1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:30,720 Speaker 1: and of course, on the Bloomberg terminal. We are thrilled 6 00:00:30,720 --> 00:00:33,120 Speaker 1: to bring you the former Governor of the Federal Reserve System, 7 00:00:33,200 --> 00:00:36,839 Speaker 1: Randall Krosner, of the University of Chicago Boost School, Holding 8 00:00:36,880 --> 00:00:41,760 Speaker 1: Court in London as well. Randy, we are staggering step 9 00:00:41,840 --> 00:00:45,800 Speaker 1: by step through the tangible data through a new FED 10 00:00:45,920 --> 00:00:50,680 Speaker 1: policy dovetail the mystery around the table at the Eccles building. 11 00:00:51,000 --> 00:00:54,880 Speaker 1: They have a new FED theory, a new FED construction, 12 00:00:55,520 --> 00:00:58,240 Speaker 1: but we've got the same old data. How do they fit? 13 00:00:59,680 --> 00:01:02,800 Speaker 1: Uh yeah, same old data, but but a new framework 14 00:01:02,800 --> 00:01:06,080 Speaker 1: that's exactly right. So we have this uh average inflation 15 00:01:06,080 --> 00:01:10,080 Speaker 1: targeting framework that says, rather than well, when we see 16 00:01:10,120 --> 00:01:13,960 Speaker 1: inflation coming, we're gonna act now proactively, it says, no, No, 17 00:01:14,000 --> 00:01:15,960 Speaker 1: we're not going to do that. We're gonna wait until 18 00:01:16,120 --> 00:01:19,000 Speaker 1: inflation gets to at least to our target or maybe 19 00:01:19,000 --> 00:01:22,280 Speaker 1: moving above, before we start to Act, and obviously we've 20 00:01:22,319 --> 00:01:24,560 Speaker 1: seen that because inflation has been very high over the 21 00:01:24,680 --> 00:01:27,479 Speaker 1: last few months. But the feed is said, hey, we're 22 00:01:27,520 --> 00:01:32,280 Speaker 1: not moving until Randy. Are there any hulks left at 23 00:01:32,280 --> 00:01:35,640 Speaker 1: the Federal Reserve? Oh? Yes, I think you see some 24 00:01:35,680 --> 00:01:38,399 Speaker 1: of them, because it sounds like to me there are 25 00:01:38,440 --> 00:01:41,760 Speaker 1: doves and then there are super doves, doves and super doves, 26 00:01:41,959 --> 00:01:45,280 Speaker 1: and I see no hulks right now. Who are they? Well, 27 00:01:45,319 --> 00:01:47,840 Speaker 1: I guess that also changes in context too. So you 28 00:01:47,880 --> 00:01:51,400 Speaker 1: have someone like Governor Waller who just spoke recently, we 29 00:01:51,480 --> 00:01:53,920 Speaker 1: said we've got to get moving, We got to start 30 00:01:53,960 --> 00:01:58,720 Speaker 1: to to start tapering a little bit more rapidly because 31 00:01:58,720 --> 00:02:01,920 Speaker 1: we see the economy coming back. Rich Clarada had a 32 00:02:01,960 --> 00:02:05,520 Speaker 1: fairly optimistic view of where the economy was going, seemed 33 00:02:05,560 --> 00:02:09,880 Speaker 1: to be discounting the role of the delta variant, although 34 00:02:09,919 --> 00:02:11,800 Speaker 1: he is certainly much more on the wish side of 35 00:02:11,840 --> 00:02:14,800 Speaker 1: waiting til end of two before starting to raise rates. 36 00:02:15,440 --> 00:02:17,120 Speaker 1: Do you agree with Eddie Blanche Flower, who was on 37 00:02:17,120 --> 00:02:20,000 Speaker 1: the show earlier today, who is basically saying it's correct 38 00:02:20,080 --> 00:02:22,240 Speaker 1: for all of these doves to be dove and dovish 39 00:02:22,320 --> 00:02:24,959 Speaker 1: because basically the fact that we have this very low 40 00:02:25,000 --> 00:02:28,880 Speaker 1: participation rate in the US labor market is really a 41 00:02:28,880 --> 00:02:32,040 Speaker 1: result of failed policy. Do you agree with that assessment. 42 00:02:33,080 --> 00:02:35,720 Speaker 1: I'm not so sure it's exactly the results of failed policy. 43 00:02:35,760 --> 00:02:37,000 Speaker 1: I mean, I think there are a lot of people 44 00:02:37,040 --> 00:02:40,000 Speaker 1: who have decided that that, especially the older people who 45 00:02:40,040 --> 00:02:42,560 Speaker 1: had come back into the labor market, who said, gosh, 46 00:02:42,560 --> 00:02:45,679 Speaker 1: with all these uncertainties around health, maybe this is a 47 00:02:45,680 --> 00:02:47,520 Speaker 1: good time for me to stay out of the labor market, 48 00:02:47,720 --> 00:02:50,200 Speaker 1: to to retire. So I'm not quite sure that it's 49 00:02:50,240 --> 00:02:52,079 Speaker 1: just policy. I think there are a lot of other things, 50 00:02:52,120 --> 00:02:54,640 Speaker 1: like the pandemic that you know, it's just a shock 51 00:02:54,720 --> 00:02:56,760 Speaker 1: that we really can't do. I mean, we can, we 52 00:02:56,800 --> 00:02:59,680 Speaker 1: can respond with vaccines and such, but it just fundamentally 53 00:02:59,760 --> 00:03:02,239 Speaker 1: changed is the way people think about going to work, 54 00:03:02,480 --> 00:03:06,840 Speaker 1: going going shopping. Professor Krausner, you you represent the land 55 00:03:06,880 --> 00:03:12,880 Speaker 1: of microeconomics. Macro is just more microeconomics of Chicago. Professor Krausner. 56 00:03:13,040 --> 00:03:17,160 Speaker 1: How do you address the dynamics forward of our immense 57 00:03:17,360 --> 00:03:22,799 Speaker 1: demand and supply imbalance. So this is a really interesting 58 00:03:22,840 --> 00:03:26,000 Speaker 1: question where policy has a very large role to play. Obviously, 59 00:03:26,040 --> 00:03:30,160 Speaker 1: we've seen extraordinarily easy monetary policy and a commitment for 60 00:03:30,200 --> 00:03:34,680 Speaker 1: that for a long time. Unbelievable fiscal policy, just unprecedented 61 00:03:34,720 --> 00:03:37,360 Speaker 1: for the term a billion times, but it really is true. 62 00:03:37,560 --> 00:03:40,120 Speaker 1: Or either have spent or planning to spend on the 63 00:03:40,240 --> 00:03:43,680 Speaker 1: order fift of GDP within an eighteen month time period. 64 00:03:43,800 --> 00:03:47,120 Speaker 1: That's just absolutely extraordinary. Plus you had all the pent 65 00:03:47,240 --> 00:03:50,560 Speaker 1: up demand, high savings of people or the savings that 66 00:03:50,640 --> 00:03:52,960 Speaker 1: people have built up when they could go out, So 67 00:03:53,120 --> 00:03:55,960 Speaker 1: that's all being unleashed. And so obviously we're seeing that 68 00:03:56,520 --> 00:03:59,920 Speaker 1: in terms of lots of lots of price pressure combined 69 00:04:00,160 --> 00:04:02,920 Speaker 1: with someone off factors like the chip shortage that we're 70 00:04:02,920 --> 00:04:06,400 Speaker 1: talking about, like other supply chain disruptions. So we're going 71 00:04:06,440 --> 00:04:09,880 Speaker 1: to see a lot of a lot of price increases 72 00:04:10,400 --> 00:04:12,920 Speaker 1: in the short run. The key question is are those 73 00:04:12,960 --> 00:04:16,160 Speaker 1: transitory or are those sustained? Um. I think we're gonna 74 00:04:16,200 --> 00:04:18,719 Speaker 1: see them transitory for a while. I don't think they're 75 00:04:18,760 --> 00:04:21,040 Speaker 1: necessarily going to be sustained over the year to two 76 00:04:21,120 --> 00:04:24,400 Speaker 1: year horizon, But over six months horizon, I think certainly. Randy, 77 00:04:24,440 --> 00:04:25,960 Speaker 1: I don't want to talk about projections. I want to 78 00:04:25,960 --> 00:04:28,320 Speaker 1: talk about how we'd respond to outcomes. So help me 79 00:04:28,400 --> 00:04:31,240 Speaker 1: understand this from a Federal Reserve perspective. If a higher 80 00:04:31,320 --> 00:04:35,160 Speaker 1: rate of inflation persists, and it's primarily attributed to supply 81 00:04:35,200 --> 00:04:39,599 Speaker 1: side constraints, but those supply side constraints also persist, how 82 00:04:39,640 --> 00:04:43,320 Speaker 1: long before you have to take notice of that? Yeah, 83 00:04:43,320 --> 00:04:46,080 Speaker 1: that's exactly. That's a very important issue because now it's 84 00:04:46,120 --> 00:04:49,159 Speaker 1: sort of described as one off. You know, there's some 85 00:04:49,360 --> 00:04:52,200 Speaker 1: supply chain disruptions, but within six months to a year 86 00:04:52,200 --> 00:04:55,159 Speaker 1: they will be eased. High demand for used cars. There 87 00:04:55,200 --> 00:04:58,839 Speaker 1: are a lot of particular explanations each each month, But 88 00:04:58,920 --> 00:05:02,440 Speaker 1: if those accumulate over time, and in particular, if those 89 00:05:02,520 --> 00:05:06,720 Speaker 1: start to change people's expectations so that people are expecting that, well, 90 00:05:06,800 --> 00:05:09,120 Speaker 1: g I need to get paid more in order to 91 00:05:09,600 --> 00:05:14,120 Speaker 1: UM in order to UH consume, And companies say, well, 92 00:05:14,200 --> 00:05:16,359 Speaker 1: I can push price increases in a way that I 93 00:05:16,360 --> 00:05:17,960 Speaker 1: haven't been able to do in a decade or two 94 00:05:18,240 --> 00:05:22,320 Speaker 1: to accommodate this higher wage increases. UM, you can get 95 00:05:22,360 --> 00:05:25,360 Speaker 1: into this this cycle where inflation starts to to take 96 00:05:25,400 --> 00:05:28,720 Speaker 1: off and become become more permanent. That's really the key. 97 00:05:28,880 --> 00:05:35,520 Speaker 1: Can they keep inflation expectations well anchored. We'll see Randy 98 00:05:35,600 --> 00:05:37,719 Speaker 1: gotta leave it that Randy Croys and now University Chicago, 99 00:05:37,800 --> 00:05:45,920 Speaker 1: both school economics professor and former Fed Convernor. We need 100 00:05:45,960 --> 00:05:48,440 Speaker 1: to stop the show, I said last night, and you know, 101 00:05:48,440 --> 00:05:51,200 Speaker 1: as we put the show together, I said, stop, We 102 00:05:51,240 --> 00:05:54,760 Speaker 1: need to talk to somebody and calm down about what 103 00:05:54,839 --> 00:05:58,160 Speaker 1: to do into September and for that matter, into September 104 00:05:58,200 --> 00:06:01,440 Speaker 1: of two thousand twenty two. See, Misha is perfect with 105 00:06:01,520 --> 00:06:05,600 Speaker 1: principal global investors their chief strategies today seem it can 106 00:06:05,640 --> 00:06:11,320 Speaker 1: you own banns. Well, Look, it's so challenging right now. 107 00:06:11,360 --> 00:06:13,720 Speaker 1: I mean, you know one eighteen whatever it is now, 108 00:06:13,880 --> 00:06:18,200 Speaker 1: it's it's it's very difficult to go long bonds at 109 00:06:18,200 --> 00:06:20,560 Speaker 1: this kind of level now looks of course, momentum can 110 00:06:20,560 --> 00:06:23,240 Speaker 1: take you lower. But if we're looking at the fundamental 111 00:06:23,320 --> 00:06:27,000 Speaker 1: story with strong growth, strong earnings um and affect, which 112 00:06:27,000 --> 00:06:28,840 Speaker 1: you know, I agree, it's it's hardly you can hardly 113 00:06:28,839 --> 00:06:30,800 Speaker 1: call it a hawk ish but also me, they're moving 114 00:06:30,800 --> 00:06:32,920 Speaker 1: to a point that they can start normalizing. I think 115 00:06:32,920 --> 00:06:36,240 Speaker 1: it's a really difficult argument make to own treasury seem 116 00:06:36,279 --> 00:06:40,159 Speaker 1: a global opportunities Beckon heard that a few times over 117 00:06:40,160 --> 00:06:41,640 Speaker 1: the last few months. In fact, to be fair, I've 118 00:06:41,680 --> 00:06:43,360 Speaker 1: heard it throughout the whole of this year. Why do 119 00:06:43,440 --> 00:06:48,160 Speaker 1: they beckon now? Well, I mean there's a couple of reasons. 120 00:06:48,200 --> 00:06:50,000 Speaker 1: You've got a global recovery and play. I think the 121 00:06:50,040 --> 00:06:52,239 Speaker 1: most interesting part of this, though, is that you've seen 122 00:06:52,240 --> 00:06:54,640 Speaker 1: it kind of a move from region to region to 123 00:06:54,720 --> 00:06:58,240 Speaker 1: region through the progress of the vaccination um So we 124 00:06:58,240 --> 00:07:01,400 Speaker 1: started for the US, you're how had a fantastic couple 125 00:07:01,400 --> 00:07:03,960 Speaker 1: of months and to what Although em is looking really 126 00:07:04,040 --> 00:07:07,000 Speaker 1: dice at the moment, there are still opportunities going forward. 127 00:07:07,040 --> 00:07:08,760 Speaker 1: And then in this kind of environment where it's really 128 00:07:08,800 --> 00:07:11,560 Speaker 1: difficult to make any decent return, you need to be 129 00:07:11,600 --> 00:07:13,840 Speaker 1: looking at where's the next thing which hasn't yet been 130 00:07:13,840 --> 00:07:16,480 Speaker 1: tapped for that vaccine progress. I've heard it from US 131 00:07:16,520 --> 00:07:19,040 Speaker 1: based investors they're like the UK, the foot seas up 132 00:07:19,040 --> 00:07:21,800 Speaker 1: ten percent this year, I'm told They're like Japan. Japan 133 00:07:21,800 --> 00:07:23,559 Speaker 1: has done nothing for me this year. It's up about 134 00:07:23,560 --> 00:07:25,200 Speaker 1: one percent on the n K. Do you like those 135 00:07:25,240 --> 00:07:27,680 Speaker 1: markets too? Right now? See, there's a reason to pivot 136 00:07:27,680 --> 00:07:30,320 Speaker 1: away from the wonderfulness of the USA COUDI market that 137 00:07:30,320 --> 00:07:32,640 Speaker 1: we're seeen for the year so far, towards the UK 138 00:07:32,760 --> 00:07:36,600 Speaker 1: towards Japan. Yeah, And it gives a really good question. 139 00:07:36,640 --> 00:07:38,840 Speaker 1: I think, like you said Japan has been such a 140 00:07:38,880 --> 00:07:42,840 Speaker 1: disappointment with the global recovery. Typically Japan should do well, 141 00:07:42,880 --> 00:07:45,320 Speaker 1: it just doesn't seem to perform. But we do think 142 00:07:45,320 --> 00:07:48,240 Speaker 1: that those again as opportunities there for vaccine progress, a 143 00:07:48,360 --> 00:07:50,560 Speaker 1: kind of a jump start again in Japan. But you know, 144 00:07:50,640 --> 00:07:54,520 Speaker 1: I agree, it's it's difficult to stay excited about Japan. 145 00:07:54,880 --> 00:07:56,600 Speaker 1: With the UK, I do wonder if they've had a 146 00:07:56,600 --> 00:07:59,720 Speaker 1: bit of their heyday already over the last six months. Um, 147 00:08:00,000 --> 00:08:01,680 Speaker 1: we need to see more actions from the government. Was 148 00:08:01,840 --> 00:08:03,480 Speaker 1: stimulus plans? What are they going to do from the 149 00:08:03,480 --> 00:08:06,800 Speaker 1: fiscal side to keep this rally going? But certainly, you know, 150 00:08:07,120 --> 00:08:10,040 Speaker 1: the US does look good, but there are always opportunities globally, 151 00:08:10,120 --> 00:08:12,440 Speaker 1: you know, we know you need to be diversified, and 152 00:08:12,480 --> 00:08:16,000 Speaker 1: there are other opportunities, UM, Europe, e M which is 153 00:08:16,000 --> 00:08:17,920 Speaker 1: still beckoning for US. We're talking about the US. Do 154 00:08:17,960 --> 00:08:20,200 Speaker 1: you agree with David Carston's view over a Goldman Sachs 155 00:08:20,280 --> 00:08:22,480 Speaker 1: that we're looking at a fort on the SMP at 156 00:08:22,480 --> 00:08:24,880 Speaker 1: the end of the year and are by year end 157 00:08:25,680 --> 00:08:29,560 Speaker 1: two we are still very much risk on. We still 158 00:08:29,560 --> 00:08:31,920 Speaker 1: think there's a lot to play for with within excuse 159 00:08:32,040 --> 00:08:34,079 Speaker 1: and for the same reason that that David's been pointing out, 160 00:08:34,120 --> 00:08:36,480 Speaker 1: which is you look at the fundamentals, earning scross has 161 00:08:36,520 --> 00:08:39,920 Speaker 1: been fantastic. UM. You know, we're seeing companies showing real 162 00:08:40,000 --> 00:08:45,120 Speaker 1: pricing power, which does fill off with some positivity going forward. UM. 163 00:08:45,160 --> 00:08:46,800 Speaker 1: I think the big question marks I said, there is 164 00:08:46,800 --> 00:08:49,120 Speaker 1: a correspond deals, UM, and if we're going to get 165 00:08:49,120 --> 00:08:51,680 Speaker 1: to that two percent level that some people still um 166 00:08:51,679 --> 00:08:53,760 Speaker 1: pinning down for the end of the year, that's going 167 00:08:53,800 --> 00:08:56,320 Speaker 1: to make it much more difficult. We we don't think 168 00:08:56,360 --> 00:08:59,360 Speaker 1: two percent is likely. It's a slightly lower level. UM. 169 00:08:59,400 --> 00:09:02,160 Speaker 1: And in that kind of environment, yes, uf excs can 170 00:09:02,200 --> 00:09:04,959 Speaker 1: continue to perform well. Seem can you walk us through 171 00:09:05,120 --> 00:09:07,840 Speaker 1: a scenario in which bond yields get two percent and 172 00:09:07,880 --> 00:09:11,160 Speaker 1: the reaction function in equities? I mean, I'm personally confused 173 00:09:11,400 --> 00:09:14,000 Speaker 1: by the scenario that will lead to two percent yields 174 00:09:14,040 --> 00:09:17,719 Speaker 1: and then how that will trickle into equities. Yeah. Look, 175 00:09:17,800 --> 00:09:20,600 Speaker 1: if if put like this two months ago, if we've 176 00:09:20,640 --> 00:09:23,760 Speaker 1: then seen US yields need two that would have been 177 00:09:23,760 --> 00:09:26,080 Speaker 1: a steady rise through the rest of the year, and 178 00:09:26,080 --> 00:09:28,960 Speaker 1: I think exles could have digested that at this point 179 00:09:28,960 --> 00:09:30,960 Speaker 1: where yields are for them to hit two percent now 180 00:09:31,000 --> 00:09:32,480 Speaker 1: by the end of the year. That would be a 181 00:09:32,600 --> 00:09:34,959 Speaker 1: very very sharp move. It would be very disruptive and 182 00:09:35,000 --> 00:09:37,120 Speaker 1: I don't think XS could cope with it. But to 183 00:09:37,200 --> 00:09:40,000 Speaker 1: get us there, you need to have the growth boom 184 00:09:40,040 --> 00:09:42,680 Speaker 1: really once again taking off. You need to have the 185 00:09:42,760 --> 00:09:45,960 Speaker 1: FED clearly indicating that tapering is on the agenda, and 186 00:09:46,000 --> 00:09:48,280 Speaker 1: you just need that momentum to be there now. Positioning 187 00:09:48,559 --> 00:09:51,679 Speaker 1: to ask tells us that it could. It could shift right, 188 00:09:51,720 --> 00:09:53,840 Speaker 1: that momentum could come through where you get a huge 189 00:09:53,840 --> 00:09:58,320 Speaker 1: overshooting of on whatever your fair value perspective is. But 190 00:09:58,400 --> 00:10:00,199 Speaker 1: we need a lot of the start to align. It 191 00:10:00,320 --> 00:10:04,240 Speaker 1: seem that the challenge here is our history of e 192 00:10:04,440 --> 00:10:09,439 Speaker 1: M is the history of I'm guessing Ecuador, Mexico came 193 00:10:09,480 --> 00:10:12,439 Speaker 1: along in ninety four and on and on. Is the 194 00:10:12,600 --> 00:10:17,600 Speaker 1: great surprise out there that e M falls apart is 195 00:10:17,640 --> 00:10:20,800 Speaker 1: the developed countries are just over the next twenty four months, 196 00:10:22,880 --> 00:10:25,040 Speaker 1: I think. So, you know, I think a lot of investors, 197 00:10:25,080 --> 00:10:27,160 Speaker 1: including US, we look at it as look at the 198 00:10:27,360 --> 00:10:29,839 Speaker 1: M as a long term opportunity to where your long 199 00:10:29,920 --> 00:10:33,080 Speaker 1: term growth forecasts are going to come through. And once 200 00:10:33,160 --> 00:10:35,440 Speaker 1: you know we've got COVID behind us, especially for those 201 00:10:35,440 --> 00:10:38,280 Speaker 1: countries and then we would expect a lot of those 202 00:10:38,320 --> 00:10:42,199 Speaker 1: benefits to come through so um. But you know, particularly 203 00:10:42,200 --> 00:10:45,200 Speaker 1: with themergy market, it's simply it's just not a homogeneous market. 204 00:10:45,320 --> 00:10:48,360 Speaker 1: You have to be picking your country, is yourffective very 205 00:10:48,440 --> 00:10:51,160 Speaker 1: very carefully because there is a lot of differences, and 206 00:10:51,200 --> 00:10:54,400 Speaker 1: as we'll know, policy politics becomes really a far more 207 00:10:54,440 --> 00:10:57,920 Speaker 1: important issue for E. M. SEA. We've gotta leave it there. 208 00:10:57,920 --> 00:11:01,240 Speaker 1: It's gonna catch up. Appreciate principal Globe and Investors, chief 209 00:11:01,240 --> 00:11:10,440 Speaker 1: strategists out of London. What's more important? Que or race? 210 00:11:10,520 --> 00:11:12,040 Speaker 1: Let's bring it Steve a studio for more on that 211 00:11:12,080 --> 00:11:14,720 Speaker 1: from a zoo. Security is the chief US economists, Steve, 212 00:11:14,800 --> 00:11:17,400 Speaker 1: let's start there. You think that QUI is actually the 213 00:11:17,440 --> 00:11:20,000 Speaker 1: more important tool here? When someone and I sit, someone 214 00:11:20,080 --> 00:11:22,320 Speaker 1: like I sit to myself, sits here and says, you 215 00:11:22,360 --> 00:11:24,800 Speaker 1: know what, I think, QUI doesn't really matter. A hundred 216 00:11:24,840 --> 00:11:27,040 Speaker 1: twenty billion, a hundred eighty that doesn't make a difference. 217 00:11:27,040 --> 00:11:28,800 Speaker 1: Do you think it does make a difference, Steve White? 218 00:11:29,880 --> 00:11:31,400 Speaker 1: Do you think it does? Because I believe you know 219 00:11:31,440 --> 00:11:33,920 Speaker 1: you're living in a world of excess supply and therefore 220 00:11:33,960 --> 00:11:36,320 Speaker 1: what you need to do is you need to create 221 00:11:36,360 --> 00:11:40,800 Speaker 1: the liquidity that allows inflation rate to actually not get 222 00:11:40,880 --> 00:11:44,280 Speaker 1: sucked into a deflationary bias. And this has been the 223 00:11:44,320 --> 00:11:48,400 Speaker 1: feds ongoing risk by continuing to fall back into their 224 00:11:48,440 --> 00:11:51,480 Speaker 1: preemptive ways. And this is the thing that worries me 225 00:11:51,640 --> 00:11:54,200 Speaker 1: the most. You know, the interest rate dynamic, how it 226 00:11:54,200 --> 00:11:57,400 Speaker 1: affects the currency is not having any impact whatsoever on 227 00:11:57,440 --> 00:12:00,600 Speaker 1: the currency. You know, a difference between a year zero 228 00:12:00,679 --> 00:12:03,079 Speaker 1: interest rate level or you know, a five to ten 229 00:12:03,120 --> 00:12:05,959 Speaker 1: basis point negative isn't going to cause people to move 230 00:12:06,360 --> 00:12:10,240 Speaker 1: assets around globally and therefore affect the currency and then 231 00:12:10,280 --> 00:12:15,080 Speaker 1: expose US global import prices. But que does QUE one 232 00:12:15,160 --> 00:12:18,800 Speaker 1: worked very very well at avoiding the deflation initially during 233 00:12:18,840 --> 00:12:21,800 Speaker 1: the financial crisis. Q E two worked very very well 234 00:12:21,840 --> 00:12:24,760 Speaker 1: to do exactly the same thing. And it worked very 235 00:12:24,840 --> 00:12:27,640 Speaker 1: very well. And here until the FED began the process 236 00:12:27,720 --> 00:12:31,280 Speaker 1: of backing away from being preemptive, backing away from being 237 00:12:31,320 --> 00:12:34,880 Speaker 1: reactive to being preemptive, by laying out forecasts of when 238 00:12:34,880 --> 00:12:37,120 Speaker 1: they thought it would be appropriate to exe q E. 239 00:12:37,559 --> 00:12:39,880 Speaker 1: I don't think they should ever exec QI. I think 240 00:12:39,920 --> 00:12:41,680 Speaker 1: they have to trim it back to the pace of 241 00:12:41,760 --> 00:12:44,880 Speaker 1: nominal GDP growth and leave it an automatic pilot. This 242 00:12:44,960 --> 00:12:48,120 Speaker 1: is a huge call. They should never exit que and 243 00:12:48,280 --> 00:12:51,079 Speaker 1: the follow on here is they should never shrink their 244 00:12:51,120 --> 00:12:53,760 Speaker 1: balance sheet. The idea here that an a point two 245 00:12:53,840 --> 00:12:57,200 Speaker 1: trillion dollar FED balance sheet is not big enough. How 246 00:12:57,240 --> 00:13:00,840 Speaker 1: big should it be? Steve Well, I don't think there's 247 00:13:00,840 --> 00:13:02,720 Speaker 1: an answer to how big it should be. Let's take 248 00:13:02,760 --> 00:13:05,840 Speaker 1: a look. Five point four trillion of the big expansion 249 00:13:05,880 --> 00:13:09,800 Speaker 1: here was done under the environment of offsetting the huge 250 00:13:09,920 --> 00:13:12,560 Speaker 1: drag on the economy as a result of the COVID 251 00:13:12,640 --> 00:13:16,679 Speaker 1: nineteen lockdown mitigation strategy. That is, a one time, permanent 252 00:13:16,760 --> 00:13:19,959 Speaker 1: increase in the balance sheet, allowing the balance sheet to 253 00:13:20,040 --> 00:13:22,800 Speaker 1: then continue to grow at the pace of nominal GDP 254 00:13:23,520 --> 00:13:27,600 Speaker 1: suggests primarily that you're continuing to support the economy. You 255 00:13:27,679 --> 00:13:31,079 Speaker 1: want that level of nominal GDP to be consistent with 256 00:13:31,160 --> 00:13:34,319 Speaker 1: let's say a five percent nominal GDP growth, so you 257 00:13:34,360 --> 00:13:36,439 Speaker 1: can get a growth rate that's somewhere between two and 258 00:13:36,520 --> 00:13:38,880 Speaker 1: a half percent and an inflation of two to two 259 00:13:38,920 --> 00:13:41,240 Speaker 1: and a half percent, and therefore it gives you an 260 00:13:41,280 --> 00:13:45,599 Speaker 1: environment where you're supporting that inflationary bias in the economy 261 00:13:45,720 --> 00:13:48,800 Speaker 1: to avoid the bigger risk of falling into deflation, which 262 00:13:48,880 --> 00:13:52,120 Speaker 1: Japan has been done in for thirty years. Europe is 263 00:13:52,240 --> 00:13:55,400 Speaker 1: arguably in there now with thirty year ones trading in 264 00:13:55,440 --> 00:13:57,959 Speaker 1: the negative territory ten year ones down a mine is 265 00:13:58,040 --> 00:14:01,320 Speaker 1: fifty uh. Europe has gone on the deflation path. There's 266 00:14:01,440 --> 00:14:04,200 Speaker 1: arguments that China has gone down the deflation path or 267 00:14:04,320 --> 00:14:07,240 Speaker 1: is going down the deflation path. That's thirty percent of 268 00:14:07,280 --> 00:14:10,880 Speaker 1: global g d P A. They're all net creditors. We're 269 00:14:10,920 --> 00:14:14,080 Speaker 1: a net debtor. If we have deflation, it's a real problem. 270 00:14:14,559 --> 00:14:19,440 Speaker 1: Stephen Shuto, have you extended out this glide path from 271 00:14:19,440 --> 00:14:23,320 Speaker 1: a boom economy back to some form of normal? Have you, 272 00:14:23,400 --> 00:14:27,400 Speaker 1: in the last weeks, even the months, extended that out 273 00:14:27,440 --> 00:14:32,920 Speaker 1: into and indeed even twenty four Well, I mean you have. 274 00:14:33,080 --> 00:14:35,880 Speaker 1: I mean the reality is the stimulus that we're providing 275 00:14:36,000 --> 00:14:38,960 Speaker 1: is transfer me and to to a great extent, has 276 00:14:38,960 --> 00:14:41,640 Speaker 1: been a one sign transfer of wealth because households have 277 00:14:41,640 --> 00:14:45,160 Speaker 1: been allowed de leverage, which is good, increase their savings, 278 00:14:45,400 --> 00:14:48,240 Speaker 1: which is good. So we've taken wealth from the public 279 00:14:48,280 --> 00:14:51,360 Speaker 1: sector and we've given it to the private sector. That's 280 00:14:51,360 --> 00:14:55,600 Speaker 1: good as sure as you a longer sustained expansionary environment. 281 00:14:56,080 --> 00:14:58,160 Speaker 1: It doesn't tell you the rate of growth that you're 282 00:14:58,160 --> 00:15:00,840 Speaker 1: going to get. And I think in a globe deflationary 283 00:15:00,920 --> 00:15:03,880 Speaker 1: world where we have a trade deficit of seventy five 284 00:15:03,960 --> 00:15:08,120 Speaker 1: point seven billion dollars, where basically we've leaked a lot 285 00:15:08,160 --> 00:15:12,280 Speaker 1: of the stimulus transfer payments, the demand that was created overseas, 286 00:15:12,600 --> 00:15:15,680 Speaker 1: and yet they still can't get out of a deflationary bias. 287 00:15:15,720 --> 00:15:18,360 Speaker 1: You know, we're in an environment where we're gonna rapidly 288 00:15:18,480 --> 00:15:20,520 Speaker 1: turn back to that two to two and a quarter 289 00:15:20,560 --> 00:15:22,960 Speaker 1: percent growth rate in our forecast, or we get there 290 00:15:22,960 --> 00:15:27,200 Speaker 1: by stay just quickly plain rolls tomorrow seven see the estimate? 291 00:15:27,280 --> 00:15:30,080 Speaker 1: What are you looking for? Well, I'm slightly below that. 292 00:15:30,120 --> 00:15:32,880 Speaker 1: I'm in the seven fifty area. The reason for it, look, 293 00:15:32,920 --> 00:15:35,760 Speaker 1: even one of those numbers is great. Um. I just 294 00:15:35,800 --> 00:15:38,560 Speaker 1: think the seasonal factors are probably a little bit screwed 295 00:15:38,640 --> 00:15:42,360 Speaker 1: up given the volatility last year. And again, I don't 296 00:15:42,400 --> 00:15:45,760 Speaker 1: know how many of the seasonal workers relating to education 297 00:15:46,280 --> 00:15:48,680 Speaker 1: because a lot of the southern schools have already gone 298 00:15:48,720 --> 00:15:51,200 Speaker 1: back to uh to the classroom. Whether or not that 299 00:15:51,280 --> 00:15:54,920 Speaker 1: athmatic and manifests itself, especially in the Northeast area where 300 00:15:54,920 --> 00:15:57,320 Speaker 1: people are being a little bit more reluctant to start 301 00:15:57,360 --> 00:15:59,800 Speaker 1: bringing people back, not knowing what's gonna happen. Is we 302 00:15:59,880 --> 00:16:03,160 Speaker 1: go into the September school year, Steve, gotta cash up. 303 00:16:03,200 --> 00:16:05,720 Speaker 1: Let's get your thoughts, especially going into tomorrow, Steve, a 304 00:16:05,720 --> 00:16:09,600 Speaker 1: shoot out like that looking for eight seventy that's yourmmedian estimate. 305 00:16:09,680 --> 00:16:12,120 Speaker 1: The range is wide, wide, wide. It is always wide, 306 00:16:12,120 --> 00:16:20,440 Speaker 1: white white, these tys right now what I'm hearing from 307 00:16:20,480 --> 00:16:23,080 Speaker 1: so many people anecdotally thank you for the tweets and 308 00:16:23,120 --> 00:16:26,240 Speaker 1: the emails. We love getting them in. Is you really 309 00:16:26,280 --> 00:16:29,800 Speaker 1: like that we talked to experts on your fears of 310 00:16:29,880 --> 00:16:34,040 Speaker 1: the variants? Gig Gronville, Senior scholar at Johns Hopkins Center 311 00:16:34,080 --> 00:16:36,880 Speaker 1: for Health Security, and what are some so important to 312 00:16:36,920 --> 00:16:39,280 Speaker 1: your folks is? Dr Gronville is one of the nation's 313 00:16:39,360 --> 00:16:43,600 Speaker 1: leading protein chemists, where they work at Memorial Sloane Cuttering 314 00:16:44,000 --> 00:16:45,960 Speaker 1: over the years. G g I'm gonna cut to the chase. 315 00:16:46,000 --> 00:16:49,280 Speaker 1: We're not gonna make this leningers one oh one. There's 316 00:16:49,320 --> 00:16:54,160 Speaker 1: delta variant, there's lambda variant, and there's the spike protein. 317 00:16:54,680 --> 00:16:59,760 Speaker 1: What do our listeners and viewers need to fear, Well, 318 00:17:00,280 --> 00:17:04,160 Speaker 1: they don't need to fear variants. They're not magic. Um, 319 00:17:04,400 --> 00:17:08,000 Speaker 1: it's they from a from a broader perspective, from public health, 320 00:17:08,160 --> 00:17:11,680 Speaker 1: and these variants are making the disease harder to to end, 321 00:17:11,800 --> 00:17:15,160 Speaker 1: just making the pandemic harder to end. But all the 322 00:17:15,200 --> 00:17:18,960 Speaker 1: things that you can do for DELTA, all the things 323 00:17:18,960 --> 00:17:21,840 Speaker 1: that you should have been doing for alpha, they still work. 324 00:17:22,200 --> 00:17:25,399 Speaker 1: You still need to get vaccinated, UM, use a mask 325 00:17:25,640 --> 00:17:29,600 Speaker 1: of in areas of high transmission. UM, really pay attention 326 00:17:29,640 --> 00:17:35,520 Speaker 1: to air quality, get air hepa filtration devices for classrooms 327 00:17:35,520 --> 00:17:38,600 Speaker 1: and public spaces, and you know, and you should be 328 00:17:38,680 --> 00:17:43,200 Speaker 1: okay within the spike. And let's not get into d NA, 329 00:17:43,640 --> 00:17:45,720 Speaker 1: m r NA and the rest of it and the 330 00:17:45,960 --> 00:17:50,120 Speaker 1: very fancy Greek letters of your world. Do the vaccines 331 00:17:50,200 --> 00:17:53,159 Speaker 1: that we have now do they have a confidence to 332 00:17:53,280 --> 00:17:57,280 Speaker 1: carry over to these other variants or should we worry 333 00:17:57,359 --> 00:18:00,439 Speaker 1: about it like we worry about say, steph lecocca in 334 00:18:00,480 --> 00:18:05,840 Speaker 1: the bacteria world. Right, Yeah, so it is a concern, 335 00:18:05,960 --> 00:18:09,240 Speaker 1: but it's not something we've seen yet, and so people 336 00:18:09,280 --> 00:18:12,000 Speaker 1: don't need to worry that their vaccines are not effective 337 00:18:12,119 --> 00:18:15,000 Speaker 1: right now. What we're seeing is that UM, you know, 338 00:18:15,119 --> 00:18:20,200 Speaker 1: some there might be some fewer antibody responses from one 339 00:18:20,280 --> 00:18:23,200 Speaker 1: variant or another, but you're the vaccines are good. Thankfully, 340 00:18:23,280 --> 00:18:26,119 Speaker 1: your immune system is a little more complicated than just 341 00:18:26,280 --> 00:18:29,560 Speaker 1: one way of measuring it, and um, your immune system, 342 00:18:29,680 --> 00:18:32,560 Speaker 1: We've were involved, creatures. We've been going to war against 343 00:18:32,680 --> 00:18:36,000 Speaker 1: infectious diseases for a very long time. So, UM, you 344 00:18:36,080 --> 00:18:38,920 Speaker 1: know we're gonna be okay as long as you get 345 00:18:38,920 --> 00:18:42,320 Speaker 1: the vaccine. And if we need to have an updated one, um, 346 00:18:42,359 --> 00:18:44,240 Speaker 1: that will happen at some point in the future. But 347 00:18:44,400 --> 00:18:46,919 Speaker 1: things look good right now. We're evolved creatures. I like 348 00:18:47,040 --> 00:18:49,480 Speaker 1: that some of us are. Dr Gronville. There is a 349 00:18:49,640 --> 00:18:52,600 Speaker 1: question also about the booster shots, because, especially as we 350 00:18:52,640 --> 00:18:55,639 Speaker 1: hear from MODERNA that there m R and a vaccine 351 00:18:55,760 --> 00:19:00,840 Speaker 1: remains effective six months after the second the idea here 352 00:19:00,840 --> 00:19:04,919 Speaker 1: of nine efficacy basically being nearly the same as initially 353 00:19:05,000 --> 00:19:08,359 Speaker 1: does this basically remove the need for near term boosters 354 00:19:08,400 --> 00:19:10,840 Speaker 1: and lengthen the recovery time that we could potentially have 355 00:19:11,160 --> 00:19:15,280 Speaker 1: economically and socially. So just to clarify, so they saw 356 00:19:15,320 --> 00:19:18,320 Speaker 1: that efficacy six months out, that that doesn't mean that 357 00:19:18,440 --> 00:19:20,840 Speaker 1: the vaccine only last for six months. We think that 358 00:19:20,880 --> 00:19:23,960 Speaker 1: the vaccines will last potentially for years before you might 359 00:19:24,000 --> 00:19:26,480 Speaker 1: need a booster. And yes, you're right that that probably 360 00:19:26,520 --> 00:19:29,920 Speaker 1: means that for most people they will not need a booster. 361 00:19:29,960 --> 00:19:33,359 Speaker 1: I think most people are thinking boosters might be necessary 362 00:19:33,680 --> 00:19:37,560 Speaker 1: or probably will be necessary for people who have um 363 00:19:37,600 --> 00:19:42,360 Speaker 1: IM you know, compromise it. You position there's uh conditions 364 00:19:42,400 --> 00:19:45,840 Speaker 1: like they might have had a liver transplant, or they 365 00:19:45,880 --> 00:19:49,199 Speaker 1: are very elderly, or they have some other condition that 366 00:19:49,320 --> 00:19:52,040 Speaker 1: is going to lead to them needing to have a 367 00:19:52,080 --> 00:19:55,280 Speaker 1: booster shot. Meanwhile, that's good news. On the bad news, 368 00:19:55,320 --> 00:19:58,399 Speaker 1: the vaccine has not prevented the spread of the delta variant. 369 00:19:58,640 --> 00:20:00,879 Speaker 1: Is it a feudal goal to try to eliminate the 370 00:20:00,920 --> 00:20:05,960 Speaker 1: circulation entirely of these viruses? We're not, um So, any 371 00:20:06,000 --> 00:20:08,960 Speaker 1: talk of eradication just put that out of your mind. 372 00:20:09,160 --> 00:20:11,560 Speaker 1: Um it's not going to happen. Um This is a 373 00:20:11,640 --> 00:20:15,120 Speaker 1: virus that's very It called a generalist virus. It infects 374 00:20:15,119 --> 00:20:19,360 Speaker 1: other animals. People have gotten infected from animals from there, 375 00:20:19,400 --> 00:20:22,320 Speaker 1: from mink, it's gone to mank and back, and it 376 00:20:22,400 --> 00:20:25,359 Speaker 1: probably has gone to two pets and back too. But 377 00:20:25,440 --> 00:20:29,320 Speaker 1: we haven't seen that yet. Um So, I that's not 378 00:20:29,359 --> 00:20:32,120 Speaker 1: going to happen. But we can make it something that 379 00:20:32,320 --> 00:20:35,240 Speaker 1: is not going to cause people from the hospital and 380 00:20:35,520 --> 00:20:37,879 Speaker 1: that's really you know, what we need to to be 381 00:20:37,960 --> 00:20:41,880 Speaker 1: focused on. We need to prevent morbidity and mortality. Dr 382 00:20:41,920 --> 00:20:44,840 Speaker 1: Granville John Ferrald is really focused on China, the dynamics 383 00:20:44,880 --> 00:20:47,520 Speaker 1: of this pandemic in China, and we've had reports from 384 00:20:47,960 --> 00:20:50,840 Speaker 1: experts there that this time is different. How do you 385 00:20:50,880 --> 00:20:55,480 Speaker 1: interpret the size, the scope, the scale of China and 386 00:20:55,520 --> 00:21:01,840 Speaker 1: their ability to contain to diminish hospitalizations and deaths UM. 387 00:21:01,920 --> 00:21:05,359 Speaker 1: China has some uh, some ability to move in different 388 00:21:05,359 --> 00:21:08,720 Speaker 1: directions and require things that other places do not. UM. 389 00:21:08,720 --> 00:21:11,800 Speaker 1: But humans are the same everywhere and UM. I think 390 00:21:11,800 --> 00:21:15,960 Speaker 1: people UM have a natural tendency to congregate and UM. 391 00:21:16,000 --> 00:21:18,640 Speaker 1: So that's going to be a challenge in combating any 392 00:21:18,680 --> 00:21:22,240 Speaker 1: infectious disease UM that has passed from person to person 393 00:21:22,800 --> 00:21:25,800 Speaker 1: and UM, and it can be counterproductive if you're not 394 00:21:26,080 --> 00:21:29,960 Speaker 1: fully getting all the information that you need. UM. But yes, 395 00:21:30,000 --> 00:21:34,320 Speaker 1: this variant is definitely more challenging than others because people 396 00:21:34,359 --> 00:21:36,879 Speaker 1: have a lot more virus in their nose UM, and 397 00:21:36,920 --> 00:21:39,760 Speaker 1: they're breathing more out and so they're in they're infectious 398 00:21:39,840 --> 00:21:42,520 Speaker 1: for longer. And so that's UH, that's why it's going 399 00:21:42,560 --> 00:21:44,760 Speaker 1: to be a challenge for even countries that have done 400 00:21:44,840 --> 00:21:47,200 Speaker 1: very well with the with the disease so far. Doctor, 401 00:21:47,240 --> 00:21:49,200 Speaker 1: always enjoy catching up with you. Thanks for your time 402 00:21:49,240 --> 00:21:54,160 Speaker 1: this morning. Sitia Scola's Health Can Center for Health Security 403 00:21:54,320 --> 00:22:02,280 Speaker 1: at the Bloomberg School of Public Health. Yeah, we all 404 00:22:02,359 --> 00:22:05,920 Speaker 1: have our litmus paper of a daily pricing. Long ago 405 00:22:05,960 --> 00:22:08,159 Speaker 1: and far away it used to be a court of 406 00:22:08,200 --> 00:22:11,680 Speaker 1: melk and for so many today it is what does 407 00:22:11,720 --> 00:22:14,400 Speaker 1: an uber cost, what does a lift cost? And all 408 00:22:14,400 --> 00:22:17,960 Speaker 1: the rest of it, the transportation for our offspring, our 409 00:22:18,000 --> 00:22:22,960 Speaker 1: own transportation, get out sometimes, Lisa Bramwood says, and add 410 00:22:23,080 --> 00:22:27,480 Speaker 1: up the bill. It becomes big. Big is the word 411 00:22:27,560 --> 00:22:32,280 Speaker 1: we would operate on. That's very true. Right now with 412 00:22:32,440 --> 00:22:35,520 Speaker 1: a big interview, with the definitive interview on all this 413 00:22:35,760 --> 00:22:40,639 Speaker 1: right hailing our Emily Chang with the Uber CEO. Here's 414 00:22:40,640 --> 00:22:44,560 Speaker 1: Emily Chang. Welcome to our Bloomberg television and radio audiences. 415 00:22:44,600 --> 00:22:46,920 Speaker 1: I'm Emily Chang in San Francisco and joining us now 416 00:22:47,160 --> 00:22:50,000 Speaker 1: Uber CEO. Dara Cosra shahy Dar. Great to have you 417 00:22:50,080 --> 00:22:53,680 Speaker 1: back here on the show. Of course we're following earnings 418 00:22:53,720 --> 00:22:56,720 Speaker 1: be on the top and bottom lines, but losses five 419 00:22:57,359 --> 00:23:00,119 Speaker 1: million dollars I know you say that will narrow significantly 420 00:23:00,560 --> 00:23:02,720 Speaker 1: in the next quarter, but the delta variant is ripping 421 00:23:02,800 --> 00:23:05,520 Speaker 1: up the playbook yet again. How are you seeing this 422 00:23:05,560 --> 00:23:09,840 Speaker 1: play out on the roads? What markets are struggling the most. Yeah, 423 00:23:09,880 --> 00:23:13,520 Speaker 1: I think it's interesting to see the effective delta. Overall, 424 00:23:13,600 --> 00:23:16,000 Speaker 1: we're really happy with the results the top line beat. 425 00:23:17,000 --> 00:23:20,160 Speaker 1: We knew that we needed to get more drivers out 426 00:23:20,320 --> 00:23:24,000 Speaker 1: driving and couriers delivering because the demand was growing so quickly, 427 00:23:24,440 --> 00:23:28,119 Speaker 1: so we leaned in to really increased courier supply and 428 00:23:28,240 --> 00:23:32,480 Speaker 1: driver supply, and we added four hundred twenty thousand couriers 429 00:23:32,680 --> 00:23:36,680 Speaker 1: UH and drivers UH. During the quarter between kind of 430 00:23:36,760 --> 00:23:40,520 Speaker 1: June and February, UH added another hundred ten thousand with 431 00:23:40,640 --> 00:23:44,560 Speaker 1: mostmates curiers as well. So we're really getting the earner 432 00:23:44,680 --> 00:23:47,840 Speaker 1: force out there, and it's resulted in top line volumes 433 00:23:47,840 --> 00:23:51,240 Speaker 1: that are very very strong UH, and it's putting us 434 00:23:51,240 --> 00:23:53,119 Speaker 1: on a path where Q three losses are going to 435 00:23:53,200 --> 00:23:55,600 Speaker 1: come down significantly in Q four, we're gonna hit epidot 436 00:23:55,640 --> 00:23:59,720 Speaker 1: profitability as well. As far as the delta goes, it's 437 00:23:59,760 --> 00:24:02,800 Speaker 1: did fel cool to tell what the effect is except 438 00:24:02,840 --> 00:24:05,840 Speaker 1: for markets that have closed down, So Sydney, for example, 439 00:24:06,680 --> 00:24:09,600 Speaker 1: has really shut down the mobility business comes down, but 440 00:24:09,640 --> 00:24:13,920 Speaker 1: our delivery business grows very significantly, and we ned out, 441 00:24:13,960 --> 00:24:20,120 Speaker 1: for example on Sydney at ahead of of nineteen volumes. 442 00:24:20,160 --> 00:24:24,160 Speaker 1: So overall we have this great hedge between mobility and delivery. 443 00:24:24,200 --> 00:24:26,040 Speaker 1: But when we look at city by city, you look 444 00:24:26,040 --> 00:24:27,720 Speaker 1: at the New York, you look at the Paris, you 445 00:24:27,760 --> 00:24:30,679 Speaker 1: look at an l A, etcetera, it's very hard to 446 00:24:30,720 --> 00:24:33,399 Speaker 1: discern any patterns. As far as delta bills, we'll be 447 00:24:33,440 --> 00:24:37,639 Speaker 1: watching very closely. We're gonna talk about eats in a second, 448 00:24:38,160 --> 00:24:40,800 Speaker 1: but you know, in terms of right hailing, look, I've 449 00:24:40,840 --> 00:24:43,639 Speaker 1: taken about ten Uber's in the last month after not 450 00:24:43,680 --> 00:24:46,119 Speaker 1: taking any for a year and a half. Sometimes it's 451 00:24:46,119 --> 00:24:48,080 Speaker 1: their intu and it's sometimes it's there in twenty minutes. 452 00:24:48,119 --> 00:24:52,000 Speaker 1: Sometimes you're welcome, Sometimes I get canceled on. So when 453 00:24:52,000 --> 00:24:55,440 Speaker 1: do you foresee a more consistent balance of supply and demand. 454 00:24:56,280 --> 00:24:58,520 Speaker 1: So Emily, this is exactly why we really meaned it 455 00:24:58,560 --> 00:25:01,040 Speaker 1: in Q two. We wanted to at the Uber service 456 00:25:01,119 --> 00:25:04,159 Speaker 1: back to predictable prices that you can expect, e T 457 00:25:04,400 --> 00:25:06,399 Speaker 1: s that you can expect, and e T s and 458 00:25:06,480 --> 00:25:11,719 Speaker 1: prices are coming back to historical levels. UH in states 459 00:25:11,720 --> 00:25:15,160 Speaker 1: like Texas, Florida, et cetera. They're getting there faster. New 460 00:25:15,240 --> 00:25:18,520 Speaker 1: York is in better shape. So it's really location by location, 461 00:25:18,920 --> 00:25:21,680 Speaker 1: but we are consistently seeing e t as and prices 462 00:25:21,680 --> 00:25:25,960 Speaker 1: come down. I think that by September, October November, you're 463 00:25:26,000 --> 00:25:29,040 Speaker 1: gonna get that magical uber experience that you've all you've 464 00:25:29,080 --> 00:25:31,600 Speaker 1: always been used to. And we're leaning as a as 465 00:25:31,640 --> 00:25:35,680 Speaker 1: a company to get there as quickly as possible. And 466 00:25:35,760 --> 00:25:38,640 Speaker 1: you're spending a lot to get drivers back out there, 467 00:25:38,680 --> 00:25:41,560 Speaker 1: two million dollars in the last quarter. But you've said 468 00:25:41,600 --> 00:25:44,440 Speaker 1: you can taper incentives through the rest of the year 469 00:25:44,760 --> 00:25:47,800 Speaker 1: lifts as they're amping up their insensives. So what makes 470 00:25:47,800 --> 00:25:50,720 Speaker 1: you so confident you can win drivers back if you 471 00:25:50,720 --> 00:25:54,280 Speaker 1: whittle years down. Well, because we're seeing the drivers come back. 472 00:25:54,280 --> 00:25:58,720 Speaker 1: Four came came back uh in just a couple of months. 473 00:25:59,040 --> 00:26:01,040 Speaker 1: And what we're seeing in Joe I is, you know, 474 00:26:01,080 --> 00:26:04,160 Speaker 1: we started with incentives to really get drivers out there, 475 00:26:04,280 --> 00:26:10,280 Speaker 1: but we're moving from essentially incentives to improving our onboarding processing. 476 00:26:10,359 --> 00:26:15,200 Speaker 1: We reduced onboarding time by nine with a new much 477 00:26:15,240 --> 00:26:20,359 Speaker 1: smoother onboarding process. We're reaching out to drivers who had 478 00:26:20,400 --> 00:26:22,840 Speaker 1: stopped driving to resurrect them to get back on the road. 479 00:26:23,000 --> 00:26:26,320 Speaker 1: That has been enormously successful as well. So in July, 480 00:26:26,480 --> 00:26:29,640 Speaker 1: for example, we were able to tap our incentives. We're 481 00:26:29,680 --> 00:26:33,720 Speaker 1: targeting them much more specifically in the cities where we needed, 482 00:26:33,960 --> 00:26:37,160 Speaker 1: when we needed. And at the same time, new drivers 483 00:26:37,160 --> 00:26:39,840 Speaker 1: who signed up in July were up thirty month on 484 00:26:39,960 --> 00:26:42,720 Speaker 1: month from from Julia. So we're seeing the numbers. They're 485 00:26:42,760 --> 00:26:45,159 Speaker 1: really encouraging, and we're not assuming that we're going to 486 00:26:45,200 --> 00:26:48,200 Speaker 1: get any better, even though based on our technology and 487 00:26:48,200 --> 00:26:50,200 Speaker 1: the systems that we have in place, we do think 488 00:26:50,240 --> 00:26:52,600 Speaker 1: we can get more targeted and better in terms of 489 00:26:52,600 --> 00:26:58,360 Speaker 1: onboarding drivers and couriers and obviously no profitability really important milestone. 490 00:26:58,400 --> 00:27:00,439 Speaker 1: You've promised you're still going to hit that before the 491 00:27:00,520 --> 00:27:02,000 Speaker 1: end of the year, but what are the chances that 492 00:27:02,040 --> 00:27:04,560 Speaker 1: Delta could shake that up to What are the chances 493 00:27:04,600 --> 00:27:07,200 Speaker 1: you don't hit that milestone? You know? The good news 494 00:27:07,200 --> 00:27:09,600 Speaker 1: for us is that we we have the head right 495 00:27:09,680 --> 00:27:13,320 Speaker 1: so if if mobility gets hit because of Delta, we 496 00:27:13,400 --> 00:27:16,600 Speaker 1: see the delivery business growing, and we've also say that 497 00:27:16,760 --> 00:27:19,160 Speaker 1: the delivery business is going to get bit up profitable 498 00:27:19,240 --> 00:27:23,359 Speaker 1: by Q four as well, so we think we're reasonably protected. Obviously, 499 00:27:23,440 --> 00:27:26,520 Speaker 1: it's a very very uncertain environment. But we're the only 500 00:27:26,600 --> 00:27:29,760 Speaker 1: company out there that's leading in mobility on a global 501 00:27:29,800 --> 00:27:32,960 Speaker 1: basis outside of China, that's leading in delivery on a 502 00:27:32,960 --> 00:27:36,560 Speaker 1: global global basis outside of China. These businesses are now 503 00:27:36,880 --> 00:27:40,800 Speaker 1: strengthening each other, and actually customers who use both mobility 504 00:27:40,800 --> 00:27:44,920 Speaker 1: and delivery count for nearly fifty of our growth spookings 505 00:27:45,040 --> 00:27:47,960 Speaker 1: on a global basis. So if you stay home, you're 506 00:27:47,960 --> 00:27:49,960 Speaker 1: gonna use Eats, If you want to get out to 507 00:27:50,000 --> 00:27:53,960 Speaker 1: a restaurant, you're gonna use classic Umber. Uh. That is 508 00:27:53,960 --> 00:27:58,760 Speaker 1: a strength and the unique strength that we burn. Now, 509 00:27:58,920 --> 00:28:01,439 Speaker 1: last time we spoke, you talked about how you've basically 510 00:28:01,480 --> 00:28:05,119 Speaker 1: built another Uber. There's Uber ridesharing and Uber eats. When 511 00:28:05,160 --> 00:28:08,080 Speaker 1: you look five years at which Uber is bigger. You know, 512 00:28:08,119 --> 00:28:11,760 Speaker 1: you're obviously expanding into grocery, you're expanding into instant delivery. 513 00:28:12,080 --> 00:28:14,280 Speaker 1: Um but but but how do the two Are the 514 00:28:14,440 --> 00:28:18,480 Speaker 1: two Uber still twins or or something else? Emily, you're 515 00:28:18,560 --> 00:28:21,760 Speaker 1: making me choose between my kids. I'd much rather have 516 00:28:21,880 --> 00:28:25,480 Speaker 1: them compete. You've got a team that's growing our Uber business. 517 00:28:25,480 --> 00:28:27,960 Speaker 1: We've got a team that's growing our eats business. They're 518 00:28:27,960 --> 00:28:30,600 Speaker 1: going to compete with each other. Uh, and you know, 519 00:28:30,680 --> 00:28:33,040 Speaker 1: we'll see who wins. I do think that the delivery 520 00:28:33,119 --> 00:28:36,919 Speaker 1: total addressable market. You know, we've expanded delivery from just 521 00:28:37,160 --> 00:28:41,360 Speaker 1: restaurants now to grocery. We're getting into alcohol delivery, we're 522 00:28:41,360 --> 00:28:44,560 Speaker 1: delivering for Apple, will deliver a and an iPhone to 523 00:28:44,640 --> 00:28:48,320 Speaker 1: your home. So the total addressable market for the delivery 524 00:28:48,320 --> 00:28:51,840 Speaker 1: business is probably bigger. But as it relates to Uber, 525 00:28:52,000 --> 00:28:56,800 Speaker 1: we're getting into transit. We're wiring up taxi cabs, two wheelers, 526 00:28:56,840 --> 00:28:59,400 Speaker 1: three wheelers. So it's gonna be a great competition and 527 00:28:59,440 --> 00:29:01,400 Speaker 1: I'm going to be bushing both of them to grow 528 00:29:01,720 --> 00:29:07,040 Speaker 1: as fast as possible. You are doubling down on freight 529 00:29:07,240 --> 00:29:11,160 Speaker 1: bought Transplace last month two point five billion dollars that 530 00:29:11,600 --> 00:29:15,320 Speaker 1: make software that helps companies manage their supply chains, manage logistics. 531 00:29:15,320 --> 00:29:18,440 Speaker 1: What's the vision to own that? What's the vision to 532 00:29:18,480 --> 00:29:22,280 Speaker 1: own supply and logistics? Well, I think you hear all 533 00:29:22,320 --> 00:29:25,800 Speaker 1: the time now how supply chain has become a problem 534 00:29:25,800 --> 00:29:27,600 Speaker 1: for a lot of companies and it's becoming a much 535 00:29:27,680 --> 00:29:31,960 Speaker 1: more important part of how they operate. Fift of Uber 536 00:29:32,000 --> 00:29:35,880 Speaker 1: Freights customers are actually a consumer package of goods makers, brands, 537 00:29:35,880 --> 00:29:39,360 Speaker 1: et cetera, the same brands that were delivering for you know, 538 00:29:39,480 --> 00:29:43,320 Speaker 1: corner shop into your home. So we think with Transplace, 539 00:29:43,680 --> 00:29:46,280 Speaker 1: we're going to be helping these brands actually managed our 540 00:29:46,320 --> 00:29:49,920 Speaker 1: supply chain. With Uber Freight, we are connecting them to 541 00:29:50,000 --> 00:29:53,120 Speaker 1: the shippers that can get the food or the water, 542 00:29:53,520 --> 00:29:56,440 Speaker 1: or the sodas or the beer from the warehouse to 543 00:29:56,480 --> 00:30:01,440 Speaker 1: the store. And with eats we can get uh that 544 00:30:01,440 --> 00:30:05,400 Speaker 1: that soda or food from the store to the home. Uh. 545 00:30:05,440 --> 00:30:08,200 Speaker 1: It is There's no one else that is building this 546 00:30:08,360 --> 00:30:12,320 Speaker 1: kind of end to end logistics infrastructure powered by machine 547 00:30:12,400 --> 00:30:15,440 Speaker 1: learning that understands where you are, when you are and 548 00:30:15,480 --> 00:30:18,400 Speaker 1: can make that chain the most efficient. That's really what 549 00:30:18,440 --> 00:30:21,880 Speaker 1: we're building. Uh. And the Translats team is just dynamite, 550 00:30:21,920 --> 00:30:24,239 Speaker 1: so we would be very happy to have them as 551 00:30:24,240 --> 00:30:27,920 Speaker 1: part of that. We were family. You've pushed back your 552 00:30:27,920 --> 00:30:32,400 Speaker 1: return to work. You're mandating vaccines for your corporate employees. 553 00:30:32,440 --> 00:30:34,920 Speaker 1: You did have a COVID exposure at a board meeting, 554 00:30:35,080 --> 00:30:38,280 Speaker 1: and and look that delta is real. It is scary. 555 00:30:38,480 --> 00:30:42,200 Speaker 1: You're not mandating vaccines for drivers. How are you thinking 556 00:30:42,600 --> 00:30:45,520 Speaker 1: about this? Instat cart CEO just told me they're debating 557 00:30:45,520 --> 00:30:47,920 Speaker 1: it for shoppers, is it at all on the table? 558 00:30:48,760 --> 00:30:51,320 Speaker 1: It's it's you know, these are subjects that we talk 559 00:30:51,400 --> 00:30:53,400 Speaker 1: about all the time. I do think that is different 560 00:30:53,400 --> 00:30:56,120 Speaker 1: when you're talking about employees are spending eight hours a 561 00:30:56,200 --> 00:30:59,880 Speaker 1: day in an office. And remember, for us UM the 562 00:31:00,120 --> 00:31:02,720 Speaker 1: big issues if we mandated for drivers, I think we'd 563 00:31:02,720 --> 00:31:05,480 Speaker 1: have to mandate it for riders as well. And when 564 00:31:05,520 --> 00:31:09,520 Speaker 1: you have a company that has a has essentially a 565 00:31:09,640 --> 00:31:15,200 Speaker 1: hundred million riders and drivers using the service every single month, 566 00:31:15,440 --> 00:31:19,080 Speaker 1: I don't think that UH. To have a company have 567 00:31:19,240 --> 00:31:23,280 Speaker 1: the power to mandate vaccinations over a hundred thousand, a 568 00:31:23,360 --> 00:31:26,760 Speaker 1: hundred million people who are moving around UM is probably 569 00:31:26,760 --> 00:31:28,840 Speaker 1: the right call. So we are going to work with 570 00:31:28,920 --> 00:31:31,800 Speaker 1: governments based on government mandates, local mandates, we're going to 571 00:31:31,840 --> 00:31:35,480 Speaker 1: follow them. And at the same time, we're pushing very 572 00:31:35,680 --> 00:31:40,800 Speaker 1: very hard to help drivers, couriers, riders get vascinated, often 573 00:31:40,800 --> 00:31:44,160 Speaker 1: providing vaccinations for free or transportation to vascinations for free. 574 00:31:44,160 --> 00:31:48,480 Speaker 1: So we're absolutely doing your park. We are coming up 575 00:31:48,480 --> 00:31:52,600 Speaker 1: on your four year uber versary, so congratulations on that. 576 00:31:52,720 --> 00:31:54,760 Speaker 1: The New York Times recently called you the dad of 577 00:31:54,840 --> 00:31:59,040 Speaker 1: Silicon Valley, a start contrast to your predecessor. As you 578 00:31:59,080 --> 00:32:03,240 Speaker 1: look out on the next four years from a cultural perspective, 579 00:32:03,520 --> 00:32:06,000 Speaker 1: what are your priorities, you know, especially when it comes 580 00:32:06,040 --> 00:32:09,480 Speaker 1: to diversity and building uh, you know, a more inclusive workforce. 581 00:32:09,600 --> 00:32:13,120 Speaker 1: What's the company and the culture that you want to build? Well, 582 00:32:13,160 --> 00:32:14,600 Speaker 1: I think the kind of company that we want to 583 00:32:14,600 --> 00:32:19,920 Speaker 1: build are full of entrepreneurs who want to have impact 584 00:32:20,480 --> 00:32:23,920 Speaker 1: and impact in the broadest way but in real life. Right. 585 00:32:24,080 --> 00:32:27,840 Speaker 1: The service that we are building essentially will allow people 586 00:32:27,880 --> 00:32:32,920 Speaker 1: to go anywhere, get anything into their homes and and 587 00:32:32,920 --> 00:32:36,320 Speaker 1: and millions of people learned that comes with a lot 588 00:32:36,400 --> 00:32:39,040 Speaker 1: of responsibilities. So we want entrepreneurs who want to build, 589 00:32:39,080 --> 00:32:42,440 Speaker 1: but they want to build responsibly, and diversity is a 590 00:32:42,480 --> 00:32:44,640 Speaker 1: big part of that. We need to have that diversity 591 00:32:44,760 --> 00:32:48,360 Speaker 1: in our workforce because we certainly have that diversity in 592 00:32:48,480 --> 00:32:52,520 Speaker 1: our earner base and our courier base. Uh. And ultimately 593 00:32:52,600 --> 00:32:54,360 Speaker 1: that is going to help us build a better product. 594 00:32:54,400 --> 00:32:56,920 Speaker 1: But it's all about impact in the real world, and 595 00:32:56,960 --> 00:32:59,920 Speaker 1: we've got a lot of people who are incredibly excited 596 00:33:00,040 --> 00:33:03,640 Speaker 1: to build our go get vision uber CEO dark Hosra Shall, 597 00:33:03,960 --> 00:33:06,000 Speaker 1: thanks so much for joining us today. Great to have you. 598 00:33:06,080 --> 00:33:09,840 Speaker 1: Thank you. Emily Chang in conversation with a gentleman running 599 00:33:09,840 --> 00:33:15,000 Speaker 1: a dynamic business as well. This is the Bloomberg Surveillance Podcast. 600 00:33:15,240 --> 00:33:18,600 Speaker 1: Thanks for listening. Join us live weekdays from seven to 601 00:33:18,720 --> 00:33:22,760 Speaker 1: ten am Eastern on Bloomberg Radio and on Bloomberg Television 602 00:33:23,120 --> 00:33:27,120 Speaker 1: each day from six to nine am for insight from 603 00:33:27,160 --> 00:33:31,680 Speaker 1: the best in economics, finance, investment, and international relations. And 604 00:33:31,800 --> 00:33:36,920 Speaker 1: subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg 605 00:33:37,000 --> 00:33:40,320 Speaker 1: dot com, and of course on the terminal. I'm Tom 606 00:33:40,400 --> 00:33:42,760 Speaker 1: Keene and this is Bloomberg