wel give you a super easy refund. we'll even cover the return shipping. this is a limited time offer, so go to aerotrainer.com to get the body you want with aerotrainer. ♪ >> whether there is an uptick in inflation, to be determined, but the debate has changed, and that matters. >> there is still a catch-up happening in the correcting for the covid shock. >> the economy is reopening, and the stock market is going to bid it to the next story. >> there will be numerous tests of the fed that the fed will have to reply to overtime. >> we are to some extant flying blind in the simple -- flying blind here. this pandemic is quite different than the last crisis. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa

abramowicz. tom: good morning, everyone. jonathan ferro, lisa abramowicz, and tom keene. a simulcast, bloomberg radio, bloomberg television. lisa abramowicz off today. you and i with the vice chair of the federal reserve in moments. these markets signal a boom economy. jonathan: they have been comfortable with high yields, consistent the briar -- the brighter outlook. inflation in america, tuesday the cpi print, we will start to see that build. is it just a head fake? is it transitory? how will we know? tom: we go up 900,000 jobs, and then you look at james dimon's letter, and it folds into 6%, 7%, a percent or more gdp. you wonder if this is original federal reserve odyssey for the rest of the year. jonathan: it is, but something has changed. we have gone from a forecast

based federal reserve to an outcome based federal reserve, and that is a switch. only just now in the last couple of months has that really started to resonate with people, just how much has changed at the federal reserve under chair powell and vice chair clarida. tom: that is my first question to the vice chairman. let's look at the market before we get to a good conversation with richard clarida. let me take equities very simply here. nasdaq leading through the week. maybe a pause here. the vix at 16.94. jonathan: 1.67% on tens. that is the story of the session. the story of the month is stability. i think that has been important to that snapback that we have seen in the nasdaq over the last several weeks, too. tom: let's get right to it right now. he's the vice chairman of the federal reserve system, richard clarida of columbia university, one of our noted academics on monetary policy, assisting

jerome powell let every step of the way. vice chairman, jon ferro and tom keene. good morning to you. vice chair clarida: good morning. tom: i look at where we are, and i want to go back to your important paper, the science of monetary policy, of years ago. you lead with a quote from another vice chairman, alan blinder, who talks about the practicing of the dark art. give us a state of the practicing of the dark art of the fed, given this original moment in american history. vice chair clarida: well, thank you, tom. i certainly believe there's as much or much more art than science in monetary policy, but it is good to refer to some of that as well. i think that the federal reserve in august adopted a new framework, and evolution, but it is a robust evolution.

primarily it is outcome based. our goals are maximum employment and price stability, and we want our policy to be robust if our models break down read we can still do monetary policy, but we are going to be more outcome based and less outlook based, and i think that has served us well in the pandemic, and i think it will serve us well in the years ahead. jonathan: could you characterize that as a commitment to being late rather than being early? vice chair clarida: what we have said, in september of last year, following our framework announcement in august, is that we do not expect to lift off until three conditions are met. first, that inflation actually gets to 2%. we want to see actual inflation for a year or two, and we want that to be sustained, not just one and done. secondly, we want to be looking at labor market indicators that are consistent with a fully employed economy. third, we want that to be sustained. we think that is appropriate since we have had the effect of lower bound.

inflation has been below our target for most of the last 10 years, and under those circumstances, that is a good policy. in the past, the fed was more preemptive, and indeed, my research suggested that if you've got good models, you want to be preemptive. but if the models are not serving you well, you are more robust if you are looking at actual data, so that is the way i characterize it. jonathan: the conversation right now is over what substantial progress actually is. you are familiar with the debate. we talk about it almost every day on programs like this. do you think it is necessary to define what substantial progress actually is? vice chair clarida: first of all, it is actual progress. it is hard numbers on the labor market and on prices. that is the first point. secondly, we are early on in this year. i know we have already sort of penciled in 6% or 7% growth, but under outcome based policy, we really want to see that.

as chair powell has indicated and i have indicated, as we go through the year, as the data comes in, as we release our sep projections based on that incoming data, we will have a sense on where we are relative to that progress, and chair powell has also indicated, as we think we are making that progress, we will communicate that to people who listen to our communication. i think this is really. . where we want to be it is actual product -- really where we want to be. it is actual progress, and we will be informing our views on that progress. jonathan: you've talked about the conditions needed for lift off, but we haven't really defined them. conditions consistent with full employment. i have no idea what that is. i have no idea what you will tell me. i still don't know what progress actually is. you don't plan to define what substantial further progress is. you have promised to give markets warning before changing policy. how exactly do you plan to do that?

mr. clarida: we have eight meetings a year. we release the economic projections of four of those meetings. so we will have ample opportunity, and the chair will not have been making this comment publicly if he was not committed to it, so we will have many opportunities as the actual data comes in to inform fed observers about our assessment of are we making that progress. tom: the critics have a habit of coming out friday for weekend consumption, and have a true fear of inflation. your researcher for affairs is looking at core inflation, looking at the dynamics of energy. it gets to the visceral fear that our radio and tv listeners have. are you afraid of inflation? should we fear inflation? mr. clarida: the reality is we

have a dual mandate, and half of that is price stability. so every federal reserve since paul volcker has been committed to that. the poll said is -- the powell fed is too. essentially, what we have said is that we want inflation outcomes that keep inflation expectations anchored at 2%, and that can mean it will sometimes be above 2% and sometimes below. we focus on inflation expectations intensely. we have a new index of common inflation expectations. i would say, and we have indicated, that because of the nature of the pandemic shock a year ago, as we move through 2021 on a year-over-year basis, headline inflation is going to likely move above to resent

because we are going to be comparing this year's prices with last year's collapsing prices. but we expect in our baseline most of that to be transitory, and for inflation to return later this year to around 2%. that is our baseline. let me also say that around the baseline, there are risks on both sides. in the risk case in which inflation were to begin to move above a level consistent with price stability, we would have the tools to address that, and i am confident that we would under that risk scenario. tom: fold in the balance sheet. that can be the twin deficits, the comparison of the fiscal situation to gdp, and of course, trade dynamics as well. what do we do with a six standard deviation move in between deficit out, say, two years? are you optimistic that we can stabilize that terrible trend? are you optimistic that we can somehow revert to a better outcome? mr. clarida: you are correct, and i think this is pointed out in the imf world bank meetings

this week, that because the u.s., for a variety of reasons, including better progress on vaccination and very robust policy support, is going to be growing rapidly this year compared to other countries. what we tend to see historically is that when the u.s. grows faster than most of the rest of the world, some of that goes into our imports, and we have a bigger trade deficit. the rest of the world, that is a good thing, more locomotive then caboose, so i would expect the current account deficit to widen this year and next under the baseline scenario. it is not something now that is a concern because capital flows into the u.s., in part because of our rates relative to the rest of the world, so it is not a concern. any circumstance with a victim balance can become a concern, but it is not a concern now to me. our good friend and colleague reached out and indicated that lori logan over at the new york

fed suggested that they will be changing the composition of its qe purchases to match the outstanding u.s. debt profile. can you elaborate a little bit on the objectives behind that? mr. clarida: sure. lori is a fine colleague, and has done a fabulous job and my three years at the board, so i am lucky to be able to work with her. what lori said this essentially restating what has been our policy for some time now, which is as we are purchasing treasury securities, we are doing so in the secondary market, and we would like those to roughly match the outstanding supply of treasuries in the market according to different maturities. as the treasury changes its issuance patterns, we would of course adapt our program to match those outstanding. i don't think she was trying to make news there. it is really just articulating what our policy has been for some time. jonathan: you wouldn't

characterize this as operation twist, then? mr. clarida: i would not characterize it as operation twist. jonathan: michael would be happy we address that particular question. [laughter] i had to bring it up. we have been playing a drinking game, every time the vice yourself speaks, every time the chairman speaks, transitory, transitory, transitory. how will you know if you wrong that it is not just transitory? mr. clarida: the sump list answer is that if inflation at the end of the year has not declined from where it is in the middle of the year, that would be some good evidence. i also think we look at both headline and core measures, and let me also say, because not surprisingly, it is a good question, and this show seems to ask good questions -- sometimes, not always. [laughter] but i would say that

an important point to note, there is a lot of pent-up demand in the economy. we have a lot of fiscal support. monetary policy has been all in. but there's a lot of pent-up supply. it .5 million jobs short of where we were months ago. a lot of small businesses shut down. so we do think the economy is going to reopen, so both supply and demand will be in play, and there could be some temporary imbalances in certain sectors. so-called bottleneck effects. but again, we would expect those to be transitory, and as the year progresses and we go into next year, if they are not, we will have to take that into account certainly. i should also say that i consult my bloomberg regularly, and one of my favorite screens is ecfc, where you accumulate all of the individual forecasts for the economy, and your entire bloomberg panel shows a similar

projection. again, forecasting is hard. that is why we do it a lot. but the baseline view even given the fiscal package is that most of the move above 2% inflation we see this spring should revert back later this year. jonathan:jonathan: i am looking at ecfc right now. you mentioned something important. you talked about the turn from 2021 into 2022. is that the ultimate test, that you won't really know until we get a little deeper into early 2022 to draw that distinction of whether something is transitory or more persistent? mr. clarida: sure. i think that as time goes on, you learn more about how the economy is going to adapt. i think i heard some sound, you must've had my good friend ken rogoff on at some point. this is a very unusual shock. a shutdown of the global economy through a truly exalting this event -- truly exalting us --

truly exogenous event has never happened in my career. so we will be bringing sectors back online, and i'm sure there will be surprises along the way. we need to be attuned and attentive to the dataflow. and also, we welcome the 900,000 plus jobs that are gained, but there is still a hole in the labor market, and we will get a better sense over this calendar year about how rapid that progress is and how that is showing up in other indicators of the labor market. tom: vice chairman, a final question, if we could. we did speak with kim's rogoff -- with kim's rogoff -- with kenneth rogoff of harvard today. you had the privilege of not only reading mandel, but working with them at columbia university. your thoughts on what he gave to kenneth rogoff, richard clarida,

and the rest of us? mr. clarida: i was very saddened when i heard the news this week. bob was a friend and mentor for 30 years. it was one of the thrills of my career to be a colleague of his because all global macroeconomists today are either students of mundell one way or the other. he is truly the father of the euro. expensive, creative, wonderful gentleman, and one of the great economists of the second half of the 20th century. he will be sorely missed both as a human being and a scholar. jonathan: and i think everyone echoes those comments. always great to catch up with you, sir. i think we are all looking forward to getting in the same room today. looking forward to doing that down in d.c. richard clarida, vice chair of the federal reserve. tom, that conversation we just had, more fuel gets added to

that debate over the weeks and months to come. tom: there's no question about it. it's interesting here is it is going to be formulated in the press conferences here, including april 28. michael mckee joins us now. not only what did you learn they are, but how does it change the pressure for jerome powell april 28? michael: i think it helps relieve some of the pressure. you guys did a great job. i may not even ask a question. tom: i like that. continue. michael:michael: michael: michael: the thing that struck me -- michael: the thing that struck me as the confidence with which he and jay powell in his previous comments speak about being able to contain inflation if it goes up, and that enabled them to let the economy run hot. he didn't give any specifics. jon, you really beat on them for it, and you didn't unfortunately get it. which is by design. they don't want the markets to have a checkpoint to say this is

the point at which they are going to do this. they are delivering this message over and over again with supreme confidence, and that has begun to sink into the bond market. you can see how yields have stabilized. they are believing that the fed has the credibility here. jonathan: we had this conversation with tom porcelli of rbc. there is a frustration from the fed watchers that they don't have the detail they demand. but as you say, it is a feature, not a bug. economists seem to be on the same page. the vice chair brought up a function on the bloomberg. he mentioned the end of 2021 into 2022, whether that was the marker to define if what we are about to see is transitory or if it will persist. that means this debate is going to go on through the whole of 2021 and doesn't get resolved anytime soon. michael: it may bleed over into 2022, considering the inflation dynamics. each one of them is going to be

speaking about this on a regular basis that is going to keep this debate alive, even if it doesn't necessarily move forward. tom: to me, the issue is disinflation, even downright inflation. does clarida assume that we will have goods inflation? michael: it is a supply problem with the pandemic, and the other issues we have seen in the shipping world, and as he said, there's a lot of slack out there that has to be absorbed. at that is on the labor side. the other side is a shortage of goods for people to buy, and that should push inflation up. the issue is, does that push up inflation in your mind? inflation expectations. do people start to think prices are going to go up in their mind? jonathan: mike, good to catch up on the latest following our conversation with the

vice chairman of the federal reserve, richard clarida. we will bring you the full interview on bloomberg radio, on the bloomberg terminal, and on bloomberg.com. we add 0.3% to the s&p. on bloomberg tv and radio, this is bloomberg. ritika: but the first word news, i'm ritika gupta. some sad breaking news this morning. he was known for his gruff public persona and for helping modernize the british monarchy. prince philip, the husband of queen elizabeth, died today at windsor castle. he was a penniless greek royal who married in 1947. prince philip always walked a step behind the queen at the thousands of public events they attended. on their 50th wedding anniversary, she said philip had been her strength.

most coronavirus vaccines are going to the wealthiest countries. so far, 40% of the vaccines administered globally have gone to people and 27 wealthy nations. that represents 11% of the population. that is according to the bloomberg vaccine tracker. countries making up the least wealthy 11% have gotten just 1.6% of the vaccines. in other words, countries with the highest incomes are vaccinating 25 times faster than those with the lowest. more fallout from the archegos capital blowup. bloomberg has learned credit suisse is planning a sweeping overhaul of the hedge fund business at the center of the collapse. the swiss bank may make significant cuts to its prime brokerage arm in the coming months. credit suisse has already moved to tighten financing terms with some funds. another problem for the boeing 737 max. the company hesitant to find a potential electrical issue on some of the planes. it has alerted customers they should ground jets until the issue is solved. it is not related to the near you -- to the nearly two-year

grounding of the 737 max after two fatal crashes. 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. ♪ ♪ jonathan: from new york city, for our audience worldwide, live on tv and radio, this is "bloomberg surveillance." alongside tom keene, i'm jon ferro. lisa abramowicz back with us on monday. tom: right now, tina ford and with us. it is can -- tina fordham with us. it is constrained because of our conversation with the vice chairman. we go into this weekend with instabilities in europe, including in eastern ukraine, including here, including their. it is an uneasy time that i

would suggest has been underreported. why do we need to focus on the international relations of europe this weekend? tina: there is so much good news, and i have been watching the program this morning. so much genuine basis for the enthusiasm about outperformance, forecasts upgraded, but also an excellent time for opportunists to take advantage of governments staying distracted elsewhere. demobilizing in eastern ukraine is where -- israel. there are so many things happening that would have been front of mine that i would be talking to you -- front of mind that i would be talking to you about regularly that are getting swept under the rug because frankly, we are coming out of this pandemic tunnel. but as you know, with the way i work, i am always monitoring the horizon for things that can disrupt markets. tom: well said. i've got time for one more

question. we will have you back next week as this unfolds. where does nato sit right now, as you monitor the horizon of the future? his nato a force that can push up against -- is nato a force that can push up against russia? tina: not in ukraine. we are going back to 2014, the crimea annexation. the tactics russia are using is probably what is called coercive diplomacy, but it is a geopolitical test for biden and for europe, and it is a great time to grab up territory if you are in that way inclined. no nato response for adventurism in eastern ukraine. more acutely, there might be tension between greece and turkey, both of whom are nato members. jonathan: always good to hear from you, and always too short. tina fordham, avon hearst -- avonhurst head of political

strategy. coming up as a guy from ubs you might have heard of, luke kawa. tom: nope. we will have to see. jonathan: i'm looking forward to that conversation. tom: i don't know. i think he's worthy of a substantial piece. jonathan: how long is a conversation with him? looking forward to that. luke kawa joining us on bloomberg radio and tv. i think he used to work here once upon a time. tom: what is amazing is axel weber will be watching. [laughter] jonathan: i'm going to whip through the price action. all-time highs on the s&p 500. big week for the nasdaq coming into friday. on the session, off by about 38 points on nasdaq 100 futures. interesting to see the

stability in treasuries. euro-dollar a little negative, down to $1.1875. heard on bloomberg radio, seen on bloomberg television, this is "bloomberg surveillance." ♪ ♪

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jonathan: 10 seconds away from economic data in the united states of america. for our audience worldwide, live on tv and radio alongside tom keene, i'm jonathan ferro. lisa abramowicz back with us on monday. 60 minutes away from the opening bell. in the bond market, yields are up by five basis points to 1.67, and now approaching almost one suit -- 1.671. a little lift in yields over the last hour. a pickup over the last morning after stability over the month. michael mckee is back with us. this is ppi and then cpi next week. michael: cpi is the one everyone will be watching but ppi does

give us an idea of the direction of inflation. the direction of wall street, i do not know whether this is because everyone is clicking at once or it is a supply-side issue because of the pandemic, but the bls website appears to be down but we do not have the numbers. tom: we get to make them up? michael: the website says the bls website is is the. -- is busy. refresh the page and try again. tom: we have cpi which everyone knows. there are three kinds of ppi inflation. which matters within a boom economy? michael: we are looking at the way it builds. we start with the raw materials. the headline number is finished goods, but if we are seeing raw materials rise, does that feed into each step of the way or is a lot of that absorbed? from the time it moves into the factory gate or the consumer, is

that generally the process? tom: there is a fear we addressed with the vice chairman, but we are nowhere near 60's or 70's cpi. we are nowhere near that dynamic. michael: we are not. we may be by the end of the year because as the vice chairman said the issue is a transitory? tom: transitory, stop it. michael: the drinking game. i said it. everyone will be watching the monthly inflation game and away we have not been watching in years. tom: i look at the inflation dynamic. we will talk to luke kawa about this in a moment. it is a mystery of the goods dynamic. if there is a commodity boom, if we see china with 8% imf listed gdp, is that finally the goods in laois and people fear -- is that finally the goods inflation

people fear? michael: we buy a lot from china. china inflation was up today. part of that will come in through import prices and part of it will feed into cpi because we have a strong preference for chinese made goods. the issue is for how much and how long? jonathan: stick with us. we will get the economic data at some point and when we do we will turn to you. cpi on april 13. the year on year figure. this'll be the number, the median as bennett -- the median estimate is 2.5%. that sets us up for the debate. tom: i agree with that. it will be on the labor economy as well. i will go back. it is about 7 million jobs to be formed. that is the best gas we see -- that is the best guess we see. joining us is luke kawa, ubs

asset management and formerly with bloomberg. we are thrilled he can join us today. you mentioned the goods producing economy. ubs has a terrific reach, particularly across the pacific rim. what you see in the dynamics of the goods producing economy? luke: what we highlight and what we are excited about that informs a lot of our positioning is the breadth of the strength in good sectors. if you look at the share of 25 major economies we track where ism manufacturing is above 50 and accelerating on a three-month racist, that is well over three quarters -- on a three-month basis, that is well over three quarters. when you're seeing new orders up, customer inventories down, that is the recipe for future production growth. that gives a lot of confidence that this row cyclical trade in equities and currencies does have room left to run. jonathan: that is what gets my

attention from some of the notes you gave us a of the interview. you want to stick with it. can you walk me through the sticking with it after huge rally in the last six month and having the confidence and the willingness to do that and how difficult it might be? luke: the sticking with it does entail a bit of adapting and going to areas where it is still going to be early cycle and changing the nature of how much risk you want to take. in terms of the broad equity market beta, of which the u.s. is part, that means may be dialing that down and focusing on relative value trades much more exposed. japan and europe versus the world. your value stocks. also focusing within foreign-exchange. areas you think there is more bounce back or the u.s. services sector assumes recovery. i would argue there is very lofty expectations mixed in. whereas another segments

completely sentiment completely sentiment filled, washed out, a lot of room to run. i think it has been interesting over the past couple of weeks when you have some bad negative europe related vaccine and lockdown announcements. play game of wind at the headline hit, where you see it in the u.s.? you do not. alongside u.s. data not offering much of a lift to the dollar and yields as it has in weeks past, that is a good sign the degree of pessimism towards europe is baked in and you are primed for a bounce back. another interesting thing is european economic growth and relative profit growth do not have to correlate. that is due to the cyclical orientation of the index. we expect because of the stimulus u.s. growth will be far

superior to europe. that does not necessarily entail lower european profit growth. that is focusing on italy and banks and also on the currency. tom: telus the character of dollar weakness. is that a dollar weakness to trend or is there a real vector of significant dollar week this in your call? -- significant dollar weakness in your call? luke: i think you had my boss evan brown on several months ago after the georgia election saying you have to rethink how broad a u.s. dollar decline can be in an environment where we will get all of this fiscal stimulus. that is something that has been reflected well in our positioning. going forward, the way i am thinking about the kind of factors that will lend itself to u.s. dollar week this -- u.s. dollar weakness, if it comes from the federal reserve. if you look at front end

euro-dollar, anything below mid 2023, you can pick up an option. on the one hand they are pricing in all of this risk premium based on fiscal stimulus and how good the economic data. on the other hand you have folks like richard clarida saying we will be patient. we see the growth to cop. we did -- we see the growth pick up. those euro-dollar options are not exhibiting any time delay you can expect from the fed continuing to read right forecast about strong growth does not mean higher short-term policy rates. it is that kind of give-and-take we think will be the dollar because we have priced in so much in the front end and it cannot go much further. at the same time you're starting to have vaccinations in europe pick up a little more breath to the service sector recovery. that is what induces a lot of asymmetry. tom: is cash of value to you? it has been a debate of the last

three to four days. as a traditional mutual fund 3% to 4% cash or can you build up cash to be opportunistic? luke: i will say carry on a relative basis is perverted. whether you are dialing up relative equity market data or carry based on the equity rally we have had, it pushes you more towards carry on that front, whether it is through high-yield or emerging-market dollar debt. that is something to think about. in terms of cash with an economic backdrop as strong as we have, does not seem like the most prudent course of action when you have kerry available and when you have relative output trade, you do still have a lot of leverage. tom: and what is so important is we are waiting and waiting to see the dollar reversal. it has not happened. it is like the toronto maple leafs have not won since 1967.

jonathan: i recognize the voice. is he familiar. this guest? have definitely seen him before. is it the maple leaves? how are the maple leaves? how are they doing? luke: we've been waiting since the late 1960's, the last time we had a muscular sustained fiscal policy. that is the last time the leafs won. maybe heralding a return. jonathan: luke, it is been too long. great to see the success you are having at ubs luke kawa, ubs asset management. if you are tuning into ppi, i am always tuning in for michael mckee. at 8:30 we are waiting for those numbers to cross. i understand it is refreshed and try again. michael: i am here but the bls is not. under the trump administration they decided to get rid of the

lockups where reporters were given the data in advance and were able to write stories and sent them out. to be fair, it also came about because of the pandemic. they did not want to lock a bunch of us in a small room. this is the downside. the computer goes down and all of wall street does not have the information. ppi not the biggest mover in the world but you can imagine if this were jobs day what kind of reaction you would have. tom: i will revisit a question that came up this past weekend. somebody said can you trust the data? give us an update, and this goes to the national association for business economics, can you update us on the quality of the bls data? michael: the quality is good. they have made an effort to let people know they have statistically verified the data. the only thing is the department of labor which does jobless claims, not as good. jonathan: michael mckee on the latest data.

tom: very helpful. jonathan: refresh and try again. i will run. great to catch up with luke kawa. on the open we will catch up with mohamed el-erian, columnist and queens college cambridge president. that conversation later. from new york city on tv and radio, this is bloomberg. ritika: with the first word news, i am ritika gupta. he had no official role, but for more than 70 years he was one of the most influential members of the british royal family prince philip died today at windsor castle. he was 99. he was a penniless greek royal who married elizabeth in 1947 and helped modernize the british royal family and his politically incorrect statements both amused and appalled the nations at times. michigan is grappling with the coronavirus surge that has made it worst pies for covid in the

u.s.. the state reported more than 8000 infections and 30 death on wednesday. it is now on pace to surpass its december record. on a per capita basis, michigan has the most coronavirus hospital patients. the u.k. will decide whether britons can resume taking international holidays. on may 17 countries will be rated turning -- rated according to the rest. it is too late to say which countries will get the green light. in vienna the chief negotiator of the nuclear talks says the focus is now on -- the u.s. is not commented on the claim and there is no word what iran is offering in return. the u.s. has ruled out unilaterally lifting sanctions in order to get iran to return to the 2015 agreement on nuclear enrichment. a historic election will determine whether workers and amazon warehouse will become the

first to join a retail union. amazon is ahead by a 2-1 margin. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> a new strain will get everywhere within three or four months.

that makes it absolutely essential we have a global vaccine effort, a global testing effort, and, this is a critical point, we'll have one of these things every decade so. we need infrastructure to make sure we are constantly watching and ready to stop it at its source, at the beginning. tom: the economist larry summers, former treasury secretary. important comments. it has been a terrific day of economics, including richard clarida. we finish strong. angus deaton. the gentleman from princeton is our definitive voice on our inequalities. it is front and center for all of us in our economics and our

politics. his new book is also definitive. it is francine lacqua's book of the year and we are thrilled to have angus deaton with us on the despair that is out there. how bad is our inequality? what is original about our 2021 inequality? angus: everything is different in the pandemic. one of the things one is most worried about inequality during the pandemic is the pandemic affecting different people differently. some people, like you and me, are staying at home and talking to each other over the web while others are risking their lives. what i am afraid of is during covid will exacerbate differences that were already there and were festering in america and surrounding issues i

have been writing about. tom: do you believe we have a political will to at least nudge our inequalities in a better direction? angus: the current administration is much more interested in doing that than the previous administration was. it is very early days. the american rescue act would help with income inequality. whether the measures in the infrastructure plan will go through is not clear to me right now. tom: what do we do with our american individualism? there is a voice in america that says inequality comes from our individualistic effort, and that buttresses up against more societal, more all-encompassing.

how do we stand on our individualism and how do we move that forward and sustain that as we tried to get away from the inequality? angus: i think the individualism is incredibly important. i do not think it is very much at risk. we focus on the individual aspects for a long time. it has brought us great benefits. wonderful benefits of modern capitalism, which have helped many. we have to make sure for those of us who have done well out of this that other people share in that. one of the biggest divisions in america and one of the riskiest is an educated elite that have a four year college degree have been doing extremely well for the last 50 years, whereas for the people without college degrees, they have seen a 50 year trend of downward wages, downward labor force participation.

we will tear our country apart if we do not share it. tom: what is important and i believe we talked about this at davos, is the impute of technology upon us. we try to look out 10 years or 20 years or half a century to what this profound technology means. what you think it will mean for society? angus: less then some people think. i think this vision of a world in which there is no jobs at all and everything is done by robots is science-fiction. was then, is now, and probably ever will be. there are a lot of things we can do that provide good jobs for less educated americans were to stop destroying jobs for less educated americans, like subsidizing the introduction of robots, which we are doing right now. or having a health care system

which is gutting the labor market for less educated folks. tom: what is so important. i will go to a chapter, which is things come apart. a huge body of our radio and tv audience believes whatever their background or their wealth, the fact is they look at this country and say things are coming apart. how does the elite engage this conversation given the political maelstrom of washington? angus: i think it would be good for us to talk together right now. it is important for those of us who want the educated elite to listen to the people, one of the things i keep hearing people saying is do you hear us now? rioting at the capital or voting for someone i regard it as a very destructive president,

perhaps those would be less severe if we listen harder and longer, and not just celebrated the undoubted triumphs of capitalism but understanding two thirds of the population is not benefiting very much from it, life expectancy is falling. even that is falling for the last 10 years for people without a bachelors degree. tom: thank you so much. the laureate from princeton. agnes deaton. we are here with a mix on the screen -- angus deaton. michael mckee with us with dead silence. has this ever happened before? michael: we have had problems before but none that i can remember this long. tom: we have no data. michael: we're just going to have to go on with life somehow. tom: without data? michael: somehow without data.

it does seem to be a major crash at the bureau of labor statistics. their website is down and we do not have the ppi prices. there are rumors in the market about numbers i will not repeat but they are just rumors. the are seeing a reaction in the bond market with yields up a little bit. you never know what people in the markets know we do not. tom: i will suggest we start the weekend at 1.70, down 1.63. now 1.68 on the 10 year yield. how far away is april 28? tom: is a couple of weeks away. do they get data? will they be wiser about the boom economy? michael: we will get retail sales for one thing. we have a lot of housing data. what they will not have is the latest pce data. they will have the cpi. tom: very good. i just had to get my dose of mickey data -- my dose of

michael mckee data. jonathan ferro and i say thank you to our team for a first-rate day of economics. we thank all of you worldwide and across the nation. coming up, jeffrey eckel modo of the imf. this is bloomberg. ♪

♪ jonathan: here come the higher

prices. from new york city, good morning, good morning. "the countdown to the open" starts right now. equity futures slightly negative. we begin with the big issue. is the cyclical rotation losing steam? >> yields have come in. >> a little relief on the 10 year. >> that is part of the reason tech has worked. >> rotation and counter rotation. >> we will see the yield stabilized. >> we saw huge rotation going cyclicals to small caps. >> small caps starting to underperform. >> we are beginning to trim back many of the reopening stocks. >> perhaps the rotation is slowing down. >> the stock market is going to pivot to the next story. >> the move in the 10 year does