they are now buying treasuries, which is dangerous. you are printing money out of thin air that has no value and they are buying the currency. the debt is not owned by people anymore like different countries are not buying our debt. janet yellen was on here in 2017 on this program. she told the senate banking committee you have got to quit spending money. we can't afford to keep renting this money. janet yellen said that. lately she said we have to open up the printing presses because she is back in the business again. i think what is going to happen here, this money will become worthless one day. the fed owns the money. they are not regulating. ron paul has been trying to get an audit on these people for years. there is no audit. we don't know how much was printed. you only get your information from the fed. all this stuff you are telling me, -- the american government does not own the money. host: let's let our guests respond. -- guest respond. guest: the fed has a difficult task. there is a huge pandemic and the government is shovel

so let's look at the speculation that is behind the us treasury bond, cuz this is a 10 year treasury chart. and it goes back from the eighty's and you see a clear channel all the way down to the point now where, you know, most bonds and how far are trading in a negative territory, at least in real terms. and the us, the entire yield curve is close to or indeed a negative in real terms if you subtract inflation. so then all of them make an interesting points regarding this because now it is no longer in investment. it is a pure speculate. speculation. you're betting that it might even have further to fall and she puts it this way. and other words, i literally, without exaggeration, speculate to own some dollars. federal reserve liable. these or tea bills. us treasury liabilities in the chance that these things will spike and value a k risk assets decline and value allows me to buy more valuable things. so if you're holding it, she's saying they're that like you're, you're all, you're taking the gamble. that stock market crash or property markets crash, and then you'll be able to use t

treasuries have seen their yields plummet over the last few years.y yields are the best representation of long-term interest rates when they go up, it means investors feel more confident about the future because they're expecting more demand for borrowed money when it goes down, they're expecting less demand for borrowed money four months ago the benchmark ten-year treasury had a 1.6% yield. as of today, that's fallen to below 1.3% i know these are little numbers. let me tell you, that's a gut-wrenching decline. the bond market was right. covid was making a comeback courtesy of the delta variant and the millions of americans who will not get their shots, refuse to get their shots, whatever you want to say, the worries about an overheated economy were transitory. now we have to ask ourselves where are bonds headed next and what's that mean for the stock market tonight we're going off the charts with the help of legendary larry williams, an iconic technician who has been trading stocks, futures and commodities since i was a kid. written more than a doz

so let's look at the speculation that is behind the us treasury bond, cuz this is a 10 year treasury chart. and it goes back from the eighty's and you see a clear channel all the way down to the point now where, you know, most bonds and how far are trading in a negative territory, at least in real terms. and the us, the entire yield curve is close to or indeed a negative in real terms if you subtract inflation. so then all of them make an interesting points regarding this because now it is no longer in investment. it is a pure speculate. speculation. you're betting that it might even have further to fall and she puts it this way. and other words, i literally, without exaggeration, speculate to own some dollars federal reserve liable. these or t bills. us treasury liabilities in the chance that these things will spike and value a k risk assets decline and value allows me to buy more valuable things. so if you're holding it, she's saying they're that like you're, you're all, you're taking the gamble. that stock market crash or property markets crash, and then you'll be able to use thos

supply is difficult to map movement in treasury yields in real time.f we think about last year, supply was increasing but demand was exceptionally high for treasuries. if deficits are going to be significantly larger to fund long-term investment in large-scale structure, that should have the impact over a long period of time of raising the real interest rate, but i would put a big short position on the treasury market today based on what we are hearing right now. jonathan: up next, the auction block, debt values pushing high yields to the second busiest on record as the rush to procure funding continues. that conversation, up next. from new york, this is bloomberg. ♪ jonathan: time for the auction block where we kicked in's of in the united states with strong demand for tenure paper, three basis points. bidders climbed to a record high. hybrid leading the charge with 30 borrowers issuing $36 billion in today's and high-yield issuance hosting another week of heavy sales with the rush to secure funding. sales above $10 million for the week. still with us

ira: it is a little bit harder for pensions to buy full board treasuries -- fullbore treasuries.ut there is going to be some rotation out of equities and some other risk assets and into treasuries if for no other reason just as a hedge. you just need to hedge some of your positions. but that doesn't necessarily fit benchmarks. the idea that you can take a pension fund today, unless you are 150% funded, which not many are in that situation yet, but unless you are very overfunded, you're not just going to immunize yourself and just buy treasuries and corporate bonds to immunize yourself. but there will be some rotation, and that is going to be true probably and a lot of different products as well. so not only pensions, but just regular people who want to keep an 80/20 or 60/40 portfolio. that keeps getting more difficult as the equity rally continues to rally and treasuries have rallied a little bit, but only a few percent. lisa: what is the dynamic of a taper tantrum in 2021? is it yields going a lot lower, or yields going a lot higher on the long end? ira: i think treasuries will

we had peak optimism and tenured treasuries only got to 180. jonathan: mark cabana, final word on that? mark: we think the market is too low. we think it is going to realize closer to 2%, if not above that. it is a lot of reason for pessimism right now. we hear the peak growth argument a lot. covid is a natural downside risk. all of these factors are being cited for why the fed will not be able to raise rates far look, it's going to depend on the underlying data. that data, we got a very encouraging point today. much is going to depend on the delta variant, but we think it is going to fit -- to fade over time and allow the fed to raise, even the strong input from stimulus and the fact that stimulus is not yet done. jonathan: let's continue that conversation. next, the auction block. junk bond issuance remaining hot. that conversation, coming up next. from new york, this is bloomberg. ♪ jonathan: from new york, i'm jonathan ferro. this is bloomberg "real yield." it is time for the auction block. she wants across all sectors only reaching 7 billi

that will probably be a little bit of a risk off move and benefit treasury yields.ink treasury yields would be higher, but they are not going to go 100 basis points higher this time on taper. it is more like 30 basis points to 50 basis points, so manageable with sub two your percent tenure yields -- 2% tenure -- 10-year yields. lisa: there with me on this friday of teal to be a bit nerdy, if a federal reserve taper ends up with yields where they are now, and i am talking 10-year yields, and in the recent pronouncements, typically what we have seen is longer-term yield go down. if that is the trend, why would risk assets sell off if a lot of people justified low yields for the reason they are buying riskier security? ira: that is a good question, lisa, but a big question mark is how far will the fed ? right now they -- fred go f --ed fed go? i think there is expectation on them changing as you get further into 2022, and as those expectations of how far the fed can go because the economy may be is doing pretty well, through delta and people learn how to live with

we had made that a requirement for treasury as part of the legislation, and secondly, we provided treasurymemo laying out the different challenges we have been hearing from employers that they have been facing when they try to claim it. your staff responded and i think later today, we will be receiving a briefing, but can you provide a broad update on the president's efforts to implement it? do you find that employers are aware of the credit? do you think that the irs is able to process these claims sufficiently? secretary yellen: first of all, i agree the er tc is an important and useful tax credit, and is it's critical that employers know about it. i note that one thing the irs has been doing is working with those who provide tax services, firms like intuit, to make sure that when they work with small businesses or larger businesses, when they are filing tax returns, that they are a source of information to these businesses about the availability of this credit. i gather from conversations i have had with executives that there is good awareness of the availability of this credit, but i b

reporter: [inaudible] >> this was negotiated with the treasury department. i'm confident that means the administration generally supports it. thank you. [indistinct conversation] >> sunday, c-span's series, january 6, views from the house, continues. three more members of congress share stories of what they saw, heard and experienced that day. including democrat dean phillips of minnesota. >> at that very moment, when the capitol police officer, i stood up. the representative from arizona was objecting. and at that moment, i simply shouted out at the top of my lungs, this is because of you. i screamed it. i ware

so from my vantage point is the former treasury act as a full competence in the treasury department leadership and their expertise. and wealth of expertise to address this crisis moving forward. working with the international community, working through the international financial institutions like the world bank. i am at the international partners to find inappropriate way for that protects the united states, including our national security interests with counterterrorism. financing being our primary concern, sanction being another concern. well, also ensuring that we are helping the afghan people. okay. alex said in grades get your thoughts. thank you so much for joining us on al jazeera. we appreciate it. thank. thank you so much. thank you. connect. the united nation says the by the thirds of its $300.00 strong staff will be leaving us, ghana, stan, due to the bullets all situation there. that's display growing calls of un to step up. the plastic efforts, insiders believe there may be a window of opportunity to influence the taliban, but warm the time is of the essence onset for months agai

bees to become the secretary of the treasury. and the opposition is the white working class of the day. in an interesting scope between socialistic ideas and small capitalist ideas. in dire opposition to that. and that's what sets off the explosions that i believe, to owned this note. so we can get some q & a in here are still in many ways, with us today. so i'm going to leave it at that and thank you for your very kind attention today. thanks a lot. as we're about to do the q & a, let me say one more thing. i want to, i'll forget. i want to thank the museum of american finance for its multitime tolerance of my eccentric and uproar just approach to the hamilton problem and also the awareness society. i don't know if you are still speaking to me after this. thank you for your liberal approach. thanks a lot. how are we doing this q & a? is there a microphone going around? >> hi. i have a proposal for nancy. i run an american system now blog. on hamilton. the on postal for the credit, since hamilton's work was all devoted to the ide

lisa: but also, there's a question of we don't know treasury yields. they have continued to go down despite all of the calls for them to go up. jonathan: if i could tell you the print, and i do not have the print, the white house has the print. if i could tell you the number coming out in 19 minutes, could you tell me how this bond market would respond? lisa: absolutely not. jonathan: that's where the tension lies. yields higher by three basis points. did you say something, tom? tom: dow futures are up. [laughter] jonathan: from new york this morning, it's a beautiful morning. this is bloomberg. ♪ ritika: the u.s. senate is set tomorrow to approve that $550 billion infrastructure package. it will be the largest infusion of cash aided cades before -- infusion of cash. united says employees must be vaccinated against coronavirus. united says employees must upload their injection records to a company database no later than october 25. public universities in the u.s. faced lawsuits over coronavirus vaccine mandates, according to dow jones. all suits challe

even though the underlying is secured by a treasuries security. tom: you know, it is august.worried about ted lasso having a christmas show in august. what was that all about? does it matter that you're coming back to coach richmond? does that really work in soccer? [laughter] ira: player coaches can work out very well. you look at some of the highest level coaches, some of them were players, and some of them were not even necessarily some of the best players. you look at a guy at liverpool who's one of the best managers in the world, and he never played. he never won a champions league. you go across the other side and look at someone at manchester city, and of course, he won everything there was. so i think it is important for someone to know the game and be a student of the game, and a lot of times those are players. tom: i miss jon so much. lisa: oh my god. i was just writing that. you are clearly missing him a lot. tom: did you see ira jersey totally change there, talking about richmond and all of that? francine: i still can't believe you know the rules. what, 18 months

treasuries? that is why i am interested to see the june net treasury international capital flows. the idea here of, have we seen an increase in foreign buying that has given these low yields more downward pressure to go? jonathan: lisa, thank you. i would love some visibility as to what is happening on china. industrial production, retail sales down, unemployment, not a great move on unemployment in china. tom: you and lisa have been way out in front of this versus me, and the idea here is that it is sort of unthinkable to see china gdp below 6%, and then something as the data comes in that we have to frame. jonathan: and the currency remarkably stable. 6.47 on dollar china. mark, let's begin with a question -- to what degree if any will the issues overwhelmed the domestic goals of the administration? mark: good morning, jon. i don't think that it will overwhelm. they certainly are, as you rightly pointed out, in a setback and there is cause for concern, the hasty exit over the weekend was quite uncomfortable to watch. i heard this, some people died in their efforts to leave the a

treasury yields. think it is important to emphasize that the longer dated rates are really on the global market. you can see high correlations across the u.s., japan, germany, all developed market economies. these rates trade closely together. it is a common global market, low rates in germany, low rates in other major economies hold down the treasury market. i think that means for treasury yields to set much higher, back to the metals that were compensated in the 1990's. we need a different global environment. need european growth, japanese growth set higher, but those treasuries do not look as attractive as they are today with japanese investors. we need a more complete selloff in the treasury curve. guy: not quite there yet, maybe a little further on. zach, we appreciate your input. zach -- zach pandl of goldman sachs. morgan stanley could lose momentum. more on that story next. this is bloomberg. ♪ ritika: it is time for the bloomberg business flash. i'm ritika gupta. reportedly cutting the pay of

treasury yields hold their gains.h, consumer firms are turning pessimistic as they struggle to find staff after lockdown. france's road to recovery, eight months from the presidential election. executives and politicians gather in paris. we are live from medef. anna: 15 seconds until the start of the european equity trading session. futures looking sluggish, and increasingly so after we have been heading to the start of the european trading day. the asian session has been slipping a little, further selling of tech names in china. what do we see at the start of the european trading day? tom: asia once again failing to pick up for another record. the ftse 100 down 0.2%. we have been talking about the pressures building around labor shortages, and that business lobby group talking about the lack of business sentiment. that is something investors are weighing. there was a rally, another record stateside. the pressures in china around the regulatory hurdles and technology and the real estate sector, holding investors back.

treasury yield holder gain.t down pay in asian stocks as the regulatory push hits the outlook for growth. labor crunch. britain's biggest group warns consumer firms are turning pessimistic as they struggle to find staff after lockdown. the futures for the u.s., s&p 500 are pointing lower after another record. a bold call from ubs global wealth management, the cio making a prediction. you will get to 5000 on the s&p 500 by the end of 2022. let's check in on the markets. the msci asia pacific down .4%. continued concerns around the regulatory push by china and the delta variant continuing to weigh on the economy as we see a significant pick up in places like japan. down in the u.s. by over .10%. the dollar index posting modest gains ahead of that speech by jay powell. a bit of strength for the greenback. and we are focused on the korean won. the bank of korea, the first major developed bank out of asia to hike rates by 25 basis points. it was a 50-50 review. but they did hike. -- 50-50 view. but they did hike. let

treasurys to fund debt.t allows the treasury to redeem certain investments in federal pension programs as well as halt new ones to raise cash. the treasury department is having difficulty right now trying to figure out exactly when the government will run out of money because of all the covid related spending that has happened. the head of the bipartisan policy center said we've come to the brink of not paying bills too many times. >> the result of not making good on all of the u.s. governments bills is unthinkable. it has never happened in modern u.s. history but we've taken ourselves that close many different times over the past decade. we really need to find a better way. both parties are realizing that the current method of addressing the debt limit is not working for anybody. reporter: now the house of representatives is on a scheduled break until september 23rd. house members were told to be ready to come back for the bipartisan infrastructure deal so not the debt ceiling n 2011 we came close to the li

seems to be promoting _ come from the treasury seems to be promoting himself sol come from the treasuryink that certainly— promoting himself so i think that certainly borisjohnson promoting himself so i think that certainly boris johnson has a promoting himself so i think that certainly borisjohnson has a rival for his— certainly borisjohnson has a rival for hisjoh — certainly boris johnson has a rival for his job-— for his “ob. idea. well, we'll see what for his job. idea. well, we'll see what happens — for his job. idea. well, we'll see what happens come _ for his job. idea. well, we'll see what happens come monday, i l for his job. idea. well, we'll see - what happens come monday, i suppose. monday morning. let's turn to the sunday mirror. i am going to stay with you because this is one of your papers. with you because this is one of your -a ers. , , with you because this is one of your --aers. , , . , with you because this is one of your n-aers. , , . papers. this is dominic raab he was in paris on july _ papers. this is dominic raab he was in paris on july the _ papers. this is dom

global stocks hold steady in treasury yields.nvestors wait to hear from jerome powell at the virtual jackson hole gathering. they way a second term for the fed chair. plus. >> we will not forgive. we will not forget. we will hunt you down and make you pay. tom: biden vows retaliation after a pair of bombings in kabul leads does instead and complicates the already messy u.s. withdrawal. supply chain snags turning to a chronic headache. we bring you our interviews with the ceo, gm, and president of chinese ev maker -- up next let's check in on the markets. i want to show you what we are looking at today as we guerra for jay powell's speech at jackson hole. this is what it's all about. the tapering of nbs securities held by the federal reserve and treasury holdings as well. just a recap and highlight for you. you are looking at 5.3 trillion on the fed balance sheet. nbs, 2.5 trillion. it's the pace, it's the timing, and to what extent this will be sustained before there's a pause. when the rate hike cycle starts. let's check in on t

treasury securities. there is always some last-minute passage of some agreement. that is what the markets are betting on. but it is definitely heating up. haidi: kathleen hays there. time for morning calls ahead of the asia trading day. sophie kamaruddin is in hong kong. you are looking at implications of the climate report. sophie: that's right. at jefferies, the ramifications of factors like geographic concentration and reliance on less resilient infrastructure and it comes these climate change risks. the asg research team says investment implications, we could see more adoption of ev policies and support for decarbonization, which should mean market will reward companies that have a faster pace of reduction in carbon dioxide and other target. utilities seeing that is an area where renewables can place fossil fuels. as for managing the physical climate risk, jefferies says insurance is an industry that will face increased headwind. the last point on this list, a decrease in material consumption may be n

treasury hanging on to about 1.27%. we're back in a moment ♪ ♪ ♪ ♪ with a bit more thought we can all do our part to keep plastic out of the ocea. do you have a life insurance policy you no longer need? now you can sell your policy, even a term policy, for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized that we needed a way to supplement our income. if you have one hundred thousand dollars or more of life insurance you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit conventrydirect.com to find out if you policy qualifies. or call the number on your screen. coventry direct, redefining insurance. - [announcer] at southern new hampshire university, we never stop celebrating our students. from day one to graduation to your dream job, that's why we're keeping your tuition low for the 10th year in a row. - [student] the affordability and the quality of education, it can be enough to change your life. -

treasuries, u.s.will be quite strong, which is why i think the dollar will continue to do well, which is somewhat against consensus or was against consensus. lisa: before we let you go, i want to ask the philosophical question. as we talk about the fed and their ongoing asset purchases every month at a time of rising inequality, at a time of inflated asset prices come at a time when a lot of people are saying corporate profits are as good as they will ever get and will continue to accelerate from here because of their dominance over specific sectors. is this bond purchasing program or helpful than it is harmful at this point? greg: that is a great question. clearly inequality is something that has worsened during the pandemic. you're creating a wealth effect. central bank policy is one instrument. this portfolio channel effect where raising asset prices to increase spending has not work that well. i think the fed focus will continue to be around getting real wages higher. for me the focus is less on p

treasuries are not doing much. you can see some softness in the commodity complex.d tv, this is bloomberg. ♪ (announcer) looking for a better way to lose weight and feel good? how about the one with the 98% success rate and the more affordable weight loss solution? that's golo. there are no monthly fees and it's guaranteed to work or you don't pay. how can golo offer all of that? because it's not like any of those diets you've already tried. it's the new way to lose weight. no stimulants, no starving, just results. results you'll keep for life. no more sacrificing to lose weight only to put it back on. no more sacrificing, period. it improves your lifestyle and delivers incredible results. with over 2 million satisfied customers, golo is the new way to lose weight. this is the only program i have ever done that i have never deprived myself of anything. (announcer) if what you're currently doing to lose weight isn't working, or you feel like diets don't work, you're right. don't give up. get golo. go to golo.com and get your life back, with golo. (chorus) golo! >> th

the inflation report coming out of 8:30 eastern time, a huge turn the treasury market.th a 1.12 handle last week, now 1.37. your equity market down 3, negative 2 on the s&p 500, down by 0.06%, and in the commodity market, crude is $67.70, a really rough, tough week last week, this morning, down .9%. this is bloomberg. ♪ oomberg. ♪ ritika: 21st word news, i am --with the first word news, i am ritika gupta. senate democrats have passed a $3.5 trillion budget framework. that opens the way for president biden's economic agenda. the blueprint also includes what the democrats call the biggest tax cut ever. now there will be months of wrangling about the details of the plan. angela merkel increasing pressure on presidents to get -- residents to get vaccinated. they are expanding testing requirements and nonvaccinated people, and those tests will no longer be free. merkel trying to avoid another lockdown that more strain on the economy. in canada, while way'chief financial -- huawei's chief financial officer rejects an x tradition request. encouraging improper demands by u.s. a

jonathan: that is the bullish view on treasuries this morning.en the bullish view for the past few months. on the flipside, people say at some point, fundamentals have to matter. if inflation starts picking up, that will make a big difference. it does make me wonder, even if the fed tapers, what is the response in the bond market? some people are saying yields are going to go higher, yet even without the supply and demand dynamic you have been talking about, we have seen yield go lower because it hampers growth to be tightening more early. so many questions in terms of not only what the fed does, but also how traders respond. jonathan: robert tipp of pgim, that conversation just around the corner. your equity market shaping up as follows. five days of gains hit a headwind. we are down 20 on the s&p, -0.4%. we decline on tens to 1.2250%. the last couple of weeks have been difficult for crude. $66.80 on wti. we declined by 0.7 5%. heard on radio, seen on tv, for our audience worldwide, one hour still to go. this is "bloomberg surveillance ." ♪ and

states but globally and so i think all those factors are feeding into where you see the 10-year treasury >> president kaplan, i want to continue the discussion on monetary policy, which is really related to what kelly was talking about. you began and made a couple comments there about interest rates. can you walk us through the sequencing in your mind? you talked about an eight-month taper. i didn't do the math, but i think if i add two months and six months it brings me to june. i just did that live on national television are you thinking that interest rate hikes begin immediately thereafter >> so i am explicitly saying, and i've been saying publicly, i am divorcing my decision-making on adjusting purchases for my views on the fed funds rate. and so i don't want to tie them together there's different metrics and a different set of criteria i'll look at in deciding whether or not to raise the fed funds rate. what i'm saying is these purchases are not well suited to the environment we're in now and like a doctor who's prescribing medication to a patient that's been through a trauma, if yo

and don't forget the fed is still buying treasuries, despite we have a rebound in taxed income, the treasury has some money, the same is true for europe when we have stronger economic growth, you have less to do it with. issuance on the bond market, on the state bond market, is not so brisk, not as brisk as we have seen in the past and central banks are still buying. this is particularly true for europe. so it's europe which is dragging you down by reabsorbing all this efforts to buy central banks and this is dragging down. i don't think this is reflecting really what's going on in the economy, in the economy we see quite strong growth. we see inflation picking up. when we talk about stagflation, we -- you have to contradict basically this transer to narrative and we don't buy into that. dani: david, we have more to cover with you. you're going to stick around. now over to anna belle for the news. >> hi, dani. fully vaccinated visitors arriving in england from france no longer have to isolate for 10 days that puts them in the same category as most other european nations. the u.k. eased rules

you think tapering is actually bearish for treasuries? because some people are taking the other side of that. lisa h: hard to say right now because we had the selloff, and now we have had the rally, so where does that actually leave us? i think the fed is going to try to focus in on the size of the balance sheet is going to remain extraordinarily large, so the incremental flow that will take down $10 billion per month perhaps, it will take close to a year to actually taper. the real question is what happens after that. last time they waited a year to actually start hiking rates after they finished the tapering cycle, but also last time around, they started hiking rates, and then they also started reducing their balance sheet fleet area so i think they're going to try to sequence this in a much more extended way , and that is probably in our view going to result in a higher inflation backdrop then the market has become accustomed to over the last decade. we are not talking about pernicious 5%, 6% inflation, but we think the inflation regim

an announcement from treasury that this is not a surprise, it was expected but if treasury follows throughuces the size of the auctions as soon as november, it will be the first time they have done so in five years. they will continue on path to issue $106 billion. is that indication that they see a high watermark of spending? spending has risen, perhaps they see the decline somewhat. matt: it will be interesting to see -- the fed is out there as a buyer and there are so many institutions that have to buy this paper. especially bills and we will see far fewer bills issued or far less issuance in terms of bills. you could see prices rise and others fall. robinhood shares are rallying. it is now trading way above the ipo price of the eight dollars. that didn't take long. dave wilson is here looking at the come back. dave: basically it was one week ago that the shares were getting pitched to investors and initially sold. trading started the next day. yesterday, we saw them up 24%. today up as much as 82%. along with the surge in price, you saw a rebound in volume. the first day, $102.5 millio

i was his treasury secretary. it is a question of balance, i think. the commitment to values that i mentioned earlier, james mcgregor burns's definition of leadership is a commitment to values. those values are ideological usually, for the most part. so you have to have some ideological component in your polity and your worldview but it is a question of balance. i think if you are overly ideological you are going to be too strict and too wedded to the ultimate and governing and international negotiations are a matter of balance. you need to be -- there's a conflict in american foreign policy between realists and ideologues. you need realism in foreign policy but also got to have some ideas. ideological fervor, don't know what you mean by that but you better have some ideas. america's foreign-policy is built on idealistic principle. >> last november when you spoke to the national convention of world affairs council and i read david rubenstein's book where he interviews you, would you be able to achieve in today's politics the kinds of things you did du

that was a supply shock to treasuries, which sent in the yields lower. dynamic will reverse in october when the debt ceiling gets worked out. that is something we think will resume inflation as rates go back up. we think it will be a key thing to look out -- at. alix: where do you go for safety with that? gordon: we have a buy rating on u.s. steel, on cameco, which is uranium. we think the inflation trade is alive and well. we think the temporary blip in interest rates is indeed temporary. as inflation fears reemerge, we think that tech will underperform. we think that that will be the inverse of what you want to do. rates will go up and some of the material stocks will continue to outperform this year. guy: how are you factoring in delta? gordon: i'm sorry, i did not hear. guy: what about the virus and the resurgence of the delta variant as you think about these markets? gordon: i think that if you look at the data, as hospitalizations go up, it is in countries where you have significant vaccines where and has collapsed significantly. politicians will s

there's very little motivation for long-term players to be in treasuries.ys think of treasuries is adding a balance to portfolios where the standpoint is good for the professional investor, but for a longer-term retail holder investor that might be watching your show or listening, it's not the right time. tom: mike schumacher, thank you so much. i love the idea of the big goliath in you wonder, do we overemphasize big goliath at our peril? lisa: it has been the theme but the idea that you can push it back in and people take it in relief without pricing it in is not market behavior. typically people bring forward the potential ramifications. that's why it's so strange that people knowing that it's going to taper, they don't seem to think that goliath taking a thumb off the market will have an impact at all, which is what we were hearing earlier on the show. tom: 12 months trailing, the nasdaq composite, up 29%. i'm afraid. taylor: i hate to say it, how do you buy bonds after inflation where you lose money and it pushes everyone into these risk assets. talkin

treasury yield still falling, but paring some of those lows. the u.s.reasury has set the stage for reduced debt issuance in the coming months. bloomberg process at reporter katie gry felt -- katie g reifeld is following that. katie: this really boils down to what is happening with real rates, when you strip out the effects of inflation. tenure real rates hit negative 1.21 basis points today, another record low. as you can see in the chart, it has just been a steady grind lower. what is interesting is we know the demand for bond is there, but the supply of treasuries is set to come down as well. we heard from the treasury department in a statement saying it expects option size reductions as soon as november. so no changes this quarter, but the supply cuts are coming. we will find out soon enough whether that will add further fuel to the bond rally we are seeing. guy: thanks, katie. great update. let's talk about equity world. ewa gil doolittle is here to talk about what we are seeing in the earnings story. abigail: it is a mixed picture at this point. ac

this means more debt potentially being issued by the treasury.lier we spoke with chris brightman, cio and cio at a research affiliate. here is what he had to say. >> if you have the treasury wire transferring trillions of dollars of newly created money into people's bank accounts, it's going to reduce the value of dollars relative to goods, services, and stuff. romaine: this seems to be the issue a lot of people in the market are concerned about, the treasury continuing to bump money out, the idea that over time this could devalue the dollar. that hasn't happened yet. with negative real yield, all the concerns, that hasn't materialized. when, if at all, do you think we get to the point when that becomes a material factor? zvi: i think it may have materialized in nonobvious ways. for the last decade plus the fed and other central banks have been printing money at an incredible rate. textbooks say that could -- that should cause inflation and that has not occurred, or only relatively slightly. instead a lot of that money has increased the prices of

back to 1962 where the average 10-year treasury is 7%, scott. i mean that's perspective, right. and then et average treasury since the great financial crisis is 2%. i think citigroup is spot on in what we have also said is that historically going back more decades than the 1960s when the stock market rallies from low interest rate levels from low levels when interest rates start going up from low levels the stock market does significantly well because the economy is improving. i think mr. saperstein is spopt on on the speck laroue growth argument you need to be a tech investor longer term. but near term, the ebbs and flows of the market are going to make you want to be equal weight growth and value and equal weight small mid-and large. we talked in the broadcast about small cap underperform now is the time to buy in small cap dip and be equal weight across the board. >> a nice lift today pete najarian has a question for you. brian. pete. >> brian, great to have you on, man. i'll tell you, i'm curious about this we watched volatility last week. l

well, i bank with the treasury committee. why was the treasury commit to do this? well, a has a set the majority, frankly to our parliament. all parliamentarians know that there is nothing they can do to challenge the government with the atc for georgie. however, elected by a minority of people in the new pay, we must always remember that this is the consequence of having a 1st call, the post electro system, which is to be unfit for purpose. we give a government like this one, a massive majority, which led to exonerate itself to blame for what it's done and exonerate. previous 5 minutes this the blame for what they done. i flies the official whitewash to the action, but which action is basically representing a minority of people in minority. but as you know, paul show bar johnson will populate than ever. and that's after we heard that the sleep watch dog is going to have one of his old bullying didn't friends on the building, didn't club famous for? well, the allegations are, they used to burn 50 pound notes in front of the homeless people. what was your reaction t

let's get back to the 10 year treasury option. $41 billion in supply being sold by the treasury. kriti gupta is breaking it down. kriti: you are seeing them stock 3.2 basis. 10-year note's drawing 1.34%. some of that going into indirect bidders. you have 9.6% to primary deals. 13.1% to direct bidders. this will be crucial because the bid to cover ratio i'm seeing is going to be 2.65%. according to my calculations, this is above the average pair this is why you see yields lower. i want to show you what the bid to cover ratio has done in a year. the bid ratio has gone up and come off of its high. looks like it is coming up. let's talk about what this means for the broader stock market. this has a lot to do. you can see a quick drop, looks like the demand is coming back up. that is a year-to-date story. for the broader stock market, the low yield story is bolstering tech. that is going to be a crucial piece of the equation. when we are talking about the readthrough into this continuous demand you are seeing in those tenure options. . the kailey:. .2%. that is around session lows. th

we will speak to the former chief of the treasury department, janice eberly, and more on her takeaways from that event, next. ♪ next. ♪ >> the criteria that we put in the statement about what it would take for us to begin tapering, i think we are pretty much there. >> we still have a fair amount of energy momentum. i think that we can do our tapering faster. >> let's phase out the purchases and give ourselves a breathing room in 22. >> keep it simple. let's start the process and get it over with. >> it may give us more flexibility down the road on our decisions on the right. >> the timing and pace of the coming reduction in asset purchases will not be carrying a direct signal and timing of interest rate lift off, for which we have established a different and more stringent task. caroline: a few of the fed presidents and jay powell speaking about the timeline for tapering. of course, the ending of what we are seeing. for more, we would like to welcome janice eberly, professor of finance and former chief economist at the department of treasury. the jackson hole event this morning, talk t

that really raises an issue -- is there a sort of potential for treasury yields to rise? remain in this goldilocks scenario because the fed, as you said, typically creates the volatility? in this situation, they are not there they are committed to holding policy as easy as possible through the cycle. does that mean we stay in this range through the cycle? margie: yes. the fed's dual mandate, full employment and inflation around 2%, to me, you cannot reconcile the two, so therefore, how can they begin to tighten one we have 9 million people unemployed? so we will never get to 3% unemployment, so i cannot see them tightening. tom: it is amazing how this destroys the taper worry. kailey: i asked this yesterday, why was anybody surprised? had we not been having this conversation about a taper coming in the next three and half months, that it was all too likely the fed will announce those plans? yet it seemed to take the market by surprise. i am not sure what exactly changed. do you think anything has changed in terms of a taper conversation? margie: no, it ebbs and flows with

can the treasury yields go up in a measured way?eople reprice this idea of near-term rate hikes without disrupting the broader market in a way that is potentially going to destabilize and send the fed retracing their moves? vishwanath: one thing is possible. we would put the fair value for the 10-year treasury or u.s. rate at 160 as a fair value. we think our year-end numbers over 180 for 10-year. it is quite possible we can get there in an orderly manner. as a result we think we have seen the lows in the 10-year for the year. jonathan: we have to leave you there. vishwanath tirupattur. this is the work being built off the team at morgan stanley. this call, the 3.3 unappointed by year end 2022, and the risk you don't get this late cycle boost to labor supply. what does that do to dynamics? what does that mean for the federal reserve and the fed funds rate? tom: to tied it into the chat at jackson hole, maybe not the speeches or the papers. it's about the wage dynamic you talked about. the other thing i look at is the idea of when we

the federal reserve buys $80 billion of treasuries everything month. the big thing that means is that dealers, intermediaries of the market have someone to sell to all the time so they are able to pass through anything that they buy and send it right back out to the fed. once that buyer leaves the market, the market will have to reprice and adjust for that. what that means is 10 year treasuries go from where they are now to maybe 170, 180 level. our work suggests that the current round of quantitative easing is worth 50 basis points to the 10 year yield. nothing like the 2013 experience once they taper, but it is going to have a pretty meaningful impact. francine: what is your timing on the possible rate hike? ira: i have the end of 2023 as penciled in for my rate hike. so much of this really has to do with what you are talking about with michael mckee. are we going to have other variants? probably going to have a slower reopening and are we going to have additional shutdowns? there is a lot of unknowns. at the end of the day, we have to think about th

amrita: that is partly playing out through the treasuries. seen the move in the treasuries and therefore we have seen the move in the dollar. the strengthening dollar headwinds for the market. it is not the main driver but it does not help when everything is selling off anyway. i am with alix. i love backwardation too. where the dollar comes in is on the flat price side. the pressure is much more dollar play as well. i do not think the spreads are being affected but there will be a lot of pressure on the market, particularly on flat price more so than spreads given what is going on in the broader macro backdrop and the u.s. dollar. alix: all the cool kids like backwardation. when you look at data points, will it be import or stop draws, which region? what is the most important number you are looking at going forward? amrita: the tricky bit right now is the stock draws we are seeing is all in china. what we need to see to get the market back is possibly more oecd draws. the u.s. is drawing. we have not talked about refining margins apart -- ma