charlie evans, the consciousness of the dollar bulls.utis rolling get ready for an all-time high. gold moves on of the back of the dollar. there is the pound. down she goes. it is trying to find a new litmus level and a new floor, one could say. to the u.k. government and that story, tightening measures to combat the spread of coronavirus. britons have been ordered to work from home wherever possible. pubs will close each night at 10:00 p.m. prime minister boris johnson has appealed to the public to obey the new restrictions if the country wants to avoid a new national lockdown. >> for those who say we don't need this stuff and we should leave people to take their own risks, i would say these risks are not our own. the tragic reality of having covid is that your mild cough could be someone else's death knell. annmarie: meanwhile, the uk's hospitality industry is warning that extended restrictions will devastate the sector without more government help. the world's largest brewer is upping the impact will not be a severe . ibev ceo.to the

we are getting a market reaction from charlie evans before jay powell takes the stage?ld he say that? mike: he said he sees inflation at 1.5% by the year end and a slow climb to 2%. he says fiscal stimulus is important for the government, especially support for state and local governments. i guess what he is saying is it does not have to be zero. the fed does not have to be stuck at zero. that is the flexibility robert kaplan was talking about when he did his interview with me explaining his dissent. bits going to be a confusing for people on wall street at this point to understand what they mean when they say average inflation targeting. i'm not sure anyone on capitol hill is going to ask about that. alix: you can see rates coming up a little bit. in terms of what bullard said yesterday that was surprising? kind of an outlier on this view. a lot of people look at that and say it is a macro view. there is a lot of money in the whole economy. money has gone to corporations and they have sold a lot of bonds, that doesn't tell people who lost their jobs. alix: we are still

charlie evans saying they could hike rates before that. he tried to walk that back.nce. tom: our delicate balance is to tell you it is not about lisa abramowicz, jonathan ferro, and tom keene. we have to thank all of our economics team led by simon kennedy for literally writing out my questions. how do you spell that? do you drink red bull? lisa: you drink red bull? tom: you drink red bull? yeah. stay with us on bloomberg television. good morning. ♪ ♪ from new york and london for our viewers worldwide , good morning, good morning. the countdown to the open starts right now. 30 minutes until the opening ballot. equity futures update on the s&p 500, we advance .2%. fed chair jay powell beginning a marathon on capitol hill. >> love you the recovery process. -- looking at the recovery process. equityite the fact the markets might have you think. >> we are still expecting economic recovery to continue. >> it is too early to make that call. >> still worried about the fourth quarter. >> that would motivate the white house to get this package through. >> as we work to layer

unusual was an situation, charlie evans doing a speech today. rates asked whether zero apply to the idea of a 2% average inflation. you leave rates at zero until you get there, and he said maybe not, we may have to raise a little bit before getting to 2%. that caused a market reaction. the fed has not specified what wouldns by how long it raise rates, how far it would go over to percent. the markets filling in the holes, and unfortunately, that is a problem for jay powell. this was not the venue for him to respond. david: some talk about the coronavirus. chairman powell saying we need to get the economy reopened but we have to do it in a sustainable way, in particular, talking about masks. mike: the fed chair has always made it clear that controlling the virus is the way to get the economy back. i think he wanted to make that clear to members of congress, some of them whom, for political reasons, do not want to support that. secretary mnuchin did not take up a position on that comment, but was wearing a mask, so both of them reinforcing that ide

one person i will watch is charlie evans of chicago, who has been exceptionally articulate about thison higher, if we ever see it, and yields. jonathan: i do not expect to see a governor king, governor carney type response to let inflation go to 2%, 3%. bear in mind that was largely offered currency move. i imagine you are right, tom, two point 5%, 3%, and you are back in the hock. there are less hawks on the -- 2 .5%, 3%, and you are back on the hawks. there are less hawks on it. because of the earlier in reasons i mentiond the program, there are two economies mentioned, one absolutely on fire, stocks going through the roof. those companies, we all know, amazon, microsoft, etc. there are other companies, tom, really struggling. parts of the economy on its knees. the fed has been set policy for one, and you have to see what happens on the equity market off the back of it. tom: there is no question, the number one thing, jon, in all this mystery as i would not go 2.5% or 3%, and i defer to michael mckee and other experts, percentage.1% of the point changes the sweat as we break higher.

charlie evans is speaking in the u.s. and it is back putting and saying that you need inflation over 2% for a longer period of time. he is talking about 2.5% inflation. you had an ecb board member in a speech talking about potentially and thee european fund pandemic recovery fund actually permanent. a it a con -- is it contribution -- is any competition? kartina: i do not think that europeans like to go into competition with the fed. as we look we are having a very long and hard discussion about inflation. there are reasons that we can see disinflation or low levels of inflation. and demandthe supply imbalance and we have a lot of supply and not as much demand. we look at unemployment rates and those are things that dampen down inflation especially wage inflation. as we look to the longer term we look at what the fed has said. we have looked at average in place and -- inflation targeting when we have had such an average number below target and we would tolerate -- tolerated above target. as we bring that over into equity

. >> i want to ask you about the headlines from the fed's charlie evans a short while ago. it was spoke briefly about that with daive a few minutes ago the fed has not really clarified to market participants with this new average inflation frame work means. it adds to this hawkish till that is coming out of their statement last week. >> e gi got to admit i'm not su what charlie is talking about right there. the average fed forecaster has forecast no rate hikes for three years. this is really a theoretical discussion around the possibilities that the fed may raise rates before it hits 2% if it seems itself aiming toward 2% inflation. i think you hit the nail on the head there, kelly. this is a premature discussion without a lot of bearing in the present and i think it's not really the con centuse really the con centusesus of the board but it does point out the fed needs to provide more guidance and maybe more concrete language about what this new average inflation target means so there's no misunderstanding in the market. >> we'll see if they attempt to do that soon >>> mark

tighten policy and people want clarity on that, you know, how far above 2%, for how long that's what charlie evans gave some context to today saying it could be 2.5% and so forth do they need to lay out a more specific framework or at least say one is coming or kind of talk more in that direction so that people understand what those benchmarks will be because otherwise they're probably going to default, you know, similar to what we've already lived through which is, you know, maybe 2% or just the projections getting us there and we tighten, anyway >> i think wall street wants a formula and i think the fed is pushing back hard on the notion of getting out a formula and wall street's just going to have to get used to that. i think what the fed has said, it has been very, very clear, is before they will get off of ze o zero, and that's the big issue that everyone wants to know, before they get off of zero, two things have to happen. in this order. number one, you have to get to maximum employment, which is not a particular unemployment rate but a holistic assessment. maximum employment is a necessary

charlie evans says the fed could raise rates before inflation gets to its 2% target. interesting to see we get that reaction before we get fed chair powell. you are all seeing maxine waters speak right there. let's break down what to expect. emily wilkins joins us now. will the passing of ruth bader ginsburg, as well as the fight for the supreme court play into these to conversations today. emily: the senate has really been taken over by filling this new supreme court vacancy. it is something they want to have done before november 3, that is something we heard from the white house. types ofhese nominations take about 70 days. this senate will have to buckle down to get this done. we expect it to be extremely contentious. a lot of democrats feel they were cheated out of not having mayor garland sat because mitch mcconnell said we need to leave it to voters ten-month before an election and now they are saying this is in fair, republicans are saying they control the senate and president, why wouldn't they get this nominee through. is the treasury secretary now a lame-duc

james bullard stepped back from .hat, having to overshoot charlie evans came out and said some thingsnk the markets were a bit surprised by. the dollar even rose on this for a a while. let's listen to what charlie said at this virtual event. >> we sort of said we are looking to get inflation up to 2%, and then after that, we could be raising rates and still have an accommodative setting of monetary policy. if you read the statement, that is in the cards. we could start raising rates before we start averaging 2%. we still need to discuss that. >> this strikes me as a very important thing. a lot of people put it in extremes. let's say unemployment foster 3%, gdp is going up 5%, and you are at or above 2% but you have an average above that. would you really not start raising rates? charlie seems to suggest, sure, maybe we could. these are details we are working out. it really added something to the debate and i'm sure we will put an x or close ear on everything onextra close ear everything. as jay powell said today, they want the economy to get as strong as it possibly can, but they have