and now adding the word vaccinations the fed obviously monitoring that fed chair powell made that clear to us in the last press conference, that the pace of vaccinations is a key metric for gauging the recovery of the economy. aimed for inflation above 2% this is the third or fourth statement he's done that now saying it poses risk to the economyings and the economic outlook. eliminated a couple words here eliminated the phrase near term to describe the risk to inflation and near term, the risk to the outlook, maybe suggesting that the fed thinks we're nor a longer haul here in terms of the risk to the economy. finally a bunch of new voters in the changeover of presidency vote every year. mo morgan >> steve, as somebody who sat through these press conferences, i wonder what you expect those key areas are, key questions to be asked of the fed chairman. >> i think the chance that perhaps whether or not the fed is thinking about eventually tapering its bond purchases given that the economy has indeed performed better than expected and when that might happen i think some of the interesting

bloomberg spoke earlier with howard marks about the impact of the fed's moves. >> the fed and treasuryctions, and specifically the reduction of the fed funds rate to zero, has required people to invest. because they do not want to sit around with their cash, money market funds, bank deposits, all earning zero. they don't want treasuries at less than one or high-yield bonds at less than two. so they have had to push out into risk assets. romaine: howard marks speaking a little bit earlier. i think we can do two shots at once, bring both of us on screen. this is a serious issue. there is a lot of talk about, if you start to see a meaningful rise in rates, when does that start to eat into some of the returns you get on equities? is there an equilibrium out there? that isno one knows but what they want to find out. isoline: it is true, there an issue that people seem to be pushing across assets. we have the s&p 500 still lingering near the record high. healthyus to talk about federal reserve sort of communicates this, julia your perspective here on some of the taper talk we have had. it fr

they're not fighting the fed. charles: maybe only the fed can fight the fed at this point.ielle, phil, thank you both very much. >>> coming up when individual investors get out of their lane and wall street wants to change the rules. this is my thoughts coming right up. ♪. [ sigh ] not gonna happen. that's it. i'm calling kohler about their walk-in bath. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. ♪ ♪ the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading pl

countdown to the fed.an 30 minutes before that decision and one hour before the news conference. we will break it down with kathy. ets take care and will speak with the ceo of accelr8 technology's about his focus on blank tech vehicles. and we are continuing to watch gamestop another reddit field stocks as volatility continues and short-sellers surrender. amanda: it is not often that the white house press briefing, and it an individual stock comes up. the press being told the biden team is monitoring the situation. there are stocks that continue their wild rides. broad markets are not going along for the wild ride to the upside. we have weakness on this for a day. we will get to those individual names that continue to move sharply higher, potentially driven by mass buying on retail levels. on the broad market, we see energy as a standout to the upside and every subgroup of the s&p 500 moving lower. these are some of the names that are defying that trend today. these moves come after days of similar moves,

because the fed's not getting out of the way and the fed being a principle reason of what you just said why we're here in the first place, if that dynamic snot goiis not going toe anytime soon, is it vulnerable or justified where it is >> all markets are vulnerable to a fact that's undeniable that's going to happen in the next four or five months and that is whether it's sustainable or not, the cpi headline number is going to move up in a very meaningful way by mid year we have a model at double line that's worked very, very well. it's not very complicated model but it's amazing how well it works, and we suspect that inflation on the headline cpi is going to come up to close to 3%. it may even hit a three handle in the may or june report and you might remember that charlie evans last week said something pretty remarkable for a fed governor, number two guy in the fed relative to getting the inflation rate higher which we all know is their fervent desire he said we're in it to win it, meaning we are in this to get inflation higher and they don't even have to do anything based upon the bas

i joined the fed in 2012. i wasn't there for the response, we still had a long way to go in the economy and i am very familiar with what happened during the crisis. we learned plenty of lessons. the whole review effectively, if you can take a step back, in 2012, we didn't know what the new normal was going to be. for many years, people were writing down a return to 3% growth, 4% nominal federal funds rate and a 10 year -- we didn't know. we lived through an expansion and we see what is happening around the world and happening in the u.s. economy. we learned. we also learned from in particular fiscal policy tightened a lot in 2013, 2014, 2015. the fed is over there doing qe3 and an extension program and fiscal policy is just a weight on the back of monetary policy, it's not helping. the response ended too quickly and it was not sustained. not only everyone act quickly into strongly at the beginning, but we have seen follow-up from the fiscal authorities and that has been part of the story. you are looking at fo

obviously, the fed sees these numbers, these statistics. i'm being glib but these factors aren't the primary drivers. but on the conference calls that we are about to listen to in this earnings season, will we start hearing that i would imagine we would on the earnings call. the dominoes pizza said he expects food inflation to be between 2 1/2 to 3%. this input companies are seeing the rising cost of inputs into their products >> no question we talk about lumber prices. i think copper prices, you can check me, i think they're at three-year highs today all these things are going higher you said it somewhat tongue in cheek about the fed. i won't be as turt yus to them if they don't see it, they shouldn't be in the jobs and if they do see it, they're not paying attention to it and telling the rest of us it's easy not to have inflation when you choose to not measure the things that are inflationary everybody knows i'm a bit of a fed naysayer that's fine. i'll take that label but there's inflation all around to tim's point about deflation the he

and that's what the fed's main concern is.hey are looking out for main street despite them saying that's not really part of their toolbox. i think the fed understands that we can't sustain significantly higher yields. i would see the fed likely jawboning against further tightening, naturally as yields drift higher they become more and more attractive. people moving out orequities into fixed income seeing foreign buyers because they are faced with negative interest rates. the fed usually does what the bond market wants. at which thepoint fed has to go, we need to start thinking about changing our outlook here. where does the 10 year need to get to for that inflection point to be reached? when i said we wouldn't reach 1% to aggressively. now we are sitting at 1.13 percent. it's a little bit higher. i think it's natural for yields to drift higher. whether that is 1.4% are 1.5%. the likelihood for increased volatility isn't really there because the fed is likely to be on hold. i absolutely think the fed would start talking the mar

and now adding the word vaccinations the fed obviously monitoring that fed ai

if the fed is not careful, and if the fed sounds overly hawkish , like they want to taper a bit too muchthere's a real risk that they could begin to impose a bit of a headwind on the economy. the market might begin to question how accommodative the fed would ultimately be, and that could further accelerate this rate move, and it could begin to have some negative feedback onto the real economy. we are just hearing that the janet yellen confirmation hearing is now planned for january 19. obviously, the timing around this with what is happening in congress is incredibly difficult, i would imagine. but let's talk about what the fed is communicating right now. what do you make of the conversations that we are getting from fed officials, bostick and others? we've got some of the quote boards to show you. they are talking about tapering. why are they talking about tapering? what is the objective here? mark: again, i thing they are a bit enthusiastic given how quickly the backdrop of fiscal policy has changed. we know that the fed doesn't like being in financial markets. they like having a fairl

coming up, is the fed creating asset bubbles?ll speak to the former fed .overnor of monetary policy , the turning point series is next. this is bloomberg. ♪ this is bloomberg. ♪ >> there's no question that they monetary and fiscal policy actions have definitely been very supportive of asset prices, so obviously equity markets benefit from that. i said a few weeks ago, and i stand by it now, it is hard to justify some of the evaluations i see in the market, particularly around very growthy companies, around some of the ipos that have come. inhave seen other periods markets before. they rebalance overtime. the excess will be balance in the coming months, but i am much more focused on the medium and long-term. i don't get concerned about short-term market gyrations. goldman sachs ceo david solomon speaking to sonali basak earlier. we are going to take a look at different areas that could see a lot of change in 2021. today we are going to focus on the fed and financial regular. going us now is the man you want to hear from, former fe

rates are so low and on that note, i know court did mention jay powell, the fed chair. he is speaking at the bottom of the hour at princeton university it's a closely-watched speech given what's happened with interest rates of late there is the ten-year now. 110 is where it currently is it's up better than 50% in just three months and on that note, we are joined now by nancy davis. she's managing partner at quadratic capital. she has a trade for you on what's happening with interest rates. we'll get that in a moment senior economics reporter steve liesman is joining us. good to see you. nancy, welcome happy new year steve, i begin with you looking ahead from what we'll get from the president elect tonight, do you think that the democrats winning control of the senate sort of resets the conversation now on interest rates and inflation? >>. >> i think potentially certainly for the market the victory by the democrats in georgia in the senate races did change the equation and the possibility of more stimulus could bring things forward more quickly, but i think the message f

the fed's first meeting of the year is upon us. investors are looking for reassurance from jerome powell he will not pay for asset purchases anytime soon as the global virus continues to worsen. but acceleration of the vaccine rollout and prospects of more stimulus are offering some hope. the imf has boosted its global forecast to 5.5%, the biggest expansion since 2007. they credit improvement in the u.s. for much of the upgrade. >> we estimate that if you can get faster end to this health crisis by a faster rollout of vaccine, we had $9 trillion to the global economy. and everyone benefits, including the advanced economies. this is a very strong economic case. yousef: let's get out to chris weston, head of research at pepperstone group. quite a bit of consensus around staying the course around rates for the fed. what are we going to get in terms of signposts for the future of the repurchase program for the bonds? chris: i do not think we are going to get a lot unfortunately, because the fed are now under their new regime. they wan

but i can tell you this when the fed pulls the plug on their q.e. program and starts raising it rinses rates a market is going to crash and you want to be aware that when i are talking i'll send it back to you is there anything that the buy an administration can do or even will do to strengthen the reliance or the confidence in the u.s. dollar right now. well i think they're going to do their very best to try and undermine that so i think they're going to be spending a lot more money and we're going to see michael pender's theory really put to the test here and see how quickly they can really engineer the economic crash they're going to be spending a lot more money they're going to be doing things like raising the minimum wage quite aggressively they're going to be forgiving all sorts of debt and creating all sorts of new debt so it's going to be interesting for years i will say that i agree with with with michael's assessment that once the fed starts increase interest rates things are going to look really bad but the real problem there is that ever

yes, bond yields have ticked up, but interest rates from the fed, the fed funds rates, those aren't going higher anytime soon and of course earnings coming off what was a horrible 2020 for so many reasons, earnings will only get better. so as crass as it might seem, markets look out and what they see, and i'll try to be a little bit optimistic here at 4:30 in the morning, is that there are better days ahead. the vaccines as slow as the rollout may seem are coming. >> brian, julianna here and thank you again for joining us so early in the morning. great points on the market moves we saw yesterday i'm curious politically speaking, if we're going to see any substantial changes as a drekts result of wha direct result of what unfolded yesterday. >> i need to correct you, it is not good morning, it is good evening because if you excellent here in the united states, i'm not sure that you were paying attention. i think this is just a continuation ultimately of yesterday. but it is good to be here as well and good to see you too i'll look forward to being black onset in london with you guys at som

i think the fed has shown it is reactive to equity markets.tember 2018, when they pivoted from hiking to basically ending the hikes, because of the equity markets selloff, they have shown they are reactionary to markets. i do not think they have a firm level in mind. i think they will see how equity markets are spot, hallow credit markets respond, and when their there is signs of stress there, talk about purchases, yield control if they need to, they do not want to upset markets. so i do not think they have a fixed market in mind, but as soon as there is a market impact, it will prompt discussion and basically focuses their thinking. francine: patrick, does it change dollar trajectory? patrick: um, a higher yield potentially could be dollar positive. the thing with the higher yield is it is probably with a backdrop of a strong rebound in the economy is how you get higher yields, basically. there is growth, there is a reflationary backdrop, and with the u.s. being the larger consumer in the world, can consumption is the driver of the u.s. econo

plus, morgan stanley says the fed will announce tapering this year and one prominent fed member says that it's on the table. could it leave to a taper tantrum like it did in 2013, and as bitcoin's rally just a repeat of 2017? one expert says it's different this time because of the big money. he'll join us but we'll start with the markets this hour mike santoli has more on that. hi, mike. >> hi, kelly markets are moving kind of in lock step all across the index yesterday they were down a percent and a half pretty much in harmony shows you regaining a third of yesterday's losses. look at the s&p 500 over the last few months. little shakeout we got yesterday didn't disturb what's been going on for at least a month or so, december 4th closed at 3419 and january 4th closed at 3700 under the surface a lot of churn and stocks down a fair bit from their highs so maybe this has been a refreshing in consolidation or start of a new choppy phase energy material this, stuff is moving crude is higher above $50 a barrel, wti, opec meeting, but also there's been a global reflationary sentiment and s

big fed day today.ear from the fed chair jay powell, speaking at a special event in princeton. we look for to hearing what he will say in light of the alarming jobless claims numbers, which were much higher than had been anticipated. just a short time ago our colleague mike mckee had a talk with mary daly, president of the san francisco fed, and she emphasized that we have a big holder climb out of when it comes to unemployment. she said she was not entirely surprised that it spiked, given where we are right now. talking about fiscal stimulus. there is a concern about the economy. we will talk about it even as we wait tonight at 7:15 eastern time to hear from president-elect biden, who will lay out his stimulus package. reports are it will be $1.3

cleveland fed president loretta mester, please stay with us.s is bloomberg. ♪ kathleen: you are watching " bloomberg daybreak asia," and we are speaking to cleveland fed president loretta mester. she continues with us along with coanchor haidi stroud-watts. i want to get to women in economics. i will never forget my first advanced econ class. kids,, like, a hundred there were, like, nine young women. you surprised by the small number of women studying the subject compared to other social and even hard sciences? loretta: not really because back in the day, we did not even have math professors in barnard. you had to go across the street to columbia. as beingt strike me unusual that there would be no women. importantis such an field. it touches everyone's lives. policymakers make policies that touch everyone's lives. business people make hiring decisions that touches everyone's lives. because it is such a broad field, and it really is important for everyone, i think it is really important that we have a very diverse group of people going into econ

certainly all as all eyes are on the fed right now now michael last week fed chairman jerome powell repeated his stance on keeping interest rates low and having an average inflation rate of 2 percent for the u.s. dollar won't miss it ever be possible especially when americans wages have remained stagnant for the past 2 tag for the past 3 decades. first of all i want to say how much i love a jovial octavio its name and i agree with everything he just said you know there's nothing more misunderstood on wall street than inflation ok right now you have a tremendous amount inflate of inflation in asset prices look at stocks bonds real estate is matter of fact the average market cap to g.d.p. ratio going back to the beginning of time today is about point 6 we are now almost 2 times the market cap of equities is almost twice the value of the underlying economy and it's just like octavio said it's because the fed is printing a $120000000000.00 each and every month a 1000000000 in treasury purchases and 40000000000 in mortgage backed securities so when they stop when they taper this time it's going t

the fed stepped in trying to -- financialederal crisis was not put on top of a fed crisis.u had set up some facilities so credit could continue to flow. the fiscal authorities did stimulus payments. the ppp lending to help small businesses. given toat could be stressed households. the extension of unemployment benefits. thesecond cares act, package just passed, that was targeted on those most vulnerable. if there is another package next year and that is up to congress, that will presumably be targeted as well so we can get to that second half. where we have a chance with the vaccinations being broad-based, getting beyond the pandemic part of the recovery into a post pandemic, postvaccination part of the recovery. impactingally see it a need for monetary policy. i don't think we are going to be .ecessarily back to our goals i think this is a real journey, not a splint. bond market is looking at a bit of a pickup of peace. 10 year yields decisively above 1%. on reflation.ting higher inflation. do you see perhaps the need to take action on something the fed has discussed, exte

this is someone who was intricately involved in the recovery efforts in her time at the fed and as fed chair woman. she also navigated through the progressive movement in terms of the far left of senator elizabeth warren and more moderate democrats, so she really does have a good understanding, and she will be aided by some top obama administration officials, like her top individuals at the treasury department. she has a clear understanding of the dynamics of the democratic party, and a clear understanding of the congress, having met with republicans for years and her time at the central bank. alix: we are also looking at a live shot of the hearing. you have senator grassley having a seat. probably his last time chairing the senate finance committee. vence, i want to bring you into the conversation as well. what are you going to be looking at as a trader when janet yellen speaks? vincent: what myself and most other traders are looking for is fiscal stimulus. the thought is that she's going to do the go big or go home speech, and that fiscal stimulus should be taken on in a big way by t

fomc minutes, i am wondering how much the fed is taking into account the atlanta fed president assertionhat the fed could start tapering monthly bond purchases if the economy does well this year. that would come as a surprise to markets. withi like how you do that the january 8 employment a port -- report. the change in nonpar payroll for friday is 73,000. that is a number that is always of angst, certainly with the news flow we are seeing it will be closely watched. a presumption of further stimulus and income replacement by a biden government. we don't have official word on this, a democratic house, i democratic senate, and president-elect biden, a democratic president. what a shift for markets in the last number of weeks. emily wilkins is looking at the shifts in atlanta and joins us this morning. extraordinary 24 hours in atlanta. tell us the difference, the parsing of cherokee county to the north and gwinnett to the northeast, and the difference of exurbs and suburbs. emily: it used to be a given that the atlanta suburbs were a republican stronghold. then we started to see that feed

what do you expect the fed to do? >> the fed will probably not change very much in terms of policy. what we're looking for is maybe a small tweaking of language, breaking an amazing that the end of luck -- recognizing that last year, largely speaking, it's going to be a relatively supportive and comforting message. they don't want to rock the boat at this stage. yousef: if the reflation trade has been priced to perfection -- let's go with that -- is it time to reassess our expectations around insulation and around the yield curve? >> this is a very, very important issue, but the way of look at it, let's cross that bridge once we get there. at this stage, you look at core inflation, it's very well behaved. of course, there are some inflation -- but what we launched last year, targeting a regime from the fed, it implies policy makers be quite tolerant about trend inflation as long as it's accompanied by job creation. the bigger problem is not inflation and bubbles, but rather getting people back to work. the economy may have to run hot, or harder than is normal they the case for some

treasury rather than the fed. any lessons we should learn from the action in the treasury for the central banks, not only for the u.s., but for other countries? chairman powell: to start with public debt and monetary policy, i would say, first of all, the u.s. is not on a sustainable ath the federal government level. in the simple sense that the debt is growing significantly faster than the economy and that means by definition that it is unsustainable. that is not to say that the level of debt is unsustainable. it is not, it is far from unsustainable. i think we are a long way from fiscal dominance of the united states if we get to that place. high public debt in no way impacts monetary policy. now, we are squarely focused on serving the public through our new framework to achieve maximum employment and stable prices. my strong view is that central bank independence is an institutional arrangement that has served the public well. every advanced economy democracy around the world has central-bank independence. inst

the two day fed meeting starts in washington today.e will get the call from matt hornbach of morgan stanley in just a moment. this is "bloomberg surveillance ," counting you down to tom: the opening bell. tom:dow futures -- to the opening bell. tom: dow futures up 75? [laughter] jonathan: he's looking at the dow again. i think that's the first time i've done it in five years, ok? the dow is up 70. 67 now. does that help? does that add any value to anybody's day? tom: it is a value add. [laughter] jonathan: come on. this is bloomberg. ritika: with the first word news, i'm ritika gupta. a delegation of house members took the next step in the impeachment process. lawmakers delivered the single article of impeachment against donald trump to the senate. that triggered the start of an unprecedented trial of the former president, accused of incitement to interaction -- to insurrection. new treasury secretary janet yellen is tasked with promoting president biden's stimulus package and hiring a new staff. she will be the first woman to hold the

fed commentary is way too soon. the fed learned the lesson in '13. that was bad.would focus on if jay powell or richard clarida the says tapering this year seems a good idea, then the markets should be concerned. we are not worried. yields go up. lisa: because the fed will allow them to or because inflation will start to pick up more than expected? michael: more the fed. inflation rises course of the year but not quickly. next two months, fairly subdued. we saw numbers on cpi yesterday. nothing amazing. fairly low inflation path until may-june makes sense. near-term, how much is the fed going to allow yields up? so far, fairly tolerant. that continues. yields don't go crazy. huge number would be 150 midyear. tom: do you see in the monetary literature, any discussion of the appropriate fiscal statistics? with the changing of the guard, $2 trillion, who knows where that number will be? is there a number within economic site guys to too much -- economic zeitgeist too much? michael: not really. economic models are linked to past data. how much do we have on pandemics?

fed and treasury actions, the reduction of the fed funds rate 20, has had a very coercive effect onket. it has required people to invest because they don't want to sit around with cash, money market funds, bank deposits, earning zero. they don't want treasuries at less than one. so they've had to push out into risk assets. matt: we are joined now by sandra flippin -- phlippen. what do you think about this financial repression during, you know, this historic lockdown? it's pretty interesting to watch. sandra: yeah. it's pretty amazing. in germany, there's going to be an extensive extension of the lockdown, also here in the netherlands the is continuing. i think that we are probably moving the same direction of the germans in e.m.. that goes for the whole of europe. i think the big question is, how will s&p coporation still with us? will they stay afloat during all of this? it provides two thirds of the european neighbor. that is something to really pay attention to now. matt: we saw yesterday, not sure if it was -- one of the papers reporting that angela merkel is considering extendi

we look ahead to the fed decision day.umbers beat the street thanks to stay-at-home workers. very good morning to you from bloomberg's european headquarters in the city of london. manus cranny, live from dubai. this is daybreak europe. very good morning to you. you've been laser focused on what we heard out of the states in terms of the ramp-up of the vaccine. you are seeing a lot of the vaccine production really come to life in the middle east. here in the u.k., it was quite tragic last night the number that we got. 100,000 deaths in the united kingdom. almost exactly a year since the u.k. really started to brace the impact of covid when they first had 83 british it -- british passengers. it's the first country in europe to pass that grim statistic. manus: yeah. you are right. i am sitting in one country where the ramp-up and rollout of vaccines has been delivered at a frenetic page -- pays. if we look to the u.s., biden is setting the agenda. he's ordering 200 million doses. what does this mean? you are seeing almost ari

the fed chair speaks today. and the french finance minister opposes a buyout saying food security is a priority amid the virus. the u.k. has its deadliest day. welcome to "bloomberg daybreak: europe." one of the biggest moves from the republicans toward impeachment. this is a dramatic move but perhaps bigger market moving news is from cnn, where biden talks about her $2 trillion stimulus package. there are a great deal of assumptions baked into it. goldman sachs says global equities are now in the hope phase of a new bull market. 33% growth in earnings this year, a positive for single-digit returns. stocks in america, keeping an eye on europe and italy. roll it over and you begin to understand the manifestation of what a $2 trillion stimulus package might have. the dollar is back on the dip at the moment. we did spike a little bit higher. powell, jay powell will speak today. i will be really surprised if i don't hear him push back on all of this potential mutterings and the hawkish clack that has arisen over the

and related issue, have you given any guidance yet to the fed staff or system on when the fed itselfmight resume in-person events? >> yeah, so in the statement on the language, we dropped in the medium term because really the risks are in the near-term frankly. as i mentioned, it's the rollout of the vaccine. it's the arrival of new strains that are more contagious and perhaps more virulent, and those are the -- and also, just the third thing of course is the ongoing spread of the virus. it's in the near-term. it's not in the medium-term. we were thinking, when we were thinking medium-term we were thinking longer term scarring and things like that. nonetheless, i think to go to your second question, and as i mentioned in my opening remarks, there is good evidence to support a stronger economy in the second half of this year. in fact, if you look at, as we do, look at a range of private forecasters, what was their forecast in december and what's their forecast now, right across the board much higher forecast for 2021 growth, and that's because of the ongoing rollout of the vaccines an

willingness to give the fed more macro powers. you will see a greater willingness for security regulators to use these powers a little bit more, you know, more often than has been the case in recent years, and i think this is part and parcel of how you actually feel the cracks to avoid extreme spillovers into monetary policy into parts of the economy where it becomes dangerous or, you know, worse. tom: gene frieda with us from pimco. we will take advantage of his immense knowledge into fundamental knowledge of the options market. right now we join you tracy alloway, who with joe weisenthal has looked at these derivative excesses. i want to go back to what you and i observed a decade ago, which is distortions where conservator institutions -- i want to make this clear, folks, not pimco -- but where conservative institutions had to affect covers of derivative trades as things moved. is jean -- as gene frieda just said, are we in an equivalent analog this morning? tracy: a lot of people are likening what we see with came stop to the

there are those that draw a connection with the fed policy and the fed monetary policy and the fed qe policy. do you think that connection is a fair one? alan: it's mostly unfair with a dab of fairness. the real interest rate moves equities. -- the discount rate in the future is row -- lower. when there is craziness. maybe. this cannot be the first, second, and -- [indiscernible] alix: fair, but i bet he gets a lot of questions from the journalists. alan: probably. alix: in terms of margin requirements and more oversight, do you think that is something we will have to start thinking about once we get past the covid hump? alan: margin requirements get brought up when the market is doing something people don't like. it even happened back when i was vice chairman of the fed. margin requirements are more of a futile exercise. they are so easy to get around. you don't have to be a great rocket scientist on wall street to figure out that. the fed has not been interested in raising the margin requirements or the loan requirements. margin purchases are not a big deal. some people by a margin

crisis and the fed has assumed various roles. one was i think very crucially in march the fed intervened or you intervened in order to stabilize the system not only for the u.s. but for the global economy more broadly and one was that the u.s. treasury, ten year yield treasury the market making function was not working so well anymore and you took on the role of the market maker of last resort that is something which i think one has to elaborate on a little bit and to what extent the fed is also there in order to ensure the safe assets status of the u.s. treasury remains the global safe asset what i found most striking is, and you alluded to this already, is that the fed put up the corporate bond programs and it was enough to just be there as a back stop and the market was then working on its own again. so without really buying corporate bonds it worked phenomenally well again and there is a record issuance of corporate bonds in 20 to despite the fed only said with communication, and back stop if something were to go wrong really

and in a related issue have you given any guidance yet to the fed staff and when the fed itself might resume in-person events? >> in the statement on the language, we dropped in the medium term. the risk is in the near term frankly part as i mention it is the roll out of the vaccine. it is the arrival of new strains that are more contagious and perhaps more verily. and also just certainly in the ongoing spread of the virus print is in the near term not in the medium-term. we're thinking medium-term were thinking of longer-term scarring and things like that. nonetheless, to go to your second question as i mentioned in my opening remarks, there is good evidence to support a stronger economy in the second half of this year. in fact if you look as we do at a range of private forecasters, what was their forecast in december? and what is the forecast now? right across the board. much are forecast for growth. because the ongoing rollout of the vaccine and fiscal policy. expectations and the cra act getting done. there is a positive case there. think of that is the basic case, a strong econom

manus: so let's just -- the fed is a nonevent. i like your very pragmatic approach to what we have got ourselves all keyed up about. that's see what you think of paul singer. he reckons that going back to the 1970's -- i did not enjoy the 1970's. i was very young. going back to the 1970's, we are in for a tremendous surprise in the near future. the bond markets will significantly and abruptly reprice. if i look at the speed of repricing and breakevens, which is a quadrupling in the space of 12 months, do you expect the same velocity to breakeven inflation as singer is suggesting? is that a risk, martin? martin: absolutely it is a risk. you know, back almost one year ago when the pandemic hit in march, the breakeven inflation rate was 80 basis points and just in the last week, we have gone about 200 basis points. but that is the same level as we were in 2016, 2017, 2018, 2019, so 2% inflation is the inflation level that we have in america where we can enjoy levels above 2% and to discuss inflation really is not a short-term issue.

a month of the asset purchases that the fed is doing now with some fed officials saying it may end this year, but she is not talking that way, and she is saying that the economy is far away from the fed's goals of maximum employability, and from the vaccines and the globalized synchronized vaccination around the global availability, and she says that it is going to lead to a considerable loss, and she calls ate k-shaped recovery and talks about people disadvantaged in the recovery. now, on the opening of the show, she is talking about the issue of inflation that you were talking about, and she says they are up, but remain close to the low end of the historical range. they may temporarily and note the word temporarily rise two or above 2% in a few months, and that is the fed's tolerance in the new policy statement, and it has to be sustained improvement of inflation to meet the average fed's goal. so brian, i know that people out there are talking about inflation and prices being hot out there right now. and the fed right now not hot about inflation and price increases. >> well, steve, i

kayla tausche. >>> coming up, the fed went into uncharted territory last year. did it help to prop up the markets? we'll have that answer next. don't go anywhere. >>> welcome back we've got the jobs report this morning. showed the economy lost 140,000 jobs in december that's the first monthly decline since april as surge willing virus cases and fresh restrictions took a toll on the recovery, but we did see some positive signs as well job gains were revised upward for october and november, nearly offsetting the december losses and wages were surprisingly strong here to help us make sense of the data and the state of th economy is michelle my yes, head of u.s. economics head of global research the wage number was pretty strong, that's like 10% annualized. >> yeah, it was exceptionally stopping, the wage number but we have to be real careful reading too much into that a lot has to do with compositional shifts in the labor market so when you think about where job cuts were concentrated it was highly in leisure and hospitality which tend to have lower paid workers, a

they're still a lot of money sloshing around in the system from the fed and otherwise and you could be looking at a big stimuluspackage, infrastructur under a president biden and money needs to go somewhere. so mix that with the warnings about others with valuation of the market >> scott, this is why it's such a thorny issue for investors because gundlach's right, and others are talking about how bubbly the market feels and doug cass has been writing about it you have high valuations and that has been driven by i whole lot of monetary stimulus and low rates and look what we're getting, more monetary stimulus and more low rates you've got janet yellen and nancy pelosi and jay powell elbowing each other out of the way to pour more punch in the punch bowl right you inow. they're not wrong, the market's expensive and the stocks are expensive, but the jet fuel lifting these prices doesn't show signs of stopping so now as an investor, what do you buy and how do you deploy money and the answer is, to be funny about it is very damn carefully, but i think it does argue against buying a broad in