this is what the fed looks out for is your listing the fed has been dealing with liquidity issues when the repo markets were destabilized the fed was putting liquidity in the system since then the pressures on the financial markets coming from the insurgency, associated with this crisis, there's been a lot of destabilization, the fed has responded in a big way. it has been for example buying large amounts of treasury and securities to have good functioning in those critical markets. it continues to put cash into the system to try to make the repo markets and the money markets work better. open up the discount window so banks can borrow one fourth of 1%. the interest, as they need liquidity to make loans, very importantly, the fed has also getting liquidity in the international systems are back in 2008 in the financial crisis, one of the problems around the world with so many financial transactions take place in dollars of course the only source of dollars as the federal reserve. so in order to stabilize the money markets around the world the. engine fed conducted swap operations with 1

the fed is helping there as well. it announced just today or yesterday that it will buy sba loans from banks or provide a secondary market for those loans making the more liquid and making banks might want to make those loans. i think the thing to emphasize is that the fed, what is the fed can do is reinforce the private credit markets. they are dysfunctional because the leveraging come because of uncertainty, but that can come in and replace those markets to some extent or strengthen those markets and try to get private lenders back into those markets. the fed does not give away money. the 133 requirements to require the fed pay collateral and intend to be repaid, but in order to give the fed protection a big chunk of the money in the fiscal program, $465 billion essentially provides equity for the fed's lending programs so that if they do lose money it will be covered by the treasury funds. so again, there has been progress. we have seen credit markets in peru. i think the critical issue of the how quickly the publi

end game here because what the fed -- the message the fed to give the markets is we are here, we are here and absolute force with no thinking or talking about or any looking over our shoulder about what we're doing right now remember, that was a big sort of break on the fed's stimulus in the crisis, this idea that, hey, we are ending this, we'll go back to normal rates real soon this time it's all out, all open, whatever it takes for as long as it takes. >> steve, because the data is more promising from gilead today, because the stock market is 15% from the all-time highs, is it possible the fed never launches some of those programs if the economy they think improves enough? >> that's a wonderful question it really underscores the way the federal reserve can act. there's a marked effect on the corporate bond market. yes, it is possible. some of these programs may take weeks to launch but the idea that the fed is going to launch them had a positive effect on markets oar very much so it'll be interesting as we see more details thanks very much see you again next hour for the big decisi

the fed was involved but it wasn't primarily a fed program. this time congress has a lot of faith in the fed, jay powell said he can leverage 10:1 to lend. this time they are talking about buying securities in municipal bonds and corporate lending. i'm wondering if you're comfortable with this use of the fed to decide who gets credit and who doesn't and whether you think this is an appropriate role for the fed? >> it is an appropriate role for the fed given the circumstances. glenn hutchins pattern not been talking about the importance of governance and making sure there are clear rules and oversight over the spending process but the fed under jay powell in previous chairs has established a good record of nonpartisan objective analysis. the fed is, i think providing government supported credit based on objective criteria and less subject to partisan debate then another type of approach might have. i don't think it should be a regular feature. the private sector should not be a source of credit under all circumstances but in this case were cred

the fed chair. watch --chair powell: we watch intellective awe as servants puted theirs in selves at risk for the public good. people have been asked to put their lives and livelihoods at hold at significant cost. we are moving with alarming speed from 50 year lows in unemployment to what will likely be very high, although temporary, levels. all of us are affected, but the burdens are falling most heavily on those least able to carry them. it is worth remembering the measures we are taking to contain the virus represent an essential investment in our individual and collective health. as a society, we should do everything we can to provide relief to those who are suffering for the public good. the recently passed c.a.r.e.s. act is an important step in honoring that commitment, providing $2.2 trillion in relief to those that have lost their job, low and middle income households, employers of all hospitals and health care providers, and state and local governments, and there is additional legislation i

listen to what the fed said. money is going to be there because we can't have as many stores being boarded up as a lot of us have been seeing i think this is a clarion call to say we're going back to work, america, so don't get off the train. it's coming. i like that. i think it's very important. >> yeah, you know, when you look at what the fed is willing to buy here, again, it's just remarkable, guys and i made the point about high yield bonds because have they actually ever done that? no we're talking about them buying corporate bonds, eligible individual corporate bonds, a facility they're putting together may purchase bonds that at the time of purchase were issued by an eligible issuer remaining maturity of five years or less. eligible etfs. this facility again they're talking about, the secondary market corporate credit facility led by the federal reserve bank of new york, will lend on a recourse basis to a special purpose vehicle that will purchase in the secondary market corporate bonds. >> unbelievable. >

act the fed, congress provided a backstop, if you will, of 10% to back up what the fed is doing and that'sin the right direction, but it's not near enough i'm worried about the fed independence and the temptation of congress to use the fed in the future for fiscal policy actions. that's what worries me and that's what deviating from a long history since the 1950s >> charles, i wonder if you think we're entering a new economic era in general. modern monetary theory was seen as a fringe concept only a couple months ago. some of the policy making going on on the fiscal side right now, you have these checks getting directly deposited, universal income right now, do you think that this is -- that these theories are now startingto actually become a more mainstreampiece of the discussion and what does that do to u.s. economic outlook longer term, especially given the fact that we have a deficit that is now ballooning and at some point once the crisis is over it will have to be dealt with? >> right morgan, those are excellent points and, in fact, i would argue that ha we've seen right now is, it's

let's move it along and talk about the fed. powell voiced concern that the coronavirus crisis could leave permanent scars on the u.s. economy. all stripes need to do more, stand up and be counted in terms of limiting the damage. that was the sobering teleconference. the virus will be far from over, even if the economy begins to recover in the third quarter. the deep dive that we are seeing is the worst since the great depression. let's take a listen. >> congress has also reacted quite aggressively and strongly with the cares act. and other laws. that's appropriate. with enhanced unemployment insurance and the paycheck protection program, we have 16 -- seen a large reaction. i would say it may well be the case that the economy will need more support from all of us if the economy is to recover. james foley is ahead of fx strategy. great to have you with us this morning. it's interesting that the dollar turned around this morning. when you listen to jay powell yesterday, he really reaffirmed -- we are a long way from recovery. tha

to the fed's dual mandate. natures a temporary relate to all of this. you can see that in inflation expectations. they have been moving up and improving. they are not soaring. i think it is important to evaluate what the fed is doing in that context. tom: yogi berra talked about theory and practice and said basically in practice, there is no theory. what is the theory right now the central bank? michael: i think the theory is to not allow a supply-side shock, a natural disaster or a pandemic, to morse into a deflationary depression. -- morph into a deflationary depression. from early march to late march, we were seeing scary signs of a massive dollar liquidity panic that initially seemed to overwhelm the fed's efforts, but now, the tide is starting to turn because of the feds very aggressive and open-ended actions. that is good news because the last thing you need is for a nasty supply-side shock, which is essentially, an act of god, a global pandemic, to then be massively compounded and exacerbated by a moneta

it's all about the fed today. what to expect from the rate decision this afternoon let's bring in mike mckee. great to have you with us. why are we expecting -- what are we inspecting today? are we effecting any new initiatives or just a continuation of what we have seen? mike: a continuation is the wall street bet that they will be looking at what it has done and analyzing the effects so far. maybe strategizing on what they may do next. there does not seem to be more they need to do to prop up the markets, which has been their goal. to unclog the plumbing of the markets. it isn't time to stimulate the economy because nobody is going out and spending yet. they are on hold at this meeting. it might be a technical change. they may raise the interest rate on excess reserves by about five basis points because the effective fed funds rate is running really close to zero. they would like a little room. that's a technical change. it would not mean anything as far policy. shery: what are we expecting in terms of guidance

the fed of course was involved but it wasn't primarily the fed program. they seem to have given money which they say they can leverage 10-1. i'm curious what you think about this. and including this time they are talking about buying security from the municipal bond as well as corporate. i wonder if you are comfortable with this use of the fed to decide who gets credit and who doesn't doesn't >> guest: i think that it's appropriate. there was an op-ed to look at the rules and funding of the process. but they've established a good record of nonpartisan objective analysis. the fed is a vehicle for providing credit that would be based on objective criteria to the partisan debate we want the private sector to be the source of the credit under almost all circumstances. but where the credit markets were disrupted i think they have an appropriate role to restore stability and one sign of this is we don't expect the lending to crowd out all other funding we are already seeing are all private funding returning to its like a backstop vanity only wonder type of circ

i actually leave that to the fed.purchased , even inted securities the new program at the fed, commencing them to go down to gradeto full investment bbb's is a big stretch. junk bonds are a little out of their normal range. i think they will look at that but also skepticism, within the context of creating illiquid markets. one area they are going to have to do that with is mortgage at theies, with cm bs aaa level and going down a bit. they will find their way. actually willonds be low on their list. alix: fair. unfortunately we have to leave it there, but it was really wonderful to talk to you. thank you so much for your donation to new york state as well. steve schwarzman, ceo and chair of blackstone. much more coming up. this is bloomberg. ♪ ♪ alix: welcome to "bloomberg daybreak" on this tuesday, april 7. i'm alix steel. let's take it right from the top. secretary dominic raab tries to reassure the nation as prime minister boris johnson is moved to intensive care in case he needs a ventilator after his coronavirus

i cut up with dan tarullo, former fed governor, and what more he sees the fed can do. the fed is going to expand their balance sheet further, probably quite substantially further. remember, under their authorizing legislation, which was reiterated, re-emphasized by congress in the care zach, the fed is that the cares act -- the cares act, the fed is not to take on the emergency lending that it does. so it is in part going to depend on the degree to which secretary mnuchin and the immense ration are willing to use those funds to back various kinds of assets, some of which might entail substantially greater losses then things like investment grade corporate paper. so the question has got an economic component to it. is it important for the fed to do that, to put a floor under financial markets and the economy? secondly, to what degree does the treasury want to allocate the funds that it has two back assets where they could well take losses rather than just provide some insurance money? alix: so what do you think? if you were still in the fed, would you be advocating the

so the fed needs to do more.the things we were struck with a lack of willingness for the fed to provide more clarity around their asset purchases, in particular around the treasury and mortgage asset purchases. they continue to talk about how these purchases would be structured supports move market functioning, but refrain from really providing more stimulus to the economy. that would be a nice secondary benefit of the ongoing purchases, but i think the market was looking for a little bit more. when he says fiscal and monetary authorities need to do more, they really want to provide some concrete guidance to that effect. the risk is that the fed is going to continue to taper their purchases or reduce the amount of woodley and monthly purchases they have been doing. -- amount of weekly and monthly purchases they been doing. that just seems inconsistent with the message fed is trying to deliver. alix: what did you make of the fact that they didn't? mark: it seems like they want to preserve optionality. they want to

cabana, should the fed be buying high-yield etf's? fed has two objectives. stimulus as they can to the real economy. the second is also to ensure they are protecting the taxpayer. remember, they are utilizing funding from the treasury that has been given to them by congress, which is essentially taxpayer dollars. the fed has to ensure they maintain a certain amount of credit protection. mentioning, i think they are dipping their toe into the high-yield market. i do not see the fed embracing theyyield just because have to have some credit standard somewhere. by agreeing to purchase entities that have been downgraded, i think that is reasonable at the smaller size. we have seen that with the other money market programs the fed has laid out. i do not think they will necessarily be embracing this knowt just because they they have to have some type of credit protection to the taxpayer. fair, and obviously buying a distressed energy company debt -- not the same as buying a fallen angel in the last few weeks. we are obviously dealing with buying dollar funding. as

>> the short answer is yes the longer answer is it's not just the fed what the fed's doing is very muchconcert with what treasury and congress are doing. so i would say the bank of uncle sam, we, the people, our government essentially ensured that our economy is a growing concern even though it shut down and believe me, i'll be the first to give a salute and a high five to the fed, but i think it's important to recognize that this is a joint venture with treasury and the congress, because congress has got to allocate the loss-absorbing capital for all of these spvs that the fed is creating which then they can lever 10-1 with helicopter money. so it's a beautiful cooperation between the fiscal and monetary authorities and the stock market thinks it's really cool, and i do, too. >> okay. spv, special purpose vehicle and one of these other three-letter acronyms we haven't heard in 13 years and now they're coming back, paul let me ask it more directly. do you believe that the taxpayer we forget the t.a.r.p., do you believe that these programs will all or some ultimately pay for themselves.

they're not alone. >> yes, i think the fed -- yeah, i think the fed will appreciate the help right nowi think that's a positive thing. we're going to need to see more, but also, we need to have a less-political environment in which these decisions are made >> sorry to jump in, but here's jay powell at the podium for the virtual press conference let's listen in. >> both here in the united states and around the world. the coronavirus outbreak is first and foremost a public health crisis and the most important response is coming from those in the front lines, in hospitals, emergency service, and care facilities. on behalf of the federal reserve, let me express our sincere gratitude to those dedicated individuals who put themselves at risk day after day, in service to others and to our nation the forceful measures that we as a country are taking to control the spread of the virus have brought much of the economy to an abrupt halt many businesses have closed, people have been asked to stay home, and basic social interactions are greatly curtailed. people are putting their lives and liveliho

coming up, fed vice chair to clara -- fed vice chair richard says we can keep the economy out of a demand♪ >> i am very confident that is the economy recovers from this hit and begins to return and recover, that we at the appropriate time will be able to unwind these programs. alix: that was fed vice chair richard clarida. for opportunities in this environment, brian weinstein joins me now. i am curious to see how you are thinking about the fixed income world. doyou buy what the fed buys, you go further out the risk curve, or do you buy into safety? i don't even know what that is anymore. >> i think the overwhelming theme of investors that call us is they want principal protection. there was a big fear over the last couple of weeks that you could lose principal. the first response is to go where the fed wind. the problem is that keeps changing. they are expanding the view. i think the question for investors really is do you have a manager that is doing their homework. no one has ever seen anything like this. we've never seen as many people lose their jobs in three weeks. never seen the gl

the fed is not a fiscal authority. the fed's in the lending business, and they can lend against anything that they deem to be good collateral. they can be incredibly liberal in that mission. but they're not in the grant-making business. and to the extent this economy needs to have grants from the government to households, to business, to state and locals, that has to come through congress and i love -- i think sarah noted when he talked about the great fiscal power of the united states, and he was openly calling on the fiscal authority to give him some equity in order to be able to take more risk so i think he did a really good job of saying, a, we're doing everything we possibly can, but, b, there are limits to what we can do and congress should use its great fiscal power that this great bank of uncle sam that's been created, which is a joint venture between the fed and the treasury, needs to have more taxpayer dollarsfor grants and loss absorption. >> sarah, i know you're sensitive about this issue you were at the fe

>> look, as i said earlier what i want to know from the fed right now is what the fed is going to dolp the little guy? they have already helped the big guy. they already helped the investor. they bailed out the speculator and the hedge fund. i want to know from jay powell what he will do for small business in america today. cheryl: obviously a big piece of that, is the ppp is connected to the federal reserve and the treasury. i'm not smart enough to make that connection in five seconds but we shall see. anyway, let's take a look at virtual q&a with jay powell. >> begin by acknowledging the tragic loss and tremendous hardship people are experiencing here in the united states and around the world. the coronavirus is first and foremost a public health crisis. the most important response from those in the front lines, hospitals, emergency services, care facilities. on behalf of the federal reserve let me express our sincere gratitude to those dedicated individuals who put themselves at risk day after day in service to others and to our nation. the forceful measures that we as a country a

i think largely, the fed has. fed has succeeded largely in reducing all of the dislocations in the markets. that is off the back of just announcing a bunch of these facilities. they haven't rolled many of them out because i think in terms of what they will announce later this week, we will probably hear very little. think the fed is focused really on getting this alphabet soup of new programs set up and rolling them out. monetizationin a of debt situation, whether you want to call it mmt or something else? megan: i don't think we are there yet. we will get there? possibly. it depends on what the fed is doing with its balance sheet. if you don't think the fed is ever going to shrink its balance sheet, it is just going to hold onto these assets forever, it is essentially debt monetization. mmt kind ofn situation, though. for the most part, we are seeing some limits in terms of what we are willing to spend. you mentioned in the fiscal side that there are some signs that politicians aren't willing to throw all the mon

some more get reaction to what the fed is doing. we are stepping further into the credit space when it comes to the fed. fed chair jerome powell making remarks a little while ago in the last hour. joining us to give us some analysis, viktor hjort, global head of credit strategy at bnp paribas. what did you make of what the fed had to say? what did you make of jay powell's comments? viktor: you are absolutely right, this is a further step from the fed away from being a liquidity provider of last resort to being a liquidity provider of first resort, now providing funding to corporate bond markets in both primary and secondary markets. i guess the significance of the that it is also prepared to go below investment grade in terms of where it , today sayingng that it will also include so-called fallen angels and its corporate qe program. it will also be including high-yield etf and its bond purchases. expanding the -- ,rogram to include aaa tranches providing funding for the leverage loan market as well. hand, it is a big step for the fe

vonnie: michael mckee, the fed whisperer for us, thank you. let's check in now on the bloomberg first word news. here's viviana hurtado. viviana: china rejecting the u.s. intelligence community claim it hid coronavirus numbers. five agencies concluded that beijing under reported both total cases and deaths from the disease. china's foreign ministry says u.s. officials just want to shift the blame. now to capitol hill, where senate majority leader mitch mcconnell would move slowly on considering a fourth stimulus bill. senator mcconnell telling "the washington post" he would ignore efforts by nancy pelosi to get talks going. he says he is concerned about how congress would pay for another wave of spending. spain reporting its worst day yet in the coronavirus pandemic. there were 950 fatalities in the last 24 hours. that has pushed the death toll past 10,000. spain now has more than 110,000 confirmed cases. it is the second-most severe outbreak in europe after italy. the price of oil surging today. china plans to start buying up oil for its stra

but affects the fed's balance sheet.t's not whether the fed has the tools to get the genie back in the bottle, it's whether the conditions prevail that makes them think this would be desirable and at this stage i think we're a long way from that. taylor: thank you to neil shearing. you can check out tv go and click on our charts and interact with us directly and go to tv go. this is bloomberg. ♪ vivianna: you're washing bloomberg, let's get the business flash. u.s. stocks probably hit bottom because of what the firm calls the whatever it takes approach of policymakers. goldman removing its prediction in the near term. the s&p could fall to 2000. apple plans a refresh of its top tier iphones. bloomberg learned in the fall there will be a major refresh. apple is borrowing huge from the latest ipad instead of the current curb design. two high end iphones will have flat stainless steel edges and 5-g will be added to as many as four new models. that's your bloomberg business flash. taylor and tom? tom: thank you so much. grea

when we come back the fed in focus.owell and company say about the central bank's unprecedented move we'll discuss about glenn hutchins that's next on "squawk box". every financial plan needs a cfp® professional -- confident financial plans, calming financial plans, complete financial plans. they're all possible with a cfp® professional. find yours at letsmakeaplan.org. they're all possible with a cfp® professional. featuring the emmy award-winning voice remote. all the apps you love, including netflix, prime video, youtube and hulu. and the most 4k content. the best entertainment experience all in one place. stocks looking to bounce back. major index snapped multi-day winning streaks yesterday but this morning they are on the rise once again. >>> earnings reports are coming fast and furious quarterly results this morning from boeing, general electric, big defense contractors and health care firms. >>> we're about to get a look how the entire economy did in the first quarter just as the coronavirus was reaching the u.s.

then we go to the fed.hey will decide what they are going to do, eight's probably nothing because they have done so much already, but look for some discussion from jay powell in the virtual press conference this afternoon on where the fed thinks we go from here. do they think we need to add more stimulus to the economy? do they think we are going to be doing this for a year, two years? a lot of the programs they set up are supposed to expire september 30. do they think they will have to go longer than that? some questions about where to invest in the future, but not a whole lot of additional action expected. alix: if that is the set up, what are you watching within that? damian: i agree, the big what it discusse fed doesn't the actual duration. i don't expect that it will. but if it should do that, that could be, in my opinion, quite bearish for markets. let's see what happens there. in the meantime, i am focused on china. we are seeing the big banks. we just saw the big oil producers. clearly they are not

coming up next, the fed decides. fargo security strategist tells us what he is watching for in the fed announcement and what you should be watching in the weeks ahead. this is bloomberg. ♪ >♪ saw a risk to the outlook for the economy and acted. rangereduced the target for our policy interest rate by one percentage point, bringing it closer to zero. ♪ >> we are deploying these lending powers to an unprecedented extent. we will use these proactively and aggressively until we are confident we are on the road to recovery. chairmanderal reserve jerome powell will have comments on his monetary policy and emergency actions later wednesday. the macro strategist from wells fargo will be listening in closely. great to have you with us. there is no great surprises we are expect to hear from jay powell, but what level of assurances of you need to give to markets? bewe expect the message to they will remain accommodative for a long time especially with the policy rate and the different measures they have taken. what we are lookin

all of this following the fed's big announcement this morning. we also have some big moves to the upside in retail with gap, kohl's, macy's and nordstrom's seeing gains of more than 10% today and the cruise lines are also surging norwegian, royal caribbean and carnival up double digits, up about 20% in norwegian's case. and finally, take a look at shares of ford, which are soaring today, because the fed announced it will be buying what they call fallen angel debt and ford is among them let's get to the very latest now on the coronavirus pandemic. over to sue herrera for the headlines at this hour sue? >> thank you very much, kelly. good afternoon, everyone here's the latest. the global death toll of the pandemic has now risen above 90,000, with more than 15,000 here in the u.s. it's still ongoing, but moments ago, new jersey governor phil murphy in his news conference reported 198 deaths since yesterday, bringing that state's total to 1,700 new jersey also saw a surge of new cases more than 3,700 in just the last 24 hours house speaker nancy pelo

how -- why do we want the fed to do that? there was another way to do it we could have just had congress borrow the $3 trillion and make all of those decisions >> right >> the economics are exactly the same i mean, at one level, i suppose, it's a good sign that congress trusts the fed, probably more than they trust the trump administration to do this properly but there's going to be some tough questions ahead, kelly i mean, you know, jay powell has said on september 30th, we'll decide if these facilities are still needed and i don't doubt that he will apply a very non-partisan, economically informed view to that but steve mnuchin might have a slightly different view, you know he might have an eye on the election and what he wants the shape of the markets to be in. those are the kinds of conflicticonflict ing incentives that the fed is going to have to negotiate >> again, we're just at the beginning, i think, of that. greg, thanks so much it's a great piece and thanks for joining me today really appreciate it >> thank you, kel

we are getting used to the fed acting at any time.esn't have to be on the of a of -- be on the day meeting. we are expecting further announcements today, no new facilities, maybe some fine-tuning of programs that are already underway or have already been announced. but we don't expect any new sweeping initiatives. but there will be items in which the markets will focus, from a higher -- high-low economic standpoint. market participants are very interested not so much in with the fed things about the second quarter, but what do they expect about the rebound, the pace of recovery over the second half of the year? i think a lot of interest around the fed's purchases of treasuries and mortgage backed securities. will we start to see them move from a period where they have been taking actions, nothing purchases every week as they really look to stabilize markets to a more regular program along the lines of the kiwi programs we have seen in the past four we will start to see monthly announcements, get a better will occurere they along the c

the fed stuck to guidance.or a closer look at how the central bank sees it from here a professor of economics at princeton university. thank you very much for joining us from washington dc. say that chaird powell was successful in this meeting. there was a most no reaction -- almost no reaction, which for central banks is a success. >> there are occasions where the central bank that is trying to move rockets. one.was clearly not trying, when you don't move markets, that is good. those expecting a change in monetary policy were sorely disappointed. i saw speculation he might hint at yield curve control. that didn't seem likely. he didn't. his basic message was what it had to be, we are here with a toolbox. it doesn't have everything in it. congress has to do some things. but we have a toolbox and intend to use it to the maximum extent possible. >> could that mean additional measures? already they have announced so much. so far it seems only five of the nine lending facilities they announced are fully operational

what does the fed still have on the shelf? i suppose the simple answer is, they can make money. >> well, yes and essentially, that's what they're doing. so still on the shelf is this main street lending facility tyler, this main street lending facility that the fed has could expand the balance sheet by $4 or k5d trillion if they use this simple ten-to-one ratio of treasury money to fed money they've used in the past just so people would understand, the fed would take $100 of collateral and the treasury would take the first $10 piece of whatever losses there the fed would be protected using that $450 billion that was given to the federal reserve in the cares act. there is still several areas, tyler, where the federal reserve has some problems in the markets. you have this mortgage service issue that diana olick has written a lot about. you have people not paying their mortgages. so the people -- the companies that are supposed to pay it are in really a bind right now of liquidity. so that's another area high yield credit is ano

let me follow up on carl's question on the fed. powell said there's no limit to what they can do no limit resonated with the traders by the comments i was getting. not only are they buying corporate bonds, corporate etfs, they're buying high yield, they're buying munis as well we used to call this japan-fication of the global markets. i'm wondering if you can react to that. we are going the way of japan here do you think that this is a good way to go? will the fed eventually buy equities as well remember, in japan, the bank there, the central bank there, owns the substantial portion of all etfs and about 5% of equities are we heading it in that direction here in the united states >> well, i certainly hope not and i don't think so i think what you're seeing here is a fed that is addressing a problem that's usually not one that the fed traces. the fed comes in when you're having major economic recessions and that usually means large segments of the economy, whether it's the energy group, the automobile group, it's when large corporat

of american workers have to come to grips with they are expend job bowl in an environment where the fed can give their friends trillions of dollars with no restrictions whatsoever this is another clear example as well of being an issue of distribution there is no shortage of money there is no shortage of credit there is no shortage of room on the federal reserve's balance sheet we see that now because when the hedge funds and private equity groups when they start wobbling because ever since back in repo something was going on but now we have them there are fracking debts defaulting we have the commercial real estate sector trillions and trillions and trillions of dollars trillions and the fed instantly is able to transfer money to them instantly in the other space where the rest of the 99.9 percent of the population lives where we all live we have a situation where oh it's so hard i don't know we don't have the money and we don't have the infrastructure we don't have the institutions like all these small and medium sized enterprises having to borrow via you know the s.b.a. the small bus

open market committee wrapped up crucial meetings where they decided to keep interest rates near 0 fed chairman drone paul held a virtual press conference following the meetings and had this to say. last month we quickly lowered our policy interest rate to near 0 we stated then and again today that we expect to maintain interest rates at this level until we're confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals so let's get some expert analysis on the state of markets and the economy with former fed insider and c.e.o. of quill intelligence. co-host christine thank you both for joining us today now i want to start with you on this fed decision the fed is actually now plays additional actions and lending programs as the economic conditions have worsened what are the tools do we really have to work with here after that you know near 0 interest rate. well you know in the press conference chair powell said that if the size of the facilities that have been authorized thus far are not adequate if they're not big en

i haven't seen that since glen fed and cal fed in the '80s. shocking anomaly the bank can float some of those questionable high yield bonds of the fed if it has to we get results from united health, unh. this is the most important managed care company they call it health care insurance company. great company. wall street didn't care about it when there was some chance bernie sanders would become the democratic nominee going to war with private insurance now that's off the table it makes a difference. pandemic will be tougher to manage earnings. it has a lot of levers i like the stock >>> thursday we hear from abbott labs they keep saying they need coronavirus testing before we can reopen the economy that's why we need to rely on abbott with the five-minute test no pain, then bingo. they're producing 50,000 in the day. i want them to ramp up, so does everybody else we have to get to at least 500,000. 500,000 at least so people can feel confident go out and do things abbott is a fabulous company i think this test is a game changer. if they make

the fed is actually now plays additional actions and lending programs as the economic conditions have worsened what are the tools do we really have to work with here after that you know near 0 interest rate . well you know in the press conference powell said that if the size of the facilities that have been authorized thus far are not adequate if they're not big enough that the fed actually has 0 impediments to grow them as much as they want he drew a parallel to the p.p.p. program the 1st of which was capped at $349000000000.00 for example and said that unlike the cap that congress puts on certain facilities that are working through congress through the small business administration that the federal reserve is not impeded by any such limitations and that they can grow these facilities as much as they possibly need to until the economy is on a self-sustaining path. i mean that brings me to this point what it what is the danger of the fed actually blooming the balance sheet i mean its pursuit to stabilize the markets it is now ballooned to a record at 6.6 trillion dollars which is near

what if they don't deliver we'll break down the big fed bomb is trouble brewing for starbucks. ayitusfa iba in two. which is why we're ready to listen. and ready to help you find opportunity. so. let's talk. edward jones. it's time for investing to feel individual. since 1926, nationwide we've been there in person, during trying times. today, being on your side means staying home... "nationwide office of customer advocacy." ...but we can still support you and the heroes who are with you. we're giving refunds on auto insurance premiums, assisting customers with financial hardships, and our foundation is contributing millions of dollars to charities helping with covid-19 relief. keeping our promise to be on your side. >>> finishing higher today for what could be a major moment of the truth for the market the fed kicks off a two-day meeting tomorrow, buying whatever it takes to stabilize the economy, the stakes couldn't be higher. listen to what the chief economic adviser said earlier today on sidewalk box. >> if the fed went all the way down to high yield, why not one step furthe

it is fed day and a fed date of many dynamics.e better speak to you then the choiceser, on that chairman powell has this afternoon. stay with us. this is bloomberg. ♪ ♪ let's get your first word news. signing anp executive order compelling slaughterhouses to stay open. a number have shut down because of the coronavirus and the president says that frightens the food chain -- threatens the food chain. activists want to protect workers from the disease. facingtrump says states budget deficits because of the coronavirus will not get aid unless they take action against so-called sanctuary cities and says that would be part of any deal with house democrats. in germany, for the first time in three days the number of new coronavirus cases rising. there have been almost 160,000 infections and 6300 deaths, as the government considers steps to return the country to normal. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. tom: thank you so much for kee

the fed has cast a wide net. it's offering these programs to a lot of different companies and they would fail and lay people off if they didn't offer such a widespread net. they can't selectively eliminate certain possible buyers or certain corporations from their programs so they are casting a wide net and it's capturing names they might not prefer to capture but that's something that has to be resolved later. that's a fiscal question. the fed can only offer the lending capacity that they are playing the role they are supposed to in an extreme time. i wouldn't be too critical, you know, on them for providing funding or allowing for funding to specific companies when it's not their intent at all. liz: fair enough. thank you both. i hope you tune in to "the claman countdown" tomorrow because we do have the ceo of carnival cruise lines. the ceo and president will join me in a fox business exclusive tomorrow right here at 3:00 p.m. eastern on "the claman countdown." we are thrilled to have him because we are dying t

those investment grade fed chair, jay powell, in a web cast at brookings saying there's more the fed can do and really no limit on what it can do >> our abilities to do that is limited by the law we have to find unusual circumstances. the treasury secretary has to agree. we are using this fiscal backstop there's no limit on how much of that question do other than it must meet the tests under the law as a mended by dodd frank. >> let's take a look at the main street lending program i'm sure a lot of viewers are interesting in the federal offer of the banks will offer four year loans and the banks put those to the fed it's opening to companies with 10,000 or fewer workers. revenues less than 10 per company but really the fed seems to suggest that the smallest business should work through the sba's ppp program. assignments more aimed at mid size companies the program and interest will defer for one year not to be out done, the municipal bond facility. something the fed had never wanted to do it will buy short term notes from states and large counties and cities it's going to take some t

michael mckee spoke with austin fed president eric rosengren to get his read -- with boston fed president eric rosengren to get his read. >> i think it is quite likely by the end of this quarter, we will see an unemployment rate north of 10%. michael mckee, bloomberg international economics and policy correspondent, joins me with more. this kind of sets the stage for initial jobless claims, where anything goes. i've heard estimates all over the map at this point. michael: they are, and the funny thing is eric rosengren is one of the more optimistic people by predicting only a 10% rise in unemployment. let's call it the jobless claims chart. i heard you whistle last week when the number came out. hold your breath because this week is probably going to be even worse. right now, the forecast is three point 7 million people will be on the unemployment rolls. that would beat last week's 3.3, which was four times the previous record. we are in uncharted territory. this is a much more timely indicator that gives us an early look at what is happening to the labor market. sirenalso a screaming say

it is a focus on the fed this is bloomberg -- fed. this is bloomberg. ♪ 49...50!you! good job. now i'm gonna stay here and you go hide. watch your favorites from anywhere in the house with the xfinity stream app. free with your xfinity service. now any room can be a tv room. stream live tv, on demand shows and movies, even your dvr recordings. download the xfinity stream app today to stream the entertainment you love. ♪ tom: this morning, equities continued to surge on the powell-lagarde jump on put. the chairman will stay socially distant from jeff bezos will not buy amazon shares. a week of central banks to the rescue. meet packers are leaving the virus we know there -- virus. we know they are buying cuts they have never bought before. in these three months of vietnam war, the number of dead good morning, -- dead. good morning, everyone, bloomberg "surveillance" from new york and london. the emotional swings from this landmark of 58,000 dead and harkening back to the vietnam war, to the

since the intervention of the fed days so say in 1907 when the plunge protection team and alan greenspan came to the rescue of the bad bets made on wall street chicago. and ever since and we've had more and more and more unfair system it starts off a little bit unfair and as we see like a little change of direction way back then in history becomes a huge gap we see that with the wealth and income gaps and we see that with every single crash and the subsequent bailouts gets worse and worse towards the very wealthy and the connected so when we've already covered the trillions going to the banks instantly and the fact that the ordinary person is struggling to well you know waiting desperately for the stimulus checks to arrive to them the measly little ones you know when the fed is buying these collateralized loan obligations you have to realize that 81 percent of them are owned just by j.p. morgan wells fargo bank of america and citibank just those 4 banks own 81 percent of it so those are the guys getting bailed out by the fed in the mean. time u.s. housing j.p. morgan chase to raise mortg

it decides how much money is in the financial system and the fed can create as much money as it wants. what the fed did after the 2007-2 thousand eight crisis was it created a lot of money and it used that money to buy treasury securities and that helps to hold interest rates down. what a textbook will tell you if amazon -- and uby on keeps amazon, if the fed printing all of this money, it will cause hyperinflation. that is not what happened in 2007 and 2008. inflation has been low. it is not what happened in japan after its crisis in the 1980's and inflation was low there. what the fed is counting on right now is that it can print these moneys and buy these bonds and it will not cause inflation. if we start to get inflation and we see consumer prices go way up, the fed will have to change it strategy and that can be painful. it is hard to get inflation in an environment where people are not spending money. if you cannot go out to a restaurant, if you cannot get on an airplane, if you cannot go to a hotel, you are not spending that money and it is hard to create inflation in that envi

if i had asked you 24 hours ago why we would rally today would you say a, gilead or b, the fed? that's easy. i can name that catalyst in one note, mel. that's the layup the fed, clearly, i mean, come on no sorry, the correct answer is gilead the market soaring after the company reported positive test results for its potential coronavirus treatment remdesivir and while we did hear from the fed today, chair powell said the fed will continue to do whatever it takes to support the economy. with the backstop firmly in place, does it all come down to hope for a coronavirus treatment? tim, what do you say >> well, look. it's a frustrating day to listen to the fed because they're back patting themselveses a patting themselves and talking about how they stabilized the market and i love to hear how they'll get out of policy sooner this time and i'd love to hear the fed's view on bailing out levered long investors and a lot of things that have happened in this run, so i do think that today's story is about gilead and i do think it's about the sense that all of these companies and i'm talki

i have to tell you, this fed is the most aggressive fed.hey do not want to be known as the reason why we went into a depression if we get the science to match what the government is doing here, and i know we all want the community banks to do faster, but remember, you have the sba, which is backlogged, community banks are baglocked, major banks are backlogged, and you hear this and say hold out, hold out, it's coming. it's coming. it really ishold, as i'm sure joe knows what i'm talking about. you have to stay in business, because if you do, there's a cavalry coming here. i'm very impressed the fed is just very -- the fed is on its game this is what is needed because we have to fight off a depression we have to get america open for business >> jim, i guess if it's all of these things, i'm surprised that the market reaction. we were down a couple hundred points, we have gone up a couple hundred points, but it seems like it's more important than the market is indicating at this point. >> i agree we need to hear something positive vaccine, som