vaccination mandates. instead, the president will remain in d.c. to advances infrastructure agenda. a source says there is a "strong sense progress is being made." the president will attend a memorial service for former indiana first lady susan -- a shiite cleric calling for wide process with -- participation in elections saying despite shortcomings, voting remains the best way for iraqis to take part in shaping their future. the elections are being held a year before they were scheduled to take place, a key demand of protesters who filled the streets in october 2019 demanding change in the country where corruption is widespread. the u.k. government is taking steps to ease the shortages that have triggered chaos at gas stations. a fleet of reserve fuel tankers

is available and soldiers will be deployed to drive the trucks. a trade association says there has been a drop in the number of stations without gas. france warned the u.k. it is in violation of brexit deal. france says the british denied several small european union fishing boats access to its territorial waters. the dispute focuses on the licenses the u.k. is issuing for small boats. france had threatened to prevent financial firms from doing business if the fishing issue was not resolved. 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 am mark crumpton. this is bloomberg. ♪

>> 1:00 a.m. in hong kong, welcome to bloomberg markets. top stories we are following from all around the world. the world's top central bank chiefs meet to discuss the state of global recovery. we dig into comments from jay powell, andrew bailey and -- hundreds of united airlines workers face discrimination after declining to get vaccinated. discuss the decision to let the employees go. shares of lucid motors soaring. the debut of its electric sedan nears. delivery expected to begin at the end of next month. where watching warby parker. we are looking around 54.25 -- $52.75. it was bad yesterday, today i am

going to save head cap balance and people say, you can't have a debt cap balance unless you had a drawdown. one could argue a 2% drawdown for the yes and he -- s&p is a big deal. the s&p managing to eat out again, up by three tents of -- .3%. flipped into negative tory and now sitting right at flat. getting relief or the nasdaq is going to be yields. they are flat but at the higher end of the range. we punched higher through main technical levels. the story for me is keen dollars. bloomberg dollar index up again today. it was up yesterday. maybe this is an inflation bid. i do not know. stronger dollar continues as sterling gets hammered. speaking of global currencies, central bankers are speaking at

a virtual event about various topics. inflation is front and center. >> this inflationary spike will not lead to a new regime of ongoing higher inflation. the current spike is a consequence of supply constraints meeting strong demand. >> we have no reason to believe this price increase we are seeing now will not be largely transitory. >> excluding temporary factors like this, the underlying inflation is not solely headline figure. >> [indiscernible] alix: joining me is bloomberg economic correspondent michael mckee. >> a lot of agreement among central bankers. their problems are different but they agree on the situation,

that their problems with inflation are largely caused by supply chain problems because we are trying to reopen the economy of the world. but, central banks can't do a lot about supply chain problems. it is a problem of the -- the problem of demand. there is a frustration expressed. all of them have an inflation problem. the u.k., the u.s. and euro zone have too much inflation. japan has too little, even if he doesn't think it is a proper measure. the answer in all of those cases is more fiscal health. the new japanese prime minister promising a fiscal program. central bankers saying if inflation gets out of control, which in japan's case is too low, they would react. the week already knew that -- but we already knew that. alix: i was interested in what

andrew bailey was saying, he was saying it is important to anchor those expectations. it feels like the u.k.'s getting double hit because of brexit. driver shortage is causing more increase. what are medium-term inflation expectations? alix: they're not putting a timetable on that. alix: of course not. >> the short-term lasts longer than maybe we would have defined it a couple of months ago. bailey saying the brexit related shortages and problems are starting to clear up. he is hoping that the inflation rate will start to come down soon. they are all sort of in the dark because they do not know when the next leg of the pandemic is going to be and how that is going to mess things up. he said we thought things were

getting better and then we had outbreaks of the delta variant in a lot of smaller countries around china that had absorbed supply chain manufacturing and that has slowed us down as well. one point from corona worth mentioning, he doesn't think the chinese problems with evergrande are going to be a major problem for the world. he says it is different from the real estate problems we saw in the early parts -- from 2008 on. alix: no rest for the weary, powell back on capitol hill tomorrow with janet yellen. what are you looking for that is different from yesterday? >> that will be the key. even tuesday we got that nasty comment from elizabeth warren about jay powell, but that did not have to do with monetary policy. is there anything the markets have not already heard and have not priced in already about the fed's monetary policy? we are expecting a taper as long

as we get a good jobs report. then what? it becomes a question of when do they start talking about raising rates. i do not think you are getting an answer tomorrow. alix: they will push them, but no. michael mckee. coming up, hundreds of united airlines workers facing termination after declining to get the vaccine. we discuss that and more with ceo scott kirby. this is bloomberg. ♪ ♪

alix: this is bloomberg markets. united airlines saying as many as 593 employees facing

termination after declining to get the coronavirus vaccine following their vaccination deadline. for more, i want to bring in ceo scott kirby and our own guy johnson. scott, thank you for joining us. what has been the reaction? what are you going to do with those people? scott: i am proud of united airlines team. we got over 99% of our employees vaccinated. it took us seven weeks from the time we announced it, and that means a lot to all of us. i know we are going to save lives as a result. we feel really good about it. at the company, the overwhelming majority of employees are very supportive. i have had more employees stop me telling me they are proud over this issue than anything i have seen in my career. same thing with customers.

he did not do it for that, we did it because it was the right thing to do. guy: let's pick up on that, have you had feedback from passengers saying they want -- particularly customer facing staff -- to be fully vaccinated? is this something you have had that heard from the flying public -- is this something you have heard from the flying public? scott: absolutely. i have had a lot of communications from customers that are proud of what united has done. they said they are going to switch their business, but that is not why we did it. we did it because it was the right thing to do. i never wanted this to be a competitive advantage. every airline should do the same thing. i hope they will. it has created a sense of pride amongst employees and customers. in some ways even more so because no one else has done it yet. it feels more impactful doing

the right thing even if you are on an island. guy: the administration is going to put pressure on the industry to do this. i am assuming you think others will follow. how quickly do you think the rest of the industry will follow? scott: we will see what the final rules are. it appears they are going to wait to be forced to do it by government fiat. it is possible that will change but it looks like the government is going to require all airlines by december 8 two either have employees vaccinated or tested once a week. they are going to have to do it by december 8 and i am glad we got to do it. we won't be having the complications of trying to test hundreds of thousands of employees. it is really good this is in the rearview. alix: let's walk this forward a little bit. when we talk to ceos, all they

are saying is the labor shortage is hard. if you let these people go, how do you replace them? is there the workforce to do that? scott: first, getting over 99% vaccinated, we are at 0.7% of our employees being let go. everyone is surprised at how small the numbers. this is that this has become a recruiting tool. we have had employees at job fairs saying i came to this job fair because i want to work for a company that puts employee safety first. and stands up for doing the right thing. that is not the reason we did this. we are more able to import -- we are more able to hire employees than before because there is a big population out there that wants to work for a company that does the right thing. alix: the other way of asking

that question is, what -- demand? kids are back in school, summer is over, talk to me about your domestic traveling? what is demand like? scott: demand was on an upward slope and delta pushed it back. we are starting to recover and it feels like we started to recover again. business bookings over the last couple of weeks are back to the levels they were pre-delta. they are still down 60% compared to pre-coded but they have dropped -- precoded, but they have dropped to 30%. the opening of europe is important. our bookings are actually higher than they were the same week in 2019 pre-covid. we are back on the road to recovery and increasing vaccination rates are the way we stay on that road to recovery. we are probably they are.

you never know for sure with covid. but it feels like we are back on the road to recovery. guy: as you say, we are transitioning from a narrowbody to wide-body recovery. what about the pacific? scott: the pacific is at least a year away. policies are different, vaccination rates are different. zero-tolerance policies are the -- zero tolerance policies and many countries in that part of the world. i hope it is earlier but it is probably 12-18 months later than europe. guy: we talked about labor, let's talk about another cost, fuel. i feel like i am stepping on alex bang -- alix's toes. alix: you are. [laughter] guy: because of the volatility

in the lack of understanding -- reopening of the atlantic caught many of us, have you changed hedging policy? fuel prices are going up, we are seeing demand for fuel pushing up towards $80 a barrel. how differently are you approaching this in terms of how you are managing fuel? scott: we didn't hedge feel before. we don't hedge fuel and most airlines don't hedge fuel. the volatility leads to the option premiums being so high you need fuel prices to go up 30% year out just to break even. every airline around the world that hedges fuel over time you loses money. you can't beat the house long-term. you may win for one or two years, but long-term you lose money. our natural hedge is to demand. when you see fuel prices go up

it is because demand is strong. when demand is weak, fuel prices go down. we have a more natural hedge to the revenue line. alix: the elephant in the room, business travel. i still have not gotten on a plane, no business travel booked. if that does not return in 2022, what do you look like in terms of earnings? scott: i think business travel is going to come back. we need to get out and travel. i have been traveling a lot. i didn't even realize how much i missed it. i took it for granted. business travel is about human relationships. nothing about human relationships have changed. zoom is great for some things, i think it is going to replace telephone calls, but nothing replaces getting to know people. getting dinner with your partner, talking about their kids. nothing replaces the serendipity that happens when you have 10

people in a room together brainstorming. it can happen on zoom. i have been of the view that business travel is coming back. i think it is going to get closer to full recovery, we think -- some will be different. business travel is going to come back because business travel is about human relationships. alix: telephone? when was the last time i was on a telephone? [laughter] thanks for sticking around for that interview, guy johnson. breaking news on were become a stock finally opening after we have been waiting. let me pull this up quickly. you can see the tick by tick as it opens around $54.05. it slowly moves higher up throughout the morning. $54.05 after that direct listing.

we will break that down as well as the pipeline. this is bloomberg. ♪

alix: time for the stock of the hour. definitely warby parker. after its direct listing it opened at around $54.05. sonali basak -- sonali bostic joins us now. >> another model that has gained popularity. when that happened a couple of years ago, there were a lot of companies that had shaky openings. this is a great opening, given it is higher, more than double where it was trading in private markets. we know their sales have been up but their profitability has

been, well, unprofitable. it is a good open for war be -- warby and the designated market maker. one other fun fact about this listing, you have goldman-s tax and morgan -- goldman sachs -- since this model started to take off with spotify and slack, those four players are the players we have seen dominate the market. many other things get shut out of this process. the more you see direct listing model happen, the more you see it eat away at the traditional ipo. people have more options now to go public. alix: how to direct listings perform versus spac's? >> it has been mitt -- it has been hit and miss. there hasn't been a good sample size to say it is a better model, but this one is going smoothly. also a 120-1 15 open is not too bad.

-- 1:15 open is not too bad. but, when you look at other firms, amplitude also rose quite a bit from its open. if you see that happen, it tells the companies that they do not necessarily leave money on the table through an ipo price that may have priced them a lawyer. the market decides itself. alix: an ipo popping, where you question if you lower it is little bit because we expect there to be a pop. well, you leave money on the table, none of that is in the conversation for direct listing? >> exactly. that conversation starts to go away. does this model work? coinbase is another example where the first day of trading did not indicate how to feel about the rest of the day. it was choppy and fell quickly. alix: bitcoin also, it is hard

to see. >> the other fun fact is that the technology is different at niceta and -- nyse and nasdaq. having traders today finally back on the floor as it opens, i remember when this happened a couple of years ago for others, but it is becoming a more popular model. warby was a darling of the banks. bankers were tell me they would often wear warby just a warm up to them and be more trendy to -- trendy to warm up to them. alix: we were talking to stacy cunningham earlier, she seems to think the pipeline was still really strong. recent volatility wasn't going to disrupt this kind of deal in capital markets, what are you hearing? >> great question because the october pipeline is hot. it is as hot as we have seen

since the summer. the question is, volatility, the magic number sources give me is about 25 when it starts to get choppy for equity offerings. let's see if that sticks but so far the vix above 20 has not deter these ipos. alix: great stuff, good hustle. $53 -- well above the $40 potential price we were looking at. sonali bostic joining us. yesterday we had that deep selloff in tech, we are stabilizing. this is bloomberg. ♪ ♪

mark: vladimir putin is in isolation following exposure to covid-19 after an outbreak among his staff. the kremlin says president putin shows no signs of illness and conducted his regular schedule

of meetings over video. president putin met today with turkish president erdogan, his first in person meeting since his covid exposure. in japan, -- is the next prime minister. the former foreign minister and -- is expected to secede yoshihide suga. he will face an immediate test of his broader appeal in a federal election that must be held by november. 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 am mark crumpton, this is bloomberg. ♪

alix: 1:30 p.m. in new york. welcome to bloomberg markets. here are top stories. president biden's economic agenda facing a pivotal day of congress with the prospect growing up a setback in his infrastructure bill. markets take notice to the intensifying debt ceiling standoff. china evergrande credit rating just under default. -- says they have not received payment. the global energy crisis widens. three more energy companies are pushed out of business by natural gas prices bring into more than 1.7 million customers who have lost their supplier. amanda lang is with us as well. the markets have combed down a bit from what we saw yesterday but i am not 100% convinced this

is a solid rally. >> it is a question of seeing buying on the debt. we are seeing just about every subgroup in the s&p 500 in positive territory today. the exception is materials but a broad-based advance but tech groups are the heavyweights. that shows up on the nasdaq in negative territory. still this question on where rates go from here as we get pass from the fed. of course, commentary about the debt ceiling. we can't discount the fact that will weigh on the risks out there. of course, it does not weigh on the long end of the core -- carriers, but the short end. there is a fair amount of risk off mentality, but some analysts would say it is an important sign for the health of the market and belief in valuation. the senate is trying to move forward on negotiations for the

stopgap funding measure to prevent government shutdown. this is a perennial issue. maya mcguiness -- maya macguineas, what happens -- what needs to happen to get the stopgap in place? >> there is a lot of uncertainty. the most immediate thing is they have to find a way to fund the government by the end of the fiscal year in september. we didn't go through the normal process we should have where the budget committees actually passed a budget and congress actually agrees to a budget and we have a roadmap of what we are doing. instead, we are borrowing trillions, having discussions about massive changes and no plan. now we are caught at the last minute -- which happens too often, without a plan to fund the government. they need to pass a continuing resolution rather than the individual bills and we will find out in the next day or two

whether they can get that done. it is not at all clear the votes are there, though we will get that stopgap -- measure. alix: i have been reading more about why doesn't the treasury just mint a $1 trillion coin and buyback bonds from the fed? they are legally allowed to do it. it would reduce the outstanding stock. why is that something not actually on the table? maya: i am rolling my eyes. [laughter] we always find these easy out fixes that people put forward like we could just make it all disappear. what you really do is start to undermine the very agreements in your financial system and change the money supply rapidly and do things like suddenly create currency to pay back the debt. the entire premise of the u.s. being the most credible reserve

currency, the backbone of the global economic system, starts to be whittled away. countries around the world are interested in replacing the u.s. as central currency. everything we do, whether it is shut down our government, talk about default, or talk about creating money out of thin air undermines that confidence. >> on that front, this is a recurring issue. one thing we have just seen not just in the u.s., but canada and europe is an abandonment of any sense of fiscal prudence. not just politicians, citizens seem less concerned today than they did a few years ago. how do we keep this from being an issue that comes up again and again. maya: the best thing would be if we had an understanding of what responsible policy needs. during the covid experience, we should have been borrowing. we borrowed trillions and that was the right thing to do. you want to borrow when there's

economic reasons to do so. the problem we have is that the three years before that, we also borrowed trillions when the economy was strong and now we are in discussions about borrowing trillions more even though the economy -- the trick is, can we convince people that you borrowed not for political expediency? the answer appears to be no. so many politicians and allies are basically making up theories that things are free or pay for themselves or the cost doesn't matter and that is the recipe for a very weak economy down the road once you have left yourself vulnerable and put pressure on interest rate inflation and currency, things you want to keep stable. >> my issue with that is one, as janet yellen said, rates are gonna stay low for a long time. eunice they arise 2% or 3%.

this is a global issue. on a relative basis, the u.s. doesn't have the advantage of other nations of having exactly the same problem of debt. aren't we all in this boat together? maya: as long as the u.s. is doing better than other countries, people are more willing to lend to us. however, it is not clear political stability is as strong in the u.s. as it used to be. there are questions about what is going on in our political system, why we are so dysfunctional and unable to pass budgets and be confident we are not playing chicken with defaults. the second reason, even if interest rates to go up one percentage point, because we have borrowed so much and are at near record levels of debt, the highest it has ever been other than right after world war ii,

even a 1% increase would add over 200 billion dollars to interest payments per year. 2% or 3%? we are in serious trouble. the biggest part of our entire budget. nobody knows where interest rates are going. there is a huge risk that if they go up we are in big trouble because we have already borrowed so much for -- so much. >> thank you so much. coming up, evergrande getting a downgrade. two companies say they have not received a coupon payment. this is bloomberg. ♪

alix: this is bloomberg markets.

-- downgrading the long-term foreign currency ratings of evergrande and two subsidiaries to double c. here is andy brown. can you put this downgrade into perspective for us? investors to the dollar bond still have not been paid and there is a significant power crisis. andy: don't forget, evergrande bonds are a small part of their overall debt. not all of that dollar that is linked to evergrande core property businesses. some is linked to their -- which weirdly have better prospects. real drama is playing out in china, their second largest real

estate company is collapsing and spreading pain across the country. it's in literally hundreds of cities and at the same time we have two simultaneous crises because we've got severe industrial disruptions to industrial production spreading from the industrial northeast, the rust belt, which is beyond the great wall of china all the way south. which is the workshop of the world. that is hardly the result of power shortages -- partly the result of power shortages, but partly because of government enforcing standards. it adds up to the picture of economy wide stress in china. >> one thing that makes this interesting, we have been talking a lot about the various energy crises around the world.

not unlike when it comes to the debt situation in china, the difference is its centralized authoritarian government that has the ability other governments may shrink from. what will be different from china when it comes to the energy crisis? how may they handle it differently from the u.k.? andy: the irony in china is at -- at the root of these crises is government action. on one hand, we talked about how local governments want to enforce green standards, but also on evergrande you've got a government saying we've got to do something to rein in the out-of-control debt of our property developers, which potentially poses a systemic threat. they want to obviously avoid a disorderly collapse. the last thing they want is a lehman moment.

what they are doing short-term is flooding the economy with liquidity. that is important because you've got the national holiday coming up next week and they don't want to run attic cash. people traveling all over the country, eating and entertaining and so on. but, this is a really big test of the chinese government. in order to address some of the epic problems within the system, problems of debt and wasteful investment and environmental catastrophe, they are going to have to accept a lot of disruption, a lot of economic pain and slower growth. how slow that growth is and what their pain threshold is we will find out. alix: can we take the pain threshold lands end put it to the power sector for a second the echo power prices may rise, which will be passed on to the consumer.

what do you think beijing does? do they opt for more power at lower prices and burning dirty coal? or did they stick to their environmental mandate, shut down steel mills and coal plants and transition to l and g? it is like choosing between two good/evil spirit -- good/evils. andy: we are seeing a political power struggle play out within the energy complex. the fundamental problem is that power prices are capped, or controlled by the government and coal prices are fed by the market. so you've got on one hand coal producers, power generators, power distributors, essentially the state monopoly and the government is trying to mediate between all of these players. are they going to accept higher

energy prices? which could crimp consumption and affect industrial consumption. how this is going to play out, nobody knows. amanda: those higher energy prices are also inflationary, what is the overall concern? andy: inflationary and potentially through medium of trade could spread inflation to the rest of the world. these power supply disruptions are snarling many of the global production supply chains which move through trying out. alix: as we look at the data that is going to come out, what are going to be the key read through's you look at to measure what china's pain threshold actually is? andy: already you've got economists downgrading china's

economic growth. not just for this year, but next year too. they are serious about deleveraging, serious about bringing the property sector under control. that is more than a quarter, almost one third of all economic output. they may have to consider gross grinding down to well below where it is now. some economists are talking about 3%, even 2%. alix: great to have you with us. bloomberg's new economy editorial director andy browne. check out the new economy daily from bloomberg economics, focused on what is driving the economy. sign-up for the newsletter at bloomberg.com. staying with energy crisis, the u.k. deepens. three more providers filing for bankruptcy. breaking news, walgreens is said

to be looking at an acquisition of people and health -- we will keep an eye on walgreens taking over. walgreens on the day, and up next we take a look at the u.k. energy crisis. firms have edited to failure because of high prices. stay with us. ♪

alix: this markets. we are watching the energy crisis in the u.k. deep and after three more energy suppliers have collapsed. u.k. regulators looking for a supplier to absorb the 233,000 customers left without a provider.

from london, bloomberg power and renewables reporter todd gillespie. let's start with the scale of this problem. customers without power is a serious issue in a modern economy. >> absolutely. let's not get this too overblown, but -- don't know how much it is going to cost them because tariffs. they are essentially being floated out to the rest of the market with -- the companies to take on these customers and that is 1.7 million households in the u.k. that have lost their supplier and are essentially buffered out of an offering to the rest of the market who don't really want to take them on right now. given they are not going to be able to charge them as much as it will cost them to provide that energy. >> i wonder how this winds up

changing the way the u.k. deals with power. u.k. is still going ahead with the energy transition, that is not going to change, but do you need to start paying more for natural gas to keep natural gas plants online more consistently so they can ramp up when wind or solar fails? were put more money in battery storage so wind can be stored better? this is going to change the dynamics of how the u.k. manages its power situation. >> there have been stories it is a really big problem for the u.k.. we have no storage for natural gas. we are dependent on imports. lots of people have been dredging up, and spied david cameron and -- lots of people have been dredging up comments by david cameron that there wouldn't be any issue like this. now with the energy transition, you have a little bit of -- with

wind. we've got a very inconsistent at the moment gas supply coming from russia. we've got all sorts of dynamics playing into a chaotic supply scene for the u.k.. storage i think is where the money is going to be piled into. hydrogen and potentially nuclear technology the u.k. is considering. >> obviously this is exacerbated by the fact this is a crisis that is happening elsewhere as well. there are shortage issues across europe. how quickly resolvable is this for the u.k., if we put ourselves in the shoes of parliament who is concerned with keeping the lights on? >> in terms of the timeline for this, they are looking at quick fixes.

asking bigger companies to take on consumers. the longer term investment problems for the supply side is going to take a long time. we are talking years, next winter, more investment in storage but they are going to be muddling along for 12 months at least. they've got all sorts of other problems to deal with now, but the regulators have their work cut out. >> makes for this update. we appreciate it. todd gillespie. that is it for bloomberg markets. this is bloomberg. ♪

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mark: i am mark crumpton with bloomberg's first word news. the u.s. recovering from the latest covid-19 wave is taking

hold across the country, with cases dropping or poised to start falling in 47 states and the district of columbia. the seven day average of new cases in the u.s. was about 110,000, down from more than 160,000 at the start of the month. still, some states are managing crisis level situations in their intensive care units. covid strained hospitals. be most concentrated in iowa, montana, wyoming, georgia, and west virginia. lloyd austin told lawmakers today that the trump administration did leave behind plans for a negotiated withdrawal and afghanistan for him to use when he took over the pentagon. secretary austen told the house armed services committee there was no "handouts" given to the biden administration. secretary austin's remarks came after general mark mille