ornback, kathy jones, and david riley.es it for us from new york city to read will see you next friday at 12:30 p.m. new york time. 5:30 in london. we will bring you those comments and reaction with a full round table we finally hear from chairman powell in his semiannual testimony. this was "bloomberg: real yield." this is bloomberg tv. ♪ >> this is bloomberg etf iq where we focus on the risks, assets and rewards offered by the etf. some critics say the structure hasn't been adequately tested, we should you why it recently passed a big test and volatility is the buzzword of 2018. we drill down to the first volatility etf vxx. warren buffett likes to pick stocks run the business, there is no getting around their

ertainly here, and what we're seeing, as kathy jones was saying earlier, the federal reserve is reducing size of its balance sheet. it's not theer last bf bonds any longer, at a time when the u.s. treasury, because of the x reform bill, will be borrowing more money to fund the deficit $1 trill everyone this. ye that's a huge increase from lastar, so the fed's not going to be buying the treasury's going to issue more debt, and the economy's accelerating and inflation may also be picking up. that's not a beautiful environment in which to invest in bonds, so that means rates could go up. that's problematic for ocks. >>hat about the political rhetoric in wardington. i hhat cited by a number of traders today. they're worried because we'rep bumping against some key deadlines and they're worried that, one, the government, wema have another government shutdown later this week -- >> we may have a debt limit problem sometime later in e year, given that the treasury's borrowing more. >> exactly. how much of a ftor do you think washington is, or not at all? >> well, no, i would say as a background n

. >> full house in new york city today, joining me is matt hornback, kathy jones and mike.t, it went well. $258 billion. matt: we knew about the supply from a year ago. here it is, the treasury market did a really nice job handling the supply. when you're talking about supplying impact on the market, in the grand scheme of things, the flow impact is very small. there is a cottage industry of hedge funds that try to monetize these will impact and their so microscopic that it takes a lot of people to try to pick up just a few ticks in the market. >> numbers have been significant. some of these issues have been unprecedented in size. we are not talking about the bond apocalypse. there is a of fear about the deficit by some fringes of the market, do you think it is overdone? kathy: i think supply will be an issue. it is not going to end. we are going to have to absorb a lot of supply but otherwise we haven't had that challenge over the last couple of years. i think it will continue to push rates up. we will see them to continue to grind higher. >> i think when treasuries hit to

quickly we're going to see interest rates rising joining us for her take on the selloff shakeout is kathy joneshe chief fixed income strategist at charles schwab kathy, thanks for being here today. we saw yesterday the ten year moved through 2.9% this morning back at 2.83% what's really happening with rates? was that the real froth and fury last week or do you expect to see us continue to push higher >> i think it will continue to grind higher there's a structural change taking place with the fed pulling backand the other central banks pulling back with the quantitative easing and market stimulus. the market has to absorb more supply that brings back volatility and higher rates we're rounding up a pretty hot economy relative to potential and adding stimulus at the same time we think rates will continue to move up. >> there's two stories we've been going back and forth about this over the last week or so the good news is the economies continue to push higher and that should push rates higher the bad news is you're seeing central banks go higher. which is the dominant story? what would you be tel