deliberations a jury found kyle rittenhouse not lt on all counts. the teenager killed two men and wounded a third last year at a chaotic black lives matter protest. defense lawyers argued rittenhouse acted in self-defense. the 18-year-old was charged with counts ranging from reckless endangerment to intentional homicide and was facing life in prison without parole. president biden's plan to expand the social safety net, address climate change, and rewrite tax policies passed the house of representatives today. the bow comes after months of intraparty squabbling. nancy pelosi urged democrats to pass the legislation. >> today we have the honor of participating in passing legislation for the people to build back better. as i always say, with women, for the children. this occasion were not have been

possible without the vision of our great president, president biden. mark: the legislation now goes to the senate, its fate remains uncertain. democratic senators are expected to make substantive changes before voting on it, potentially in december. bloomberg has learned that washington and beijing have agreed to open high-level channels of communication between their militaries. during a virtual summit monday chinese president xi jinping agreed to elevate talks between the u.s. military and top officials from the people's liberation army, including the vice chairman of the country's powerful central military commission. the white house is now defining a strategy on how to approach china in the areas of cybersecurity, space, and nuclear weapons. u.s. labor secretary marty walsh will meet with members of the transport industry in los angeles to discuss supply chain issues. record-breaking backlogs have late the long beach port,

fueling goods shortages and inflation. the american trucking association also says the country has a current shortage of about 80,000 drivers and is expected to get worse. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. >> chaim amanda lange, welcome to bloomberg markets. >> i'm alix steel. here are the top stories that we are following for you from all around the world. as mark mentioned, kyle rittenhouse was acquitted of all charges. we bring you the latest. plus, europe's reopening stalls as new covid out have some

countries imposing markdowns. we discussed the impact this has had on travel. and covid cases are not the only thing that is surging. so our u.s. mortgage rates. climbing as americans struggle to find a place called home. amanda? amanda: some interesting action across stock markets today. we do have the so-called reopening trades under pressure. even as we see that nasdaq 100 shooting into overbought territory, those of the leaders of this market today. you are seeing strong moves for the chip space, but we should note we have seen a turn to the negative here. we had been in positive territory. we are also seeing a flattening of the yield curve after comments from a key fed official that the pace of taper may need to be reviewed in december. of course, the all-important question, when do rates start rising? some of the things preoccupying starts -- preoccupying stocks.

alix: kyle rittenhouse, the teenager who shot and killed two men at a black lives matter protest in wisconsin last year was acquitted of all charges. want to bring in crime reported eric larson with the latest. what do you know about the verdict? eric: they found rittenhouse not guilty on all five charges. he is 18 years old. the jury had deliberated for -- this was their fourth day of deliberations. deliberations had gone on for some time. there was a question whether or not they would go into the thanksgiving week. obviously they came to a unanimous decision. clearly not what the two victim 's families were hoping for, but kyle rittenhouse was happy. he broke down and collapsed on the floor in tears. alix: you surprised? -- were you surprised? eric: not terribly. the writing may have been on the

wall when rittenhouse took the step of testifying in his own defense. during that testimony he also broke down and that was replayed over and over on the news. was clearly seen as a synthetic character. he was 17 years old when he killed these two men and injured a third. he did not have a prior record. perhaps some of these things played into the mind of the jury. he had a very strong self-defense case. over and over again they argued it was self-defense, even though he was the one with the gun at this rally that he attended and he wasn't even old enough to actually have that gun. they clearly bought the self-defense argument. alix: can you take us to the significance of what this case represented and the time that it happened? eric: sure. it is a very significant case. we all remember the events of 2020 and the social upheaval. the protest that occurred last year, august 2020i'm a took place after a black kenosha man

was shot and paralyzed a white officer. that sparked protests, routing as well. that is why kyle rittenhouse traveled to kenosha from nearby antioch, illinois, where he lived. the state claimed he was there to provoke people, that he did in fact provoke people, and sort of lost that right of self-defense because of that. it is one of many cases involving abe black lives matter -- these are black life -- lives matter protests. outside the court at kenosha there have been protesters waiting for this verdict. alix: what happens now, anything? eric: what happens now is i think all eyes are going to be on the city of kenosha to see how the city reacts to this verdict. there is clearly the potential for, you know, more unrest. hopefully that doesn't happen, but it is certainly something that could happen. the governor has put hundreds of national guard troops on notice and they certainly had a lot of

sheriff's officers, police officers around the courthouse. it is going to be about how the country reacts. the aclu and its go put out a press release saying they were not pleased with rittenhouse not being held responsible for these crimes, is the way they put this was a case that president biden weighed in on. it is clearly something a lot of people were watching. alix: have we heard from the white house at all? eric: not that i'm aware of. they would have to be careful with what they say, i think. it's a go president biden referred to rittenhouse as a white supremacist. he was criticized for that, even threatened with a definition -- defamation lawsuit. they probably will have something to say. alix: thank you so much for that analysis. eric larson joining us on that. europe's reopening is stalling as new outbreaks have countries closing restrictions and downs. what it means for travel stocks,

next. this is bloomberg. ♪

alix: this is bloomberg markets. i'm amanda lange, with alix steel. as we have been reporting, the surge of coronavirus cases has sent austria back into lockdown. germany, debating a similar move. the rise in cases is sparking anxiety. what will it do to travel? adam sachs is the founder of travel economics. great to have you with us. we have to keep this in the context of what has been a reasonably healthy rebound. people were willing -- were willing to travel again, even in

the face of continued cases. it is your expectation about what the situation in europe might do to that data? adam: it is a setback, but i don't think it is a significant one. what we have seen increasingly is that travelers are more and more resilient. of course, a big part of that is vaccinations and the confidence that has produced among travelers. i don't see the rise in cases creating a major setback for travelers' willingness to travel. the policies that have been put in place are -- i think it will be short-lived. the one in austria is going to be a maximum of 20 days. those in other parts of western europe are only for those who are unvaccinated, which is a i know any of the population. which hopefully encourages further vaccination. for those reasons i think it is a setback, but not one that is going to have any enduring effect. alix: adam, a lot of the short-haul travelers were expecting a solid 2022.

the long haul travelers were kind of finally getting out of their whole -- there -- their hole. is 2022 going to look different for these short-haul carriers then what we thought? adam: this is where timing matters. this is happening in mid-november. if it happened in july i would be more concerned. a lot of that long-haul travel happens during the summer months. i think that pete travel season is still intact. it is very likely we are going to be in an improved health environment by then. again, with the borders of the u.s. opening up to western europe and other major markets a couple of weeks ago we have seen significant pent-up amount of demand for travel, long-haul, across the atlantic. i don't see this changing any of that. the vaccine has produced confidence among travelers.

these initiatives are going to be short-lived. amanda: we definitely have seen a strong reaction and some of those reopening traits. some of the other issues we are hearing from airlines are around those higher input costs, higher fuel costs. how much of those do you think will filter into higher prices that might have a more dampening effect than the fear of covid? adam: the increasing prices across the channel industry so far has only brought prices back up to where they were in 2019. while prices are higher, they are only higher in relation to how low they were in 2020. right now this is not been a significant headwind. i expect prices to continue to rise, whether i'm looking at hotels or air tickets. but because consumers have been saving money over the last 20 months, they are still in a position to absorb those cost increases. after that the pent-up demand for people, many of them not

having traveled to the extent they are used to, i think they are going to absorb that and we are not going to see a knock on effect on demand as prices rise. alix: i mentioned the short-haul travelers. the long haul travelers are geared toward business players. i'm wondering if the rise covid cases and these lockdowns -- typically the u.s. is six weeks behind what is happening in europe. does it slow the business traveler return? adam: it does. as we have tracked survey data, businesses have been reactive to rises and falls in cases and hospitalizations. he saw that with the wave that happened at the end of summer and early fall. that is going to be a big factor as we think about travel returning. that said, we are seeing great traction on the business travel front. businesses are in a position where they are seeing business travel as indispensable to operations. whether it is conventions and trade shows or internal meetings, these are happening at

an increasing rate. if you look at the earnings calls for major hotel companies, they are seeing travel back in the range of 70% of 2019 levels. the reports of the death of business travel are highly exaggerated. in the need is going to prevail, even as we see a temporary stall in the recovery. amanda: that is really interesting. that is not what the discussion has been. there has been a suggestion that businesses were not travel. that is a highly lucrative part of this business. i'm guessing 100% of 2019 is what we need to see for real health there. is there optimism? adam: it does get back. i would push back on any assumption that says we have rethought how we travel as businesses, that business travel is no longer essential. that said, it is going to take

several years. our forecast has business travel recovering to not -- in 2024. we get a lot of that back in 2022, so from an operational standpoint the airlines and hotels are going to be able to turn a profit in the second half of 2022. even those dependent on business travel. alix: we appreciate it. adam sachs, thank you for joining us. u.s. mortgage rates are on the rise. we are going to break that down with bob broeksmit, ceo of mortgage bankers association. this is bloomberg. ♪

alix: this is bloomberg markets. u.s. mortgage rates have surged back above 3%. the average rate on a 30 year loan was 3.1%, up from 2.90%

last week. that is the highest since october 2018. i have to tell you, i got my 30 year fixed, 2.7 5%. i got that back in january. i kind of called the bottom, it feels. amanda: it feels like he made a smart move there. it is important to know that it may be that the rise we do see one not be that dramatic. if the fed is right we will see rates normalize. but it is still going to be pretty low. if we are wrong about that, you will look like a genius. we may well see rates shooting higher. alix: i can be a genius either way, let's be honest about that. let's get more information to see which way the mortgage rate is going to go. bob broeksmit, president and ceo of the mortgage bankers association joins us now. am i a genius? bob: you are. alix: i knew it. bob: we think in 2022 rates are

likely to go up closer to 4% by the end of the year. i have seen some comments from the fed that the tapir may accelerate and mortgage-backed sick -- fewer mortgage backed securities will be bought by the fed. we see inflation that looks more persistent than people thought. we think those factors will conspire to drive rates up, probably to 4%, by the end of 2022. amanda: one of the things that seems clear is that we are seeing a rush to pre-approve, we are seeing an increase in application. people see the writing on the wrong -- writing on the wall. is that a healthy place to be when we see demand pulled forward in a market where demand is already kind of skewed relative to supply? bob: i would certainly say that on the refinance side all of our viewers should call today, because rates, we believe, will continue to go up. we have had millions of borrowers take advantage of these low rates, but we still

have a surprising number of people that have rates that are higher than market and have not taken advantage of the programs. we have a lot of things going on to make it easier to refinance. i think if you get in there now you can still enjoy a good, low rate. on the purchase side of things the real constraint is demand. the market is not producing enough inventory, and resales are getting snapped up, still. they have slow down a little, but are getting snapped up quickly. a very high percentage of listings within the first month on the market. and with home prices rising in the teens, like, 18% year-over-year, and actually is healthy to get in the market now before they go up higher and rates go higher, which is a double whammy which will hurt affordability. alix: the rush to suburbs out of the cities, is that real? is that happening? bob: it is a thing, it is not

accompanied by a hollowing out of the cities, which is what some people feared at the beginning of the pandemic. you have seen rents in new york, the sale is over and people are coming back. there are people choosing to live somewhere where they could not live before because of flexibility and work arrangements now. there certainly is a very hot market in the suburbs, and also the secondary and tertiary cities. i don't think long-term it will be as expensive. amanda: we talk about these forces that are driving behavior, we have to ask about the quality, right? especially on some of those refinancings. do we worry about the indebtedness level? balance sheets improved, can we trust on the other side of the break and that lenders are being as prudent as they should be as we head into a rising rate environment? bob: we have good news there too. a lot of the reforms coming out

of the great financial crisis have stood lenders in good stead in terms of their credit standards. we are not eating people mortgages without verifying their income. we have stable products. and borrowers are qualifying with standards that are tougher than there were several years ago, despite the fact that rates have been so low. i think that we have seen delinquencies which were prompted by the pandemic come down nicely. a lot of our wars who went into forbearance. about two thirds of them have exited forbearance in a positive way, meaning they were able to keep their homes and keep making payments. we have seen resilience. alix: on that front, one of the big fears is stagflation. is that being priced into the prudence you are talking about? bob: we see an economic growth which will slow down to

long-term trend, say, in 2023. it will be robust in 2022, come back down in 2023. we do not think that stagflation is a serious risk, but we also are hoping and expecting that home price appreciation, which has been at these high levels, come down next year. it will be a soft landing on value, and re-think with 10 million job openings the economy has a lot of growing to do before we worry about anything like stagflation. amanda: appreciate your time. bob broeksmit is the ceo of the mortgage bankers association. alix: i wanted to restate, the big headline we did get about 30 minutes ago. kyle rittenhouse, the teenager who shot and killed two men at a black lives matter protest in wisconsin last year, was acquitted of all charges after a

two-week trial. a jury found kyle rittenhouse not guilty of any charges, including homicide and reckless endangerment. we will be following any additional developments throughout the day. this is bloomberg. ♪

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mark: i'm mark crumpton with bloomberg's first word news. after three and a half days of deliberations a jury found kyle rittenhouse not guilty on all

counts. the teenager killed two men with an assault rifle and wounded a third last year at a black lives matter rally in kenosha, wisconsin. rittenhouse broke down in tears on the witness stand and argued he acted in self-defense. the 18-year-old was charged with counts ranging from reckless endangerment to intentional homicide, and was facing life in prison without parole. on capitol hill house democrats today passed president biden's $1.6 trillion economic agenda. the plan expands the social safety net, addresses climate change, and rewrites tax policies. the boat comes after months of intraparty squabbling. legislation now goes to the senate, or its fate remains uncertain. democratic senators are expected to make changes before voting on it, potentially in december. austria will impose a nationwide locked down next week in germany

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