♪ >> there's endless reasons for optimism. >> powerful growth will continue into next year, and it is still too early to get positions bearish on the market. >> right now we are well past the crisis and the recovery is underway. >> this growth can be extended as we continue to deal with covid. >> the problem if we don't start tapering is the pressure of inflation. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. jonathan ferro, lisa abramowicz, and tom keene. ferro on sabbatical. thrilled that you considered his new book coming out. we look for that summer 2022. and for -- in for fer

ro, francine lacqua and london. lisa, chairman powell is going to watch claims. lisa: very much trying to get a gauge of this economy ahead of his speech tomorrow at 10:00 a.m. eastern. i do think there's a change in the tone in markets. we went from optimism to pessimism to now full on bull. everyone cannot get bullish enough. it is unclear what chair powell would do with that. tom: what is the tone on the bank of england, francine? is there a taper frenzy there? what is the battle with governor bailey right now? francine: there's talk about a taper, but it probably would not come before the fed. it is very different here because we are contending with brexit and there's a severe shortage of workers for almost all indiscreet -- almost all

industry groups. it is a small open economy, so it kind of comes at the u.k. from all sides. the bank of england is in a tricky situation, a bit like the fed, but even more difficult because it needs to fine-tune its message. tom: we stop the show right now to inform you of news that matters. you mentioned last hour, there's a chicken shortage? francine: there is, there's a chicken shortage because of the lack of drivers. i never get nando's because i know you usually get fancier places, tom, but it is one of the more popular chicken places here in the u.k., and they had to close about 104 stores because there's a shortage of chicken. tom: why did we have francine on today? there you are, chicken updates from the united kingdom. valuable for radio and television, coast-to-coast in

america. what we are looking to is the one change this week. the fact is, yields elevate. lisa: that's true, they do elevate to one point 35%. that to me as a notable move. -- elevate to 1.35%. that to me is a notable move. 51 record highs in 2021, with the most recent one coming yesterday. the fact this just keeps happening, it might be a sleepy market, but it keeps going higher. tom: 17.43 on the bics. i'm using that as a casual bellwether. the pros are looking at other fancier messages of volatility, but it is a vix that may be should be 16, and it is not. it going under $47,000. it is a drawdown on bitcoin. that will be chapter 14, i think, for jon ferro. curve steepening slightly with these new elevated yields. brent, $72 a barrel.

francine breaks into tears over that statistic. in the currency market, finally a little bit a fractional giveback. i'm struggling with the data check because it is august. lisa will save us at the wall. lisa: we were supposed to get a three-day confab in jackson hole. basically, we get one hour. we get jay powell speaking tomorrow at 10:00 a.m.. people are not gathering in jackson hole today. is virtual. but today, we hear from the kansas city president of the federal reserve, esther george, joining our own michael mckee in about a half an hour. interesting to see how she frames this in light of the quick transition to virtual, the increase in delta cases, and how that might affect policy discussions at this meeting. at 8:00 a.m. which get initial jobless claims. interesting that bloomberg intelligence put out an economics piece talking about how the client and jobless claims puts -- the declining

jobless claims, how do we get workers? how do we get chickens? if you want chicken nuggets and a milkshake at a mcdonald's, it is going to be a problem. tom: thank -- lisa: thank you, tom. then we hear from general motors' ceo, mary barra, to discuss the path forward for a company that has seen the price of their cars go up dramatically even though there seems to be a supply chain disruption. tom: but lisa, she's got to talk about the electric car. you've got to take them into the shop because the battery is going to blow up thing. lisa: the idea of some of the regulatory scrutiny from the u.s. government, the idea of what that bar is, and what the competition is like at a time when any type of regulatory scrutiny really dampens potential interest. tom: we welcome all of you on

radio and television. this is the important conversation today of the emotion of what to do. you know the cliche. there is a wall of worry, and darrell cronk is esteemed and able to write about it at wells fargo. he's their chief investment officer. i love your note because you go to the emotion of this. forget about the textbooks. forget about all of the fancy stuff. you say here are the worries. you've got to feed these. you've got to follow closely these, and you've got to fear these. what do i fade here on the worries i can ignore? darrell: good morning. i think there's a number of them that you can actually fade. this one may be a little controversial, but i think from an economic and capital markets standpoint, delta is one of those. you can't fade it from a health standpoint, but i think you can fade it from an economy note, just of 51 new highs that was just discussed.

there's some violence rotation under the surface from growth to cyclicals to bond proxies and back again. but beyond that, markets still move higher. i would watch the debt ceiling. i think you've got to fear the debt ceiling. september is going to be a white knuckle event. you've got a whole bunch of things going on there, with the budget resolution, perhaps serving the debt ceiling and ask ordinary measures. you've got the reinstatement of powell. lisa: september is going to be a white knuckle month at a time when we have all bears easily blown out of the water and everyone trying to get more bullish on absolutely everything. using this is the problem, setting up for kind of a perfect storm in the next few weeks? darrell: i do think it is going to be a lot of headlines, i guess is what i would say. we've got the bipartisan infra structure package, a $3.5

trillion spending budget legislation, potential government shutdown, and the reappointment of fed chair powell, all of which have to get somehow resolved and progress in september. we know where the partisan politics are, so this is a real risk. 10 years ago this month, august 2011 when we downgraded the u.s. debt as a result of a standoff, so that had a 24% decline in consumer confidence and a 17% decline in the s&p. i think in the end, they do find the resolution, but it is not going to be without some of those white knuckle events. i think it is going to create a september to remember out of washington. francine: i like that, september to remember harriet -- to remember. how much of that white knuckle event will come from volatility? darrell: we actually think the dollar is in a near-term peak. we think it is in a longer-term

kind of sideways trend with some we getting here, which is part of the reason you're getting a little bit of that bullish sentiment. people are turning things back on. what is interesting here is if you get under the surface, i am paying attention to high yield spreads and credit oas. they are up 60 basis points in the last two weeks. so we need to pay attention to that. you've got emerging markets now negative year to date, and copper and oil both off double digits from the previous highs. there are some things we've got to pay attention to. tom: darrell cronk, thank you so much. too short a visit. with wells fargo, their chief investment officer. francine, i know you haven't been doing this with us, but there is a pendulum out there. it is a pendulum of a perfect storm. ferro is doing the gilligan's island thing. he's in the pacific. where is he, tahiti, fiji?

lisa: he's writing his book on meditation. tom: i think he's in fiji or something like that. lisa: the idea here of potential political risk, that is what he was talking about. the idea of a september to remove or, a perfect storm. he's got great catchphrases. honestly, you look out over the next couple of weeks, and given how bullish people have gotten, is there that fragility? tom: i know what francine is going to say. i've worked with her for years. here's francine. lisa, have an abril spritz -- have an aperol spritz. francine: you know what haven't talked about? china regulation. this has been over the last two weeks, basically china selling off, european stocks kind of getting their impetus from china and the asian markets, and then you buy the dip in the u.s.. i don't know how long this lasts

into september. tom: lisa, again, that goes to the point of a white knuckle september. to francine's point, we've heard from inda karen and -- from end curran and others about china this year and into next year. lisa: the reaction in markets is, nah. you can get yields. the fed will come in. it has not been significant. tom: it is like the red sox pitching staff. let's just cut to the chase. it is going to be the andrea gail of septembers. the perfect storm. futures at negative four, dow futures go the other way, up 10. lisa stay with us. on the equity market, sam stovall, cfra. we do that next. this is bloomberg. ♪ ritika: with the first word

news, i'm ritika gupta. the u.s. and the u.k. are warning citizens in afghanistan not to travel to the kabul airport. they say there are threats of a terror attack. the biden administration says it knows of about 1500 americans still in the country. israel's prime minister plans to discuss strategy on iran today at the white house. they fear iran is speeding up its nuclear program at an alarming rate. israel has said it may use secret attacks. the labor shortage in the u.k. is leading consumer businesses to be pessimistic, according to a survey. the survey found optimism at -17% this month, down from a positive reading of 47% in may. this is as restaurants and bars can't find enough workers to fill jobs after the lockdown. western digital is in talks to merge in a deal involving two chip companies that could be worth more than $20 billion. the company's are longtime joint

venture partners. the combination would create a bigger competitive force in the market for memory chips. shares of china's evergrand are collapsing in hong kong. it has wiped about $80 billion from what was the company's was valuable listed asset. evergrand is the world's biggest property developer. 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 rick agrippa. -- i'm ritika gupta. this is bloomberg. ♪

>> at the end of the day, there's got to be good, renew motive job opportunities for

middle class and lower income americans paying rising wages. that is what we have, with a robust recovery behind us, strong tailwinds, strong job gains, wages going up, and very closely connected to the rescue plan. tom: jared bernstein of the council of economic advisers, speaking of divide and plan, a $1 trillion overlay expected there. we spoke in the last hour about afghanistan, about and -- about an eventful day near the kabul airport. we turn now to annmarie hordern. i look at the infrastructure bill, and what is so telling to me it is it is nowhere to be found in the debate of the zeitgeist. we had a vote. policy -- pelosi won, and it is gone. how gone is the introductory

bill until september? annmarie: you make a good point. the is really prime minister is visiting today and having a meeting with the president, but we are seeing a little bit of scoop come out in terms of what the house and senate and these committees are starting to draft up in terms of language. overnight we heard about one about conservationism when it comes to natural resources. some house democrats want to spend some $30 billion. some of that, they would get that money between eleanor proteins and royalties on oil and gas and pipeline companies. as we lead into september, you're going to hear a little bit about where these democrats are moving in terms of what is going to be the detail of that 3.5 trillion dollar package. but nothing is going to be set in stone until september. tom: we've got to get to september, and part of that is a constituent reaction. what are the politicians hearing about an overlay of $2 trillion,

$3 trillion of new ideas? annmarie: we just don't know yet because every politician is selling it at home very differently. the progressives are saying we have about five agenda items we want to be in and a lot of that has to do with social programs and climate initiatives, while you have more centrist moderates saying don't freak out just yet. we are still negotiating this. $3.5 trillion is a topline figure. this budget resolution is just a framework of potentially what we could see. no one thinks, and we spoke about this yesterday because i know you had greg valliere on, no one really think they are going to get 3.5 trillion dollars. that number is likely going to come down. lisa: a lot of this does dovetail into the white knuckle situation darrell cronk was saying just recently. i am curious how far we have gone in terms of negotiations of the debt ceiling debate, of lifting it or prolonging it to

enable the economy not to default in the united states. annmarie: it is an excellent question because it is about the fiscal health of the united states, and these conversations have been very muted. of course, this week was all about the debate within the democratic party about moving forward that rule of the resolution and putting a firm date on the bipartisan infrastructure. but when it comes to the debt ceiling, the republicans just continuously push back and basically consider the conversation moot. they say if the democrats are already going to have a budget reconciliation program, they need to put the debt ceiling in that. but the democrats especially leading up to the midterm elections don't want to be the ones to have to edit that into their $3.5 trillion reconciliation package because they don't wanted to be seen that they are being reckless with the u.s. finances. they want this to be a bipartisan approach. there's going to be a lot of back-and-forth on this between september and october and when the cbo says the u.s. could

potentially run out of those funds, but this is at the moment just completely mute because foreign policy has taken center stage in washington. francine: how much is the president also focusing on some of the cyberattacks and ransomware? are we going to see more of an effort after the pretty difficult summer months we've had on that front? is he going to step up the efforts to try to do a u.s. counterattack? annmarie: we had the executive orders earlier this summer directing the agencies to really step up cybersecurity, and yesterday we had dozens of executives coming in. this was really more of a summit , the first start of how the private/public sector can work together. what was so interesting about his remarks yesterday is that he did call out russia. he said we know that some of these ransomware attack's come from the likes of russia, and that was in may. we know when the colonial pipeline attack last year with

solarwinds, he said he looked putting in the eye at the geneva summit and said we want you to take care of these groups operating in russia "because you know who they are and you know where they are." so it is a little but of a geopolitical concern as well for the president. lisa: there's also an issue of afghanistan, just going back to what is largely thought of as a debacle in the manner of the withdrawal. i am curious, from your perspective, how much the cybersecurity issue dovetails into increased terroristic threats, including potentially stemming from that nation. annmarie: i think the foreign policy team in washington for the said adminstration would say leaving afghanistan come part of that was to put money towards where the future potentially of those threats could come, like cyberwar fair. over the past year, we have seen a number of attacks from actors, especially in russia and china. this withdrawal, though, certainly center stage as we

have only a few days to get the civilians out, and secretary of state antony blinken yesterday saying about 1500 american citizen blue passport holders. there are a number of other people there who are green card holders. these people need to come out before the military starts to wind down, and right now, from what i am hearing with people who are also trying to evacuate and journalists on the ground who are trying to get family out, it is very difficult get anywhere close to the gates and for the u.s. military to get onto the tarmac evacuate. overnight, in the middle of the night last night, the u.s. embassy in kabul released a security alert saying if you are anywhere near these gates, please go home and we will direct you to the airport because they are quite concerned about a potential terrorist attack at that airport. tom: thank you so much, annmarie hordern in washington. on the markets, about an hour in

six minutes away on claims. we will have a lot on this as well. we've got some serious anticipation of one of the more conservative presidents of the fed. lisa: esther george is joining us in about five minutes with erin michael mckee. curious to see -- with our own gimmicky. -- with our own michael mckee. curious to see how she frames out this conference. they were planning jackson hole, canceling all of those flights, all of those hotel rooms, saying we just can't do it in person. tom: it is certainly a different conference for the phd papers and the discussions around those papers, which at times, when everyone is together, can really get heated. i saw someone once almost punch the great seven foot bear outside the lodge. took a swing at it. [laughter] he was so angry. francine: i will never forget

that image, tom. maybe they will do that with inflation. tom: for those of you interested in the monetary state of the nation, the president of the kansas city fed next, with our michael mckee. red and green on the screen. claims in an hour. this is bloomberg. ♪

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♪ tom: good morning, everyone. francine lacqua in for jon ferro. tom keene and lisa abramowicz. we are watching the data, particularly of claims here in exec lee when our. -- in exactly one hour. john ryding scheduled to be after mr. mckee. right now, mckee begins his work in jackson hole. the number one issue is taper. no, not the economic taper. the taper of my waist after three meals at the pioneer grill. guess what? it is not going to happen because we've gone virtual. mckee is virtual, and the esteemed esther george is virtual. let's listen. esther: we had hoped for an in-person meeting. we knew in the back of our mind

that would be a function of how the virus unfolded, and as we saw last week, risk levels went up, and in the interest of our guests, we pivoted to a virtual platform. so disappointed, but still looking forward to a great conference. we've got a great lineup of speakers and papers that i think are going to bring insight to important topics. michael: you lead to an important question, the latest covid spike. how do you think that is going to affect the economy? esther: i think it is a risk to the outlook, but what we have seen so far is the economy continues to grow at a strong rate. consumers are still spending. the labor market is continuing to heal. we saw good job gains last month. so the outlook i think remains a positive one. we will have to see what impact

this flareup in the virus might bring. you can imagine it might slow down some of the returns to the labor market, but emerald expect at this point that it will derail the economy as we saw last year when we first had to deal with the virus. michael: do you think it slows down your timetable for when you might want to taper because you might want to wait and get more data? michael: as i look at the progress -- esther: as i look at the progress the economy has made so far, it really does suggest that we have come to a point where we can begin to ease up on the amount of accommodation provided to the economy. that is different than suggesting that we have arrived at the objectives that we have in terms of full employment and price stability. so i don't think that it changes my own calculus that it is time to begin to make those adjustments, given the gains we have seen so far.

michael: have you gained enough on the employment side, especially in the diversity area ? have we seen enough progress, especially in terms of getting minority and employment down? michael: clearly, we have not -- esther: clearly, we have not seen the labor market fully recover. there is still slack there, when you look at millions of people that have not come back into the workforce, have not yet resumed working yet. as you noted, when you begin to drill down into who is recovering, who's not recovering, we know that there is disproportionate outcomes right now for black and hispanic workers. that i think is a function again of watching how the labor markets heal and how the economy recovers. to the extent that some of those contact intensive sectors can continue to bring jobs back on, we saw that last month. we saw leisure and hospitality

come in pretty well. if those kinds of gains can continue at a healthy pace, than my expectation is we will continue to see the impacts begin to narrow across many dimensions of the labor market, and that would be a good sign. michael: is there any division on the open market committee about when to taper? wall street is making a lot out of the fact that some people think we should wait until the end of the year, and say we haven't seen enough progress, and then there are people like you and other colleagues who say we have made enough progress. esther: this is a big committee, as you know. one of its real strength is diversity of views it brings to looking at a common set of data. that is a healthy discussion, and you often see those differences emerge at the point that the economy is turning. so it is a healthy sign for the

committee to begin to debate those issues as we judge when we have made progress toward the objectives we have set up for the economy. michael: i am just wondering if wall street is making too much of it, the idea of whether you say something in september or november. is that cutting it as a policy to finally -- policy too finely? esther: i think what you've seen is a commitment to communicate clearly, to make sure that we are being transparent about the factors being considered for that transition as it relates to asset purchases, and i think that is what has been happening. the markets, the public has been hearing those communications. of course, we are coming into a meeting in september where we will continue to talk about how the economy has unfolded and the timing for adjustments to those massive purchases.

michael: interesting story today about how wall street doesn't care as much about when you begin the taper as when you ended. what is your view on how fast you would want to get out of the qe business. esther: i think it is important to get started, and the conditions of pace, the timing of when we end, i think i am open-minded to listening to the debates around that. but i am less interested in deferring that decision. so i think it is important to relay center on when we believe the progress in the economy is sufficient to start that process. that is really where i am focused. in that sense, i think we should get started this year so that we can begin to pair back the amount of accommodation, watch to see how the economy unfolds after that, and then down the road, be in a position to make

decisions as the economy changes on what we need to do with our policy rate. michael: i am going to guess you would agree with chairman powell that tapering is not tightening, and that the two are not connected. but the way traders see it, at this point, you aren't going to start tightening until you are done with tapering, so there is a bit of a connection on the backend. i am wondering if you agree with the numbers of the committee who say we should get it done faster than we did last time. esther: i think there's good arguments for that. again, depending on how the economy unfolds, the arguments that ending the asset purchases will give the committee some flex ability to judge the progress in the economy, but i don't think that is in anyway and mechanical position, and one that we can lay out today, whether it is a certain amount of months, the conditions really that have been laid out in the guidance from the committee has

been that we will have achieved maximum employment and price stability objectives when that rate decision is made. michael: whatever decision you make about the pace of tapering, you are doing $120 billion a month right now. at what would anybody even otis in the economy? -- even notice in the economy? esther: i will be watching for that because it is a tremendous amount of accommodation going into the economy right now, and assuming communications have been laid out and to committee's response to how the economy is unfolding is clear, you would expect the economy to be able to work through that. that is my expectation, that with good communication, with clarity around the factors that we judge that are pushing us toward our mandates, that that

will all work out in terms of the economy's ability to absorb that. michael: the last couple of meetings suggest that you have all essentially reached your mandate on the inflation side. i am wondering where esther george the inflation hawk is at this point. what do you thing about the progress of inflation? do you have some concerns that maybe be it is not transitory? esther: i think watching the level of inflation right now certainly has gotten my attention. it has gotten the attention of many households and businesses in my region. they frankly had not had to think about inflation for many years in their decision-making. so it is not something to ignore by any means. having said that, i do think it is reasonable to assume that what we are seeing right now is coming from a combination of robust demand running up against supply constraints.

that of course is keeping upward pressure on prices. over time, i would expect that to moderate, and that i think is a reasonable assumption to make. but that of course will depend on a variety of other factors. to what extent does risk from the virus affect those supply chains? will they become more persistent? will it begin to build into people's expectations in a way that will cause us to have to rethink that policy accommodation different than we are today? michael: you've always been on the lookout for inflation, and one of the first to warn about the possibilities, so i am wondering if you think we would have time, or you would have time, since i don't have a boat, to react if inflation proved not to be transitory, and that you are not behind the curve. esther: it is hard to say today, given where we are in this recovery. certainly the committee has the

tools it needs to respond to inflation. that of course is always a function of understanding what is going on in the broader economy. it is hard to judge, but i think no one should question that the committee is committed, that i am committed to a 2% inflation objective over the long run for the economy. we will just have to see how this transition in the economy from a terrible pandemic shock to beginning to recover from that unfolds. michael: i have to ask you one last question on the fiscal side. leaving aside the merits and the partisan issues involved in the budget that was just passed by congress, do you worry that billions more, hundreds of billions more in spending would be inflationary? esther: i think the question of fiscal spending is one i am

going to defer to fiscal policy makers to judge. i think as a monetary policy maker, i will be watching carefully any number of impacts to our economy, including fiscal spending, to understand how it might change the dynamics for how we achieve the objectives congress has given us. michael: i actually have one more question. you talked about the great guest lineup you have. there's one in particular that everybody wants to hear from. the minutes of the last meeting said no decisions were made, so i am wondering what we should expect from the chairman. is he going to be giving us guidance or opinion? esther: well, the chairman has not shared his were marks with me, so i could not honestly tell you what he will be offering. but i am sure it will be worth listening to. tom: from the midwest, esther george of the kansas city fed and a decidedly different president of the fed. she does not have a phd in

economics, but just a simply different path, replacing, sonic -- replacing thomas honig at the kansas city fed. i've got to get to breakfast at the pioneer grill virtually. michael mckee, i really want to go to the voice and place of esther george in a washington fixated by powell, brainard, clarida theory. it is different outing kansas city, isn't it? michael: this is one of those times when the fed bank presidenta add a lot because they are on the -- fed bank presidents can add a lot because they are on the ground in their district. they can see the course of the economy through the disease, and whether or not inflation is going to be a major issue. if esther george, who has always been an inflation hawk, isn't particularly concerned, then there's probably not a lot of

concern out in the kansas city district. tom: the inflation us to -- the inflationistas are in retreat, but define a hawk right now. i don't think we know, do we? michael: it is angels dancing on the head of a pin. tom: that was almost the name of the show. [laughter] michael: a hawk is someone who wants the paper sooner. right now we are talking december, november, so if you're talking about a september announcement, it doesn't make that much difference. they are all kind of in the same boat at this point. there's less disagreement, and you heard her answer my question on that, then wall street would think. lisa: to your question about liking the conference virtual, basically dismissing longer-term implications about how this may affect their policy decision-making. do you hear that consistently from others on the fed, that basically this is just a circumstantial issue having to do with an idiosyncratic patch

of virus cases in the region where this conference is going to be held? michael: that is what you hear from fed officials, although they caveat that with we have to see because nobody quite knows where this virus will take us next. we didn't anticipate this came city fed symposium -- this kansas city fed symposium being canceled. so there's a feeling that we are going through another wave, but the country has changed. we are not going to lock down as much, some ab the economic impact is not going to be a great. francine: in your great conversation with the fed president there, how much did you feel that she was way down -- she was weighed down about the possibility of doing a misstep at this point in time? michael: i don't think she's particularly worried about that. i think the focus will be on jay powell and what he says, so the fed bank presidents and wall street understands they all have their own opinions, and they've expressed them for many weeks now. the idea is leave it to the

chairman, and we will get whatever takeaways from his views. the rest of them are just kind of reflecting what they have learned in their own district. tom: michael mckee, greatly appreciate it this morning. michael mckee will be here in 44 minutes with jobless claims as well. looking forward to john ryding afterwards. i find fascinating here at jackson hole, and i have always complained about this, tom honig would have punched me, they don't release the papers until they come out. lisa: i agree. tom: which i just can't stand. i want to read the papers. let me rephrase this. there's like eight papers, i go to mckee, and i go, which one should i read? he tells me which one to read, and i read it. lisa: do you read it front to back, or the first few pages? tom: i read it at the pioneer grill, printed out, over the pioneer grill breakfast.

i read it on a couch next to tourists. lisa: in particular, how esther george dodged certain questions such as the fiscal stimulus question, the idea of well, that is not our job. we look at everything that could potential he come up has any ramifications. we take everything into account. how much can we absolutely learn as the fed looks at a scenario where they are still weighing all risks? tom: and francine, the process here is so different from the bank of england. over here, the bank of england has always been removed from the debate. i know that is unfair. francine: i don't think it is unfair, actually. we look at the differences between the bank of england and the fed, you have a lot more to contend with. one of the things we keep on hearing from the ecb is that they worry about when the fed starts, and there is a great piece saying that we focus so much on when tapering starts, we forget when it ends, and that will be crunch time for the

markets. but the ecb is looking at some of the spillover effects of wind that starts in the u.s., so europe is kinda following at this point. tom: red and green on the screen right now. on radio, on television, stay with us. claims in less than 45 minutes. this is bloomberg. good morning. ♪ ritika: with the first word news, i'm ritika gupta. rising coronavirus cases are limiting what fed chair jay powell can say about what is next for u.s. monetary policy. powell speaks tomorrow at the annual jackson hole symposium. the conference has been turned into a virtual one this year. powell is excited to reinforce the message that it will probably begin appropriate to begin scaling back the fed's bond buying program by the end of the year. the u.s. and the u.k. are warning citizens in afghanistan not to travel to the kabul airport. they say there are threats of a terror attack. british prime minister boris johnson discussed the evacuation today.

pm johnson: i thing we have to be transparent about the risks and realistic about what is going on. you will appreciate that there are terrorists out there. ritika: the u.s. says there are still about 1500 americans in afghanistan, but many apparently don't wish to leave. offices in manhattan have lowered their expectation for a return to offices. a partnership new york city's has they now see 41% of office workers returning by some timber 30th, down from an estimated 62% in may -- by september 30, down from an estimated 60% in may. several vaccination sites reported foreign particles found in vials. moderna said issues arose at a contract site in spain. speculative that bitcoinrally's debts that bitcoin's rally -- that bitcoin's rally is running

out of steam. bitcoin and other cryptos are lower today. 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. ♪ is is bloomberg. ♪ ♪ pres. biden: the reality is most of our critical infrastructure is owned and operated by the private sector, the federal government can't meet this challenge alone. tom: good morning, everyone. we greatly appreciate your attendance. the president of the united states advancing the story forward as they see it, as we heard from ritika gupta, annmarie hordern, and emily wilkins. it is a really dicey time in afghanistan. we will be following that through the entire morning as well. what you need to know is you take the subway, you don't take

the nrbq. you take the nqrw. if you are up by central park, you are by nordstrom's and their swanky new store that pretty much everyone says has been a colossal failure. you wander down on the nrbq -- that is a music joke, before lisa's time. [laughter] you wander down to macy's. in the distance, 12 minutes on a bus has never been greater. it is stunning. dave: not on the stock market, anyway. i was struck by the reaction among investors to those two companies' results. i through coals into the mix just so you could have something -- threw kohl's into the mix to see you could have something to compare to. i've got to tell you, 37%

different because you saw nordstrom's go way down yesterday after its numbers after last week. macy's went way up. tom: you look like dana tall see. give us the securities analysis on this. why? dave: they are much smaller companies now than they used to be. tom: all you do is much in a brand, and that gets the difference. what is the brand difference between macy's and nordstrom? valentino? dave: i don't know. i don't shop at those stores all that much to know the brands. it really comes down to the fact that these are smaller companies now because the industry has really been hit by the rise of amazon as much as anything, and as a result, you have stocks that become more volatile along the way. you go back seven quarters, the gap was 30 points top to bottom in terms of stock market reaction. they are just more volatile companies now, given what has happened to retail.

and of course, you through the pandemic in, and you could argue that has really heightened volatility. lisa: dave wilson is not a nordstrom or a macy's guy. he's a louis vuitton kind of guy, i think. there is a question, though, of how much there has been a shift away from brick-and-mortar, and now kind of back to brick-and-mortar, with even amazon opening some stores, distribution stores, but also this emphasis on a multifaceted storefront that can also do everything in terms of deliveries and pickups. how much have these stores adapted to that, and what kind of traction are they getting? dave: i believe the word you are looking for is on the channel -- is on the channel. that is -- is omnichannel. that is the kind of jargon of the industry, being able to buy online, pick up in the store, whatever you want. these companies have adapted to that, therefore making shoppers

happier. so they have adapted to some extent, but the idea of amazon going in the other direction tells you that there is value in actually being in a lot of places so people can pick up stuff, even if they ordered online. tom: did you ever see nrbq, the new rhythm and blues quartet? dave: i can't say i did. tom: they were phenomenal. i saw them in newport, rhode island. these guys were from kentucky and they ended up with a record plan in new york. it was like an original blues thing, nrbq. dave: i am sorta familiar with the music, not enough that i can say titles of the top of my head. tom: did you like i did the best from nordstrom down to macy's? dave: i like that. lisa: he needs the ego boost, come on. dave: now you got to make

out how to get that bus to stop at kohl's. tom: i think some others would say it is not working. francine: tom, if anybody believes that you take the bus anywhere, then they will believe anything. [laughter] treasuries at 5%. lisa: i will say, you were talking about the band, can we talk about having a drink of uzo ? tom: uzo? francine: uzo and doing luxury shopping. tom: i wouldn't know anything about that. lisa: it is interesting to see all of these transformations, and interesting that dave also pointed to retail sales coming down. we will be getting retail sales data tomorrow, just ahead of the powell speech. interesting to see if we will continue to see momentum there. tom: in the next hour, sam stovall with us. we've done a lot on equities recently. we are getting reaffirmation,

and sam stovall is never a super bull, super bear. that will be must listen, must watch. claims in half an hour. this is bloomberg. good morning. ♪

♪ >> if you look at every thing we've been through, it is not clear we went through a recession, so therefore it is not likely we are going into a recovery. >> there's endless reasons for optimism if intact growth is accelerating. >> monetary policy is getting a bit more rational. >> the big problem if we don't start tapering is the pressure of inflation. >> i would watch the debt ceiling. i think you've got to fear the debt ceiling. september is going to be a white knuckle event. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. lisa: countdown to jo