than we were in the first half of october. >> you are not going to get a continuation of this straight upward movement. there are going to be pullbacks. >> we are very much due for a tough time. >> the fed has been quite clear that they expect the federal government to hopefully provide more income support. >> what they really want is for congress to do its job, and that is not happening. >> whether there is reflation, central banks are worried. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. from new york and london for our audience worldwide, good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equitymorning, with futures going nowhere, but the crosscurrents this morning absolutely phenomenal. where do you want to begin. tom: where do you begin? i've got to go to politics.

the shift we saw in washington yesterday about 4:00 p.m.. we don't need to be on this all day. every other network is going to cover it up and sideways come but this this is original actions by a president of the united states, really reminiscent of what we saw in 1876. it is a story our washington team will cover. this election of 2020 continues. jonathan: that tuesday night still continues in some ways. the news of the last 15 minutes is on the vexing front. pfizer -- on the vaccine front. pfizer set to file today for emergency other ration -- emergency authorization use. think that has been the sequence, and each time there is a lesser market reaction. jonathan: i tug-of-war continues. if we think about the tug-of-war right now, the tension is

phenomenal. on the one side, the darkening near term outlook because of the restrictions in the of the economy, and then the brightening forward outlook it can get vaccinations started in month. in the last 24 hours, the federal reserve and the treasury secretary mnuchin and chair powell have been on the same page. .isa: this is the story to me people have been committed to the fed, the belief of don't fight the fed when it comes to corporate credit, when it comes to sovereign debt. yet right now, we are having the fed pushed back substantially to this proposal to take back all unused funds from that $450 billion appropriated under the c.a.r.e.s. act. today we are hearing from a whole host of fed officials. we are hearing from robert kaplan, raphael bostic, esther george.

how vociferously will they push back against the treasury's latest moves? i am also interested to see what we see out of the baker hughes u.s. rig counts. some of those barrels are getting close to the tops that we saw earlier this year, when we saw negative future prices. we are not back there yet, but they are seeing that much less demand as we are seeing the virus increase. today, president-elect joe biden will be meeting with nancy pelosi and chuck schumer, the first time democratic leadership has gotten together to talk about the plan, how to get some sort of fiscal support package biden'show to get cabinet passed. jonathan: january 20 feels like a long way away. lisa, thank you. we will start with the price action, then get the latest vexing news. on the s&p 500 -- latest vaccine news.

on the s&p 500, not much going on. we will continue that debate on this program. year yield, 0.84%. $1.1873.ar, fazeli ofllie -- sam bloomberg intelligence joins us now. we've heard the first from pfizer. give us your take. dr. fazeli: it is what we expected, which is why market is probably not reacting much anymore. if a thing goes through lee without any hiccups, you could in the firstting se or second week of december. tom: are we setting ourselves up for a pandemic winter of our discontent with these vaccine hopes, and getting the calendar

wrong, where vaccines are farther out than we actually think? dr. fazeli: that is an excellent question. i have seen some people talk about 320 million people being vaccinated in the u.s. i jun -- u.s. by june. i doubt that that will happen. the critical thing is that we are all going to start counting doses and people being vaccinated as soon as this comes out. i think the winter is going to be as horrible as we all expected. the vaccine will not make that much difference. at the very least, it takes six weeks for people to become immune once they have become vaccinated. lisa: wait, six weeks from the time people have started getting vaccinated to feel the full effect. so can you walk us through what the timeframe would look like if there was this emergency authorization approval that pfizer and the like are seeking right now? how soon before we start to see some critical mass of

immunization? dr. fazeli: initially, in january and possibly into february, i think you are seeing thele being vaccinated at forefront of dealing with covid patients. i would be very happy to see the general public getting vaccine doses handed to them starting in february. jonathan: it is great to get you onto the program to react to this news. ere of bloomberg intelligence. if you are just tuning in, pfizer announcing they plan to five today for emergency use authorization that could allow their covid vaccine to be used in america as soon as next month. wells market, anna han, fargo equity strategist, joins us now. how do you react to the news this morning? this morning is encouraging for equities. like you were talking about

.arlier, that tug-of-war this is one item that might be able to juncker the markets a little but higher -- able to yank the markets a little bit higher. it is hard to say what is going to win outcome of the rising andd cases or the vaccine perhaps rekindled stimulus talks on both ends. maybe that is going to be the winning factor. six months out, we still think equity risk and uncertainty rules, and equities will march higher. tom: i want to drive this into a physics discussion here. do we know the coefficients right now? are you flying blind, or within your equation, your expectation that you see, do you actually feel like you've got a handle on how the equations pieced together? anna: for us, we do think we have some sense, especially as

you see what the rotation has been. as the market has been pretty flat this week, still underneath the hood, you are seeing certain groups have a higher beta to more positive covid views. you are seeing more of a cyclical and value trade outperforming. that has been the trend month to date. with get as much longer to go in the longer term. how: in the short-term, much of a hit could that cyclical trade take? anna: as you know, cyclicality is very sensitive to economic indicators and how the economic recovery is going. so far, recoveries seem to be chugging along, but we know the risk has always been what happens with the coronavirus cases. is it manageable? in new york city, you're seeing schools close, restaurant dining get rolled back in our short. these things are concerning if we get them at a nationwide spread. jonathan: they are more

concerning if we make a policy mistake. that is why i think perhaps the biggest news overnight was the gap emerging between the federal reserve, chairman powell, and treasury secretary mnuchin. there is a worry that the fed backs away, you start to see a gapping out. that would be my concern this morning. i was surprised i didn't see a big move in this market. we had a bit of one overnight, then arrested pretty quickly. tom: i think everyone in washington is overwhelmed by the constitutional news, but to your point, the fiscal stimulus timeline has been adjusted. there's no question about that. i want to go back to beta. let's call it sector beta. full disclosure, i don't believe in beta on individual securities. into 2021 an absolute change or a relative change? can i still own tech? anna: you can still own tech,

but for 2021, we are thinking more pedestrian growth than we have seen in the past two or. . three years for us -- the past two or three years. for us, we want to know if the market is going to be or pedestrian and growth, what about underneath that? what sectors are going to have that relative outperformance? for us, we think it is more of the economically sensitive names . that is what we have been recommending to investors right 2021.hen you look out to jonathan: are the financials part of that? anna: it is. specifically,als the beaten down and unloved banks. recently we have pounded the table on being overweight banks for a longer-term trade because valuations look ripe for the picking, and as we have seen, that book to price factor has

performed, and we think it has more to go. that hopes that bank argument. eventually, with rates staying at zero, even if we don't get the biggest fiscal stimulus package come another we do have concerns, what happens is that credit support roles off? that is going to help banks come back, especially if down the road we get a little reflation. lisa: i want to go back to something jon was talking about, this rift emerging between the federal reserve and the treasury of the extra money going toward bond purchases, main street lending facilities, going towards municipal bond purchases. i am wondering how much this threatens the idea that the fed can swoop in as a backstop to markets. frankly, this has been one of the biggest arguments for equities and evaluations where they are. does this threaten that based on this inconsistency in messaging? anna: you are right, it is a bit

of a shock to hear treasury secretary mnuchin and the fed are taking different stances. . one of the reason you can find such inflated multiples on the s&p is the liquidity we have had, this monetary accommodation. now you have treasury secretary mnuchin asking for a refund. that is shocking because one of the steady things we have had throughout this turmoil has been steady market support. if companies lose their access to capital, that comes a distressed -- that comes in distress for equities, but so far we have seen credit spreads tight, well-behaved, both in investment grade and the high yield markets. . so as long as that can remain capped, we think equity volatility remains muted. jonathan: good to catch up, as always. thatve to imagine

secretary mnuchin has the best of intentions around this. he is looking to deploy some fiscal ammunition. i just find the communication around it to be really come on the -- really clumsy. two individuals that have been on the same page suddenly start to split. tom: we are not in the job of speculation, but the speculating of the speculation is was he ordered to do this, or did he do it unilaterally? what was the why of this? i would suggest that is a mystery today. maybe it gets solved today. maybe it doesn't, with the other distractions the white house has. jonathan: you're right is a mystery, and you are right we are speculating, but the outcome is there for all to see. it is a communication blunder to see the chairman of the federal reserve and the treasury secretary on two different pages when the economy is decelerating. tom: on radio, this works. i've got fingers left over of the blunders going on in washington among all the parties right now. in the blur of it all, it is

just another major blunder. you're right. jonathan: no market fallout, the. coming up on this program, jared andstein, center on budget policy senior fellow and advisor biden duringelect the obama administration. this is bloomberg. ritika:ritika: with the first word news, i'm ritika gupta. arer and biontech asking u.s. regulators for emergency authorization for their vaccine. earlier this week, the drugmakers reported that a final analysis of the clinical trial data showed the shot was 95% effective at preventing the disease. another legal setback in president trump's bid to overturn joe's election victory. overturn joe- to biden's election victory.

night, according to a hand recount, biden won georgia by more than 4000 votes. president trump is reaching out directly to michigan lawmakers to try to overturn the state's vote. he will meet with members of the state legislature today. some allies have urged him to persuade legislatures and states to give him the state's electoral college vote. the leaders of france and togium are urging the bloc step up preparations for a new deal brexit at the end of the year. that is in case talks with u.k. don't resolve in a trade and security agreement. if there is no deal, they will face disruption and higher costs because tariffs and quotas will return. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg.

♪ ♪ the way the federal therve has dealing with dollar i think has been a positive direction. our interest rates are the lowest they have been in modern history, and i thing that is a positive thing. jonathan: president-elect joe biden on the economy, the dollar, the federal reserve as well. tom: nailed it. [laughter] jonathan: i don't think there was much conviction behind that statement. tom: i am going to give the president-elect some major slack there. it takes practice. i deal with this everyday.

it takes practice to say nothing. it is a skill that i'm sure the president-elect will figure out. jonathan: he basically said nothing. to be honest, i was going to let it slide. i am surprised you stepped in and took a dig. the news on the economy front from this administration, the future administration, next week we should find out who the future treasury secretary might be. we might find out before thanksgiving or shortly thereafter. the speculation game down to about three names. tom: all really wonderful candidates, and it is a fun time to see how any presidential cabinet is put together. it is an interesting time, if not fun time, and washington. emily wilkins joins us now, bloomberg election 2020 reporter. we've got to talk about the cacophony yesterday. let me give you an open question to start. within election 2020 and the blur of this, what are you focused on this friday?

thingsthere are a lot of to focus on. i think people in particular are looking at what the trump campaign is trying to do to deal, or not deal, but the fact that the president does not have enough electoral votes to win. he's invited the michigan state legislature to the white house, a republican led legislature, and it appears to be part of a strategy on the trump campaign to overrule voters and give him the electoral college vote. is maybelution there they go visit mr. biden as well. i am watching vice president pence. what would you expect to hear from the vice president in the next 24 hours? emily: all of the republicans going down to georgia, as vice president pence is, have this

very unique line to walk right now. they have to convince republicans to turn out and vote in the upcoming senate elections, and one of their big arguments is that they need them to come out so republicans can take control of the senate. the problem is republicans are also still trying to play the game where they are not really saying that trump has lost the election, and because if the democrats win georgia, it is a 50-50 tie, they have to encourage voters to come out without admitting that trump has indeed lost. lisa: from the political side, this is a lot of the focus. from the market side, the markets have moved on. they basically think joe biden is going to take the white house on january 20, and the question is what will be his agenda, what will be his to do list, and how will he be able to roll out a vaccine messianism to get this pandemic over quickly -- out a vaccine mechanism to get this pandemic over quickly.

once again, the federal government has not formally recognized that we are going to have an incoming biden administration, and he is not able to start the transition. that said, biden has already started talking about plans for coronavirus. he's been talking about really encouraging people to wear masks , starting up an infectious disease task force that was there under the obama administration, but was downgraded during the trump administration. so i think we are going to see a lot of strong messaging on coronavirus from the biden administration. the question is whether he will have a senate that is slightly in democratic control and able to work with him, or whether he is able to work with mitch mcconnell on getting something done. last 24 hours,e the cdc warned against traveling for thanksgiving. california has ordered a late-night curfew. rhode island has ordered a two week pause that won't begin

until november 30. those are just some of the moves in the last 24 hours. month with hopes of a vaccine next month. we've got to get through this first. tom: i'm literally putting it out on twitter right now. we had a coronavirus briefing yesterday. i am absolutely fascinated by this. do we have a coronavirus panel? the whitere is in house a coronavirus task force, although there has been some criticism about how often that has wound up meeting. tom: yeah, what do they do? you know all the dirt. what do they do every day? emily: it is a group of different people that includes vice president pence. he obviously has different things on his plate. at theostly ones looking response, figuring out how to go forward, what guidance to give, if any. how much to leave to the states. the federal government has left

a lot to the states. i think we are going to see under the biden administration a much stronger federal government when it comes to addressing how the nation needs to respond to the coronavirus. jonathan: we don't live in an authoritarian regime, and that ultimately has been the difference between the way china has handled this and the way the united states and europe has handled this situation. we played the tape a little bit earlier this morning, the better comparison is probably the united states and europe with places like south korea, like australia. it is not just at the federal government has lifted to the states. the states are leaving it to individuals. the administration would say that is the american way. but when you hear the governor of utah suggests that thanksgiving and mixing households is probably not a good idea, but we will leave it up to you, what do you thick is going to happen? tom: i really don't have a strong opinion on thanksgiving. this is a holiday in america, the fourth thursday of november, and we've got to move on from

detroit lions football. i really don't know what is going to happen other than clearly, as you noticed yesterday with united airlines, travel is plunging right now in america. jonathan: emily, great to catch up. appreciate your time this morning. emily wilkins there of bloomberg government. this is the situation right now. even in the united kingdom, we have been trying to balance restrictions with civil liberties, the independence to make your and decisions, but ultimately, the health care system in some parts of the country just became overwhelmed, and that balance wasn't part of the equation anymore. lisa: i think that people underestimate the exponential aspect of the virus. the idea that we cannot necessarily get a handle on just how bad it is until it is already too late. the idea that it is not just deaths, the idea that there are long-lasting ramifications from the virus, as dr. quick was talking about yesterday. i will say you are seeing activity slow. you are seeing gasoline demand

decline the most week over week since may. you are seeing mobility drop. people are responding, and this has been the story and will intinue to be the story as the midwestern states, this really is the worst it has been. tom: that was like lights out, bringing gasoline demand. lisa: i read. [laughter] jonathan: the thursday balance sheet headline drop for the fed yesterday, and then you start to read about gasoline demand shortly thereafter. i have to say on the policy front -- tom: i was looking at manchester city. lisa: there's your problem. jonathan: that is not the focus in the u.k. right now. you guys are looking ahead to thanksgiving. we are looking ahead to christmas. there have been some reports that maybe governments will allow households to mix on christmas day in the u.k., but if they are going to allow that, it means we might have to have a

longer gum going into christmas or after cosmos. can you wrap their head around lockdownave a longer going into christmas or after christmas. can you wrap your head around that? you either need the restrictions or you don't. tom: they should have the keene strategy to just ignore christmas because nobody gets along. keep it short and sweet. vet bill gets a gift. lisa: there you go. [laughter] jonathan: can you imagine how nice that week is at the keene household? the week after is the wedding anniversary. they just ignore each other, is that the plan? we would go to venice or kazakhstan. instead we are like all of manhattan. jonathan: how is kazakhstan? tom: that is on our list. lisa: do you mean you end -- you and vet bill? [laughter] jonathan: alongside tom keene

and lisa abramowicz, i'm jonathan ferro. tom: merry christmas. jonathan: from london and new york this morning -- tom: ♪ chestnuts roasting ♪ jonathan: tom keene with a christmas song. [laughter] carry on. tom: oh no. no. are you frustrated with your weight and health?

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jonathan: from london and new york, this is "bloomberg surveillance." here's the price action this friday morning. the confluence of things going around the world absolutely unbelievable. on the week, the s&p 500 pretty much unchanged coming into friday. but eight the surface, i think the relative trade that everyone is looking at his big tex versus small caps -- beneath the surface, i think the relative trade that everyone is looking at is big tech versus small caps. the russell down by about zero point and -- by about 0.1%. detention right now is really tight -- the tension right now is really tight. if you get to the bond market, here is the dominant issue this morning, they spat between the chairman of the federal reserve

and the treasury secretary. not on the same page about the credit backstop. if you don't have that fed put in the credit market, where does it leave the fed? they have to load up on bonds, extend bond buying through the treasury curve to buy even more. in the treasury market this morning, unchanged at 84 basis points. but the story of the last couple of weeks, since monday, the curve is basically exactly where it was monday before the vaccine news. the 10 year, pretty much exactly where it was the monday before the vaccine news. this market hasn't repriced in the same way the equity market has. looking forward, when ethan could about demand, what you check in on? i think this is -- when you think about demand, what you check in on? i think this is really important. asia-pacific em, there's a little more optimism at the moment. if you want a pure gauge of where demand is in the market right now, there's only a couple of places you can go to, and the commodity market is one.

month,about 17% over the on the session, 0.6%. copper about 1.4%. a multiyear high on copper. this commodity market is pretty resilient in the face of near-term risks. tom: jon ferro and i at the dorchester hotel, i can see it now. we saw that years ago. thank you, jon. i would note dollar-mexican peso really showing mexican strength. that shows some of that e.m. strength we have been talking about through the week. what we like to do at "surveillance" is not talk to the fancy people or pundits. we like to talk to the people they read and listen to. ,ne of those is jared bernstein and esteemed career at the center on budget and policy priorities, and the senator from delaware years ago discovered

this, and so mr. bernstein joined the team, an advisor for the president-elect. i really want to go to transition my new show -- transition my new show -- transition minutia. like being on a transition team? jared: i think the most important thing to recognize is that this is such a critical moment for a smooth, normal transition process to happen, and what is happening right now is anything but normal. remember, i was the chief economist of the then price that -- the then vice president-elect in 2008, and at this point, we were actively planning -- remember, that was the great recession -- for a fiscal relief package that was legislated less than four weeks after obama and biden took office. that is what should be happening now, but this is not normal, for

this transition to be drawn out this way, and it is coming at great cost in terms of health and in terms of the economy. tom: we make fun of champ and major returning to the white house with the president-elect. what is your plan if this transition is interrupted? are you planning out a budget process without the knowledge of the present white house? , and you willly hear the president-elect talking about this, we are thinking about a fiscal package with great urgency. one of the things he said -- and by the way, president-elects like to wait until they are in office to move legislation, he has said that is not the case. he said it should be done in the lame-duck, and i could not agree more. but if you are talking about preparing for this job that the american people have elected him for, you've got to talk about virus control, and that of

course, you can see the president-elect is very active on planning virus control, but the former surgeon general on the covid team recently talked about how important it is to get that information in transition from folks that are currently in the white house, and that is not happening. again, avoidable suffering to americans in terms of health care and economic hardship because this transition is not occurring the way it should. jonathan: we are lucky to have a bit of time with you this morning so we can talk about the transition a little bit more in just a moment. i want to talk about a fiscal plan just a bit with you. the republican senate is the obstacle to getting a deal that pelosi wanted. we will likely have one after january as well. what do you think president-elect biden can chieve that speaker pelosi couldn't? jared: the president-elect continues to talk about how people can decide to cooperate,

and now is the perfect time for them to do so. we have heard positive sounds about a fiscal package from ,embers of the republican squad including from mcconnell himself. what we are not seeing is the kind of negotiations that the president himself has been stressing. we have an unemployment insurance system where over 20 million people are making claims, and at least 12 million, we recently learned, could lose as it expires at the end of the year. we have over 400,000 small businesses that have close,d. long-term and play meant is increasing in something we haven't seen in the history of that series. according to ziprecruiter, job growth is slowing not just in places where the virus is surging, but in other places as well. i think the urgency of the

economic situation and the health situation, which are intimately connected, just has to reach legislators. i am an economist, not a politician. but i can certainly stress the urgency of this moment in that regard. anathan: currently, there is 1.5 trillion dollars spread between the two sides, i -- the two sides, and i am not sure how that closes, if at all. best: i think probably the way to think about it is to start adding up what is necessary. state and local budgets are really hurting. remember, they can't run budget deficits. the unemployment insurance system needs work. nutritional support has to be on the table. here's lots of people facing potential evictions and foreclosures, so we need those programs to continue and be re-upped. and of course, virus control is at the time of the list. you will get into the

neighborhood of the heroes act, which is what the president-elect was touting the ther day, and at least second version of that was a -- was in the $2 trillion to $3 trillion range. but i think what matters most right now is speed. speed, size, composition, they are all important. but i would put speed first because this economy is at a precarious point. lisa: if speed is the biggest issue right now, you think democrats should cave to the republican demand of a smaller bill and get anything passed, even if it is substantially less than what is required? jared: i don't think cave is the word anyone should be thinking about. it is cooperation, working together to serve both the health care and economic needs of the american people. as the president-elect has stressed, there are avoidable if bothhat could occur

sides would get together and start cooperating. by the way, ron klain, the incoming chief of staff, someone who knows a lot about pandemics, he pointed up something the other day that i want to stress. he said yes, vaccine, that is important. it is essential. but vaccine without vaccination doesn't get you very far. so along with all of this other transition planning that should be happening now, the manufacture and distribution of the vaccine is essential planning that has to occur, and i don't think anybody needs to cave to each other to get to work on serving the american people in that regard. lisa: given that there is some sort of bridge right now to try to get us through the very difficult couple of months, what do you think is necessary when it comes to potential infrastructure spending, which has been some the net has been touted out, and how should we pay for something like that? jared: that is a really good question. relief andmuch on

this fiscal bridge to the other side of the crisis. i don't think we should forget, and certainly the president-elect has an agenda that is extremely rich and important in this regard, that simply getting to the other side of the crisis back to where we were isn't nearly good enough. we have to come the way he puts it, build back better. that is have a far more resilient economy on the other side of the break, and resiliency in the case that you are raising has to do with investments in between energy and infrastructure, health care infrastructure, safety net infrastructure, and unemployment insurance system that is up to the task, a health-care system up to the task, and all of those investments i think need to be made. discussions that will have to happen when the president-elect becomes the president. in terms of relief packages right now, it is essential to recognize that interest rates are so low and locked in at such a low rate that government

borrowing, given the return on the kind of investments i am talking about, we could live early -- we could literally save lives at an extremely favorable interest rate. the idea that congress isn't acting with urgency to do that right now i think it's just a huge mistake. jonathan: 84 basis points on the 10 year. jared, great to catch up. comeack soon. jared bernstein of the center and budget -- the center on budget and policy priorities. the speed right now is severely lacking. tom: the most intelligent thing i heard there was from jon ferro, which is it is a republican senate. i get dr. bernstein's enthusiasm here, but they are running right into a ripple book and senate. i don't get it -- into a republican senate. i don't get it. jonathan: let's put our differences aside and negotiate on my terms. that is not an approach that is ever going to work. that is the heroes act

$2 trillion, and the $500 billion that mcconnell has on the table. rateif the unemployment turns higher, maybe that changes the dialogue. jonathan: retail sales first, then claims. up next, terry w -- up next, thierry wizman. -0.1%.s&p, we are this is bloomberg. ritika: with the first word news, i'm ritika gupta. if the fda gives the green light, that coronavirus vaccine from pfizer and biontech could be used next month on high-risk populations. the drugmakers say they will file today for emergency use authorization. the final analysis of clinical trial data -- of clinical trial data showed the shop was 95% effective at preventing the

disease. if federal judge refused to block georgia from certifying its election results. a hand recount shows joe biden by in georgia by mo than -- more than 12,000 votes. earlier in the day, a judge throughout a suit seeking an audit in a pivotal county. the trump campaign pulled the plug on its own suit in michigan, falsely claiming it had stopped the state's vote certification. congress is getting closer to a deal on a spending bill that would avert a government shutdown at month. house speaker nancy pelosi and senate majority leader mitch mcconnell met to work out the details. republicans are far apart in stimulus negotiations. america's biggest oil storage hub is filling up again. stockpiles at cushing, oklahoma were at 81% capacity as of a week ago. cushing is the delivery point

for wti futures, the glut has ballooned just as americans face more research in's hurt demand. -- more restrictions that could hurt demand. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ i'm ritika gupta. this is bloomberg. ♪

♪ we could haveble negative growth if this resurgence gets baguette enough -- gets bad enough and mobility falls off enough.

>> we knew that things were going to slow down after the bounceback in the third quarter. you are seeing that in the data now. jonathan: robert kaplan, dallas fed president, and loretta mester, cleveland fed president, speaking to bloomberg in the last 24 hours. alongside tom keene and lisa abramowicz, i'm jonathan ferro. i've been lucky to catch up with president mr. two or three times over the last nine months. in theough the momentum economy has been quite impressive in the back end of the year, the tone that president mr. took in that mesteriew -- president took in that interview, they were toward capitol hill pleading for more fiscal help. tom: it is there geography. i have done a lot of reading on this over the years. for those of you particularly international, went they went down madison avenue to j.p. morgan and said, you've got to fix this, and they set up the

fed, the only way they could do it with the distrust of agricultural america of urban america, they set up the regional feds. it is we'll simple. they have each of them a character, and president mester the history of the midwest. thierry wizman knows all of this . you've talked about the bite in effect. would -- the biden effect. what is the biden effect? that with abelieve bite and then ministration coming into office ash a biden administration coming into office -- a biden administration coming into office, it will be a different relationship with china. it will not be about imposing

tariffs on imports into the u.s.. it will be more human rights oriented, it might be more sanctions oriented. i think the markets will like that. there will be fewer surprises. but there will be also fewer surprises for china as well, and it is one reason why the dollar has depreciated relative to the weeks. the past few lisa: we still have 60 days at least before we deal with the biden ed ministration, and then talk about what happens after that. in the near term, there is a distance growing between the federal reserve and the treasury secretary that emerged yesterday about the extra funds allocated to the fed under the c.a.r.e.s. act. i would love your take on how significant ed is that the fed might not have -- how significant it is that the might not have enough ammunition to lend to businesses. thierry: i am going to try to downplay this quarrel between the fed and the treasury.

it is up that it is updated is not important. it is not that it can affect market sentiment adversely. stockmarkets wobbled a little bit, but they did recover. the reason i am putting it into context is because there are much more grave situations lining up for the u.s. economy in the next few weeks. one of them is this fiscal cliff. we may see at the end of the year this moratorium on foreclosures come on student debt relief, on the extra employment funds expire. when you think about the size of , it makes theiff treasury look like small potatoes compared to the stuff that is happening on the fiscal side. jonathan: how much damage you think this could do to the economy? we wake up to more good news around the vaccine. we could be seeing vaccinations

next month in america. a concerned are you about the damage we could do between now and really getting a ramp up in that vaccine rollout? thierry: this is a battle between the forces of light and the forces of darkness. the forces of light are the vaccine and its efficacy and the speed with which it can be rolled out not just in the u.s., but globally. the forces of darkness is the fiscal cliff i just mentioned, the spread of the pandemic and the so-called seven wave -- the so-called second wave we are seeing in the northern hemisphere winter. the fact that there is going to be a vaccine by the spring that will be pretty dramatically distributed not just in the u.s. , that will serve as an anchor for market sentiment even though we will see a double dip in

growth in the fourth quarter, early part of the first quarter. i am also figuring in the prospect that congress will come to terms with the administration and pass some sort of fiscal relief between now and inauguration day. that will help to alleviate at least part of that fiscal cliff we are looking at the end of this year. tom: it sounds like a nerd episode of "the mandalorian." we will have to see how that goes. i notice on bloomberg dollar index, we are back to january 2015. basically, the dollar has gone nowhere for five years. which way does it cut, or does it stay in this remarkable range? thierry: we actually think the dollar is going to we going forward. it may not be a dramatic weakening. some houses on the street are talking about it when he percent decline in the value of the dollar index -- tom: i don't mean to interrupt, but why is stephen roach wrong? thierry: because there's certain advantages the dollar will have,

even in a biden administration. we can make a case that u.s. growth will still have a premium over europe and the global economy. it is not as if u.s. growth is going to collapse. the dollar will still maintain part of its reserve currency status. reserve asset managers will not rotate out of the dollar yet. however, we do see some weakening. wrong.ot that he is the reason the dollar will continue to weaken and potentially the dxy will break through that 92 level of support is because there are good things happening in europe despite it all. there is unity on the fiscal side. there's going to be a little more fiscal expansion in europe next year than in the u.s. if anything, the u.s. will see a decline in the cyclically adjusted fiscal deficit. you could also make a case that to some extent, reserve asset managers will rotate out of the dollar somewhat back into the euro. they haven't done so since 2012.

maybe the time is right for that to happen. to the extent that we do get a vaccine next year, it is going to help cyclical stocks, and that is going to work to the benefit of stock indexes outside of the u.s. in europe, and asia. when people think of the u.s. stock market, they think of growth. when people think of the stockmarkets abroad, they generally think of value and cyclically oriented companies. it will also hurt the dollar, to the extent that managers will have to buy foreign currencies to buy foreign stock market. there's a whole host of reasons why the dollar will weaken, but it is not a catastrophic weakening. jonathan: think of how much money we have lost trying to play that european trade. trade to catch up, as always. appreciate it. why steve roche is just harshly wrong. tom: it is a huge debate, and this word magnitude is used. magnitude is underplayed, particularly in american media. the british do it better, but

magnitude matters. jonathan: i agree. coming up on this program, jim paulsen, lose hold weeden capital management group chief investment officer. this is bloomberg. ♪ businesses today are looking to tomorrow.

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she even beats her insurance price. good for you kate, good for you. goodrx, stop paying too much for your prescriptions. download the free app today. >> we are in a much worse place today then we were in the first half of october. >> you are not going to get a continuation of this straight upward movement. there will be a pullback. >> we are very much due for a tough time. >> the fed has been quite clear that they expect the federal government to hopefully provide more income support. >> all they really want is for congress to do its job, and that is not happening. >> even in supposedly the good places where there is reflation, central bank are worried. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. love to