♪ caroline: from bloomberg's world headquarters in new york, i'm caroline hyde. joe: i'm joe weisenthal. caroline: let's take a look at your market moves. we are pretty flat on the s&p 500, but a new record high. the russell 2000, the amc stock back in play. joe: the question is, "what'd you miss?" caroline: amc was up 15% on the

day, wendy's, and gamestop. this sets the play, of course, for the next week as we hear from the u.s. federal reserve. core cpi is high, the highest level since 1992, prices surging. lumber, food -- baseball cards. but joe, yields, we did not talk about it much this week. joe: they were the story of the week in some sense, because of all of these things are surging in price and headline inflation metrics are going up, even baseball cards, you think the fed might raise rates, but it hasn't happened. a big week for a decline in the 10 year yield, we basically drop it a year, which is pretty wild. not exactly what the smart money might have guessed. to explain more on all of this, let's bring in bloomberg cross asset reporter katie wright

-- katie greifeld. katie: we got inflation data yesterday, i think it was yesterday -- it's been a long week. it was super hot, but there's so much in this report that you could brush away as transitory. if you look at vehicle prices, homes, transportation, etc.. the other theory is that maybe there is some sort of short squeeze going on, and brian and i did a twitter spaces yesterday with mohamed el-erian, and he thinks you are seeing an incredible demand from pensions and institutions with a lot of liability matching flows. they are slamming yields lower and forcing people basically out of their positions. caroline: talk to us, like short squeezes? i thought that just happened in

meme stocks. amc was running hot today, even european meme stocks got in on the action. air berlin -- i used to fly air berlin and it is back up. katie: you saw it with amc, and amc it worked out, because that company may be isn't going to go bankrupt anymore, but the meme stocks, it is easy to track, but in another way it is hard to track. if you go on twitter and wall street bets, you can see what people are talking about, but it feels like it is kind of random. there is the short interest, they tend to target stocks with high short interest, but some stocks don't even hold water. caroline: 10 days. katie: that does rhyme with wendy's. joe: that's a thesis right there. in crypto kind of a weak week overall. katie: yeah, bitcoin up about 4% for the week, but the most interesting thing that happened

with bitcoin was the microstrategy bond issue. el salvador was huge too, we can go get -- go there, but this was the first corporate bond ever issued to fund bitcoin purchases. the bond is not doing well, it is the worst new issue on the week. it is the only new issue of this week to trade below the level it is priced, and you cannot even blame bitcoin because it is up 4% on the week. it is not having that bad of a week. caroline: why would people want to get into this? if you want exposure to crypto, by crypto -- buy crypto, but is this a nice way of doing this? katie: there's a lot of hedge funds maybe they don't want -- funds, maybe they don't want direct exposure to crypto, but yields were just above 6%. the average u.s. junk yield is about 4%. that's a pretty hefty premium in

today's market. joe: to get back to fed week, next week, the inflation may be on their minds, but if you look at the markets overall, a good week for stocks and treasuries, it is kind of like goldilocks. katie: it kind of feels like it. it is a tired talking point, but i don't think anyone is expecting fireworks. maybe some talk about tapering, but there's nothing this week that we saw will move the fed's needle. caroline: how many times are we going to say transitory? how many drinks are we going to have to have? joe: i will keep an eye on that. caroline: katie greifeld, great to have you. coming up, we will dig into the inflation debate and preview next week's fed decision. this is bloomberg. ♪

♪ caroline: the fomc meeting next week with the decision announcement on wednesday. joe, the key focal point is going to be, what do you know, inflation. joe: we got that inflation measure earlier in the weekend on the headline it was hot. the highest since 1992, 5%

year-over-year. it's pretty transitory -- caroline: autos, airlines -- joe: maybe not that big of a deal. but for more, we welcome skanda amarnath. look, we know the headline inflation measure is hot. it's easy to say that it's just cars, used cars, airline tickets. we can lop off that. what's the responsible way to think through this in a useful perspective so we don't run the risk of blinding ourselves, lopping off the hot stuff and getting the answer we want to see? skanda: thanks for having me on. i think there is a need to take some care and how we assess inflation, the sort of component at that level, because you can lisa -- easily track that. if you want to say inflation is not a big deal, ignore the ones

that are high. two things worth keeping in mind a what are t -- are, what are the results of inflation you are seeing? airfare is higher, there are some things like used automobiles, where there seems to be a strong bid right now for used automobiles in part because of some of the impact of the pandemic last year. we have seen some of those impacts translate and that inflation is real in a sense, but will it be useful in forecasting what future inflation looks like and how hot about an economy are we talking about in 2022, as opposed to something, there is sort of a binary effective going back to normal. the other part of it is, are we seeing the kinds of inflation where tamping down on the demand, ok, fed policy through financial conditions will be really effective in creating

disinflation of the kind that will be welcomed if it's not going to risk recession. is this the kind of thing where the fed is a helpful hand if they try to play a role in creating that kind of disinflation, or is this something that will resolve it out because businesses were already trying to figure out how to respond, adjust, and these price increases are one time in nature or where more investment is happening to resolve that problem. caroline: of course, the ability to fly as relative luxury, and perhaps for those who are slightly wealthier. what's interesting, the new role of the federal reserve to certain extends to really focus on inequality, to ensure that those who have been left behind previously are enjoying an incoming rebound and can bring this back into the workforce. we are also seeing inflation in food in particular, and the likelihood that lower

income households are going to be affected by this. talk to me about that? skanda: there's different parts of the inequality landscape people will focus on. if you want to focus on people on the lower end of the income spectrum, what are they dealing with, it's very different than people with higher incomes. people flyer do business travel, differently than someone who is living paycheck-to-paycheck. what can the fed influence? can they influence food prices with some consistency? i would argue, probably not area i think food prices are especially volatile and a variety of different things. there's weather, natural disasters, what's the demand for particular agricultural to monitor -- agricultural commodities also changes that. the fed supporting financial condition sufficiently to real and -- real economic activity

and labor market outcomes, that we do have a high participation labor market that actually does reach more people, so more people can work who want to work. i think that is shifting right now, it's a turbulent period of time, but it is hard for the fed to evaluate how much support or if the same amount of support is needed. even if it's disappointing, it's towards job gains right now. joe: one of the things that has been striking this week, even with all the inflation talk and the headline numbers, not just the fact that rates haven't gone up, but they've gone down pretty dramatically. we had that chart earlier showing the biggest drop in 10 year yields in a year. is it surprising to you? even if we can, on the show, have a conversation about looking through some of these headline numbers, are you surprised that it read to which the market is implicitly that confident that the fed is not going to say, do a u-turn or start to talk about hiking rates

sooner than expected? skanda: i think it should be a little bit surprising from that standpoint. we have gone through a regime where the fed told you it is going to be dedicated to controlling inflation, and while the reaction has shifted over time, market participants might think, we have had two strong inflation periods, so the fed might have to hike a little sooner. that might be a little bit surprising, being a know it all, you think you can actually forecast this perfectly. but there's evidence of how the market is probably interpreting the inflation data right now. people in the weeds on the car market right now are aware of these one-time changes going on right now, and how colors are forecast for 2022 inflation is probably not that much. carmax, they are bidding up on used automobiles into the summer

of 2022, it isn't really being affected by what's going on right now in a way that we think of as persistent. part of it is also that the fed had also conditioned their interest rate policy not just on achieving 2% inflation on average, the average inflation target, but also maximum employment. that's going to take some time. we have to balance the fact that the recovery takes a few more months or may take a little longer than previously expected against the fact that we are also seeing inflation running hot in the moment, but it may not be very informative about what inflation dynamics look like a year and a half from now. caroline: and autos have been affected in terms of the pandemic but also chips, impacting new cars and secondhand cars. you are an employer in america, -- you are in employee america,

how much are we seeing this friction that we keep seeing within people actually having jobs, do we get into jobs? i am looking on tiktok all the time and people are making these hilarious reels and stories and videos about walking in and turning their sixth job of the week down, for example. is that a reality, and our people moving around very quickly? are wages actually starting to increase? skanda: i think you are seeing some clear evidence of friction, if you look at the job openings and labor turnover survey. for the past week, you did see that going on. hiring rates are high, but people are quitting their jobs. they may have taken a job at the start of the pandemic they otherwise might not have taken and are in a position to switch. have a little meant more support because of stimulus checks and

unemployment, these are all possible reasons, right, for why that is. we are seeing that friction has also manifested itself in a stronger wage in a particular category, that looks like leisure and hospitality, because there is an aggressive push to hire, because now people are willing to go out to eat, so a lot of those businesses are scaling up and willing to hire, pay higher wages to make sure they can scale up. that's not a bad thing. that's a good thing from our perspective at employ america. we talked about two disappointing jobs reports, where it was breakneck numbers and it has been a little cooler on expectations, but as this is sort of -- this is a multi-month, multi-quarter process, especially because vaccinations are still a work in progress and there's a lot of unresolved issues around childcare and other areas where it's going to take a little bit of time.

we should still navigate high expectations for what the labor market can achieve, but the friction is definitely there. because we are going from off to on, that shift -- not all areas are able to adjust so rapidly and so quickly. joe: real quickly, you are obviously active in the washington debate, trying to push at policies and pursue full employment. it is just two numbers, to jobs reports, but between that and the higher-than-expected inflation, did they dense momentum towards policy at all, or at this point, in your view, has it not changed the perspective of future policy? skanda: i think the inflation data, this is somewhere where the fed debate, for now, you are not hearing from fed officials to suggest we are going to hike

rates. i think you are seeing a steady hand. they know the data will be volatile through the summer and part of it is having a steady hand and not getting shaken out by the various -- it's a huge beat and a huge mist, historically high, historically low. they have to look through it. the big debate is on infrastructure. what are people really focused on? i think the primary point of gridlock is on taxes, which you can think of tangentially relating to inflation, but it is not guiding that discussion. if you are really serious about inflation, i say maybe you should take a more holistic approach. fiscal policy can be eight supportive of a disinflationary outcome, whether that is through more public investment or through smarter subsidization, like health care and higher education. those are not areas people are focused on in the same way, that if you wanted to do something about an nation, you could take a slightly more, a broader view

of what could be done right now in commerce. caroline: skanda amarnath, always great to have your take. we wish you a happy and healthy me -- weekend. up next, the boom in trading cards and other memorabilia. this is bloomberg. ♪ berg. ♪

♪ caroline: we have seen many assets faltering from the pent -- soared during the pandemic, from digital art to crypto to trading cards. we saw a kirby bryant card sulfur thousands -- sell for $1.75 million. it is surprising to not see it as an nft. joe: an nft versus a piece of cardboard.

joining us for more, lucas shaw from los angeles. i remember reading about sports cards taking off, and i thought it must be some joke. people rating the stores for their own open packs -- unopened packs, but i guess it's real. is it nostalgia, or do people want to collect anything these days? lucas: i think there are collectors who look at trading cards like fantasy sports or like gambling, where it used to be you would collect really old players, there was a card that could sell for $4 million or $5 million. now they want to buy lebron james, kevin durrant, or the young, rookie cards. so you buy a star for the memphis grizzlies because you think he is going to be a ha ll of famer. you pay 50,000 for it now, but it might be worth $500,000 in 10

years. caroline: in aggregate, do we just have an enormous amount? i am looking at one that sold for $4.6 million for another key player. how are we seeing the money add up? lucas: the estimate is that in 2021, the sports collectible business will be $10 billion. the majority of that will be spent on trading cards. ebay is the biggest generic sellers of these things. golden auctions, which has established itself as the biggest individual auction house devoted to this, is on track for $500 million in nails alone. at an auction in may, they sold 50 -- $50 million of material. the numbers keep going up. joe: is this connected to nft's and crypto in some way? you mentioned how there is this gambling element, but it is all of a type, where it's a moment

where people like to buy and collect stuff that they can own. lucas: 100%. i think it is tied from everything from nft's to music rights to speakers, where you have people with a lot of money who want to invest in internal -- in alternative and tangible assets. it's not the same as the crypto phenomenon, where you had people making money and crypto buying trading cards, which is what has driven nft's, but you have young investors with too much money who want to buy something that makes them look cool or feel cool. caroline: lucas shaw, all over the latest craze. lucas shaw from l.a., we thank you. it feels funny that we seem to be always interviewing players who are getting into nft's. i can imagine they want to be getting into their own image on a card joe: joe: as well. that's probably doubling down on their own career. caroline: that's got a hike come

because if it is not -- hike, because if it is not sneakers it is a baseball card. that does it for us. joe: have a great weekend. ♪

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