>> the course of the virus, the pandemic and the vaccines will determine the future of the economy. >> the economy has shown good resilience to this third wave. >> the bottom has really fallen out of low income. >> in the last several weeks, the mood has changed dramatically. >> you are likely to see some churn. you may see a pullback in markets. >> last year, it was all about making sure you survive. this year, it is more about investment. >> this is bloomberg surveillance. >> jonathan ferro, lisa abramowicz simulcast. around the world, without question a historic day in the united states. an impeachment expected of the president.

lisa, the calendar is they start about 9:00 a.m. in the afternoon, we may see that the event. >> there's a big question hanging over this proceeding, which is how does the republican party define itself without trump? that is increasingly the theme as we have mitch mcconnell supposedly saying he would support impeachment. a big shift. jonathan: a big shift. i want to point out the distinction of what many of us saw. you look at the geography of republican supporting democrats in the house, and it is fascinating, the diversity of the geography. many of them in closely contested districts. liz cheney, in a trump state, making her more extraordinary. kevin cirilli will give us a brief here in a bit. lisa: it is a party of trump

becoming a party without trump. jonathan: wait. you are going to go. lisa: i'm going to talk about whether this will become the party of collaboration. one of the more interesting stories that fell under the radar was joe biden looking for consensus. not looking to do just some sort of side deal with democrats, to work with republicans. will the republican party become the party of collaboration? that could change the entire dan amec -- entire dynamic in the beltway. and that might be on the table. jonathan: someone publishing moments ago about the deal that the president -- an economist for clear she is still on board with many trillions of stimulus during the pandemic. i do not want to go into too

much data today. oil, $56.69. bitcoin, $34,147. we go into what we have got. the currency market not giving me much. lisa, save me here with the news of the day. lisa: we will get a read on inflation as people try to reimagine when it means. you have a money supply increased by 25% in the past year. we will get december cpi, headline inflation figures. we also get hourly earnings. 2:00 p.m., we get the december budget statement. how big is our deficit? -- also, the fed's beige book. three 5:00 p.m., richard claritin speaking.

i think this may be the key event. the big question for the federal reserve is to discuss papering -- tapering or not to. they could potentially nip that in the bud and say we are not going to discuss it, come back to us in 2022. jonathan: we will look at what is going on in march -- washington and in the markets. we will touch on the pandemic at some point. i extrapolated out the death rates in america, and you get out to 500,000 deaths in early may. the good news is johns hopkins experts say the vaccine can come to the rescue and soften that trend. right now, on the markets and on the application of fixed income, someone joins us from morgan stanley. jim, think of open question to you.

-- an open question to you. what is it that you have most focus on now? jim: the potential for interest rates and bond yields to rise and how high. the reason is it has some very good aspects and also some negative aspects. too much of a good thing might not be so good, meaning that it is good that you get interest rates to rise when you have stronger data, potentially more stimulus, the potential for growth, but it is bad if rates get too high and it has deleterious effects on another asset classes like credit spreads widening and maybe the dollar getting too strong. it does not mean those riskier assets cannot necessarily reset in value, and maybe they should, but the point here is that the fed wants to keep easy financial conditions. the fed has set course to have

flexible inflation targeting. they are inviting higher yields as long as those are coming alongside better growth and growth dynamics, but, if rates rise to quickly, wellhead of earnings or cash flows from the real economy, then it creates a slowing effect and that can be not such a good thing. lisa: are you dismissing the taper talk as premature and you will count on the bullards of the world to say that will not be in the table until next year? jim: right. i don't think it is on the table until next year at least. there is a self-correcting mechanism in the market, and the fed, just like we at morgan stanley on the fixed-income team, you have from the lens of financial conditions. it is really an index. it is a combination of equity, prices, credit spreads, the dollar, interest rates,

everything together. the point here is that if rates were to rise to quickly, i think those other assets, equities, credit spreads, or even the dollar could strengthen to a point where it starts to threaten the economic recovery, and that would turn yields down. where the fed has risk is in inflation. we don't know how inflationary this might be. we really have not seen a lot of inflation over the past several years. if it does become inflationary, that will push the rate of change of yields higher very quickly, and that can have a negative effect. that is what we have to be worried about. that is what the fed needs to talk about. it is not so much the level of interest rates or whether they will taper or not right now. it is about how are they going to respond to inflationary pressures. lisa: inflationary pressures has been one of the biggest question marks facing markets this year.

if you think about the statistic that the amount of money in the u.s. economy is 25% higher at t0 -- higher than it was at the beginning of 2020. are we going to be in for a surprise? jim: this week was academic. if you are monetarist, they have not done so well in terms of predicting that. money supply is high, but it is money supply times velocity. it is m times z that equals inflation. we had a bad year in 2020. we are probably down five percentage points off of trend growth lines, potential growth.

it requires we grow at least 5% this year and next year to close that gap. as long as you have an output gap, which we do, and it is large now, it will be hard for aggregate demand to overwhelm the supply of the economy that would push prices higher. if we have a recovery in 2021, just, that's a failure. we need a boom in 2021 and 2022. that is why so many people are e optimistic about economic growth. this urgency. the market misses why the fed is so urgent. weiser this urgenc -- why is there this urgency? they need to not just engineer a recovery, but a boom to close

the output gap quickly and allow those inflationary pressures to start to rise as they are targeting. jonathan: thank you, jim caron. morgan stanley. i could go for an hour with him. futures negative five, dow futures -28, fixed 23.5. lisa, in the bond market, my question is how do you define a bear market? lisa: not this. steven major of hsbc but that a note this morning where he said he reaffirms calls for 10 year treasury yields to fall to 0.75%, so i treasury bowl at this. point -- so i treasury bowl -- a treasury bull at this point. jonathan: you look at the dollar market and how that has reversed just in the last week. i think of the mark mccormick interview we did.

he's an outlier, but even dollar neutral is away from any kind of consensus. lisa: we see an increasing number of firms saying they are pushing back on this consistently weaker call for the dollar near-term. one thing someone said yesterday that i found interesting, talking about bond yields and inflation, is that you are seeing inflation in asset prices, signs of frost in asset prices. to that cause deflation if that comes off? i thought that was interesting. jonathan: let me do a data check because that is what we do here. futures negative five, dow futures -29, vix goes nowhere, yield goes nowhere, 1.1%. how does john farrell make a boring data check? it is a gift. lisa: incredible, you know. jonathan: 10 year yield, 1.13%.

oil, $56.72. dollar with some strength. coming up, kevin cirilli, mark coward as well. on radio and television, this is bloomberg. >> i'm ritika gupta. the house has voted to demand that vice president pence use the 25th amendment to remove president trump from office. the vote was largely symbolic because pentz told nancy pelosi would not comply. this sets the stage for a vote today to impeach the president the second time, a week after a pro-trump mob stormed capitol. the number three republican in the house will vote to impeach. liz cheney of wyoming said president trump summoned this mob, assembled the mob, and lit the flame of this attack. the daughter of dick cheney has

been a target of internal republican criticism. bloomberg has learned that president-elect biden will probably name wall street critic gary gensler to head the sec. he ran the commodity futures trading commission during the obama administration, a role putting him in combat with the banks. the trump administration is to unveil last-minute changes to fannie mae and demand -- freddie mac. they would allow them to retain more capital. the thorny decisions would be left to the biden administration. canad -- a canadian convenience store giant is in talks with a french company. the owner of circle k that values that canadian company at $20 billion. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries.

i am ritika gupta. this is bloomberg. ♪

>> allowing the president to

incite this attack without consequences is a threat to the future of this democracy. for this reason, i will vote to impeach president. >> the majority is asking the house to assume a power it does not have. the house has no role of initiating section four of the 25th amendment and we should not pretend otherwise. that power lies with the vice president. >> free speech is under assault like never before. the 25th amendment's of zero risk to me, but will come back to haunt joe biden and the biden administration. as the expression goes, be careful what you wish for. jonathan: i cannot say enough about how our team finds the voices there. someone has been with me for years and he is wonderful at picking out selected voices. president, tom cole of oklahoma, one of the smartest people in the house, and john comfortable air -- and john, a republican

making history saying he would impeach. -- a trial attorney and public service in the narcotics wing of our federal prosecution. kevin cirilli joins us from washington. kevin, there's 18 stories to cover and i have to go to one that is shocking. the gentlelady from the 11th district of new jersey on her facebook page last night talking about reconnaissance in the capitol the day before the rabble came through the doors. does that even possible, that people helped them figure out the layout of our nation's capitol. kevin: it is haunting and it is why the investigation is so important. it is why, to be candid, there's been a palpable angst that has gripped this city, and anyone that works or touches the capitol building over the past

seven days. she came forward with those comments. i can all but guaranteed they will now be investigated and that there will be -- and that this had been discussed in the rumor mill, but now it is in the public discourse, the zeitgeist, tom, and it will have to be looked at. tom: after you do sound of, you will have to get off stage. -- sound off, you will have to get up stage. impeachment. what is next? kevin: the trial in the senate. how may republicans will vote for trump? look no further than liz cheney. we covered that. liz cheney said she would vote to impeach the president, the

top three republican in the house. it comes out there republican say she should resign. the back-and-forth is dizzying, so to speak, about where the vacuum of leadership lies right now in republican politics. it is unclear. leader mcconnell open to having a senate trial. what does that mean for the party moving forward? what does it mean for the 2020 for crop of candidates? i would note, if you are ted cruz, for example, do you want president trump running again in 2024? there are so many unknown valuables that -- unknown variables that it is important to follow the process. i anticipate the vote and impeachment comes anytime between about 2:30 p.m. eastern to 7:00 p.m. and the trial in the senate, look for leader mcconnell's words or statements in the next

24 hours. lisa: the republican party now has to tear itself away and become the party without trump. you speak with a lot of political strategists. what are they seeing in terms of republicans, rank-and-file voters, and how they would like to see this play out? kevin: they would like to see the decoupling from trumpism continue. i am thinking of one lawmaker whose staff i spoke with, who is a republican, who essentially really walked me through the division within the offices of certain republican lawmakers on how to proceed. you had certain advisors who are saying your constituents and your deeply conservative district are behind president trump, and from a matter of practicality, in terms of the

path forward for the party, we feel, according to the staffers, you have to break away from that. that is literally an open conversation that is not only playing out around the country but also in elected officials offices. tom: translate -- what is deep background? kevin: they cannot say who i spoke with nor the office. tom: that helps, because ferro uses that all the time with me. lisa: he has been a deep background for five months. kevin: i've been on deep background for 5.5 years. lisa: i want to ask about what the collaborative efforts look like with republicans and democrats. joe biden is trying to strike a tone now, saying there will be a combined moment in -- be a

kumbaya moments in washington, d.c. is this a real reality check for the republic or is that wishful thinking? kevin: we put this question to congresswoman abigail spanberger, a centrist to beat a republican in a conservative district in virginia. she said maybe it does not even come in front of the cameras and microphones. there's definitely an appetite for it. to the voters once it? -- do the voters want it? to they will -- do they want it reflected in the system? i don't know. but there is a need and one foray from lawmakers. -- and once for it -- and want for it from lawmakers. tom: will we hear from trump? >> not from twitter. tom: kevin cirilli, our chief

washington correspondent. what a moment. we are losing scale. remember january 4? it feels like eight months ago. lisa: jim carrey was saying we want our money back 2021. i do think about the splintering of the republican party and the existential question of what the soul is. that is at the heart of all politics in the u.s. for the rest of this year. tom: so money politicians are speaking about it -- so many politicians are speaking about it. all these people have pretty close contests. there is a politics out there. it is not idaho republican or massachusetts democrat -- pick your democratic state or island, manhattan, but there are close contests out there and these politicians adapt. market check -- -10 on spx futures, dow futures -54, the

dollar fractionally stronger. looking forward to speaking to mark howard coming up. stay with us on bloomberg radio and bloomberg television. good morning. (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that and more in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design to help you to maintain comfortable, correct form. that means better results in less time. you can do an uncomfortable, old-fashioned crunch or an aerotrainer super crunch. turn regular planks into turbo planks without getting down on the floor. and there are over 20 exercises to choose from. incredible for improving flexibility and perfect for enhancing yoga and pilates.

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tom: good morning, everyone. bloomberg surveillance on television. lisa abramowicz, tom keene, jonathan ferro on assignment. the biden administration team with a conversation on samantha power taking on new duties. we will have that for you on a minute -- for you in the minute. samantha power to join the biden administration. we join the equity market outlook with futures at -10 with romaine bostick. we affirm he has been wonderful. what have you got, romain? romaine: let's start with some of the biggest movers premarket. twitter getting beaten down in that political vortex. a lot of folks are saying, once

you start getting live events, this should help twitter and make up for whatever loss they might have on the political side. pelletier actually getting a downgrade to sell. this was a big direct listing last year. the shares almost tripled at one point. right now, of the eight analysts we track, only one has a buy rating for it. on the screen, we should point out expectations were low and they cleared a high bar. on fire right here, getting a price target, arrays of about 120. lisa: i want to be clear. tom would not feed his dogs chewwie. he gets something home delivered every morning. tom: i got a personal think you

note from the leaders of chewwi e. i want you to cut it off and go right to affirm. i do not get fired up about the tech ipo world of romaine bostick, but i am here. this is a huge signal for technology, isn't it, to see affirm explode? romaine: it is a huge signal and a victory. a firm has been one of these stocks, companies, everyone has been keeping an eye on. the price came in well above with the initial chatter was, and we will see what happens when this -- tom: do you have any indication? romaine: i have no indication. i have no idea where this will open, but i can tell you, tom, the chatter -- don't pay attention to this, viewers. lisa: tom is getting.

-- kidding. tom: seriously. we show $41, 49. will this be unlike uber and lyft? >> the trend says likely. hard to know for sure, but when you look at the ipo's we have had in fintech, the appetite, the demand is there. i want to pivot something quickly, what's going on in the ev space. gm shares closed at a record high yesterday. a lot of enthusiasm in this space. they are working on a commercial delivery vehicle for for and it makes -- vehicle for fedex. if you want a piece of that, you look at the eco-. it has nothing to do with the economy. the clean energy index is basically a proxy for what has

been going on, not only in the ev space but for solar power as well. on a six-month basis, you are talking about a 180% price return. you compare that to the s&p or even big tech, you are getting about a 30% return. tom: appreciate that. lisa: talking about tech ipo's, the affirm ipo that was so successful, razzie's -- successful, raises an issue. someone said the ipo flurry is out of control. mark howard, not howard marks, joins us now, senior multiaxis specialist. let's start with those tech ipo's. is this a sign of a frost that is a sign of caution to you? mark: good morning, lisa and tom. it is something you certainly need to monitor, but given where rates and real rates are and given the shift that is

happening in washington over the coming weeks, i do not think it is unreasonable. with the new economy post-covid, many of these tech ipos will have increasing relevance and flexibility in the new economy. tom: there is question -- lisa: there is a question of how you will avoid pockets of frost. you see bitcoin coming off a bit and the dollar strengthening as people reverse short positions. will there be other frosty areas that will get burned out in the near term, or do you think this will keep grinding the way that it was a week ago? mark: that's an important question, lisa. i don't think there's going to be a lot of further burnout. in particular, i point to what happened last week and what i

think is underappreciated on the part of investor behavior after last week. what happened at the capitol was terrible and gathering all the headlines, but what happened in the senate is also really important. the combined effect of those two events is causing investors to pivot in some interesting ways. i think it is a more risk on pivot, but gradually and subtly, and we are seeing that in the credit market, to a degree in the equity market, but most importantly, the rates market had already discounted a lot of risk on. i think if we saw great sleep i -- if we saw rates leap higher, then yes, i would be worried, but i do not think we will get a lot of tapered discussion. tom: when i looked at the correlations, the first thing i looked at was the foreign exchange in the pacific rim.

there's a remarkable thing we see with asia dxy. strong currencies over there. what does that mean for their equity markets? mark: tom, i think that one of the things that is happening around the world, particularly fr -- for dm investors, is a search for return. returns are low, so when you see positive signs coming out of dxy, at asia, other em's, it reflects the fact that people are reaching further for returns. they cannot get them in some of the traditional developed markets. they may be cautious about some of the dm growth areas, like technology, where the bloom was cut off the rose for a variety of reasons. we are constructive on emerging

markets for 2021. tom: unpack that for us. i love that phrase. when you say you are constructive on em, what is the action of being constructive? mark: with em, just like other higher volume sectors, you have to be selective, but we like both em equities and credit, sovereign and corporate credit. obviously, where there is good governance and not political strife. there are a variety in all three parts of the world. we see opportunity, asia, latin america. lisa: how much does that long em trade hinge on an ongoing weakening of the dollar? mark: we have a core view that the dollar is going to see depreciation versus most major currencies, including an em basket in 2021.

it is not just tension on that, lisa. i think the global liquidity flows is another powerful factor. the dollar can have period's, like recently -- the dollar can have periods, like recently, where it is stronger relative to other currencies. i do not think that would delink the em trade. it is more about the shift in search of alternatives. lisa: what would you say to the steven majors of the world who said this morning that the reflation trade has run its course and he sees value in treasuries, sees yields following to 0.5%, saying we will not get a good deal of inflation, growth, and people will come back to havens? what would you say? mark: mr. majors has had a

terrific call over many years. i think he may be overestimating what has transpired here in washington. i thing we will see more cohesion in the center and more fiscal stimulus and maybe even a meaningful infrastructure package. those things will be positive not just for domestic growth but for global growth. on top of that, we will see more of the biden team get approved by the senate, which will help the global picture. that will be positive for sentiment and growth over time. we do not see rates going back, certainly not to zero, and we expect the u.s. 10 year to be up by the end of this year. lisa: thank you for being with us. as mark was talking about, the biden administration is shaping up. samantha powers. you talked about that she is

going to head an agency. tom: this is much, much bigger than that. this is the first real seachange, lisa, and restructuring the trump administration. samantha power, formerly our ambassador to the u.n., and what we are doing here is going into what president trump did with usaid, and not only is president biden, president-elect biden, taking this power, but he is also elevating usaid up to the national security council. you have to believe there is a budget follow on to that to, i don't know, restore or even advance usaid -- even enhance usaid over what it was in the obama administration. lisa: we have heard they want to

reestablish ties with some allies. this comes as the trump administration put out china policies. the crosswinds are hard to keep track of. tom: that's right. the crosswinds in the development of an administration and the final gasps of a trump administration, extraordinary. stay with us. megan rainey, brown university, with us. this is bloomberg. >> with the first word news, i am ritika gupta. it is a historic day on capitol hill. the house will vote whether to impeach president trump. the votes comes a week after the mob of the president's supporters stormed capitol hill. yesterday, the house voted to demand that mike pence use the 25th of may meant to remove the president. that vote was largely symbolic. he had already said that he would not comply. joe biden will seek a deal with republicans on another round of coronavirus belief. bloomberg has learned that the

approach could mean a smaller initial package that includes some priorities backed by mitch mcconnell. the goal is to avoid trying to ram through a bill without republican support. president-elect biden has named former u.s. ambassador samantha power to head the agency for international development. biden also said he would make the post part of the national security council. that is a sign his administration will emphasize the role of development. power is an immigrant from ireland. in london, financiers are keeping the faith that they can win back access to the eu. in a poll by the consulting firm ey, 76% of bankers said they expect the eu to grant some form of equivalence decision. that would open the door to more market access. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700

journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪

>> the vaccine is the weapon that will end the war, but it

will not hit critical mass until june, september, or even december. if we rely solely on the vaccine the way many states are, we are looking at months of shutdowns and the economic, mental, and spiritual hardship they bring. we need to begin to act now. tom: and what we need is historical perspective. the governor of new york state, as all of our nation confront a pandemic. there have been different voices we have spoken to with different expertise. megan rainey's expertise is out of the magical part of harvard, their history of science, a real understanding of the process of modern medicine. she holds court at rhode island hospital of brown university. megan, you have had such

initiative around the actual process of this pandemic, being in the emergency room, being in the icus. what have you learned since march of last year? >> what haven't i learned since march? we knew virtually nothing about this virus at the beginning. we were doing our best to make up procedures and to find treatments as we went along based on what we knew about other diseases. we now have standard treatment protocols, standard lab protocols. we know so much more about how to take care of these really sick patients. we avoided intubated them and -- avoided intimating them and kept them alive much longer. also about health. mask wearing, distancing, and handwashing are still our best ways of preventing the virus.

i know well the degree to which politics and science intersect. i had never seen in real time before the way misinformation can be spread to a population, allowing this disease to spread. lisa: it seems to change in real time. a variant has been spreading throughout wildfire throughout ireland, the u.k.. the former head of the cdc said, if it spreads here, it will make a bad situation work. what is the likelihood of that, and what does it look like? >> it will almost inevitably happen here. we have already identified a number of people across the united states infected with a variant, despite that it makes up virtually none of our positive cases. it is already here. we know from the experience of britain and ireland that once it takes hold, it spreads like

wildfire. the thing that worries me is that our hospitals are all d -- are already at capacity. when this takes hold, when this starts to spread, we will see already overwhelmed health care systems become all what lake -- become all like what l.a. is experiencing now. lisa: how quickly can a vaccination reduce community spread? when do we start to see the effect? >> i just got my second shot. many but not all health care facilities across the u.s. are actively vaccinating workers. if the biden/harris plan to get 100 million doses in arms in 100 days works, and based on discussions with them i have faith that it will, we will have

about one third of america vaccinated by the end of april. we are looking at the average person starting to have access to vaccine in may, june, july and that will be the best case scenario. tom: full disclosure -- i went into this hospital with an injured foot years ago. the hospital you work at. can you discuss that the virus is out there for all of us, but we are seeing observed inequalities, and particularly among east central workers? >> thank you for asking that question and i hope we took good care of you. we see that everyone is at risk for this virus regardless of power, wealth or privilege. i am seeing a disproportionate number of minority and frontline workers getting sick, higher number than normal number

of my patients are spanish-speaking or immigrants. and our staff, a lot of our nurses are married to firefighters, police, teachers, etc., people they cannot stay home. tom: very important question. kevin cirilli spoke to dr. birx. we have found and birds -- we have fauci and birx. what will that medical community look like in 2021? does the new president have your back? >> i am excited about the new president and his administration. he has put together a top-notch team of advisors, ranging from dr. smith, who will advise on

equity, dr. murphy, surgeon general under obama, and other folks under him. those of us who are not ready to give up our day jobs, we are talking to the full extent the administration who are advising them. we have a large network of medical experts. they will not be isolated the way that fauci and birx were. lisa: dr. ranney, thank you. you cannot mention that you hurt your foot and went to the hospital in providence without the story. tom: there was a guitar involved. this is really important, lisa. i will be blunt. there are some really tough, tough parts of providence. i do not think, frankly, there's a new york city equivalent. rhode island hospital is one of these places where fancy

educated people go. they are in the trenches of emergency medicine, starting with gunshot wounds. lisa: that's a question -- how do you deal with the pandemic on top of everything else? she talked about the l.a. situation could be the templates for the rest of america -- the template for the rest of america. that's a concern. tom: we have coverage from west hollywood out in los angeles and it is locked down. arizona, especially difficult. what else do you see within this pandemic today? lisa: we are moving ahead. this whole concept of reflation. she was talking about the vaccination schedule. how quickly can these vaccines put an end to the pandemic? we have kind of jumped ship in terms of combating it any other way.

tom: vaccination to get the real acceleration as well. we will have more from washington on this historic day. and we are thrilled to bring you robert doll of nuveen. on radio, television, nationwide, this is bloomberg. ♪

>> the course of the virus, the pandemic and the vaccines, will determine the course of the future economy. >> a demand shock of covid. >> the economy has showed resilience to this third wave. >> the bottom has fallen out of low income. >> the mood has changed dramatically. >> you are likely to see some churn. you may see a pullback in markets. >> last year, it was about hoarding cash to make sure you survive. this year, it is about investment.