Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along
Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jay Ley, we bring
Speaker 1: you insight from the best and economics, finance, investment, and
Speaker 1: international relations. Find Bloomberg Surveillance on Apple podcast, Suncloud, Bloomberg
Speaker 1: dot Com, and of course, on the Bloomberg terminal. Thomas
Speaker 1: Purcelli joins his chief US economists with RBC Capital Markets.
Speaker 1: Tom Purcelli, how much of this new inflation is wage
Speaker 1: inflation and what does the FETE do about it? Yeah,
Speaker 1: so I think here's here's what I think is really
Speaker 1: very interesting about about this inflation report. In particular, I
Speaker 1: think what we need to keep in mind is those waitings.
Speaker 1: I think those waitings gonna there's new waitings. I think
Speaker 1: they're going to haunt inflation for the next few months. Um.
Speaker 1: You know, you now have a bigger weight on goods.
Speaker 1: And as we've been writing about for quite some time,
Speaker 1: the thing that's really doing most of the driving from
Speaker 1: an inflation perspective is really good prices and make a mistakes.
Speaker 1: Services are certainly um starting the process of of amping
Speaker 1: up here a little bit. But this is really a
Speaker 1: sort of a goods dominated UM inflation backdrop. And what's
Speaker 1: interesting about that is this new waiting. The waiting is
Speaker 1: now about one and a half percentage points more weight
Speaker 1: toward goods UM, which again just keep in mind that's uh,
Speaker 1: this is sort of an interesting thing in the context
Speaker 1: of we are a service dominated economy, but goods now
Speaker 1: have a bigger weight. That's obviously a reflection of what
Speaker 1: happened last year. People were spending uh, you know, um
Speaker 1: a lot of this extra money that they had on goods,
Speaker 1: not services. So I think what's gonna wind up happening is,
Speaker 1: you know, if if the transition from goods to services
Speaker 1: spending um uh you know is sort of slower to
Speaker 1: evolve UM this year, and then we think that probably
Speaker 1: will be the case. That means that you could actually
Speaker 1: continue to see some some additional upward pressure on in
Speaker 1: lation because of this this new bigger weight on on goods.
Speaker 1: I think that's a really sort of an interesting thing
Speaker 1: that that not a lot of people are talking about.
Speaker 1: But here's the but here's the punch line time to
Speaker 1: all of this. While I think that that will be
Speaker 1: the case for the next you know, sort of you
Speaker 1: call it the next couple of months, few months where
Speaker 1: you'll see continued upward pressure from goods. I think what's
Speaker 1: gonna want up happening this year is that this transition
Speaker 1: is going to happen from people basically spending a lot
Speaker 1: on goods and shifting to services. And so what will
Speaker 1: want up happening I think as the year progresses is
Speaker 1: that this new firm weight UM in goods will actually
Speaker 1: want of acting as an anchor around the neck of
Speaker 1: goods prices. So as people shift from goods to services spending,
Speaker 1: we think that that will actually want to putting some
Speaker 1: pretty notable downward pressure UM in the good space. I
Speaker 1: want to be clear, you know, that's the anatomy of
Speaker 1: what we see happening over the balance of the year. UM.
Speaker 1: I think in the immediate term, I do think that
Speaker 1: you're going to see continued up pressure so so so Tom,
Speaker 1: I think, and again it's not to not answer your
Speaker 1: question directly, but I think that that's the thing that's
Speaker 1: really sort of doing most of the drive from from
Speaker 1: from an inflation perspective, the consumers are in a great
Speaker 1: spot from a wage perspective, you know, to sort of
Speaker 1: the continue to sort of drive UM to drive spending.
Speaker 1: I mean, look, we all we live in a nominal world,
Speaker 1: whether that's you know, sort of a better or worse idea. Um.
Speaker 1: But and so I think that that, you know, sort
Speaker 1: of gives the consumers some some confidence to be able
Speaker 1: to spend. But but again, I think that you're going
Speaker 1: to see this transition away and I think goods prices
Speaker 1: could actually start the process of slowing pretty meaningfully. Again
Speaker 1: give that, give that a handful of months. But I
Speaker 1: think that's probably where we're going to get me too, March,
Speaker 1: because we need to do March first, middle of March,
Speaker 1: March six, the fed mates what's on the table and
Speaker 1: what on earth happens with that dolt plot. Yeah, so
Speaker 1: I think that you know, you're looking at probably for
Speaker 1: four hikes this year. Um uh, you know the fedt
Speaker 1: is gonna go twenty five to start this process off.
Speaker 1: I mean, look again, you know, I love that the
Speaker 1: pal keeps on saying, you know, they want to be
Speaker 1: humble and they want humility. Look at all, Frank this
Speaker 1: they should have had that last year, all of last year.
Speaker 1: I think what they actually need now this year is
Speaker 1: also a hefty dose of patients because I think if
Speaker 1: the patients will be rewarded. If they do not get
Speaker 1: aggressive here early on in the cycle, inflation is going
Speaker 1: to start the process of slowing at a minimum base
Speaker 1: effects are going to eat into the year and year pace.
Speaker 1: But if I'm right about this transition from goods to
Speaker 1: services um spending and that taking quite a bit of
Speaker 1: the heat off of this this you know, sort of
Speaker 1: the singular component that now has a bigger weight that's
Speaker 1: been doing a lot of the driving. I think that
Speaker 1: they can they if they have a bit of patients,
Speaker 1: they can avoid a fifty, They can avoid going every
Speaker 1: meeting over the balance of the year. Um. But you
Speaker 1: know it's that's repelled to decide where does the balance
Speaker 1: sheet come into play here, Tom, Because it's not just
Speaker 1: about the rate hYP mechanism. Yeah, no, I think that's true.
Speaker 1: I mean, look, and this is I don't know how
Speaker 1: much time we have. This is I'll try to I'll
Speaker 1: try to keep this part of it tight. Also simply say,
Speaker 1: is QT is not the mirror image of q E.
Speaker 1: That's not the how it works with q E. You
Speaker 1: know the amount of duration that the FED is pulling
Speaker 1: out of the market right there buying you know X
Speaker 1: number of ten Eccember of seven, etcetera. We know that definitively.
Speaker 1: With QT, you do not know the amount of duration
Speaker 1: that's being added back into the market because what happens
Speaker 1: when the Fed basically starts the process of unwanting to
Speaker 1: balance you, they create a funding gap between themselves and
Speaker 1: the Treasury, and so it's the Treasury that decides what
Speaker 1: duration is going to be added back into the market. So,
Speaker 1: in other words, if the if the treasure is going
Speaker 1: to meet the funding gap with you know, loading up
Speaker 1: on bills, well then there's no duration added back into
Speaker 1: the market. And we think that's actually what they're gonna
Speaker 1: want to do, because bills is a relative too. I'm
Speaker 1: totally outstanding is actually pretty pretty small time. I got
Speaker 1: a bright to hit, so if I've got a few seconds,
Speaker 1: But let me just put a conclusion on this with you.
Speaker 1: Are you saying this gets worse before it gets bets up.
Speaker 1: I don't think there is any question about that. But
Speaker 1: again I think you live with a live with it
Speaker 1: being a little bit worse because I think by the
Speaker 1: end of the year it will be quite a bit better.
Speaker 1: Of BC Capital markets, TM, we appreciate you, so we
Speaker 1: always do thank you. If you are in the stock market,
Speaker 1: you need to stop what you're doing now and listen
Speaker 1: to one William Booth. Bill Booth is an epic and
Speaker 1: they have a method, they have a style, and you
Speaker 1: need it when it's a bull market, you need it
Speaker 1: when it's a bear market, and you really need it.
Speaker 1: Among the historic tumult of the moment, the tenure yield
Speaker 1: touching up two percent, we're not quite there yet, down
Speaker 1: negative to seven on the opening, Bill Booth. What a
Speaker 1: shareholder yield and why is the study of that so
Speaker 1: valuable right now? Good morning? Shareholder yield is all about cash.
Speaker 1: Cash is king in the equity markets in our view,
Speaker 1: and shareholder yield is all about owning companies that are
Speaker 1: returning gobs of cash flow to shareholders in the form
Speaker 1: of dividends, sherry purchases, or debt reduction. And the market
Speaker 1: like this with the prospect of rising rates. I think
Speaker 1: there's been a lot of talk about shortening the dire
Speaker 1: ation of of portfolios, and you can think of shareholder
Speaker 1: yield is a short duration approach because you're getting more
Speaker 1: of the intrinsic value of the company up front. What
Speaker 1: do you do with a short duration focus is the
Speaker 1: X axis. You hear me talk about what do you
Speaker 1: do with an X X is dynamic, shorter, medium, or
Speaker 1: longer with a huge cash flow tech generators like Microsoft,
Speaker 1: Google and Amazon. So I think those those companies actually
Speaker 1: are owned in some of our shareholder yield strategies UM,
Speaker 1: and I think in those instances the dividend yields tend
Speaker 1: to be a bit more modest, but certainly there are
Speaker 1: very large and aggressive share repurchase programs, and so I think, uh,
Speaker 1: we look at the dividends and repurchases of roughly equivalent
Speaker 1: forms of returning cash. And of course there's another use
Speaker 1: of cash, which UM if you have right management teams.
Speaker 1: And I heard your comment about Disney and I you're
Speaker 1: in SHAPEC if you have good management teams. Were happy
Speaker 1: to see reinvestment through things like M and A. And
Speaker 1: we know we saw Microsoft use some of its pocket
Speaker 1: change seventy billions to announce the acquisition of Activision UM
Speaker 1: and we're perfectly happy with with M and A UM
Speaker 1: if if it makes strategic and financial sense. So Bill,
Speaker 1: you know again, we did have some good numbers from
Speaker 1: Disney last night. The time, and I've been parsing through,
Speaker 1: and I guess we're about two thirds of the way
Speaker 1: through the earning season here, and earnings that come in
Speaker 1: very strong and potentially allaying some of the valuation concerns
Speaker 1: in this market. What's been your takeaway from the earnings
Speaker 1: that you've seen so far this season. I agree with
Speaker 1: your assessment. I think on balanced, they've been quite strong. Um.
Speaker 1: Certainly we've had a few hiccups, like Meta the other day,
Speaker 1: but I think, you know, some of these earnings disappointments
Speaker 1: largely seem to be I would say company specific issues
Speaker 1: right with Meta clearly has to do with you know,
Speaker 1: maybe it's competition, maybe it's the iOS changes privacy. UM.
Speaker 1: So when we've had disappoint meants, I don't think they
Speaker 1: have been um alarm bells that whoa, there's just something
Speaker 1: systematically wrong here. I think the Ernie disappointments have largely
Speaker 1: been company specific one offs, and for most of the
Speaker 1: company's recording it's been quite quite good and above expectations.
Speaker 1: So I know some of the names you like, one
Speaker 1: jumped out at me, Sony. I would love to hear
Speaker 1: your Sony call here, because that's a company that a
Speaker 1: lot of people don't really know how to value is
Speaker 1: it electronics companies and immediate company? This is brilliant. Bill
Speaker 1: Booth and Paul Sweeney between the two of you, has
Speaker 1: Sony been a train wreck for ten or is it
Speaker 1: twenty years? Yeah? Tom, you're exactly right, And I don't
Speaker 1: think anybody really knows what to do with this name. Bill,
Speaker 1: what do you think about Sony here? Well, we really
Speaker 1: really like it. And actually if you look at this
Speaker 1: stock price chart, it's it's tripled over the last five years.
Speaker 1: So the train wreck is maybe go ok good? The
Speaker 1: track the tracks um. It's funny because because most people
Speaker 1: when they think of Sony that they think, like me
Speaker 1: when I grew up, Sony is all about the Walkman
Speaker 1: jority even know what a cassette tape is, let alone
Speaker 1: Walkman Um. But that that stodgy consumer electronics reputation has
Speaker 1: sort of stayed with the company. But what Sony really
Speaker 1: is as a premier global media and content company six
Speaker 1: its profit is now coming from video games, music, and movies,
Speaker 1: and we know we're in a world where content as king,
Speaker 1: and so this company has a seven percent free cash
Speaker 1: flow yield, valued very much like a stodgy consumer electronics company,
Speaker 1: even though it is a premier entertainment company UM. And
Speaker 1: we think that, you know, as the company continued to
Speaker 1: deliver good strong revenue and profit and pre cash flow
Speaker 1: growth UM, that this stock will continue to work up
Speaker 1: even after it's UM recent rise. And I will note
Speaker 1: that it did set off on the Microsoft Act Division
Speaker 1: news on fears of increased competition in the PlayStation business,
Speaker 1: going head to head with with Xbox and a potentially
Speaker 1: more formidable Microsoft. But we're very comfortable that that Sony
Speaker 1: has UM the strategy and assets in place to to
Speaker 1: deal with that. Yeah, Tom, I'm looking at the c
Speaker 1: o MP function for Sony. This is a stock that's
Speaker 1: over the last five years has had a compoundent on
Speaker 1: a return of almost eighteen percent per year, so smidge
Speaker 1: better than SMP is completely removed from that. Yeah, it's
Speaker 1: this extraordinary. So I just wanted to amateur, I am,
Speaker 1: but that's why we wanted we get experts like Bill
Speaker 1: on here and Bill, I mean this inflation. You know,
Speaker 1: when Tom goes to fill up the surveillance Bentley, he
Speaker 1: sees it at the pump. When I go to the supermarket,
Speaker 1: I see it there. Inflation. I'm just I'm I continue
Speaker 1: to be concerned about it because many people in this market,
Speaker 1: most people in this market had never really experienced long
Speaker 1: term inflation. How concerned are you about that after this morning?
Speaker 1: It's a little bit more than I was last night.
Speaker 1: You know that the reading this morning we're we're troubling
Speaker 1: in the sense that we're seeing a broadening of inflation.
Speaker 1: You know, it was really a good and adorable, good
Speaker 1: story for for a good spell. But now you've got
Speaker 1: services inflation over four percent year in the year. Um,
Speaker 1: and it really is a tax on the consumer. I
Speaker 1: see the same thing at the gas at the gas
Speaker 1: station myself. So, um, it is a tax on the consumer.
Speaker 1: And so we sort of have you know, maybe the
Speaker 1: said now the rate market saying maybe there's a fifty
Speaker 1: chance of a big increase in March, and you have
Speaker 1: decellering earnings growth probably through the rest of this year.
Speaker 1: That competition of a combination of rising rates and decellerting
Speaker 1: earnings growth generally is a good one for markets. Bill
Speaker 1: and did a chart this morning of American banking is
Speaker 1: compared to your European banking. Is banking where you want
Speaker 1: to be given inflation, given the curve oddities we see
Speaker 1: and is European banking a value or the mother of
Speaker 1: all continued value traps? Well, for decades it's been the
Speaker 1: value mother of all value traps um. I think you know.
Speaker 1: The struggle with with banks in general is it's almost
Speaker 1: a Goldilocks scenario because in theory, rising rates are good
Speaker 1: for banks net interest margins. We all know that, but
Speaker 1: at some point we've know the less twelve hiking cycles
Speaker 1: eleven have resulted in a recession. You don't want to
Speaker 1: own a bank going into recessions. It's almost like the
Speaker 1: markets saying with the financials Goldilocks. The fen is gonna
Speaker 1: do just enough to make the macro backdrop ideal for banks,
Speaker 1: but they're not gonna do so much that they cause
Speaker 1: an economic contraction. And that's something that history says doesn't
Speaker 1: really happen all that often. Bilbo, thank you so much,
Speaker 1: greatly appreciate with the epic investments and shareholder yield. Right now,
Speaker 1: we're gonna digress. And when you go to Brown Harris
Speaker 1: Stevenson for those Stevens, for those of you worldwide and
Speaker 1: across this nation, all you need to know is fancy
Speaker 1: real estate in New York. We're gonna talk to Best Friedman,
Speaker 1: their chief executive officer, about the real world. Best, You've
Speaker 1: got a listing on eight Street and not the fancy
Speaker 1: part of eightieth Street, which is one bedroom, one bath
Speaker 1: and a kitchen. I can't turn around in and it's
Speaker 1: popping five nine thousand. My question to you, and this
Speaker 1: goes with all the great work that you do nationwide
Speaker 1: with Brown Hairs Stevens, is do we have the income
Speaker 1: levels to afford the new real estate price you're touting? Yeah?
Speaker 1: I mean, hi, Tom, It's so nice to see you,
Speaker 1: by the way. Um, Listen, none of us expected that
Speaker 1: would be the performed the way that it was in
Speaker 1: real estate in New York City. It came back with
Speaker 1: a vengeance and prices have gone up. Um. But remember
Speaker 1: we were in a buyer's market. We have now shifted
Speaker 1: to a seller's market. So people made a lot of
Speaker 1: money during the pandemic and things are starting to open.
Speaker 1: There's a sense of safety. We have a new administration,
Speaker 1: new mayor and governor working together, um, looking to mitigate
Speaker 1: crime and get our city back and working. And so
Speaker 1: I think there's a lot of good things happening in
Speaker 1: New York City. It's turned around. But as you were,
Speaker 1: guys are talking about and frightening me a little bit
Speaker 1: with this inflation talk. Uh, the cp I going up
Speaker 1: is you know, not ideal. You know, we have less
Speaker 1: power in our money to spend um. But you know,
Speaker 1: the truths don't grow to the sky the best best
Speaker 1: This is really really important. Is the lack of rising
Speaker 1: incomes one of the constraints unsurging real estate inflation? Or
Speaker 1: is that just something nobody worries about because there's so
Speaker 1: much money slashing around them. Yeah, I mean I think
Speaker 1: there's definitely a lot of money slashing around, as you
Speaker 1: put it, um and prices have ticked up, but not
Speaker 1: incredibly in New York City, and so people have come
Speaker 1: back and they're here and they're investing, and they're changing,
Speaker 1: they're moving around, and so I don't think that's a
Speaker 1: huge The inflation piece is not the thing that's worrying
Speaker 1: people in New York City. It's really the focus is
Speaker 1: making sure that crime is under control, that we're focusing
Speaker 1: on getting people back to work. Because the market, it
Speaker 1: did not take up so much in New York City,
Speaker 1: the prices. It's the other regions like Connecticut, Palm Beach.
Speaker 1: Those markets you saw incredible prices go up, and now
Speaker 1: the supply chain is really sure there's nothing to buy there.
Speaker 1: It's an inventory issue. Best. Just because we are so
Speaker 1: focused on that inflation data today, given how hot it was,
Speaker 1: we're going to have to see some sort of reaction
Speaker 1: to that. On the monetary side, we are expecting that
Speaker 1: the Federal Reserve is going to raise rates a number
Speaker 1: of times this year. When that translates through to higher
Speaker 1: mortgage rates, what impact is that going to have on
Speaker 1: real estate, not just here in New York City but
Speaker 1: across the country. Kelly, Look, rates are still historically low,
Speaker 1: and I think it's good that they increase them and
Speaker 1: they go up maybe once or twice. It will be
Speaker 1: good because it can't keep moving at this page. This
Speaker 1: is why part of the reason why the prices have
Speaker 1: gone up. It's a contributor. And so we can't you know,
Speaker 1: can't be Champagne and Cave are forever. Things have to
Speaker 1: slow down a little bit, and so we need supply
Speaker 1: and demand to intersect in a better way in other
Speaker 1: regions so that the market will stay fluid um. But
Speaker 1: inflation we can always you know, We've dealt with inflation
Speaker 1: in the past. We've dealt with rates going up. What
Speaker 1: we can have is a paralyzed market from something like
Speaker 1: a pandemic or like we saw after nine eleven uh
Speaker 1: an act of terrorism. That's when markets freeze, and that's
Speaker 1: when people are scared. Inflation we can deal with. We
Speaker 1: can manage with inflation well. And obviously it's not just
Speaker 1: about on the monetary side. There's the fiscal side of
Speaker 1: the equation, and there's a great debate about how that
Speaker 1: has contributed to the inflation we are seeing. But best
Speaker 1: on the fiscal side, a lot of what we thought
Speaker 1: might come to fruition under the Biden administration, differences potentially
Speaker 1: a change in the salt cap have not. What is
Speaker 1: the impact of that when you're thinking specifically of this
Speaker 1: Tristate area, I mean, we're that's still they're still discussing that.
Speaker 1: We'd like to see that increase from ten thousand I
Speaker 1: think they said eighty thousand dollars, which would be helpful.
Speaker 1: The good news, Kayley, is that we have a new
Speaker 1: city council. We have a new speaker, Adrian Adams, who
Speaker 1: is much more moderate, and we're hoping that the legislation
Speaker 1: in Albany is going to be much more reasonable economically
Speaker 1: so that we don't drive people out of the city.
Speaker 1: So I think we want to create sort of tax policy,
Speaker 1: as I always say that seat in economics and that
Speaker 1: we work to create an environment that keep people here.
Speaker 1: We need rich people here. We don't want to drive
Speaker 1: them out. We want them to be here. It's important
Speaker 1: for the city. Best Freeman, thank you so much. We've
Speaker 1: got Marcus moving with Brown Harris Stevens on what we're
Speaker 1: all talking about, which is the inflation and rent in
Speaker 1: ownership of real estate nationwide as well. When I go
Speaker 1: out for dinner this Friday, do we need to take
Speaker 1: photo ID to get in a restaurant on Saturday morning?
Speaker 1: Do we need photo I D to get a coffee
Speaker 1: to go into a cafe? I believe the answer is
Speaker 1: it depends. Because there's no longer the mask or vaccine mandate.
Speaker 1: As of today, a business doesn't have to ask you
Speaker 1: to wear a mask or check your identification, but that's
Speaker 1: going to depend on business to business. They're free to
Speaker 1: make their own decisions. So John, I guess it depends
Speaker 1: on where you go. Maybe bring the passport in your
Speaker 1: McDonald's on Third Avenue is taking a very loose check.
Speaker 1: Would you like to test this a little bit later
Speaker 1: this morning? I do that, you know every day when
Speaker 1: I go there for breakfast, you know, we check it out.
Speaker 1: I look forward to checking out of it, like, Okay,
Speaker 1: Christian Briers going, what are they talking about with us?
Speaker 1: Truly one of the world's experts on epidemiology and this virus.
Speaker 1: Christian Brier joins us, of course with John Hopkins in
Speaker 1: South Africa, and we're so honored he could attend to
Speaker 1: us on a weekly basis. It is an important moment
Speaker 1: for me. Dr Byra And then I just noticed in
Speaker 1: the Washington Post the chart where I can report deaths
Speaker 1: have rolled over. They're not like cases, they're not like hospitalizations.
Speaker 1: But now that we've finally seen the moving average of
Speaker 1: deaths roll over, do you feel that will continue from
Speaker 1: on down to the nirvana of nine deaths? Well, we
Speaker 1: always knew that deaths were going to lag behind hospitalization
Speaker 1: and hospitalizations behind cases. The cases are down, hospitalizations finally
Speaker 1: coming down, and so the decline in deaths is is
Speaker 1: what we'd expected. It's still high. And remember that we
Speaker 1: started at a very high baseline before a macron in
Speaker 1: the United States. So but yes, it is, it is
Speaker 1: trending in the right direction. We're paying attention to the
Speaker 1: new A macrons subvariants in pluting the point to but
Speaker 1: it again looks highly infectious and not as pathogenic as delta.
Speaker 1: What should we know about that? Give us thirty seconds
Speaker 1: on these new sub variants. Well, these have emerged within
Speaker 1: a macron lineage and they share that same high infectious nous.
Speaker 1: But it does appear that they are not more lethal,
Speaker 1: not more pathogenic. It's taken over very quickly here in
Speaker 1: South Africa, so that the amicron B A point too
Speaker 1: is now the predominant variant that that is turning up here.
Speaker 1: But what we're seeing happily is while infections, uh you know,
Speaker 1: are rising with that variant, deaths are still declining. Yesterday
Speaker 1: they were only twenty two people who died in this country.
Speaker 1: A week before that it was under a hundred, but
Speaker 1: nowhere near that low. So that's really good news. Okay,
Speaker 1: Dr Byros, We're talking about different variants in other parts
Speaker 1: of the world. Dr Anthony Fauci, when talking about the
Speaker 1: situation here in the US to the Financial Times yesterday
Speaker 1: said that the US is heading out of the quote
Speaker 1: full blown pandemic phase of COVID nineteen. I guess full
Speaker 1: blown is a phrase is probably open to interpretation. Do
Speaker 1: you agree with that characterization? Well, I think part of
Speaker 1: what Dr Fauci is referring to is the fact that
Speaker 1: first of all, we now have the broadly neutralizing anybody's
Speaker 1: We have the anti virals, our treatment is getting better,
Speaker 1: and the amicron wave is declining, so we have many
Speaker 1: more tools to manage COVID. Again, of course, we have
Speaker 1: an epidemic of severe disease in the unvaccinated and in
Speaker 1: the unboosted, and in the elderly who are either unvaccinated
Speaker 1: or unboosted. That hasn't changed. But the al kit has
Speaker 1: greatly expanded, and I think that's really what he's referring to,
Speaker 1: that we have so many more options. Well, and part
Speaker 1: of that tool kit, as you mentioned, is boosters. He
Speaker 1: went on in that interview to say that he doesn't
Speaker 1: think that every American is going to get to need
Speaker 1: regular boosters. Where are we in that conversation, not just
Speaker 1: in terms of getting doses of existing vaccines, but whether
Speaker 1: or not we can create a vaccine that maybe addresses
Speaker 1: all future variants as well. Well. There's obviously a great
Speaker 1: deal of work underway on that front of people who
Speaker 1: have been working on a pan coronavirus vaccine. Both Fiser
Speaker 1: and Maderna are working on a macron A specific vaccines,
Speaker 1: so that is absolutely happening. I think the challenge that
Speaker 1: we're still seeing is that there's a lot of breakthrough
Speaker 1: infections even in fully vaccinated people with a macron That's
Speaker 1: part of why it's spreading so effectively, as we all know.
Speaker 1: But the boosters really make a difference in terms of
Speaker 1: whether you get severe disease, whether you in the hospital.
Speaker 1: Is the language a breakthrough infection nothing more than endemic?
Speaker 1: Is that honestly the definition of endemic, not really Tom.
Speaker 1: What we mean by a breakthrough is a confirmed infection
Speaker 1: PCR positive and somebody who's been vaccinated um so Am
Speaker 1: Crown has had the ability to do that. We do
Speaker 1: also see infections, breakthrough infections and people boosted, but of
Speaker 1: course much less severe and less common. Um. By endemic,
Speaker 1: what we really mean essentially is that there will be upticks,
Speaker 1: but the majority of the population will be protected either
Speaker 1: by natural immunity, by having recovered from covid or by
Speaker 1: vaccination and boosting. Obviously you're better off if you have
Speaker 1: the vaccine, don't. We're struggling at the moment to identify
Speaker 1: whether set in policies and bank by science or bank
Speaker 1: by politics. The recent guidance around mass mandates, the removal
Speaker 1: of them, the adjustment of them. What's been your reaction
Speaker 1: to them, Well, you know, we're we are on the
Speaker 1: right side of the Amicron curve coming down, but we still,
Speaker 1: as I said, have a high number of deaths, high
Speaker 1: number of hospitalizations. Many of our hospitals are stressed. Uh So,
Speaker 1: the idea that governors, particularly in the Blue states, are
Speaker 1: lifting these restrictions because they're so unpopular at a time
Speaker 1: where we're just getting out of this does feel epidemiologically
Speaker 1: not supported by the evidence. I think that's why you
Speaker 1: heard Rochelle Willinsky say, as far as the CDC is concerned,
Speaker 1: we're not ready to do this yet. So there is
Speaker 1: a disconnect there, and I think that disconnect is largely
Speaker 1: political and not epidemiologically driven. Dot to thank you for
Speaker 1: being so cleared on that. Dot. Chris byre that the
Speaker 1: John's Health Kings, Bloomberg School of Public Health This is
Speaker 1: the Bloomberg Surveillance Podcast. Thanks for listening. Join us live
Speaker 1: weekdays from seven to ten am Eastern. I'm Bloomberg Radio
Speaker 1: and I'm Bloomberg Television each day from six to nine
Speaker 1: am for insight from the best in economics, finance, investment,
Speaker 1: and international relations. And subscribe to the Surveillance podcast on Apple, podcast, SoundCloud,
Speaker 1: Bloomberg dot com, and of course, on the terminal. I'm
Speaker 1: Tom Keene and this is Bloomberg