>> i'm caroline hyde. >> i'm joe weisenthal. >> i'm romaine bostick. let's get you caught up. that s&p 500 finishes out at a high. >> the question is, what'd you miss?? caroline: this week maybe the calm before the storm.

next week, maybe things will change. investors concerned about inflation. we have ppi data, they shrugged it off today. what about cpi data? what about bank earnings? much to be digesting, but we start with volume. joe: it is notable and very disappointing. we are used to a lot of action. romaine: wonderful. volume was lower. we dropped every day this week. today, finished around -- get a little bit of sense of how though it has been. we are coming off a couple weeks, a lot of kids out of school, vacation, easter, passover, everything else.

you may finally get the action you have been looking for. joe: joining us is katie, didn't you promised us the volume was going to pick up? it is just my recollection? >> i think i said something smart like it may come back. today was actually the lowest volume day across u.s. exchanges since christmas eve. tomorrow is not christmas but that is a staggering number. there are seasonal effects, spring break in the united states, but we have earnings next week. an interesting time to be a bank, but overall, if you look at the earnings season, it is expected to be the strongest since 2018. s&p 500 companies expected to grow profits by 24%, huge number. that is expected to be led by the banks. i'm interested to see if financials really deliver, maybe it will revise the rotation

trade that has been on the back burner. caroline: interesting time to be a bank. interesting time to be any company. and just in time also if you are playing the volatility in the markets. katie: we have been talking about the vix and how i believe we are at a 16 handle, which seems staggering, but i want to point out that for like seven years, the vix was stuck in the 11 to 14 range. even though this feels low, and it is relative to recent history, we are still stubbornly elevated. this speaks to the market we have been talking about where maybe this is the calm before the storm. you're seeing the vix as lower, but we are heading into an important period, we have earnings and data coming up. we will see if we get above 20. romaine: a lot of people looking at that cpi report, it is going to be a bit distorted because of the pandemic.

you are also getting retail sales numbers that all coal -- that also could be distorted. how much are traders hanging onto that data for clues as to how much further this rally can go? katie: i'm going to argue that data is going to matter more going forward than it has over the last few months. the stakes are going to be higher, especially top-tier data , inflation, employment, because we are going to get to put numbers to the expectations built into this market and i'm going to make the argument that ppi was a good example of that. this morning, we were coming in, you had a strong chinese factory data, strong ppis. romaine: i was wondering if people are dismissive of it. i came in this morning and joe was poopooing the ppi data. katie: it was late but it was strong. we have been talking about for months that now the boom is

expected to take off, at least in the united states. i'm getting a vaccine on monday, the roll out is way underway. romaine: bragging. katie: i'm not trying to brag. caroline: don't brag upper two is still waiting for her vaccine. we are meant to be doing well but i'm not getting any call up. we did not get into the exciting world of refrigerators. everyone buying cool beverages and a fridge to go in. what about next weekend the chip shorted? that is kind of feeding into temptation and that is what the white house is going to be discussing monday. how much are people talking about bottlenecks? katie: the chip shortage is interesting. we did get news that republicans said this week that they are willing to work with democrats in congress to address that chip shortage. i am wondering if we are at a ceiling in the semiconductor

index. it is stalling out near its all-time highs. how this plays out will be interesting. we will find out how much of this chip shortage is causing this rally versus a fundamental case for chips, which are in just about everything. joe: next week, we are going to figure out how philadelphia got to name the chips. we have to talk about that. katie: i will research that. romaine: katie, we will catch up with her next week, maybe not monday. coming up, we are going to find out joe's favorite dmx song and then dig into real-time indicators to see where we stand on the economic recovery. this is bloomberg. ♪

romaine: on the show, we talk a lot about those big headline economic data points. joe, i know you are a ppi truth there -- truther. joe: i just care more about consumers than producers. that is my preference. i year ago this time, we got obsessed with a lot of the real-time data because we were moving so fast, the official data was not coming fast enough. there are restaurant bookings, we are starting to erase the losses. imagine what happened if we actually defeated this pandemic. caroline: the u.k. starts to a been -- starts to open up on april 12. plenty of people are booking the day of to sit outside a pub, the

first time and however long. the u.k. is ready for a. joe: are they going to -- ready for it. joe: are they going to pay you to go to the pub? caroline: then covid spread like wildfire, they decided maybe that was not the best way to stimulate the economy. joe: joining us with more inside, steve matthews. thank you for joining us. it has been a while since we focus on a lot of these indicators, we used to be obsessed with opentable numbers and things like that. >> the reason we looked at it a year ago was because the government data has lagged and things were changing so quickly that the real-time data give you an insight that you did not have otherwise, and things have been kind of stable for a long time, but that has changed now.

starting in mid-march, the real-time data, things like opentable for restaurants in the tsa data has picked up substantially. while the official government data has looked pretty good, last week's jobs report, that was taken in the first half of march, and what has happened since then is there has been an acceleration across the board and sectors of the economy like leisure and entertainment that have been shut down by covid and even just in the number of jobs. romaine: what are we seeing in terms of geographical differences? steve: it is interesting because when you look at it geographically, there are some areas that are still suffering, looking at hotels, for example. in florida, miami and tampa are

the two markets at the highest level of occupancy of anywhere in the country, which makes sense because people are going to vacation. you get your vaccine, you wait two weeks, then you say, i'm hitting the road, i'm going to take a vacation, and florida is doing well in terms of hotels and so are some of the other coastal markets. that is also true in the restaurant reservations as well. florida is doing well, south carolina, utah, those are some of the markets doing well. on the flipside, in the cities that are essentially business markets, big on business travel, they are really slumping stale. it is also true that they are cold cities, but minneapolis, boston, they are not doing well. caroline: sticking to what has happened in chile, they were

getting the vaccine out, they were managing to tamp down on the virus, but not quickly enough, and we are seeing the virus spread. i'm interested as to whether you see any breakdowns, the states are still doing badly, michigan for example. did you see data when everyone was eating out and this is why the virus is spreading? i say that because of what i mentioned before, the u.k. opened up previously, everyone ate out, then the virus came back. steve: that is an interesting point because that is exactly what you saw in the winter, where the markets, where there were pickups in covid, things shut down. people freaked out and stopped going, responsibly so, not criticizing anybody. it will be interesting. michigan in particular, to look

at the data that comes in. we have not seen huge impacts so far, but in the next few days, the michigan situation has gotten dramatically worse and you can easily see some serious results. joe: what happens if we actually defeat the virus? we have a lot of people in this country contracting covid, still a lot of deaths, the average is still around a thousand on the seven day moving average. a lot of people are not feeling comfortable going out, there must be a substantial number of people who do not feel comfortable going out in these conditions. steve: that is true. while you see improvement in some sectors, you look at, for example, live entertainment, concerts, movies, people got excited last weekend over godzilla vs. kong, but the movie

box office is down 70% year-over-year for last weekend, even though it was better than expected. you still have big portions of the economy that have a long way to go. i mean, understandably. a lot of people have been vaccinated, but you still have a long way to go. romaine: when we start talking about this ramp up and economic activity, some of the concerns we have had is this idea that you are going to see despite inactivity but that at -- but that will at some point level out. what is the general trend line, the expectation of that trendline that economists are looking at? steve: i think there is a lot of pent-up demand. the savings rates have been out of the world, so people have money, a lot of people has money, not everyone, there is a segment of the population that is still really struggling, but a lot of people have money.

there is a lot of pent-up demand, so i think people are expecting a boom for a while, although in some of the service economy, there are limits on how much of a boom you are going to get. one of the federal reserve presidents makes the point of saying, he may have foregone getting a haircut for six months or for a year, but once you start getting a haircut, you just need one haircut a month, you are not going to make up all those haircuts. caroline: steve matthews, love the point. coming up, the federal reserve and vice chair telling bloomberg policymakers are looking for hard numbers on whether they are reaching their goals on price stability. we will take a look back and

also, new york times bestseller. that is next. this is bloomberg. ♪

caroline: today, we got joseph second favorite inflation number, ppi. -- joseph second favorite inflation number, ppi -- joe's second favorite inflation number, ppi. joe: i love ppi and i regret ever having suggested that i did not care about producer prices because they have been picking up, highest since 2011. we all know about these base effects. fastest growth since 2011 this morning. big question is, will they stay true to the consumer?

also, wooden pallet prices picking up a lot, the highest since 1993. joining us, zach carter, author of the bestseller, the price of peace. thank you for joining us. in your book, you talk about the episode of hyperinflation. the question on everyone's mind is when you see wooden pallet prices picking up like this, is that historically the thing that precedes hyperinflation? zach: if it is, i have not seen it in the data. i don't claim to have seen all economic data, but that is not one i have watched super closely. i think there is an understanding of inflation, demand-driven inflation, you have enough demand in the economy, people in power will push prices higher, but that is different from hyperinflation.

hyperinflation happens when you have a political crisis. inflation can be a problem, it can be something you want to worry about, but it is a distinct problem from hyperinflation, which is when people lose faith in the legitimacy of the government. caroline: you have written about it plenty. at the moment, we have this push and pull of some people on one side want to worry about inflation, others not so doing and want to see the whites in the eyes of 2%. do you think we'll ever get to the overshoot from your perspective? is there something we should legitimately be worrying about? zach: i think people who are confident about what they think inflation is going to look like in the next two years or two months, let's just say they have more confidence than i have.

these price changes, they make sense until your model is wrong. i myself am not worried about this right now. i think the federal government can afford to spend a few more trillion dollars before we have to worry about demand-driven inflation becoming a problem. but i could be wrong. i have been wrong about stuff before. if so, the thing that animates this particular moment, if we overshoot and get too much and inflation does happen, there are a number of tools in the federal reserve's toolkit that are designed for fighting inflation, they have not been using them for like 15 years. it does not seem to me to be that terrible a risk to overshoot. we could overshoot, but if we do, i don't see what the catastrophe is. romaine: when we talk about

those tools and the potential negative effect of them having to utilize those tools, should we start to see some meaningful inflation, a lot of folks are saying, if you don't have a gradual normalization, it means you are setting us up for what could be a policy shock or the need for a policy shock similar to maybe what we saw in the late 1970's, early 1980's. do you think that is the potential risk or should we not be worried about that? zach: the reason i don't worry about that -- again, i could be wrong -- in the late 1970's and early 1980's, one of the reasons paul volcker went for this high interest rate policy is because you had not only high inflation, but also high unemployment. if you are only worried about one of those two variables, it seems to me that there are pretty clear policy tools available to fight either one. when you have both at the same time and they are extreme the

elevated, fighting one often seems like it can create problems for the other. it is not clear to me that if we have a little bit of extra inflation or even a lot of extra inflation in 2022 that we will also have elevated unemployment. as a result of that, i think this problem is not super complicated. if you run the economy a little too hot or even a lot too hot, you know how to pull it back. joe: let's talk more about hyperinflation. you made the point that it is a different thing, it is more about politics and losing faith. what is the connection that we should think of? the connection between losing faith in the system and true, intense inflation that destroys people savings and makes consumption impossible? zach: to some extent, even talking about this is the sort of thing that freaks people out

a little bit. joe: thank you for coming on. [laughter] caroline: instead of freaking out about extreme inflation, we have in writing about how small inflation does hurt those at the federal reserve is trying to help, those on low income, the fact that food is getting more expensive, gasoline is getting more expensive. it does become a political and philosophical issue. zach: certainly. i did not want to be dismissive to joe, i was trying to make a joke. certainly, if consumer prices rise, prices of the things that most people buy at a rapid level, that reduces the standard of living up ordinary people, that is bad. ordinary people not having access to a job and paycheck is

also a problem. how do you balance these things -- it is not necessarily obvious at any moment in time with the right call is, but generally, i tend to err on the side of more employment and if you get too much employment, it is ok to take a minute and think about pulling back. these political crises, things like hyperinflation, we are talking about when that happens, that is a real breakdown in the collective faith of society to believe in both the political legitimacy of the government and the value of the currency. that causes things to happen that don't square to the money supply or aggregate demand, things that are out of control, and that is a different problem. joe: our things to zach carter,

author of the price of peace. very soon out on paperback, you have to check it out. you can hear more expensive conversation next week. caroline: that does it for what'd you miss?

emily: this is bloomberg technology. coming up amazon workers vote not to unionize, that is the latest in the historic election where there are still disputed ballots being counted and accusations of intimidation by amazon officials. we will have the latest and amazon's response.