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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene. Along

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Speaker 1: with Jonathan Farrell and Lisa Brownwitz Jay Leye. We bring

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Speaker 1: you insight from the best and economics, finance, investment and

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Speaker 1: international relations. Find Bloomberg Surveillance and Apple Podcast, Suncloud, Bloomberg

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Speaker 1: dot Com and of course on the Bloomberg Termament. He

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Speaker 1: is a former mayor of Boston. He is a Secretary

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Speaker 1: of Labor of the United States of America. Marty Walsh

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Speaker 1: here with our John Farrell after this interesting jobs report

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Speaker 1: again the Dow up a hundred nineteen points, New York.

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Speaker 1: I'm place to say, joining us now on TV and

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Speaker 1: on Bloomberg Radio on the payrolls report. First reaction from

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Speaker 1: the White House with US Labor Secretary Marty Wall. Secretary Walls,

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Speaker 1: great to catch up with you, sir, as always, how

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Speaker 1: me with this one, because we've all struggled with this

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Speaker 1: labor market report this morning. How would you characterize the

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Speaker 1: state of the labor market right now? Sexually? Welsh? In

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Speaker 1: the United States, I would say, if you look at

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Speaker 1: what's happened since President Biden's Tacond office, you dropped two

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Speaker 1: points off the unemployment numbers, I'd say we have a strong, strong,

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Speaker 1: strong market moving forward. Obviously, we have job openings that

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Speaker 1: we have to work on, and we still have people

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Speaker 1: out of work. And as you mentioned in in the

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Speaker 1: in the words before I came on here, we're still

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Speaker 1: dealing with the coronavirus. We're looking at the new variant

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Speaker 1: now to see what the impacts that will have. But overall,

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Speaker 1: we feel good. I feel good about where we're going

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Speaker 1: as an economy here. Obviously you brought out inflation up

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Speaker 1: as well. You know, the President made a moves this

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Speaker 1: week with with the oil reserves and also you know,

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Speaker 1: creating an economic plan. We're seeing people with with more

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Speaker 1: opportunities and more more money in their bank accounts than

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Speaker 1: this time last year or pre pandemic. I guess I

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Speaker 1: should say. So, you know, we still have work to do,

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Speaker 1: there's no question about it, but but I feel good

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Speaker 1: where we're headed. Let's talk about that work and the

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Speaker 1: work we still need to do. As you know, we

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Speaker 1: talked a lot about where wages are close to five pc,

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Speaker 1: the low ware inflation is currently and going into next

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Speaker 1: week up leave a lot of people in this economy,

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Speaker 1: in this market on wall straight. Secondly, walls looking for

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Speaker 1: something closer to seven on c P I, do you

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Speaker 1: still see the benefits of running this economy? Halts? Secondly, well,

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Speaker 1: so the benefits to doing that as you see things well, well,

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Speaker 1: you know one of the things that's want to talk

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Speaker 1: this week, I went out to Los Angeles. I was

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Speaker 1: out at the ports in Los Angeles and Long Beach,

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Speaker 1: and when you think about the economy, you think about

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Speaker 1: people coming back to work. One of the things when

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Speaker 1: I was out there, you know we have the long show.

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Speaker 1: I'm in working seven, not every day, but but the

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Speaker 1: ability to work seven. We're seeing the ships come in

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Speaker 1: with seeing the ships unloaded. And there's an issue with

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Speaker 1: truck driving. And when you think about when you think

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Speaker 1: about this economy and we think about all the different aspects,

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Speaker 1: we really we have to be more intentional now and

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Speaker 1: focus in certain areas and how do we create better opportunities.

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Speaker 1: So truck driving is one of those areas that we

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Speaker 1: have to create better pathways to bring more people back

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Speaker 1: to work. When you look at this report, you see manufacturing, uh,

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Speaker 1: the numbers are high. You look at transportation, the numbers high.

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Speaker 1: You look at hospital care and healthcare, the numbers on

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Speaker 1: as high. So we have to we have to start

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Speaker 1: the focus now intentionally in different different actors of the

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Speaker 1: economy to make sure we get we get people trained

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Speaker 1: out and get people back to work. So this is

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Speaker 1: not about a broad based effort to run an economy.

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Speaker 1: Hall you think this is about specifically targeting certain sectors.

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Speaker 1: Is that right? Right? Well, I think we have to

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Speaker 1: target certain sectors now to bring those sectors back. I mean,

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Speaker 1: we look at some of these numbers hospitality this month. Uh,

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Speaker 1: the numbers are kind of when I don't want to

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Speaker 1: say flat, but we didn't see growth on hospitality. We

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Speaker 1: didn't see growth in construction. We saw growth in construction

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Speaker 1: in the sector. We didn't see any growth actually job

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Speaker 1: loss in the government sector. So we really have to

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Speaker 1: start looking at these different sectors and see what the

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Speaker 1: supports they need. And that's quite honestly why in the

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Speaker 1: Build Back Better Reconciliation plan the President has put out there,

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Speaker 1: there's twenty there's a couple of I think almost twenty

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Speaker 1: billion dollars in job training, workforce development money that will

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Speaker 1: allow us the opportunity here at the Department Labor to

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Speaker 1: kind of focus on other sectors to help create and

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Speaker 1: build them up. The reason I asked this question is

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Speaker 1: because there was a big effort to get us back

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Speaker 1: to where we were before the pandemic. And one measure

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Speaker 1: of that one metric was the employment of population ratio,

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Speaker 1: which is back to about fifty nine before the pandemic,

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Speaker 1: make it was at about sixty one. And secondly, what

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Speaker 1: was the federal reserve? The administration has talked about getting

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Speaker 1: back to where we were. Do you think that's achievable?

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Speaker 1: How dependent do you think this really is on just

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Speaker 1: the virus? Is there's something else going on here in

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Speaker 1: this labor market? Well? Yeah, I think we have to.

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Speaker 1: I think we have to be realistic about the labor

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Speaker 1: market and look at what is the future going to

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Speaker 1: look like. I think that the pandemic has changed the way,

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Speaker 1: or at least had conversations about the way the office

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Speaker 1: looks people working, teller working. We've seen thirty percent I

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Speaker 1: think last month if I get the number correctly, increase

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Speaker 1: in entrepreneurship in this country. So you know there is

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Speaker 1: an evolution and a change going on to some degree,

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Speaker 1: I think that measuring measuring the way we do our

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Speaker 1: economy back to February of I don't know what if

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Speaker 1: they look like that when we get beyond the virus.

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Speaker 1: But I definitely think that with the President and the

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Speaker 1: administration staying focused on creating opportunities, five point almost six

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Speaker 1: million jobs created since president by the Tacond Office. Four

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Speaker 1: point two percent unemployment rate today, which is a good number.

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Speaker 1: We obviously wanted to continue that number of going down.

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Speaker 1: We've seen better participation in the black unemployment rate drop

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Speaker 1: the whole percent women put unemployment rate four percent. We're

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Speaker 1: starting to see some games here now, we do we

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Speaker 1: still I think we have to continue to acknowledge his

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Speaker 1: work to be done. Do you personally have more work

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Speaker 1: to do in the seat you're in right now, Secretary Walsh,

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Speaker 1: No question about it. I mean we have a lot

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Speaker 1: of work to do. We have to work on making

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Speaker 1: sure that we implement the unemployment insurance UM work that

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Speaker 1: we're doing and kind of reorganizing unemployment insurance two million,

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Speaker 1: two billion dollars. We have an office created job Force

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Speaker 1: workforce development training money. I really want to look at

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Speaker 1: changing the way we train workers. I think we want

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Speaker 1: to make sure we're training workers not just for the

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Speaker 1: jobs of today, but the jobs of the future, and

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Speaker 1: thinking about more creating more pre apprentice programs. We have

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Speaker 1: a lot of work to do here at the Department

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Speaker 1: Labor the reason, so it's not a personal attack. There

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Speaker 1: was just some news this week that maybe you might

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Speaker 1: be interested in the seat that Charlie Baker might leave

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Speaker 1: empty in the coming here. Do you want to respond?

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Speaker 1: Do you want to sponsored? You'll put that right over

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Speaker 1: right head. I wasn't even paying attention as I said,

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Speaker 1: I have a lot of work to do here at

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Speaker 1: the devironment of latter, Lady Kelly says, you're weighing the run.

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Speaker 1: Is that true or false? Well, listen to the governor

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Speaker 1: myself have a great relationship. You know, we were partners

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Speaker 1: for seven years, six years in Boston. I was one

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Speaker 1: year of Governor Patrick. We did a lot of work.

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Speaker 1: We we what we started the pandemic together. We've got

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Speaker 1: the city of Boston, the Carmalton, Massachusetts at least through

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Speaker 1: the beginning days of the pandemic. And for the last

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Speaker 1: week I've been I've been out in l a long beach,

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Speaker 1: all over the country here in Washington today. So I'll

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Speaker 1: leave it at that. Should I take a signal from

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Speaker 1: your refusal to answer that direct question? There's no signal.

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Speaker 1: I love my job here. Secondary Welsh will let you go, sir,

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Speaker 1: I know you've got a busy morning. Thank you, thanks

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Speaker 1: for being with us. The US Labor Market Secretary Marty

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Speaker 1: Welsh that it's not much here to steer the feed

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Speaker 1: away from what they've discussed all week. When they get

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Speaker 1: together on December fifty and this real you have sizes

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Speaker 1: of me, John, They're just gonna wait for more data.

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Speaker 1: With two different reports there and a lot of people partists,

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Speaker 1: including Jeffrey Rosenberg, portfolio manager of Systematic Multi Strategy Fund

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Speaker 1: at black Rock. Jeffrey, when you get ambiguity like this,

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Speaker 1: what do you do well, it's a really interesting report.

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Speaker 1: I think you guys have broken it down well that

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Speaker 1: it may not be so ambiguous when you when you

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Speaker 1: look behind the headline. The headline is the disappointment on

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Speaker 1: to ten. But as Mike McKee just went through, a

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Speaker 1: lot of that looks like seasonality and the impact of

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Speaker 1: seasonal flows coming in lower than what the seasonal factors

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Speaker 1: would otherwise expect, and so you get some disappointment on

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Speaker 1: the headline. As Jonathan just went through, the initial market

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Speaker 1: reaction is all the machines looking at that headline number,

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Speaker 1: give it a minute and you look at what Lisa

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Speaker 1: talked about, which I think is the much stronger message here,

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Speaker 1: that decline in these unemployment rates, the impact of labor

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Speaker 1: force participation finally coming back. This is the strength of

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Speaker 1: the underlying labor market that is speaking here. And I

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Speaker 1: think when you look at the market reaction kind of fading,

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Speaker 1: that initial disappointment is spot on, and that's really the

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Speaker 1: bigger message. And Tom to your last point, I don't

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Speaker 1: think this report really changes anything from the from the

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Speaker 1: FED with regards to the labor market, but it is

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Speaker 1: obviously the cross currents between the headline and the underlying components.

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Speaker 1: I think the underlying components here are much stronger. Jeff,

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Speaker 1: we got to talk about the FED when they get

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Speaker 1: together on the fifth. It's not just about the type

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Speaker 1: of conversation. Let's discuss their fullecast year and next year

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Speaker 1: they've got unemployment at three point eight percent. Jeff, were

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Speaker 1: almost there at full point to how much of an

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Speaker 1: adjustment do we need to see in a couple of weeks. Yeah,

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Speaker 1: we could certainly see the adjustments come down. Uh, you know,

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Speaker 1: as they keep pace with how rapidly the labor market

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Speaker 1: is is improving. I think they're closer on the on

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Speaker 1: the jobs front than the other forecast, which is of

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Speaker 1: course the big topic, which is their their inflation forecast,

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Speaker 1: and I think that's going to be the driver into

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Speaker 1: December fifte And of course, you know the other big story,

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Speaker 1: the elephant in the room here is that this report,

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Speaker 1: you know, doesn't have any of the COVID, any of

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Speaker 1: the O Macron issues that we still have in front

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Speaker 1: of us. So over the next ten days we're going

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Speaker 1: to find out a lot more. That's going to drive

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Speaker 1: that debate into the FED meeting on the fifteen. Jeff,

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Speaker 1: I would agree with you that the underlying components are

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Speaker 1: much more interesting and point to a very strong report.

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Speaker 1: Aside from that headline, Miss I am though confused by

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Speaker 1: average hourly earnings and how much we're seeing wages increase.

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Speaker 1: That was a disappointment and to me it actually fell

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Speaker 1: in terms of the pace of wage rises from month

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Speaker 1: to month. What do you make of that? Yeah, it's

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Speaker 1: hard exactly to to know what's going on there. A

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Speaker 1: lot of the month to month variability, Lisa is confu

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Speaker 1: using based on the shift in the underlying mix of

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Speaker 1: who's coming in, who's coming out. So when you look

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Speaker 1: at average hourly earnings as opposed to other measures like

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Speaker 1: employment cost index UH, what you end up seeing is,

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Speaker 1: you know, a measurement of two things, what's the change

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Speaker 1: in who's coming in and out and what's the change

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Speaker 1: and what they're getting paid. And so when you have

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Speaker 1: more lower wage workers entering the pool relative to higher

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Speaker 1: wage workers, it can push down what you see in

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Speaker 1: average hourly earnings. Even if what we think of is

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Speaker 1: kind of a fixed pool of workers, wages are going up.

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Speaker 1: The message on those fixed pool UH metrics have been

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Speaker 1: for a while now clear that we're seeing pricing power

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Speaker 1: come back to wages. And I don't think this disappointment

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Speaker 1: on average hourly earning should be overly interpreted as as

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Speaker 1: kind of challenging that story. I think it's still a

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Speaker 1: strong labor market, with strong labor market racing and wage inflation.

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Speaker 1: Fifty minutes away from the up and in Bow States

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Speaker 1: side features up eighteen up four tents of one percent

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Speaker 1: on the NaSTA and NaSTA one hundred features of six

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Speaker 1: tenths of one percent. Counting down to the up and

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Speaker 1: in Bow will be catching up with Muhammad al Arian

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Speaker 1: of Rick Reida, Mike Collins, and Anastasia Amarosso Tom to

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Speaker 1: really break down this job to report and get first

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Speaker 1: reaction as well from the White House in about fifty

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Speaker 1: minutes time. The reaction as well of a market lifting up.

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Speaker 1: I note the nas deck one after all this up

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Speaker 1: six tenths of a percent, and the VIX is a

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Speaker 1: key statistic for me really escaping the thirty and twenty

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Speaker 1: eight level in the twenty six point one eight Again,

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Speaker 1: Jeffrey Rosenberg with us with black Rock, Jeff, I I

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Speaker 1: want to talk about systematic and your responsibilities of black Rock,

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Speaker 1: and I don't want to care about I don't care

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Speaker 1: about systematic the twelve thirty one or even out in

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Speaker 1: the January. How are you managing an allocating capital outter

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Speaker 1: the middle of next years, say the July FED meeting. Yeah,

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Speaker 1: this is a really good question, Tom, because what we're

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Speaker 1: really debating is, you know, the bigger picture away from

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Speaker 1: today's report is the FED is talking about accelerating the

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Speaker 1: pace of tapering, which is so that they can accelerate

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Speaker 1: the pace of tightening. Uh. And you know markets have

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Speaker 1: priced that in so so a lot of that changes

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Speaker 1: with us. The bigger change that we all have to

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Speaker 1: contemplate is the impact on real interest rates. You've had

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Speaker 1: a spectacular level of support for acid inflation across all markets,

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Speaker 1: whether they be financial markets or otherwise, from exceptionally low

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Speaker 1: levels of real interest rates, and the FED is basically

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Speaker 1: saying it's time to change that outlook. So we should

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Speaker 1: expect a very different financial market outlook in an environment

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Speaker 1: where FED policy is reacting to the exceptionally accommodative UH

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Speaker 1: settings of negative real interest rates. And so that challenges

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Speaker 1: a lot of investment returns that you've seen investment portfolio

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Speaker 1: UH strategies, and so we're looking at, you know, where

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Speaker 1: are their vulnerabilities and where are their opportunities in a

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Speaker 1: rising real rate environment. I just want to point out

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Speaker 1: that as we speak and as traders passed through this report,

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Speaker 1: two of your treasure yields have turned positive or turned

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Speaker 1: positive on the day. I should say, uh, once again,

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Speaker 1: zero point six people assessing the underlying components here and

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Speaker 1: seeing a very strong report. Jeff, with respect to FED hiking,

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Speaker 1: how many rate hikes can this market withstand and not

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Speaker 1: be disrupted from a risk asset performance perspective? Really great question,

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Speaker 1: because look at what the bond market is telling you

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Speaker 1: with this massive curve flattening, right, So it's a very

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Speaker 1: clear message from the bond market that it can't withstand

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Speaker 1: that much increases. So what you see priced into bond

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Speaker 1: markets is an expectation that the Fed is going to

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Speaker 1: do what they're telling you increase the pace of of

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Speaker 1: rate increases. We've priced in from one hike in two

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Speaker 1: thousand twenty two to two hikes, so it's not a

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Speaker 1: super aggressive increase. And when you look further out, you

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Speaker 1: see that that pace of pricing in of interest rates

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Speaker 1: by the Fed starts to fade relative to the feds

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Speaker 1: dot plots, and that is reflective of the expectations that

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Speaker 1: the market, financial market conditions tightening, the impact of rising

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Speaker 1: real interest rates just can't handle as much of a

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Speaker 1: normalization of interest rates as the kind of full trajectory

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Speaker 1: of Fed normalization and the dot plots otherwise would say.

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Speaker 1: And that flattening of the yield curve, you know, is

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Speaker 1: a message that we should pay attention to. It's basically

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Speaker 1: saying as you move into an aggressive FED tightening policy,

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Speaker 1: that the impact is going to slow the economy, tighten

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Speaker 1: financial conditions, and is A is A is a warning

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Speaker 1: of a recessionary indicator. Whether the FED goes there will see.

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Speaker 1: But that's what the bond market is saying. Okay, I

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Speaker 1: agree the bond market is saying that very quickly. Or

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Speaker 1: Jeff Rosenberger, as we move on to the equity markets,

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Speaker 1: the ambiguity of today's report. Does it change the path

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Speaker 1: or the belief the cadence of taper to titan. I

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Speaker 1: don't think it. I don't think it does. I think

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Speaker 1: that and as Lesa just highlighting, you know, the turnaround

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Speaker 1: in the two years. I think the market figuring out

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Speaker 1: that this isn't gonna this is not a disappointing a

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Speaker 1: playrole report that takes the FED out. So I think

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Speaker 1: the pace is as the market the narrative is is

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Speaker 1: still the same pricing in the acceleration. Now how far

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Speaker 1: the market gets ahead of the Fed, or whether the

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Speaker 1: market can push the FED to go even further than that.

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Speaker 1: It's kind of the next phase. You know, we've priced

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Speaker 1: in basically, you know, two hikes in two accelerating that

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Speaker 1: first tike to June or July of next year. You know,

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Speaker 1: will will we get more? I think we're gonna have

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Speaker 1: to see more data, more worries from the Fed on inflation,

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Speaker 1: and a willing this to be more aggressive before we

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Speaker 1: get there. Jeff Rozenberg, thank you so much for the

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Speaker 1: treatment this morning, on this job's report, right now, on

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Speaker 1: this economy digestingness of employment report, and of course markets,

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Speaker 1: A Dow up eighty three points, a lift not like

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Speaker 1: the futures lift we saw off of a thirty, but

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Speaker 1: nevertheless up here the VIX point five five a state

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Speaker 1: of the American economy. Tiffany Wilding joins us with Pimco,

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Speaker 1: their chief US economist. Tiffany, your excel spreadsheet into twenty two.

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Speaker 1: What's the biggest economic plug in on your spreadsheet? What's

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Speaker 1: the biggest mystery? Um? Well, with the labor market report today,

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Speaker 1: I mean I think I would I would just point

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Speaker 1: out the participation rate UM is going to be I think,

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Speaker 1: really key UM, and how much labor supply you know,

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Speaker 1: we do get back because you know, I think that,

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Speaker 1: as Marty Wall sort of hinted at when he was speaking,

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Speaker 1: I think the labor market post pandemic, you know, could

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Speaker 1: look different in many aspects than it is pre pandemic. UM.

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Speaker 1: You know, it's it's obviously been talked about that we

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Speaker 1: we've had a lot of retirements as a result of

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Speaker 1: this pandemic, and I think those people probably won't be

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Speaker 1: as quick to come back to the labor market. But

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Speaker 1: in addition to that, I think that there there's more frictions,

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Speaker 1: um in this labor market now and and those have

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Speaker 1: to do with, um, you know, the types of jobs

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Speaker 1: that people prefer are changing and where jobs are are located,

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Speaker 1: where they're demanded versus where the labor is supplied. That's

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Speaker 1: also changed as a result of telework and people moving

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Speaker 1: out of large cities. UM. So it's I think the

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Speaker 1: question is how long do these things kind of take

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Speaker 1: to resolve themselves. Um. And of course that's gonna that's

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Speaker 1: gonna matter for the participation right next year. Yesterday Mark

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Speaker 1: Kisel joined alber Intelligence Credit Panel and talked about how

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Speaker 1: he was glad to see the FED changing its rhetoric

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Speaker 1: and that the Federal Reserve is way behind the curve. Uh.

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Speaker 1: Does that represent your view as well, and does this

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Speaker 1: labor market really feed into that? Well? I mean, I

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Speaker 1: think that are certainly a risk. Uh. You know that

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Speaker 1: we have higher and more persistent inflation that than the Fed. Uh.

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Speaker 1: You know or or other forecasters are projecting um. But

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Speaker 1: but ultimately, though, I do think that the FED is

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Speaker 1: managing the risk of of higher inflation by you know,

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Speaker 1: by talking about the fact that they're probably you know,

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Speaker 1: that they're going to increase the pace of tapering. We

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Speaker 1: think they're now going to get the asset purchase programs

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Speaker 1: done by March. That gives them more room this year

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Speaker 1: to hike rates earlier, um than than we're previously thinking.

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Speaker 1: We you know, we now think they probably hike in June.

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Speaker 1: So I think the FED is is moving towards met

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Speaker 1: or has moved towards managing these upside inflation risks, you know.

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Speaker 1: And and ultimately, although inflation has proven to be more persistent, um,

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Speaker 1: you know, we have to remember that we had the

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Speaker 1: delta variant and the the COVID cases that have been

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Speaker 1: more elevated, I think for longer than many expected as well,

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Speaker 1: and that had you know, implications for not only US

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Speaker 1: inflation but also global inflation. So our you know, our

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Speaker 1: own view is still that inflation does moderate next year,

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Speaker 1: you know, And that and that the FED really isn't

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Speaker 1: behind the curve. But I think there's certainly a growing

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Speaker 1: risk of that and a risk that the FED has

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Speaker 1: to manage. There's also a growing risk that the FED

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Speaker 1: is going to have to tighten conditions to deal with

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Speaker 1: inflationary impulses that do not relate to monetary policy. The

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Speaker 1: idea that Ellen Zentner raised of Morgan Stanley this morning

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Speaker 1: that perhaps the Fed's response to omicron is to actually

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Speaker 1: tighten sooner rather than later, simply because you see some

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Speaker 1: of the supply chain disruptions persist. What's your view on that, well,

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Speaker 1: I think one of the reasons, one of the things

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Speaker 1: that have contributed to the elevated inflationary princes is the

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Speaker 1: fact that we've have seen people substitute away from services

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Speaker 1: towards goods um and that overall, you know, obviously the

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Speaker 1: um you know, the post pandemic stimulus that we've gotten,

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Speaker 1: you know, has boosted consumption of goods and in the capacity,

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Speaker 1: and that's run up against a clear capacity constraints. So

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Speaker 1: if you know, if if if a macron, uh, you know,

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Speaker 1: you know, basically prolongs this very high, high high pace

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Speaker 1: of of goods demand that we've seen over the last year,

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Speaker 1: We're still going to have these sorts of capacity constraints.

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Speaker 1: That we're running up against because it does seem like

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Speaker 1: on the supply side, it's much less inelastic. In other words,

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Speaker 1: it expands much less than we had fought, you know.

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Speaker 1: So I think I think that there is room for

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Speaker 1: the Fed to try to alleviate some of that demand

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Speaker 1: a little bit until the supply can catch up. Um.

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Speaker 1: But but you also have to remember here that it's

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Speaker 1: tricky because monetary policy works through long and variable legs,

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Speaker 1: and so the tightening that the Fed does today, you know,

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Speaker 1: that really starts to uh, you know, filter through the

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Speaker 1: economy in a more meaningful way, you know, a year

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Speaker 1: to maybe even two years out. So um, you know,

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Speaker 1: they have to be a little bit careful here. Is

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Speaker 1: inflation going to come down by itself without the moving um,

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Speaker 1: you know, or or is it going to be more persistent?

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Speaker 1: I think that's really the key question. Let me circle

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Speaker 1: back the one final question, which I guess takes us

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Speaker 1: back six months. Is tapering tightening? Well, I mean I

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Speaker 1: think it depends on what the market had priced in previously, right,

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Speaker 1: because I mean it's about market expectations. So if the Fed,

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Speaker 1: you know, is announcing a faster you know that they're

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Speaker 1: going to uh, you know, likely announce a faster pace

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Speaker 1: of the per or tapering. Excuse me, you know then

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Speaker 1: then I think that that's a you know, it could

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Speaker 1: be a surprise to the markets. Markets have to price

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Speaker 1: that in and that implies, you know, some of financial

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Speaker 1: conditions tightening. The other thing that's important here is the link,

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Speaker 1: even though the Fed has tried to delink it, the

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Speaker 1: link between tapering and rate expectations. You know it definitely

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Speaker 1: if they get that purchase programs done sooner, it allows them, um,

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Speaker 1: you know, the opportunity or or the option to to

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Speaker 1: hike sooner as well. You know, so certainly that's tightening. Tiffany,

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Speaker 1: thank you. Someone a Tiffany Welding a brief here from

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Speaker 1: PIMCO right now on a Friday, as we plan for

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Speaker 1: the weekend, as we try to stagger through this holiday season.

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Speaker 1: With delta, amicron and the other Greek letters, I can pronounce,

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Speaker 1: we gain perspective for Andrew PEKOFS. He's professor virologists JOHNS.

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Speaker 1: Hopkins Bloomberg School of Public healthon of Chrise. Mr Bloomberg

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00:22:06,520 --> 00:22:09,560
Speaker 1: has a modest interest in this TV and radio platform

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Speaker 1: as well. Dr PEKOFS, I want to talk about the

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Speaker 1: reality of Johannesburg, pretoria and the rest. And I want

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Speaker 1: to look at Adrian Puran, who's an internationally acclaimed virologist

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Speaker 1: in South Africa. Tell us the back and forth this

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Speaker 1: weekend in South Africa as they inform pros like you

431
00:22:31,680 --> 00:22:37,840
Speaker 1: about amicron. Well, it actually starts before Thanksgiving. UH. Sequences

432
00:22:37,880 --> 00:22:41,399
Speaker 1: were being distributed through the research networks that are focused

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00:22:41,400 --> 00:22:45,160
Speaker 1: on COVID nineteen before Thanksgiving, So we saw these sequences

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00:22:45,200 --> 00:22:48,080
Speaker 1: and of course they registered to US as being on

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00:22:48,359 --> 00:22:52,440
Speaker 1: of significant concern on paper. But then the Thanksgiving Day

436
00:22:52,480 --> 00:22:56,520
Speaker 1: announcements of the spread of this virus through South Africa

437
00:22:57,240 --> 00:23:00,439
Speaker 1: really gave the entire world a headstart. I mean, my

438
00:23:00,520 --> 00:23:04,440
Speaker 1: lab is ready this week to do omicron specific experiments

439
00:23:04,440 --> 00:23:08,560
Speaker 1: and it's only because the South African public health, US

440
00:23:08,800 --> 00:23:13,680
Speaker 1: and scientific community shared all of their information about sequences

441
00:23:13,720 --> 00:23:17,240
Speaker 1: as well as case numbers UM. So early the world

442
00:23:17,320 --> 00:23:20,440
Speaker 1: got a head start and we are better prepared now

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00:23:20,480 --> 00:23:23,479
Speaker 1: to handle this because of their efforts. When will we

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00:23:23,560 --> 00:23:28,760
Speaker 1: see results from labs such as yours. Two things that

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00:23:28,800 --> 00:23:32,000
Speaker 1: I'm really looking for now right now Next week will

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00:23:32,040 --> 00:23:35,960
Speaker 1: be important to follow surges and hospitalizations in South Africa,

447
00:23:36,040 --> 00:23:39,320
Speaker 1: because that's about that two week window post the emergence

448
00:23:39,320 --> 00:23:42,480
Speaker 1: of this virus where we expect to see the hospitalization

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00:23:42,680 --> 00:23:48,639
Speaker 1: rates move. Remember, hospitalization rates lag behind case rates. And

450
00:23:48,680 --> 00:23:50,600
Speaker 1: then as soon as we get icelets and we have

451
00:23:50,680 --> 00:23:54,080
Speaker 1: islets in the US right now, UM laboratories will be

452
00:23:54,119 --> 00:23:58,359
Speaker 1: telling us how well the antibodies from vaccine and infection

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00:23:58,960 --> 00:24:01,800
Speaker 1: UH CROSS react to all macron and that will be

454
00:24:01,840 --> 00:24:05,560
Speaker 1: that first hint about how widely we expect this virus

455
00:24:05,600 --> 00:24:08,280
Speaker 1: to be able to transmit dr Packosh. Until we find

456
00:24:08,320 --> 00:24:10,880
Speaker 1: out that information, it's hard to know whether we're underplaying

457
00:24:11,000 --> 00:24:15,000
Speaker 1: or overplaying this whole new variant. What would your recommendation

458
00:24:15,080 --> 00:24:17,879
Speaker 1: be As people head to Christmas parties, as people go

459
00:24:17,960 --> 00:24:20,600
Speaker 1: into the office, they want to engage with other people.

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00:24:20,680 --> 00:24:23,160
Speaker 1: Do you think that it is time to actually restrict

461
00:24:23,200 --> 00:24:25,560
Speaker 1: activity a little bit more or do you think that

462
00:24:25,560 --> 00:24:28,159
Speaker 1: people need to go about their lives and act as

463
00:24:28,200 --> 00:24:31,680
Speaker 1: though this is just another kink on the way to recovery.

464
00:24:32,400 --> 00:24:35,720
Speaker 1: Right now, I would suggest two ways to be proactive

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00:24:35,760 --> 00:24:39,600
Speaker 1: in a in a positive way. Number one, vaccines, Go

466
00:24:39,640 --> 00:24:41,760
Speaker 1: out and get your booster. Go out and get your

467
00:24:41,840 --> 00:24:45,040
Speaker 1: vaccination if you haven't gotten it, If you've been infected,

468
00:24:45,080 --> 00:24:46,960
Speaker 1: go out and get your vaccine, because we know that

469
00:24:46,960 --> 00:24:50,280
Speaker 1: that increases your immunity. Right now, we've got a window

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00:24:50,280 --> 00:24:52,480
Speaker 1: of time where we as a population here in the

471
00:24:52,560 --> 00:24:55,480
Speaker 1: US can increase our immunity. And even if some of

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00:24:55,520 --> 00:24:58,720
Speaker 1: that doesn't cross react to all macron, the more immunity

473
00:24:58,760 --> 00:25:01,520
Speaker 1: the better, and it will it will protect us against

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00:25:01,560 --> 00:25:05,080
Speaker 1: severe disease uh if omicron doesn't been to spread. And

475
00:25:05,080 --> 00:25:07,400
Speaker 1: then the second thing is to think about testing protocols.

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00:25:07,600 --> 00:25:10,240
Speaker 1: One of the critical things in the Biden plan that

477
00:25:10,440 --> 00:25:12,679
Speaker 1: may go under people's radar screens is the use of

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00:25:12,760 --> 00:25:16,560
Speaker 1: at home tests. That is an incredibly powerful tool for

479
00:25:16,640 --> 00:25:20,000
Speaker 1: us to really intervene and stop people who are potentially

480
00:25:20,480 --> 00:25:23,840
Speaker 1: trans going to transmit the virus. And utilizing those at

481
00:25:23,840 --> 00:25:26,800
Speaker 1: home tests is going to be very, very critical to

482
00:25:26,880 --> 00:25:29,960
Speaker 1: really controlling this omicron surge. And let's not forget the

483
00:25:29,960 --> 00:25:31,960
Speaker 1: delta surge that we're still in the middle of Andy.

484
00:25:32,000 --> 00:25:35,320
Speaker 1: Because your laboratory is working specifically on O macron, what

485
00:25:35,480 --> 00:25:37,399
Speaker 1: is your sense of its VIRU lens. I know that

486
00:25:37,440 --> 00:25:39,359
Speaker 1: we're going to get the actual data next week, but

487
00:25:39,359 --> 00:25:41,960
Speaker 1: on a preliminary basis, a lot of people have found

488
00:25:42,000 --> 00:25:45,399
Speaker 1: that yes, vaccines do prevent a severe illness, and it

489
00:25:45,480 --> 00:25:48,119
Speaker 1: does seem like perhaps you're not seeing as much of

490
00:25:48,119 --> 00:25:51,640
Speaker 1: a surge in hospitalizations yet as you would might expect.

491
00:25:51,800 --> 00:25:54,600
Speaker 1: What's your sense of what the reality is? Yeah, I

492
00:25:54,640 --> 00:25:57,360
Speaker 1: think we really need to wait one more week. You know,

493
00:25:57,440 --> 00:26:01,040
Speaker 1: the vaccination yet, you know travel US are the primary

494
00:26:01,119 --> 00:26:04,080
Speaker 1: people that have been picked up now with UM with

495
00:26:04,080 --> 00:26:06,760
Speaker 1: with a macron, they have a tendency to be of

496
00:26:06,920 --> 00:26:10,240
Speaker 1: more highly vaccinated population. So some of the data we're

497
00:26:10,280 --> 00:26:13,720
Speaker 1: seeing now from the US and from Europe is really

498
00:26:13,760 --> 00:26:18,320
Speaker 1: skewed to vaccinated populations. In the next week, UM in

499
00:26:18,359 --> 00:26:20,560
Speaker 1: South Africa will be the lead on this. We'll be

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00:26:20,600 --> 00:26:24,000
Speaker 1: starting to hear how the various populations are doing with

501
00:26:24,040 --> 00:26:26,720
Speaker 1: respect to infection and disease of varry. So that's really

502
00:26:26,720 --> 00:26:28,760
Speaker 1: going to be the critical thing, and they always great

503
00:26:28,760 --> 00:26:30,159
Speaker 1: to catch up with. He said, let's get to hear

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00:26:30,200 --> 00:26:33,560
Speaker 1: from you, Andrew Pekosta of John's Health Kids. This is

505
00:26:33,560 --> 00:26:37,560
Speaker 1: the Bloomberg Surveillance Podcast. Thanks for listening. Join us live

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00:26:37,720 --> 00:26:41,480
Speaker 1: weekdays from seven to ten am Eastern on Bloomberg Radio

507
00:26:41,720 --> 00:26:45,360
Speaker 1: and on Bloomberg Television each day from six to nine

508
00:26:45,359 --> 00:26:49,800
Speaker 1: am for insight from the best in economics, finance, investment,

509
00:26:49,920 --> 00:26:54,960
Speaker 1: and international relations. And subscribe to the Surveillance podcast on

510
00:26:55,040 --> 00:26:58,840
Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course, on

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00:26:58,960 --> 00:27:03,000
Speaker 1: the terminal. I'm Tom keene In. This is Bloomer