♪ manus: from bloomberg's middle east headquarters in dubai, i am manus cranny along with annmarie hordern. it is "bloomberg daybreak: europe," the stories that set your agenda. futures push higher after another record for the s&p 500 amid a dovish fed minutes and jay powell speaks today. the g20 pledges to reach a consensus on new global tax rules, as janet unveils

proposals to recoup $2 trillion and the eu fails to form a united response over astrazeneca's vaccine. the health commissioner calls on the bloc to speak with one voice. 6:00 a.m. in london. good to see you. two words come to mind from the fed, unanimity, batting away the taper possibilities and discussions, but this is it, don't worry, i am not going to turn out a song. what does it mean? sounds like 2.5% is the new consensus number for some. annmarie: they certainly like it hot. charles evans even sang we could see 3% and that would even be welcomed in terms of what the fed officials are saying. they are steady as they go. the data is coming in better than expected, but at the same time, they are going to remain accommodative.

same tone from the fed. we will get more insight as to what jay powell has to say when he speaks later today. manus: yes. we would expect he is likely to reinforce this view that we have miles to go before we taper and miles to go before we taper. that is in some ways what has caused a dislocation in the short end of the rates market. we will get to steven major and ask him whether there is a regime change. i don't think he is convinced there is a regime change in the risk market. it is not a taper tantrum. annmarie: let's take a look at what is going on in the markets. pretty much steady as we go. the s&p 500 notching up another record high. u.s. futures up 0.4%. asian equities are flat. i put the pound in there today. it is now on the favor of your side, that euphoria on sterling and a vaccine rollout, that hot trade we saw last june and the

beginning of this year is starting to fade. better for you, not so much for me. this is something we are going to want steven major's take on. manus: well, let's get to steven major himself. he joins us now, hsbc global head of fixed-income research. good day to you, sir. we are trying to assess the fed minutes. the consensus seems to be two words, they were unanimous and they want actual progress before they move. have they done enough to bat away the taper, i suppose, obsession in the market, the risk of taper? steven: good morning. good to see you. the taper has been put into the price of bonds for the last six months. i think markets have been preparing for what is basically inevitable. it will happen at the four year end -- full year-end.

markets have been preparing for this for ages. they have to keep this consistent messaging. things are so ambiguous. average inflation, no one knows exactly what average is. they are to keep communicating. the market is really quite childish. the market seems to hang on each data point. and really when it comes to bonds, the valuation is about much, much more long-term drivers. these are things that don't change on a whim. annmarie: steven, how clear will the signal be from the fed when they start to think about tapering? steven: well, they said that they will tell us when they are ready. i think it's inevitable, and people in the market should appreciate that. if you look at the pattern of qe 1, 2, and 3, you will see that

what happened is that the market bought the rumor and sold the fact. once they got this out-of-the-way, the bond yields could even be going down. just look at the charts of qe and you will see it. there is no rush. they don't want the market to get confused. if they go early on the taper, then it will bring forward the first rate hike. so, there's no rush. i think the market is trying to push the fed into doing something that there's no reason for doing. manus: there is that sense of breathlessness when we talk about an 80 point we pricing -- re-pricing and the real rates moving higher. you set a very high bar for what you call a regime change. i am asking you, is 80 basis points large? is it abrupt? i get the sense that you would say it's not persistent.

what does it take for you to leave un-wobbled and say there is a region change? steven: the definition of a regime change, which -- and financial markets or even climate change, if something were to happen that is large and abrupt, but it must persist. that's the one that's missing, the persistent. -- persistence. this fiscal loosening from the biden team, this could be a sugar rush. it might well spin into next year, but does it move the path of the potential gdp of the u.s. higher? because that's what matters. the answer is probably no. what is needed is massive investment spending. that involves infrastructure. there are plans, but the actual investment spending seems quite a small proportion of these plans.

it's going to take ages to come through. and at best, it might underpin the real rate that is implied in the fed's dot plot. the market repricing of this year has only been a repricing in line with the dot plot. that's all that's happened. if i look at the longer run dot, it is 2.5. the market is implying a plus 50 basis point -- from that kind of picture. i think the real yield shift is the interesting thing for this year, manus. that's what's happened. it has not been about inflation, that was laster. manus: ok -- last year. manus: ok. steven: this year, it is about the real yield, which is implying something about the regime, something about real growth. it's different. annmarie: the shifter this year, you say that this year, the shift in real yields is about growth. steven: yes.

yes, so, well, it's about either some combination of the growth or the regime at the fed. so, is a combination of the two. it could well be about the uncertainty of future growth. it doesn't mean anything. it's the market's interpretation. it's been an adjustment. we cannot say that real yield equals real gdp, for example. you cannot say that because you're market derived real yields are deeply negative, so they become a bit less negative. manus: steven, can we just push you a little bit on the real yield? i have been a bit obsessed about the real yield. in 2013, we went from deeply negative to positive. we can walk away with your view that that is not a risk, real yields will not flip to positive

2021? steven: back in 2013, it was a real yield move and the term premium, two things moved in 2013. because we went from assuming that there will be qe forever to the end of qe, and the markets have not experienced anything like this before. it was a massive new turn in the space of a few months. if you like, the similarity this time is that the market has determined that there is some kind of supply shock going on, supply shock bonds, if you like. i don't particular buy it. i am not that impressed by it, quite frankly. that's why the real yield is higher. these things tend to play out and i just think that the market has moved of a similar magnitude in terms of real yield forwards and term premium as in 2013, and it's directly comparable.

annmarie: term premium is now back above zero. steven major, hsbc global head of fixed-income research, is going to be staying with us this morning. let's get a recap of your first word news. here is laura wright. >> the european union has failed to find a united response to links between astrazeneca's covid vaccine and a rare type of blood clot. italy has followed germany and france by recommending it is only for people over the age of 60. eu health minister say they will continue talks on the issue. the u.k., meanwhile, says it remains on course to reach vaccination targets, despite issuing new guidance effectively ruling out authoring astrazeneca jabs to people under 30. the centers for disease control and prevention has confirmed the u.k.'s covid-19 variant is now the most common strain in the u.s., over taking the original form of the virus. despite rising cases across the country, new york announced it will reopen beaches in time for the memorial day weekend, and

public pools will open the following month. u.k. prime minister boris johnson says he is deeply concerned by ongoing violence in northern ireland, which has seen more than 40 police officers injured in rioting in recent days. local police report that a bust was -- bus was set on fire in belfast yesterday and officers have been targeted with petrol bombs. pro-british boilers have been protesting against the placement of a border in the irish sea. the white house is said to be considering a pledge to cut u.s. greenhouse gas emissions by 50% or more by 2030. that would nearly double the previous target set by the obama administration, and would require dramatic changes in power, transportation, and other sectors. the goal has not been finalized but it is expected to be unveiled before president biden hosts a climate summit later this month. 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.

this is bloomberg. manus? manus: thank you. coming up, the global minimum tax debate. g20 finance chiefs pledge to reach that deal by the middle of the year, after janet yellen put corporate taxation on the agenda. the details. this is bloomberg. ♪

♪ >> we are working with g20 nations to agreed to a global minimum corporate tax rate that can stop the race to the bottom. >> we do have a -- corporate tax rate, which was an active trend. the principle of a global minimum tax rate, we do have reservations about it. we want to hear all views in relation to this. >> i am open to an increase on

the level of taxation. we have proposed 12.5%. an increase is a possibility. >> the usa gives this initiative as a series he deciding tailwind for the tax rate i have put forward, along with my colleague. >> there would be kind of a safety net which would make sure that -- end up in tax havens or if they are in tax havens, one country would take the difference up to the minimum level of taxation. we have a proofread which is ready and growing building on the blueprint. >> there is a unique window of opportunity to have a new international taxation system which would be more efficient and fair. >> if we want a real recovery from the covid crisis, we need standing for public goodbye

government -- good by governments, and to have this, we have to stop the race to the bottom on corporate taxation. manus: financial institutes with their take on the minimum global tax. the g20 finance chiefs pledged to find an agreement on new rules by the middle of the year. it is coming fast, it is coming hard and heavy. bruce einhorn is our reporter on the story. bruce, why were the g20 chiefs so optimistic? bruce: in part, because of the changed administration in the u.s. after years of disputes during the presidency of donald trump, they feel like they have a real partner now with the biden administration. as part of his infrastructure plan, president biden called for a global minimum tax, and so negotiations are seriously going

forward now. annmarie: what exactly is the united states proposing, bruce? bruce: so, president biden in his plan last week and then since then, janet yellen, treasury secretary, have both talked about how the u.s. would like a 21% minimum tax, which is well above the 12.5% that have been floated. the plan also calls for taxing rights to be allocated based on a formula that accounts for revenues generated within a specific country. so, the idea is that the plan would not necessarily raise companies' taxes, but what change where they pay those taxes based on where they have users or consumers and based on just where they are headquartered. annmarie: bruce einhorn, thank you so much for a recap of what is going on with the g20. steven major, hsbc global head

of fixed-income research, still with us. steven major, he heard a bit there from all those finance chiefs and even an oecd head. how realistic is a global tax rate? steven: well, i think it will take time. it is a step in the right direction, because we have not heard too much about taxation so far this year. it has been mainly about spending and fiscal deficits. and it is required to balance the books longer run. and i think that the idea that there is a free hit from government spending is basically incorrect. so, over the longer run, the books have to balance. i think even as soon as this summer, we could see some sort of fiscal challenge in the u.s., because the debt ceiling is up.

why would anyone assume that this spending will just increase and increase? it has to be balanced at some point. i think it is quite refreshing about a step has been moved in the right direction. manus: steven, we have been peddling narrative. fiscal stimulus will un-anchor inflation expectations, but could it be that janet yellen's attempt over the next 15 years to bring in over $2 trillion from global taxation, if that does not stack up, if she does not get the 2.5 trillion over the next two or three years, could that unseat the bond market in any way? how would that playback to bonds in the u.s.? steven: i don't think that supply really matters. i just think it's a bit of a lazy narrative out there that focuses on the increased supply of the auctions as a reason why yields go up. that does not stack up to me at all.

so, if you look at the deep analysis, we need to -- demand of the bonds as well, and that's a function of the yield. it's much more complicated. there are so many ways to raise revenue in the u.s. if you look at the taxation per capita, it is very low for a large, developed country. so i am not going to speculate as to where it's going to come from, but the corporation tax is -- it could be that wealthier individuals are looked at, it could come from any means. they u.s. per capita taxation is actually very low, so some kind of reversion to the mean is going to make sense over time. do not underestimate that the taxation side is going to become more important as we go forward. annmarie: steven, in your notes,

you talk about the debt overhang in economies and what we could learn from japan. you say the wealth gap is quite different between the united states and japan? why so? steven: japan is a completely different society. it is much more homogenous. the japan implication backdrop that global bonds have been experiencing in the last decade is about debt overhangs, demographics, generally lack of productivity. in the case of the u.s., the society is much wider spread. the difference between rich and poor is much greater. when you talk about wealth inequality, it's a much bigger issue in the u.s. than it is in japan, for example. in terms of the adjustments that are going to be made, they will be different. the thing that there is still much to be learned from japan. when you have so much debt, it

tends to weigh on future growth, and that comes through the debt servicing channel. the other thing is, aging populations tend to save more and they tend to be more risk-averse. in the last year, the birth rate dropped in the u.s. the population is aging going forward. there are some parallels. manus: steven, stay with us, do not hang up the zoom,. that's still the same mantra. steven major, our guest host this morning, on rates and more. coming up on the shelf, their heads to credit suisse keep coming. this time, thomas gottstein, the ceo, feels the heat from his very own bankers. more of the details on the contentious internal call. this is bloomberg. ♪

♪

manus: another day, another archegos aftermath. credit suisse ceo thomas gottstein facing tough questions, this time internally from his own staff. he held a contentious conference call. this is what we know. late tuesday, dozens of managing directors whose stock options are underwater was at the source of the angst. dani burger has the details. >> you have to imagine it really is because the stock itself is down about 15% so far this year. and of course, they are probably awarded it at a different price but still, that is a grim picture you are facing if you're an employee. senior management on this call were asking why did credit suisse take so much of a bigger hit than rivals? not to mention just its risk assessment and sort of collateral it holds in assessing its clients and counterparty risk. 2021 might not look good for

bonuses as well given that the first quarter is now facing a loss and there is no bigger threat to employee retention then cutting bonuses. we have already seen a lot of senior executives see their bonuses for good. thomas gottstein at the same time is facing a board who is increasingly taking charge. we have learned that the oust of both laura warner and brian chin, the investment bank chief and chief risk officer, where the decision of the board, not gottstein himself. he is in between a disgruntled staff and a board who is taking matters into its own hands. annmarie: this is a ceo who pledged a "clean slate." what does this mean for his future strategy here on out? dani: you would hope that by the end of 2021, perhaps he does get that clean slate. in order to do so, they need to have a series assessment of risk and at least the relationship

they have at this moment. on this call, gottstein was not able to give specific details but he did point to the incoming chair, who comes from lloyd's. he has more of a retail backing and he should be the chair as soon as the end of this month. he says ok, this is the opportunity we have to do a strategy review. the board wants an entire review of all of credit suisse, not just the troubled units. we are expecting a pretty widespread perhaps strategy change, at least assessment, throughout the bank. annmarie: certainly news really pushing forward to that on that call, wasn't he, to try to deflect what is going on at the moment. thanks to dani burger. later today, we are going to be hearing credit suisse from the former credit suisse ceo --to be hearing from former credit suisse ceo. manus use to fly constantly back and forth from london to zürich to interview him. that interview coming up at 5:00

p.m. london time. the eu failing to find unity what the link between astrazeneca's vaccine and a rare type of blood clot. this is bloomberg. ♪

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vaccine. the health commissioner calls for the bloc to speak with one voice. 6:30 a.m. in the city of london. good morning to you. it's all about the fed and we are going to get more news on that later today when we hear from jay powell himself. as steven major set out the top of the show, what does run it hot really mean? evans is talking about potentially 3% would be welcomed. clearly, on inflation front, they are running it hot. strong jobs numbers coming in. what happens in june when they have to upgrade growth prospects but still save we have to remain accommodative? manus: if you look at what steven major had to say about the u.s. bond market, he talks about the 80 points of repricing. that taper is in the price, according to steven major, global head of rates at hsbc.

that taper could take place before the end of the year. i have got to hand it to steven major further one-liners, he's just unimpressed by it. bottom line, from the fed, there is unanimity and they want actual progress before anything else. and the other lines to throw? annmarie: one thing i also liked about yesterday, something i found interesting was what jamie dimon had to say. he said quote twice in his notes about goldilocks scenario. he outlined the risks, one of the risks being the variant. ottawa locking down a little more severe. if inflation may not be temporary, it may not be slow. what happens when that happens and it's not a goldilocks scenario? manus: exactly. let's have a quick whip through the markets. records are still holding on the s&p 500. asian equities also climbing higher.

where we go next is quite possibly down to the belief that you are in a goldilocks scenario. as jamie dimon said, we are in a boom, boom, boom through 2023. the dollar is just rolling over ever so slightly. suddenly now, we are obsessed about a benevolent fed is going to take the dollar down. rates 1.66. what is a fiscal taper worth to the bond market? we will revisit that again with our guest host in just a moment. it's all about vaccines. annmarie: yes, certainly, especially here in london. the eu is failing to form a united front in terms of the links between astrazeneca's shot and a rare type of blood clot. the bloc set the ministers shared different interpretations of a safety report. joining us now, sam fazeli. the science is the same across the u.k., france, germany,

italy. why can there not be one united decision on what to do in terms of astrazeneca? sam: good morning. obviously, each country has to make a decision for themselves based on what's happening within the country. if you look at case rates, for example, in france, they look like the highest amongst european countries. the equation you need to solve for in terms of, what does france have to get out of a vaccine that has x-risk of this very rare side effect profile in some group of people, depending on their age? it's different to what spain needs to do, to what italy needs to do, what germany needs to do. the european union is all fine. european medicines agency doing what it did is fine, but each country does need to take its own decisions based on what's happening and its demographics. that's what has to happen and i don't think we should worry about united front here.

manus: new guidance and united kingdom if you are up to the age of 30, even up to 31, you should look at an alternative to astrazeneca. is this a delicate moment in the u.k. belief in vaccines? could this cause a little bit of a less embracing by the younger generation? sam: yes, so this is again going to be a situation to solve. i am a scientist, after all, or i was up to about 30 years ago. the problem here is this, we have to think about the psychology of this. is this going to invoke the british stiff upper lip and say right, i am going to sacrifice the minute risk of getting this side effect for the better of the society and for the better of my future to sooner open up the country? or am i going to fret about? if this equation was saying that

10 people were going to fret about it before the press conference yesterday, i reckon that's going to be a bit more today. i don't know how many more. annmarie: what you are saying is you expect, likely, vaccine hesitancy in the u.k. if there is a ton of vaccine hesitancy, especially among some of these younger folks, is there going to be enough vaccines to go around, sam? sam: there will be. we have other vaccines coming. the question is, can the government stick with its data, not dates, pledge and the schedule that it has got? and that depends, as it has said, one of the key elements of that is vaccination rates. if people slowdown, then that will have to change. what i am not saying here, i am not suggesting the government is going to commence a right, because you did not get vaccinated, we are not going to

open up but that was part of the equation. you have got novavax coming, johnson & johnson coming at some point. if we decide not to go and take the vaccine shots, then it's going to have to slow things down. manus: sam, thank you very much. sam fazeli on the very latest on the vaccine front around the world. our senior pharmaceuticals analyst and director of research for emea. thank you for joining us both. steven major has been listening to that narrative. he is the global head of fixed-income research at hsbc. apart from the fact that i now sound old talking about young people under 30 want you to take vaccines but we will partner that -- wanting to take vaccines but we will park that. what is the most important thing here? the vaccine rollout and getting to grips with herd immunity by the end of july or is it the fiscal livery -- delivery?

what is the most important thing, in your mind? steven: there is no doubt that the virus backdrop is not good for the eurozone economy and it is definitely dragon. you can see it in the -- dragging. you can see it in the data really. the main reason for higher yields in europe is down to the u.s. the u.s. has a very big move in a very short time and it has dragged yields higher. meanwhile, the chances of a positive surprise on the fiscal side appear less than they were at this time last year. this time last year was the head of the announcement of the recovery fund. it was only being talked about. the big bazooka came last early summer really. to get that kind of impulse again, that kind of positivity

from the recovery front news is very unlikely. from what we can see, not much money is being dispersed, and there is a bit of haggling going on. does not look that good, does it? from a fundamental point of view, i wonder why it is that european yields have gone up at all. it can only be because of the u.s. annmarie: well, also bruno le maire expressed his impatience at the recovery fund you're talking about. steven, you look at the vaccine rollout between the united kingdom and european union, a hot trade has been of course really the -- we saw in the pound against the euro. do think that trade is over? steven: that might well be burning itself out. markets tend to react to very much in advance of these developments. the more of the problem is the

populations in the euro zone looking across the channel and sing the u.k. opening up, and what that does to the elections coming up. it sort of introduces a bit of discord. as i say, generally, i don't see why european yields have gone up. it can only be because of the u.s. manus: italy came to the bond market yesterday, portugal came to the bond market at 50 years, so very long duration in terms of that. 64 billion for the first 50 year paper in five years. there was a heck of a demand for italian and portuguese bonds. would you at any juncture recommend either of these papers? our guest yesterday said i don't have any european bond exposure at the sovereign level at all. steven: all the yields went up from the lowest ones to the highest. from an investment point of view, they got cheaper bonds

than a few months ago. then, there is the specific maturity, you do mention about 50 years, now that is quite specialist. there are those who will hedge that with tenure paper, for example -- 10 year paper, for example. there are some that need longer-term assets to -- liability. nobody is really worried about the extreme tail risk of something going that. -- going bad. the market is in general agreement that may be yields have backed up too much. annmarie: when you look at the inflation store in europe, u.s. officials, fed officials are talking about spikes in inflation. they are not worried about it. do you think that is the same in europe? steven: it is totally transitory. it is because there was no inflation at this time last

year. i think most of us have recognized there is a big energy component. the question is just how sticky it is in th subsequent monthse. maybe there is a supply-sider inventory based rationale. the big picture is not -- inflation. inflation goes up for a few months but comes back to target by year-end. that applies to europe and the u.s. manus: i am trying to round of here with what you think re-anchors rates. i think you are quoted as saying we are in a fiscal tantrum, not a taper tantrum. i just want to reaffirm your level on 10 year government bond yields. cut a hot work, anxiousness ash -- could a hot war, anxiousness between the tensions between u.s. and china, take us back to that risk?

steven: i think the story is -- we see falling trend gdp just about everywhere, including china, by the way. that's now official. inflation is not a problem in china either. looking for catalysts and triggers is always very difficult. our forecast is 1% year-end. i am more interested in what the possible scenarios are and trying to weight them. i do not think it is plausible that we have an early rate hike next year in the u.s. market seems to be starting to price that in. if people want to forecast 2% bond yields, then that is basically the forward. that is already in the price. a proper bond yield the forecast if you are bearish is 3%, but that's a very difficult number to justify. i guess once we get past the peak in inflation and we see the momentum starting to play in,

which it might be already, than the yields will start sliding down. the second half of the year, we will see the yields falling back towards 1% in the u.s. annmarie: contrary into what a lot of people are telling us on this program. thanks to steven major hsbc global head of fixed-income research, for his time this morning. treasury secretary janet yellen has unveiled her sales pitch for the biden administration's proposed a new tax code. the details next. ♪

♪ >> there is a unique window of opportunity to have a new international taxation system which would be more efficient and fair. we are having very in-depth discussions at the technical

level between the french administration and the american administration on this matter, but i think that we should put forth our best efforts to reach an agreement by next summer. manus: that was the french finance minister, bruno le maire, speaking exclusively to bloomberg on the potential global tax a deal currently being spearheaded by the u.s. of ministration. the u.s. treasury secretary, janet yellen, has unveiled her sales pitch for the by demonstration's proposed new tax code. she says over a decade, the plan would bring back the u.s. about $2 trillion in overseas corporate tax profits. the key elements of the blueprint include raising the u.s. corporate tax to 20% from 21% -- 28% from 21%. i am a fully paid up and i pay tax at full levels throughout my career. i am a fully paid-up citizen. my question to you is, a global politiciansre -- are global

politicians using the pandemic as a super flight to implement huge tax regime change? >> i think this is something that people have wanted to do for a long time, right. and, you know, any time is a good time for the. i do think that part of the impetus here, in united states at least, is there is a desire to pay for something that is fairly popular and that is a very large infrastructure package. it is infrastructure plus plus and a lot of things that some people would define as infrastructure and some people wouldn't. but there's this desire that this has to get paid for in some form, it has to get offset in some form. the popular way to do that is to hike taxes on the rich people and corporations. that polls really well. so, joe biden and his

administration are sort of coming from a position of strength, rhetorically and popularly, although not necessarily one from a position of strength on actual getting votes to hike taxes, which is really deeply unpopular among republicans. annmarie: that was going to be my next question. i think some republicans potentially are going to compromise on this, but it's a lot of money and lobbyists, especially from big corporations. what are the chances they get enough from the gop to get on board? >> well, i think that joe biden by signaling that he was open to negotiations here but republicans really do have to meet him maybe a little more than halfway as he is saying like, you guys, you are not going to be able to stand on no. you have to come to me if you want this to move or i am going to go do what i've got to. now, i am mindful, because you know how i love playing the longer game here. there's going to have to be a

conversation about taxes at some point coming up in the next couple of years, because some of the provisions of the republican past tax law start to expire for individuals in like the 2025 window. that starts to be a pain point that you have to deal with as a potential cliff out into the future. at some point in the next couple of years, that has to get addressed somehow. there is a presidential election between now and then, but that is something that is looming in the horizon. maybe this is the start of that conversation, but that's going to have to come up. this is not necessarily based in stone. the first thing democrats are going to want is that corporate tax. manus: steven major was with us. he said the debt ceiling comes up in the middle of the summer and that could be one of the prodding points on the tax debate. couldn't it be? >> yes, i think so.

the question on debt limit is going to be one that is, you know, really big, because obviously the debt has gone up a lot. there is an overarching debate about how much that matters but it has gone up. and certainly, a lack of potential revenue is part of what gives you those deficit gaps, right. taxes definitely plays in that. i know democrats don't want to use this as an excuse, but republicans, for lack of a better term, have found religion on this issue again. it was a huge impediment during the obama years, much less so during the trump years, but it was a huge impediment. you have got a lot of people from across the aisle who are saying we need to start paying attention to this, including democrat joe manchin of west virginia, who is a pivotal votes on literally everything and who democrats cannot pass anything without unless they get republicans on board as a. this -- as well. this issue is really critical to not just people who are around

the world watching bloomberg tv wondering about effective tax rate, but also to biden and the democrats' pledge to do literally anything they want to do now in terms of infrastructure and some big agenda items. annmarie: we are talking about how you're going to pay for it but what is the agenda items? this massive infrastructure bill is likely going to come piecemeal. what are they tackling first? derek: well, look, you've got a guy who has ridden the rails so much that he has a train station named after him as president. joe biden is really fond of infrastructure. he wants to do something about this. a lot of these swing states, you look at infrastructure across the country, and varies, but a lot of these swing states in the u.s., you are driving on moon roads. we just live a big problem with texas' grid. you've got any suite of things that you can go after. some of those tangible things

are the first order of business. i also think this is a point where democrats really want to expand the definition of the word infrastructure. what i mean by that is that you could be sitting here talking about how child care for working parents is a form of infrastructure, things like that. grid is going to be something that democrats are going to bring up. basic broadband access is going to be a huge one that they bring up over and over and over again. . all of these things individually, and a lot of them are really quite popular. annmarie: i was going to say i heard joe biden yesterday talking about lead in water pipes. i don't think there is going to be any american that is going to argue that nobody should have access to clean drinking water. just ahead, key events to look out for. it's the daybook. this is bloomberg. ♪

♪ manus: it is "bloomberg daybreak: europe." i am manus cranny with annmarie hordern. setting the agenda everyday, your daybook. the fed will publish meeting minutes as it bids the ecb will publish meeting minutes. annmarie will give you the u.s. book. annmarie: across the atlantic, we will get a gauge of u.s. recovered with initial jobless claims. the event of the day, fed chair jay powell speaks on the global economy and imf meeting at 5:00 p.m. london time. i came back with an answer today, i spoke to mike mckee. we do have a date for the jackson hole symposium. it is the end of summer, the end of august. because that is a lot of time

between, it might be held in person. they are still debating whether virtual or not. manus: that would be radical. i might even be in switzerland before the end of the. you know the rules, tomorrow is friday, you are all on your own. don't break anything. ♪

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