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00:00KATIE: WELCOME TO "BLOOMBERG MARKETS." I'M KATIE GREIFELD. THE S & P 500 NOT DOING MUCH, PRETTY MUCH UNCHANGED ON THE DAY. THAT IS AFTER A BIG RALLY FRIDAY IN THE WAKE OF JEROME POWELL'S SPEECH, OPENING THE DOOR TO A RATE CUTS. A LITTLE MORE DIRECTION WHEN IT COMES TO THE NASDAQ, HIGHER BY ABOUT 0.1%. EVEN MORE DIRECTION IN THE RUSSELL 2000, LOWER BUYER ABOUT 0.5%. THE VIX, VOLATILITY MAY BE COMING BACK A LITTLE BIT. THE VIX TRADING WITH A 14 HANDLE. AS I WAS MENTIONING, A LONG-AWAITED SIGNAL CAME FRIDAY, WHEN FED CHAIR POWELL OPENED THE DOOR TO A RATE CUT IN SEPTEMBER. BUT POWELL'S WORDS FELL SHORT OF A GUARANTEE, THERE IS A LINGERING QUESTION OF WHAT INFLATION WILL LOOK LIKE IN THE COMING MONTHS. FORMER KANSAS CITY FED PRESIDENT SPOKE ABOUT THIS ON "BLOOMBERG SURVEILLANCE." > > INFLATION AT 3%, IN MY OPINION, AT LEAST. HE HAS TO WALK THIS TIGHT ROPE. THERE IS AN ENORMOUS AMOUNT OF PRESSURE ON THE FED THAT CANNOT BE IGNORED. WE HAVE NOT SEEN THIS SINCE JOHNSON AND NIXON. IT IS VERY SIGNIFICANT, AND IT IS MORE DIRECT, MORE PUBLIC. IT PUTS THE FED IN PLAY, BOTH ON THE MARKET AND ON THE PUBLIC SIDE. SO I AM VERY WORRIED ABOUT IT. KATIE: LET'S BRING IN CLAUDIA SAHM, CHIEF ECONOMIST NEW CENTURY ADVISORS. SHE ALSO SERVED AS A SECTION CHIEF AT THE FEDERAL RESERVE AND WAS A SENIOR ECONOMIST AT THE COUNCIL OF ECONOMIC ADVISERS. GREAT TO HAVE YOU WITH US. LET'S TALK ABOUT WHAT HAPPENED FRIDAY. YOU ASKED THE BOND MARKET, AND IT SEEMS LIKE WE ARE LOCKED AND LOADED FOR A RATE CUT NEXT MONTH. TALK US THROUGH SOME OF THE POTENTIAL RISKS THERE. CLAUDIA: I THINK IT IS CORRECT TO HEAR POWELL'S SPEECH IS OPENING THE WAY FOR A SEPTEMBER CUT, RECOGNIZING THE RISKS AND THE LABOR MARKET SHIFTED WITH THAT LAST EMPLOYMENT REPORT. WE GOT THAT MESSAGE LOUD AND CLEAR. HE DID ALSO SAY THE FED HAS THE ABILITY TO PROCEED CAREFULLY, AND I THINK MARKETS WERE CORRECT TO NOT JUST PRICE IN A WHOLE SERIES OF CUTS ONE AFTER THE OTHER. THIS IS A FED NAVIGATING A VERY CHALLENGING SITUATION. ITS DUAL MANDATE IS IN CONFLICT. THEY WILL FEEL THEIR WAY THROUGH THIS AS THEY GET MORE AND MORE DATA. A CUT IN SEPTEMBER, I THINK THAT IS GOOD INSURANCE AGAINST FURTHER LABOR MARKET DETERIORATION, BUT WE MAY SEE HOTTER THAN EXPECTED INFLATION PRINTS THAT SLOWS IT DOWN. WE WILL HAVE TWO WAIT TO SEE THIS ROLLOUT. LOOKING AT HOW ARE THEY ASSESSING THE RISK, WHERE ARE THEY RIGHT NOW? IT WILL BE DATA-DEPENDENT FROM HERE ON OUT. KATIE: I WANT TO POINT OUT, ON OUR SCREEN NOW, YOU CAN SEE PRESIDENT TRUMP SHAKING HANDS WITH THE PRESIDENT OF SOUTH KOREA. OF COURSE, THE TWO LEADERS DUE TO MEET TODAY. WE WILL BRING YOU UPDATES AS WE HAVE THEM. LET'S TALK A LITTLE BIT MORE ABOUT WHAT YOU SEE GOING FORWARD. AS YOU MENTION, THE INFLATION SIDE OF THE MANDATE IS IN CONFLICT WITH WHAT WE ARE SEEING IN THE LABOR MARKET NOW. I THOUGHT THIS POINT IN YOUR NOSE IS INTERESTING, THAT POWELL GAVE THE GREEN LIGHT TO A SEPTEMBER RATE CUT. ALSO A GREEN LIGHT TO DISSENT. IT SEEMS LIKE THERE WILL BE DISAGREEMENT THERE. CLAUDIA: IT WAS NOTABLE. IN THE SPEECH, THE PART EVERYONE PAID ATTENTION TO WAS THE BALANCE OF RISK MAY WARN CHANGING OUR POLICY. THAT WAS THE GREEN LIGHT IN SEPTEMBER. THAT FOLLOWED THAT WITH WE ARE NOT ON A PRESET COURSE. THEY DID NOT VOTE FRIDAY. THINGS ARE SET UP FOR SEPTEMBER, BUT IT IS NOT A DONE DEAL. THEN REINFORCED FOMC MEMBERS NEED TO MAKE THEIR ASSESSMENT OF THE DATA AND OUTLOOK AND THE BALANCE OF RISK. IT IS WORTH NOTING, AT A TIME LIKE THIS, IT IS VERY HARD TO READ THE ECONOMY. IF YOU LISTEN TO FED OFFICIALS, YOU HEAR ALL KINDS OF DIFFERENT PERSPECTIVES. I TAKE THAT I SAYING YOU ALL WILL VOTE IT AS YOU SEE IT. BASED ON DATA, BASED ON THEIR JUDGMENTS. THAT PIECE OF THE SPEECH WAS ALSO AN AFFIRMATION OF THE INDEPENDENCE OF THE FED. THEY MADE IT CLEAR OF THOSE DECISIONS ARE BASED SOLELY ON THE DATA AND THE JUDGMENT THAT COMES WITH IT, NOT ANY OTHER FACTORS, LIKE POLITICS. HE WAS PRETTY EMPHATIC THERE AND SAY WE WILL NEVER DEVIATE FROM THIS APPROACH. THERE WAS A LOT TO UNPACK THERE, BUT I THINK IT IS HEALTHY FOR THE MEMBERS TO BE VOTING AS THEY SEE IT AND NOT GIVE THIS UNDO DEFERENCE TO THE CHAIR. KATIE: HE NEVER USED THE WORD INDEPENDENCE BUT MADE IT CLEAR THEY WILL NOT DEVIATE FROM THEIR APPROACH THERE. TALK ABOUT THE SIGNIFICANCE OF THOSE WORDS, THAT STATEMENT, ON A GLOBAL STAGE. JACKSON HOLE IS NOT ABOUT THE FEDERAL RESERVE. CLAUDIA: FED INDEPENDENCE IS UNDER ATTACK. WE HAVE SEEN MULTIPLE EFFORTS BY THE ADMINISTRATION TO EXERT MORE INFLUENCE THAN IS USUAL. THE PRESIDENT ALWAYS HAS SOME INFLUENCE OVER THE FED IN TERMS OF MAKING NOMINATIONS. WE ARE GOING ABOVE AND BEYOND THAT AT THIS POINT. IT HAS THE POTENTIAL, IF THE FED LOSES CONTROL OF MONETARY POLICY, AND WE KNOW FROM HISTORICAL EXPERIENCE, IT LEADS DOWN THE PATH OF HIGHER INFLATION AND FINANCIAL INSTABILITIES. THAT IS A BAD OUTCOME. WE ARE SEEING MORE AND MORE EFFORTS IN THAT DIRECTION. POWELL DID NOT USE THE WORD OF FED INDEPENDENCE, BUT I LIKE BETTER WHAT HE DID, HOW HE DEFINED IT, WHICH IS WE MAKE THESE DECISIONS BASED ON THE DATA, NOT WHAT WE ARE TOLD TO DO. THERE IS A REAL RISK THE FED WILL NOT BE ABLE TO WALK THAT PATH IN THE COMING YEARS. KATIE: TO THE POINT, THE IDEA OF THE FED LOSING CONTROL OF MONETARY POLICY, DO YOU SEE THAT AS A REAL RISK THAT PEOPLE SHOULD BE THINKING ABOUT THAT AS WE GET TO 2026? CLAUDIA: YES, I DO. WE ARE EIGHT MONTHS INTO THIS ADMINISTRATION, AND WE CAN COUNT THE NUMBER OF EPISODES WHERE THERE IS MORE INFLUENCE, ATTEMPTED INFLUENCE, MORE ATTEMPTS TO CONTROL THE FED THEN WOULD BE TYPICAL. IT DOES NOT MEAN WE END UP IN A PLACE WHERE THE FED LOSES CONTROL OF MONETARY POLICY, BUT WE SHOULD PAY ATTENTION. WE ARE POINTED MORE SO IN THAT DIRECTION THEN WE HAVE BEEN IN LIVING MEMORY, AND THAT -- THE PIECE OF INDEPENDENCE THAT WAS MISSING FROM POWELL'S SPEECH IS WHEN HE TALKED ABOUT THE INFLATION RISKS. FRANKLY ONE OF THE INFLATION RISKS AT THIS POINT IS THE FED LOSING CONTROL OF MONETARY POLICY. I SIMPLY DO NOT THINK THAT IS A DONE DEAL, BUT IT IS A REAL RISK AT THIS POINT, AND THAT WILL LEAD TO INFLATION EXPECTATIONS GETTING D ANCHORED -- DEANCHORED AND A LOT OF BAD OUTCOMES. I DID NOT EXPECT POWELL TO SAY THAT. THAT WOULD HAVE BEEN WAY TOO AGGRESSIVE IN THIS SPEECH. EVEN IF IT IS NOT A LIKELIHOOD, IT IS A REAL RISK. KATIE: GREAT TO GET SOME TIME WITH YOU AFTER A VERY EVENTFUL JACKSON HOLE. THAT IS CLAUDIA SAHM, CHIEF ECONOMIST NEW CENTURY ADVISORS. ALSO FOLLOWING A BUSY DAY AT THE WHITE HOUSE. PRESIDENT TRUMP IS HOSTING SOUTH KOREAN PRESIDENT LEE. FOR THAT, LET'S GO TO BLOOMBERG WASHINGTON CORRESPONDENT TYLER KENDALL. SHE IS LIVE AT THE WHITE HOUSE. WE SAW THE TWO LEADERS SHAKE HANDS. IT IS INTERESTING THAT, JUST HOURS AHEAD OF THIS MEETING, WE HAVE THE PRESIDENT OF THE UNITED STATES REALLY TAKING THE SOUTH KOREAN PRESIDENT TO TASK ON SOCIAL MEDIA, TALKING ABOUT A, QUOTE, "PURGE OR REVOLUTION" IN THE COUNTRY UNDERWAY. WHAT KIND OF CONVERSATION ARE WE EXPECTING TODAY? TYLER: DEFINITELY A HIGH-STAKES CONVERSATION AT THE WHITE HOUSE. WE SAW PRESIDENT TRUMP THE SOUTH KOREAN PRESIDENT, SHAKING HANDS AND TELLING REPORTERS HE EXPECTS TO HAVE A GREAT MEETING TODAY, IN HIS OWN WORDS. BUT AS YOU MENTIONED, IT DID NOT START OFF SO GREAT THIS MORNING AFTER PRESIDENT TRUMP ALLUDED TO THIS POSSIBILITY OF INSTABILITY IN THE COUNTRY. WHEN TALKING ABOUT THIS IN THE LAST HOUR, PRESIDENT TRUMP BROUGHT UP THIS IDEA OF ALLEGATIONS OF THE CURRENT SOUTH KOREAN INDUSTRY IS CONDUCTING RAIDS AGAINST CHURCHES IN A U.S. MILITARY BASE. IT IS UNCLEAR AT THE SPECIFIC INSTANCE PRESIDENT TRUMP WAS REFERRING TO. THE PRESIDENT HIMSELF SAID HE WAS UNCLEAR WHETHER OR NOT THE ALLEGATIONS HE WAS BRINGING UP WERE TRUE. BUT HE MENTIONED HOW THAT IDEA OF POLITICAL INSTABILITY CAN MAKE IT DIFFICULT FOR THE U.S. TO DO BUSINESS WITH SOUTH KOREA, SO PERHAPS WE ARE SEEING A LITTLE BIT OF A NEGOTIATING TACTIC TODAY, GOING INTO THIS HIGH-STAKES MEETING, BECAUSE WE KNOW THAT TRADE WILL BE AT THE TOP OF THE AGENDA TODAY. WHILE SOUTH KOREA WAS ABLE TO SECURE THAT MORE PREFERENTIAL TARIFF RATE OF 15% ON SOUTH KOREAN EXPORTS, THERE ARE STILL A LOT OF DETAILS I NEED TO BE WORKED OUT. WE DID HEAR FROM KEVIN HASSETT SAYING THE GOAL IS TO FINALIZE SOME OF THOSE TRADE DETAILS IN THAT FRAMEWORK THEY ARE WORKING ON WHILE THE SOUTH KOREAN PRESIDENT IS IN WASHINGTON. ONE OF THE DISCREPANCIES I WILL PUT ON YOUR RADAR HAS TO DO WITH THAT $350 MILLION INVESTMENT PLEDGE FROM SOUTH KOREA. THERE ARE STILL A LOT OF BIG QUESTIONS ON HOW THAT WILL BE STRUCTURED, WHAT SORT OF STEAK AND REVENUE SHARE THE U.S. WOULD GET -- STAKE AND REVENUE SHARE THE U.S. WOULD GET. FOR EXAMPLE, THE SOUTH KOREAN GOVERNMENT HAS SAID THIS WOULD BE MORE AROUND LOAN GUARANTEES THAN DIRECT INVESTMENT CAPITAL. KATIE: LOOKING FORWARD TO MAY BE GETTING SOME SPECIFICS OF THAT DEAL. A SOUTH KOREAN NEWSPAPER REPORTED LAST WEEK THAT LEE'S GOVERNMENT IS EXPECTED TO UNVEIL 150 BILLION DOLLARS IN U.S. PRIVATE PLANES IN THIS MEETING. WE WERE JUST BEGINNING WITH CLAUDIA SAHM ON THE PRESSURE THE TRUMP ADMINISTRATION IS PUTTING ON THE FACT. ONE OF THOSE AVENUES OF PRESSURE, PRESIDENT TRUMP REALLY RAILING AGAINST LISA COOK, SAYING HE WILL FIRE HER IF SHE DOES NOT RESIGN. TYLER: THE LATEST ESCALATION FROM PRESIDENT TRUMP JUST MOMENTS AFTER FED CHAIRMAN JEROME POWELL HAD TAKEN THE STAGE AT JACKSON HOLE. IT WAS INTERESTING WE DID NOT HEAR HIM COMMENTS ON THE SIGNALING WE GOT FROM POWELL, THOUGH I WILL MENTION AGAIN KEVIN HASSETT DID SAY POWELL'S COMMENTS WERE WELCOMED AND SOUND, IN HIS WORDS. WHEN IT COMES TO PRESIDENT TRUMP HEIGHTENING HIS RHETORIC AGAINST FED GOVERNOR LISA COOK OVER THESE ALLEGATIONS OF MORTGAGE OCCUPANCY FRAUD, IT IS RAISING QUESTIONS IN WASHINGTON, ONE ABOUT THE MOTIVATION, AFTER WE HAD THE FA DIRECTOR SAY THIS IS PART OF A BROADER CRACKDOWN WHEN IT COMES TO MORTGAGE FRAUD. BUT SECOND IS THE LEGAL RAMIFICATIONS. THERE IS A VERY HIGH LEGAL BAR IF THE PRESIDENT WERE TO REMOVE A FED OFFICIAL. WE SAW THAT PROTECTION BOLSTERED BY THE SUPREME COURT EARLIER THIS YEAR. AT THIS POINT, THESE ARE JUST ALLEGATIONS. NO FORMAL CHARGES HAVE BEEN BROUGHT AGAINST COOK. IN A STATEMENT LAST WEEK, SHE STATED SHE WOULD NOT BE BULLIED INTO STEPPING DOWN. KATIE: BLOOMBERG'S TYLER KENDALL REPORTING LIVE FROM THE WHITE HOUSE. COMING UP, OUTSIDE THE FED AND PRESIDENT TRUMP, WE DID GET A BIG DEAL IN A COFFEE COMBINATION. CARROT DR PEPPER WILL PAY ABOUT $18 BILLION TO ACQUIRE PEET'S. THIS IS BLOOMBERG. KATIE: THIS IS "BLOOMBERG MARKETS." I'M KATIE GREIFELD. LET'S HIGHLIGHT A COUPLE INDIVIDUAL MOVERS. WE WILL DO THAT WITH -- > > LET'S TAKE A LOOK AT VERINT. IT IS A SOFTWARE MAKER THAT HELPS CUSTOMERS IMPROVE CUSTOMER SERVICE. -- LOOKING AT SHARES DOWN JUST A TOUCH, DOWN ABOUT 1.2% IN TRADING TODAY. THAT IS AFTER SHARES ALSO BOUGHT BY THOMA BRAVO. ANOTHER DEAL, LET'S LOOK AT SHARES OF CRESCENT ENERGY. CRESCENT ENERGY IS IN FOCUS AND IN VITAL ENERGY. THIS AFTER CRESCENT ENERGY AGREED TO BY ITS RIVAL SHALE OIL PRODUCER. THERE HAVE BEEN A LOT OF ACQUISITIONS IN THIS SPACE, PARTICULARLY OFF THE IDEA PEOPLE ARE TRYING TO EXPAND THEIR PORTFOLIOS AS IT PERTAINS TO FUTURE DRILLING SITES. THIS WAS AN ALL STOCK DEAL, BUT YOU CAN SEE THE SHARE PERFORMANCE HERE. WE HAVE VITAL ENERGY UP DOUBLE-DIGIT GAINS, UP ABOUT 15% AS WE SPEAK. LASTLY, LET'S LOOK AT A DEAL ON TRADERS' MINES TODAY, KEURIG DR PEPPER. IT IS PURCHASING JDE PEET'S. THIS IS AN 18.4 BILLION DOLLAR DEAL. THIS IS AS OF THE COMPANY, KEURIG DR PEPPER, IS HOPING TO BOOST ITS STRUGGLING COFFEE BUSINESS PRIOR TO A SPLIT OF ITS COFFEE AND SOFT DRINKS UNIT. REALLY INTERESTING MOVEMENT HAPPENING AS WE LOOK AT THE DEAL SPACE. KATIE: GREAT ROUND UP. THAT IS BLOOMBERG'S NORAH MULINDA. LET'S TALK MORE ABOUT KEURIG DR PEPPER. WE WILL DO THAT WITH BLOOMBERG'S MNA REPORTER MICHELLE DAVIS. -- M & A REPORTER MICHELLE DAVIS. IT SEEMS THE IDEA IS TO SEPARATE THE COLD AND HOT AND REALLY FOCUS ON COFFEE. > > WHAT IS INTERESTING ABOUT THIS DEAL IS CURATED IS -- KEUR IG IS ESSENTIALLY UNDOING THE DEAL IT DID TO COMBINE WITH SNAPPLE DR PEPPER -- DR PEPPER SNAPPLE GROUP WHAT THEY'RE DOING IS HOPING TO BOOST THE COFFEE BUSINESS. COFFEE HAS NOT BEEN DOING AS WELL AS A BEVERAGE, SODA BUSINESS, AND THAT HAS TO DO WITH COMMODITY PRICES HAVE INCREASED CARE THAT MAKES COFFEE MORE EXPENSIVE. THERE ARE ALSO CHANGING CONSUMER TASTES. SO THEY HOPE TO MAKE THE BIGGEST PURE COFFEE PLAYER IN THE WORLD. THE IDEA IS TO BETTER COMPETE AGAINST NESTLÉ OR SOMETHING LIKE THAT. KATIE: WHEN THESE COMPANY SEPARATE, WHO IS THE CEO OF THE SODA BUSINESS, THE CEO OF THE COFFEE SIDE? MICHELLE: THE CFO OF KEURIG WILL BE THE CEO OF THE COFFEE BUSINESS. WHAT IS INTERESTING IS IT ECHOES A THEME WE HAVE BEEN SEEING ACROSS M & A, WHICH IS SIMPLIFICATION. WE HAVE SEEN A LOT OF RECENT M & A DEALS UNDONE BY SEPARATIONS LIKE THIS. KRAFT IS ALSO REPORTEDLY EXPLORING A SEPARATION. AND WARNER BROS. ANNOUNCED IT IS BASICALLY UNDOING THE DISCOVERY DEAL FROM A FEW YEARS AGO. KATIE: IT IS FASCINATING. IT REALLY CUTS ACROSS INDUSTRIES AS WELL. LET'S TALK A BIT MORE ABOUT THE FOOD AND BEVERAGE SPACE AND THE SPECIFIC TRENDS YOU'RE SEEING THERE, BECAUSE YOU ARE SEEING THOSE SEPARATIONS, BUT YOU'RE ARE ALSO SEEING CONSOLIDATION AS WELL. IT IS VERY ACTIVE. MICHELLE: IT IS, AND A LOT OF IT HAS TO DO WITH TARIFFS, COMFORT, DOING THESE BIG DEALS PEOPLE WERE AFRAID TO DO IN THE LAST FOUR YEARS. THEN CHANGING CONSUMER PREFERENCES. CONSUMER TASTES CHANGED SO MUCH. WHEN THAT HAPPENS, IT CAUSES COMPANIES TO WANT TO REEVALUATE THEIR PORTFOLIOS AND THINK ABOUT COMBINATIONS -- WHAT'S OLD IS NEW AGAIN. KATIE: IT WILL BE FASCINATING TO SEE HOW THIS GOES FORWARD AND WHAT THAT SEPARATION LOOKS LIKE. ZOOMING OUT, THINKING ABOUT M & A MORE BROADLY, I THINK IT IS SAFE TO SAY M & A HAS COME BACK THIS YEAR. YOU ARE SEEING THAT COME INTO THE IPO SIDE AS WELL. AS WE LOOK DOWN THE BARREL AND LOOK INTO FALL, WHAT DOES OUTLOOK LOOK LIKE NOW? MICHELLE: IT IS OPEN SEASON. IT IS REALLY RARE TO SEE BIG DEALS LIKE THIS ANNOUNCED IN AUGUST. I THINK IT IS A TESTAMENT TO THE FACT THAT PEOPLE ARE REALLY BUSY. COMPANIES THAT PUT SOME OF THEIR PLANS ON HOLD IN THE SPRING AFTER LIBERATION DAY ARE NOW FEELING COMFORTABLE OUT ABOUT THE DIRECTION OF THE ECONOMY AND TARIFFS AND MAY BE RATES WILL GO DOWN AND THAT ANTITRUST WILL BE EASIER TO NAVIGATE. SO WE ARE SEEING COMPANIES TALK ABOUT AND EXPLORING DEALS ACROSS SECTORS, AND I THINK WE WILL SEE A LOT MORE OF IT. KATIE: THAT IS BLOOMBERG'S MICHELLE DAVIS. SHE COVERS M & A FOR US. MEANWHILE, PRESIDENT TRUMP IS SPEAKING IN THE OVAL OFFICE RIGHT NOW WITH SOUTH KOREAN PRESIDENT LEE. HE SAYS HE IS TALKING ABOUT CONTRACTING SOME SHIPS WITH SOUTH KOREA AND THAT WE WILL BE BUYING SHIPS FROM SOUTH KOREA. THE IDEA HERE, ACCORDING TO PRESIDENT TRUMP, IS SOUTH KOREA WILL HELP US GET BACK INTO SHIPBUILDING. HE ALSO SAYS HE WILL TALK WITH SOUTH KOREA ABOUT PURCHASING MILITARY EQUIPMENT. FOR HIS PART, PRESIDENT LEE OF SOUTH KOREA SAYS HE HOPES SOUTH KOREA CAN JOIN US IN MANUFACTURING REVIVAL. YOU CAN SEE THAT CONVERSATION IS ONGOING RIGHT NOW. WE WILL BRING YOU MORE UPDATES AS WE HAVE THEM. THIS IS BLOOMBERG. > > KOREA WAS ABLE TO OBTAIN ECONOMIC WEALTH AND VELMA THROUGH OUR IRONCLAD ALLIANCE. GOING FORWARD, I HOPE TO DEVELOP OUR ALLIANCE INTO A FUTURE ORIENTED ALLIANCE. KATIE: WELCOME BACK TO "BLOOMBERG MARKETS." I'M KATIE GREIFELD. NEGOTIATIONS BETWEEN BOEING AND STRIKING WORKERS ARE SET TO RESUME TODAY, MARKING THE FIRST FORMAL TALKS IN THREE WEEKS. THE WALKOUT HAS AFFECTED MORE THAN 32 HUNDRED HOURLY WORKERS AT KEY ST. LOUIS AREA PLANTS AS BOTH SIDES REMAIN AT ODDS OVER PAY AND BENEFITS. FOR THE LATEST, LET'S BRING IN BLOOMBERG'S JULIE JOHNSON, WHO COVERS BOEING FOR US. THIS WOULD BE THE SECOND MAJOR STRIKE FOR KELLY OR BERG -- ORTBERG SINCE HE TOOK OVER AS CEO. TELL US ABOUT WHAT IS UP THE CENTER OF THESE DISCUSSIONS? JULIE: SOME OF THIS IS ILL WILL FROM CONTRACTS THAT BOEING STRONG-ARMED OUT OF ITS UNIONS A DECADE AGO. WITH THREATS TO MOVE PRODUCTION CARE THAT WAS THE SCRIPT IN SEATTLE AND IN ST. LOUIS. AND OLDER WORKERS ARE STILL REALLY UNHAPPY ABOUT SOME OF THE CONCESSIONS MADE BACK IN THE DAY. ORTBERG, WHO IS NEW TO BOEING, HAS SORT OF INHERITED SOME OF THIS ILL WILL. KATIE: HOW DO YOU FIX ILL WILL? IS IT JUST BIGGER PAYCHECKS? HOW DO YOU DO THAT? JULIE: I THINK THAT IS WHAT THEY ARE TRYING TO DO AT THE TABLE TODAY. BOEING HAS BEEN TALKING INFORMALLY WITH UNION LEADERS FOR THE LAST THREE WEEKS SINCE THE STRIKE BEGAN TO FIND THE MAGIC COMBINATION THAT WILL APPEAL TO WORKERS OF ALL STRIPES. THE FACT THAT THEY ARE FORMALLY NEGOTIATING NOW IS PROBABLY A GOOD SIGN. KATIE: PUT THIS IN THE CONTEXT OF WHAT IS HAPPENING AT BOEING NOW. WE KNOW THEY ARE TRYING TO TURN AROUND THE BUSINESS. KELLY ORTBERG HAS MADE SOME STRIDES THERE. WHERE ARE WE ON THAT TIMELINE? JULIE: THAT IS SO FASCINATING ABOUT ALL OF THIS. KELLY ORTBERG, WHO IS A MIDWESTERNER AND CAME TO BOEING FROM A SUPPLIER, HIS PREACHED CULTURE IN VALUES AND RESPECT, FROM DAY ONE. BUT FOR THIS TO TAKE ROOT, IT HAS TO START ON THE FACTORY FLOOR, WHERE THERE IS THIS LEGACY OF LABOR STRIFE. IT IS FASCINATING TO ME, AS AN OUTSIDER, TO SEE HOW HE WILL WIN OVER THE HEARTS AND MINDS OF PEOPLE BUILDING THEIR PLANES. KATIE: REALLY INTERESTING STORY TO FOLLOW. LOOKING FORWARD TO HEARING MORE UPDATES FROM YOUR TEAM. THAT IS BLOOMBERG'S JULIE JOHNSSON. MEANWHILE, PRESIDENT TRUMP IS SPEAKING IN THE OVAL WITH SOUTH KOREAN PRESIDENT LEE. LET'S TAKE A LISTEN NOW. > > I COMPLETELY AGREE WITH YOU.

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