♪ caroline: i'm caroline hyde. romaine: i am romaine bostick. let's take a look at where financial markets stand. the great selloff of 2021 gives way to the great rally. caroline: markets close out the week on a high. a broad-based rebound. and a day rally ahead of supply coming into the market next week. are we done worrying about peak

growth? china is getting more dove which. -- doveish. the fed is promising more root -- support until we have more jobs. this comes before he is said to head to the hill. americans are feeling the effects of the pandemic. we're digging into two indications. one in the home. the other 10 people back home. let's talk about these markets. joe: absolutely. of course, remain talking about the stock market and this incredible recovery we saw about the great crash of yesterday. still a downturn but not a crash. it bounced back in the 10 year yields but the big picture story is how low they've got it. we were below 1.3 yesterday. 1.35 compared to a month ago. much lower. let's bring in cross asset reporter katie. it shows today you get paid for writing out the volatility.

katie: i forget yesterday ever happened. what is helping sentiment is you see that bond rally finally crack. the narrative is it is starting to feel like what to the bond traders know that we don't? that hysteria has faded. i hope you have seen a lot of shorts in the treasury market get washed. it is more extensive -- expensive to hedge for lower yields than higher, which hasn't been the case since august 2020, which tells you to what degree we saw a washout. joe: when we talk about some of the buying yesterday in the bond market, the idea is there was of floor. there was only so much lower yields can go. there is no way anybody else would buy into it. it shows when the time is right, those folks are willing to come in. caroline: you said there was a floor. we got down below 130 and the

market took a step back and said should we be here? joe: is there everything you chose red instead of green? that's your rally dress? katie: yes, -- yes. romaine: yields are up. price down. we can sort that out. no corrections today. katie: the market took stock of what is coming. we have $120 billion of supply coming next week. we have cpi and ppi that could cause fireworks especially after you have that positioning washout. maybe we see it reload next week as we have fundamental data. caroline: bake in the etf world. -- big in the etf world. katie: they made perfect sense this week. you saw a lot of money, into the qs. a lot of money poured into s&p 500 tracking fund.

a lot of money coming out of financials and energy in the real estate etf's. i am looking at iy it has been a long week. r. that is some of the biggest real estate funds. worst outflows ever after a record june. it arose versatile a fortune. -- a reversaal of fortune. joe: jay powell set to testify before congress next week. let's get a preview of that. bloomberg opinion colonist connor. it feels like a long time ago from a market perspective, from the last time we heard from chairman powell even though it was only a few weeks ago. compared to the middle of june 2 now, we have a huge move in rates. do you expect a pivot in the language from the fed or the chair and how they talk about things versus how they might have a month ago? connor: i don't because they are

talking about a congressional audience that is focused on things like the housing market and inflation and things like that. there is a big disconnect between what mainstream people are looking out and people in the trenches looking at the data are scrutinizing and seeing. that disconnect is something we will have to wrestle with. caroline: who wins out in the disconnect? connor: it's interesting because we expect powell to talk about --hawkish is strong but they are likely to taper their security purchases earlier this year than people thought and particular meet mortgage backed securities seem to be an area of emphasis given what is happening in the housing market. you see the housing market's going crazy and the fed is buying mortgage backed securities. it makes sense. even if there is not a great relationship it sounds plausible so we will hear the fed talking about when they might be tapering at the same time that we saw the 10 year at 1.25% yesterday.

it is hard for markets to focus on. romaine: we joke about what happened yesterday with the stock markets falling off and the bod rallying. there is a cadre of folks who are not buying into the growth rate. they are not buying into the inflation story or the idea that the fed is going to move any faster than what was priced in earlier this year. with the data we are expecting next week and in the months ahead, you have any sense here that may the growth story or lack of growth might be proven out? connor: i think you can sort of pain a narrative when you say we see the housing market slowing a little bit, used car prices are cooling-off, stimulus next year isn't what it was this year, so you can say all this and especially if you're looking at what is going on in the bond market, you could say, why would you distrust the bond market when it is giving you a signal

that the move in march was overdone? i think that is compelling even if you are not seeing it in the data. joe: one area that may be heating up is lover's down and used cars are down but a big portion of what americans pay every month and market data looks like that is going to start gathering. it may be reflected in the numbers. connor: if you want the fed to be dovish, one thing is if you found police in september, it is not due into this december. you're locked into the lower rents. even if the stock market is hot, it will not roll to the average american for six to 12 months. we get some breathing room even if the market price goes up rapidly. caroline: you look and awful lot at the real estate market and what has been happening. there has been tug-of-war

discussion whether nbs will be tapered at a different time than u.s. treasuries and what that says about the housing market. is that what the fed is looking at? connor: i think some on the fed are concerned the housing market is on fire and we are supporting the housing market. does that really make sense for what we are trying to accomplish? even if pulling back on the purchases would hurt other areas of the market, for some, particularly into the regional fed presidents, that may be something they did not want to be a part of. romaine: do you think there is the ability that powell can get everyone on board in terms of the public messaging and what is communicated to the market is more in unison of what we have heard than the past few weeks? connor: it seems like he is getting pushback from regional fed presidents but he would like to do that. we have heard these regional

president say one after another we think we should be tapering sooner. we are concerned about mbs purchases. i think that is why markets got so caught off guard. we heard what we wanted to hear with powell but there was not more -- a lot more dissension than we realize. spring was the final straw for some to hold her tongue. caroline: never holding his tongue when it comes to opinions. go read them on bloomberg economy. higher prices on dyson. -- dodges. we will discuss the impact on strained households. this is huge. one in three families cannot afford it at the moment. this is bloomberg. ♪

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romaine: we focused a lot on inflation on the show but we wanted to hone in specifically on one product that is emblematic of some of the inflationary pressures and a product that has a lot of major consequences for a lot of folks. joe: even if headline inflation numbers as people say they will roll over. some acute categories hurting diaper prices. really surging. one area that has dropped significantly. extraordinary gains. month over month. there are categories and of course it is great to say the headline it moderate, but if you have to buy diapers, if you have babies, that is pinched. joining us is a reporter, darrell. diapers or something, if you have babies, you have to buy them.

what is the key driver of the price increases you found in your reporting? darrell: i'm glad to be here. the key driver for everything we are seeing across the industry is the commodity inflation that is hitting manufacturers. when it comes to these raw materials, they come from petroleum and like you see with other oil intensive industries, prices are being shifted to the main sectors and passed down to retailers and consumers are bearing the brunt of the burden. caroline: it is a duopoly. cng runs the most main brands i know as a mother. they could protect their bottom line. we are not to see capitalism -- here to say capitalism is dead but how are -- is this having effects on people from an economic perspective? >> richard dixon was in a tight

spot word diapers were. when you look across the board to folks we spoke to not in the story, this is something that is compounding their finances. thinksmart tightening up for them. apparel costs are going up as back-to-school season kicks off and everything under the sun that is essential or discretionary. when it comes time to pay the bills every month, looking at diaper costs going up, one family who showed it is $16 more past six months. you add that up plus tax and it will take a toll if you don't have unemployment benefits because the governor took them away or you do not qualify. it is an economic conflict for these families. romaine: these are the shorter term inflationary pressures. longer term than we have seen on inflation in these prices. i'm going to play devil's

advocate. i know some of these companies like kimberly-clark would talk about how these diapers are made and the fact that the type of diapers many decades ago were inferior products compared to what a toddler today would wear. i'm curious how much of that has played into the inflation and the idea that prices can't come down necessarily. darrell: that is part of the issue where these are products where they have been innovative overtime. they are improved to the point where parents get everything they want in terms of the quality and proposition in the diapers but when it comes to something where not necessarily you want to innovate a product, you want one that can get the job done, there are not many options because when procter & gamble announced these increases, they said they would offset the inflation with innovation. some of these parents right now

are not looking for innovative products as much as they are just one that can give them value. down the line, we will see how this played out but until september, it will not be fully seen work practical -- procter & gamble's increases were at and we will have new diapers by that time or the price will come down. we will have to see. romaine: reporter for bloomberg news. a great story on the bloomberg terminal and bloomberg.com. diaper inflation is wrecking families. we are talking about companies being able to pass the cost to the consumer. this is one area were companies have that message. we will talk about inflation and the labor market. we will connect into job openings at a record in the u.s. some are turning to tiktok to help get higher. expert on tiktok trying to lead this discussion. coming up next. this is bloomberg.

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♪ caroline: we've been talking about inflationary pressures and while the labor market needs wages improved, we could see this interesting key to the outlook. job openings at a record high. jobseekers are ditching traditional resumes and going to a new area to put their work out there so companies are saying, and work for us. people are saying i have the skills you need by the power of tiktok. the #tiktokresumes is trending at the moment. people are putting up their own resumes and getting stories about how to make your resume stand out. i saw the detroit pistons are looking for a new intern in terms of creativity at the moment, putting out there add from big sean.

an amazing way to connect. romaine: this is why inflation can't seem to hire workers. they are just going to look on tiktok. as we know, job openings -- there are various reasons and we can get into all that but we know objectively speaking by government measures, job openings are at record highs. surging. it is a big part of the story. former vp of people at linkedin. steve, you have a new book out workplace, on the future of work. is this a real phenomenon? there is anecdotal talk about people want to do the sow and they are going to quit and use this moment to find something different. worklife balance. pursue their dreams. i can never tell how anecdotal it is. is this a real thing that is going to change, taking this moment and doing something different with their lives? steve: i think it will but the meals that put this in motion started before the pandemic.

we saw according to bls, over the last seven years, the length of time people stay in jobs move from five to four years and in the demographic of 25 to 35 euros, that has come down to 2.8 years. we have seen that over the course of the last seven to 10 years that people are staying in jobs less than before. i am not surprised to see this but i think as you mentioned, the fact is we have had a year and a half to look at our life differently and in a world where you have more choice and see the world differently, i think many of us will make different decisions and that is what we are starting to see play out with increasing resignations. the april number was the largest number of resignations in the united states. they have been tracking it for the last 20 years. joe: for a lot of years, we have been talking about stagnant wage growth and a lot of people brought the specific -- statistics from decades past. one of the reasons you had better wage growth than previous

generations with mobility and workers were a lot more efficient than today. do you think the companies themselves will respond in a way to this mobility that will actually lead to more sustainable growth? steve: it will take time honestly because listen, the pandemic came out of nowhere. we were first how to learn how to lead people remotely. that is not a major business goal i know of. we are learning as we go. i think we are going to learn over time. i have been recruiting in silicon valley for the last 30 years and it has been an absolute battle for talent. we have been tried to find -- trying to find software engineers for -- like crazy. it has moved into retail and restaurants that have not face this before. their first knee-jerk is we need to do a signing bonus or some kind of park and i think they will soon realize the long-term

victory here is about creating a culture and an environment where people can do their best work. we are still going through a bit of a turn but we are not sure what will happen. people are making different decisions around where they want to be. i was in hawaii last week. every restaurant worker i met was new. a lot of the management staff said the people that were there are not coming back. they are having to train new people. find new ways of recruiting. long-term that will benefit them but we face the same thing for a long time and it forces you to have to be smarter and more innovative around wages. there is many other things that drive people who want to work for you and they think right now what we have learned in the pandemic is people value freedom and independence. i want to be able to go shopping for groceries on tuesday morning instead of wait until sunday laughter new. people are not wanting to give that up. they have had a taste of that. it is going to sustain some change over time but i don't

think we will see anything immediate in terms of new companies and new approaches until they experiment. caroline: i like that you went from -- because it feels sometimes this whole yo-yo effect. kind of an inequality is -- discussion because silicon valley is being paid the big bots - - bucks. you can have that flexibility. if you are in a low income job, you have less freedom. restaurant workers --people are not going back to work until perhaps some of the government protections and payments have been getting, the benefits run out. will the labor force still have that empowerment and strength when this support runs out? steve: i, i, i think--do i think unemployment insurance contributes to people delaying the reentry? i do and part but i don't think that is a bigger picture. the bigger picture is people

have had time to -- many of those industries you mention, those people were laid off and they are thinking that is a vulnerable sector. maybe i should take advantage of the free education of the new online education opportunities being offered around the world. upskill myself and better myself. that is why you see organizations -- chipotle. jacoby is fascinated because they are and a competitive marketplace. they are not a career destination. they are a career transition point. they know people are not coming there to work forever but to work there while they find a job as an actor or finish their degree to go do something different. what tripoli said is we know this is not your desired destination. we will double down on you and give you free education and no student loans and you don't have to stay here. you don't have to pay it back. we are ok this is not your dream job. we want the best of the best we can access.

that creativity is going to serve organizations well and people will seek more choice at least for that next year while we go through this transition period. caroline: what you miss. romaine: bloomberg technology is up next. joe: have a great weekend. this is bloomberg. ♪

♪ >> from the heart of were innovation, money, and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. emily: