[speaking foreign language] ♪ caroline: i'm caroline hyde. joe: i am joe weisenthal. caroline: volumes down. the s&p 500 managing to push forward to the close. joe: the question is? what do you miss? caroline: economic data. the stocks in a long mode. raphael bostic both saying it

may happen sooner rather than later -- tapering may happen sooner rather than later. we're going to be digging into price expectations but investors assesing the recovery and the fed. that is dominant. how hot are the markets running? joe: we're looking at the nasdaq over the last two years. pretty extraordinary. how many times have the fed made policy mistakes? the fed is caught in a box of its own making. the fed is in a corner. the line is going up to the right. there you see it with the nasdaq, new record highs. let's bring in bloomberg news reporter amy for more. the lines keep going up. amy: it feels like it. volumes like caroline noted are down. if you look at the s&p 500, volume was 20% lower across the

20 day average. you saw a hick up the s&p 500 when you had bostic make hawkish noises that he sex -- expects a 2022 lift off and they could expect bond buying in the next two months but they are back on top. caroline: everyone seems to be chilling out and having a fun summer. what was their action in terms of -- i don't know whether we are going to be doing value or growth for the people determined on what wins out from here if we are going to push the s&p 500 to new highs. >> that is the debate. you're seeing a war of words because tech is breaking out a little bit if you look at the lines. they are hitting all-time highs. there is this narrative that emerged best -- last week that cyclicals have run their course and had an incredible rally. if the fed is going to tided in

three years, that could cause time on the cyclical rally but you are seeing charles schwab and morgan stanley saying not just yet and there is an interesting story on the terminals from charles schwab saying the fed isn't going to tided as quickly as they loosen policy so they are still a long way for financials for energy to run. it will not happen overnight. joe: you know what i don't get? the fed presidents talk about the tapering and seemed to move markets. maybe governors but we knew the dots were there and people come out and say there is a dog. explain that to me. amy: even jerome powell last week says --take this with a break --big grain of salt. we know the man in charge of the fed hates it. the markets -- market hangs on their every word so that you are

going to see volatility. if you look at the 10 year yield for treasuries to where we are this week, it is unchanged. there is a lot of interweave volatility because they won't stop talking. caroline: the s&p 500 has done the same thing as yields have come in back to where they started. what about volatilty incrypto? we bounce off a technical level of 28,000 but we are not getting much of it. do we drip higher? amy: we are drifting higher. it is-- was very dramatic yesterday where we landed flat after plunging. the coin is at an interesting place because if you zoom out to the year of date -- to date, it falls. amy: we had the death cross but bitcoin has entered a death cross seven times since 2010.

do really well of the next 50 days and return an average of 34%. who knows -- with an asset like crypto whether that will hold true. you could make the case if you look at the tentacles, it is not so bad. caroline: contrarian indicator. coming up, brent falling in u.s. cities in the economy rebounds. feeling the price increases. allen debt meister. this is bloomberg. ♪

♪ caroline: the u.s. looking to block solar goods made in china. this once again being a pushback

from the u.s. to china on human rights abuses against the uighurs in that part of the world. they produced half of the world's poly silicon. more inflationary pressures when it comes to solar issues. as i mentioned, the u.s. dropped unexpectedly in may and it feels we have a strike on our hands. joe: home sales kind of week amid the higher prices. one area prices are widely expected to grow up -- survey the big jumpo in rent expecations. this is important because one component of the inflation industry is it has not soared. it has been slow. that is a key thing to watch. joining us for more insight, alan debt meister. thank you for joining us. if you look at the major inflation aspects and powell talked about this, it seems the

inflation is largely confined to reopening areas. we haven't seen brent take up -- rents tick up with housing data. that would not be a reopening measure. is this going to surge later in the year inevitably? >> yes. we have seen strong increases in rents for new listings. private-sector data from zillow and single-family rent index have moved up very strongly. they were a little weak earlier in the pandemic but they have moved up very strongly in the last few months adnt -- and those take time to get into the cti basket. six to 12 months before those on average get into the cpi basket. the cpi is not looking at new rights. -- rents.

they're looking at the average rent paid. caroline: i have to say -- anecdotally, i feel it. i have been looking for a new apartment and i was thinking i would catch some sort of deal and i missed it by several months. the whole world wants to come back to new york city. is this the case forever were at the moment? is this a new york dynamic? alan: the monthly increases have been the strongest in new york and some of these areas where we have seen at the early weakness. new york, boston, san francisco -- and it is not in the further out areas. they did see big strong increases. earlier in the pandemic. the most recent monthly ones have been in the inner city areas. over the last 12 months, you see it in areas that weren't

affected earlier in the pandemic. they had large increases over the last 12 months but not as much in the last couple. >> what does this mean for headline inflation? we can look at 4.7 percent or 5% and say this is a few different categories. supply chain hiccups that we could expect to resolve. our really big components -- what do you see in terms of pressure that is going to put on the headlines? alan: those will put a big upward pressure on cpi, particularly core cpi, where rents are 40% of the index. a lot less on the fed's preferred index, where they get half of the way. there will not be as much upward pressure on the fed but there will be on the financial markets and tips. that is going to lead to disconnect last year.

we expect the spread between those to open up to 120 basis points by early next year where the average is something like 30. we expect to see pretty weak numbers on the fed's preferred inflation gauge because you have weakness in core goods prices likely to be seen when you get to the fourth quarter of next year. caroline: to that point, is it right for the fed to look through what is now a sudden flight back to cities and maybe that will be transitory? i am interested in what happens to the fodder for rent as everyone wants to get back out of the cities? do upset things over time? is the only way up? alan: behrendt gauged in their core -- the rent tends to be slow moving

so it will not get too strong until the fourth quarter of this year or into next year but says it is slow-moving, it will be hard to tell if this is just a transitory pickup and going back to the inner cities. or is it something more persistent. that we will have to follow these other gauges like you showed the zillow and apatment list and see if they come back down. we haven't seen it yet. the last few months - joe: do you have a forecast for where it is going to go? even precrisis, we were in the mid-threes. we are into the 1200s. do you see it shooting -- overshooting or getting back to the precrisis levels? how far do you think it could go based on other indicators? alan: for right now, we are

expecting the 12 month to peek out above where it was the precrisis up to four to 4.25 %. we've got official indexes peaking out late next year and a could occur quicker and higher than we expected. caroline: can you dispel =--what shows up? when are these real estate brokers -- all these real estate brokers were offering three months that didn't change the lever of rent? alan: they should be picked up. they tried to give you a month of free rent. bls will take that you are

paying 5-6 rent. some of those things got pretty complicated where you can pick different months in the year or take half rent for a couple of months. it is not clear the cpi gets all of that -- those concessions. they attempt to. joe: let's talk real briefly elsewhere within the basket. we know the contours of current inflation. we know the fed stance. the market is not showing any signs of breakevens. the transit story story -- transitory story -- do you see any evidence to dot plot? alan: no ended has been a narrow increase in response to use cars, new cars, strength in household furnishings and supplies -- furniture--and

airfares which are below their pre-tail direct levels by 12.5%. that is getting back to where they were. for those other things, you will see of movement away from the goods based consumption that we have seen since the pandemic started. down back to services based. that will decrease demand and cost for a lot of goods. i expect strong inflation numbers over the last few months, -- next few months, probably higher than the fed is expecting. this could lead to more hawkish and us. caroline: i want to thank you. getting nitty-gritty with rent coming out. coming up, regulating. some say it is the best past dusk -- best path forward.

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♪ ♪ >> the conversation about crypto is a minor percent of any dialogue we have with any company. it is not terribly important. it could crypto become an important platform? sure. if there was a digital dollar, that will change -- that would be much more impactful than any other crypto. caroline: part of my conversation with larry fink. blackhawk ceo and clearly, he is animated about the media overblown crypto. joe: overblown crypto.

no such thing. caroline: i know. he is having conversations with the government clearly. joe:d officials are paying attention. stable coin -- federal reserve boy -- board of governors saying the views will create a network externality with arrest that the widespread use of private money for consumer payments could fragment the u.s. payment system in ways that impose burdens and raise cost for households and businesses. for more on the stable coin at world, we want to welcome the ceo and cofounder of a regulated blockchain platform that has its own stable coin, one of the world's most popular. thank you for joining us. so much fascination. it is a way to move coins across exchanges. people wonder what is backing them. we have recently had reporting concerns about potential use like how well they are tracked.

why should people feel comfortable that stable coins, whether yours or others, are not a systemic threat or they are backed by what they say they are? >> it does come down to what is stable coin? they are not all created equal. ours is a little different from others because we are fully backed and audited and regulated. it has been approved by a primary regulator. that is different from others. there has been talk about teather and other coins. are they a systemic risk? what could happen? the technology is unlocking a new way to move money which is important and has a lot of interest and demand. at the same time you want to have the right oversight. that is what we have done from the very beginning -- the highly regulated and make sure we can create trust to make this adoption happen at a mainstream

level,p no just for early adopters and maybe crypto enthusiasts. that is the shift that needs to happen for the industry -- how you build industrial-strength, institutional grade products. caroline: it must give you a competitive edge -- the fact that you have gotten regulated and targeted and gone through that process. will this happen to others? will we see certain stable coins fade away? >> it is a good question. frankly in some ways, being regulated is a hindrance in the early stage. you have to move slower. there is more oversight. our view has always been that how are you going to change the financial system in the long term? how are you going to change peoples lives every single day? you can't do that if you are and not trustworthy. i think it is hard to go back and ask for permission.

you have to have done it in the very beginning. there is a real difference between building at the right way from the beginning and building it with a backbone mentality. that can hurt -- work in other industries but in financial services, that is not the right approach to take. i think we will see that over the next year or two because you have to move beyond the crypto early adopters. that is what we have done. we have seen big names come in and use technology over the next months. it can really change the payment system and change how consumers have access to financial services which is important. stable coins allow a lot more inclusion and that is the most important attribute. caroline: are reporting says there are regulators concerned about stable coin who say the things people are worried about with other crypto puritan money laundering. the inability to track it. there are mixers on the

internet. places to deposit as stable coin, put them in a place, and can't trackp it. someone else picks it up and it is hard to follow th coming to get more aggressive or make it easier for regulators to track every hop, skip, and jumped to know who is holding it at any given time or is it sufficient customer joe: there are couple components. if you look at what the number one currency use for money laundering, it is u.s. dollars. that is not meant to be said in a cheeky way. that is the fact. creating a stable coin is going to allow you to understand each cop along the way. it is publicly available. it is not anonymous. it is pseudo-anonymous. the amounts that move are well known to everybody. there are fully honorable forever. we have seen this trading

ability for law enforcement to understand what is happening but partly what needs to happen is the stable coin it. it is not enough to be able to have audited ability. you have to make sure whoever is issuing them -- and i think ideally that should be a central bank at some point -- but there is so much discovery that needs to happen that before you get to a central bank, you want to see the market whittle out what works and what doesn't. regulation will work. that will allow us to say how do we want to construct our controls? all of the stable coins are on smart contracts. you can to develop all sorts of controls. it is lot-- not like bitcoin were nobody is overseeing it. caroline: really interesting. thank you. come back. ceo co-founder.

you're watching stable coin? * mr. cascarilla: i will see with the price of a one dollar stable coin is tomorrow. first quote i will check everyday. caroline: go along. mr. cascarilla: have a great evening. joe: this is bloomberg. ♪

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♪ >> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. emily: i'm emily chang in san francisco. this is bloomberg technology. if coming up, antitrust showdown in the house. it takes up a series of bills like to change the internet as we know it. tech