5 things to start your day

Good morning. Powell is set to take the stage in Wyoming, Trump posts his first mug shot and Bank of America strategists have a stern warnin [View in browser]( [Bloomberg]( Good morning. Powell is set to take the stage in Wyoming, Trump posts his first mug shot and Bank of America strategists have a stern warning for US tech bulls. Here’s what’s people are talking about. — [Sofia Horta e Costa]( R* Obession Today’s [highly-anticipated speech]( from Fed Chair Jerome Powell starts at 10:05 a.m. New York time. Markets will parse his words for clues on the outlook for interest rates, which are at the highest level in 22 years. Other attendees include European Central Bank President Christine Lagarde, who is scheduled to speak at 3 p.m. in her first major public remarks since her team also lifted borrowing costs in July. Investors are also focusing on whether Powell will address [an abstract interest-rate metric]( known as R*, which measures the  theoretical level at which rates neither stimulate nor restrict an economy. The Fed has since 2019 had a 2.5% median estimate for the policy rate over the long run — essentially policymakers’ gauge of neutral — down from 3.5% eight years ago. Bloomberg TV will run a [special edition]( of Surveillance live from Jackson Hole from 8 a.m. to 12 p.m. New York time. Trump Tweets President Donald Trump is back on his favorite social media platform. He posted his own mug shot, along with the words “ELECTION INTERFERENCE NEVER SURRENDER!” in [his first post on X]( since he was banned from the micro-blogging site formerly known as Twitter in 2021. Trump is now using the photograph at the Fulton County Jail, the first time he’s been forced to have his mug shot taken, to capitalize on his claim that all the cases are part of a “witch hunt” to undermine his campaign to return to the White House in 2024. He was in the jail in Atlanta for roughly 20 minutes before returning to the airport. Trump’s arraignment is expected early next month. Trouble for Tech [Technology stocks will be in trouble]( in the second half of this year, according to Bank of America strategists. The buzz around artificial intelligence will be overshadowed by the debate around whether central banks need to keep interest rates higher for a sustained period of time, wrote the team, who have maintained their bearish outlook on stocks throughout 2023 even as equities rallied. While the Nasdaq 100 has slumped in August — its worst month of the year — it’s still up 35% in 2023. EPFR’s latest flows data showed that, in the week before Thursday’s slump, tech stocks saw the largest inflows in 10 weeks at $2.3 billion. Markets Stabilize US equity-index futures signal stocks will stabilize after Thursday’s brutal selloff. Contracts on the Nasdaq 100 were little changed after the tech-heavy gauge sank more than 2% at the close yesterday. Treasury yields ticked higher, with those on two-year notes, which are more sensitive to imminent policy moves, holding above 5%. The dollar was little changed as of 6:10 a.m. New York time. Coming Up… There is plenty more going on in Jackson Hole, and [here’s the full schedule]( of speakers and panels. The University of Michigan will release its final reading of the August consumer sentiment indicator at 10 a.m. New York time. US Commerce Secretary Gina Raimondo travels to China this weekend as part of the Biden administration’s effort to lower tensions between the world’s two largest economies. What we’ve been reading This is what’s caught our eye over the past 24 hours. - US budget deficits are [exploding like never before.]( - A stimulus rally in Chinese markets [lasted just 10 minutes](. - Nordstrom says [losses from theft]( are at a historic high. - Quants are struggling to [make it big]( in India. - This tiny Japanese factory [handcrafts microphones]( for Dr. Dre. - [Swanky plans]( are in the works for New York’s Gramercy Park Hotel. - If you’re visiting London in the fall, [here’s a list]( of which shows to watch. And finally, here's what Garfield’s interested in this morning This year’s Jackson Hole symposium of central bankers [is looming at least as large]( as previous gatherings with bond markets at, dare we say it, a pivotal point. The selloff that’s dogged Treasuries and their peers for much of August accelerated this week to send benchmark 10-year US yields to a 16-year high. Some even started to ponder the case for 6% US yields. Japanese bonds also slumped now that the Bank of Japan’s policy tweaks give them greater scope to move. While the rout had a slew of drivers, you could mostly break those down into concern about too much supply — thanks to increased borrowing — and wobbly demand. The continued resilience of many developed economies has raised concerns that bets on imminent recession would again face their own hard landing. Pacific Investment Management Co. is among those saying the Federal Reserve may not be done raising interest rates just yet. The jitters reached something of a fever pitch as speculation about R* started dominating discussions across trading desks. After decades spent lowering its estimates for this level, investors and economists are pondering the chances the Fed will change tack and start increasing estimates instead. There’s even chatter that just maybe Powell will use his Jackson Hole speech to signal just such a move is coming. Any such shift would be the strongest signal yet that yields can go even higher. Bonds might end up posting a third-straight year of annual declines, based on Bloomberg’s global aggregate index, after 2022’s shocking fall delivered the first back-to-back losses since the gauge’s 1990 inception. Former Fed New York President Bill Dudley chimed in with an opinion piece saying farewell to the bond bull market. — Garfield Reynolds  Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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