caroline: breaking news, brainard goes in front of congress tomorrow for her role as vice chair of the federal reserve. we get that testimony ahead of time. she says that slowing up too high inflation is the most important fed task. committed to independent nonpartisan statement of the federal reserve, the priority is about protecting economic gains in helping their -- helping the recovery. she still says that supporting monetary policy response to conditions, giving flexibility that we heard earlier from chair

powell, and committed to keeping the financial system strong and resilient. we have some comments coming from the prepared remarks. and inflation is too high, she says, is a concern. we want to dig in on inflation on a day where the cpi reading came in at 7%. romaine: let's bring in olivia rockman for more perspective. we are hearing from lael brainar d that inflation is too high, but she makes a direct connection that the economic recovery and evenness of it is dependent on getting inflation under control. olivia: that is right. it is interesting to hear from her at this time because we have not heard from her publicly since september and the inflation picture was different from then to now. to hear her saying inflation is too high and they are going to do everything they can to tackle it shows that even the more dovish members of the fed are

really committed to this. taylor: and tackling inflation in part because, as we have heard, you cannot have full employment with this type of inflation, right? olivia: that is right, and brainard was one of the co-authors of inflation targeting, messaging, which has to do with maximum employment and balance of inflation. so if she is calling this out as someone who typically is also focused on that picture, it means that the fed in general is really going to do what they can to tackle these inflation numbers that we saw earlier this morning. caroline: and in a flexible manner. she is talking about responding to conditions and one of the big highlights from yesterday's testimony seems to be from fed chair powell, saying it will peak the second half of. the year olivia: that is right -- the second half of the year. olivia: that is right, and there is the risk of allowing

inflation to go too high, and then that is significant and something that brainard is also understanding, that if inflation does not get under control, we might end up with a weaker situation than what we are dealing with right now. romaine: based on the hearing tuesday with jay powell and the line of questioning which focuses on policy going forward rather than others that normally come up during a confirmation hearing, is the expectation tomorrow with brainard's hearing that the line of question will primarily focus on some inflation numbers, as well? olivia: we expect that obviously because of inflation, congress members will push her on that, but the difference is that powell has already been confirmed, he had a full turn, and brainard is a governor but has not held a position as high as the vice chair role. she might be questioned more on other things like climate change, employment, and other things about her history on the

fed, whereas members of the senate are more comfortable with powell's history. romaine: we are keeping an eye on that hearing tomorrow, olivia giving us a preview. a lot of discussions will be had on inflation coming off the cpi print this morning. we will get a ppi number later, in a few hours. we will dive deeper into that the rest of the half-hour. we want to talk about it from the housing perspective. a senior housing economist at apartment list is with this, chris, i want to start with the rental and shelter numbers we saw, specifically in the cpi data, which most people seem to say under represents the real increases folks have seen on the ground. what are you seeing? chris: in the cpi relief today, what we saw was an increase of 4.1% year-over-year in the shelter component, and that is, you know, obviously quite a bit lower than what we were

reporting in our apartment list index, so our data has a rent increase of almost 18% over the course of 2021, but, you know, i want to be clear here that that is not to say that the number in ppi's necessarily underreporting around growth, it is that we are capturing two different objects here. our index represents rent growth for new leases on market rate rental units, whereas the ppi is capturing rents for all americans. really, that difference between new leaders is the crux of the difference here. obviously, most americans do not move over the course of 2021, so that to not get the big increase it would see on a new lease. i think we are obviously seeing faster growth in our index, and i do think the better risk

probably that we will see continued upward pressure on cpi and the shelter component in the coming months as more folks do move in the higher rental landscape, but that is the quick overview of what we are seeing. taylor: we are glad you are clarifying it. an analyst note i read excited your data, and we asked about it being underrepresented in the way it is calculated, and i got multiple, scaling emails. we are glad you are clarifying the difference in the way the calculations go. talk about the discrepancy you see with the new rents that you have talked about, maybe an 18% increase, and those who stayed in place, and are they getting a rent increase, albeit at a lower rate? chris: yeah, so i think there are two components of this. one is that rents are normally

locked in for at least 12 months over the course of a lease, and in any given month, most americans are not going to see their rent change because they did not move and the existing lease did not come up for renewal. most americans are going to see on a month to month basis no rent change, and for folks who stayed in place and maybe renew a lease, in some cases, many folks will see their rent increase, but we definitely see that lease renewals tend to have much lower increases than new lease signings. i think those folks that are staying in place, and that is important to note here, throughout the pandemic, we have actually been seen in elevated rate of lease renewals, so more folks renewing their leases and less places and on average, they tend to see smaller increases than folks that move into an entirely new unit.

as i said on the new leases, we are seeing rapid rent increases. caroline: is there a slight chicken and egg situation that people are not moving because they know that their rents go up skyhigh? how much of those incredible numbers that we are looking at, 18%, is because the comps and the space we were in in january 2021 were just coming off the back of a disastrous year for people personally and psychologically? chris: yeah, i mean i think to your first point, there definitely is a chicken and the egg problem. definitely a lot of folks are staying in place because they are seen that rents are increasing so quickly, and they probably will have a hard time finding a new place if they were to move, so more folks are staying in place and going further back and some of that is still related to the pandemic

itself and a lot of folks may feel it is not the smartest time to be moving right now. because of that, because we do see lower rates of people moving, what you see is vacancy rates are extreme the tight right now, and when less people move, there is less inventory available, and the households looking for new places, you have more folks competing for the few vacancies, and that is driving strong increases. the second point about how much of this arose and 2021 makes up for lost ground in 2020. it certainly is the case, but we saw a slight decrease in rents nationally in 2020 but it was modest. our national index was down by 1% in 2020, and that is actually masking a lot of regional variation, where certain markets saw steep declines, but that was limited to a handful of the expensive coastal markets, places like san francisco, new

york and d.c. saw steep declines in 2020, but, overall, it was not the case that we saw those big declines everywhere, whereas, last year, 2021, we saw this rapid growth happening more or less across the board. now, our national index is well above that pre-pandemic level. caroline: thanks for the insight. senior housing economist at apartment list, chris salviati. coming up, we talk about inflation and supply-chain turmoil on food prices. we are looking at the biggest impact in cpi over rent and food. this is bloomberg. ♪ ♪

taylor: our triple take today is a focus on main drivers of inflation, rent, clothing, and food. the un food and agricultural world index is near an all-time high. prices are having an effect from general mills to coca-cola to procter & gamble. those companies and more are members of the consumer brands association. joining us is the president and ceo of the group, geoff freeman. it may not be surprised that we will ask this question. what are all of your constituents telling you about the rate of change that they are seen in their input costs? geoff: the folks leading the industry had done a remarkable job over two years. they have had experience in the industry for decades. they have never seen an experience like this. when you look at the inflationary environment, you have everything going up

simultaneously from ingredients, asportation, labor and materials. there has never been a time like this. i am proud of the industry. inflation was up about 7% last year, and prices are up about 3.5% with consumer package goods. this consumer industry is doing everything they can to keep costs down for consumers and eating some costs, and that is of the to be proud of. romaine: they are, and certainly so. we talk about supply chain issues and how that factors into illusionary pressures, for a while there was discussion that this was temporary and it would abate, but this is going on now for more or less a year now, and there is not to be any sort of movement towards that pre-pandemic baseline. what are they telling you about how they are anticipating, if at all, any drawdown into some supply chain issues? geoff: i think we expect supply chains to be looked at.

we have underinvested for many supply chain issues, so i think the supply chain problems are going to be with us for quite some time. i think the demand is going to be with us for some time. the demand exceeds 2021, 2020 and 2019. expect to see that to continue and we expect labor challenges to continue with millions of people who have chosen to leave the work hours. there is no easy solution of what we will do on the labor side, so you are looking at a perfect storm in many respects. that said, throughout the crisis, the industry has been able to deliver for 300 plus billion americans each and every day, and they will continue to do that. you talk to ceo today and it is heckuva lot harder job than a may have been for the predecessor. caroline: on a story on the bloomberg, we talk about the supply oxygen that they thought

would have been improving by now, and omicron has put in into that idea. talk to us about where in the country is being hit the hardest because we worry for our team mascot, who is mocha, the cat, that taylor does not turn on the heating for, but what happens is he is perhaps not getting the food he needs because he cannot find it in the stores. geoff: omicron is hitting all the country relatively simultaneously. we are seeing this pressure peak in the system across the board. that said, when i look about what is happening now, when you see more out of stocks and grocery stores, that is due to the labor shortage and demand. you throughout winter weather in the markets, and that really pushes the system over the top. we have seen that in the mid-atlantic and northeast, and we will see more pressure over the coming weeks as we see the virus peak in the midwest, where many of the manufacturing facilities are.

we are 120,000 workers short within the consumer goods industry now. what happens when another 10% call out each day or are out because of having to quarantine? you can see the pressure on the system. taylor: a complicated question and i hope you can give us insight. some notes i read today say it is the rent inflation that is not a problem but that for a long time, you had zero inflation on some goods they have been talking about because of the loss and wage growth and it has fueled some of the good inflation that you are seeing, and tying this altogether, where is there an endpoint and what does it look like? geoff: we are proud of what we have done to not only protect our workforce but compensate our workforce are you have seen an increase in the neighborhood about 7%, and as i speak with many leaders in the industry,

and needed to happen, and they are proud of the fact that they could bring that into fruition, but there is no doubt when you can find that with inflation that is happening right now, the report suggest less buying power today, even with that 7% increase in compensation and that is a concern for all of us. we have got to see some rightsizing here when it comes to supply chain pressures. we have got to take some of these pressures out of the system, and we can do that by keeping more workers on the front lines. one of our biggest problems right now is that in order to stay on the front lines, you need it, but there are no tests available. that is two years into the pandemic, and we need to be expediting tasks to the essential workforce to keep people on the front line. that is not just at manufacturing facilities but with truckers, logistics and other aspects of the system. if we can keep the labor force strong, that will go along way towards addressing inflationary pressures.

taylor: really appreciate it, consumer brands association president and ceo geoff freeman. we will continue our take on the big story of the day, which is inflation. next, we will speak to the cofounder of clothing and apparel company throwback and tells us how inflation will be affecting his business. this is bloomberg. ♪

caroline: our triple take today, a focus on key drivers of inflation. rent and food we have done. let's go to clothing. kevin hubbard is with us, joining us now. a fascinating journey. you are making masks, getting back into activewear, but tell us how much of a cost increase you are seeing from the supply side of things. kevin: we are seeing prices rise

faster than we have ever seen in our five year history. whether it is shipping, on the shipping side of things, we are seeing prices up four to five times up, and the prices of raw material is up, as well. romaine: we have talked about the cost of cotton, textiles, and other things that going to clothing. i am looking at the space behind you, and it seems like you have a good inventory. do you keep that inventory level higher than normal given the issues going on? kevin: absolutely. only certainty is uncertainty the last few years, so being a young, fast-growing e-commerce brand, we have had to hedge against a little bit of the craziness of covid inflation, so we have actually gone out ahead and purchased more than we normally would manufacture ahead of time just to be prepared for whatever is going to be thrown at us next. taylor: what percent of those cost increases that you are

feeling are you able to pass on to the consumer? kevin: we actually have run competitive analysis, and we are seeing some competitors increase the price of garments by $10 to $20 per garment, so even over a two-month span. luckily, we are e-commerce direct to consumer, so we are able to absorb more of that, which we are looking to be able to do, but even we are seeing some of the pressures of that and having to increase cost a little bit. caroline: as the cost of goods go up, sodas demand and increase in wages. we also have the supply chain issue is omicron sweeps through the u.s., you are e-commerce mainly, so you are not worried about manning stores, but you must have issues with labor to some extent? kevin: absolutely. we are based in charlottesville, virginia, and we have the best team in the world, but it has become more competitive. we are raising our wages and

salaries to recruit top talent and try to pick people off from the likes of lululemon, under armour, north face, you name it. it is becoming more and more competitive. that is the name of the game right now. romaine: kevin, when we talk about, i guess, the appeal of certain brands and their ability to sort of have the pricing power, if you will, a lot of that depends on the cachet of it. we talked a lot about lululemon, nike, two companies that have shown if you have not just good product but that sort of brand recognition and loyalty, you can sort of premium price your goods here. rhoback is relatively new. what type of relationship have you built up right now in the zeitgeist with consumers to make that brand a little better known? kevin: absolutely. for us, superior product is number one. you will not build a brand around a product that people

will not want to return to where again, but we have been lucky to build a super loyal returning customer base. a lot of that has been in some of the recent changes, we have the largest clothing company program with college athletes, so that has been one thing we have done to grow a super loyal and growing community, but, really, just embracing your community, speaking to them, being honest about prices and supply chain issues, but really, that is what it comes down to and focusing on superior marketing and building a community and not just selling a product. romaine: quickly, the name, there is a dog in your logo, is that a ridge back on there? kevin: absolutely, my business partners, matt and christina, they have bunker, around the warehouse summer, but he is in the office with us every day. the ridge back was the front line, so that is the quality we bring.

as still having a lot of fun. romaine: this is a pet friendly show, kevin. it is nice to catch up with you, cofounder of the rhoback activewear brand. back in a moment. taylor: no, this is final thoughts right now, romaine. this is our last block. romaine: this is bloomberg. ♪

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>> from the heart of where innovation, money, and power combined in a silicon valley and beyond, this is "bloomberg technology" with emily chang. ♪ emily: i'm emily chang in san francisco, and this is "bloomberg technology." coming up, robinhood says it will allow most employees to work from home permanently. we discussed the continuing