louis fed president jim bullard. think that was a classic mike mckee clinic on some of the issues. a key issue he has cited repeatedly, i think it is important that he keeps asking this, what do we get from one hundred 20 billions a month -- from $120 billion a month that we would not get? tom: i think james bullard has been way out front about his interesting theory on regime change. and i think the fed president inserted well. it gives you an idea of the debate that is going to take place in the coming months. from new york city this morning, good morning. for our audience worldwide, this is bloomberg. ♪ ritika: fed reserve chair jerome powell said it is too early to scale back the aggressive support for the economy. he told the house of financial services committee that the debate over bond buying will continue at the central bank's upcoming meeting. meanwhile, powell said inflation has risen faster than expected. he's back on capitol hill today. senate democrats have found a way to help pay for their $3.5 trillio

bullard and evans said they are open to discussing the idea. joe: tons of fed speak with bullard and evans and the two day appearance from powell. ultimately, should we just listen to powell? michael: yes. he is the chairman. he is the centerpiece. you pretty much know what is going to happen. the one thing i thought we saw during the week from jay powell is him trying to steer a center course. he does not want to be seen as one of those people who might the moving sooner because then we pay attention to him and everybody starts repricing. he did not sound like he is determined to keep think status quo forever. if the data changes, we will change. romaine: michael mckee out there in beautiful idaho. are you just going to stay out there until jackson hole yucca michael: i'm going to quarantine out here i think. romaine: smart man. michael mckee, our chief economic correspondent cared coming up, we are going back to the conversation joe had with the u.s. deputy secretary of the treasury. this is bloomberg. ♪ joe: i spoke earlier today with the u.

james bullard whic -- james bullard, the st. louis fed president, that is coming up.quity market 4351 on the s&p, down 0.4%. in the bond market, yields lower to 1.2 557 -- 21.3257%. this is bloomberg -- to 1.3257%. this is bloomberg. ♪ ritika: the biden administration is extending a trump era halt to economic dialogue with china. treasury secretary janet yellen's team is in touch with chinese counterparts, but there are no plans to restart those higher liver talks. -- those higher level talks. it is evidence that biden is toughening his stance on china. the european governments are growing increasingly frustrated, citing inconsistent rules, academic costs, and an outdated strategy for stopping the coronavirus. the travel ban is likely to come in today when the president meets with germany's chancellor angela merkel. south korea seeks to move up its spot in the global space race. the country says this means launching satellites on homegrown rockets, and eventually a mission to the moon. >> the reason for moon exploration is because we expect it to be utilized in the fu

louis federal reserve bank coming up, james bullard.ou're seeing in terms of inflation, when you think this federal reserve conversation picks up speed, is it the jackson hole conference in august which is what most analysts are looking for. >> i think what you obviously see the fed do now is walk people and guide them to a future tapering to make sure there isn't a violent taper tamper like we had in 2013. and the thing to remember is it's for good reason. we are having extremely strong growth and it appears like inflation will be temporary. that's what markets are saying now, if you look at the 10 year yield in the 1.4 had to 1.6 range. as long as that's the case and the fed keeps cranking up money supply growth at 14 to 16%, it's hard for equities to lose money. they won't have the upside they had in the first half of the year but we expect a strong back half and unlike some of your guests, it's hard to point to what would cause an air pocket when the balance sheet's cranked up by $120 billion a month and money supply growth is at su

louis fed president james bullard speaking.choed bullard's statements on tapering, but in contrast, he thinks the job goal has been met. evans took a more cautious tone. the chicago president said the fed could begin tapering by year end if unemployment slides closer to 4.5%. >> here we are now in a strong rebound. the economy is recovering very strongly and going very well -- growing very well. the numbers are so large, i have a hard time seeing them in my head. i am exciting this year real gdp growth is going to be on the order of 75%, an extraordinary number. towards 100% or more, that comes with growing pains. but growth has been good. looking for 7% this year, 3% next year, which also is a very good level of growth. the kind of numbers i find a little more transparent in terms of naturalness or the unemployment rate numbers, even those are subject to a lot of interpretation given labor force participation variations. that i am looking for the end employment rate at the end of 2021 to be about 4.5%. we are at 5.9% unemploym

and, you know, james bullard, the held of the st. louis federal reserve bank, was on fox business this morning, and he pretty much said that all of this data point to the fact that we need to fire up the tapering trucks and start cutting back on these bond purchases. here's what he said, and then i'll have you comment. >> we have a booming housing market. it's not at all clear that we want to be feeding into an incipient housing bubble. we have really a rapid a pace of purchases in an economy that's already growing 7% as fully recovered in gdp terms from the pre-pandemic level -- to the pre-pandemickic level. pandemic level. liz: okay, jim. do we need to -- now the tapering, does the fed need to announce tapering at the next fed if meeting which is in august? >> at the prior fed meeting, it should have announced. but notice he did clear his throat and say we may begin to at some time talk about beginning to talk about tapering. the problem is that we have the highest equity valuations except for one exception or two, we've got the lo

tom: the distance from brainerd to bullard, just as two examples on the fed, as an intellectual exercise. the distance from germany to finland is a different exercise, isn't it? jonathan: i would say the difference from christine lagarde and the executive order in the bundesbank right now is much wider than the distance between brainerd and bullard. tom: explain that. jonathan: there is an agreement on the federal reserve about interest rates and flexible average inflation targeting. that is much more of a dovish reaction function then we have over at the ecb. there is an agreement there. we have this very murky agreement over at the ecb, wary of just approaching 2% so-called symmetrically. i think that is different. the forward guidance has been agreed over that the ecb is radically different to the guidance that has been achieved and the framework shift, the reaction function shift, at the federal reserve. tom: and we have negative yields further negative in europe. we have less negative yields on germany and in switzerland. they have turned around and fractionally smaller negative yie

that was james bullard, the federal reserve bank of st. louis president.r audience worldwide, alongside lisette rewards, and jonathan ferro. tom keene back with us on monday. lisa -- lisa abramowicz, i'm jonathan ferro. tom keene back with us on monday. lisa away for a week. playing musical chairs. yields come up to basis points. we've had a week full of fed speak. let's pick up on the line that jumped out for you, lisa. i imagine it was the "we don't want to jar markets or anything. " is that the right line i think upon? lisa: you got it. the question is, how to they do this? and what counts as jarring markets? is it going to be something that is disruptive enough to threaten the economy in some kind of fundamental way? what is the threshold for that, and how much are they considering that as they take a look at housing prices at record highs, inflation reads that even jay powell has said have come in hot? that is what stood out to me. you nailed it. jonathan: he talked about the context of the original decision , the crisis they faced comedy possible dep

louis fed president jim bullard this week.hael mckee talk to him about tapering and said the decision was made in the context of an emergency, facing the potential of a depression. he had one concern, we don't want to rock the markets too much. i am paraphrasing, but that was basically it. mark, when you hear what your peers have to say, there is nothing to worry about, get on with it. mark: liquidity is abundant, and it will get even larger in the couple months ahead, due to ongoing fed qe, the decline of the treasuries. cash balances there will be about a trillion by the end of october, assuming that resolution. this dynamic of very easy financial conditions is likely going to persist, barring some type of significant external shock and growth. in this context, with incredibly easy financial conditions, it makes a lot of sense for the fed to march down that path to taper. you are right, the way they arrive at the $120 billion a month in treasuries and mortgage purchases was almost by experiment. they initially needed to do a

louis fed president james bullard worried about? i just spoke with him. arkansas congressman french hill on calls for congress to extend the nationwide ban on evictions. former detroit police chief james craig on the push to combat rising crime coast to coast, and wyoming senator cynthia loomis on why she's worried about the beijing olympics. but first, our top story this hour, all eyes on the cdr as the agency's expected -- cdc as the agency's expected to release the data they use to justify mask recommendations. correspondent mark meredith is live at the white house. we're waiting on the science on this, where is it, mark? >> reporter: that's what we're all waiting to the find out. at this moment president biden's getting to meet with a handful of governors to talk about wildfires, but most people are focused on the pandemic and the latest cdc guidelines which means millions will be required to wear masks again indoors. these guidelines are because so many people are still not vaccinated and because the variants are still spreading rapidly. to get thing

different trajectory to bank of canada, rbnz, the bank of england, even to the non-autopilot status that bullardalked about last week at the fed. dani: thank you so much. you will be outside the ecb covering the decision day for us throughout the remainder of the day. that's manus cranny outside the ecb in frankfurt. let's get into this further. joining us now is derek halpenny. thank you so much for joining us this morning. in your view, is the ecb meeting today alive one or is it just a technical implementation of this new inflation target? derek: it is certainly a lot more significant than what it was before we had the announcement and the details of the monetary policy strategy review. when we listened to christine lagarde and press conferences explaining the outcome of the review, she tried so hard to emphasize this as being a major event, a very significant change in terms of the monetary policy strategy going forward. markets didn't really buy it. i think the effort will be there again today. we are certainly going to get some changes that we wouldn't have got if we hadn't had this review

jerome powell saying this is transitory but jim bullard telling bloomberg earlier today it is time toaper. is there agreement within the fed right now? diane: no, i think you'll see debate get heated, and this is where powell's challenge will come, especially into the summer and fall. once we get into 2022, voting members, those presidents will take voting positions and will be dominated by people who penciled in 2022 rate hikes. this debate about tapering and when to do liftoff on rates will heat up in the fed, and that is fair enough. what chairman powell has laid out is he thinks this is a level shift up in wages and inflation, and then we will settle down after we do that level shift up. it will be transitory, but if he is wrong, he says it will be transitory either way because we will deal with it. his timeframe has become more clear in all of this. through the end of the year, they'll be watching things closely. if you don't see a change in momentum out there through the end of the year, that will make the fed act much more aggressively in 2022. kailey: when you say the fed will

you've heard kansas city fed president james bullard saying it's time to start tapering so i think the real question is, will the feds react in time to drop this back in or will inflationary expectations push an out-of-control? then you have a fed that has to slam on the brakes and it can do damage to the economy. charles: the answer to that dan, if it's the feds will no, the answer is no. they will be behind the curve again they will get on the brakes, curve, swerve whenever they can, and that is the big giant ms. as more money gushes into the economy, we have another human welfare program that kicks in. it's a dangerous game. >> they are and jerome powell did say we've never experienced trying to revive 20 trillion-dollar economy to the degree of monetary fiscal support so they have to the other way. it's a must by definition, the feds will be behind the curve before they recognize exactly what they should do with interest rates and everybody out there was the most sophisticated investors on wall street, people sitting around the kitchen table in the evening trying to figure out whet

david: you look at dave bullard. he is talking about tapering and saying he could do it now. he could and did now. he is not a voting member on the fomc but he will be next year again. can say what he likes i suppose without being on board. is the time right? can we see that in the u.s., persistent inflation? mr. anand: absolutely. i think, you know, some of the factors that are going to cause inflation to be sort of more persistent and more present, and some weights haven't begun, you know, you haven't started to see infrastructure programs really start to kick off. you haven't started to see the very different way in which companies are going to be looking at their sort of working capital. i do think it could stimulate or incentivize the fed to act earlier. i do think whether they start earlier or later will have that much impact on shaping how it looks for inflation. in the same way, that the connotative -- accommodative monetary policy only drove up prices in asset markets. yvonne: it raises the question of whether bond markets were breaking too soon. we saw breakevens up

louis fed president james bullard, saying he looks for a hike in 2022.e thinks the job market is recovering quite well. the market not really taking that in stride at all. caterpillar following the most in nine months. you have cyclicals and tech really falling today. dani: caterpillar, it really is that kind of stock that you look to to give you an idea of whatever thing is doing. the bellwether, that is certainly what caterpillar is typically seen as. alix: 100%. if it is going to be price pressures and supply constraints , is that different than we getting demand? how do companies manage that in an idiosyncratic way? do you still need growth to come back, and firm growth to help the companies? dani: i feel like you perfectly set me up for what we are going to discuss next because those supply bottlenecks featured heavily in the gdp figures we got, especially for germany. the euro area economy did rebound sharply in the second order. you have businesses reopening following the lifting of lockdowns. let's get the details with our senior editor for econo

that is putting them both at odds with james bullard.ys the fed has met its goal to start tightening. >> i think we are in a situation where we can taper, and i think setting those parameters the right way -- we do not want to jar markets or anything, but i think it is time to end these emergency measures. rishaad: the german chancellor has pledged swift up to people affected by devastating floods in western for money. angela merkel called the situation a catastrophe. more than 60 people are dead and dozens missing due to torrential rain. mobile and internet services also impacted. there are also floods in the netherlands and belgium. netherland's per minister designate stepped down after the president rejected his latest cabinet proposal. the two would not be able to agree on a way forward even after more time to consult. the political crisis is adding to the company's already dire situation. yvonne: coming up, toyota and panasonic taking on established names in the battery market for tv's. the president is up next. ♪ david: breaking ne

louis fed president james bullard speaking to bloomberg's michael mckee.hicago fed, charles evans, and while inflation has picked up more than expected, next year will be more number -- normal. >> so here we are now in a strong rebound, the economy is recovering very strongly and growing very well. in fact, the numbers are so large, i have a hard time keeping them in my head. i'm expecting real gdp growth is going to be extraordinary number. and when you take an economy that's 75% and take it to 100% or more, that comes with growing pains. but growth has been good, 7% this year, looking for 3% next year, which is a very good level of growth. the kind of numbers i find more transparent in terms of naturalness or the unemployment rate numbers, even those are subject to a lot of interpretation given labor force . i'm looking for unemployment rate at the end of 2021 to be about 4.5%. we're five point 9% unemployment right now and come down dramatically -- 5.9% unemployment right now and come down dramatically, which is good. i'm still optimistic that's the cas

louis fed president jim bullard, that is one indicator he has been championing.ou do have a rise in the delta variant infections. but what does federal reserve policy do for that? what we need to do, and admirably we have seen some governors in southern states come out and say this, is get the vaccination rates up. it is that simple. monetary policy cannot combat the economy. tom: on the planet, there's fingers left over of people with legit bank of england and fed experience like john ryding. his chairman powell speaking globally today, and is he speaking to central banks that are maybe not on the same page as he is? john: obviously there's a massive global element to this, and other countries, a lot of of the haven't had access to the same vaccine supply. the u.s. has an abundance of vaccine supply relative to the number of people who are willing to take the vaccine, and that is a major issue. but the question is does the chairman give some signal on backpedaling on when they are going to start tapering back the purchases of bonds? as you have pointed out, and

none of this bullard, kaplan stuff. this was when they use to actually dissent.ley: you can't blame them. -- lisa: you can't blame them. they've been conditioned by rate hikes that had to be reversed. at what point do the centers -- do the dissenters have a point? you have a discourse, but it's kind of narrow. jonathan: we are down 0.6% on this be 500. someone earlier called stagflation light stag lite. sounds like something tom keene is drinking this morning. what would it mean for this bond market if more and more people start talking about stagflation? of course, we are talking about slowing growth. persistently higher rates of inflation will consist -- will persist at this rate. kailey: he said he really didn't hundred that -- lisa: he said he really didn't understand why yields went down so much after the previous meeting. how do you predict anything, given the fact that it depends on how much money is in the financial system and how much international flows are going into the u.s.? how do you forecast that out based on the fiscal response, the monetary resp

tom: i do not thanks we will hear it with jim bullard or michael mckee, but john, -- jon you wonder where the voices are will say let us go. tom: the extreme -- jonathan: extreme accommodation is one thing and positioning for rate hikes is another. the reason some fed officials are not keen on the former, this is where people start to run towards the latter. the sequencing of this is important. if you start tapering then you and i will have a conversation about lift off. only some people on the fed wanted to happen. tom: it is this tantrum, everyone agrees to that. is it feasible with our lack of knowledge that a central bank can accommodate a society and system without tantrum? that is unproven. jonathan: anthony roth joins us. why are yields lower and why is curve flatter? anthony: i wish i knew the answer to the question, and i think we do not see the forest for the trees, we need to step back from a lot of the gyrations we see recently and project where the 10 year will be, on labor day at the ee -- or at the year and we believe it will be higher through the year. inflation is going t

we talked about the division between a president bullard and governor brainard.the ecb. a story out by reuters on that division and some of the dissent that christine lagarde had to deal with. here's the quote. "a third policymaker, who also voiced significant objections, had to leave the meeting early and was not present at the final tally. this according to a source of there's -- the final tally." this according to a source of theirs. tom: i am a bit of a student of fed history, but i can't recall from 1951 a gap of style that we have seen from draghi to lagarde , without any aspersion to either of them. but what a change of messaging have we seen with christine lagarde. jonathan: i think most people in this market miss the communication of president draghi, that is for sure. and that was a high bar anyway. let's be clear about that. could the barbie any higher for the handoff? i think the bar was pretty high for chairman powell from chairman yellen, and that first quarter was not pretty. the man we heard at the end of 2018 is just a different person compared t

louis fed president james bullard said this week he has, quote, a little bit concerned we are feeding incipient housing bubble dallas fed president said that the fed should begin tapering to begin offsetting, quote, some of these excesses and imbalances, end quote. the boston fed president eric rosengren raised alarms that the fed's mortgage backed security purchases may be contributing to the boom in real estate prices citing the potential financial stability implications i guess you know i have been clear for a long time, i have been very skeptical about the ongoing mortgage backed purchases. are you concerned about the unintended consequences associated with $40 billion worth of mortgage backed security purchases that continue month after month? >> housing prices are going up around 15% this a very high rate of increase a number of factors are contributing monetary policy certainly one of those factors. other fact e, people have long balance sheets, so they are able to make down payments and supply factors are constraining the supply temporariarily. the best thing is that the diffe

>> and then you have president bullard concerned that maybe we're feeding into an incipient housing bubbleontinuing to buy up these mortgage backed securities is unintentionally worsing inequality because people are being priced out of these homes. >> yeah, i think the fed should be worried about an overly hot housing market right now. i don't think we're anything close to the bubble we were in 15 years ago. mortgages are much smaller part of household financial portfolio right now. but, you know, cheap mortgage rates are a wonderful thing, but the flip side of cheap mortgage rates is that house prices go up a lot. and it becomes harder to buy one, we're going to start to see rents going up as well. so i think if the ted has tools, which it does have, to tamp down the housing market a little bit, that would mean mortgage rates would go up. we all hate that. but they are 2.5 right now and there is room for them to go up and still be quite low. >> i have one final question for you. i don't think this got nearly enough coverage. but the warning yesterday from fitch that it may downgrade the s

louis fed president bullard today saying the fed should taper in the fall and finish by early next year. what role is all of that conversation playing here? >> well, i mean, i think that, you know, anything that starts the market to believe that -- that the fed will taper early is actually good for bonds, because that is, you know, increasing the -- and i mean treasury bonds. because that's increasing the risk that any will -- the fed will cause a economic slowdown faster than anticipated. but the other side of this is, you know, the majority of the- of the fomc, the majority of fed presidents, and certainly the board of governors don't believe that we're anywhere near the time we're going to start reducing asset purchases and so i think, scott, the time line we're working with is sometime probably in december, the fed will announced their plan and just like they did the las time they'll wait for a period of time, which i think is more likely to be six months before they start to implement their plan for tapering. and then it will take them about a year, which will put us into the middl

it wasn't long ago that james bullard, one of the big names at the federal reserve, said vaccinations said they would have toby 75% before they started to taper. they are bringing mask mandates and fed takes cue from the white house. very strong relationship between jay powell and treasury secretary janet yellen. on top of that are jobs. three areas in the jobs market that are nowhere close where jay powell wants them to be, participation, employment to population and then the unemployment numbers for black and hispanic workers are miles away from where they were in september 2019 when they hit record lows. there is the jolt to the market. the fed trying its best to ease into this, hoping that the wall street crybabies won't go and throw away all their stocks in protest. there is a lot going on today as we await for the fed, the actual q&a session. i want to bring in two of the best out there. really can't do any better. gary kaltbaum, phil blancato. you know them. you know the firms they represent. gary k., you're not a big fan of the fed. so we'll not talk about as much as the impor

louis federal reserve president james bullard on tapering.taper discussion, yeah, i do think we need to get moving here. we have a booming housing market. it's not at all clear that we want to be feeding into an incipient housing bubble. we have really a rapid pace of purchases in an economy that's already growing 7% and is fully recovered in gdp terms from the pre-pandemic level, to the pre-pandemic level. so i think sooner is better on tapering. i think markets are ready for it. dagen: john, your reaction to that? >> you know, we agree completely. we believe we're going to start to see at least the beginning of the tapering. it will take a while. but at least the beginning of the tapering at year-end. we're hoping we see it and we think we're going to get some indication. you'll see the employment data today. you'll see gdp at the end of july. you'll see you've got the jackson hole conference. we think the fed is going to get indications and we think they're going to continue moving in this direction and that would be a great sign. we share

we heard from jim bullard, who said the following. >> we can taper, and setting those parameters theng, but it is time to end these emergency measures. vonnie: for chanson propose creating a new position to exert power over towns and counties, tackling inequality across the u.k. he says mayors should take charge of skill training, reforms, and designing transport. the eu as rolled out its climate plan as it looks to cut pollution by 2030. the e.u. plans to bring shipping into the world's largest carbon market and ban new combustion cars and fine dirty home heating. >> we believe this can be done. they should understand meeting 55% reduction in 8.5 years is a legal obligation. vonnie: 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 vonnie quinn. this is bloomberg. >> the countdown to the summer olympics is on. the tokyo governor says the games becoming a beacon of hope for the world to find its way out of the pandemic. i spoke exclusively on one person's vision for the game and plans ahead

bullard's on the tape today saying that he thinks criteria and jobs might be met sooner than people thinkt the delta narrative is going to be temporary and that the pandemic is coming under better control. dow opened down about 100 points and has recovered quite a bit. we're down about 19. who knows if that had something to do with it. amazon, six-week low pins two-month low, and a little pit of a negative halo on etsy and ebay this morning. >> yeah, worth watching all of these, of course amazon being the main one as you see down almost 8%. you know, potentially going to earn less and spend more i guess that's the simplest way to put it. and carl, it's been just an extraordinary week of earnings from these enormous companies. i know i've come back to it many times, apple had 36%, i think it was top-line growth. facebook was 56%, alphabet 57% constant currency. amazon still, what, 27%, and microsoft 21%. those numbers are just almost inconceivable for companies of this size. the five companies i just mentioned, what do they add up to in market value, i can't even doe do 2, $8 trillion. alm

. >> certainly from bullard earlier in the week.ong can you support a housing market when first time buyers are getting priced out so dramatically. >> this question of how you get ahead of this versus just letting it run hot, reacting to it, is the economy substantially different today than it was, you know, in the latter half of the 20th century in a way that it kind of changes how you deal with these things, and i think that's a key question here too as we look at this transitory word that we have been talking about and debating, you know, for months now. >> yes perfect segue to steve liesman who can curtain raise for us, the fed chair today in front of house financial services, with the comments already out steve, good morning. what can we expect and how do you think q&a is going to go >> think the key is in face of the higher inflation readings we got yesterday and today. jay powell is sticking to his plan to keep easy monetary policy in place. he said the fed will keep to the current funds rate range until employment and inflat

louis fed president james bullard said this week that he is, quote, a little bit concerned that we areeeding into an incipient housing bubble. dallas fed president kaplan said that the fed should begin tapering to begin offsetting, quote, some of these excesses and imbalances, the boston federal president raised alarms that the if he had's mortgage backed security purchases may be contributing to the current boom in real estate prices citing the potential financial stability implications. i guess you know i've been clear for a long time i've been very skeptical about the ongoing mortgage backed purchases. are you at all concerned about the unintended consequences that are associated with $40 billion of mortgage backed security purchases that continue month after month? >> so housing prices are going up as you mentioned around 15%. this is a very high rate of increase. a number of factors are contributing, monetary policy is certainly one of those factors. there are also other factors, people have very strong balance sheets so they're able to make down payments, there are also supply fa

louis fed president bullard, one of the more hawkish guys, i'm looking to atlanta fed president bosticks will start coming out now. that will force that hand in tapering, coming into jackson hole, maybe even before it, but this inflation number, it really gives credence to it. the bond market, really today you're seeing the 30 year bond those yields are lower. they're doubting the fed's ability to be able to taper those bond purchases. you're seeing the yield curve flatten. that means lower crude or alludes to potentially lower growth. you spoke to microsofts an apples, they're at record highs because they love this lower growth environment around the fed is capitalizing on it. stuart: let me turn to cryptos. suppose bitcoin came down to 25,000 bucks a coin, would you buy at that level? >> yeah. i'm long right now. i have been, i got out a couple months back waiting for the market to come into 32,500. it was coming to there, i was starting to buy. i will back the truck up at 25,000. i invest ad third of what i want to. i pointed clients in direction getting exposure. i'm not just lookin