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

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jay Ley, 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 on Apple podcast, Suncloud, Bloomberg

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Speaker 1: dot Com, and of course, on the Bloomberg terminal. Thomas

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Speaker 1: Purcelli joins his chief US economists with RBC Capital Markets.

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Speaker 1: Tom Purcelli, how much of this new inflation is wage

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Speaker 1: inflation and what does the FETE do about it? Yeah,

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Speaker 1: so I think here's here's what I think is really

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Speaker 1: very interesting about about this inflation report. In particular, I

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Speaker 1: think what we need to keep in mind is those waitings.

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Speaker 1: I think those waitings gonna there's new waitings. I think

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Speaker 1: they're going to haunt inflation for the next few months. Um.

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Speaker 1: You know, you now have a bigger weight on goods.

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Speaker 1: And as we've been writing about for quite some time,

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Speaker 1: the thing that's really doing most of the driving from

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Speaker 1: an inflation perspective is really good prices and make a mistakes.

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Speaker 1: Services are certainly um starting the process of of amping

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Speaker 1: up here a little bit. But this is really a

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Speaker 1: sort of a goods dominated UM inflation backdrop. And what's

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Speaker 1: interesting about that is this new waiting. The waiting is

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Speaker 1: now about one and a half percentage points more weight

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Speaker 1: toward goods UM, which again just keep in mind that's uh,

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Speaker 1: this is sort of an interesting thing in the context

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Speaker 1: of we are a service dominated economy, but goods now

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Speaker 1: have a bigger weight. That's obviously a reflection of what

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Speaker 1: happened last year. People were spending uh, you know, um

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Speaker 1: a lot of this extra money that they had on goods,

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Speaker 1: not services. So I think what's gonna wind up happening is,

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Speaker 1: you know, if if the transition from goods to services

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Speaker 1: spending um uh you know is sort of slower to

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Speaker 1: evolve UM this year, and then we think that probably

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Speaker 1: will be the case. That means that you could actually

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Speaker 1: continue to see some some additional upward pressure on in

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Speaker 1: lation because of this this new bigger weight on on goods.

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Speaker 1: I think that's a really sort of an interesting thing

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Speaker 1: that that not a lot of people are talking about.

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Speaker 1: But here's the but here's the punch line time to

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Speaker 1: all of this. While I think that that will be

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Speaker 1: the case for the next you know, sort of you

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Speaker 1: call it the next couple of months, few months where

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Speaker 1: you'll see continued upward pressure from goods. I think what's

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Speaker 1: gonna want up happening this year is that this transition

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Speaker 1: is going to happen from people basically spending a lot

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Speaker 1: on goods and shifting to services. And so what will

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Speaker 1: want up happening I think as the year progresses is

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Speaker 1: that this new firm weight UM in goods will actually

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Speaker 1: want of acting as an anchor around the neck of

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Speaker 1: goods prices. So as people shift from goods to services spending,

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Speaker 1: we think that that will actually want to putting some

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Speaker 1: pretty notable downward pressure UM in the good space. I

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Speaker 1: want to be clear, you know, that's the anatomy of

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Speaker 1: what we see happening over the balance of the year. UM.

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Speaker 1: I think in the immediate term, I do think that

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Speaker 1: you're going to see continued up pressure so so so Tom,

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Speaker 1: I think, and again it's not to not answer your

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Speaker 1: question directly, but I think that that's the thing that's

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Speaker 1: really sort of doing most of the drive from from

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Speaker 1: from an inflation perspective, the consumers are in a great

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Speaker 1: spot from a wage perspective, you know, to sort of

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Speaker 1: the continue to sort of drive UM to drive spending.

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Speaker 1: I mean, look, we all we live in a nominal world,

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Speaker 1: whether that's you know, sort of a better or worse idea. Um.

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Speaker 1: But and so I think that that, you know, sort

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Speaker 1: of gives the consumers some some confidence to be able

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Speaker 1: to spend. But but again, I think that you're going

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Speaker 1: to see this transition away and I think goods prices

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Speaker 1: could actually start the process of slowing pretty meaningfully. Again

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Speaker 1: give that, give that a handful of months. But I

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Speaker 1: think that's probably where we're going to get me too, March,

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Speaker 1: because we need to do March first, middle of March,

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Speaker 1: March six, the fed mates what's on the table and

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Speaker 1: what on earth happens with that dolt plot. Yeah, so

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Speaker 1: I think that you know, you're looking at probably for

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Speaker 1: four hikes this year. Um uh, you know the fedt

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Speaker 1: is gonna go twenty five to start this process off.

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Speaker 1: I mean, look again, you know, I love that the

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Speaker 1: pal keeps on saying, you know, they want to be

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Speaker 1: humble and they want humility. Look at all, Frank this

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Speaker 1: they should have had that last year, all of last year.

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Speaker 1: I think what they actually need now this year is

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Speaker 1: also a hefty dose of patients because I think if

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Speaker 1: the patients will be rewarded. If they do not get

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Speaker 1: aggressive here early on in the cycle, inflation is going

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Speaker 1: to start the process of slowing at a minimum base

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Speaker 1: effects are going to eat into the year and year pace.

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Speaker 1: But if I'm right about this transition from goods to

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Speaker 1: services um spending and that taking quite a bit of

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Speaker 1: the heat off of this this you know, sort of

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Speaker 1: the singular component that now has a bigger weight that's

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Speaker 1: been doing a lot of the driving. I think that

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Speaker 1: they can they if they have a bit of patients,

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Speaker 1: they can avoid a fifty, They can avoid going every

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Speaker 1: meeting over the balance of the year. Um. But you

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Speaker 1: know it's that's repelled to decide where does the balance

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Speaker 1: sheet come into play here, Tom, Because it's not just

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Speaker 1: about the rate hYP mechanism. Yeah, no, I think that's true.

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Speaker 1: I mean, look, and this is I don't know how

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Speaker 1: much time we have. This is I'll try to I'll

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Speaker 1: try to keep this part of it tight. Also simply say,

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Speaker 1: is QT is not the mirror image of q E.

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Speaker 1: That's not the how it works with q E. You

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Speaker 1: know the amount of duration that the FED is pulling

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Speaker 1: out of the market right there buying you know X

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Speaker 1: number of ten Eccember of seven, etcetera. We know that definitively.

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Speaker 1: With QT, you do not know the amount of duration

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Speaker 1: that's being added back into the market because what happens

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Speaker 1: when the Fed basically starts the process of unwanting to

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Speaker 1: balance you, they create a funding gap between themselves and

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Speaker 1: the Treasury, and so it's the Treasury that decides what

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Speaker 1: duration is going to be added back into the market. So,

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Speaker 1: in other words, if the if the treasure is going

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Speaker 1: to meet the funding gap with you know, loading up

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Speaker 1: on bills, well then there's no duration added back into

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Speaker 1: the market. And we think that's actually what they're gonna

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Speaker 1: want to do, because bills is a relative too. I'm

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Speaker 1: totally outstanding is actually pretty pretty small time. I got

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Speaker 1: a bright to hit, so if I've got a few seconds,

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Speaker 1: But let me just put a conclusion on this with you.

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Speaker 1: Are you saying this gets worse before it gets bets up.

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Speaker 1: I don't think there is any question about that. But

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Speaker 1: again I think you live with a live with it

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Speaker 1: being a little bit worse because I think by the

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Speaker 1: end of the year it will be quite a bit better.

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Speaker 1: Of BC Capital markets, TM, we appreciate you, so we

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Speaker 1: always do thank you. If you are in the stock market,

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Speaker 1: you need to stop what you're doing now and listen

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Speaker 1: to one William Booth. Bill Booth is an epic and

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Speaker 1: they have a method, they have a style, and you

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Speaker 1: need it when it's a bull market, you need it

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Speaker 1: when it's a bear market, and you really need it.

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Speaker 1: Among the historic tumult of the moment, the tenure yield

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Speaker 1: touching up two percent, we're not quite there yet, down

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Speaker 1: negative to seven on the opening, Bill Booth. What a

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Speaker 1: shareholder yield and why is the study of that so

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Speaker 1: valuable right now? Good morning? Shareholder yield is all about cash.

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Speaker 1: Cash is king in the equity markets in our view,

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Speaker 1: and shareholder yield is all about owning companies that are

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Speaker 1: returning gobs of cash flow to shareholders in the form

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Speaker 1: of dividends, sherry purchases, or debt reduction. And the market

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Speaker 1: like this with the prospect of rising rates. I think

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Speaker 1: there's been a lot of talk about shortening the dire

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Speaker 1: ation of of portfolios, and you can think of shareholder

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Speaker 1: yield is a short duration approach because you're getting more

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Speaker 1: of the intrinsic value of the company up front. What

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Speaker 1: do you do with a short duration focus is the

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Speaker 1: X axis. You hear me talk about what do you

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Speaker 1: do with an X X is dynamic, shorter, medium, or

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Speaker 1: longer with a huge cash flow tech generators like Microsoft,

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Speaker 1: Google and Amazon. So I think those those companies actually

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Speaker 1: are owned in some of our shareholder yield strategies UM,

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Speaker 1: and I think in those instances the dividend yields tend

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Speaker 1: to be a bit more modest, but certainly there are

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Speaker 1: very large and aggressive share repurchase programs, and so I think, uh,

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Speaker 1: we look at the dividends and repurchases of roughly equivalent

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Speaker 1: forms of returning cash. And of course there's another use

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Speaker 1: of cash, which UM if you have right management teams.

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Speaker 1: And I heard your comment about Disney and I you're

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Speaker 1: in SHAPEC if you have good management teams. Were happy

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Speaker 1: to see reinvestment through things like M and A. And

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Speaker 1: we know we saw Microsoft use some of its pocket

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Speaker 1: change seventy billions to announce the acquisition of Activision UM

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Speaker 1: and we're perfectly happy with with M and A UM

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Speaker 1: if if it makes strategic and financial sense. So Bill,

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Speaker 1: you know again, we did have some good numbers from

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Speaker 1: Disney last night. The time, and I've been parsing through,

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Speaker 1: and I guess we're about two thirds of the way

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Speaker 1: through the earning season here, and earnings that come in

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Speaker 1: very strong and potentially allaying some of the valuation concerns

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Speaker 1: in this market. What's been your takeaway from the earnings

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Speaker 1: that you've seen so far this season. I agree with

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Speaker 1: your assessment. I think on balanced, they've been quite strong. Um.

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Speaker 1: Certainly we've had a few hiccups, like Meta the other day,

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Speaker 1: but I think, you know, some of these earnings disappointments

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Speaker 1: largely seem to be I would say company specific issues

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Speaker 1: right with Meta clearly has to do with you know,

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Speaker 1: maybe it's competition, maybe it's the iOS changes privacy. UM.

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Speaker 1: So when we've had disappoint meants, I don't think they

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Speaker 1: have been um alarm bells that whoa, there's just something

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Speaker 1: systematically wrong here. I think the Ernie disappointments have largely

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Speaker 1: been company specific one offs, and for most of the

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Speaker 1: company's recording it's been quite quite good and above expectations.

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Speaker 1: So I know some of the names you like, one

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Speaker 1: jumped out at me, Sony. I would love to hear

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Speaker 1: your Sony call here, because that's a company that a

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Speaker 1: lot of people don't really know how to value is

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Speaker 1: it electronics companies and immediate company? This is brilliant. Bill

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Speaker 1: Booth and Paul Sweeney between the two of you, has

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Speaker 1: Sony been a train wreck for ten or is it

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Speaker 1: twenty years? Yeah? Tom, you're exactly right, And I don't

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Speaker 1: think anybody really knows what to do with this name. Bill,

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Speaker 1: what do you think about Sony here? Well, we really

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Speaker 1: really like it. And actually if you look at this

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Speaker 1: stock price chart, it's it's tripled over the last five years.

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Speaker 1: So the train wreck is maybe go ok good? The

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Speaker 1: track the tracks um. It's funny because because most people

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Speaker 1: when they think of Sony that they think, like me

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Speaker 1: when I grew up, Sony is all about the Walkman

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Speaker 1: jority even know what a cassette tape is, let alone

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Speaker 1: Walkman Um. But that that stodgy consumer electronics reputation has

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Speaker 1: sort of stayed with the company. But what Sony really

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Speaker 1: is as a premier global media and content company six

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Speaker 1: its profit is now coming from video games, music, and movies,

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Speaker 1: and we know we're in a world where content as king,

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Speaker 1: and so this company has a seven percent free cash

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Speaker 1: flow yield, valued very much like a stodgy consumer electronics company,

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Speaker 1: even though it is a premier entertainment company UM. And

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Speaker 1: we think that, you know, as the company continued to

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Speaker 1: deliver good strong revenue and profit and pre cash flow

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Speaker 1: growth UM, that this stock will continue to work up

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Speaker 1: even after it's UM recent rise. And I will note

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Speaker 1: that it did set off on the Microsoft Act Division

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Speaker 1: news on fears of increased competition in the PlayStation business,

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Speaker 1: going head to head with with Xbox and a potentially

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Speaker 1: more formidable Microsoft. But we're very comfortable that that Sony

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Speaker 1: has UM the strategy and assets in place to to

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Speaker 1: deal with that. Yeah, Tom, I'm looking at the c

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Speaker 1: o MP function for Sony. This is a stock that's

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Speaker 1: over the last five years has had a compoundent on

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Speaker 1: a return of almost eighteen percent per year, so smidge

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Speaker 1: better than SMP is completely removed from that. Yeah, it's

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Speaker 1: this extraordinary. So I just wanted to amateur, I am,

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Speaker 1: but that's why we wanted we get experts like Bill

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Speaker 1: on here and Bill, I mean this inflation. You know,

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Speaker 1: when Tom goes to fill up the surveillance Bentley, he

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Speaker 1: sees it at the pump. When I go to the supermarket,

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Speaker 1: I see it there. Inflation. I'm just I'm I continue

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Speaker 1: to be concerned about it because many people in this market,

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Speaker 1: most people in this market had never really experienced long

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Speaker 1: term inflation. How concerned are you about that after this morning?

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Speaker 1: It's a little bit more than I was last night.

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Speaker 1: You know that the reading this morning we're we're troubling

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Speaker 1: in the sense that we're seeing a broadening of inflation.

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Speaker 1: You know, it was really a good and adorable, good

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Speaker 1: story for for a good spell. But now you've got

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Speaker 1: services inflation over four percent year in the year. Um,

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Speaker 1: and it really is a tax on the consumer. I

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Speaker 1: see the same thing at the gas at the gas

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Speaker 1: station myself. So, um, it is a tax on the consumer.

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Speaker 1: And so we sort of have you know, maybe the

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Speaker 1: said now the rate market saying maybe there's a fifty

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Speaker 1: chance of a big increase in March, and you have

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Speaker 1: decellering earnings growth probably through the rest of this year.

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Speaker 1: That competition of a combination of rising rates and decellerting

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Speaker 1: earnings growth generally is a good one for markets. Bill

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Speaker 1: and did a chart this morning of American banking is

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Speaker 1: compared to your European banking. Is banking where you want

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Speaker 1: to be given inflation, given the curve oddities we see

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Speaker 1: and is European banking a value or the mother of

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Speaker 1: all continued value traps? Well, for decades it's been the

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Speaker 1: value mother of all value traps um. I think you know.

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Speaker 1: The struggle with with banks in general is it's almost

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Speaker 1: a Goldilocks scenario because in theory, rising rates are good

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Speaker 1: for banks net interest margins. We all know that, but

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Speaker 1: at some point we've know the less twelve hiking cycles

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Speaker 1: eleven have resulted in a recession. You don't want to

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Speaker 1: own a bank going into recessions. It's almost like the

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Speaker 1: markets saying with the financials Goldilocks. The fen is gonna

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Speaker 1: do just enough to make the macro backdrop ideal for banks,

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Speaker 1: but they're not gonna do so much that they cause

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Speaker 1: an economic contraction. And that's something that history says doesn't

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Speaker 1: really happen all that often. Bilbo, thank you so much,

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Speaker 1: greatly appreciate with the epic investments and shareholder yield. Right now,

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Speaker 1: we're gonna digress. And when you go to Brown Harris

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Speaker 1: Stevenson for those Stevens, for those of you worldwide and

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Speaker 1: across this nation, all you need to know is fancy

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Speaker 1: real estate in New York. We're gonna talk to Best Friedman,

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Speaker 1: their chief executive officer, about the real world. Best, You've

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Speaker 1: got a listing on eight Street and not the fancy

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Speaker 1: part of eightieth Street, which is one bedroom, one bath

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Speaker 1: and a kitchen. I can't turn around in and it's

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Speaker 1: popping five nine thousand. My question to you, and this

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Speaker 1: goes with all the great work that you do nationwide

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Speaker 1: with Brown Hairs Stevens, is do we have the income

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Speaker 1: levels to afford the new real estate price you're touting? Yeah?

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Speaker 1: I mean, hi, Tom, It's so nice to see you,

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Speaker 1: by the way. Um, Listen, none of us expected that

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Speaker 1: would be the performed the way that it was in

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Speaker 1: real estate in New York City. It came back with

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Speaker 1: a vengeance and prices have gone up. Um. But remember

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Speaker 1: we were in a buyer's market. We have now shifted

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Speaker 1: to a seller's market. So people made a lot of

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Speaker 1: money during the pandemic and things are starting to open.

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Speaker 1: There's a sense of safety. We have a new administration,

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Speaker 1: new mayor and governor working together, um, looking to mitigate

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Speaker 1: crime and get our city back and working. And so

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Speaker 1: I think there's a lot of good things happening in

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Speaker 1: New York City. It's turned around. But as you were,

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Speaker 1: guys are talking about and frightening me a little bit

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Speaker 1: with this inflation talk. Uh, the cp I going up

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Speaker 1: is you know, not ideal. You know, we have less

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Speaker 1: power in our money to spend um. But you know,

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Speaker 1: the truths don't grow to the sky the best best

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Speaker 1: This is really really important. Is the lack of rising

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Speaker 1: incomes one of the constraints unsurging real estate inflation? Or

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Speaker 1: is that just something nobody worries about because there's so

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Speaker 1: much money slashing around them. Yeah, I mean I think

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Speaker 1: there's definitely a lot of money slashing around, as you

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Speaker 1: put it, um and prices have ticked up, but not

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Speaker 1: incredibly in New York City, and so people have come

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Speaker 1: back and they're here and they're investing, and they're changing,

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Speaker 1: they're moving around, and so I don't think that's a

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Speaker 1: huge The inflation piece is not the thing that's worrying

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Speaker 1: people in New York City. It's really the focus is

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Speaker 1: making sure that crime is under control, that we're focusing

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Speaker 1: on getting people back to work. Because the market, it

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Speaker 1: did not take up so much in New York City,

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Speaker 1: the prices. It's the other regions like Connecticut, Palm Beach.

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Speaker 1: Those markets you saw incredible prices go up, and now

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Speaker 1: the supply chain is really sure there's nothing to buy there.

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Speaker 1: It's an inventory issue. Best. Just because we are so

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Speaker 1: focused on that inflation data today, given how hot it was,

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Speaker 1: we're going to have to see some sort of reaction

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Speaker 1: to that. On the monetary side, we are expecting that

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Speaker 1: the Federal Reserve is going to raise rates a number

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Speaker 1: of times this year. When that translates through to higher

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Speaker 1: mortgage rates, what impact is that going to have on

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Speaker 1: real estate, not just here in New York City but

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Speaker 1: across the country. Kelly, Look, rates are still historically low,

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Speaker 1: and I think it's good that they increase them and

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Speaker 1: they go up maybe once or twice. It will be

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Speaker 1: good because it can't keep moving at this page. This

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Speaker 1: is why part of the reason why the prices have

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Speaker 1: gone up. It's a contributor. And so we can't you know,

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Speaker 1: can't be Champagne and Cave are forever. Things have to

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Speaker 1: slow down a little bit, and so we need supply

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Speaker 1: and demand to intersect in a better way in other

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Speaker 1: regions so that the market will stay fluid um. But

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Speaker 1: inflation we can always you know, We've dealt with inflation

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Speaker 1: in the past. We've dealt with rates going up. What

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Speaker 1: we can have is a paralyzed market from something like

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Speaker 1: a pandemic or like we saw after nine eleven uh

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Speaker 1: an act of terrorism. That's when markets freeze, and that's

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Speaker 1: when people are scared. Inflation we can deal with. We

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Speaker 1: can manage with inflation well. And obviously it's not just

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Speaker 1: about on the monetary side. There's the fiscal side of

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Speaker 1: the equation, and there's a great debate about how that

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Speaker 1: has contributed to the inflation we are seeing. But best

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Speaker 1: on the fiscal side, a lot of what we thought

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Speaker 1: might come to fruition under the Biden administration, differences potentially

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Speaker 1: a change in the salt cap have not. What is

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Speaker 1: the impact of that when you're thinking specifically of this

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Speaker 1: Tristate area, I mean, we're that's still they're still discussing that.

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Speaker 1: We'd like to see that increase from ten thousand I

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Speaker 1: think they said eighty thousand dollars, which would be helpful.

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Speaker 1: The good news, Kayley, is that we have a new

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Speaker 1: city council. We have a new speaker, Adrian Adams, who

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Speaker 1: is much more moderate, and we're hoping that the legislation

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Speaker 1: in Albany is going to be much more reasonable economically

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Speaker 1: so that we don't drive people out of the city.

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Speaker 1: So I think we want to create sort of tax policy,

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Speaker 1: as I always say that seat in economics and that

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Speaker 1: we work to create an environment that keep people here.

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Speaker 1: We need rich people here. We don't want to drive

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Speaker 1: them out. We want them to be here. It's important

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Speaker 1: for the city. Best Freeman, thank you so much. We've

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Speaker 1: got Marcus moving with Brown Harris Stevens on what we're

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Speaker 1: all talking about, which is the inflation and rent in

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Speaker 1: ownership of real estate nationwide as well. When I go

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Speaker 1: out for dinner this Friday, do we need to take

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Speaker 1: photo ID to get in a restaurant on Saturday morning?

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Speaker 1: Do we need photo I D to get a coffee

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Speaker 1: to go into a cafe? I believe the answer is

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Speaker 1: it depends. Because there's no longer the mask or vaccine mandate.

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Speaker 1: As of today, a business doesn't have to ask you

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Speaker 1: to wear a mask or check your identification, but that's

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Speaker 1: going to depend on business to business. They're free to

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Speaker 1: make their own decisions. So John, I guess it depends

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Speaker 1: on where you go. Maybe bring the passport in your

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Speaker 1: McDonald's on Third Avenue is taking a very loose check.

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Speaker 1: Would you like to test this a little bit later

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Speaker 1: this morning? I do that, you know every day when

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Speaker 1: I go there for breakfast, you know, we check it out.

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Speaker 1: I look forward to checking out of it, like, Okay,

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Speaker 1: Christian Briers going, what are they talking about with us?

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Speaker 1: Truly one of the world's experts on epidemiology and this virus.

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Speaker 1: Christian Brier joins us, of course with John Hopkins in

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Speaker 1: South Africa, and we're so honored he could attend to

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Speaker 1: us on a weekly basis. It is an important moment

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Speaker 1: for me. Dr Byra And then I just noticed in

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Speaker 1: the Washington Post the chart where I can report deaths

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Speaker 1: have rolled over. They're not like cases, they're not like hospitalizations.

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Speaker 1: But now that we've finally seen the moving average of

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Speaker 1: deaths roll over, do you feel that will continue from

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Speaker 1: on down to the nirvana of nine deaths? Well, we

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Speaker 1: always knew that deaths were going to lag behind hospitalization

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Speaker 1: and hospitalizations behind cases. The cases are down, hospitalizations finally

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Speaker 1: coming down, and so the decline in deaths is is

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Speaker 1: what we'd expected. It's still high. And remember that we

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Speaker 1: started at a very high baseline before a macron in

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Speaker 1: the United States. So but yes, it is, it is

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Speaker 1: trending in the right direction. We're paying attention to the

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Speaker 1: new A macrons subvariants in pluting the point to but

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Speaker 1: it again looks highly infectious and not as pathogenic as delta.

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Speaker 1: What should we know about that? Give us thirty seconds

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Speaker 1: on these new sub variants. Well, these have emerged within

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Speaker 1: a macron lineage and they share that same high infectious nous.

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Speaker 1: But it does appear that they are not more lethal,

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Speaker 1: not more pathogenic. It's taken over very quickly here in

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Speaker 1: South Africa, so that the amicron B A point too

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Speaker 1: is now the predominant variant that that is turning up here.

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Speaker 1: But what we're seeing happily is while infections, uh you know,

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Speaker 1: are rising with that variant, deaths are still declining. Yesterday

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Speaker 1: they were only twenty two people who died in this country.

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Speaker 1: A week before that it was under a hundred, but

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Speaker 1: nowhere near that low. So that's really good news. Okay,

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Speaker 1: Dr Byros, We're talking about different variants in other parts

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Speaker 1: of the world. Dr Anthony Fauci, when talking about the

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Speaker 1: situation here in the US to the Financial Times yesterday

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Speaker 1: said that the US is heading out of the quote

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Speaker 1: full blown pandemic phase of COVID nineteen. I guess full

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Speaker 1: blown is a phrase is probably open to interpretation. Do

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Speaker 1: you agree with that characterization? Well, I think part of

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Speaker 1: what Dr Fauci is referring to is the fact that

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Speaker 1: first of all, we now have the broadly neutralizing anybody's

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Speaker 1: We have the anti virals, our treatment is getting better,

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Speaker 1: and the amicron wave is declining, so we have many

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Speaker 1: more tools to manage COVID. Again, of course, we have

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Speaker 1: an epidemic of severe disease in the unvaccinated and in

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Speaker 1: the unboosted, and in the elderly who are either unvaccinated

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Speaker 1: or unboosted. That hasn't changed. But the al kit has

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Speaker 1: greatly expanded, and I think that's really what he's referring to,

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Speaker 1: that we have so many more options. Well, and part

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Speaker 1: of that tool kit, as you mentioned, is boosters. He

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Speaker 1: went on in that interview to say that he doesn't

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Speaker 1: think that every American is going to get to need

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Speaker 1: regular boosters. Where are we in that conversation, not just

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Speaker 1: in terms of getting doses of existing vaccines, but whether

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Speaker 1: or not we can create a vaccine that maybe addresses

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Speaker 1: all future variants as well. Well. There's obviously a great

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Speaker 1: deal of work underway on that front of people who

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Speaker 1: have been working on a pan coronavirus vaccine. Both Fiser

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Speaker 1: and Maderna are working on a macron A specific vaccines,

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Speaker 1: so that is absolutely happening. I think the challenge that

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Speaker 1: we're still seeing is that there's a lot of breakthrough

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Speaker 1: infections even in fully vaccinated people with a macron That's

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Speaker 1: part of why it's spreading so effectively, as we all know.

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Speaker 1: But the boosters really make a difference in terms of

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Speaker 1: whether you get severe disease, whether you in the hospital.

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Speaker 1: Is the language a breakthrough infection nothing more than endemic?

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Speaker 1: Is that honestly the definition of endemic, not really Tom.

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Speaker 1: What we mean by a breakthrough is a confirmed infection

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Speaker 1: PCR positive and somebody who's been vaccinated um so Am

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Speaker 1: Crown has had the ability to do that. We do

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Speaker 1: also see infections, breakthrough infections and people boosted, but of

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Speaker 1: course much less severe and less common. Um. By endemic,

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Speaker 1: what we really mean essentially is that there will be upticks,

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Speaker 1: but the majority of the population will be protected either

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Speaker 1: by natural immunity, by having recovered from covid or by

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Speaker 1: vaccination and boosting. Obviously you're better off if you have

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Speaker 1: the vaccine, don't. We're struggling at the moment to identify

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Speaker 1: whether set in policies and bank by science or bank

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Speaker 1: by politics. The recent guidance around mass mandates, the removal

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Speaker 1: of them, the adjustment of them. What's been your reaction

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Speaker 1: to them, Well, you know, we're we are on the

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00:24:00,840 --> 00:24:04,040
Speaker 1: right side of the Amicron curve coming down, but we still,

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Speaker 1: as I said, have a high number of deaths, high

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Speaker 1: number of hospitalizations. Many of our hospitals are stressed. Uh So,

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Speaker 1: the idea that governors, particularly in the Blue states, are

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Speaker 1: lifting these restrictions because they're so unpopular at a time

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Speaker 1: where we're just getting out of this does feel epidemiologically

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Speaker 1: not supported by the evidence. I think that's why you

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Speaker 1: heard Rochelle Willinsky say, as far as the CDC is concerned,

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Speaker 1: we're not ready to do this yet. So there is

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Speaker 1: a disconnect there, and I think that disconnect is largely

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Speaker 1: political and not epidemiologically driven. Dot to thank you for

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Speaker 1: being so cleared on that. Dot. Chris byre that the

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Speaker 1: John's Health Kings, Bloomberg School of Public Health This is

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Speaker 1: the Bloomberg Surveillance Podcast. Thanks for listening. Join us live

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Speaker 1: weekdays from seven to ten am Eastern. I'm Bloomberg Radio

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00:24:54,080 --> 00:24:57,720
Speaker 1: and I'm Bloomberg Television each day from six to nine

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00:24:57,720 --> 00:25:02,160
Speaker 1: am for insight from the best in economics, finance, investment,

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00:25:02,280 --> 00:25:09,000
Speaker 1: and international relations. And subscribe to the Surveillance podcast on Apple, podcast, SoundCloud,

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Speaker 1: Bloomberg dot com, and of course, on the terminal. I'm

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00:25:12,800 --> 00:25:15,480
Speaker 1: Tom Keene and this is Bloomberg