>> it was ten years ago and jackson hole that they started talking about doing q.v. to come i think jackson hole that they will talk about in the this qe but i don't think they will taper it till later in the year but i don't believe it matters, i don't think markets will ultimately care and i say ultimately because i'm sure there will be enhanced volatility traders from the algorithmic guys they get beat up and so forth but ultimately market uncertainty in the qed lingers over markets with uncertainty while providing no organic or tangible economic benefit. maria: tell me how you invest after all that you've heard and seen, your expectation for the macro story leads you to capital how? >> we really want to be as a gnostic as we can of what the fed is going to do they are hyper involved in the american economy, hyper involved in equity markets but what we want our companies with cash flow generation balance sheets that can withstand various problems that may come up, we don't think it's going to be an easy ride for a few years, we don't want to hide the very high pe

charles: i have ten seconds, you still see something in terms of tapering talk in jackson hole? >> i think right now that that is still very much patient on the sideline as we heard. i think the fed is buying themselves more wiggle room, the statement said. charles: with got to leave it there. the answer is probably not as i handed over to my colleague liz claman, give them a little traction so far what were hearing from jerome powell. liz: indeed, the s&p charging higher, breaking news the dow has talked no fewer than 170 points off the lows of the session as jerome powell just said rate hikes are nowhere on his radar and inflation will go right back to the news conference live in washington, d.c. listen. >> again with a reasonably high percentage of the country vaccinated and the vaccine apparently be an effective, we are not experts on this but it seems like a good going in estimate would be that the effects will probably be less, there probably won't be significant lockdowns and things like that, those are not decisions for us or numbers that we would be an expert in. in ter

expectation that this conversation around tapering in a change in policy picks up speed around jackson hole and perhaps into 2022, tell me what happened now in terms of the conversation are you expecting we will get more clarity in terms of the fed policy expectation later on in the summer when you have your meeting in jackson hole. >> would come a long way entrance. they and i would credit leadership of former chair on that and i think we could continue to do better on that not to mention but as far as this discussion, ideas we need to get moving booming housing market and it's not at all clear that we want to be feeding into into a housing bubble, we are really at a rapid pace of proof poetry produces they did economy that is growing 7% fully recovered. in certain gdp terms from the pre-pandemic level to the prepend a mic level, i think sooner is better on tapering. i think markets are ready for, we have really good results coming out of this pandemic on our mandate and were going to continue to get good jobs reports. maria: any thoughts on how severe this housing boom has become. i think

jonathan: did you get to jackson hole early? it looks like you did.ichael: early enough to get up early for you. jonathan: good to catch up. upside surprise on cpi in america. what happens to the market? yields at the front end, a lift. your 30 year is down about half a basis point. a flatter curve. the equity market takes a dip lower, down .2%. we were positive quite nicely on the nasdaq 100. we are now -.2%. there does go different ways of looking at this. the long end they might be buying into the transitory story. one that might be dominating is this idea that higher inflation will bring the fed in, reinforce the argument of the hawks at the federal reserve and that would explain what is happening in this market right now on two and now through the valley. we are talking five or six minutes after the initial print. i do not want to run away with the idea. for a lot of number the market -- looking at the market reaction, that is the narrative people will run with. tom: i will take it to the conference call to the banks, to what we saw with pepsico

a preview to jackson hole. this is a joy.o many negative stories about asset management, woe is me. it is nice to talk about a huge success. own a piece of the rock. you know it from prudential, their iconic effort since 1875. out of that it has become pgim. erik schatzker with the spirited conversation with the ceo taking a victory lap at pgim. erik: absolutely. that ceo is david hunt. always a delight to have you with us on bloomberg television and bloomberg radio. david: good morning. right to be back with you. erik: we heard it from jay powell and no doubt he will say the same today. too early to pull back on monetary stimulus. let's translate what that means for investors for monetary markets as someone who speaks for $1.5 trillion. is now still a good time to be taking a risk or is now time to get cautious? david: first a few comments on the chairman's remarks yesterday. i think he will say exactly the same thing today. without any doubt, the place to look is the labor market. there is all this noise about the monthly c

so they're buying themselves time, i think, over the next couple of months until we get to jackson hole or beyond when it's likely we hear the language of tapering to come in the coming months >> jack, final question, if i might. you favor large cap value over small cap growth in the emerging markets over the u.s. but the interesting point here that you make, total return is made up of three things in equities it's the earnings growth of the company, it's the dividend the company pays, and it's the speculative premium investors are likely to pay for the stock. you say that speculative premium is going to compress and that you need to look at organic growth, that is earnings growth and dividend yield and growth in choosing stocks. and you say it's health care, financials and i forget what the other one was that have done the best on that over the past decade do you expect that to continue as we move forward >> yeah. i'm not sure i would characterize that last component as speculative i think it's valuation, expansion and contraction that really is directly related to interest rates the f

but is it in between now and jackson hole that we get any sort of news or timeline off the tapering?a lot of potential for volatility from dissidents among fed officials to come out and create big market moves. how do you protect yourself in the meantime between those two events? emily: all eyes are on the fed and every bit of land which that comes out of them. what we are viewing from a fixed income standpoint right now is we are really staying away from being and cash, money market funds, because we think the fed is going to have a really hard time raising rates. they didn't probably expect that the yield curve has actually flattened as growth prospects appear to be more moderate than what the market is pricing in right now. so it is going to be very difficult for the fed to raise rates into a flattening yield curve and risk a policy mistake. that is not something we usually talk about so early in the cycle come up that is certainly a risk that is on the table. so what we are telling investors is, looking to the intermediate part of the curve for opportunities, looking to corporate

i think they're more or less confident that where we are going through the summer into jackson hole is a fairly safe place. and jackson hole, of course, will be a potential wildcard for how the quesfed i was us the ouk from there forward that's the next point on the calendar, brian, the jackson hole, not really today's jobs report >> yeah, and, jim, how do we look at it with all the other data points we've seen, the jobs number is a big one, but just one. we had other things seeming more inflationary how do you read it do we get a fed rate hike before the dot plot -- which i can't stand even saying -- suggests that we might in 2023? >> i'm glad you're going there, because it's really the rate hike we should be worried about. you know, that's when the fed turns hawkish. all the time that they're tapering they're still buying bonds, okay. that means they're still accommodative. let's talk about this. in order to have a rate hike they have to complete tapering they're not going to be accommodative by buying bonds and raising rates at the same time in order to end tapering they've got to s

i expect that to be, if not at jackson hole, then immediately thereafter.y the end of this year, early next year, they will start to do it. then the question is, when economic activity looks like it is slowing from this peak level, while they continue on that path? i think they have somewhat painted themselves into a corner here. it is a much more difficult narrative to say we have this flexible inflation targeting program now. inflation is coming down, yet we are raising rates into that. i think that is a tough challenge they have ahead. the easy part has been the past 12 months. the hard part is next. jonathan: do you think the bond market is taking this conversation appropriately, given what we have seen this week alone? lisa: that is hard to say, hard to fight the tape, the markets. our perspective is that the bond market has way overbought, the levels that we are seeing on the 10 year don't reflect economic reality at all, but they do reflect a lot of the game theory about exactly what the fed will say, both in the upcoming fomc meeting and coming out

caroline: previously at jackson hole we have had big pieces out there. remember mark carney talking early days about crypto in the space and that central bank policy. it was almost his farewell on his exit to the bank of england. he put some of those thoughts out there. do you think we will get further talk on that? cluadia: i don't know about jackson hole, but we are moving to a space where it isn't big picture ideas only, we are hitting nuts and bolts. financial services had a big good hearing yesterday on central bank currencies and the people that were there, people like julia coronado, they are getting down into the details of how we do this. that's what happens when we start moving towards this not being just a pipe dream. it might be something that we do. romaine: of course we talk about that overton window and append -- pandemic has provided a big opening for a lot of the experiments around monetary and fiscal policy, but with regards to like i guess what sort of gets us there, claudia, there is a sense that the moment has passed. that if we aren

chairman i was going to ask if you started drafting your jackson hole speech but i'm going to go in a different direction steve liesman asked you about semantics. i'm going to ask about the term transitory i think of you as someone who explained policies and programs in recent months and made a real concerted effort to explain them to the american public as a whole. i wonder about this term and what you'd say to people who don't know definitionally, don't know what it means and see prices going up and wonder how long they'll have to wait. so just some broader definition from you i'd like to hear about what it means or how you understand it. and quickly as well, you've talked about vaccines a bit. your colleague in minneapolis has placed a mandate on vaccinating -- coming back to the reserve bank is that something you'd expect to see or like to see systemwide going forward? >> the concept of transitory is really this. it is that the increases will happen we're not saying they will reverse. that's not what transitory means. it means the increases in prices will happen so there will be i

we have a lot of exogenous shocks that could come with things such as jackson hole, the delta variant and now the lambda variant that's been diagnosed in texas. and so i think there are a lot of things for us to be looking at but i think right now everybody is excited about tech week next week and we're going to have a few days of some nice market behavior >> i wonder if you think, doc, we overdid it on the delta fear selloff, friday. monday the market pulse backs dramatically, now the rebound. you talked about what the vix did. we talked to lee cooperman yesterday he is not looking for a air pocket lower here what he said. you can react to it on the other side >> the factors leading to a big decline aren't present where do you go with the money a ridiculous 10-year bond at 1.3 or buying the favorite equity >> he buys the favorite equity is that the move, doc? >> yeah, that is the move, scott. as i described yesterday, the way i do it is generally when vol comes inasmuch as it's in, droppings dramatically, falling through 19 back down to the 1850 level on the vix was it overdone? the

my guess nothing will happen at jackson hole.harles: hey, real quick, back to the markets, maybe beyond the macro look here is there any area that people should be overweight as long as stocks are going to benefit? >> if you believe rates will stay low and inflation isn't an issue and the economy is slowing, then the growth versus value trade kicks in, technology does very well and you want to shy away beginning to have this view as investment advice, stay away from cyclical, commodity related sectors and materials, et cetera. charles: joseph lavorgna, great stuff. every time i talk to you i learn something. thank you very much, my friend. >> my pleasure. charles: kingsview wealth management scott martin. and david dietze. the market meandering here a little bit today. seems to me powell is giving would be stock buyers a green light. have you taken any action this week, david? what changes have you made? >> we're continuing to gradually put money into the market. sure powell gives us the green light, it is interest rates at 1.23%

so it's an august meeting jackson hole. they say we're going to start to bring in december and probably wind down purchases over the next year. but here's the only point that you guys should all understand is that from the beginning of the federal reserve, in 1913 to 2020 a 107 years of that institutions existence, the bed bound group of $4100000.00 in the last 5 quarters, the bed belgy has grown to a point 2 trillion dollars. so the entire existence of the bell reserve, the last a 107 years, or why one julian, and we don't 5 borders. so it's going to be very, very difficult to unwind a $120000000000.01 trillion dollars of counterfeiting this time around. it's going to be even much more difficult than it was in 2013 when the stock market and bond market results. and those are excellent points. michael and octavia. we're already seeing inflation having an impact, especially in the retail sector. consumer goods giants like unit ever and general mill have already warned about being forced to raise prices on consumers. which me

there's nothing i can say about jackson hole.re in the process of writing that speech, and i am going to give a speech, but i wouldn't want to say what will be in there at this point. >> well, if i could follow up. several people have recently noted that the fed has got the markets working well, and you've got bank loans up. in other words, you've stimulated demand. but savers and companies like insurance companies and pension funds are getting hammered by the low rates, and they're wondering if the balance hasn't started to shift away from benefiting the economy to doing more harm than good. >> asset purchases were just a key part of our response to the critical phase of the crisis. they really helped us restore market function to these key markets really which are very, very important to our economy and the global economy. and then they were a big part of creating accommodative financial conditions to support demand. they were strongly needed. it was that commitment to continue asset purchases that provided strong support for t

very much in line until jackson hole.a formal announcement until the end of year making taper in my opinion a 2022 event. if you look at taper precursor to the first fed rate increase, they made it clear they want to be well into the taper process before racing rates, that puts us six to 12 months to rate increase. 2023. the fed is still very accommodative for for some time. charles: i'm sorry, federal reserve chairman jerome powell at the podium. >> we're achieving monetary goals congress has given us, maximum employment and price stability. today the federal open market committee kept interest rates near zero an mained our asset purchases. these measures along with our strong guidance on interest rate and our ball sheet will insure monetary policy will continue to support the economy until the recovery is complete. progress in vaccinations and unprecedented fiscal policy actions are also providing strong support tote recovery. indicators of economic activity and employment have continued to strengthen and real gdp this

i think they will set the stage for jackson hole next month.re's a lot of talk about the fact that we will not have a tantrum this time, because the market has been so well-prepared. this has been so well telegraphed. there is also the question of whether or not the fed is behind the curve here. are we getting real inflation, cannot get out of hand? kevin: when you think about it, matt, there are pockets of the economy where you are seeing inflation occur. prices are definitely going up. but you are also having demand destruction at the same time. that has been re-reflected in the housing market and auto market, for instance. in april, new auto sales went down 4% month over month. in may, they dropped 10% month over month. today, you saw housing down 2.6% month over month. i think what you are seeing is, it may indeed be temporary, but temporary these days as a definition of longer than three months. temporary may be into the beginning of 2022 where you have prices increasing. eventually they will come down. let's face it, consumers don't have

does that mean you are looking for jackson hole to be somewhat live in some capacity?gory: i am. i am. and i think that they might even start the body language towards that next month. the issue that's being exacerbated by the variant is that the supply chains may be broken more acutely and for longer than we expected. if that's the case, the inflationary pressures we are seeing will continue to build. though i do expect them to address the second of their mandates, the one that they have largely left untouched when we get to jackson hole. alix: is the market priced for that? gregory: i don't think so. the yields, current yields we are seeing would agree. we started to see yields lift into the 1.6 ring back in april and may as the inflationary pressure started to build in anticipation. the market has largely listened to what the fed's been saying and they have been resolute about their narrative this is transitory. alix: if that's the case, when you take a look at the p.m.i. data today, i understand we don't pay attention as much in the u.s. for that, it does imply we

if the fed or jackson hole will announce their tapering program.t seeing that in the euro. we also have a pound doing stronger as the infection curve goes down. let me show you individual companies. shell, very strong earnings after strong earnings with tou thao. -- with total. also weakness with ab inbev. alix: the other story we are following is robinhood. we are awaiting robinhood to start trading. we will go right now to emily chang. emily: i want to welcome our bloomberg television and radio audience on the day we are all waiting for robinhood to start trading. joining me is robinhood ceo and cofounder vlad tenev from the nasdaq. so great to have you back. i know this is been a long journey. there been high highs and hard blows and a big vision to democratize investing. we are looking at chairs indicated open at $38 apiece, about where you priced. how are you feeling at this moment? vlad: is a surreal moment. it is humbling that six years after we launched our product to the public we have over 22 million customers and we are on these journey

see a break of the tuesday low and you'll get somewhere just above 1% and all eyes will be on jackson hole and any pivot and any hint towards a taper at some point late in the year and we may establish a new range of 1.5% in the ten-year u.s. treasury yield. that being said if rates go up too far too fast then crude oil has some problems and we also see the dollar -- or at least very firm here with dixie just around 193 my point is that the recovery is not going to be linear and globally coordinated and we'll see fits and starts and it corrected our money in a meaningful way that stopped right at that two-year uptrend should it hold i hope it holds. if it doesn't hold, you'll have it move back towards 60 in the not too distant future and the technicals aren't important here, and if you see them take a move back toward 1%, i think they'll be moving up rather precipitously as we get closer into the summer in jackson hole. >> what do you think of the names chris flagged? >> there is one that he didn't mention that i happen to like and i know you hate it when we play our own reindeer games and

are you just going to stay out there until jackson hole yucca michael: i'm going to quarantine out here i think. romaine: smart man. michael mckee, our chief economic correspondent cared coming up, we are going back to the conversation joe had with the u.s. deputy secretary of the treasury. this is bloomberg. ♪ joe: i spoke earlier today with the u.s. deputy treasury secretary. talked about the economy, jobs and inflation. >> because we lack supply in some places, we have seen prices go up. we think this is temporary and transitory. we are continuing to think about what we can do to make sure we can grow the economy, invest in ways that create jobs and ensure we expend the potential of the economy going forward. joe: what does that look like specifically? you say we are looking at the next round of investment planned for later in the year. what does that look like to expand the potential supply-side capacity of the economy? >> it comes down to investing in two areas. one is infrastructure. the president has put out a plan and we see the bipartisan group working on this. investing in inf

tomorrow these terms that really have been absent since the fed introduced their new framework at jackson holeast year. so i think in terms of the fed and the market, and that relationship, there are a lot of terms that need to be defined and i think that is why there is this confusion on both sides. joe: we see it playing out in theory. also, as we were just talking about in the last segment, growth solidly outperforming value once again. are we going back to the old world, the post great financial crisis, pre-corona? >> i think that is the correct impulse trade. but i think that is still a trade i would rather rent than own. i think the market is going to deal with a very pivotal transition period in the third or fourth quarter of this year. peak everything right now, whether that is fiscal policy, credit impulse, peak everything. the market is kind of wearing about this handoff for all these impulses to the private sector. i think there are reasons to believe that this time around, given where private balance sheets are or the stock of fiscal policy, that we could be in a different nominal

shery: what are you expecting to see from jackson hole? that seems to be where analysts and investors are focused on. marvin: jackson hole is important because it will be probably the start of the official tapir discussion, if you will, and you know, remember, the taper process is likely going to be gradual. there is still a lot of liquidity in the system so in terms of the risk assets, because of the amount of liquidity, that is something investors can count on for a while, but it will start the normalization process and i think it is already being fairly well translated to the markets. i would not expect too big of a shock around it. quite frankly, if we are worried about growth issues going forward, not rate hike concern that comes after tapering might not be as intense as it was even six weeks ago. >> marvin, always great to have you with us. arson low for state street. let's get you to su keenan, who has our first word headlines. su: we start with president biden who says the u.s. is on track to end its military mission in afghanistan

at jackson hole i would like to be a fly on the wall to participate.he late '70s. ashley: right. david, thank you david hardin. thank you very much. as we head to the bell here, the dow and s&p, yes, they are closing in positive territory, just nasdaq down. what an interesting day it has been. that will do it for "the claman countdown." "kudlow" is next. ♪ larry: hello, everyone, welcome to "kudlow." i'm larry kudlow. senate democrats appeared to have agreed on a $4.5 trillion budget resolution, that includes 3 1/2 trillion dollars ultimately targeted for 51-vote reconciliation. i wouldn't exactly call this a blessing in disguise. let's first hear from hillary vaughn live on capitol hill with the facts, the facts and the details. good evening, hillary. reporter: president bide was he o

maybe in jackson hole we will hear more from the fed around the potential to taper.here is a huge amount of liquidity. jonathan: are you expecting the same thing, ashish? ashish: i take a step back and say that we are expecting the same thing. if that is looking at the economy and saying, things are a lot better than 18 months ago, when they put in place a lot of these policies. at the same time, we have to keep an eye on the big picture. there are a lot of people retiring, a lot of liability demands. the demand for safe yield is insatiable. you are going to continue to face a demand-supply imbalance for higher yields. higher yields will be bought by pension funds, insurance companies, in volumes that will be -- any issuance we see in the marketplace. when you see these backups in yield, remember there is not enough yield in the market. the problem is that there is too much yield in the market. jonathan: so why would expect yield curve to steepen anytime soon, given what you said? ashish: everyone has gotten blown out of the steepener. now the consensus is slower gro

jonathan: i feel like jackson hole is the place every year for a pivot.hey come on these programs and they talk about september being key, when the additional unemployment insurance expires, kids go back to school. with that in mind, if we don't get a clean read on the labor market until q4 of this year, why would the fed make a move before then or make any kind of declaration that they are about to make a move? subadra: that is except the concern the bond market is expressing in the last week. the fed has backed itself into this substantial further progress mantra. they have to wait to see the data before they act. personally, given the amount of qed we have had over the last couple years, what i would expect the fed to have done by now is to start tapering asset purchases. equities are at historical highs. yields are very low. if anything, this is the perfect time for them to start stepping back from asset purchases, but they have told us they are not doing that. that is the concern driving the bond market, they will not be able to taper asset purchases

reserve policy and central bank policy, money printer on the twitter what we have seen since the jackson holether and traded together it's not a perfect correlation, but they're tight lily correlat or trend in the same direction bitcoin has become a macro asset, number one, number two, it's being used as a pro cyclical inflation hedge when you have central bank policy being very loose, and you think there's going to be inflation, macro funds and players are buying bitcoin, and what we saw as we saw the money supply start to come down, you saw bitcoin come down, so if you are a bitcoin bull like me, what you really want to see at this jackson hole meeting is the federal reserve to come out and say hey, listen, we were wrong, this was a policy mistake or at least walk back some of that talk and have bond yields go higher you even saw today, intraday, bond yields started to tick up, bitcoin started to tick up. >> in a world where you expect the fed to start tapering, you have a limited window. >> so i'm not sure i don't necessarily expect the fed to start tapering. i actually think the taper tal

vincent: i think it starts at jackson hole. they are starting to talk about mortgage backed securities. that is not tapering as we would talk because the housing market is hot. it does not need to that support. i see it in the areas i live in, holmes gone the market and five days they are gone. that is how good prices are. the market will take that as a form of tapering. at least a knee-jerk reaction we will see a big risk off move inequities and treasuries and a bounce in the dollar. i do not see that theory lasting for a long time in the weeks after that. i think the markets will get a hold of themselves and realize mortgage backed securities are something the fed cannot be in at this time, but the next iteration, what comes after september, when the stimulus rolls off, when forbearance rolls off, we would then start to see where is the economy. our wages going up? is inflation going up? then you might see the real tapering into effect before the year end for the fed will start tapering bond purchases and treasury purchases.

from staff as to what their tapering options are, very important staff which will lead into the jackson holeat powell is going to deliver at the end of august which will set us up as we get into the post labor day. in the fed to adjust its policy, we will see a faster taper and increase in rates that they prefer. up until now and is largely because they are coming to the realization that inflation is running hotter and more sustainable than they thought up until now. maria: what is your portfolio look like in an era of peak growth now slowing down by year-end and the federal reserve class line communicating a process to take away some stimulus? >> great point i think ultimately stocks are going to reflect earnings and as were looking at the earnings picture right now technology stocks are still doing fine roughly 30% earnings gains year on year but the outside gains are going to be the economically sensitive companies. a year ago when the death of the recession of the pandemic it was the technology stocks and growth stocks that were doing fine and their valuations in our view got ahead of th