WEBVTT - Surveillance: Global Vaccinations With Malpass 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.240 --> 0:00:13.200 with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you 0:00:13.280 --> 0:00:18.600 insight from the best and economics, finance, investment, and international relations. 0:00:18.960 --> 0:00:23.840 Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 0:00:23.920 --> 0:00:30.200 and of course on the Bloomberg terminal. Right now is 0:00:30.240 --> 0:00:33.200 a treat, and it's a particular treat for me after 0:00:33.240 --> 0:00:36.519 this pandemic to have parachuting into our Bloomberg building. The 0:00:36.560 --> 0:00:39.840 World Bank president at David mel Pass I first learned 0:00:39.840 --> 0:00:42.360 of him at bear Stearns a few years ago. I 0:00:42.360 --> 0:00:46.560 have said many times in speeches the single best English 0:00:46.560 --> 0:00:50.800 skills crafted at Colorado College that I know. In Kaylee lines, 0:00:50.840 --> 0:00:53.800 are are thrilled to welcome the President of the World 0:00:53.800 --> 0:00:55.880 Bank this morning. We have so much to talk about, 0:00:55.920 --> 0:00:58.600 not enough time, but I need to address right away 0:00:58.920 --> 0:01:04.640 the delicacy of you, as President World Bank managing not 0:01:04.760 --> 0:01:09.080 a scandal but an uproar with the Managing Director of 0:01:09.120 --> 0:01:13.160 the International Monetary Fund when she was at the World Bank. 0:01:13.720 --> 0:01:17.760 You've made some very important public comments on that. Summarize 0:01:17.760 --> 0:01:21.880 that right now of how you stand in the study 0:01:22.040 --> 0:01:26.680 of these allegations against Dr George. I think there are 0:01:26.720 --> 0:01:30.399 bigger stories for us. This morning puts on a lot 0:01:30.400 --> 0:01:35.759 of reports and so in there were staff raised questions 0:01:35.760 --> 0:01:40.000 about the integrity of data dating back to eighteen and 0:01:40.040 --> 0:01:42.920 so there was an outside firm brought in and a 0:01:43.040 --> 0:01:45.479 law firm to look at it. The Board of Directors 0:01:45.800 --> 0:01:49.440 got into it, issued the report last week, so it 0:01:49.520 --> 0:01:53.680 shows the irregularities and goes through that the report speaks 0:01:53.680 --> 0:01:55.520 for itself. You speaks for the report. You think the 0:01:55.560 --> 0:02:00.560 report stands on its own, And yes, and we've discontinued report. 0:02:01.040 --> 0:02:03.360 But the World Bank is going to be very, very 0:02:03.400 --> 0:02:07.880 involved in the business climate of developing countries. That's critical 0:02:07.960 --> 0:02:11.920 for them in establishing jobs and getting growth, in in 0:02:12.200 --> 0:02:15.880 attracting new investment, and that's the purpose of the report. 0:02:16.240 --> 0:02:19.480 The purpose of the World Bank UH is to help 0:02:19.560 --> 0:02:22.639 countries and the people in the countries move ahead. So 0:02:22.680 --> 0:02:24.600 we're still going to be doing that. You're gonna still 0:02:24.639 --> 0:02:26.760 be doing that, and you have this report come out 0:02:26.760 --> 0:02:28.120 as well, and we don't need to get into the 0:02:28.200 --> 0:02:31.160 nitty gritty of who did this or what is further 0:02:31.360 --> 0:02:35.480 action needed by you on this uproar? Are you saying 0:02:35.639 --> 0:02:39.440 enough let's move on the reports discontinued and will be 0:02:39.520 --> 0:02:42.680 forming and looking for new ways to have an impact 0:02:42.800 --> 0:02:45.639 in those areas, which I think is the most important thing. Now. 0:02:45.919 --> 0:02:48.359 Time is too valuable. Right now, it's seven dollars a 0:02:48.480 --> 0:02:53.160 dose to get a vaccine. Why can't we vaccinate Africa? Yeah, 0:02:53.200 --> 0:02:56.800 this is on everyone's mind, and it's frustrating the access 0:02:56.880 --> 0:03:00.720 in the advanced economies where I'm share a task force 0:03:00.800 --> 0:03:03.560 that includes I, M F W T O and and 0:03:03.720 --> 0:03:06.960 UH W H O uh. And so that there are 0:03:07.000 --> 0:03:10.680 two point four billion excess doses in the advanced economies. 0:03:10.960 --> 0:03:14.079 So the goal would be to have those early doses, 0:03:14.120 --> 0:03:17.760 the early deliveries go to developing countries where that can 0:03:17.880 --> 0:03:21.320 use those particular doses. You know, it's a hard logistics 0:03:21.400 --> 0:03:24.200 problem because you've got to get the dose from the 0:03:24.280 --> 0:03:27.800 factory uh to a country that wants that kind of dose. 0:03:27.919 --> 0:03:31.840 So some want m r NA doses, someone astras in 0:03:31.919 --> 0:03:34.600 because some want J and J and so on down 0:03:35.040 --> 0:03:38.160 the list, and then they sit in a warehouse UH, 0:03:38.200 --> 0:03:40.920 and they're not applied to people, and that I think 0:03:41.000 --> 0:03:44.040 has to be improved. We're urging and the task forces 0:03:44.160 --> 0:03:48.920 urging the advanced economies to allow swapping of doses. So 0:03:48.960 --> 0:03:53.040 if they have a delivery scheduled into their warehouses in 0:03:53.160 --> 0:03:56.400 October of this year or November of this year, allow 0:03:56.600 --> 0:03:59.880 that dose to go to a developing country person and 0:04:00.160 --> 0:04:02.760 take a later delivery schedule because you don't need it. 0:04:02.840 --> 0:04:06.760 You've got excess two point four billion doses. Yeah, David 0:04:06.840 --> 0:04:09.120 is an excellent point. We're having a conversation now about 0:04:09.160 --> 0:04:11.800 boosters here in the US when there's many people throughout 0:04:11.840 --> 0:04:14.760 the world who have yet to receive their initial dose. 0:04:15.200 --> 0:04:18.240 Do you need the Biden administration to take more leadership 0:04:18.400 --> 0:04:22.400 on that, Hi, Kyley, You know I don't. I think 0:04:22.440 --> 0:04:25.240 the world has to come together and find solutions to 0:04:25.400 --> 0:04:29.200 this problem. Um and the boosters are countries are going 0:04:29.240 --> 0:04:31.839 to want to do that as needed in order to 0:04:31.920 --> 0:04:35.839 protect their population. That still leaves huge amounts of excess 0:04:35.920 --> 0:04:38.920 doses even in near term deliveries. What we're working on 0:04:39.040 --> 0:04:41.920 right now is trying to get November and December deliveries 0:04:42.240 --> 0:04:46.480 UH scheduled so that so that the countries can prepare 0:04:46.520 --> 0:04:49.760 to deliver that kind You need a specific kind of 0:04:49.800 --> 0:04:56.080 cold storage or of of of of trained personnel on 0:04:56.320 --> 0:04:59.560 each kind of vaccine, and that needs. We need much 0:04:59.640 --> 0:05:03.520 higher numbers of vaccine nations in developing countries and especially 0:05:03.560 --> 0:05:06.520 the poorest countries. Well, David, of course, the United States 0:05:06.520 --> 0:05:09.120 has made pledges on the vaccine front. Also this week 0:05:09.320 --> 0:05:12.000 at the United Nations, the President doubled his commitment in 0:05:12.080 --> 0:05:15.480 terms of financial aid for climate change for the developing world. 0:05:16.040 --> 0:05:19.760 Just how bad is the climate problem in certain areas 0:05:19.760 --> 0:05:23.719 of the world, and from an economic standpoint, how dire 0:05:23.760 --> 0:05:29.000 is the situation the from an adaptation standpoint, so preparing 0:05:29.120 --> 0:05:32.640 for changes in climate the countries are way behind and 0:05:32.680 --> 0:05:36.000 that costs lives. The World Bank, the World Banks the 0:05:36.000 --> 0:05:41.400 biggest financeer of climate change in the among the international 0:05:41.440 --> 0:05:45.000 financial institutions. In fact, more than half of all of 0:05:45.040 --> 0:05:48.480 the finances World Bank, and over half of that is 0:05:48.560 --> 0:05:52.600 for adaptation, to to address countries that are in low 0:05:52.680 --> 0:05:57.080 lying areas, people who are populations are at risk. The 0:05:57.120 --> 0:06:00.000 other part of the equation is to identify and priorities 0:06:00.160 --> 0:06:04.640 is the highest emitters of greenhouse gases and recognize that 0:06:04.760 --> 0:06:07.560 those have to be brought down. Uh that that's a 0:06:07.680 --> 0:06:12.200 small group of countries with big emissions, and more importantly, 0:06:12.800 --> 0:06:15.599 the projection of emissions into the future. You know, There 0:06:15.600 --> 0:06:19.599 are nine thousand coal fired power plants today and there 0:06:19.680 --> 0:06:23.039 are more in the planning stages. The permits are still 0:06:23.080 --> 0:06:26.440 being issued. So these are big challenges that cost a 0:06:26.440 --> 0:06:28.159 lot of money and there has to be a plan 0:06:28.320 --> 0:06:30.640 for actually, what do you do with the workers, how 0:06:30.640 --> 0:06:34.480 do you change the system so that there's less greenhouse 0:06:34.480 --> 0:06:37.000 gas emissions? And what can you impute on China? If 0:06:37.080 --> 0:06:39.359 China is struggling with us to say the least, and 0:06:39.440 --> 0:06:42.920 the marginal development of coal, what does the World Bank 0:06:43.000 --> 0:06:47.520 strategy to assist China to a better climate outcome. We 0:06:47.600 --> 0:06:50.240 have some programs in China, but you know, it's income 0:06:50.279 --> 0:06:54.120 has gone up and we're reducing that. Most of most 0:06:54.120 --> 0:06:58.279 of our programs are are in the area of of 0:06:58.600 --> 0:07:03.040 global public goods and space, typically marine plastic abatement, so 0:07:03.120 --> 0:07:06.080 that because a lot of plastic goes into the oceans 0:07:06.120 --> 0:07:08.880 from the rivers in in China, and so we're working 0:07:08.880 --> 0:07:12.040 on that heavily. With regard to COLE we do have 0:07:13.040 --> 0:07:16.800 one project area in China, but wherever it is in 0:07:16.800 --> 0:07:20.840 the world, it's hard to decommission an actual operating coal plant. 0:07:21.440 --> 0:07:24.200 The USC s that and that's a challenge. So the 0:07:24.840 --> 0:07:29.080 world's looking to China to do that to to change 0:07:29.280 --> 0:07:32.720 and I saw yesterday China release the the idea that 0:07:32.760 --> 0:07:36.680 they're not going to finance coal fired plants outside China. 0:07:36.880 --> 0:07:39.200 So that's a step around the world. We need all 0:07:39.240 --> 0:07:42.240 of those steps. We're gonna run out of time, President Malpass, 0:07:42.280 --> 0:07:45.360 But I want to say that today is a wonderful symbol. 0:07:45.440 --> 0:07:48.560 You are the first public official to attend with US 0:07:48.880 --> 0:07:53.720 lives since the pandemic began. It's a great, great moment, fabulous. 0:07:53.800 --> 0:07:56.680 It's good to be here, Tom. I wish the times 0:07:56.680 --> 0:07:59.960 were better because it's chaos across a lot of the 0:08:00.080 --> 0:08:03.400 developing world. I'm not gonna ask you about FED policy today. 0:08:03.480 --> 0:08:05.640 David bel Pess, thank you so much. He is a 0:08:05.640 --> 0:08:15.200 World Bank UH president as well. We're gonna stop the 0:08:15.240 --> 0:08:20.280 show right now on economics, finance, investment, and international relations 0:08:20.800 --> 0:08:24.840 and speak to an authority linking economics to ethics. You 0:08:24.960 --> 0:08:28.160 cannot do better than Glenn Hubbard. He is the dean 0:08:28.280 --> 0:08:31.960 emeritus of Columbia Business School, formally with the Council of 0:08:32.000 --> 0:08:35.120 Economic Advisors. He wants to talk I s l M 0:08:35.240 --> 0:08:37.880 theory and the rest of it. We don't we want 0:08:37.920 --> 0:08:41.880 to talk Glenn Hubbard about course B eight five eight 0:08:42.000 --> 0:08:47.559 three dash zero zero one is you resurrected Columbia Business School. 0:08:47.960 --> 0:08:52.559 You said we need to teach ethics, explain executive ethics 0:08:52.800 --> 0:08:56.280 and the idea that senior officials of the FED can 0:08:56.320 --> 0:09:01.640 do investment in bond derivative products. Well, the first part 0:09:01.760 --> 0:09:05.080 maybe easier than the second. On the first part, we 0:09:05.160 --> 0:09:08.760 do believe in this business cool parctly any top business school, 0:09:08.760 --> 0:09:11.400 that people need to understand the context of their decisions. 0:09:11.440 --> 0:09:14.960 Part of that ethics, part of its understanding social structure. 0:09:15.360 --> 0:09:17.880 The FED obviously does have to take a hard look 0:09:18.000 --> 0:09:23.760 at its rules as as as Congress, as does the administrations. 0:09:24.280 --> 0:09:26.800 I think it is a matter for ongoing discussion and 0:09:26.920 --> 0:09:29.840 cheer powells and a pretty strong signal. Well, it sound 0:09:29.880 --> 0:09:32.240 a pretty strong signal. But what should be the best 0:09:32.280 --> 0:09:36.040 outcome here? I'm not talking about senators and the politicians 0:09:36.120 --> 0:09:39.880 with feed officials and investment. What seems so germane to 0:09:39.920 --> 0:09:42.760 me is yeah, they can buy apple. That doesn't matter. 0:09:43.520 --> 0:09:48.480 Thinking by stock market, even commodities, et F etcetera. But 0:09:48.600 --> 0:09:51.800 the trading of anything having to do with a fixed 0:09:51.840 --> 0:09:55.720 income market did that strike you as odd? It does? 0:09:55.840 --> 0:09:58.440 I mean, I think the safer route for a feteficial 0:09:58.600 --> 0:10:02.080 would be to just toll on market measures, no trading 0:10:02.120 --> 0:10:06.080 of individual stocks or speculation in the fixed income market. 0:10:06.520 --> 0:10:09.160 You know, part of being an official is an abundance 0:10:09.200 --> 0:10:12.680 of caution so that people don't challenge your motors. Professor, 0:10:12.679 --> 0:10:15.080 do you think this is the credibility of the Federal 0:10:15.080 --> 0:10:18.840 Reserve or not? I don't. I don't. I think it's unfortunate, 0:10:18.880 --> 0:10:20.720 but I don't think it's certain the credibility of the FED. 0:10:21.080 --> 0:10:23.480 The issues for the credibility of the FED really have 0:10:23.600 --> 0:10:26.440 more to do with it stands on policy, frankly, than 0:10:26.920 --> 0:10:29.280 that on ethics. I want to talk about policy as well, 0:10:29.400 --> 0:10:32.520 particularly social policy. Professor. This is the quote from Senator 0:10:32.559 --> 0:10:35.280 Path to me. He said, I think he's tolerated a politicization. 0:10:35.280 --> 0:10:37.640 He's talking about Chair and Powell. The FED won't dring 0:10:37.640 --> 0:10:42.080 into the social and cultural areas where the FED doesn't belong. Professor, 0:10:42.080 --> 0:10:43.800 Can I have your reaction to that quote? What you 0:10:43.840 --> 0:10:47.640 make of that? Well, it's hard you know exactly what 0:10:47.720 --> 0:10:50.240 the center, to me is referring to the FED does 0:10:50.400 --> 0:10:53.520 have to think about the broader social construct of the economy. 0:10:53.640 --> 0:10:56.360 At the same time, in any organization, you want to 0:10:56.360 --> 0:10:59.560 be clear, you don't have mission creep. The job one 0:10:59.640 --> 0:11:03.360 for the FED is low and stable inflation and maximum 0:11:03.440 --> 0:11:07.520 employment and of course financial stability. Some of the social 0:11:07.600 --> 0:11:11.840 concerns are wound up in that climate change, for example. 0:11:12.080 --> 0:11:14.000 But I think the FED has to be very careful 0:11:14.040 --> 0:11:16.400 to focus on its key jobs and do them well. 0:11:17.760 --> 0:11:21.400 Confederate Reserve Chairman Jerome Powell continue to do his job well, 0:11:21.440 --> 0:11:24.839 do you think he deserves the second term? Well, out, 0:11:24.840 --> 0:11:26.880 of course is for the presidents, is they not for me? 0:11:27.080 --> 0:11:31.719 I think he does. The FED has had I think 0:11:31.760 --> 0:11:34.840 a good record during the pandemic period, and I agree 0:11:34.840 --> 0:11:38.320 with everything, but certainly very good record. Cheer. Powell also 0:11:38.440 --> 0:11:42.640 has had an ability that's quite distinctive to talk credibly 0:11:42.679 --> 0:11:45.199 to people on both sides of the aisle. So I 0:11:45.240 --> 0:11:48.360 think it would probably be a mistake not to reappointment. Well, 0:11:48.400 --> 0:11:50.320 let's talk about how he's going to talk at the 0:11:50.320 --> 0:11:52.960 press conference today. Do you think the FED can credibly 0:11:53.240 --> 0:11:57.880 separate a tapering of bond purchases month on month versus 0:11:57.880 --> 0:12:01.520 starting to hike interest rates sometime in the future. Great question. 0:12:01.679 --> 0:12:05.160 Obviously Chair Power will try to do just that. It's 0:12:05.200 --> 0:12:07.760 obvious that we have to have some sort of clear 0:12:07.880 --> 0:12:11.440 taper signals. There's no reason for the Central Bank to 0:12:11.520 --> 0:12:15.760 be providing large asset purchases to bolster aggregate demand. What 0:12:15.920 --> 0:12:19.320 inflation is high and supply is the problem. At the 0:12:19.360 --> 0:12:21.840 same time, a lot of people realize the dot plots 0:12:21.880 --> 0:12:26.200 are shifting the possibility of a rate increase into But 0:12:26.240 --> 0:12:29.240 I would expect Chair Powell to put off that discussion 0:12:29.559 --> 0:12:32.280 if you can, during the press conference. But you're right, 0:12:32.360 --> 0:12:34.840 it will come up, and it should. Glenn Hubbard, my 0:12:34.920 --> 0:12:38.000 book of the year is In Defense of Public Debt. 0:12:38.080 --> 0:12:41.600 I announced that quickly yesterday at Granted this is Barry 0:12:41.600 --> 0:12:44.800 Ike and Green's tour to force on public debt. You 0:12:44.840 --> 0:12:50.640 are the single greatest spokesman of responsible not supply side theory, 0:12:50.720 --> 0:12:54.520 but a more conservative theory. He opens his book with 0:12:54.600 --> 0:12:58.480 a senator from Kentucky, the junior senator from Kentucky, giving 0:12:58.520 --> 0:13:03.680 a traditional public at fear line. Speak to conservatives in America, 0:13:04.080 --> 0:13:07.120 what do they get wrong about our ability to solve 0:13:07.520 --> 0:13:12.440 this public debt crisis we're in. Well, it's a great question, Tom, 0:13:12.440 --> 0:13:15.720 and debt for a household, for a business, for a country, 0:13:16.160 --> 0:13:18.480 whether it's good or bad depends on what you're using 0:13:18.520 --> 0:13:22.479 it for. So the use of debt for the future, 0:13:22.480 --> 0:13:27.560 fighting a war, infrastructure, part of even your ongoing budget 0:13:27.640 --> 0:13:31.640 may make sense. The problem is when debt becomes UH 0:13:31.800 --> 0:13:36.040 completely wrapped up into large social programs that are unfunded. 0:13:36.080 --> 0:13:38.840 That's not just an American problem, it's a it's a 0:13:38.880 --> 0:13:42.240 global problem. So the issue is not necessarily how high 0:13:42.280 --> 0:13:45.920 debt is relative to GDP, but what we're doing for it, 0:13:46.440 --> 0:13:49.040 and eventually, of course that debt has to be UH. 0:13:49.200 --> 0:13:53.720 The ancient glen, the ancient conservative issue is if the 0:13:53.760 --> 0:13:57.080 Senator from Vermont comes out with three point five trillion 0:13:57.120 --> 0:14:01.000 dollars of social programs, whether it's to run doesn't matter, 0:14:01.200 --> 0:14:04.800 it will not be applied correctly. Do you see where 0:14:04.840 --> 0:14:09.319 we can have a two part fiscal expansion now where 0:14:09.320 --> 0:14:14.880 we can have confidence it will be applied productively. I do, 0:14:15.080 --> 0:14:17.160 and it's different than what we're talking about. So Part 0:14:17.240 --> 0:14:20.000 one is already on the table, which is something akin 0:14:20.120 --> 0:14:24.000 to the bipartisan Infrastructure Bill. Even that bill is more 0:14:24.000 --> 0:14:27.040 in it than I would call infrastructure, but it's certainly 0:14:27.440 --> 0:14:29.960 a very good bill. A second part would be more 0:14:29.960 --> 0:14:35.880 opportunity focused, helping to connect and reconnect everybody to the economy. 0:14:36.240 --> 0:14:38.680 You can do that much more cheaply than the vast 0:14:38.880 --> 0:14:42.840 non means tested expansion of social programs and Senator standards 0:14:42.880 --> 0:14:45.080 and others or suggest So is the three and a 0:14:45.080 --> 0:14:49.680 half trillion dollar price tag to high? Glenn? Well, yes, 0:14:49.760 --> 0:14:52.480 but I don't even think that's the question. The question 0:14:52.520 --> 0:14:53.880 is not whether it's one and a half or three 0:14:53.920 --> 0:14:55.960 and now, but what is it? And if it's a 0:14:56.000 --> 0:15:00.880 massive expansion of the state in new entitlement programs, that's 0:15:00.920 --> 0:15:03.280 something we ought to ask. Are we promoting work and 0:15:03.360 --> 0:15:05.960 opportunity or were doing something else? That to me is 0:15:06.000 --> 0:15:08.880 the threshold question. But yes, the price tag is too high. 0:15:08.920 --> 0:15:12.200 There's no credible pay fors for a bill that size. Well, 0:15:12.200 --> 0:15:14.680 the pay for is being considered are many, and they're 0:15:14.760 --> 0:15:17.160 higher taxes in many shapes and forms. What do you 0:15:17.200 --> 0:15:20.600 think the growth impact of that is? If those pay 0:15:20.680 --> 0:15:24.760 fors do indeed mean that Americans, granted wealthier ones, have 0:15:24.920 --> 0:15:28.480 to pay more, what depends on the pay for? You know, 0:15:28.520 --> 0:15:32.200 obviously the economy of will survive a modest increase in 0:15:32.240 --> 0:15:34.320 the corporate tax. I don't think it's a good idea 0:15:34.400 --> 0:15:37.920 of it will certainly be survived. But the small increases 0:15:37.960 --> 0:15:40.640 in capital taxes that might have a chance of being 0:15:40.720 --> 0:15:43.560 enacted are too small to really pay for anything like 0:15:43.640 --> 0:15:47.760 this bill, and assumptions like savings and drug prices are 0:15:47.800 --> 0:15:50.640 a remaking of a system, not really a pay for 0:15:50.800 --> 0:15:54.640 it a conventional set. So the numbers just don't add up. Number. 0:15:54.800 --> 0:15:57.880 What does Chairman Powell not want to say today? What's 0:15:57.880 --> 0:16:02.480 a single thing where he needs to be signed? Well, 0:16:02.520 --> 0:16:05.600 I would guess from his perspective he would rather punt 0:16:05.680 --> 0:16:08.800 on the discussion of the path for rates as opposed 0:16:08.840 --> 0:16:12.840 to tapering. He probably also would like to avoid talking 0:16:12.880 --> 0:16:17.080 about the other taper that's happening, which is the change 0:16:17.080 --> 0:16:19.920 in the rate of growth of fiscal stimulus. Obviously, that 0:16:20.080 --> 0:16:23.040 is a taper that will be affecting the economy too, 0:16:23.120 --> 0:16:25.960 and I doubt he wants to weigh into that. Glenn, 0:16:26.000 --> 0:16:28.960 thank you as always fantastic to catch up with. Glen 0:16:29.400 --> 0:16:32.640 That the Columbia Business School dean emeritus and former Council 0:16:32.920 --> 0:16:41.800 of Economic Advisors Chairman. It's what's so important here, John, 0:16:41.880 --> 0:16:44.280 is the idea of will I go full brid We 0:16:44.320 --> 0:16:47.120 know the measurement of you going full Yank in black rocket. 0:16:47.200 --> 0:16:50.720 Mr Fink have decided we need the British to go 0:16:50.840 --> 0:16:54.360 full Yank in America. And our next guest is she's 0:16:54.520 --> 0:16:57.240 she's gone full You want to have this discussion with 0:16:57.320 --> 0:17:00.800 a wonderful fund manager. Yeah, she is makes comes strategists 0:17:00.840 --> 0:17:02.640 like Marin Watson. You want to do that now, which no, 0:17:03.000 --> 0:17:04.720 we do right now. We can talk to her about 0:17:04.720 --> 0:17:07.520 the serious issues. But she's an example of the international 0:17:07.680 --> 0:17:10.520 zai absolutely. Marilyn. Did you find that you lost your 0:17:10.560 --> 0:17:14.439 tease early on? Is that what happened? I think I 0:17:14.440 --> 0:17:16.320 have lost them a little bit. I'm trying hard, not 0:17:16.359 --> 0:17:18.159 too though. I'm trying to keep them, but trying to 0:17:19.240 --> 0:17:22.199 slip might slip to Marilyn. It's great a catch up 0:17:22.200 --> 0:17:24.000 with the Marilyn Watson here with this black Rock head 0:17:24.000 --> 0:17:27.480 of global fundamental fixed income strategy. Marilyn, let's just start 0:17:27.480 --> 0:17:30.320 with today and the Federal Reserved Chairman. Something we've mentioned 0:17:30.320 --> 0:17:33.720 through the morning how difficult it will be to communicate 0:17:33.800 --> 0:17:37.720 that the decision ultimately on Que's divorced from a decision 0:17:37.760 --> 0:17:40.680 on rates doesn't set the clock ticking when the dot 0:17:40.720 --> 0:17:44.080 plot is going to be in the mix as well. Yeah, 0:17:44.320 --> 0:17:47.240 I think already they've done a relatively good job of 0:17:47.359 --> 0:17:53.200 trying to decouple tapering quee with a rising interest rates. 0:17:53.200 --> 0:17:55.080 I think they've been trying to signal that, and I 0:17:55.080 --> 0:17:57.720 think they have done a relatively good job. I think 0:17:57.760 --> 0:18:02.200 going into today, the market is expecting to maybe hear 0:18:02.280 --> 0:18:05.720 a little bit more around tapering, but they're not expecting 0:18:05.760 --> 0:18:08.400 too much. Maybe, um, something will change in the forward 0:18:08.440 --> 0:18:12.000 guidance about you know, substantial further progress being made UM, 0:18:12.080 --> 0:18:14.080 and you know, the market, I think, you know, the 0:18:14.160 --> 0:18:17.840 consensus is that tapering will start at some point before 0:18:17.880 --> 0:18:20.720 the end of this year. UM. In terms of the dots, 0:18:20.760 --> 0:18:22.800 that is something that we and I think most market 0:18:22.800 --> 0:18:25.159 participants will be keeping a very very keen eye on, 0:18:25.200 --> 0:18:28.760 particularly as we see um, you know, maybe maybe an 0:18:28.800 --> 0:18:31.800 adjustment two. It's hard to see, but we'll also get 0:18:31.800 --> 0:18:35.000 the nuance scored twenty four and at the moment, it 0:18:35.080 --> 0:18:38.480 probably looks like the Federal still probably be suggesting in 0:18:38.520 --> 0:18:40.960 adopt loots that you maybe have three great hikes in 0:18:40.960 --> 0:18:43.560 twenty twenty three and three and twenty twenty four. But 0:18:44.119 --> 0:18:46.000 I think that's so far done a pretty good job 0:18:46.040 --> 0:18:49.960 of keeping a tapering queue and a changing interest rate's 0:18:49.960 --> 0:18:53.000 pretty well separated. Well. You do a world class job 0:18:53.040 --> 0:18:57.360 of synthesizing all that you read and fixed income dynamics, 0:18:57.640 --> 0:19:02.600 what do you anticipate the real you will do well. 0:19:02.680 --> 0:19:05.040 So it's interesting if you look at the behavior of 0:19:05.760 --> 0:19:09.560 the U S real yield versus h you European rates, 0:19:09.680 --> 0:19:13.480 or you actually see that, you know, in relative terms, 0:19:13.520 --> 0:19:16.199 actually it takes a little bit higher um and I 0:19:16.240 --> 0:19:18.560 think if you do start to see it, it depends 0:19:19.160 --> 0:19:22.240 the messaging taking away from this meeting, and if we 0:19:22.320 --> 0:19:26.359 do get further guidance on you know, tapering towards the 0:19:26.400 --> 0:19:29.320 end of the year, maybe the dots as well, if 0:19:29.359 --> 0:19:32.720 it's perceived to be a bit more dovish, then I 0:19:32.760 --> 0:19:35.320 do think you will start to see you know, you'll 0:19:35.320 --> 0:19:37.960 subb to see the dollar tick down, and you'll see 0:19:37.960 --> 0:19:40.560 an impact on bill hills as well. But at the moment, 0:19:40.600 --> 0:19:43.639 I think we would expect to see real yields continue 0:19:43.680 --> 0:19:46.359 to basically tick up a little bit more if we 0:19:46.400 --> 0:19:48.560 do get the FED you know, signaling that they are 0:19:48.600 --> 0:19:51.840 going to continue with the framework of tapering before the 0:19:51.960 --> 0:19:53.639 end of this year, and also the pace will be 0:19:53.680 --> 0:19:57.000 important as well. I doubt Maryland that the dead ceiling 0:19:57.040 --> 0:19:59.719 in today's decision is going to have any real bearing 0:20:00.040 --> 0:20:02.800 for the FED, But for the bond market, is there 0:20:02.840 --> 0:20:06.119 a real fear there around the potential of that suspension 0:20:06.240 --> 0:20:11.080 not being extended. Well, I think it's definitely another layer 0:20:11.119 --> 0:20:13.880 of uncertainty to add to the myth mix, and it's 0:20:13.880 --> 0:20:18.240 certainly another risk. I think, Um, you know, not to 0:20:18.280 --> 0:20:20.960 be fully discounting it, because it is it is a 0:20:21.080 --> 0:20:24.320 risk that is still there. But you know, on the 0:20:24.359 --> 0:20:27.280 base scenario it is that something will be agreed. But 0:20:27.720 --> 0:20:30.199 I think if you add that to to COVID, you 0:20:30.280 --> 0:20:34.240 add it to the news around growth generally in China 0:20:34.400 --> 0:20:38.080 and elsewhere as well. Um, it's just another factor that 0:20:38.160 --> 0:20:40.600 I think will maybe contribute a little bit more to 0:20:40.600 --> 0:20:43.400 the ongoing volatility that we're seeing at the moment, perhaps 0:20:44.040 --> 0:20:45.880 more in the exuerty market than actually in the fixing 0:20:45.920 --> 0:20:47.520 com market at the moment. But as you say, I 0:20:47.520 --> 0:20:49.720 think it is definitely a risk, and I think it 0:20:49.800 --> 0:20:52.760 is to a certain extent big priced in. But at 0:20:52.760 --> 0:20:57.600 the moment um, you know, I think the general consensus 0:20:57.640 --> 0:21:00.520 that will be some sort of agreement, but most there 0:21:00.560 --> 0:21:02.760 always is China will deal with it. China will deal 0:21:02.800 --> 0:21:05.119 with it. Marian, Thank you. Mann Watson. Black Rock Head 0:21:05.160 --> 0:21:14.320 a global fundamental fixed income strategy. GM four A is 0:21:14.359 --> 0:21:17.199 standing by he could join in this conversation. Airbus is 0:21:17.240 --> 0:21:20.000 holding a sustainability day to day down in to lose 0:21:20.080 --> 0:21:24.399 this clearly ahead of COP twenty six GM. Welcome to 0:21:24.400 --> 0:21:26.240 the program. Thank you very much, D for your time 0:21:26.280 --> 0:21:28.960 this morning. You said this morning, and we'll talk about 0:21:29.000 --> 0:21:32.880 sustainability first. You said this morning that you are becoming 0:21:32.960 --> 0:21:37.120 quote more confident in your ability to deliver a hydrogen 0:21:37.200 --> 0:21:41.919 airplane by twenty five GM. The physics and the chemistry 0:21:42.080 --> 0:21:46.159 is incredibly complicated. What gives you that confidence. The physics 0:21:46.280 --> 0:21:50.760 is complicated, but the physics works. Hydrogen technologies are not new. 0:21:50.800 --> 0:21:54.439 They are used in in other sectors. We use them 0:21:54.480 --> 0:21:57.240 in space on our rockets, and we don't need the 0:21:57.280 --> 0:21:59.280 loads of physics to change to be able to use 0:21:59.359 --> 0:22:02.920 hydrogen on our planes. So every day we become more confident. 0:22:03.520 --> 0:22:05.399 But we think we need to have a plane. We 0:22:05.480 --> 0:22:08.520 need to have the right fuel, the hydrogen available in 0:22:08.840 --> 0:22:11.600 the right quantity at the right place at the right time, 0:22:11.920 --> 0:22:14.040 and we need the regulations to be ready. So we 0:22:14.080 --> 0:22:18.359 really need the work and the collaboration of many people 0:22:18.400 --> 0:22:20.560 are on the globe to make it happen. And that's 0:22:20.560 --> 0:22:23.399 why we have the summit to create that momentum and 0:22:23.440 --> 0:22:25.800 make sure we have the right level of collaboration to 0:22:25.880 --> 0:22:28.800 make it happen on time. What problems do you still 0:22:28.840 --> 0:22:31.639 need to solve, what needs fixing, and what kind of 0:22:31.640 --> 0:22:34.439 aircraft should we be thinking about. Is this kind of 0:22:34.440 --> 0:22:37.920 a turbo prop sized aircraft a smaller aircraft all were 0:22:37.920 --> 0:22:40.800 thinking about a replacement for the eight three twenty family. 0:22:41.240 --> 0:22:45.119 The technology needs to be introduced in planes in aviation, 0:22:45.240 --> 0:22:47.200 so we we need to be able to deliver the 0:22:47.760 --> 0:22:50.440 fuel at the airport, to use the plane on board, 0:22:50.440 --> 0:22:52.960 to store it, to burn it, or to use it 0:22:53.000 --> 0:22:55.440 in a fuel cell um. There's a lot at stake 0:22:55.480 --> 0:22:58.440 at the moment we are looking at those technologies, so 0:22:58.520 --> 0:23:01.639 it's not really about solving problem ms. It's about understanding 0:23:01.640 --> 0:23:04.840 the way we can use the different technologies and then 0:23:04.840 --> 0:23:09.639 selecting the right ones. When it comes to the plane themselves, 0:23:10.880 --> 0:23:15.119 Hydrogen as different characteristics compared to carosine. There is a 0:23:15.200 --> 0:23:19.640