michael mckee, is there an appendix? ael: there is not an appendix that explains why there were so many jobs created when we expected so many lost. the losses are explanations for some of the statistical variations. we are still missed classifying workers in the household survey. they are supposed to be considered absent from work, but on payrolls they are not counted. therefore the overall labor force does not rise as much. they say if they had been properly classified, unemployment would be 16.3%. it would still be a low number compared to what we were expecting. as long as i'm talking unemployment, let me give you other numbers. white unemployment falls to 12.4%. hispanic unemployment from 18.9% to 17.6%. those are still huge numbers. disappointing numbers given where we have been, black unemployment rises to 16.8% from 16.7%. news, to pivot to good but aggregate hours worked is sometimes seen as a proxy for gdp, and they rose significantly , which will have economists scratching their head but also going back to it an

tom: michael mckee.kes it look easy but what we are doing in real-time and what michael mckee does every day is extraordinary. i will have jonathan ferro bring in our next guest. ken leon. i think this headline is incredibly important. upated you see a stock go is up 15% on a westership with kanye brand ss. jonathan: can you repeat the name of the brand? stick with gap. kanye west. tom:, it is kanye. jonathan: always great to educate you. wants to talkleon about the banks. ken leon joining us. don't worry. i will start the interview, not tom. what did we learn from the federal reserve yesterday evening? ken: unprecedented. what was released yesterday was in a norma's insight about the federal reserve use -- was enormous insight about the federal reserve use and the sensitivity to the coronavirus. it also gives us insight into the expectations under loan losses for the banks, and then return of capital, it is fascinating to see the narrative the fed has looking out from today, not only to the issues but 2

exchange between michael mckee and the federal reserve chairman, jay powell.s a quick answer, and then he got out of there quickly. but i can tell you, that was the question that a lot of people wanted to be heard in this news conference. i was really disappointed that it came at the end because i wanted to hear people follow-up, push him more, because i do not believe it is as binary as the federal reserve leads us to believe. they can do more targeted things. it is not just about the blunt tool of interest rates. we have seen that with the things they've launched over the past month or so. tom: there's no question about that. to be fair to chairman powell, who i think gets better and better at these press conferences -- remember my am forced to listen to every word of it because i am on air with scarlet fu -- he had two statements within the conference on the pandemic. i believe near the end come on the challenges this nation faces with protests. i thought michael mckee ended the press conference with a discussion of asset inflation, and then really addressi

as we wait, we turn once again to michael mckee.e congresspeople going to ask chair powell about? how many programs does he have running, eight? programsnine up and running. they did get the primary credit program, the one that would lend directly into american corporations by buying their bonds, that was announced yesterday. in theory, it is operational. it will take a while to see how much of a spend. that could be a $50 billion program. the question is does anybody need it? spreads have come down so much, you have to pay a 100 basis point b to sell your fonts to the fed. will that get a lot of use? we have seen the fed in a secondary program, which was a big deal to the markets a while ago, spend $8 billion, not much out of the $25 billion they had to spend, buying bonds from companies like walmart, but nobody has a problem getting credit in those areas. the question will be the main street program, and that will probably be the focus for the people on capitol hill. it went operational two weeks ago but so far there have not been

let's cross over to michael mckee. l: a bounce in the wrong direction in terms of jobless claims. 1,580,000 -- that is a decrease week was because last revised. g.little confusing t much more than anticipated by the markets. the consensus forecast was 1,298,000. continuing claims number is 20 million 544,000, that is a decrease of 62,000 from the revised previous week. that is two weeks ago. initial claims last week, continuing claims two weeks ago. we are seeing a bit of a decline. pandemic insurance claims rise 760,526. of 66,000.increase these are the people who get unemployment who are not usually eligible for it. freelance work and gig workers, things like that. let me quickly check and see the number of people reporting big changes. california up 27,000. massachusetts up 17,000. want to see if there's any connection with the latest outbreaks of the covid virus. those of the weekend of june 6. we might to keep an eye on some of those dates. jonathan: unite been talking of last couple of weeks. we have seen huge ups

to tell us what we should be looking for, we welcome michael mckee.he chair,rd from including yesterday in front of the senate. most of the territory has been covered. give us a sense of what we should be looking for? are there nuances, or even subjects not in the core of what he is testifying about? michael: i'm not sure there is a lot of nuance left. the fed has few tools left. everything they do is in the service of lowering interest rates. everything they are doing is to keep rates lower, just different methods of that. it matters for people in the markets. the real issue is probably going to revolve around the fiscal stimulus congress may or may not do next. jay powell danced around that yesterday, saying it is probably going to be needed, but i do not have any advice for what you should do -- oh wait a minute, you're talking about states and localities with big-budget holes, that is something to look at. we might get more of that. patrick mchenry, the ranking republican on the committee said he was not sure the fed should be part of the fiscal e

joining us is michael mckee. if we had gotten this jobless claims number a few days ago the market would have said, it is not as bad as we thought, and today the narrative is different. michael: i would not try to put what the market will say into my words because we will wait and find out, but if you want to trade on disappointing news it will be the jobless claims. they declined for six straight weeks but they are still at 1.5 million. watching, iyone is non--- numbers because we are not comparing it to last year, we are comparing it to last week and the continuing claims have plateaued but are still high, suggesting that what jay powell said will come true. it will take a long time for the labor market to absorb the people who lost their jobs. we will see a lot of hiring right away when the economy reopens, but it will be a while before people get back to work because many of those companies will still fail and many have failed in the meantime, so expect unemployment to be a problem for a long time. that means

let's check in with michael mckee. ael: one area in which demand has been strong has been housing. we are looking at a house market struggling to keep up with demand. housing starts in up 3.4%. 974,000 at its annual rate. that is below what was forecast. looking at 1,100,000. not that much better than we saw last month. 121,000 in the latest month. that is up from 1,074,000 in april. trying to get back on track. the problem is the ability to many states just now reopening to construction. also whether or not they can get supply chains -- supplies. supply chains interrupted. purchase at an 11 year high. there is demand. housing completions is the measure of how much inventory there is. a major tell off. 1,115,000 and an annual rate up a little bit. there are still a lot of houses that need to be built. jonathan: there is a theme emerging. getting the direction right but struggling with the magnitude of the move. struggling to get a clean read as we open this economy. you expect that to continue? michael: absolutely. it i

vonnie: michael mckee, thank you. cogent and simple explanations, as always. of the emergency lending programs becoming operational. up next, we will speak to peter which justf sprott, listed on the nyse. this is bloomberg. ♪ amanda: i'm amanda lang in toronto. as we have been discussing, the fed continues its credit easing position in the market, leaving some longtime market watchers to conclude not only will it continue but it may have a devaluing effect. phrase "cashd the is trash." peter grosskopf is the ceo of sprott, which is now trading on the new york stock exchange. let's start right there. you are listing on the nyse. you had been otc, but now your common shares are listed. what does that mean for you in terms of milestones? peter: it is important move for us, brings us closer to our clients, mostly in the u.s., and allows our clients who know us from our products and strategies to buy our shares. there are some impediments otherwise between the u.s. and canadian markets. vonnie: why does now seem to be a good time, because gold prices are going up?

an extraordinary meeting, no other way to put it, as our michael mckee stop the press conference withis question about asset inflation. jane foley is with us from rabobank. let's go to the important question. i was quite surprised at how the chairman answered it, which is the idea of the actions of jerome powell leading to asset bubbles or at least to be kind, asset inflation. this time?hat at jane: i think if we look at the evidence after the global financial crisis, it is difficult to avoid saying central banks had something to do with asset price inflation. looking well beyond the u.s. to see evidence of this, we could look into sweden or australia, new zealand. one of the most damaging parts of the asset price inflation is when it hits house price inflation. households, particularly young people, having to chase house prices higher in order to get onto the property ladder. the big problem with that is it leads to households with a very high level of debt. we have seen this rise in many different economies. canada is another one. so over the last few years, certainly in the years a

some of it is figuring out michael mckee's rude questions. but i think with secretary mnuchin, they have really risen to the occasion. jonathan: the trick with michael mckee is you leave him right at the end of the news conference, you answer quickly, and then you get out and say you've got to go. another thing that i thought was really important was just the mechanical improvement, the bounce we are seeing. it is mechanical. you shut down, you reopen. you can't extrapolate out that bounce. really, the recovery begins at the end of summer. what does that look like? i think that is what we are all trying to figure out. lisa: and we don't know because we don't know the path of the virus. everyone is basically throwing up their hands. if you ask anybody where the markets going to go, you're going to get a different answer. jonathan: we see that in the payrolls estimates for payroll thursday. the gap between the wide and the -- between the high on the low, wide. the conversation tomorrow you really don't want to miss. we catch up on "bloomberg su

michael mckee, a little bit later catch up with michael on the federal reserve.'s talk about chairman powell. that testimony get easier tougher because you have to convince people not to get carried away from the initial bounce coming out of the shut down. tom: he can say that. the answer is every politician once good news. -- wants good news. republicans or democrats will love this good news. -- this is three huge surprises where good, qualified people have misjudged the micro dynamics of the moment we are in. there is no other way to put it. jonathan: the economic surprise indices are going through the roof. the positive surprises we have seen on a range of data points over last several weeks has been quite impressive. understanding how we bounce out is something difficult to do. quite clearly, lisa, as you suggested, is something economists are struggling with. lisa: we saw this with the jobs report we got last week and we saw the u.s. citigroup supply index rising to a record high. to me this raises a serious question. how much are economists able to understa

joining us with maurice michael mckee, bloomberg international -- joining us with more is michael mckeegoogle, amazon, walk me through the logistics. anhael: this has been ongoing dispute between united states and the rest of the world. the idea is european countries feel clung -- commerce is being done across national lines by these internet companies and it should be taxed, notwithstanding the fact they also need the money and they would like to raise additional cash. the french put forward a tax proposal and the u.s. threatened the same sanctions. the sides agreed to negotiate. what they are trying to do is come up with a worldwide agreement about how you tax international trade like that. in the meantime, other countries like spain have adopted a digital tax framework they would use if there is no international agreement reached. the administration pushing back on that. what they have said is they will -- a do wetion 301 see harm to american companies investigation that could be the predicate for some kind of trade sanctions. it would probably be be a long time before any kind of ta

thank you so much, michael mckee, for that report. coming up, we will talk with austan goolsbee about the state of the economy and the need tore that stimulus bill that mike was talking about. this is "balance of power" on bloomberg television and on radio. on and on radio. david: this is "balance of power." i am david westin. it is time for bloomberg news. for that we turn to mark. >> president trump says he expects the u.s. economy to recover from the coronavirus outbreak even faster than predicted after today's jobs report, surprise gain of millions of jobs. the president spoke in the white house rose garden. president trump: the numbers are great. this leads us on to a long period of growth. we will go back to having the greatest economy anywhere in the world, nothing close. i think we will have a very good upcoming few months. mark: mr. trump signed a bill to increase flexibility in the paycheck protection program. the measure gives businesses more time to use money available and have loans forgiven. here in new york city, health

tom: michael mckee, thank you. that complete report always expected and he delivers again.athan ferro, you mentioned the 10 year yield. even in the two years space with the great fist -- with the great stability, note how the two year comes in with a lower yield at 0.18%. what do think about that? jonathan: yields are not going higher anytime soon. we have an elephant sitting on the front end of the curve. the elephant is the federal reserve. the real story is yields cannot go much higher for a long time. bet is onreat aggregate demand. for is fancy economist talk a wonderful phrase by chetan ahya with morgan stanley. i first saw from him. slow ballization. trade andwn of world with a staggering unemployment, we see worldwide in this with the we reassess chief economist of morgan stanley. thank you so much for joining us this morning. it was mentioned the slow down yesterday with the imf. you have been way in front of this. how slow is slow going to be? chetan: the most important metric we are looking at is deceit went to the output level outputo see when to the levels get

we wipe them -- we welcome michael mckee. let's start with china. there was a time when the markets moved with what president trump said in a tweet. have the markets gotten past some of the trade threat? michael: they have probably not gotten past it so much as they have been overwhelmed with other news. we have lived with the trade wars for some time so markets have priced it in. we are tied together in terms of the covid virus with how things are moving forward, whether willie will recover -- whether we will recover. the economy is dependent on trade between the two. you look the numbers in the last 36 hours in terms of china and u.s. pmi and you can see they're both in the same place, a very slow recovery. the chinese world a bit faster than us to come back because they brought the factories back it while ago, but they did see their pmi number decline in the last month, after a quick rebound, just a little bit softer. they are not selling things to united states. we are still coming out of lockdown. do numbers are bad, but they show a stabilizatio

we welcome michael mckee, bloomberg cheat economics and policy correspondent.t is coming down but very slowly. david: that is the important thing. we are desperate for good news but the problem is we are not getting it. it is not the actual number itself but the direction of the number. basically flat. 1,000,480 thousand people filing for jobless claims, raising the question of why are that many people still losing jobs 14 weeks into this, or is there something wrong with the states processing or with fraud or with something else? it is a lot of people who keep losing jobs, at least if you take it literally. continuing claims job below 20 million. 19,522,000. that is two weeks old in terms of the number and does not include those getting pandemic unemployment insurance, the people self-employed are gig workers. 728,000 more added to the roles this past week, meeting over 30 million people are getting unemployment benefits of one kind or another. usid: does this tell anything about the jobs numbers we will get next week? michael: it does not appear to in the sen

we can go from the acuity of jim bullard to the acuity of michael mckee.ught there were is extraordinary moments in that conversation, none more than jim bullard's comments that there is a debate at the fed over yield curve control when in times past maybe that would've been less so. color the debate over yield curve control. michael: i think you have to define the word raging. at the fed they do not rage. it is a bunch of academics talking about the theories involve. they are trying to decide whether it is necessary, because of you look at fed funds futures and the futures curve for treasuries, it does not show any sign we will see any kind of increase in rates anytime soon. you may get back up if we start to see more economic activity. then they have to decide, do they need to use that to push down on rates? the argument is if you are using yield curve control it could be cheaper because you do not have to spend a lot of money once you've promised to spend all the money in the world. the market will not challenge you. the other argument is we do not need

write down is bloomberg's michael mckee. michael: jobs expected category. the american people think employment will get a little better but not a whole lot. full numbernty rises to 24 from 16.5. think jobs aret plentiful has arrives those who think there is no change went down. people think things will get worse in the short run. over the longer run, they do think things are going to get a little better. the six-month indication is 38.4% believe there will be more job not as good as we have seen in dirty 9.5. -- 39.5. the status quo in the underlying numbers at this point, also a really interesting number to look at. only 15% of people think incomes will increase over the next six month. 14 percent feel they will decrease. 17.5% feel they won't change. if you don't think you're getting paid enough, that is not particularly good news. it is also a situation where we really don't know what is going on with the economy or how this survey incorporates the latest news from the states. that's exactly what i was going to ask you. what is the survey carrier? it cou

that's crossover to michael mckee. michael: just waiting for the initial jobless claims numbers.s forecast. week, that isthe a decrease of 355,000 from a revised number the previous week . it does not look like it was significantly revised. the number everybody wants to see his continuing claims, and isay what we are looking at 20,929,000, which is up slightly from the forecast. a low bit higher than the forecast. from thee of 330 9000 previous week's revised levels. continuing claims fall. part we are not sure about is what role the pandemic unemployment assistance, the extra assistance that goes to gig workers and the self-employed not included in the overall totals. that is down a little bit from last week 796,000. this is for two weeks ago. continuing claims are two weeks ago as well. the number that matters to jay -- 29 and company, 29 million 504,000 in the week of may 23. that is the total number of people getting all kinds of benefits. still an enormous number of people out of work. we also got the ppi. .4% on a month over month basis. if you go to the poor rate -- if you

we are going to dive into the data, michael mckee is joining us. it is less bad thing that we are going to keep talking about? michael: it looks that way, this is a good report given everything. the service sector is the u.s. economy and consumer spending is 69% of u.s. gdp. so what happens here is arguably more important than the manufacturing index. if you look at the numbers which are under the headline, better than active, business activity is version of duction you get going up to 41 -- version of production you get going from 41 to 26. employment does not improve all that much, but we know that, and when you look at the numbers underneath the hood it looks like things are starting to get better. this could reflect two things. there is a sentiment index, it could reflect that we have reached the bottom and that purchasing managers might think that things are starting to look up. the other is that they reflect a little bit that some states have opened and the anecdotal report is that people are not going out and spending money but they could, ma

we welcome michael mckee, our chief economics and policy correspondent. this was not entirely unexpected. this is been in the works for a while. what does it say about the u.s.-eu trade relationship? michael: the u.s. and eu are on a slippery slope, headed for trade war, just with the global economy needs. a transatlantic trade war. back in october the wto gave the u.s. the right to impose 7.5 billion dollars worth of tariffs on european states that contribute to what were deemed illegal subsidies for airbus. the u.s. only put on about half of those tariffs. they were on things like wines and cheeses and scotch whiskey. now the u.s. trade representative wants to use the rest of the tariff money and impose additional tariffs. the first round of tariffs were 15% on aircraft parts, 25% on everything else. these could be as high as 100% on machinery, trucks, and gourmet food items including british gin, even though the u.k. has left the eu, they are part of this tariff. the eu is waiting for a ruling from the wto expected anytime that would give them light --

tom: i think you said it delicately and i thought you and michael mckee speaking with loretta mestereveland touched on that as well. i see a lot of pushback from our guests that we did not nationalize the bond market. i do not buy it. i observe we are in the process of nationalizing our bond market. maybe we can say in five to 10 years it will not be, but we have nationalized it. haves.nefits the , the upper 20%% to 30% of this nation. jonathan: we always compare it to an extreme. we say it is nothing like the extreme and therefore there is no problem. the extreme would be the bank of japan and japanese government bond market. the treasury department is nowhere near like the jgb or the boj. you can see the direction of travel. you have to start thinking about what the exit strategy looks like. i have no idea what the exit strategy looks like. lisa: and frankly the fed does not either although they continue to say they will have an exit strategy. i want to go back to what you are saying. that is that fed policies seem to widen the gap between the wealthy and the less wealthy. the ques

to take us through that, we welcome michael mckee, bloomberg chief economic and policy correspondent. what are you looking at? will it give us any indication of whether the jobs numbers are indicating something larger about a rally? michael: it is hard to tell because the data we have do not do a lot. i have not got a lot of numbers on the labor market. we do get initial jobless claims. still expecting 1.5 million claims. that is hard to square with what we saw on friday. we had a lot of churn in the labor market but that is an extraordinary amount. we will have to see what we make of that. this is a week of price indicators. cpi in particular. if we are in a deep recession we should see prices lower falling. last month the cpi fell .8%. this month we are looking at a flat number. it leaves year-over-year inflation rate at just .3%. that would definitely say we are in recession. then the question is for wednesday with the fed meeting, what do they think of inflation? do they think it will start rising again? it is hard to tell. we may not get a lot of ratification of where we are goin

for more, i want to bring in our international correspondent michael mckee. what is some of the manufacturing data this morning telling us about where we are? the basic message is me will not see a recovery. shaped recovery. the chinese numbers, which came out over the weekend were down a touch. they reopened earlier, so their numbers are higher. europe is next. germany is up, italy is down. here in the united states, some improvement but still below 50. these are basically psychological tests, do you think things will be better this month and last month? while people are suggesting things may be better, they don't see a rapid rebound. to see we are starting some hints of recovery in china before the u.s. that data gives us insight into what our future date and they look like? mike: it may and may not. i hate to sound like an economist with two hands there. us andference between china, they can order everybody back to work. there was out that nobody to sell the stuff too. but they are keeping the factories open. here in the u.s., we may see a slower opening a

michael mckee has more. do we know? michael: nothing really know in the testimony. us the feds telling really does not know how fast the recovery is going to be or when it actually hits, but they will keep interest rates near zero until it does. here are some of his main points in his prepared remarks. gdp will be the worst ever. i think everybody knows that. the impact is disproportionally on the poor and it could widen economic and equality, so something needs to be done. government spending has helped but public confidence we key. you have to believe that you will be safe to go out. he says inflation will be low, and the fed has helped market functioning with its lending programs. they will keep buying agencies and treasuries, at the current pace, and then they will wind down with the crisis ending. the key point seems to take in the fact that we saw that amazing report today. he notes that with the easing of restrictions on mobility and commerce and the extension of federal loans, some businesses are opening up while stimulus checks are supporting households and

your labor department data with bloombergs michael mckee.u can hear me, we 1,877,000 initial jobless claims for last week. that is a decrease of 249,000. we continue the trend lower to make things better, that it is still an extraordinary number. a couple of months ago we were looking at 200,000 a month. continuing claims is what everybody is focused on. they come in at 21,487,000. that is an increase from last 20 10 52.h was it does suggest we are seeing more people getting continuing claims. -- it wastwo states not as big a job as people anticipated it might be. maybe it means we are leveling out. in one thing you have to add is pandemic unemployment insurance for people who do not get regular unemployment insurance. self-employed, 623,000 last week which is a major decline from the week before, which was almost 1.3 million. it looks like those who are filing have filed and we are working our way through the backlogs and we will get a fairly clean picture of how many people run continuing unemployment in the next week or so. michael: thank

we bring in michael mckee. we heard last week from the and what did we hear new today? shortest of the answers ever given on television, not much new. basically consistent with what he has been saying. the fed, like everyone else, is in the dark for how long it will take to get out of this hole. he expects the u.s. economy to do well eventually between now and then, reputedly emphasized the need for additional assistance. he said congress should consider additional assistance. as to what that should be, he said it is up to congress to decide. when senator van hollen of maryland asked if they should focus on states and localities, powell said that is what i would do if i were you. david: he specifically said, we are laying off states employees, and i will be a bigger first contract. he also said it is to be more support for the unemployed because some jobs just to look like they are coming back. mike: even though we had a good employment number, we should see more people go back to work, it will still leave an awful lot of people unemployed. 2.5 million people hired in m

chairman, michael mckee, bloomberg television and radio. i came across a statistic the other day that amazed me, since your march 23rd emergency announcement every single stock in the s&p 500 has delivered a positive return and i'm wondering, even the levels of the market right now, whether you or your colleagues feel there is a possible bubble blowing that could pop and set back the recovery significantly or that we might see misallocation that could leave us worse off when this is over and second, inequality is not just about wages, it's also about wealth and a number of studies have suggested by keeping rates low for so long and targeting the markets after the great financial crisis that the fed did contribute to wealth inequality in this country and wonder if there's some tweak or message you could give that could affect that. >> what we've targeted is broader financial conditions. if you go back to the end of february, early march, you had basically the world markets realized at just about the same time, i remember that monday, that th

. >> thank you for the last question we'll go to michael mckee, bloomberg television. >> michael, bloomberg tv and radio. i came across a statistic, since your emergency announcement, every single stock in the s&p 500 has delivered a positive return i'm wondering even the levels of the market right now, whether you or your colleagues feel there is a possible bubble that could pop and set back the recovery significantly or we might see capital misallocation that will leave us worse off when this is over. second inequality is not just about wages but also about wealth a number of studies suggested keeping rates so long and targeting markets after the financial crisis that the fed did contribute to wealth inequality in the country. i'm wondering if you think there's some tweak or some message you could give that would affect this. >> what we've targeted is broader financial conditions if you go back to the end of february and early march, you had basically the world markets realized just about the same time i remember that monday, that there was going to be a global pandemic and the possibilit

. -- michaeling at as mckee joins us to break things down. michael: you will have to probably pay more for gin and cheeses. it is hot in london today. what is happening, the u.s. trade representative in the united states as the trump administration got permission withthe wto last october $7.5 billion worth of tariffs, supporting airbus with illegal subsidies, including the u.k., even though they are not on the e.u. anymore. the u.s. only used half of those, and now they want to re--- now they want to use the remaining half. they put tars on a wider range of products,, including some cheeses and wines. now they want to put tariffs on of two 100% on machinery, tools, trucks, plus cheeses, wines, and britt is -- and britt is gin. not only is the u.s. putting tars on the european union put of the european union is about to get a decision and the next month or so by the world health organization about subsidies the was gave to boeing. the u.s. is expected to put on $11.5 billion worth of tariffs. we could see trade war's escalating transatlantic at

mckee's take on all this. your thoughts on what the president had to say? michael: it is hard to know where to begin, because he talked about just about everything under the sun. just about something alix said, the president saying the economy is in great shape. the economy is not in great shape. the economy is still in very bad shape. there are 20 million people who lost their jobs who have not gotten them back. we had a good month of hiring in the month of may. that's what you can say. if it continues, the recovery may be quicker than people thought, but we are not in great shape yet. and that raises the question of what happens next. the president so far has not address that. it will be interesting to see if he gets that in a q and a, if he takes questions. do they support a fourth round of stimulus spending to try to keep this going? it does appear the paycheck protection program brought people back onto payrolls. the president signing an extension of that today. that could help. but do they need to put more money into the economy to keep the expansion going an