michael mckee joins us now. t only what did you learn they are, but how does it change the pressure for jerome powell april 28? michael: i think it helps relieve some of the pressure. you guys did a great job. i may not even ask a question. tom: i like that. continue. michael:michael: michael: michael: the thing that struck me -- michael: the thing that struck me as the confidence with which he and jay powell in his previous comments speak about being able to contain inflation if it goes up, and that enabled them to let the economy run hot. he didn't give any specifics. jon, you really beat on them for it, and you didn't unfortunately get it. which is by design. they don't want the markets to have a checkpoint to say this is the point at which they are going to do this. they are delivering this message over and over again with supreme confidence, and that has begun to sink into the bond market. you can see how yields have stabilized. they are believing that the fed has the credibility here. jonathan: we had this

let's bring in michael mckee and kailey leinz. is out with its latest economic forecast and the guy on the bar who is buying ar

alix: that is basically michael mckee saying it will be boring. nterpreting what he is saying. michael: but i will be on the show. alix: it will be fun because michael mckee will be there. we have coverage, the fed rate decision in chairman powell's news conference. stay tuned for balance of power with david westin. this is bloomberg. ♪ ♪ david: from bloomberg's world headquarters in new york to our tv and radio audiences worldwide, welcome to "balance of power," where the world of politics meets the world of business. i am david westin. president biden addresses a joint session of congress tomorrow evening and part of it will be given over to new social programs he proposes and paying for them with increased taxes. for a preview we welcome laura davidson who covers capitol hill for bloomberg. it seems like everyday there is a new tax proposal. what is the latest? laura: a long list of tax increases. one big one this morning is an inheritance tax that has been on the books for many years. it means when someone who has a stock or a business during t

michael mckee has been digging through it. t is more background detail on how the tax plan would work. we already know the what of the plan. this is the why. think about it as janet yellen sales pitch, the document that will be used as background. profitable companies would no longer be able to use tax breaks to completely limit their federal tax bills. they would have to pay at least 50% of the profits reported on their financial statements. -- at least 15% of the profits reported on their financial statements. it is only companies that make more than $2 billion. of those there about 180 companies but only 45 would have to pay more, about 300 million a year. using figures from the nonpartisan congressional joint committee, the administration says u.s.-based companies operating locally paid 7.8% as an effective rate in 2018, the first year the trump tax rate went into effect. the year before they paid 16%. across member countries come the treasury makes a big deal out of this, the oecd corporate tax revenue equivalent to an ava

here is michael mckee. another surprise to the upside for jobless claims. 744,000 last week. that is up from 719,000. that is the unrevised number. continuing claims that 734,000, little bit higher than anticipated. a little bit lower than they were last week. right now the numbers still point to a job market that is weak. at the risk of talking against my own book, i wonder how much these numbers mean anymore? they were the key number for weeks and weeks as the pandemic went on, but with the numbers so high, in contrast to the jobs creation numbers, i wonder whether they have that much impact anymore? tom: what is the difference, i say this flatlining from october 20 of last year. we have basically flatlined at 700,000. what does that signal to you given the jobs report we have just witnessed. michael: the jolts data is showing more than 7 million jobs available. that is two months old but it does suggest there are openings. we go back to the old question of whether or not people are qualified for the jobs

michael mckee joins us as he prepares for his press conferences happening with the chairman. t with the trade balance. i care, don't i? michael: you care. it is very interesting. as we recover we seem to be buying a lot more stuff from overseas. the initial numbers for the march traits good deficit, $90.6 billion. that is notable because that is the largest u.s. monthly trade deficit ever for the month of march. it will subtract from second-quarter growth. tom: what does it mean for twin deficits before we get to inventory? is this something on your radar to worry about the combination of our physical debt, the speech tonight, and this record trade level? michael: there is a lot going on. the person i would hate to be is the foreign ex strategist. how do you combine the idea of a massive stimulus in this huge trade deficit? -- and this huge trade deficit? interesting to find out what is going on. exports were up 8.7% during march, but imports up 7.6%. these are big percentage changes , historically. tom: that number i have never framed in my brain, let alone seen. -90.6 is jaw

economic data in the united states means we bring in michael mckee for more. good morning. e are seeing the effect of the stimmys. personal income numbers extraordinarily high. we all got our checks. some of us got checks and some of us did not. those who did got a lot and it pushed up incomes. this is going to be an interesting story because we know this is driven by the government's generosity and so next month we will probably see declines. it will take a couple of months to get a good reading on personal income. spending up 4.2%, last month it was down 8%. overall we are looking at better numbers because of stimulus spending. the real personal spending, which is inflation-adjusted, up 3.6%. the number a lot of people are watching for because they want to see what the fed will do is the pce index. that is up .5% on the month, which pushes the pce you're over your 2.3%. the fed was looking for it to go over to percent. they want it to be in the 2.3% to 2.5% range. the problem is that was largely driven by food and energy this month. the core is only up to 1.8%. it is getti

here is michael mckee. l: last week we had a big surprise because of the easter distortions to jobless claims, they fell significantly. this time they go down again. that is good news for the economy because maybe some of the seasonal factors are working their way out of the data. 500 47,000 initial jobless claims. this is the kind of number we had been expecting. last week everybody said it was easter, it is hard to seasonally adjust. it is possible some of that leapt over into this week or last week as well. we do not know yet. if we continue this kind of thing it will be a decrease of 39,000 from the previously revised number of the week before. the lowest level for initial claims since march 14, when it was 256,000. that was the week before we started getting the amazingly high claims numbers. tom: michael mckee with bloomberg's and all of the fancy moving averages. what i am seeing is a curvature. we are going from convex, rolling over to a concave set of moving averages. can you call a trend change whe

alix: michael mckee, international economics and policy correspondent. to repeat here, amazon wins over unions. the count is still ongoing. guy: let's talk about what is dominating the agenda over here in the u.k. prince philip, the husband of queen elizabeth, died today at windsor castle. he was 99. while he had no official constitutional role in the monarchy, he became viewed as one of the most influential members of the royal family. joining us with more is emma chandra. emma: he was the longest serving consort to a british monarch in history. the flag is flying at half-mast over buckingham palace, where we are also seeing people lay flowers both there and at windsor castle, where we understand prince philip died peacefully in his sleep. wall-to-wall media coverage here in the u.k., and also political leaders in the u.k. paying their respects and will be suspending campaigning ahead of local elections next month. in terms of next steps, we understand prince philip is to get a royal ceremonial through neura -- ceremonial funeral. it will be scaled back

. -- michael mckee will slice and dice the data.those so good at it is simona mocuta with a smart note linking fiscal and monetary into our inflation worry. which is more important for this fear of runaway inflation? the fiscal story or the monetary story? simona: i think none of them are particularly impactful in the near term. everything we are seeing today has to do with what we are talking about just now, reopening, base effect, all of that. i think where the policy framework shifts in the way we set policy is more about inflation over the medium-term. it is hard to chart which is more important than the other because there are many -- i think we come back to monetary. monetary policy almost has control of guiding to what extent fiscal spending or fiscal expansion is allowed to help the economy run fast before monetary puts the break to it. at the moment you have a combination where on both sides the intent is to really allow for more prolonged episodes of the economy running hot on all sides of policy. lisa: let's talk from mac

let's bring in michael mckee. michael: big numbers coming out.et's start with jobless claims. 553,000, that is down from 547,000 on revised from last week. we will see with the revision is joint looks like -- we will see what the revision is. looks like still 547,000. not much of a change. 553 thousand is little bit higher than anticipated last week. we are also in the range of 500,000 on a solid basis. a decrease of 13,000 because they revised up to 566,000. it goes down a little bit. we are at least in the range of what we have had the last couple of weeks, which gives you an idea this is the new range. gdp is just coming out. the number comes in a little bit softer than anticipated. the forecast was for 6.7%. we get 6.4% for the first quarter gdp. this is the first estimate. frequently those are revised higher. we could see that happen. what we are looking for is to see the breakdown. personal consumption comes in very strong, 10.7%. last quarter it was 2.3%. we will look at that and go stimulus checks come everyone out and spent them. the gdp

tom: michael mckee, with the rudest question at the fed meeting on wednesday. ok for that in our special coverage. michael: don't hit jay powell. tom: he may swing back. jonathan: for the audience, this blackeye looks so attentive. are you going to clean that makeup off? tom: i put my glasses on to hide it. that is what happened. it finally leaked out that jonathan i really do not get along. jonathan: i think people have been sold on that idea for a long time. lisa: let him get in a good punch. tom: guy lebas joins us. what we are hearing is maybe the inflation fear is a bit overrated. is it? guy: probably, at least on the margin. right now the financial markets, breakevens or inflation swaps are pricing in round numbers. that is a cpi measure. they have already priced in the federal reserve hitting their target. even then, given the last decade and a half of inflation misses, signals a high degree of confidence. i have to argue for this moment in the cycle, a lot of inflation is already priced in. jonathan: it is amazing when we compare and contrast what we are

with more is bloomberg's michael mckee chart is stunning. michael: youth inc.f it sort of like a balloon. you squeeze one area and it -- you think of it sort of like a balloon. you squeeze one area and it expands in another. two of the countries that have vaccinated the most, cases are going down, but look at what is happening in india. they are just exploding and having an and norma's problem. the prep -- having an enormous problem. the problem with that is if we have a country were to are many that don't have cases under control -- a country or two or many that don't have cases under control, that can mean variants, and that means problems around the world. israel and the united states leading the world in the major country category of people who are being vaccinated, but to get back to the point i just made, there are 83 countries with 0.5% or less, most of those with no vaccinations at all, so the globe still has a real problem. let's take a look at what is happening in the united states. 23% overall. alaska is doing the best job. new york, 26%, moving up.

joining us now is michael mckee, bloomberg international economics and policy correspondent. was his plea to the people, basically. michael: explaining what wall street has already heard to the rest of america. here's what jay powell was talking about. a long time ago when alix was a little girl, there was a president called ronald reagan. [laughter] and growth in 1984 was about as high as you could get. it was very strong, about 8% that year. we haven't seen anything like that since then. but you see the white line down there, that was last year. that was the pandemic, condemning the economy to negative growth. and look at what the forecast is, the highest growth since that reagan year. what are they waiting for, then? why aren't they raising rates? they are looking at how far can we bring down unemployment. here's a couple of measures of what they are going to be looking at. the employment population ratio in white, those numbers should be 2% to 3% higher than they are now. the fed is going to try to get them up there, which raises the question of what could go wrong. obvio

michael mckee has all the details. ael: the imf is looking at what the united states is doing in terms of its stimulus, and also looking at the vaccine rollout speed, predicting that the u.s. will see extraordinary growth that will boost world growth to the highest ever in the world economic outlook, but then look what happens. it drops off rapidly, and that is a function of a lot of other countries not having the fiscal support and the vaccine support. so the imf says what we are facing here is a big divergence between the advanced nations and the developing nations. advanced nations will see their per capita incomes followed by 10% from 2020 22022, but 20% for those in the emerging and developing markets. a much bigger problem. plus, we have seen 95 million people fall below the poverty line in recent years, and 80% are now more malnourished. that is an issue. so what are they talking about doing? they are talking about a $650 billion allocation of what they call special drawing rights, sort of a reserve currency like

perhaps this will be interesting but most of the time to get michael mckee san, this is really noisy data. -- saying, this is really noisy data. look for gains and look for a lower print in terms of the numberf unemployed filing for benefits. at 8:45 a.m., important conversation, director of fiscal affairs for international monetary fund will be joining "bloomberg surveillance" and talk about the $16 trillion of fiscal stimulus plan that has been proposed globally over the past year. we are seeing this in europe and now in the u.s. what can actually get done? if it doesn't, does the world sat under the weight of the debt that is been encouraged by the pandemic? :00 p.m., fed chair jay powell be speaking at the imf eating. interesting to hear how much he pushes back against market expectation. greater degree of hiking. by the end of 2023, 3 additional rate hikes. this despite the fed sign, no, we are holding tight. the fed meeting minutes yesterday did not seem to indicate and pushing back greatly on this. jonathan: so far the fed is sticking to the script. it was so different in the

bloomberg's michael mckee is joining us with the economic data. your take? michael: it obviously shows the economy is getting stronger over time, with the sub index is higher. the jump by 3.2 points to 68, and a big jump of about five points in production, so manufacturing is humming right along. you would expect them to be hiring more people. the hiring number, the employment number at 59 .6, is the highest since february 2018. you're right, it does not match up with the story that claims seem to be telling, but as i said earlier today on bloomberg television, i think i am joining steve stanley in the camp of the people who think that the unemployment claims numbers are sort of meaningless at this point. we went back up again to 719,000. you've had 78 million claims filed over the past year. i think basically, what's happening is you get a lot of double counting. sometimes people get laid off, hired, and laid off again. so they file three times. it doesn't really tell you exactly where we are here. it does show there is still a long way to go, but i wouldn't

something to consider in something michael mckee tried to ask at the news conference.ot slammed. jonathan: they played elevator music over the top of him and chairman powell did not respond. tom: that is accurate. what is fascinating as everybody is calling for higher inflation. jonathan: you see the research and you hear it on the corporate calls as well. this earnings season, microsoft later, apple tomorrow, amazon after that. the federal reserve with the decision. captivating coverage on tv and radio. tom keene and caroline hyde and scarlet fu making an appearance. looking forward to the coverage tomorrow afternoon. alongside tom keene and lisa abramowicz, i'm jonathan ferro. this is bloomberg. ritika: with the first word news, i am ritika gupta. president biden will propose a large-scale tax increase tomorrow and also call for giving millions more to the irs to make sure the rich people and large corporations pay all they owe. bloomberg has learned the proposal will raise the top tax rate to 39.6% for those making at least $400,000. that is a key element in the ame

joining me to break it down is michael mckee, bloomberg and if national economics and policy correspondent. rarely would you have been booted for other news in the 10:00 hour for cpi. what were some of your biggest takeaways for market reaction? michael: the big thing is that the dog didn't bark. when you were just giving the market report there, no bond movement at all. that is kind of interesting because this was a really hyped cpi report and it came in stronger-than-expected. what we seem to have done is validate the idea that the market's already priced in this kind of movement. we saw the biggest move since 2009 in terms of a monthly move. on a year-over-year basis, up 2.6%. the core rate was up 0.3%, and is up 1.6% for the month over month. so some news there in terms of the growth, but it really was all about gasoline, up 22.5% on a year-over-year basis. that is probably going to fade. food was only up 0.1%, up 3.5% on a year-over-year basis, which is about what it was in prior months. apparel costs fell, down 2.5%. economists seem to think we will see this reverse. that is what the

michael mckee, little more expert at that than i am. dow futures -43.yields driven lower, price up, you'll down, high yield has done the same thing at 3% on the spread. lisa: 2.9%. that is what we are looking at in terms of what investors are demanding to own high-yield bonds. high-yield bonds are yielding the least versus investment great going back to 2007. that spread is compressing. tom: is that a frenzy of buying? james: it is a frenzy -- lisa: is a frenzy of buying and the riskier credit. these companies have pushed out there debt maturity. not that much concerned about the potential for a downturn. coming up we will continue the conversation on open the open -- on "the open." tony despirito will be joining us to talk about how to navigate within the sphere of american exceptionalism. tom: stay with us on radio and television. futures at negative five. this is bloomberg. ritika: with the first word news, i am ritika gupta. the richest person in the world supports investing in u.s. infrastructure and raising taxes to help pay for it. jeff bezos sto

bloomberg's michael mckee. bloomberg. ♪ alix: live from new york, i am alix steel with guy johnson in london. more updates from the opec meeting. it looks like the deal is done. they will be increasing production starting in may, about 350,000 barrels in may and june a-day and upping that in july. we do not know what saudi arabia will do. they were cutting in one million barrels. we do not yet know what that will mean. guy: it is interesting the conversation had with the u.s. in which the u.s. hinted at the fact they do not want oil prices to get too out of control. the only thing that will upset -- you do not want anything to upset this recovery. let's not let them get out of control. alix: the sally's do like a surprise -- the saudis do like a surprise because the market was not affecting this coming up, elise gould is the economic policy institute senior economist. guy, you and i have more to do. guy: you're only going to be there for half an hour. you're going to do commodities edge, which today is a good t

tom: michael mckee, i'm looking at the hewlett-packard calculator. it looks great on radio.e revision and i take where we are now. it is a meaningless 18,000, a better number and a worse number. are we splitting hairs before what really matters tomorrow? michael: jobless claims are people who have lost their jobs. it does not directly translate into payroll numbers, which are people who got jobs. it does give you a sense of direction. the problem we have is the direction is not good. we thought we would be reversing it. i do not think these numbers are accurate in terms of the amount given the double counting fraud and the difficulty in processing jobless claims this high. it does suggest this economy may be is not recovering as quickly as some people had hoped. jonathan: the market recovers quickly to a lower yield. see a move, 1.6965. we break below 1.7% after breaking a one of 1.70 -- after breaking above 1.77%. the dollar weaker. down about .1%. one thing that does hold, the equity market still up .4% on the s&p 500. the nasdaq 100 up. not big moves. i am not trying to a

mike mckee has more. michael: at 8:30 we got some very good news brought on by the stimulus, which probably made people a lot happier as well. we saw personal incomes rise by more than 20%. 21.1%, the fastest, highest, biggest, whatever you want to call it since 1943, when the data series began. we spent more money, 4.2% of our income. we also saved more money, 27 .7% in the personal savings rate. so there is still some money that can go into spending, which is probably why people's view of the future got a little bit better. i think the numbers that the fed are watching most closely is that university of michigan five-year inflation figure. it is 2.7 percent. did not change. the one-year inflation number does fall to 3.4 percent from 3.7%. that's going to be a bit of a surprise, given the talk about how people are going to be experiencing inflation in the short run. they don't seem to be. if that is the case, it makes the case for more, hold onto your coffee cup or your shot glass, transitory. alix: ok. lisa: pr

mike mckee is here with the ism. michael: i wouldn't be surprised to see that s&p number go higher because the numbers are very good from ism. we are starting to see service industries reopen as governors reopen their states, more and more people get vaccinated, and the ism services pmi goes to's 60 -- goes to 63.7 from 55.3. i want to take a look and see if we can see the last time it was that high. hang on just two seconds here. 1997, august of 1997. alix: wow. michael: quite a record there. the new orders index rises into not only the 60's, but high 60's, 67.2 from 59 point nine. employment, 57.2 from 52.7. a big jump there, although we knew that given the employment numbers we saw last week. everyone is keeping an eye on prices. 74.0 from 71.8, so another big number in terms of prices. but the fed knows that we are supposed to be getting inflation , so we are not going to worry about that for right now, right? we will ask art hogan that in just a second. factory orders also out. they were reported up by 2.6% per month, a

mike mckee is here to tell his exact he what we need to know. michael: we got those checks in april and late march, and we saw very strong jobs numbers. those are a big improvement in the current situation index. wiley say it is on fire, it is a medium-sized fire because this takes us back to tuesday, march 31, 2020. it has been just over a year since we were higher than that. those numbers are getting better, but not where we were before the pendant again. the biggest thing is the return of the jobs market. the appraisal of current conditions went up because the percentage of consumers saying jobs were plentiful increased from 26.5 to 37.9. that is a big jump. optimism about the next six months went up from 40.3 to 40.5%, and the proportion of those expecting more jobs ahead had steady -- ahead held steady. so people are thinking conditions are really good right now, and then they will normalize. what they don't ask, and what we will want to know, is do you feel good now about going out to dinner? alix: i don't know when we are going to know that. but

mike mckee has the more -- has more on the new home sales data coming out. michael: we had a very bad month in february. and march, new home sales rise by 20.4%, which is an eye-popping number, until you realize they fell by 16.2% in the month of march. bad weather in february. you couldn't build houses. now you can. we are seeing builders try to keep up with demand. that is a 1,021,000 rate at an annual pace, up from 846,000 the month before. so i really significant increase in home sales that follows on a real drop. it averages out to maybe about 4%. the pmi's this morning, u.s. manufacturing pmi's at 60.6, services 63.1, and the deposit -- and the composite, 62.2. they are showing the u.s. economy growing quickly in the month of april so far. guy: we will wait and see exact what the data looked like as they continued to come through, but as you say, that was a solid number for the housing market. the data for the housing market looking really good right now. thank you very much, indeed. let's talk about that solid economy and think about how we are going to fund

mckee is a legend theoretical physicist dr. michio kaku he's next to talk about his new book the god about his new book the god michael: this is david: my grandfather, pinchas. michael: my great-great- grandfather, rachmaiel. gigi: pinky and rocky. simi: there was an uprising in poland. david: and then the family broke apart. michael: they scattered around in different places. gigi: they worked hard. simi: and built new lives. michael: but rocky and pinky's families didn't see each other again... all: ...until now. david: more than 100 years later, ancestry helped connect us to our ancestors and each other. hi. i'm wolfgang puck when i started my online store wolfgang puck home i knew there would be a lot of orders to fill and i wanted them to ship out fast that's why i chose shipstation shipstation helps manage orders reduce shipping costs and print out shipping labels it's my secret ingredient shipstation the number 1 choice of online sellers and wolfgang puck go to shipstation.com/tv and get 2 months free kennedy: right if you thought 2020 was a wild there just wait until the aliens get here. nasa's telescopes set to launch

mckee joins us now. the fed is going to avoid answering any questions tonight. powell will certainly avoid answering any questions tonight. what is the key question he needs to answer? michael: you're right, it is basically a lot of anticipation about what joe biden will say and what jay powell will not say. he doesn't want to talk about the stimulus plans, and he doesn't want to talk about changing any economic policies because they are afraid of how the market might react. go back to the taper tantrum in 2013. i showed you this chart yesterday about how the fed's reaction function has changed. they use to raise rates when inflation started rising, and you can see they are not doing it today what i really want to point out are the inflation expectations that have jumped in the last couple of days because we've gotten better than expected economic data. the fed is worried about inflation expectations, and that is the kind of thing that might get them to move, so you can expect questions about that today. but the feds bet is that financial conditions have been very loose, and we can see that in the goldman sachs financial conditions index. that is the white line. look at the