>> what we need to realize is we will be in a slow growth world for a very long period of time. >> how do we think about getting back to central-bank independence? >> the markets don't seem to have noticed that the number of new covid-19 cases in the u.s. have gone up by 65% in the past week. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. we are thrilled you are with us for our simulcast on bloomberg radio and bloomberg television worldwide.

we will talk the markets, fx, and the dollar, but overwhelming all today is the news on the virus. our team in brazil out with a terrific article on the pandemic in brazil. jon, i know it is not equivalent , but it is the same energy about the sunbelt in america. at a pandemic, but it is worsening condition of the virus in the sunbelt. jonathan: you're right to say it is not equivalent because it is not, but it certainly is concerning regardless. for many market participants, they've had confidence there is a higher bar to shutting down these economies once again. that teller into policy makers is beginning to be tested over the next several days. will it constrain the reopening process? will it hit his mrs. and consumers -- hit businesses and consumers? that concern is top of the mind. tom: i know we are within a

range, but i'm sorry, i observed gold really out but your stop out,st and -- really up against an $1800 price target. lisa: i cannot say for gold, but i will just say, taking a step back to the point about resurgence of virus, jonathan golub saying yesterday he had conviction in equities because the increase in virus counts were not coinciding with an in recent deaths. this is the? deaths.an increase in this is the question. mark. are people getting better, or is this a precursor for more hospitalizations and deaths to come? guests,e asked a lot of particularly those folks from

johns hopkins university, and i can assure you, even though it is a different disease for the aged from the middle-aged, certainly the younger, there is still great concern about the case build up. i want to go to you on the foreign exchange market. foundationallute thing we've got his dollar resiliency for five years. no one really saw that coming, did they? jonathan: they didn't, but there is a big headwind to dollar strength, and that is negative real yields in the united states , and inflation expectations starting to creep higher as well. i think that is what is behind we are seeing with the gold price. negative real yield in america. i think that has got to be the thing. the risk appetite people thought was improving coming into june. tom: the yield differentials and the flow differentials, that is something shahab jalinoos knows at credit suisse come out of the

london school of economics grind or it morning to you. what is the credit call on the u.s. dollar? shahab: good morning. we are looking for a weaker dollar. i think to some of the points you have already made, firstly, we have a situation where the fed is still buying around $80 billion a month in treasuries, and the balance sheet expansion is continuing may be slightly slower than the peak levels we historical any standard, at a fast pace. you also have yield curve control. the market is still pricing in about 40% of yield curve troll and the u.s. within the next three months you some feel the fed have already decided to do that, and it is a question of working out implementation. these factors, together with very low nominal rate, are also very low, and so you'll yieldentials -- so

differentials do not preclude being short all are these days. -- short dollar these days. tom: this is really important to how we fold in our conversation yesterday with james bullard. do yould curve controls, assume that means lower and longer at the zero bound? and as jon ferro mentions, the interest rate market must adapt to that, and that if expressed -- and that is expressed to the world of foreign-exchange? shahab: i think that is right. clearly, real yields matter in the long run, but in the short-term, nominal rates matter, too. that is basically the cost of carry you pay for being long or short a currency. unlike recent years, the dollar does not offer any significant yield pickup, and yield curve control would ensure that would the case going forward for a long time as well.

so all of a sudden, currencies like the euro, the yen, or the swiss franc that have some positive characteristics from a fiscal perspective relative to the u.s., they don't look so bad all of a sudden because now they don't have a negative yield differential relative to the u.s. dollar. so owning them becomes much more attractive area that is the kind of state we are in right now. jonathan: what does yield curve control mean to you? what are you expecting to see? tom: we believe it is --shahab: we believe if it is going to be introduced, it will be more like the australian case, may be up to the five-year tenet, where the fed would signal to the will allow at certain low-level up to that .oint in time

for other countries like japan, you have the yield curve control all the way out to 10 years. you don't need to have that space yet, but given the inflation expectations are going up already in the u.s., presumably you don't need to go that far up the curve area but even in the three year tenure, it is still a major innovation to move to the u.s. for yield curve control. the problem with the dollar is nobody really considered it to be a cheap currency. most valuation models would probably happen at the expense event. so it makes the trade easier to be short dollar, but it is not seen as cheap antibody -- as cheap i anybody. jonathan: we are already there for the fed, aren't we? just outside the range on the fed funds rate?\ i am trying to

work out difference yield curve control is going to make. how much lower can they go? >> that's true. as i said, i think the market is already a long way towards pressing and yield curve control being introduced as soon as the next three months. it is definitely in the consciousness already, but when you look at the dollar from a --ger-term effective long-term perspective, it is not merely yield curve control that could to get lower. it is adding this to an already difficult picture for the dollar. for example, when you look at the perspective of valuations, it wasn't cheap. you look in terms of things like the u.s.'s likely fiscal trajectory come others aren't looking good. ,hen you look at political risk possibly around the election in november. both are congressional

elections. if the whole picture put -- if you put the whole picture together, you have some politics going on, particularly in the euro, or you have a mood .eing made that seems tangible that is the shape of the european recovery fund. we will find out or about this next month, when eu leaders meet to discuss it properly. if that comes through, you do have a major multiyear innovation that is going to be euro positive, exactly at a time the dollar is facing these problems. these tend to lend to fx trends. that's the kind of thing that would make euro-dollar a likely to take back up above $1.20 this year. lisa: that is a big call. that is your highest conviction

call, that the euro will strengthen against the dollar this year. what about emerging-market currencies? is this a trend for the rest of the world outside the u.s.? jonathan: generally --shahab: , it is a tailwind. one issue in emerging markets is that interest rates come down a ,ot in those countries as well so the risk premium of what you get paid for that is much less than it used to be. secondly, there are regional differences to consider. in latin america, there are countries like chile and brazil that have been heavily affected by the pandemic and continue to be so. we probably which highway buying this currencies at this -- we probably would shy away from

buying those currencies at this time. but there's other currencies were some of these risks are slightly less immediate, and may be the fiscal positions coming into the crisis were more robust . i'm thinking about things like the korean won, the indian were be a -- the indian rupia, the russian ruble. jonathan: always great to get your thoughts. send our best to the team at credit suisse. looking for euro-dollar get out to $1.20 for year end. in your equity market, the shape of things shaping up as follows. we are down 0.7 percent on the s&p 500. in the bond market -- some crowd noise creeping into this market -- creeping up by a basis to 0.70%. i feel like i have to concerned

that it is actually tom doing an impression of crowd noises. [laughter] euro-dollar coming down 0.3%. from new york this morning, good morning to you all. bloomberg. ritika: with the first word news, i'm really could. the trump administration -- i'm ritika gupta. the trump administration is considering new tariffs on imports from the u.k., france and germany. the u.s. wants to impose new tariffs on european exports such gin, and trucks. some of the biggest states are seeing a jump in coronavirus. cases are surging in texas, florida, arizona, and california. meanwhile, palm beach county

make masks latest to mandatory. california governor newsom is -- primensumers to minister of the u.k. boris johnson is urging consumers to go out and spend. joe biden has an advantage in the "new york times" national survey of registered voters. the poll shows biden leading among women and nonwhite voters, and he is cutting into the president's support with white voters. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> we expect real gdp to come to the 2019 level by the end of may be a lotere's going to

of repair to be done in the system. the degree of predict ability is very high in terms of what may happen. ,here are other sectors leisure, gaming, where there's a lot of things we don't know. jonathan: there's a lot of things we don't know. pimco's ceo speaking to bloomberg invest. from new york city this morning, good morning to you all. alongside tom keene, together with lisa abramowicz, i'm jonathan ferro. your opening bell one hour and 12 minutes away, with equity features around 3100 on the s&p 500, down 18 off the day, off 0.6%. foreign exchange, as the session grows older, the dollar exchange --ing in a little bit odd or exchange coming in a little bit hotter. in the bond market, treasury

yields as follows. yields up two basis points on , 0.73%.ear have got one for you. just a ploy a little cash out of that fund you've got. how is that? tom: i saw that. too short of a journey. [laughter] jonathan: we will try to sort that out. i will get something a little bit longer for you. tom: they are going to call it a bonaparte. it's not there yet. with theirthe french 50 year paper. for those of you not up to speed with that, the united states says we are not going to do that. very quickly, how did the 20 year piece go? lisa: it did well. there is a question, what is going to happen with the u.s.?

will they follow through with a 50 year bond? we are expecting others to follow europe. not?% yields, why what's next, 150 year bonds? tom: i will even take 120 as well. right now, henrietta treyz of veda partners with us. full ofreat career fantastic work. wonderful to have you with us. i've got a dumb, but an obvious question. how did the people you follow change in the summer before a big election? what is the behavior that adapts and changes when the heat is on? henrietta: you never ask a dumb question. thank you very much. i feel like clients have been with us for so long, they start to ask the really good questions early. so they are already skipping

head onto what is tax policy. what can we expect from further eu tensions? where are we on china? they are already into november 4. tom: wait a minute. whoa, whoa. are they assuming the election of the vice president? henrietta: i think that is the base case for a lot of folks. that is certainly what we see from everything since the 2016 election come is a very smart -- the 2016 alexa, -- the 2016 election, the 2018 midterms. and that is literally just the math. i think that for investors and our clients who have been through some any elections now and followed very closely, understand that the house and senate are sometimes more important than who gets to the

white house. that is what they are prioritizing. we need conversations about what is reconciliation, where can the corporate tax rate go. what are the priorities with , which ind spending think a very appropriate. jonathan: president trump --lisa: president trump looks like he may be losing ground to the democratic candidate. now there's a little bit of a move. why? henrietta: that is interesting. i think there is some confusion around coronavirus that gets in the way of the developing. six months ago, we were still dealing with the potential for bernie sanders versus biden, so there was huge relief when biden won the super tuesday states and he would become the nominee because a lot of investors had been very careful of the outside

chance that bernie sanders could be the nominee ritika: there's been a lot of ash the nominee. nominee.ed view -- the the nuanced do you -- the nuanced view of what could happen during a biden administration is not far to the downside. we err on the side of $2 trillion. we use the 2009 biden is a pretty fantastic example. -- he was at the bill that pales in comparison to what we see next year. that is what we are seeing provided for 2021. lisa: it also speaks to the potential stimulus we may get ahead of the election. you wrote that if it takes

longer to get a stimulus package passed, it will likely be bigger. can you please elaborate on that? henrietta: i was having a great conversation with a supersmart die focused on the auto industry we have been working with them , are there going to be others? there are rumors about an oil bailout, cruise lines, hotels, etc. the reality is it is unlikely we will see daily helps for any specific sectors. congress still gets done shy on that after the bailouts of financial services in the great recession. so there is a version two sector but rightailouts, now, if you were looking at republican senate staff and senate members, i would say there are at least 13 members who are very opposed to meaningful deficit spending in

july. they are expecting robust june employment numbers. so if the employment requirement is there, it will make the july the julynumbers -- format numbers better. when we get to the numbers, people are expecting them to be pretty robust. and we get july numbers august that set us up for september, things are going to look worse. then you can get more money doled out. it is too much before the election. you could get president trump saying we really need more stimulus, but right now they want to hold all of their cash in a tight best. jonathan: fantastic -- in a tight vest. jonathan: fantastic to catch up with you. to november. november feels like aphid to --

feels like absolute lifetime away. i am not sure we can talk about that with any real conviction anytime soon. from new york city, good morning. this is "bloomberg surveillance ." ♪

jonathan: equities a little bit lighter if it is wednesday morning. this is "bloomberg surveillance." live on bloomberg tv and bloomberg radio, alongside tom keene together with lisa abramowicz i am jonathan ferro. equity futures down 18. the tape improving a little bit from where it was. 500, down .6% on the s&p just north of 3100 on the s&p 500. in the bond market, treasury yields higher on the 10 year, two basis points, 0.73%. in foreign, dollar strength the story against all of g10. euro-dollar coming back .25%. tom bringing up the aussie, that is down one third of 1%. allow me to a quick promo for the bloomberg investment conference.

tom: please, please. jonathan: john micklethwait will be catching up with mr. solomon of goldman sachs. i will be catching up with the co-cio at bridgewater, bob prince. that coming up later, starting around 1:00 p.m. eastern time. tom: i would suggest your interview will be interesting to global wall street. the idea of what we heard at davos, the dampening, the slow down, a lassitude to the global economy, and what that will mean for the markets. it is good to get prepared for the bob prince interview by peeking -- by speaking with peter hooper at deutsche bank who leads an acute an interesting set of economists. week howzing each deutsche bank delivers something different, a different thought on the zombie nature of the slow down or an interesting ratio. peter hooper, wonderful to have

you with us. bob prince is in the investment world of bridgewater and he would talk about the effect of the zero bound on the markets. from where you sit as an economist, what are the effects of the permanence of the zero bound on our financial system and our markets. peter: good news in the u.s. is the fed is taking the zero bound fairly seriously. unlike a number of other countries, the fed is not going to be going negative with rates, certainly no time soon judging from everything we have heard. doing so would be painful the financial system, would be painful to banks and for households. households are not savers -- the native return we are getting on assets is at an all-time low. i think the zero bound is

effective in the u.s. and that is good news. i look at all of the good news and all that is going on right now. that is fine. there is a point where the ammunition runs out. does your team have a worry the fiscal impulse ends? out,: ammunition running we are concerned. economy,news on the which was on a sugar high, given the incredible speed and magnitude of fiscal stimulus and support we have gotten so far is giving us numbers better-than-expected. the labor market, consumer spending on goods, and that is

taking some of the pressure off. delay in continuing with facing --t, we are the extra unemployment, will end at the end of july, and unemployment compensation will be dropping off substantially. we see unemployment still near 10% by the end of the year. the fed itself has it forecast close to 9%. ,f we do not see a continuation there will be a potential for substantial drop-off in spending and paying down the road. that is important. jonathan: just to jump in. one thing bridgewater has discussed is the duration mismatch between the pandemic and an 18 month episode to recover, and the three-month policy band-aid that has been applied to this economy which is

set to expire in the next 30 days. i wonder what should be the optimal guide for policymakers right now so they fully understand how much stimulus we need, where we need it, and for how long we need it for. take your guide from what is happening to the pandemic. the numbers we are getting in the southern states, the virus has been thriving indoors all along, and as activity moves indoors with the hot weather, the numbers are getting worse. the baby boomers account for something like 35% of consumer spending in this country. if this virus continues to get worse, consumer spending is not going anywhere down the road. take the economic forecast prepared tod be fill mighty big gaps as it comes along. jonathan: trying to understand

where the consensus is at the moment and trying to gauge what market participants are expecting. right now, in your conversation with clients, what to they think comes out of washington in 30 days? people are getting seriousnessout the with which congress is taking this matter. whether we get another trillion dollar package in july -- the odds are slipping. people are thinking that could ,ove into later in the summer which is beginning to cut things close. question,e is also a if they do cut things close, the unemployment rate could end the year above 10%. what is the composition of the next wave of layoffs people are talking about, the layer of

management and higher paid positions that some expect to be limited in the near future? peter: you are right. has been heavy in the food services industry and accommodation. a lot of lower paying jobs. consumer spending fails to come back, a lot of the sport -- a lot of the support we are are going to you start to see baker layoffs moving up the -- bigger layoffs moving up the pay scale. bankruptcies,of of business failures -- we are seeing a rebound inactivity from extremely low levels. as it fails to get back to anything close to normal, there will be real winnowing of firms across the spectrum.

i do anticipate more pain at higher income levels later this year, no question. lisa: how long will it take to us to get back to levels of unemployment we saw earlier this year? is notour expectation until late 2021, early 2022. in terms of levels of employment , which revised continued elevated unemployment given the trend growth we will be missing, we do not see the level of precrisis trend projections for several years, at least. it will take quite a while. jonathan: we have to leave it there. always enjoy getting your perspective on the show. send my best to you and yours.

peter hooper, deutsche bank level head of economics research. that is the consensus. we have reopened and you get the mechanical bounce, and then the long slog starts. it will take a long time to fully recover. tom: that is the consensus, but to lisa's question, the basic idea that the good news is we get back to 10% unemployment, that was the worst unemployment of 2008-2009, and we all know how we felt then. the behavioral recovery in new york city with 18% unemployment until you get well under 10% employment. no one knows when that will be. jonathan: i cannot agree more. 10% is terrible. i do not think anyone thinks that is a good number. what we all want to see is something much better. what i worry about is as we reopen in new york, massachusetts, the northeast, you will see the numbers continue to push higher. what that could do is mask

fragility beneath. there are other states further along in the reopening process, and to michelle meyer's point at bank of america, what is critical is to understand whether the increase of infections as we start to breach hospital capacity or the comfort of capacity where policymakers would be comfortable, i think that is the point where you start to wonder whether it can sit drained -- it constrained consumer confidence in business confidence as well. you have to look at the data state-by-state. this slowed down will not appear in the aggregate numbers of new york and elsewhere. that will be such a powerful force for the sequential improvement. is slow down you experience the high-frequency data in the state struggling with the pandemic again. lisa: that is where a lot of people are focusing. if you look anecdotally, you are already hearing about a fall in demand and places getting harder hit. it feels like such a model.

it is hard to -- it feels like such a muddle. it is hard to get a cohesive head around what is going on, giving all of the uncertainties and the psychology. the idea that study so consumer sentiment, their willingness to go out and their fear is what is driving economic activity, way more than any official policies. jonathan: i cannot agree more. additional layer on top of all this risk is the policymaker tolerance has been tested. harris county, home of houston, across texas, the tone of governor greg abbott has changed in the last couple of days. tom: yes. jonathan: a week ago he was steadfast, reopen, carry on reopening. there was concern in his voice in a way it was not there one week ago. others at baylor university that can advise him with the great medical system texas has. i am watching florida. thisemographics -- i said

from the beginning after valentine's day -- this virus in florida do not go together. downhan: equity futures 21. a little bit of concern starting to creep in. a defensive tilt to the price action. down .7% on the s&p 500 this morning. over last when he for hours, big tech outperforming. -- over the last 24 hours, big tech outperforming. u.s. infectious diseases and otherfauci officials have not spoken to president trump and more than two weeks. that comes at a time when coronavirus cases have surged in some of the biggest states. dr. fauci told congress he has not been asked to slow down testing. the president said he told the administration to test fewer people. another setback to the u.s. china trade. china wants international meet and soybean shippers to ensure their cargo is not contaminated with the coronavirus.

american exporters have been reluctant. they have been concerned about reliability issues. senate is headed for a stalemate over police reform. democrats are set to block a republican plan. they say it is too narrow to adequately address the national crisis over racial inequity. chuck schumer is demanding republicans negotiate a stronger bipartisan bill. republicans have promised the measure would be amended. americans are hitting the road again. gasoline demand in the u.s. has improved to nearly 80% of where it was a year ago when the coronavirus lockdown was in full effect. in april, demand had been cut in half. the fastest recovery is taking place in florida and texas. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> we are now seeing a disturbing surge of infections that looks like it is a combination. one of the things is an increase

in community spread. that is something i'm quite concerned about. this has been something that has been in the press over the past couple of days. jonathan: dr. fauci weighing in on the situation as we start to see an increase in infections in places like texas, arizona, and florida. from new york city, good morning . alongside tom keene together with lisa abramowicz, i'm jonathan ferro getting ready to step away and count down to the opening valve on bloomberg tv. doing that with kate moore of blackrock as the cyclical rotation has stalled in the last several weeks. a more defensive bias has kicked in over last couple of days. tom: that will be timely. looking forward to that. we are looking forward to your interview with tom prince of bridgewater later this afternoon. must watch, must listen for all of global wall street. lisa abramowicz and tom keene with you. right now, the most important interview we could do in this

fair city of five boroughs, new york city, then trying to get our restaurants open for the society, the culture, and the food our restaurants bring. it is everything from mcdonald's to a bistro to this and that. daniel boulud is that the top of the heap. not only the many different restaurants he has, including danielle, but also his management of the people, the management of the kitchens in the front of the house as well. us here ons bloomberg surveillance. what you need right now from mayor de blasio, what you need from governor cuomo? we got into phase two and i am opening our westside restaurant with a big terrace. they have been flexible with giving us a chance to put tables

in the street and open the restaurant, but it is not the only solution. we need the city of new york to be vigilant and very safe. we need to keep our staff very safe. we need to continue to support the center by bringing back more customers. we have done take out, and take out has been good with the kitchen. we started home delivery and we have delivered. , we will neednor a lot of support and we are asking for the government to be sensitive. we need to bring people back to work. is this oncetom: and for all that we do what europe does, which is granted we

need to move the restaurants outside, across the sidewalks, and a deed into the streets -- and indeed into the streets. do we have to change the walls are of restaurants so you can break even? daniel: the summer in new york can be so hot, it can be very uncomfortable to be outside. at you able to transform the restaurant into something more casual, more mediterranean, and do a little for a different set of time and place and a lot of safety measures. we have to make sure first and foremost that the city of new york is safe to be able to reopen inside as well. to do that.ance

lisa: casual dining evidently has a place. fine dining is dead according to danny meyer of union square hospitality, he said he will not open his finer dining restaurants until there is a vaccine. what is your view? daniel: i do not think fine dining will be dead, but i think fine dining will be suffering. is the who can survive one who has to do a good , aotiation with the landlord landlord who is supportive. willieve every fine craft still exist and continue to exist. we have the ability to scale down. we have the ability to be able to approach customers with something more centered, more soulful, more cheaper.

we will try to work in all directions. it is not because we are fine dining. with all the different restaurants i own. fine dining around the world is not going away. i do not think we want america to use its fine dining. tom: one final question. i want you to speak to all of our listeners and viewers about what is going on in the kitchen. how do you maintain a new level of cleanliness in the kitchen? daniel: we have very strict guidelines just with the crew we have right now for doing our take-out. everybody goes to an exam on a regular basis to be checked. everyone, when they arrive, we have tables with gloves and

masks, and we want them to change everything from where they come from outside. we make sure to spray themselves. respect the fact we have to wear a mask and be protected, and be safe. we try the social distancing. in the kitchen is it important. -- in the kitchen it is important. they are producing about 6000 meals every week. it is a lot of work and we try to be careful. besides the charitable work, the home take-out is important. we also are gearing up next week to open on the west side. we hope and we will learn and we

will make our staff feel its best. say, if i ownys there are times in the recent years i have had the oysters rockefeller at one of daniel boulud's wonderful establishment one too many times. thank you so much for joining us today. it will be fascinating to see the restaurants open across this nation. lisa, a lot going on in the markets. i am going to go back to what gold testing- $1800 an ounce is a clarion call. there it is. lisa: the inflation is starting to pick up a little bit and there's also a question about a safe haven. it is a conflation of both in a world of monetary stimulus and endless money printing. tom: incredibly important interviews today. i want to draw your attention to

bloomberg invest old -- bloomberg best global. mitch solomon of goldman sachs will make an appearance, and do not forget jonathan ferro in conversation with bob prince early this afternoon. this is bloomberg. good morning. ♪

♪ jonathan: from new york city for our audience worldwide, good

morning, good morning. the countdown to the open starts right now. with equity futures negative we begin with the big issue. the infection increases in states across america beginning to test the patience of policymakers state and local. >> we are not even out of the first wave of this pandemic. >> a real explosion in new cases. >> there is a trend. >> this they real spike. >> the trend is heading in the wrong direction. >> moving fast in the wrong direction. >> our numbers are going up, not going down. at anid-19 is spreading acceptable rate in texas. >> i am concerned by what we are seeing. >> if those spikes continue, additional measures will be necessary. >> i do not want the city of houston to end up in a shut down mode. >>