Warsh At Jackson Hole; Iran Says Diplomacy Not Impossible

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**Nathan Hager** (0:10)
Good morning, I'm Nathan Hager.

**John Tucker** (0:12)
And I'm John Tucker. Here are the stories we're following today.

**Nathan Hager** (0:15)
John, we begin in Wyoming, in the Federal Reserve's annual Jackson Hole Economic Symposium. Federal Reserve Chairman Kevin Warsh is set to deliver his much-awaited keynote address. Markets are trying to anticipate what, if anything, Warsh will have to say. We begin team coverage with Bloomberg Economics Chief US economist Anna Wong.

**Anna Wong** (0:36)
Warsh has a simple message that he needs to deliver if he wants to strengthen his credibility with market, which is he just needs to answer a couple of questions. Number one, affirm that PCE inflation is the sole metric for judging the Fed's 2% inflation target.
The second question he needs to provide is to provide a framework for markets to understand how he is going to react to inflation data that is going to be coming in in the next couple of months and also unemployment rate. In other words, his reaction function. All in all, we don't think he's going to be providing the specificity that the market is looking for to get any reassurance.

**John Tucker** (1:17)
And Bloomberg Economics Chief US economist Anna Wong. Tom Kean is in Jackson Hole covering it for Bloomberg Radio and Television.

**Tom Kean** (1:24)
It is not a normal Jackson Hole. There's no question about it. I remember in 07, right after Libor OIS went out, four standard deviations, the beginning of the financial crisis, the tension here. But that was a tension of the system. That was a tension of our finance. This is a tension of a newly minted chairman who even as ardent supporters suggest has stumbled into this meeting. How does he do a reset? There's eight opinions. I got 28 flavors. But the answer is the 28 flavors will know much more at 10 o'clock when those headlines come across the Bloomberg. Michael McKee will be in the room with the assembled academics. It will be dry. It'll be interesting to see. Do they applaud?
Do they clap? Do they cheer? Will there be a lead in silence? I don't know.

**Nathan Hager** (2:11)
John, we continue to update you on a tragic story overseas. Rescuers are racing to find hundreds missing.
Two days after flash floods struck the Himalayan border between Nepal and China. The Associated Press reports the death toll is past 470 now, with more than 1,500 still missing. The State Department says 90 Americans may have been affected by the flooding. Three have already been rescued. At the White House, President Trump says the US is offering help.

**Donald Trump** (2:39)
We've called Nepal and we've offered any help that they need. You know, have a very good relationship with Nepal.
That was a brutal, that was mud and water as a mixture. Nobody's ever seen anything quite like that. We're very powerful, strong, you know, strong, well-built buildings where we're wiped out like they were toothpicks. That's a terrible thing. No, we are sending aid and we've spoken to the leadership and we let them know anything they want, we'll have.

**Nathan Hager** (3:09)
President Trump speaking from the Oval Office, as the State Department says the US is sending $500,000 in aid to a Catholic charity.

**John Tucker** (3:16)
And now to the latest from the Middle East. Today marks six months since the US and Israel launched their war with Iran and now the US is claiming a milestone. The head of US Central Command Admiral Brad Cooper says the Strait of Hormuz is clear of Iranian mines.

**Brad Cooper** (3:31)
These are the long-standing lanes international shipping has historically used to transit the Strait of Hormuz and over the past few months our forces meticulously and quietly cleared them of sea mine threats using a combination of Navy divers, Navy SEALs and US air power from the Army, Navy, Air Force and Marine Corps.

**John Tucker** (3:51)
CENTCOM Commander Brad Cooper, he posted that report in a video on Axe. Bloomberg Middle East correspondent Abir Abu Omar reports shipping through the Strait is increasing.

**Abir Abu Omar** (4:02)
Goldman put out a report suggesting that we are back to two-thirds of the amount of shipments from the Persian Gulf that were there before the war had started. That amounts to about 15 to 16 million barrels of oil on a daily basis in crude products. And I was speaking to our energy colleagues earlier and they noted that that kind of falls in line with some of Bloomberg's own estimates.

**John Tucker** (4:26)
Still Bloomberg's Abir Omar reports US allies have worn privately the Strait may still be mined. US officials say that assessment though is outdated.