michael mckee is still with us.rom your perspective what the message will be from janet yellen as to when the debt becomes too much for the economy to sustain. michael: i'm sure she won't put a date on it. she will say in theory there is a time period when that could be an issue. it's imperative that the u.s. do something to bring down its debt. but the time is not now. she's not going to get caught out in a game of putting dates on it. but it's going to be important because they are introducing sometime soon the new build back better plan, which the various news organizations are reporting at $3 trillion over 10 years. that's going to raise questions about additional spending that she will certainly get asked about. lisa: what about jay powell? how will he weigh in in terms of capping yields at a certain place, buying more debt if yields rise to much to support the national fiscal deficit? michael: i think he will also dodge. his statement has been something along the lines of we will use whatever tools we need to

tom: michael mckee, thank you so much of course.ng forward the intellect at the press conference. he made his name at goldman sachs with a strange phrase called mortgage equity withdrawal. he figured out the flows of our housing market long ago and far away in a boom. he is the goldman sachs chief economist and head of global economics. i need to go to you on this boom economy you and i have never seen. how do you perceive at goldman sachs that 8% gdp fades away. will it be abrupt or will it be far more gradual and prosperous than we can imagine? >> the it percent forecast is for the fourth quarter number in 2021 and that's the way the fed looks at these numbers as well. we think they will obviously upgrade their forecast shortly as well. and our forecast, 2021, very rapid recovery. we've never seen these kinds of growth rates. afterwards i think the economy is going to be much closer to full employment by late this year early next year. in 2022, 23, we will see meaningful deceleration. maybe three instead of eight. but with an unem

joe: absolutely, more more, let's welcome in bloomberg knicks editor michael mckee. seems to me, the continued theme from powell, message discipline. this vision of not doing anything until something he accepts. michael: in his testimony in previous years, the fed is releasing his testimony before the house financial services committee that he is going to give tomorrow, getting an early start on not moving the markets. he will appear with, of course, janet yellen. nothing much he has said before. the virus is in control, but a bit of an optimistic cast as you are youred it when caroline read the headlines. due in significant part to the unprecedented and fiscal and monetary policy actions i mentioned which he mention earlier in his testimony which provided essential support to households, businesses and communities. that is accompanied by a warning and a promise much more to be done, we welcome this progress, powell says, but will not lose sight of the millions of americans that are still hurting including lower wage workers in the service sector, african-americans, a

michael mckee in the press conference. michael mckee with all of our economic coverage.go we spoke to ian lincoln -- ian lyngen, head of u.s. rates. he joins us this morning. i make jokes but it is not funny. it is a record issuance of debt. what is the distinction of this record issuance of debt? ian: the defining characteristic of what we are seeing at this moment in terms of new treasury issuance is it is not going to all be in the front end of the curve. the treasury secretary wants to term it out so we are seeing more 30's, more 20's, more tens. it is coming at a moment where the fed is content to characterize the backup in yields as a positive sign because it reflects in improving economic outlook in inflation expectations. there will be a point at which we look back at the higher rates we are seeing and say that was a great buying opportunity. the question in my mind is that 1.60 10-year gilts or 1.75. -- 10 year yields or 1.75? lisa: how much is the fed buying? they have sucked up a substantial portion of this. will they continue to absorb the u.s.'s ample and re

here is michael mckee. ael: good morning and good news to start the week if you're able for the economy -- if you're a bull the economy. the empire manufacturing index comes in at 17.4, better than the forecast 15. the best since late 2018. we are seeing strength in manufacturing in the new york area. here is the interesting thing. while the index for employment fell a little bit, still positive at 9.3, the index of prices paid is at 64.4, the highest since august of 2008, just before the great financial crisis got underway in earnest. the fed has something to look at in terms of prices. not so much that new york rices are high. it is the speed at which they have gone up and whether that concerns the market. tom: that is right where i wanted to go. i wanted to do the market with you. it is the latest change, it is the second derivative. drive your feel for the first and second derivatives of this economy right now. michael: in the inflation stance we will see a quick second derivative move because we start t

let's bring in michael mckee.el: this will be the most important release of the month next month. this month is the month before we get to the base affects, which will be pushing inflation way up. we do not see a big jump europe rate cpi on a month over month basis up .8%. -- we did not see a big jump. cpi on a month over month basis up .8%. the headline up 1.7% on a year-over-year basis. that was forecast. gasoline, one of the big culprits, up 6.4% in february. it accounts for half of the increase. you can expect that to bleed into next month because oil prices continue to rise. food up .2% in february. we should see services rise on a regular basis once we start to see the economy open up. right now services, less energy, up just .2%. the number we look at as a substitute for housing, that is up .3%. that is the biggest gain in some months because it is at .1%. rents may be stabilizing around the country. tom: we do get a market move. jonathan: there is information content in the data, also information content a

with your economic data, here is michael mckee. michael: good morning. jobless claims day so we are keeping an eye out for the latest figures. they have had some disruptions in the market. we have seen jobless claims hold higher than they were expected to come and that is what we have again today. 770,000 initial jobless claims while last week, up from an unrevised 712. the forecast was for a drop to 700,000. we are not seeing any significant improvement in the claims picture. i give you my warning there is always a question about whether the jobless claims number itself is accurate. the thing we have to keep in mind is the level and direction. right now the level and direction remain bad. philadelphia fed business outlook comes in better-than-expected, double what was expected. 51.8 compared to 23.3. here is a number we want to keep a lookout for. i'm waiting for all of these numbers to breakthrough. the philadelphia fed prices received index is 31.8. last month it was 16.7. on any kind of inflation measure we will get over the next couple of months is

with a little bit of economic data, let's bring in michael mckee. l: it is all about the this week. there is a torrent of fed speak. they were quiet running up to the last meeting on wednesday and now everyone will have their chance to explain. this is a little bit like jay powell being the lead singer and everyone else on the fed is the chorus. we get to hear from the courts. some of these will be about other topics. randal quarles is talking about libor. -- is talking about climate change, but she will also talk about the economic outlook. a lot of people laying out their views, which they hope the market will take as listen to us, we will not raise rates early. you can see the yield curve -- we are starting to see a little bit of acceptance. it has been a tough sell so far given the fact everyone expects the economy to grow so quickly this year. we also have data at the end of the week that will catch people's attention. this will come up in testimony along with janet yellen to the house and senate this week in which we get the latest spending and

i think michael mckee asked a really important question at the news conference.levated music played over the top of it. the chairman backed it away. i don't know if he did hear it. the federal reserve has come out with a series of forecast and told us these are the number that they think will happen and this is what we will not do if we see those numbers. we will not hike interest rates. i think the chairman did a good job. what i understood this week is what they will see in the future that will not lead to rate hikes, item not understand what they need to see to lead -- i do not understand what they need to see to lead to rate hikes. tom: they are going to wait and wait. jonathan: wait to see what? tom: they are going to wait to see a combination that leads to their mandate which is full employment and there is almost a social aspect. we get to 3.3% unemployment quickly. jonathan: two michael mckee's point, maybe they are waiting and they are waiting and we see a repeat of what we saw in the last cycle in europe. i think that is a question that mike is asking.

when michael mckee mentioned japan. jonathon: we talked to mike mckee a little bit later. good morning worldwide. on the s&p 500, down 17, coming in .4%. the nasdaq is suffering once again. we will talk about that more little bit later. on the fx market, there it is in the bond market, 174, right now, 172, up by 8 basis points, yields heading higher. lisa: really driven by the real yield, not necessarily inflation expectations. meanwhile in the united kingdom, we are respecting a bank of england meeting and decision today. not a lot of fireworks, expect them to reiterate the messaging of jerome powell, perhaps they can have as good of a press conference. a lot of people agree with you. 8:30 a.m. and we get the initial jobless claims and continuing claims. it is interesting to see whether we see market improvements. also curious to see how much people simply dismiss the data and still being noisy as they look toward the march jobs number as well as beyond. today, i am focused on this. tony blinken and jake sullivan headin

michael mckee is joining us to do that. this is a surprising number, stronger than anticipated, but it looks to be a fairly straightforward number. bars, restaurants, leisure sector front running the opening, bringing people back. mike: if you were running a pub or restaurant and you been struggling for the past year, and all of a sudden you feel like you can reopen, you are going to do it. that is apparently what's happening. 285,000 people going back to work in leisure and hospitality. that leaves us with this big number four payrolls, 379,000. on the private side, 406 to 5000. 86,000 jobs lost on the government side. labor force participation unchanged. average hourly earnings unchanged. yes, it is a good report but we are still a long way from where the fed wants us to be. you can see it reflected in this chart, the total number of jobs still way below where we were in february 2020. the yellow line is average hourly earnings, and they are diverging from the number of jobs. we are not seeing wage pressures generated by

michael mckee is reacting to those numbers, breaking them down, then jeff rosenberg of blackrock. this is (announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body so you can stretch and strengthen your core, relieve back pain, and tone your entire body. since i've been using the aerotrainer, my back pain is gone. when you're stretching your lower back on there, there is no better feeling. (announcer) do pelvic tilts for perfect abs and to strengthen your back. do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me, it works 100%. (announcer) think it'll break on you? think again! even a jeep can't burst it. give the aerotrainer a shot. pain and stress is the only thing you have to lose. get it and get it now. your body will thank you. (announcer) find out more at aerotrainer.com. that's aerotrainer.com. jonathan: 10 seconds to go unti

michael mckee, thanks for joining us. to talk a little bit about what is going on with the fed, the treasury, and washington. coming up, intel's ambitious bid to regain its manufacturing lead and build a couple new foundries. we will hear from the ceo next on the company's decision to spend $20 billion. this is bloomberg. ♪ matt: this is bloomberg. intel ceo pat gelsinger has unveiled plans for a manufacturing investment design that could cost $20 billion. a couple of new foundries will come out of that. emily chang spoke a few moments ago with the ceo. pat: because i'm committed to the best products in every category we participate in, the best cost structure, and the most resilient supply chain. we see the ability to leverage the industry, but also become a major supplier of foundry to the industry. this is a winning formula and the world is demanding more semi conductors than ever before. we were getting more digital and then covid happened and it accelerated, so we need to step into this in a big way. i think our stra

let's bring in michael mckee for more. good morning.el: we are looking at the new orders for durable goods report. it is not a good one. it is the first decline in nine months. february's new orders go down 1.1%. that is $2.9 billion. it followed a 3.5% increase in january. the forecast was for .5%. you exclude transportation and new orders were down .9%. a little bit less. excluding defense, new orders were down .7%. the thing we always want to look at is the capital goods orders. capital goods orders, excluding aircraft, down 1.1%. .8%. it is not a good look overall for the economy in terms of activity in february. remember how bad february was. we do not have a breakdown of snow shovels but i bet there were orders for those. lisa: is there a larger issue here of companies not investing as much as people thought they might in anticipation of this reopening? michael: it is hard to say. these numbers are always so lumpy. we had a big gain in january of 3.5%. maybe this is payback. companies ordered at the beginning of the year because t

we will get more with michael mckee. is this a manufacturing versus service thing or what is going out -- going on? michael: it appears that we are still seeing growth in the economy at 55 point three, which is relatively strong, just not as strong as last month. the services people say we are running into supply chain constraints holding back businesses. the new orders drum -- number drop significantly, 51.9 and deliveries go up to 60.8. that is the only one where it goes up it is bad news because it means a slower delivery time to customers because they cannot keep up with the orders at this point. the real numbers in here that we want to see our employment, -- are employment, but it suggests that we are still hiring and we will see friday if that leads into the payrolls report. listen to this, prices, 71.8 up from 64.2. we have supply chain price impact on the services industry as well, coupled with the numbers that we are seeing from the manufacturing report, which was 64 -- 86. we are seeing price pressures in the ec

we digress, as he ice -- he is focused on jobs data come out is michael mckee -- on jobs data, is michaelinternational economics and policy correspondent. do you just presume that the twin deficit expands out unimaginably given what we just heard from mr. deese? michael: it does expand tremendously. the problem is we don't know exact what is going to get passed because this plan also includes tax increases. i've never seen a government program that paid for itself. that is a standard washington line, but they could recoup some of it. this is one of those economic proposals that you have to look at separately from just the headline because it creates not just the jobs now to build the roads, etc., but if you modernize the economy, it makes the economy more efficient, companies can make more money, and people's living standards go up. there's no argument among economists that that is something we need to do in this country. it is really more of how you pay for it. tom: ed hyman has a 3.4% employment model -- 3.4% on the lemon model out a couple of years -- 3.4 percent unemployment model out

here is michael mckee. michael: ppi comes in almost bang on expectations. percent rise, exactly as forecast. this is down from 1.3% last month, which is the biggest in the history of the series. the poor rate goes up .2%, which is as forecast, which puts us annual rate at 2.8% for final demand and for the core, 2.5%. those are both pretty much in line, maybe .1 higher than thought. everyone will be watching to see what kind of numbers we get in ppi, whether that will translate to higher overall prices. this month we see a one point 4% rise in the index for good while services only increased .1. with service industries coming back online there was worry we would start to see inflation, but not this month. still a lot of pandemic influence but also influence from the weather. nobody wanted to sit outside and have dinner in february with the weather as bad as it was. one thing i wanted to note, important for everybody working from home. in chile, prices 8% up. these are cable great prices. i am told wine grape prices are stable. lisa: that is great to know. i

let's cross over to michael mckee. l: we are looking at the advanced trades good balance that comes in a little bit worse than forecast at 86.7. the prior was 83.7 billion, and that will contribute to a wider first-quarter deficit. here comes the income and spending numbers. that is what we wanted to see. personal income down 7.1%. last month it was up 10%. this is because the stimulus checks came out in january and not in february. spending down 1%. it had been up to .4%. the forecast was for a .8 decline, a much worse number than anticipated. pc deflator comes in softer than anticipated. on a year-over-year basis, we see the pce deflator go up .1 to 1.6% from 1.5% although it does not seem to matter a lot at this -- at these levels. this is also february. it is the march/april data that will matter because those are the months the price indexes dropped off the map. joining me to talk more about inflation and the outlook for the economy is patrick harker, the president of the federal reserve bank of philadelphia. good

let's get some data with michael mckee. michael: happy pandemic anniversary.was one year ago today the world health organization declared this a pandemic than we started seeing a norma's jobless claims and we still do. 712,000 last week. that is lower than the forecast for 725,000. the initial report last week was 745,000. looking at a drop of 35,000, 33,000 on the week, but we are still over 700,000. i do not know if we have this chart ready, but this is the 51st week we have been above the previous record high of 695,000 back in 1982, when tom keene still wore regular ties. it has been a long period of bad news. michael: one, two, eight weeks where we have a trend off the grim weeks of middle january. is that a legitimate trend to you or chairman powell? michael: it does seem to be a legitimate trend but we cannot trust the numbers. we do not know exactly how many claims are out there. as long as you're looking at those kinds of numbers, you are looking at bad news for the overall economy. the four week total of claims is back up 20 million. it dropped to 18

we want to bring in bloomberg economic and policy correspondent mike mckee. michael: i'm not sure how much fun you are having with the university of michigan numbers, but we are not watching them because they are going to tell us what is happening right now. there's not as strong a correlation as you think between confidence numbers in consumer spending, but it is important that americans feel comfortable going back out again, so we have some good news. michigan sentiment hit 83. the forecast was for 70 85, up from 76.8. that is the highest since last march. we know what happened last march. we started this whole pandemic thing. expectations at 77.5, way up from 70.7 last month, and much better than the 72 expected. we are watching inflation expectations. the fed is talking a lot about that because inflation is not a concern for them at the moment. the one-year inflation index runs at 3.1% after 3.3%. people think inflation is not going up. five-year inflation expectations for michigan, 2.7%, unchanged. at this point, people don't see a problem with inflation they do

infrastructure plan, bloomberg's international economics and internal economics policy correspondent michael mckeeith those. michael: it does not mean i will balance your checkbook. we are joined by dallas fed president robert kaplan. we would like to welcome you. i know you do not want to comment on the politics for pieces of this biden infrastructure plan, but let me ask you about the economics. $2.25 trillion over eight years being spent. what impact does that have on the economy and the possibilities for stimulus -- for monetary policy?going forward ? mr. kaplan: on infrastructure, we have had a lot of fiscal spending that's been necessary to emerge from the pandemic, but a lot of that spending will fund current consumption, and so the impact that has creates a bump in gdp, but over time, that bump wears off. the nice thing and the desirable thing for me about infrastructure spending, it is a long-term investment. what do i mean by that? it is investment you make today or over the years and it should help in the future create higher potential gdp growth, higher sustainable growth, better produ

with your adp report, let's turn to mike mckee. michaela's going back to work, at least according to adp. the numbers have come in higher than they have in months and months. 517,000 people added to payrolls, according to the payroll processor. they account for private-sector jobs, so that is a little under the forecast for the nonfarm private payrolls report on friday, expected to rise by 638,000. the numbers don't often match up between the nonfarm private jobs and the adp, but the direction gives you an indication, and the magnitude certainly should give us some indication of how the news is going to play out. in terms of the categories, service providing jobs the big winner here. 437,000 additional jobs, 169 thousand of those in the leisure and hospitality space. obviously, with states reopening, restaurants opal -- restaurants able to have more guests, we are seeing people go back to work. these aren't jobs necessarily added to the economy, but jobs restored to the economy. small businesses added 174,000 -- added 174,000, medium one u

michael mckee is here. continuing the good data out of the u.s. conversation. michael: essentially it is. i really thought you were going to tell guy you had ordered a boeing jet. alix: well, yeah. christmas is coming! [laughter] michael: factory orders numbers are what we are looking at here because the durable goods numbers have been reported. factory orders at 2.6% gain after 1.6% gain in the prior month of december. it shows an increase in january. manufacturing sector is going strong. what we have added in his nondurable goods, clothing, etc. it suggests that retailers may be looking for more stocks going forward, and that is good news. january numbers, we'll see how they play out the next two months of the quarter. capital goods shipment numbers for january, 1.8%, a little bit lower than the 2.1% in december. that is not necessarily good news. orders for quarters to come. right now, not bad given the whole situation. the question is, are we order more stuff from factories, are factories having? adp said no. we will find out tomorrow. guy: huge range in tha

here with us to discuss is michael mckee. o hear anything different from them then what we have been hearing for the past several weeks? michael: i don't think so. let me start by wishing you a happy anniversary. one year ago today, the fed announced unlimited qe and that it would buy corporate bonds. the stock market bottomed out one year ago today. i didn't get you anything for the anniversary come up but i understand your size is investment grade -- the anniversary, but i understand your size is investment grade aaa. [laughter] anyway, we are one year on, and the fed chair and treasury secretary are going to take a bit of a victory lap, but still worn that there's -- but still warn that there's lots still to be done. jay powell in his prepared testimony saying that the unemployment rate is still elevated at 6.2%, and underestimates the shortfall. he has said that before, but what this means is they are going to be looking not just at the unemployment rate, but the unemployment rate for people who are in disadvantaged catego

tom: it -- our michael mckee will be part of that press conference.ow kevin cirilli is with us. the luxury as i can go granular! i will go to your guest tonight, the gentleman from south dakota like -- who like lincoln lost and lost. kevin cramer knows what it is like to lose an election. he did it a lot before he started his north dakota career. how does senator kramer i just posted stimulus? kevin: he has the philadelphia eagles of politics! they are going to be really fighting for there to be some type of investment in infrastructure in a way that does not mean they have to raise taxes. it will be increasingly difficult for them to do so given the simple math of the congress. he actually put forth a bill yesterday with republicans in the house that would codify a piece from the executive branch that would make it more difficult for the current administration to make it harder for there to be investment in coal energy and other forms of energy as well. he has tying infrastructure to the cold debate with -- coal debate with that key sin dressed -- ke

amanda: bloomberg's michael mckee with us now i guess the most important thing to know about that is e haven't seen financial conditions tighten so what is the needle that jay powell is threating? michael: he has been trying to convince the markets that the fed means it, they will not be raising rates or tapering there qe purchases until they get the economic outcome they want which is maximum employment. he defined that is not just a low unemployment rate but many coming back into the labor force that pushes up wages. until they get inflation to 2% and over for a little while. the market things we might at that inflation rate sooner than the fed. powell was certain it would take some time. we will see inflation go up temporarily, he says, but that will be transient and it will fall back so we are not ready to move. the market reaction obviously is they don't believe him. he was asked about the disruptions last thursday and the treasury market and the good ongoing problems at the low and, the short end of the yield curve with overnight rates that are trading a little bit negative. he

tom: and michael mckee would say those forecasts really matter. what i think is important, from the oecd, it is not just about the united states. you can get that lift worldwide. jonathan: we see a plan downing d.c. -- to see a plan down in d.c. to make that much of a difference. the forecast for the u.s. is effectively doubled. does it really bleed over to the rest of the world, or does this just fueled the story of the u.s. decoupling for the year ahead? tom: futures up 33, nasdaq up a little more. you go one way one day, one way the other day. lisa, what do you see out a month, or dare i say three months? lisa: that is when the gloom will actually end for people who could start traveling again and get employed again. the gloom ended in november in markets, let's be clear. right now we are still on the precipice of the end of gloom in the economy, the idea that we can get back to normal. the question is, can we sustain momentum in markets through the economic when you have this idea of inflation? longer-term inflation expectations, one of the mo

haidi: that was patrick harker speaking exclusively with michael mckee. you more details on the lockdown beginning in brisbane today, beginning at 5:00 p.m. local time monday. queensland has reported four additional transmissions overnight. we heard 12 hours ago that authorities there were existing the idea of another lockdown. they were saying the state was more experienced in managing this more contagious u.k. variant than back in january when they went into the last lockdown. but we have seen states including new south wales and tasmania leasing restrictions. we are now hearing queensland health is putting in place a three down lockdown due to more transmissions overnight. three cases have been reported. of course this comes very close to the easter four day long weekend. incredibly concerning for the airlines as well as hospitality and tourism-related businesses. let's get some morning calls now with sophie kamaruddin in hong kong. goldman is looking beyond the hope phase for markets now. sophie: that's right. goldman saying markets are transitioning

but spring in michael mckee and kailey leinz for more. on these days with the treasury yield? kaylee: we are seeing a bit of a stabilization while the market waits for whatever it is jerome powell is point to say, but it has been a dramatic move over the last two weeks or so. right now, the treasury yield is unchanged from yesterday's levels 56 basis points higher than where we started 2021. a lot of that has to do with fiscal stimulus expectation a

guys like michael mckee have to grill him just in the background, what are the phd's thinking about this? what selected governors, the vice chairman. i'm can be watching that in the 2:00 hour. jonathan: the difference between the ecb last week in the federal reserve this afternoon it will be night and day. the forecast, language, the expression, the tone. tom: what does everyone think gdp growth will be in that workable forward number? >> consensus is around 5.5%. for europe, may be something in and around half of that which is why the forecast not only will be different compared to the ecb, but the outlook for policy will be as well. tom: the conversation we had yesterday was world-class. his criticism of astrazeneca and that debate has already moved forward. lisa: his criticism of government in europe for delaying any rollout of the astrazeneca vaccine. i have to wonder how that slowdown affects global growth let alone that in the euro region. jonathan: can we sit on the number in america. 2.4 4 million doses a day is your daily average. lisa: when are you getting yours? jonathan: hope

we will hear michael mckee interviewing someone about the inflation debate and talking about when the fed might start easing monthly bond purchases. and at 1:00 p.m., the commodity story. we have seen a lot of volatility and oil prices plunging and then rising. the suez canal blockage, the count we get will be interesting because it really talks to the shale dominance of the past era. people said peak shale was over, but now we are seeing more shale production as we see international fluids. do these shale producers see this as an opportunity to wrap up production? jonathan: april 13, cpi data for america. it is not the data per se, it is how we respond to the data. i am fascinated to see how people respond when they actually see the numbers. over the next several months. how many times we hear transitory. and how many people think it is transitory, but then start changing their mind as soon as they see the actual data itself over the next quarter or so. lisa: i wonder if there has been any president for the granularity of inflation and the analysis of that. because it is no longer in

michael mckee saying we would expect given the fact that we are seeing a decline down to lowe's not seenarch 20, 2020, we should see a pop, and we are not. 10 year yields down 1.59%. the conundrum of how we get the economy back up and running and whether all of the good data is backward looking and not necessarily indicative of whether the optimism currently in markets can be confirmed i reality. coming up on "balance of power," jared bernstein talking taxes and infrastructure spending. this is bloomberg. ♪ want to save hundreds on your wireless bill? with xfinity mobile, you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network? sure thing! and with fast, nationwide 5g included - at no extra cost? we've got you covered. so join the carrier rated #1 in customer satisfaction... ...and learn how much you can save at xfinitymobile.com/mysavings. ♪ jonathan: equities breaking down. from york city for our audience worldwide, good morning. the countdown to the opening bell starts now. equity futures down 17 points. we decli

thank you, michael mckee of bloomberg. joining us now, jason furman, former chair of the council of economic advisers under president obama. morgan stanley most aggressive, they see the output gap in the fourth quarter closing and increasing to 2.7%. help me understand what the growth impulse is going to be from the stimulus. jason: i think it is going to be tremendous. we will never have had more demand in the u.s. economy, not since world war ii, then we are going to have this year. we have left over money from the c.a.r.e.s. act that was passed in march. we have left over money for multi-spending people didn't do during the pandemic. we have left over money from the 900 billion dollars stimulus in december, and now we have a new $1.9 trillion on top of that. there will be no demand constraint on this economy this year. it is just what it can produce on the supply side that will matter. guy: jason, good morning. the office is looking nice. let's talk a little bit about the souffle affect. clearly, the last cycle, the les

annmarie: richmond fed president thomas barkin speaking to michael mckee.m one central bank to another, the bank of france governor says the ecb "can and must react against any unwanted rising bond yields that threatens to undermine the euro area economy." his comments are among the strongest yet but ecb officials. alan higgins is still with us this morning. what strikes me is the data we got last week about the ecb. they slowed their bond purchases. my guess is that timing is bad, but what did you make of villeroy's comments? should we take them at face value? alan: yeah, it was surprising because step back a bit, bond yi elds in your, in most countries are deeply negative. in contrast to what the central bank of australia has done, via actions, the ecb has not come through. really, do they really need government bond yields to be deeply negative to support the corporate sector? i don't think so. again, europe is different from the united states. the corporate market is less important. borrowing on a spread is less important. it is all about bank lending.

if we are lucky, we may even have yield curve control, by the , probably from michael mckee, who hasof the better reporters. [laughter] tom: you've got that right, matt. he will have to go last because they can't stand the nature of his questions. i want to dovetail it against the ellens and or call of a great american ash the ellens and their -- the ellen zentner called of a great american economy. with the five year yield, we saw the construction of a three bond butterfly move out 3.2 standard deviations. was that enough catharsis to clear the market for the zentner call? matthew: i think so. i think the violence of the move, after the seven-year auction tailed pretty badly, probably washed out a lot of weaker longs in the it immediate sector -- in the intermediate sector. so i do think that was enough probably to clear out a lot of bad positioning in the bond market. but as we saw, and as i mentioned, it really brought the pricing of said policy to a level that we haven't seen since the taper tantrum in 2013. we did this analysis in our last institutional research publication, whe

i do admit that june meeting, and michael mckee has said this, what is so important there is you're goingconomic data there, and by the june and end of july, you will get a feeling for the second quarter as well. jonathan: base effects have kicked in big time in the next couple of months. gdp, may growth has even peaked. that is going to be an interesting conversation to have. before we even reopen this economy and really get roaring, we start to have a conversation more and more and that several months about what 2022 looks like. tom: there's a massive mystery about that glide path off of whatever the maximum peak is. i don't think anyone has a clue. jonathan: the deceleration from 2021 to 2022 and how you want to be allocated in this market. coming up, dr. peter hotez, baylor university dean. we will talk about all things medicine next. vaccines, the pandemic, 2.5 million vaccines per day on average in the last seven days in america. phenomenal numbers, and a reason why we are talking about american exceptionalism in this global economy, certainly relative to what is taking place in eur

he spoke exclusively to bloomberg's michael mckee. . >> the important thing i look at on infrastructure have had a lot of fiscal spending which is necessary to emerge from the pandemic, a lot of that will fund current consumption, so the impact that has is it creates a bump in g. -- in gdp. infrastructure spending is a long-term investment and i mean it's investment you make today or over the years and it should help create higher potential gdp growth, higher sustainable growth, and productivity. i would differentiate infrastructure spending from other fiscal spending and it is clear we need more wi-fi in this country and other infrastructure spending to make us more productive and make more sustainable growth in the future. i think that is a positive thing. >> the government has spent trillions fighting the pandemic and you expect that lead to some transitory inflation. the fed thinks we will get to 3.5% on appointment anyway. robert joe biden is saying these should be good union jobs that pay more. does that make the danger of inflation greater? >> it clearly creates more demand. -- m

anna: that was richmond fed president thomas barkan speaking to bloomberg's michael mckee. live, of course put but a very interesting conversation. the fixed income strategist at saxo bank is here. really good to speak to you. having a fixed income strategist is always very welcome but this week is very important given what we have seen. i wonder how untroubled you think the fed is by what we've seen in fixed income markets of late because we hear some voices saying the fed should be doing something, saying something another saying the fed's right to not be too concerned. >> well, i think that the fed at this point in time should be pretty worried for the simple reason that in the past few weeks, we have seen nominal yields rising but the rate has not been rising. these reflation trades in the past few months, the past few weeks has not been in place. what has happened in reality is that investors have been selling safer bonds in order to buy higher yielding securities, which in this case are junk bonds for the simple reason they are the only type of bonds at this moment th

he spoke exclusively with bloomberg's michael mckee. >> they are seeing price pressures.not doing is planning on passing much of that along to the consumer. i think the inflation story is complicated. we will see march and april drop off. they were low months because we were shutting down the economy. we will see a spike in inflation. our forecast is around 2.1% but we don't see it running out of control. >> what about the idea of the spending side? people are reluctant to go out. what are you hearing in philadelphia? we are getting more jabs in arms and we see personal spending decline in the month of february. >> it has been choppy. we have had good months, bad months, we are seeing numbers rise in the region. until we get through this, we will see a lot of those till he in all of these measures. that makes them hard to read. for me as a policymaker, i want to hold steady and make sure we get through this and then we can normalize once we get through this. >> mortgage rates have gone up. >> we have some breaking news. this is a ship that has been blocking the suez canal

let's dive deeper into the numbers with michael mckee, bloomberg's economic and policy correspondent. michael: it has been very much one of the strong areas of the economy, and that is why kailey is here, because alix bought a house, and she is out moving into her new house. that is what millions of americans have been doing over the past year. these numbers are not going to cause a lot of consternation because with the big freeze in texas and snowstorms over the country, the last thing couples were saying to each other was let's go househunting out in the cold. there is an issue with this month going forward. we are seeing mortgage rates rise. they have risen significantly given the parameters of where we are. the existing home sales numbers just shot up year over this 6 million level, and we are at levels we have not seen since the 2005 boom, but was mortgage rising to about 3%, does that mean that activity slows historically we are still at a very low pace, but are we seeing at this point a big change in market psychology? will people slow down? the other thing to look at his city

he spoke with michael mckee earlier.s like manufacturing, supply, seeing price pressures. what they are not doing, china not passing much of that along to their consumer. the inflation story is complicated. as you said, markets will drop off. they were low months because we were shutting down the economy. we will see a spike in inflation. our guesses for inflation to creep up to 2% and our goal is to have it above 2% this year. we do not see it running out of control. michael: what about the idea that on the spending side people are reluctant to go out? what are you hearing in philadelphia? we are getting more jabs in arms and yet we see personal spending decline in february. patrick: it has been choppy because the virus has been variable. we have had good months, bad months. until we get through this period, we will see a lot of volatility in all of these measures. that makes it hard to read. for me as a policymaker in that kind of situation, i want to hold steady and make sure we get through this. then it can start to

kailey: bloomberg's michael mckee, thank you. we are getting some headlines from chair jerome powell with an op-ed in "the wall street journal," saying "the recovery is far from complete, but the outlook is brittany. -- is brightening." joining us is bloomberg intelligence rates strategist ira jersey. what are the ramifications of this move? ira: firstly, i do think that the bank regulators are going to eventually tweak the supplement a leverage ratio rule to exclude reserves. that is the cash that mike was just talking about. the idea here being that reserves don't have any risk. they don't have credit risk because the federal reserve is who pays you interest on those reserves, and they are not going to default. on the others, they don't have any duration risk because they are all overnight loans that the fed basically makes to these banks. because there's no risk, what is the point in having to hold equity capital against it? that frees up a lot of capital for banks to make other loans and to expand their balance sheet a little

thanks very much, michael mckee. treasury yields off the back of this breaching more key levels after the fed is going to allow inflation to overshoot as the economy recovers. the benchmark 10 year yield hitting 1.75% for the first time since january 2020. joining us is ira jersey, chief u.s. rates analyst for bloomberg intelligence. what is going to stop them -- yields keep going higher. what is going to stop them? ira: probably very little unless the fed gets derailed. when do higher yields actually impact the economy? we are not talking about what the stock market is doing. let's disconnect the stock market from the economy. but what slows down all of those things mike mckee was mentioning? what stops job creation? what are the things that could derail the economy? it doesn't seem like there is a lot of long as we continue to rollout vaccines and there is a lot of pent-up demand to get out there and actually spend and get the economy going. that is what i think chair powell very appropriately mentioned. we might h

mike mckee is here to tell us all. michael: i wouldn't make a bet on the idea that you will get anything different today, although claude raines was shocked there were politics going on on the house floor yesterday, or in the house hearing room yesterday. a lot of effort to get powell and yellen to support one side or the other on the debate about what stimulus is going to do and all of this government spending to the economy. inflation is what we will get back to today. the question of whether or not this is going to create inflation, powell said yesterday and will say again today that it will in the short run. the fed is watching inflation expectations, what americans think is going to happen and what the markets think is going to happen. both have been picking up, but have dropped off a little bit. it looks like we are flattening out, and right now, inflation expectations don't tell you there is going to be a long-term problem. powell will emphasize that. the other problem that goes along with that, do we have a problem wit

mckee. over to you. michael: happy campers you are, happy campers you will be, as dan quayle once said. an enormous jump in the consumer confidence numbers. the headline number goes up to one a 9.7, the highest since last march, when the pandemic was just getting underway. the present situation index rises to 110 from 92, and the expectations index rises to 109 from 90.8. an enormous amount of confidence in the economy. i guess this really tracks with the vaccine availability has been, as opposed to the talk yesterday from the cdc. alix: oh my god, both of you. [laughter] guy: it is a touchy subject. you are going to bring that up? wow. michael: you still have like 10% of people that are not happy, and i am sitting next to one of them. what can you say? it is a testament to the fact that things are going to get better. they are not taking to account to the cdc comments yesterday about impending doom. earlier today, we had the house price index up 1%. the real shocking number was the year-over-year number for the case-shiller home price index, up 11.1%. a massive gain in home prices. ali

bloomberg international economics and policy correspondent mike mckee is here with more. michael: we woke up to some good news this morning. 684,000 jobless claims filed last week, a decline of 97,000, and it does break below that 700,000 level for the first time in 52 weeks, so there is some significant movement in the claims area that sort of ratifies what has been going on in the economy. however, we are still at a very elevated level, above the highest we ever got to during the great financial crisis, which was 600 62 5000. take a look at this. there are still almost 19 million americans getting some form of jobless claims. they are still getting benefits. that squares with the idea that there are at least 10 billion people -- 10 million people who are unemployed. we still have a long way to go. jay powell saying again today that we are going to keep the accommodation in place for a long time until this number can come significantly down. we also got some news today on gdp. it is the third estimate, so it is a little stale. it goes up to 4.3%. inventory building was the real

that disney himself may have been a racist mckee mouse himself is based on recent stereotypes we've come a long way disney has come a long way absolutely michael krueger thank you so much brighter than the last dragon comes out this week on disney plus. well made in bangladesh you may have read those words those 3 words that appear on clothing sold around the world often made in harrowing working conditions made in bangladesh is also the name of a film by one of bangladesh fewer women directors rubaiyat are saying she tells a story of women daring to fight back against oppression. by yet hussein believes in a feminist intervention in cinema. the film made in bangladesh looks at the lives of the young women behind the label. i believe that it's very large it will get even or slowly arm and there carry that on the core economy. made in fact the dish tells the story of shiva a seamstress working in a factory. an accident occurs. i colleague dies and she realizes how to fences the workers are. only the women can help themselves you know why don't be suitable for the not political stuff and a bit of color in the room dubbing that they should wear a

that disney himself may have been a racist mckee mouse himself is based on recent stereotypes we've come a long way disney has come a long way absolutely michael krueger thank you so much and writing in the last dragon comes out this week on disney plus well made in bangladesh you may have read those words those 3 words that appear on clothing sold around the world often made in harrowing working conditions made in bangladesh is also the name of a film by one of bangladesh few women directors hussain she tells a story of women daring to fight back against oppression. by yet believes in a feminist intervention in cinema. the film made in bangladesh looks at the lives of the young women behind the label. that it's remarkable that is living or slowly arm and they're carrying that on a whore economy. made in bangladesh tells the story of shiva a seamstress working in a factory. an accident occurs. i colleague dies and she realizes how to fenceless the workers are only the women can help themselves you know quite a bit of good and i got all the. political stuff and i better call in the rue dubbing they said i want to acma shin with this thought pro

mike mckee is here to top us do that -- to help us do that. michael: that ism number is a very strong number. we knew manufacturing was doing well, but this is much better than be blunt is abated. --better than people anticipated. in june 2008, we were at 94.1, so we are not that far from it, and the month after that, july of 2008, inflation is measured by the fed's pce index was 4.1% which is going to be way above what the fed is going to tolerate. if this is a sign of things to come, we have a reason to be concerned. the employment number, 54.4. then you look at the comments from a number of the companies interviewed for this index, and one in the machinery industry says prices are going up and lead times growing longer by the day. from the electrical equipment sector, things are now out of control, everything is a mess, and we are seeing widescale shortages. in the plastics sector, labor shortages and affecting material deliveries d pr. so a lot of the supply-side issues people talked about coming out of the covid downturn may be starting to happen

that disney himself may have been a racist mckee mouse himself is based on recent stereotypes we've come a long way disney has come a long way absolutely michael krueger thank you so much and the last dragon comes out this week on disney plus. well made in bangladesh i'm ever read those words those 3 words that appear on clothing sold around the world often made in harrowing working conditions made in bangladesh is also the name of a film by one of bangladesh as fewer women directors rubaiyat are saying she tells a story of women daring to fight back against oppression. by us hussein believes in a feminist intervention in cinema. the film made in bangladesh looks at the lives of the young women behind the label. that it's remarkable that is living or slowly arm and they're carrying that on a core economies. made in bangladesh tells the story of shiva a seamstress working in a factory. an accident occurs. i colleague dies and she realizes how to fence and the workers are only the women can help themselves you know why don't be suitable. for little bonsa stuff and a bit of korean route that i've been that they should want to acma. this thought p