coming up, we're 15 minutes away from fed chair powell's news conference even when the fed doesn't move markets that much, sometimes the press conference does. first, we'll get you updated on the states that are still counting their votes the latest daietls on the election next on "power lunch. why don't you call td ameritrade for a strategy gut check? what's that? you run it by an expert, you talk about the risk and potential profit and loss. could've used that before i hired my interior decorator. voila! maybe a couple throw pillows would help. get a strategy gut check from our trade desk. ♪ >>> welcome back markets do continue to rally the dow up 575 points, nasdaq up nearly 300, that's a 2.5% gain and it is the best performer we are watching two major stories this hour. first the coronavirus crisis daily numbers topping 100,000 for the first time and on the election front, the electoral vote count now stands at 253 for biden and 214 for trump. as votes continue to trickle in from various states, we still have six uncalled races at this hour for the latest on the election, let's go t

jim, what do you expect the chairman fed to say today? >> i don't think the fed wants to say much. as you pointed out, we're right in the middle of an election right now that's being disputed. the fed has already talked a lot about what their plans are for a new framework in september, they have flexibility average inflation targeting. they do need to discuss a little bit more about qe and a little bit more about their balance sheet but i don't think this is the right meeting. the other is that the fed needs to weigh in the amount of fiscal stimulus they had incorporated in their previous september summary of economic projections. we're not exactly sure how much of that that they incorporated into their forecast and how that may alter. but i think they're going to keep their language very open ended. they're not going to say very much different about what they said in september. i think december's going to be a bigger meeting >> jim makes a very interesting point, mona. maybe the fed was counting on big are stiger stimulus to come and that puts the med maybe on the spot to do more

the fees the fed was charging room going to be too high and the fed's argument is they probably did not need to use the facility because the fact that it existed and the other actions they have taken in the bond market meant that rates in the muni market have come down significantly. so it is cheaper to sell your own than to go to the fed. the problem with the main street program was it took a long time to get going. borrow didwho could and generally from their banks and did not want to also pay a bit of an extra fee. those who could not borrow were considered poor risks and the fed and their banks did not necessarily want to make loans for them. neither program has worked as it is written down. the fed would argue because the overall actions lowered interest rates, lower the cost of borrowing and kept the markets open. they were successful anyway without spending the money. caroline: pushing forward for us, everyone is giving up on fiscal stimulus and looking to the next administration. everywhere on is going to be looking toward the future relationship, the next treasury secretary. ar

the fed and the u.s. treasury are butting heads.teven mnuchin and has asked for the return of unused funds. the treasury secretary sought a 90 day extension but requested that others expire december 31. backentral bank pushed causing a rare public rift. >> i was a bit surprised and i have to say that after the announcement, the airport came out with a statement expressing their interest in extending them to keep them available and that is where i am. given where the economy is and there is so much uncertainty still out there, it is prudent to keep those things open so when people, if they do have stress, can draw upon it. anna: joining us now is gregory latham cosithnot 0cio. this comes down to the lesser sign that we expect to see that markets want to see extraordinary's of work for credit markets in the u.s. do you sense that credit markets are on a sustainable footing? the backstop still really important for market sentiment? the backstop is definitely important and it takes different forms. my reaction is that i would be surpris

does that put pressure on the fed?same lines already to increase the levels of qe? and with those asset purchases be longer out on the yield curve? secondly, in terms of the more interesting things, intangible things, we have heard from biden, who may become the president, that he thinks the be mandate should not only price stability and maximum employment, but also economic equality. we have heard particularly in jayfed press conferences powell acknowledging economic inequality as an economic problem, and he becomes somewhat emotive of it as well, he has referred to it as tragic, has said that he will push hard on employment to get back from that recovery we are seeing, and he says it is very much on the fed's mind. whether that creeps into the consciousness is something to watch. finally, with the lower likelihood, given the composition of congress and the executive seat of a high level fed starts, will the to contemplate negative rates? is there more pressure on monetary policy, and will they succumb to it? david: t

but can't the fed wait for that?is the biggest debate today among economists, do we get that announcement from the fed at the december meeting or not? if they stick to what they have been communicating, that they are only acting if they need to offset financial conditions, financial conditions are extraordinarily easy today, and yesterday at the end of the day they were even easier. so we still are not seeing the catalyst. francine: there is this pretty unusual public disagreement between the treasury secretary and the fed, some of these funds and how they get dispersed. --t does that tell us about is it a misunderstanding? is this obstruction? does this get worse? ellen: i think, you know, it certainly makes it appear that treasury and the fed are not playing nice in the sandbox together. you know, this was going to be an unpredictable time coming up to the end of the year with the specialties, facilities that the fed put in place to address liquidity and credit availability in the economy. these were set to expire

if so, why shouldn't the fed do that? ed: the fed was originally created to give us financial stability. they didn't have that double mandate that was passed by law in the 1970's to keep inflation and unemployment low. everyone knows that is a tough job to perform because sometimes they are contradictions, when unemployment is low, the economy is doing well. we have seen conditions improve until the pandemic it. but youn has been low, are right, as of late, the fed has said that they believe they have some responsibility for targeting specific groups. when we say specific groups, we mean the people that have been hurt the most, remain unemployed. , the cares the tools act provided $450 billion earmarked to give to the fed as capital to give out. in many ways, the fed has become the banker of the united states. they have the ability to lend $4 trillion out if they need, but they didn't come close to making those kinds of loans because everything else they did worked so remarkably well in providing for the economy and finan

it is the fed now. it will be the fed a biden administration.hen you reeled off a bunch of other institutions, going all the way to hedge funds come eight not regulated by anybody basically -- hedge funds, which are not regulated by anybody visibly. it is conceivable that the biden administration would like to extend the regulatory umbrella to some of these other institutions. depending on the details, it will likely need congressional authority to do that. as we all know, if the republican majority stays there with mitch mcconnell acting like a cement block, the prospects for doing that are pretty poor. the question will be what can you actually do with the regulatory authority that exists. and i don't mean to demean that. you can go a long way. we now have, leaving aside the fed, which takes it much more seriously, a bunch of deregulatory regulators. if you put in place people who believe the financial system needs regulation under the same laws that exist now, i think you can make a very big difference. guy: just a final quick question for me

actually you know the fed i mean the treasury and the fed raise the backstopping you know the risks of the banks and so one way to look at it if you look at you know bank holdings of treasury securities they're at multi decade highs right now so basically instead of lending to the broad public banks are buying treasuries and lending to the federal government and then the federal government is basically you know running these big deficits and getting it out you know in some ways to the public so basically banks are lending but through all their only choosing the absolute safest assets rather then going out and lending to small businesses and other things like that of course it comes and individual banks of some banks you know these these large money center banks for example are very different than a small regional bank specialize in certain types of loans many of them for example have been called out bad energy loans right there are some banks that specialize in that and they've been you know by basically making all those loans that so there they were punishment for actually doing the l

the cleveland fed and rob kaplan from the dallas fed spoke today on bloomberg television.ob said he isn't crazy about bond purchases, he would beef up and make lending programs better. another said monetary policy might not be the right tool, looking more fiscal policy. let's listen to what she said. >> the virus case increase is very concerning. and the fact that we don't have a fiscal package is very concerning. with the disparate impact of this pandemic, that is where fiscal policy plays a role because fiscal policy can be really targeted to households and small businesses that really need the aid. a lot of -- shery: a lot of questions for fed officials being interviewed these days, and i would imagine a lot of people at the federal reserve, including the one we just heard from, were convinced today by decision we just got from u.s. treasury. haidi: global economics and policy editor kathleen hays p let's get the karina mitchell with first word headlines. karina: president-elect joe biden reaffirmed he will not impose a national lockdown despite virus numbers surging. h

that was not how the fed was designed.ed was designed to be independent and apolitical that was designed by americans to be an american institution. charles: let's go to the man of the hour right now, chairman of the federal reserve, jerome powell. >> we are strongly committed to achieving the monetary policy goals congress has given us, maximum employment and price stability. since the beginning of the pandemic we have taken forceful actions to provide relief and stability to insure that the recovery will be as strong as possible and to limit lasting damage to the economy. today my colleagues on the federal open market committee and i reaffirmed our commitment to support the economy in this challenging time. economic activity has continued to recover from its depressed second quarter level. the reopening of the economy led to a rapid rebound in activity. real gdp rose at an annual rate of 33% in the third quarter. in recent months however, the pace of improvement has moderated. household spending on goods, especially dura

if that is the case, what does the fed do about it?e heard from bill dudley a week ago, saying he doesn't think the fed has many tools left, and in truth, they don't. they raise and lower interest rates. these are the interest rates for homes, cars, mortgages and car loans. they are already very low, so can they get any more bang for the buck out of it? you've got to figure they are going to stand back and see what we need, and they are going to ask congress again for help. guy: perfect set up. thank you indeed. let's bring back into the conversation peter fisher to get his take on this. peter, i appreciate that maybe for now, the fed maybe wants to take a step back. but if fiscal is going to do less, can monetary policy still do more? peter: not really. they don't want to do that. -- a lot of mornings but a lot of voices are saying this. they are reaching the bottom of the barrel. buying more assets is available to them. we saw the bank of england earlier. but that is not really going to change the pass of consumption and savings goin

yesterday the news on the stimulus from the fed between the fed and the treasury was kind of like thes out of the tire last night. but the market is taking that and the increase in coronavirus cases in stride this morning dic given the action we're seeing now. so it can be a bit of a confusing market but if you look under the surface at the action that we'll see, we're seeing the small caps anned in caps are doing really well, nasdaq is doing well, and equal weight s&p 500 is doing well and the sectors that are leading are the more value oriented and cyclical sectors. so you have energy, financials and materials leading. so that tells me investors are looking forward to next year >> so investors are optimistic, we know some of the reasons why. much of america is not as optimistic, they are worried about covid-19, they are worried about the economy, their stimulus checks. this is very much the k shaped recovery stockholders are doing well because the markets are higher main street america not so much without stimulus from the government how exactly does that play out in industries thro

under paul volcker, the fed managed to do that. since that time, central banks around the world have done the same, using a framework called inflation targeting. challenges keep evolving. for the past two decades, many central banks have been suffering with low inflation. some have a hard time believing that too low inflation is a bad idea, but persistently low inflation can pose dangerous for the economy. to see why that is the case, lower interest rates means lower inflation. this is included in estimates of future inflation as well as real return. lower interest rates means the central bank has less power to support the economy in a downturn. bias onarts a downward economic activity, employment, and inflation. we have seen this exact dynamic whereby lower rates the two beaker activity and lower a self fulfilling process. we don't want that process to take root here. i would quickly touch on four principal changes that have emerged over recent decades and now amounts to the new normal. the first is, for these advanced economies,

you want the fed to not bend with the political wind.han: let's talk about process and wrap things up there. i've lost count on how many beatings he must've been too with the federal reserve. if there was someone with a more unorthodox approach to monetary policy, how loud could that voice possibly be if she was confirmed? william: not very loud. the way the federal reserve works is it up his sentences, -- is it is a consensus, committee, the chairman since the agenda. if you have used not shared by the committee, you can dissent. if shelton is confirmed, the main implication is that joe biden would not have a chance to appoint governors to the fed, and that might slow down his ability to put people in place he thinks are more consistent , not so muchcies on monetary policy, but in terms of financial regulation and bank regulation. jonathan: bill dudley, former new york fed president now at princeton and a bloomberg opinion columnist. whatever you think about judy shelton, when you work through the process of the fomc, and michael mckee

first woman to fed chair from 2014 to 2018 raising inequality that the fed should deal with. fed vice chair 2010-204 and ceo chairing in clinton 97-99 can expect tore additional relief for the economy, believing less in the markets to come out of the recession without government aid. here's what she thought needed to be done in april if coronavirus lingered longer than expected. >> if this lasts a long time there will need to be additional support for unemployment insurance, possibly further checks to support other needs that households have i think state and local governments need more support than the cares act provided, perhaps health insurance, particularly for workers whose got health insurance through their jobs and that's been severed. those would be things on my list >> yellen can be expected to be in line with democrats on holding the line on existing banking regulations, -- her biggest challenge as a treasury secretary should be expected to back her boss politically on economic issues but not uncommon for good economics to conflict with politics. >> on that point, s

you spent eight years at the fed.'s nothing like the fed institution to give somebody clarity and project driven process. what is the yellen process? when she takes on a project, how does ago? julia: when yellen takes on a project, she learns everything she can about it. she's the most diligent, hardest worker in the room. she knows her mind. once she has decided how to tackle a problem, she is very deft at bringing people on board and building a consensus. she was a master of that at the fed. obviously as treasury secretary, she has less of a consensusbuilding job, but more of a job on capitol hill. tom: exactly. your perspective on how she will handle the senate. julia: i think she's got really good established relationships on the senate. respect onport and both sides. obviously we are anymore divisive atmosphere, and a lot depends on the outcome of the georgia elections. but i think you've got a solid a close enough divide, and terms of republican control, and you got enough centrist moderate republicans to work w

the fed didn't even tell us what they thought they were targeting for the daily fed funds rate.hey are telling us what the target is, a range on other sides, on either side, and what they expect it to be for the next three years. that takes a lot of volatility out, and it means we are playing arrange for the next several years. lisa: if market participants really believed inflation was going to pick up, that we were going to see growth going gangbusters next year as everybody gets their sea legs and goes flying around the world, you would probably see substantially higher yields, especially on the longer end. they haven't actually been tested yet. i am wondering at what point they lose control. to iner words, do we get inflation outlook where it matters and they have to step in? or is this all just theory because the outlook isn't necessarily confirm that yields should be that much higher anyway? ian: the fed is going to be willing to look past what will probably be an initial uptick in inflation with the beginning of 2021 simply because there's year-over-year base effect, and i

a different tool set at the treasury than at the fed is it safe to say that during her tenure as fed chair she erred on the side of stimulus as opposed to inflation >> that's a great point. she erred on the side of more stimulus, less inflation she raised rates once and held the line a year or so after that she is going to have someone who believes in more stimulus and believes that in the wake of the financial crisis one of the big issues was not enough system plus in that regard when it came to attacking it right now, by the way, you know, they had done a lot initially. and now the question is, should they do more she's certainly going to be an advocate of doing more and worry being the consequences down the road the markets see stimulus with this potential nomination. steve, stick around. let's bring in kayla tausche for more on what the confirmation process could look like. >> it really depends on exactly when this nomination comes out because you remember on january 5th we have a runoff in the state of georgia for two senate seats that could decide the composition of the senate.

powell saying the fed will return unused money to treasury, has asked. out around the time yesterday that treasury, asking the fed to return money from their lending program. they're going to return it. the question is what does this mean for the fed's ability to deploy emergency lending? romaine: it also means where this money goes. steve mnuchin really trying to make the case that they are to be a better use for that money if it is put in the hands back in the treasury. we were on the phone with him yesterday. he was saying the companies that are impacted by covid such as travel and restaurants, etc., they don't need any more debt. that is what the fed program would do. they need more ppp money. they need more grants. he talked about basically there is a better way to distribute this money. talking about a man who effectively has two months to pull this off so interesting to see what the plan is. joe: let's bring in the bloomberg managing editor for asia economy and government, but following this story. chris, thank you for joining us. what do we know

the fed has always been there. >> the fed is always there when you have debt you have four options, payt back, restructure it, default on it or you can devalue u it by destroying your currency no way these companies could pay back the debt so they are not going to do that they can't restructure it because none of the holders will restructure. they can't default because then they are out of business, lose their job. same thing with governments, so they will not default on the debt so the only choice is to devalue u the currency which is what the fed has been doing they will continue to do that. that's why you see gold and bitcoin doing so extremely well. before people's eyes you are having your eyes stolen through inflation and that is not inflation of goods and services, it's inflation of money and money is being devalued. over the last three years stocks are up about 3% per year not that great but if you denominate in gold rather than dollars, they are down 44% if you denominate in bitcoin, it's way worse >> mark, you are an investor do you invest in any of these zombie companies i don

does that translate to the fed?t is harder to know because they don't have the same kind of ability to add stimulus to the economy. they can push down on interest rates and keep rates near zero. that will help stock investors, but it does not help the person in this category here. alix: thanks a lot. still with us is nick maroutsos of janus henderson. this is what we see in jobs now. the virus is picking up. we have regional rolling lockdowns in europe. we could see that here in the u.s., yet nothing coming from d.c.. what kind of stimulus do we need, and how soon do we need it? needed immediately -- we need it immediately. i think we are on the right trajectory, but we are certainly going to need new stimulus to hold us over, whether that is one round or even two rounds depending on how long the virus lasts. i would caution people to look at the top line number because i think that helps the entire story. implement relative to population is still well below where we were precrisis, and that is because i think we ar

usually you get fed on market economies.a: what does that mean in terms of emerging markets insolvencies, the idea emerging market prices a lot of people have been talking about, including yourself. do you think if we do get this period of scarring, you get the wave of insolvencies in the developing world that we have not seen? carmen: before we say we have inactivity,e pickup even before the pandemic, we had a lot of frailties in the low income economies and several emerging markets. argentina, lebanon, venezuela, ecuador, now zambia. this is a longer list than we had in years. not everything happen simultaneously, but i think the -- especiallyor vulnerable are lower income --ntries, but not limited to a very poor and tracked it -- a very protracted period of financial fragility in the banking side and the possibility come in the worst cases, outright sovereign debt crisis. be still requiring restructuring, still requiring coming to the imf programs and so on. tom: carmen reinhart and vincent reinhart with us on their impor

if you don't have that fed put in the credit market, where does it leave the fed?ve to load up on bonds, extend bond buying through the treasury curve to buy even more. in the treasury market this morning, unchanged at 84 basis points. but the story of the last couple of weeks, since monday, the curve is basically exactly where it was monday before the vaccine news. the 10 year, pretty much exactly where it was the monday before the vaccine news. this market hasn't repriced in the same way the equity market has. looking forward, when ethan could about demand, what you check in on? i think this is -- when you think about demand, what you check in on? i think this is really important. asia-pacific em, there's a little more optimism at the moment. if you want a pure gauge of where demand is in the market right now, there's only a couple of places you can go to, and the commodity market is one. month,about 17% over the on the session, 0.6%. copper about 1.4%. a multiyear high on copper. this commodity market is pretty resilient in the face of near-term risks. tom: jon

and the fed chairman is looking at the papers. he doesn't need a weatherman to know which way the covid virus is blowing. >> no, we know the numbers, we see them and they continue to get worse. which, by the way, gets to our next story, pfizer and biontech are requesting emergency authorization from the fda for that covid-19 vaccine. joining us now is operation warp speed chief science adviser dr. moncef sloui with our meg tirrell. >> thank you for being here. really historic day, walk us through what the process looks like from here, getting this vaccine to market, what the regulatory process looks like. >> well, first of all, i mean, congratulations to pfizer for having done just extraordinary work over i believe the last 248 days based on what the ceo told me between the time they first spoke with biontech and took on the challenge and the time they have completed phase three trials, scale of the manufacturing, have demonstrated 95% efficacy and have prepared the file for the fda and also for the european agency, the uk, canada

an account with the fed crypto, all of the fed calling wallet. and they could issue fed coins directly into people's wallets with and bypass the banks just say to the banks, look, you know, we're going to bypass you completely. we're just go right, right to the consumer of your thoughts. that's one of the options. so if you look at the current system, you know, from what we saw, for example, the cares act, which was the, you know, the big congressional bill that did the stimulus checks and the p.p.p. loans and all that. so what that shows that the current system has some degree of checks and balances, so the fed can't just go out and just insert money. twitter wants it has certain limitations. and we saw for example, this year, they were very flexible getting around some of those a, supposedly to buy corporate bronze. but they worked at the treasury to open up that special purpose vehicle. so they can get around some of the letters of the law. but they still certain limitations by getting it to people, whereas congress is actually our elected off

now how is janet yellen a former fed chair going to work with current fed chair powell, how are those 2 going to work together and will this be something that is actually undone? what newton's actions were done by janet yellen? or will she continue that policy? do you think i would think that this would be reversed within a matter of days, but you have to bear in mind janet yellen, earlier in this year in the spring, said that the fed should be allowed by congress to buy stocks in the open market to buy equities in the open market. we can say that she will reverse minu chin's move, but we have to bear in mind that congress has to be on board with everything that is proposed. whether it, you know, if there is something that is agreed to between the federal reserve and the treasury department, that is something that, again, is going to have to go up in front of congress and be part of a stimulus bill. again, sticking with that story of what he actually said that these emerged, these are emergency tools when the emergency is over, let's put them away and that's kind of what he said to ju

fed: we always talk about being the ultimate put, expecting the fed to step in with extending the durationhases at their meeting next month, their $80 billion of treasury purchases a month. do you think they will do this, and why? see thatreally don't happening. if you looked at last week's numbers, the fed balance sheet at $7.15 trillion. they added less than $20 billion to the portfolio, and of that, $15 million were treasuries. to havethey would like that portfolio just $7.5 trillion. i don't and they are going to rush and that. for thatat the curve validation, i just don't see that they are going to go out and pump a bunch of securities into the portfolio between now and the end of the year, certainly after we know what next year looks like from a vaccine standpoint. lisa: markets expect the fed to step in before there is even a disruption, let alone any sign of consternation. on the flipside, as you said, it doesn't really seem like the conditions are there, and vice chair clarida not seem to be particularly pessimistic yesterday. how disruptive is it is the fed does not step in with

the fed says not so fast. we saw an immediate push on the markets, dragging the s&p 500 futures lower. they are down a little bit more than .5%. nasdaq futures were a little bit higher in the green. they are relatively flat now. we do have the euro-dollar ticking higher, inching towards that 119 level, even though there is a lot of disagreement going on in brussels today and i want to get to that really twin debate happening in brussels as to whether or not it is regarding brexit or the stimulus package. to help us break all of that down is maria tadeo. where should we begin? let's start with the stimulus. we still see no breakthrough coming out of brussels. yes, and i think you framed it very well. there's almost two issues that are pending. that is why there is so much uncertainty happening out of brussels. you have a stimulus package that was not agreed to and brexit. brexit, it has a lot of positive momentum behind it. behind the scenes, you hear that the mood has changed. both sides want to get a deal. de

step in how does the fed step in with what tools? if the fed is going to be using those tools of asset purchases, we know that those tools have a certain kind of value, but we also know that they get spent. they get kind of, you know, worn out and used out and they may need to think about new things we also know, by the way, that that is not optimal. right? optimally, we would have a good balance here between a fiscal stimulus and the monetary stimulus if we are going moving to a situation where we are going to have a monetary accommodation that turns out to be 90% of the accommodate, we are going to be looking at a very different economy. >> so, paul, do you expect the fed to step in at the next meeting and in one way or another increase its asset purchase or kmapg the shape and buy the longer end of the yield curve? and what would be the net income if they do do that and then we get the stimulus later in the winter. >> i don't think that would be done in december i think we are actively discussing what type of ammo they can use if

the fed will make the noise they want to have a fiscal deal.eople are saying to me the republicans offered 500 billion before the election. you could look at something very skinny and that fiscal void and fiscal narrative is a bigger risk that we are not discounting enough. say -- mitchan mcconnell is 500. maybeould put a number, 1.3. clearly more than the 500 billion. bad, buthink it's that it's going to be smaller, and that is what the fed doesn't like. annmarie: talk about in your in theat if trump wins senate is republican, stocks though higher. if it is trump it's going to be growth and if it's biden is going to be value. are you rotating? thomas: it's a good point, good question. it goes higher, no matter what. wins, if he had had a blue suite, you would have some pressure, think that's fair. on the other hand, you would have the value stocks. you would banks performing better. now you are somewhere in the middle. i think in this scenario the -- the value is not theg to be supported from higher yields. your back to the same trade-off with

from the fed to the treasury. biden looks set to nominate janet yellen, a supporter of more fiscal spending, as his treasury secretary. she was the first female fed chair. if confirmed, she'd be the first woman to head the treasury. plus, the dax gets the biggest makeover since its inception, increasing the index to 40 members, with tougher rules on reporting and profitability. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. tom, the markets are pretty quiet at the moment. a sigh of relief that they got through for the moment not only a treasury secretary picked, which we are still waiting for confirmation of, but multiple sources have said it is janet yellen. they are also siding because for the first time in three weeks, there is acknowledgment of the transition. the transition process starting to kick in. tom: not only the good news, but just as much as there was no bad news today, and that gives a lift to equities and other adjustments in the marke

fed chair, fed vice chair, san francisco vice president, cea chair.f those would be enough to qualify her to be the treasury secretary what's it take for a woman these day fs to get the job >> a lot more work and preparation and line items on a resume she's broken another glass ceiling, first female fed chair and potentially first female treasury secretary that's what happens in the crisis, the women come to swoop in and fix t steve, thank you >> let's hope they're successful >> absolutely. >> guys, bring in alan blinder, former vice chair of the federal reserve, professor of economic and public affairs at princeton. alan, it's great to have you back good morning >> good to be here good morning to you. >> you had nice things to say in some of the news reports about her nomination to treasury we've talked about her credibility, her rolodex, her knowledge of international policy but there has to be an early crucible what do you think that first crucible is going to be? >> the first unless it gets resolved before she takes office assuming it's her, which

most of theuarles: fed programs, and the main street program is not different in that respect, the fed facilities operate as backstop. they achieve their function when they restore confidence to the private financing markets. i think you can say that has happened with the main street facility as well. i do not actually view the limited take up so far of the mainstream facility as necessarily a sign of its failing. you could view that as a sign of its success if needs are being set aside by the private sector. that is ultimately what we want as opposed to being satisfied by the fed. i think it is useful to have bit -- it out there showed the economy develop in an adverse way. sen. schatz: thank you. chairman: thank you, senator schatz. it appears that senator van hollen has left the meeting. mr. van hollen, are you with us? i think he may have had to leave the hearing. senator jones? that appears to be all of the senators who are available. do you want to make a final, and -- final comment before we conclude the hearing? >> i do not. thank you for asking and thank you to the four witnes

when the fed issued this you stated quote i am told the fed to get good comments in response to their mood making. but can you clarify what exactly you meant by that customer seems to me the fed is likely to and what theyts whatn response to your would leave you to change your mind now? that it ist thing is so similar to the final approval and its substantive developments as to be almost indistinguishable in terms of their changes their inclusions of native americans small farms and other things. we took it as the sincerest form of flattery. the main difference between rules is that the fed appears to prefer discretionary performance will i really meant is that both the fed and the occ recognize the status quo is simply untenable and had been tied thank the area incentivize for letting in investment. our basic view was that we need to make the system better and it is a way of making it still better next year, we are happy it sithat but letting was, in our view, and on acceptable option. >> the entire civil rights committee has a very different point and if anyone is an advocate for th

tools whichall bore the fed can do. number one on the fed's agenda is to try as best it can. the new secretary of the untilry, but that is january 20. meancannot do the nasty, destructive actions of secretary mnuchin in trying to destroy the emergency lending facilities. insurance policies, that is what they are. mr. mnuchin looked at these and said, we don't need insurance anymore. there have been no claims basically. so let's destroy our insurance policies. that is not the way i act or you act probably with your homeowners fire insurance, that there has been no fire, so let's cancel the policy. jerome powell, as best he can chairis perch as fed where he has to be a lot more polite then i just was, has said in polite terms more or less the same thing. caroline: nasty, mean, crazy. i am really excited to continue this conversation to discuss the former federal reserve vice chairman alan blinder with us. he will discuss janet yellen and what she can do. that is next. this is bloomberg. ♪ caroline: today, we are focused on what the bided administration might do -- the bite in a