The prior 72 hours the previous requirement was 48 hours Hong Kong on the other hand is going in the opposite directions with infections reporting out the highest tally in 6 weeks over the weekend 515 new It is the most cases since April 23rd many of those cases uncovered in a cluster at four bars in the city Australia says one of its surveillance planes was cut off by a Chinese fighter jet in international airspace over the South China Sea It says the RAAF was on routine maritime surveillance when it was intercepted by a J 16 fighter that resulted in a dangerous maneuver which they say caused a safety threat Australian offense minister Richard marles the says that J 16 fighter had flown very very close side to side That's threatened the safety of both the Australian aircraft and crew Says it then accelerated and cut across the nose of the PH setting in front very close range He said at that moment it realized a bundle of it released a bundle of chaff which contained small pieces of aluminum some of which were ingested into the engine of the P 8 Moral says Australia was operating completely within its rights under international law And we're not going to be deterred by this incident from conducting those activities in the future because it's fundamentally important to Australia's national interest He says government has filed complaint with the Chinese government and this will not deter those missions North Korea has fired 8 short-range ballistic missiles over the weekend pushing it to a record number of launches in a single year and we're not even half through the year South Korean military officials say they came from four different sites including an area very near Pyongyang's main airport all went into the water off the east coast This one day barrage as a largest in Kim largest in Kim's decade of power U.S. suffering from more mass shootings over the weekend Philadelphia popular tourist area police commissioner Daniel outlaw says three dead and more injured An additional 11 victims were struck by gunfire These victims range in age from 17 to 69 years old Their conditions range from stable to critical And the shooter is still at large In Chattanooga earlier 14 people were shot at a bar and music festival in the U.S. now the gun violence archive says more mass shootings this year than the number of days As U.S. president Joe Biden plans to head to Saudi Arabia his transportation secretary Pete Buttigieg on ABC has heard here on Bloomberg says oil companies are contributing to the problem of gas shortages It's been a very striking right now to see these oil companies who have become almost ridiculously profitable And you hear these oil executives on the record talking about how they're not going to increase production He says the companies have to step up and help me while congressman Adam Schiff says he doesn't think President Biden should go to Saudi Arabia Schiff on CBS has heard here on Bloomberg and until Saudi Arabia makes a radical change in terms of its human rights I wouldn't want anything to do with him Now I understand the degree to which Saudi Arabia controls oil prices I think that's a compelling argument for us to wean ourselves off of reliance on foreign oil and on oil More globally Schiff says he wishes the president wouldn't go Japan's prime minister fumio Keisha is considering attending a summit of leaders from NATO late this month to spur cooperation with the west over the Russian invasion of Ukraine Thai police have rescued 59 Rohingya refugees who were stranded on an abandoned southern island They were abandoned by people smugglers people smugglers close to the Malaysian border and at least 49 people have been killed in a container depot in Bangladesh It is described as a container blaze and as the latest incident that highlights the country's struggles with industrial safety In San Francisco I'm Ed Baxter This is Bloomberg Right Paul All right thanks very much Joining us this half hour We have Frank rabinsky He's chief macro strategist at Aegon asset management And Frank I want to start with that strong jobs report we saw in the U.S. has that changed the picture for you in terms of your expectations Around what we might see from the fed for the rest of the year Yes and thank you for having me back I don't think it really changes our expectation more than reaffirms And what do I say that It was still a very strong number I mean you look in right around 400,000 which is a very modest slowdown from where we were operating in kind of the four to four 50 range Job market is still very strong We're growing at three and a half 4% year over year which is I mean that's a very robust rate So we've haven't even started seeing the labor market come off yet And so I think when we have what that means for the fed we still see the fed two more 50 basis point hikes and then a couple of quarter point hikes after that And we see the fed at two 75 by the end of this year So definitely going into restrictive territory to get what share power wants is a reduction in aggregate demand to kind of help the healthy inflation picture out How much do you think that closely looking at the impact that we could have from the reduction in the Federal Reserve's balance sheet here We're in uncharted waters and we had quantitative easing have a profound impact on asset prices Could we actually see a profound impact in a negative way on asset prices because of QT Great question And it's been extremely hard to quantify I mean there's a lot of academic papers out there that if you sum them up the difference is quite striking The way I look at it if QE was a tailwind QT is going to be a headwind So it's going to make it that much harder which is why we think there's a lot of recession risk in 23 because the fed I mean our view is that the neutral rate in the U.S. is around one in three quarters maybe 2% We have the fed at two 75 next year going into 3% the year after and the futures markets even higher than that And so if you put a three and a half three and a quarter three and a half percent funds rate on top of a massive QT which is starting this month that's a daunting prospect for an economy where you're already seeing demand destruction from higher prices and so we think it just makes the 23 very high recession risk and we think therefore you want to be kind of rotating into quality when it comes to where you want to be from an asset allocation perspective As rich pointed out we really are in on China borders when it comes to that balance sheet runoff have markets know it's coming but is it priced in Could there be more downside here for equities We think I mean not only from the QT side but just from the macro picture For Paul to get his clear and convincing evidence that inflation is retreating it's going to take a while I mean we get the CTI this Friday it's still going to be year over year in the high 5s but even on the shorter term of three month averages and stuff you're still looking at it probably a 5% rate But even the core PCE which is what the fed looks at because it's factors in substitution effect faster Even that's it at four 9 So you're still a very elevated rate and to bring that and we.