard brought up a really good point earlier when he said that the fed is closer to its goal than anytime time in the last five years. Jim bullard, the president of fed, a nuance voice. One of the ones like plosser and evidence that we have been following. We havevidence that been following. You wrote that u. S. Is not japan, there is a huge p