>> from the heart of where innovation, money and collide, in silicon valley and beyond, this is bloomberg technology with emily chang. caroline: this is bloomberg technology. we will take a deep dive into president joe biden's pick for jerome powell and lyle brainard. will this help avoid a

contentious battle heading into an election year? let's take a quick look at the market reaction to the announcements. big tech took a hit we maybe see -- took a hit. we may see a more hawkish tone. many felt brainard would be a dovish voice. no news on what sort of -- who will head that part of the federal reserve. largely because we did not see yields push so much higher. that is we expect a rate hike as soon june 2022. gold futures fall down 2.4% as inflation could be tamed somewhat quicker to bitcoin at 56,000 off of its highs. not proving much of inflation hedge. it was down on the day.

some of the key tech names under pressure. the two your yield -- the two your yield. the dollar index continuing to rally up for tens of a percent. emerging markets feel the brunt. i do want to welcome our bloomberg television and radio audiences as we head to washington. we are joined by joe mathieu. and democratic senator mark warner to chew on the news we can't today. finally -- we got today. finally the announcement. the federal reserve will be held by chair powell. we wait to to hear who will be nominative to senator, your reaction to the peg. >> i think it was great news. in jay powell, we not only have continuity, we have someone the markets are comfortable with.

we have someone both democrats and republicans alike respect. i think he will be overwhelmingly reconfirmed as chair. and lael brainard as one of the vice chairs, we have a known quality. strong credentials on the democratic side. >> i wonder as someone who will be among the first to vote, if you agree with the administration when it comes to its baseline argument on inflation. is it transitory or will prices continue to rise? >> we have all been a brits -- a bit surprised at how big the inflation bump has been. we are obviously in uncharted territory. we have never gone through a complete economic shutdown and how long it is taking to get the economy reopened, we have seen

certain blips that have been transitory. how i the costs went up and they're starting to come down. trying to hear some better things in terms of shipping. hopefully that will come down. i do hope my advice to the fed chair would be i hope we can see some tapering and maybe that is moving a little faster than earlier in terms of the fed's acquisition of expanding its balance sheet. this is uncharted territory. i generally agree it is transitory but i tend to believe it could be for the short term at least, the next 60 or 90 days getting us through the holiday season it could get worse before it gets better. caroline: your democratic colleague, elizabeth warren was also perhaps less jubilant about the continuity coming from jay powell. her worry has been the oversight of wall street.

lael brainar wouldd perhaps be more tough. we're still waiting to see -- to fill more seats. what are you expecting from the role of the federal reserve or the other administration appointees who have yet to be confirmed? >> i am anxious for the administration to move a bit quicker on its other -- to move the big clicker on its other nominees. i have not always agreed. i did appreciate the fact he has been willing to move on to give the president more flexibility. i'm not sure i agree with all my colleagues that we have seen any kind of dramatic relaxation on the larger institutions. i think the basic framework we put forward and a dodd-frank has stood its test of time. we have gone through a pandemic

and a complete economic shutdown. while many parts of the economy suffered, the financial sector did not take the kind of hits. if we had not by the kind of capital reserves in place. i would give the sector -- while there may be individual areas i would have done differently, i would give it a passing grade and a lot of that was due to the reforms out of the last financial crisis. >> president biden today said chair powell assuming he will be renominated or reconfirmed will make climate change and issue. we'll acknowledge and try to mitigate the impact of climate change. republican senator sent a letter to chair powell last summer criticizing the fed for changing its tone and mission. do you believe that would be the case? what would be the mission for the central bank? >> i don't know any

sophisticated investor that does not think taking into consideration some of the hidden costs that are being brought about by climate change that -- we need to have those costs factored into the system. we need to have more visibility. we went through a year were a third of america could not go outside because of forest fires. we had more deaths in flooding in new york than we had from the hurricane. the notion we could ignore climate, i don't know any sophisticated investor who does not think there should be high not only on the fed all of central bank agenda. caroline: there is plenty of worry when it comes to the energy crisis. that dovetails nicely into consideration of the climate. we have been seeing gas prices spike in europe. much of that as we see tensions

rise between russia and europe with her comes to nord stream 2 or a buildup of troops on the border of the ukraine. that is affecting the corn market today. your perspective. it is enough being done in the geopolitical relationship between the u.s. and russia? >> i happened to be the chairman of the intelligence committee and the one thing we are sure of is vladimir putin likes to stir the pot. his overarching goal is not only physically america but visibly nato to keep us off balance. he has a historic view about ukraine that the vast majority of ukrainians don't share. the one thing that unites ukrainians whether they are in a the west or some of the eastern regions is when you see putin and his forces start to mass -- i was in the u.k. a week ago and

this is top of mind amongst our british friends. my hope would be the balance of nato would continue to send that message to putin about adventuresome tactics around ukraine would be destabilizing for the whole region. my hope is well that other nations -- the last thing the world needs is putin missing in ukraine at this moment and the overall global economy trying to come back to come -- trying to come back from covid. caroline: we always which we have more time with you. joe is going to be sticking with us because we will have some which more after this break. we're talking more politics, more power. this is bloomberg. ♪

caroline: let's get a check of where the markets were today. the renomination of jay powell as i second term. -- as a second term. lael brainard takes the vice chair position. many felt she could have been a little more dovish. expecting a rate rise as soon as june 2022. while yields are back up, they rise. the bank index does well. thanks benefit when we start to see a rise in interest rates. your underperformer in terms of commodities, gold. we start to see less need for an inflation hedge. bitcoin is your inflation hedge. we see the risk off sentiment in terms of growth. let's have a look at what we

have in terms of the s&p 500 falling off its record high. we solve -- whistle risk aversion come into the market. this is a short week. we see people start to take a well-earned break. the yield had an all-important auction. new supply comes to the market. yields push higher to the tune of seven or eight basis points. that factors in, the fact we might see rate increases. that moves the shorter end of the curve much quicker. we saw yields rise much quicker. inflation rates may push back. we saw the real yield a key area of movement. it feels as though this is a market that feels as though president biden's reappointment has less dovish but not a hit on growth. pricing in slower inflation. this is a signal of confidence. confidence in the u.s. dollar.

emerging markets feel the pain. you so emerging markets -- the russian ruble getting hit as we worry about some of the relations between russia and ukraine. we want to be going back to our conversation on the federal reserve. the fed decision and indeed we returned to d.c. where joe is with us standing by for all of his radio listeners. we want to return to the white house where we are joined by the president's top economic advisors. wonderful to have you with us. it took a wild to get these announcements but what you make of the reaction? the markets seem to think we have a slightly more hawkish bent. the rate being factored into market is we could see our first hike as soon june. >> the president's focus in nominating jay powell and lael

brainard was to focus on people with experience, expertise and independent judgment. we felt good we found two individuals with unmatched experience, sound judgment, crisis tested and both of them together spent a lot of time working on this new framework, a commitment to a strong robust recovery that brings everyone along. we feel good about these two individuals. we feel good about the reaction and we hope we will get them confirmed quickly. >> just to add onto caroline's question, we have been talking about this for weeks. what took so long to make what was a noncontroversial announcement. why wait until today? >> the president is deliberate about these issues. the stakes are high. i making an announcement now, what we are singling is two strong individuals who will have

plenty of time to be confirmed before the end of these terms. an important moment to get these rolling. good for reinforcing with the president reinforced today, which is the independence and credibility of the fed. it is important we reinforce the independence of this institution. you see the president prioritizing that in his announcements today. helping to reinforce these folks can be confirmed before their terms expire. >> senator booker elizabeth warren says she will not vote for -- senator elizabeth warren so she will not vote for jay powell. i wonder if the president asked for her support or if the white house is counting on republicans . >> senator warren has enormous expertise and is a trusted partner of this white house and the president and we are grateful to have her support for lael brainard and we

understand german powell will have broad support -- understand german powell will have broad support. we have seen that today from republicans and democrats. the congressional and progressive caucus. what you will see his support from republicans and democrats to reinforce the importance of the independence of the federal reserve. we are confident jay powell and lael brainard and we will work with supporters and detractors alike as we look toward this next set of nominees the president has to make the vice for supervision who will oversee regulatory issues. caroline: talk to us about overseeing issues and regulation. how aggressive will that person be from your perspective? that is what a lot of progressives are calling for. >> i don't want to get a have the -- want to get ahead of the

president's choice but he has focused on identifying somebody who has the expertise and toughness to do that job. it is an incredibly important job. in his conversations with jay powell and lael bra, they arei looking forward to have somebodynard in that role. -- lael brainard, they are looking forward to having somebody in that role. all three of those individuals will help to fill out this late at the fed. -- the slate at the fed. >> tell us more about the remaining seats and the remaining announcements by the president who said they will bring new perspectives and different voices to the central bank. how will they change the mission of the fed? >> i don't think they change the core mission. you heard the president reinforce the importance of the fed's independence in pursuing

the dual mandate around maximum employment and price stability. what they would bring as diversity of perspective and thought. the president is committed to the idea that a body that makes such vital decisions for the american economy should reflect america and the diversity of life experiences this economy reflects. you will see people who have real expertise, expertise in the field but also bring perspectives we have not had on the fed board historically and will add to the decision-making process. >> assuming you have a shortlist, do you expect announcements by the end of the year? ? that is our focus. we will try to get it done in the next couple of weeks. caroline: as you try to get those names, i'm interested when you try to talk about those

names at the federal reserve level, when we have such an economy that is roaring but not bring everybody with it, we saw women of color being left behind. still not seeing participation rates where you want it when it comes to women and black men. how do you hope the federal reserve might be able to ease some of that growing inequality? >> one of the things the president was most impressed by about both chairman powell and lael brainard's service is developing the new framework that puts at the center maximum employment broadly defined and looks at driving an economic recovery that rings a long parts of the labor market and parts of our society that have previously not benefited from economic growth and opportunity. that is a framework that is new and important and one i think chair powell and lael brainard

will be committed to pursuing. on the fiscal policy side, that is a core focus of our agenda. that is something the infrastructure bill will help to support. the build back better agenda by lowering the cost of childcare and eldercare will be a key way to help more women get back into the workforce. we have seen this pandemic create unfair disadvantages for low income parents who have to make the choice between stepping out of the workforce to care for a child or remaining there. we can get more people back to work by some of the investments in that package. >> how has your own view on inflation evolved with some of the data we have seen? it has become a full-time job almost for this west wing. do you see prices continuing to rise until the fed can knock them lower with interest rate

hikes? >> the prices are high now no question and that is affecting american consumers. we are looking at the actions we can take as an administration to try to address those. a lot of the drivers behind that is we still have covid globally. it is affecting supply chains. it is affecting the supply demand balances. we expect that to ease across time. tackling something like the supply chain challenges at our ports allows us to make concrete progress. a couple weeks ago, the president brought stakeholders together to get our ports on the west coast to go 24/7. we have seen the amount of time a containers headset port has fallen by a third. shipping costs has -- have fallen by a quarter. on the issue of gas prices, we have been focused. you can anticipate the president is going to talk more about that. we will do what we can to address these issues head-on

well the fed will use its tools and make those judgments independently. caroline: white house -- the national economic council. out in the cold for us. we thank you very much. we think also joe mathieu's. much more as we return. stay with us. this is bloomberg. ♪

caroline: the activision blizzard seo is not real you'll the possibility for his resignation if he is unable to fix problems. an article last week noticed he was aware of harassment. his resignation -- calls for his resignation have been piling on. el salvador intends to issue the worlds first sovereign bitcoin

bond and build a bitcoin city powered by volcano. can't make it up. we will be live from the latin american country next task, why 6.5% on that coupon? should they be paying more? this is bloomberg. ♪

>> this is a good team at the fed. >> this is sort of the dream team. >> i think this is a don't rock the boat move. >> this is the central case the markets expected here >> to not reappoint powell would have been quite negative for the markets. >> it is going to give the market more confident to move ahead with the prizing of rate hikes next year. >> we still have the fed on wait and see. >> they stick with the current pace and then hike once you get to the end of that.

>> we are at the point in the economy where stability is really important. >> total continuity. >> continuity is a very good thing to have at the central bank and that is what we are going to have. caroline: a little bit of reaction from just some of our guests earlier today on bloomberg tv about president biden's nomination of jerome powell to head the federal reserve for a second term. tech, cryptocurrencies, and the nomination as vice chair. i am joined by ed ludlow in london. what do you make of the picks? ed: you set me up well because they were talking about there will be no conflict on the monetary policy side. i thought why don't we find some conflict? that is always a good thing to do. when the white house anastas -- the white house announced this i , do not know what you call it, there was a relief rally across risk assets. if you come into the bloomberg terminal, cryptocurrencies are no different. we saw bitcoin and other cryptocurrencies, which have been heavily lower on monday,

they paired the losses but they have trickled down. this is the key differentiator between nominee powell and dr. brainard. she talked about how the fed should be more active in his research around cryptocurrency. she backed the idea of a fed digital currency, a digital dollar, whereas chairman powell has resisted the urge to go into the territory. we also expect her to be more active on the regulatory side of things. she has sounded a warning on a section of the cryptocurrency market, stable coins. this is what she had to say during a speech on may 24. she is warning about the risks for the monetary system. there is a risk the widespread use of private money, stable coin, for consumer payments that

could fragment part of the u.s. stable system. the stable coin has a fixed-price, usually has a value of $1, it is backed by real assets. it will be interesting to see what she does. there was other news in the world of bitcoin. bring up the pictures. this is an astonishing story. odell beckham junior, who has joined the rams, will take his new salary, quote unquote, in bitcoin. this is a lot of money. he has also pledged to give $1 million of bitcoin to fans via a tweet. but you wonder how much of this is a marketing exercise. if someone comes to you and says, hey, how about taking a salary in bitcoin? do you have any visibility of what you're going to earn, future earnings? imagine a sports contract like that. i thought that was astonishing. caroline: indeed. we got the leader of new york, mayor of new york wanting to take his first paychecks in bitcoin as well. quite the flavor de jour.

el salvador intends to issue the world's first sovereign bitcoin bonds and build bitcoin city, which will be free of income property and capital gains taxes. the president there announced in a beach town to a crowd of cheering bitcoin enthusiasts. and one man who knows the ins and outs of this, samson mow. coming alive from a volcano. they are going to be financing this bitcoin city that is surrounding this area of the volcano. i am wondering why any institutional bond investor would buy this. samson: why wouldn't they? caroline: because it has a 6.5% yield and the yields on the current bonds of el salvador that come to you in 10-year is 13%. samson: yes, but this bond has a bitcoin component which is why it is called a bitcoin bond.

when el salvador is facing $1 billion in this first bond issuance, $500 million will be used to acquire bitcoin and go towards energy and mining and infrastructure. so there is a war chest of bitcoin backing this fund. that dividend or that coupon will increase after the fifth year. so for the first five years it will be a 2.5% coupon but that -- a six point 5% coupon but it accelerates to a bitcoin dividend or a special dividend that is basically the bitcoin being sold off. $500 million worth of bitcoin being sold off gradually quarter by quarter. the el salvador government will share that with the bondholders. caroline: if an institutional bond investor was allowed to buy into this, to have exposure to crypto, why wouldn't they just buy bitcoin straight up? samson: they could, but usually

the mandate do not allow them to hold cryptocurrencies like bitcoin. caroline: but you think they will be allowed to hold these bonds? samson: why not? it is just a bond. caroline: but it is not, because it is related to bitcoin. and as you say, 50% over five years, if you can pay that back, would be based upon bitcoin. do you think the mandates would allow them to buy it? samson: that is for them to figure out. but we are trying to structure this in a way they can presented to the boards and directors as a normal bond because it is a normal bond. it happens to have a large chunk of bitcoin behind it. even if they don't buy it, i don't see a problem. the coins market cap is over $1 trillion. there is about 145 billion dollars worth of stable coin. this money will pour in. i was in turkey talking to the ceo of targeted i told him about

el salvador. in two seconds, he said i'm in for a million dollars paid i said are you sure you don't want to think about? he's like, no. this is for the people of el salvador. the money will come in. there was another person i talked to who said i will take 20 million. carolyn: is it not wrong to think that people should do their due diligence first? samson: they showed but there is an important part here, which is helping el salvador in fixing the money supply. that is more important than the specifications of a bond. carolyn: so even without institutional bond investors, if they perhaps are driven away by the fact the yield is so low relative to existing bonds or they cannot have exposure to bitcoin, who will be the actual investor? it will be more crypto focused

enthusiasts and they will be good for one billion? samson: there is more money than a billion going to flood into the fund. institutional investors can do their due diligence. 6.5% is in line with most bonds around the world. they can run the calculations. at the end of 10 years if bitcoin is $1 million, we have done a car -- a calculation of bitcoin appreciating 35% year-over-year than the yields that year will be 90% plus the 6.5% coupon. we had another conservative model that put it at 140% apy. it is a pretty attractive bond by any measure. caroline: versus crypto, which bitcoin has upped 240% purity may be losing out to the opportunity cost. i am interested you are in

turkey. you are in el salvador. are there other countries, areas looking at this with perhaps political risks that some do not always willingly swallow? samson: there is risk in everything. even buying bitcoin comes with the risk. we have already had some institutional investors reach out to blockchain and they are very interested in developing. i guess that means their mandate would allow them to buy these bonds. caroline: to talk about accelerating hyper bitconization. can you dissect what that means? samson: it just means you do not need to go back to currencies. you can just buy bitcoin and

stay in bitcoin and spend bitcoin. el salvador is a key part of that. bitcoin is legal tender so you can buy a proposed and spend bitcoin freely. bitcoin city is going to be a very attractive place i believe for a lot of bitcoin or's. carolyn: relations with the u.s. and el salvador from a government perspectives seem to be unraveling. hitting a further low at the moment. there are worries of relationships between el salvador and the imf. does any of that matter to some of the investors your talking to yucca -- you are talking to ? samson: no. [laughs] i do not think a lot of these organizations like the imf or world bank are relevant in the world based on bitcoin. they are only relevant because they can print money, they can make fdr. they can make money out of thin air. you cannot do that on a bitcoin standard. it really takes us back to what money should be, which is just money, not a surveillance

mechanism and not a tool to enforce your beliefs and economic policies on another nation. caroline: samson mow, a beautiful shot. don't think we have ever had someone coming from a volcano and talking us through the risks and rewards potentially coming from these bonds. we fervently say, do your due diligence. when some of the announcements come through. we will look at how one company is trying to make space exploration more affordable. a company just received a new capital to move forward on its dream of a space station on its own. -- of its own peerless take a look at zoom video. fourth-quarter revenue guidance eat analyst estimates. as you see, after down by 5.6%.

hours, this is bloomberg. ♪

caroline: amazon cofounder jeff bezos is giving $100 million to the obama foundation. it is in honor of the late the congressman john lewis. the foundation says it will be used to help programming that reaches emerging leaders in the u.s. and around the world. let's turn our heads to the stars now. sierra space, valued at $4.5 billion, just raised $4 billion that will help them move forward with its vision of setting up affordable space transportation

habitation. the project called orbital reef is a joint product with blue origin. here to talk about all of those is the sierra space president, janet kavandi. i'm interested in what you hope to accelerate through the money. i think we have some technical issues. one second. there you are. janet: what we are trying to accelerate is our space point. i happen to have a role model of that. this looks like a miniature version of the space shuttle. it's due to launch at the end of next year from the kennedy space center. so we are trying to keep that on track for that launch window that would begin at the end of november next year and end at the end of february 2023.

we want to hit that. in addition we're trying to accelerate our ability to build space destinations which would include an inflatable habitat that would go to low-earth orbit and be available for the time when the international space station reaches the end of its normal life. we want to have that checked out and operational before the end of the life of the international space station. that is what we are in partnership with blue origin four. caroline: this is validation to the credibility of the business. i look at the investors, but also blackrock private equity as well. household names. what do they see in their -- what did they see in your business? what is the vision of space you are painting? is it somewhere we go and move and live or is it more learning and mining? what is it that you paint? janet: a little bit of everything you just said. we want to enable more businesses go to the area of low earth orbit, which is about 200

to 250 miles up. one of the main advantages we provide is the ability to feel the lack of gravity. you are able to manufacture materials with fewer density. you are able to do medical research better in microgravity. we can print 3d tissue that can potentially grow into orbit so we can print organs for people so they would not have to wait for donors to donate organs to people when they are most in need. there is a limitless number of opportunities. we probably do not know the one that is going to be the big result of all this work. we probably don't even know what that is yet because most of our research end up in things that we do not anticipate.

there's of the biggest producers of monetary and beneficial gain all the way around. caroline: you worked with nostra -- with nasa. you were an astronaut. you are in the astronaut hall of fame. talk to us about some of the other companies we might know already working in partnership with you. i understand you are working with boeing. janet: we are working with boeing as well and i did work with boeing before i went to nasa in the aerospace field. we are working with red wire. we are working with several other companies that will enable us to put the whole project together. we want everything from launch capability, which blue origin can provide. we provide a space plane that can take people and cargo to the space station and return cargo and crew. we can return cargo back to a runway and crew back to a runway so they will not be coming down

to the ocean. they will weigh the space shuttle used to land. we have people with experience working at a space station like boeing who is currently operating the iss as well as people who have done 3d printing and other technology in space. carolyn: great to have some time with you. coming up, the cofounder of deliverr, valued at $2 billion, joins me to talk about how they are making shipping even faster. this is bloomberg. ♪

caroline: walmart is taking another step toward making aerial deliveries routine. dropping off items ranging from

cans of tuna to children's thermometers. for now, deliveries are limited to a little more than a mile from a store in arkansas. the service will be expanded to several more stores in the state. companies are doing everything they can to make sure things are delivered not only on time but in at least a day or two. deliverr, an e-commerce startup, just announced more funding. following -- funding the company at about 2 billion. clients include merchants on platforms like walmart, shopify, target, and ebay. joining me now is the cofounder of deliverr. what are you going to be using the money for? michael: it comes down to our merchants. we are going to be investing in things that make our merchants successful. it comes down to a few core pillars. number one is getting faster and faster with our delivery speed. very clear increase in sales you get with fast delivery and so we

are going to be pushing next day delivery and maybe even exploring same-day delivery as we get to next year. second is going to be making our platform more flexible for merchants. covering a wider variety of use cases. that includes things like temperature control, return for various different verticals to use a network. lastly it comes down to growing the team in the network. caroline: talk to us about growing the team. supply chain is something i talk about day in, day out. what are the biggest headaches for you right now? michael: well, it kind of depends where you want to focus. we are looking at actual warehouse and carrier capacity, the biggest way we are unique is we do not own any of the assets. we are an asset-like network and we basically orchestrated -- basically orchestrated different assets. we have more than double the

size of our warehouse network. we have more than double the amount of carriers we work with. with more optionality, you're going to be able to build more capacity. as it relates to growing the team, we have grown quite a bit over the past year. it has been really interesting as everything has been mostly remote. you have to come down to the cultural values and focusing on creating this cohesive community with your team and your employees. caroline: who are your competitors right now? do i know it is you delivering or do i just have a relationship with the company that i am buying through and you are the backend? how does your name work? michael: yeah. so you would not actually know you are receiving from deliverr, but deliverr is on track to power more than $2.5 billion annually. we are behind the scenes. in the end, you are going to be working with the merchant. let's say annie energy is one of

our grants, founded by josh richards, a popular tiktoker and influencer. you are going to see freed next -- free next day delivery and that is going to be powered by the deliverr network, meaning that inventory will be sitting in a deliverr location, we are going to deliver those promises to you via the store, and when you order online we are going to figure out how to get those items to you in either one or two days. caroline: to that end, who are your competitors in that landscape, and is there enough demand as we hope and pray that we move outside of a code life -- of a covid life and get back into the stores? michael: there are a lot of ways. the most common thing is merchants having their own location where they use it for everything and they ship it with one carrier. you are going to have your

typical fpl as well. they tend to do with much larger brand. then you have services owned by amazon or walmart that are mostly geared towards hoping merchants just sell on that particular channel. so it is a very diverse competitive landscape. but really, the core usually comes down to merchants shipping themselves five to seven days. our job is to convince them by outsourcing them and partnering with us, we can offer two day next day delivery across the country. carolyn: we want to thank you so much for your time. congratulations on the fund rate. that does it for this edition of "bloomberg technology." make sure to join us tomorrow. we will also be speaking with the tableau president. from new york, i am caroline hyde. this is bloomberg. ♪

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>> this is "bloomberg daybreak: middle east." powell picked again. president biden is sticking with his fed chair electing reynard to position number two. opec could adjust its meeting. as