WEBVTT - Coronavirus Is Dominating The U.S. Due To Failure To Control It 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.200 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:09.240 we bring you interviews from CEOs, A, market pros, and 0:00:09.400 --> 0:00:12.799 Bloomberg experts, along with essential market moving news. Kind the 0:00:12.800 --> 0:00:16.320 Bloomberg Markets Podcast on Apple Podcasts or wherever you listen 0:00:16.360 --> 0:00:21.279 to podcasts, and on Bloomberg dot com. Well. In a 0:00:21.440 --> 0:00:24.360 video released shortly after his return to the White House 0:00:24.400 --> 0:00:27.000 from Walter Reet Hospital, President Trump sought the play down 0:00:27.040 --> 0:00:29.320 the peril of the virus that has killed more than 0:00:29.320 --> 0:00:32.360 two hundred ten thousand Americans since Let's take a listen. 0:00:33.159 --> 0:00:36.159 Don't let it dominate, don't let it take over your lives. 0:00:36.760 --> 0:00:39.520 Don't let that happen. We're the greatest country in the world. 0:00:39.960 --> 0:00:42.240 We're going back, We're going back to work. We're gonna 0:00:42.240 --> 0:00:44.760 be out front as your leader. I had to do that. 0:00:44.920 --> 0:00:46.680 I knew there's danger to it, but I had to 0:00:46.720 --> 0:00:51.600 do it. I stood out front. I lead. That was 0:00:51.640 --> 0:00:54.520 President Trump speaking in a video. Let's get some color 0:00:54.680 --> 0:00:56.480 on some of those points there. We can do that 0:00:56.560 --> 0:01:00.760 with dr amish Abalgia senior scholar, Ineffectiousness East physician, the 0:01:00.840 --> 0:01:03.960 Johns Hopkins Center for Health Security at the Bloomberg School 0:01:04.000 --> 0:01:06.639 of Public Health. We should note that the JOHNS Hopkins 0:01:06.680 --> 0:01:09.440 Bloomberg School of Public Health is supported by Michael R. Bloomberg, 0:01:09.440 --> 0:01:12.959 founder of Bloomberg LP, Bloomberg Philanthropies. And this radio and 0:01:13.000 --> 0:01:15.720 TV operation. Dr Dodger, thanks so much for joining us. 0:01:15.760 --> 0:01:19.160 What were your thoughts as to President President Trump and 0:01:19.160 --> 0:01:21.720 his comments since leaving the hospital that don't let it 0:01:21.760 --> 0:01:24.479 dominate you. He even made it in a tweet today 0:01:24.840 --> 0:01:26.840 comparing it to the flu. What are your thoughts there? 0:01:28.160 --> 0:01:30.800 I think these are kind of misguided statements. And the 0:01:30.880 --> 0:01:33.880 fact is coronavirus is dominating us, and it's dominating us 0:01:33.920 --> 0:01:37.200 because we've failed to control it and we haven't still 0:01:37.720 --> 0:01:40.920 no ability to test, trace and isolate, and until we do, 0:01:41.319 --> 0:01:43.400 the virus is going to dominate us, whether or not 0:01:43.440 --> 0:01:46.399 we want to or not. And this isn't something to 0:01:46.440 --> 0:01:49.160 compare it to influenza. This is at least six times 0:01:49.160 --> 0:01:53.360 more fatal than influenza, and influenza isn't a worldwide calamity 0:01:53.400 --> 0:01:55.920 and disruption the way COVID nineteen is. So I think 0:01:55.960 --> 0:01:59.840 this is the President getting back to his standard down 0:02:00.040 --> 0:02:03.880 laying misinformation and outright lies about the virus that he 0:02:03.960 --> 0:02:08.800 himself luckily has survived, dr adlda. Should everybody get the 0:02:08.800 --> 0:02:13.080 exact same course of treatment that the President has gotten. No, 0:02:13.320 --> 0:02:16.600 each person's treatment is individualized based upon what types of 0:02:16.639 --> 0:02:20.720 symptoms they're having. So if somebody needs oxygen, they usually 0:02:20.720 --> 0:02:23.040 do get rem desevere in DEXI methods, and that's part 0:02:23.080 --> 0:02:26.160 of the standard of care for individuals who require oxygen. 0:02:26.520 --> 0:02:29.480 The regeneration antibody treatment that he got on compassionate use, 0:02:29.560 --> 0:02:32.359 that's not available to the general public in the clinical 0:02:32.400 --> 0:02:35.320 trials right now, So that isn't something that we give 0:02:35.360 --> 0:02:37.920 to people. We don't know if it works yet. We 0:02:37.919 --> 0:02:39.679 don't know if it works even in the President's case. 0:02:39.720 --> 0:02:42.160 But the steroids and the remdesks of your are our 0:02:42.200 --> 0:02:46.320 standard of care for oxygen basically oxygen. Docay, I know 0:02:46.400 --> 0:02:48.959 the President is not your patient, but in your opinion, 0:02:49.040 --> 0:02:52.160 based upon the knowledge that we have publicly available, should 0:02:52.240 --> 0:02:55.799 he have left the hospital, well, I think I've had 0:02:55.800 --> 0:02:58.560 patients that do well and they get discharged pretty quickly 0:02:58.800 --> 0:03:01.320 and turn around quickly even when they've been on oxygen, 0:03:01.880 --> 0:03:03.680 So so I do. I do think it's something that 0:03:03.720 --> 0:03:05.520 you have to look at. Is he on a good trajectory, 0:03:05.560 --> 0:03:08.000 have his symptoms improved? Is he no longer requiring supple 0:03:08.000 --> 0:03:10.080 metal oxygen? And then the other question is where are 0:03:10.120 --> 0:03:11.880 you sending him to? Are you sending him to somewhere 0:03:11.880 --> 0:03:14.519 that faith where he has support in case he gets 0:03:14.520 --> 0:03:17.120 into trouble again. And obviously the White House is not 0:03:17.200 --> 0:03:19.720 the same thing as sending him to an apartment somewhere 0:03:19.720 --> 0:03:21.799 where there's nobody to help him walk up four flights 0:03:21.800 --> 0:03:25.080 of stairs. So the White House has a sophisticated medical 0:03:25.160 --> 0:03:28.040 unit which can give supplemental oxygen, which can give intravenous drugs. 0:03:28.160 --> 0:03:30.080 They have around the clock doctors and nurses and other 0:03:30.120 --> 0:03:33.160 medical professionals there. So he really isn't going home in 0:03:33.200 --> 0:03:34.880 the sense that you and I might be going home. 0:03:34.880 --> 0:03:39.360 He's going to basically an advanced almost almost an advanced 0:03:39.360 --> 0:03:42.920 hospital in many by many standards, apart from putting other 0:03:42.960 --> 0:03:45.240 people at risk when he takes off the mask indoors 0:03:45.240 --> 0:03:47.040 at the White House or when he takes a car 0:03:47.160 --> 0:03:51.320 ride with Secret Service agents, albeit in Ppe. Potentially, what 0:03:51.480 --> 0:03:54.760 about the idea that he is being active on these 0:03:54.840 --> 0:03:59.640 drugs doesn't mean that he's doing himself some damage If 0:03:59.680 --> 0:04:02.720 he feel feels good and gets active or is that 0:04:02.840 --> 0:04:05.760 totally fine? If you feel good, then you know, make 0:04:05.840 --> 0:04:08.520 use of your body while you can. Well, we want 0:04:08.560 --> 0:04:12.600 people to re engage with their activities of daily living 0:04:13.040 --> 0:04:14.840 in a measured way. We want to We don't want 0:04:14.840 --> 0:04:16.920 people to go too fast, too quickly, So I think 0:04:16.920 --> 0:04:19.320 it's important that his doctors gauge it. And it's very 0:04:19.320 --> 0:04:20.919 hard to do that from a distance because I'm not 0:04:21.000 --> 0:04:23.520 his position to know exactly how much trouble he has 0:04:23.600 --> 0:04:26.119 doing activities of daily living. But we do want people 0:04:26.160 --> 0:04:31.080 to not be bedridden and not not do anything, because 0:04:31.080 --> 0:04:33.040 that also puts you at risk for complications. So if 0:04:33.080 --> 0:04:35.040 you are able to be active after you've recovered from 0:04:35.040 --> 0:04:37.839 COVID nineteen or even during COVID nineteen, it's important to 0:04:38.040 --> 0:04:41.159 take a measured amount of activity and titrate that based 0:04:41.160 --> 0:04:43.200 on your symptoms and how you're doing overall. And that's 0:04:43.200 --> 0:04:45.799 something that his doctors hopefully are helping him to decide. 0:04:46.800 --> 0:04:49.200 Dr do we know whether he is still in sexious? 0:04:49.200 --> 0:04:52.600 The president he he is still infectious. We we know 0:04:52.640 --> 0:04:54.839 that people are infectious for at least a period of 0:04:54.839 --> 0:04:57.640 ten days from when symptoms occur, so he is still 0:04:58.160 --> 0:05:00.480 still contagious to other people, probably or a couple of 0:05:00.600 --> 0:05:04.120 at least several more days. Doctor, There's probably not much 0:05:04.120 --> 0:05:06.280 you can say about this, but isn't it concerning that 0:05:06.800 --> 0:05:09.920 cases are just proliberating now throughout the White House and 0:05:10.320 --> 0:05:12.520 all sorts of people that were involved in debate prep 0:05:12.600 --> 0:05:14.800 We're at the Rose Garden, you know, and and and 0:05:14.839 --> 0:05:17.920 even staff at the White House, and presumably they'll get 0:05:18.000 --> 0:05:23.560 medical care, but this will put pressure on DC medical resources. Again, Yes, 0:05:23.640 --> 0:05:27.799 this is unacceptable and inexcusable. What's going on this White 0:05:27.800 --> 0:05:31.320 House super spreader cluster needs to be investigated appropriately, in 0:05:31.520 --> 0:05:34.120 inappropriate action taken. This is the biggest super spreading event 0:05:34.120 --> 0:05:35.800 we've seen in DC, and it was in the White House, 0:05:35.839 --> 0:05:38.640 in the most protective place on the planet. And I 0:05:38.680 --> 0:05:41.520 think that this is something that we need to understand 0:05:41.760 --> 0:05:44.000 what the dynamics are transmission were there. We need to 0:05:44.080 --> 0:05:47.039 contact race and case investigate to understand how far this 0:05:47.080 --> 0:05:49.720 will reach. Because these people, although they were on federal 0:05:49.760 --> 0:05:52.600 property in the DC Public Health Department doesn't have jurisdiction there. 0:05:52.600 --> 0:05:54.920 There are a lot of them are DC residents and 0:05:54.960 --> 0:05:58.600 the DC Public Health authorities need to contact trace those 0:05:58.600 --> 0:06:00.680 individuals to make sure that they're not starting to change 0:06:00.680 --> 0:06:02.920 the transmission that are going to land on vulnerable people. 0:06:02.920 --> 0:06:05.680 We've already had the President hospitalized and we have former 0:06:05.720 --> 0:06:08.760 Governor Christie hospitalized based on these events. So we don't 0:06:08.760 --> 0:06:11.320 want more people hospitalized because of the failure of the 0:06:11.320 --> 0:06:14.200 White House to actually take an event that they caused 0:06:14.320 --> 0:06:19.360 and perpetuated. Seriously, do we know whether there is contact 0:06:19.360 --> 0:06:21.760 facing going on for those people that were at the 0:06:21.800 --> 0:06:26.640 Rose Garden event. What we've heard is that the DC 0:06:26.760 --> 0:06:30.240 Public Health has not had much cooperation from from the 0:06:30.240 --> 0:06:33.599 White House. We've heard the CDC had a contact tracing team, 0:06:33.800 --> 0:06:35.559 but they're not doing it. So this is being handled 0:06:35.600 --> 0:06:37.599 internally from the White House. So like most things that 0:06:37.640 --> 0:06:40.080 have happened, are regarding this is probably this is going 0:06:40.120 --> 0:06:43.840 to be characterized by opaqueness and obfuscation, and so I'm 0:06:43.880 --> 0:06:46.040 not sure how much contact anything is going on. We're 0:06:46.040 --> 0:06:50.039 hearing that people were not contacted. For example, uh, the 0:06:50.080 --> 0:06:53.400 governor of of of Ohio said he was not contacted 0:06:53.440 --> 0:06:56.279 about the fact that people that the debate had positive 0:06:56.279 --> 0:06:59.560 people there. So I'm unclear to how robust is contact 0:06:59.600 --> 0:07:02.360 tracing is going on. And in the president position, Dr 0:07:02.360 --> 0:07:04.800 Commy has been no help in this manner. Uh So 0:07:05.560 --> 0:07:07.240 I don't have a great confidence that they will be 0:07:07.279 --> 0:07:09.840 able to stop these changes of transmissions because they're choosing 0:07:09.840 --> 0:07:12.640 not to soft this change of transmission. Wow, just let 0:07:12.680 --> 0:07:15.480 that thing in for a second. Dr Amish Adulga, thank 0:07:15.560 --> 0:07:18.320 you so much. Really a great pleasure to speak with 0:07:18.360 --> 0:07:22.560 you always. Dr Adulga is senior scholar and infectious disease 0:07:22.640 --> 0:07:27.160 physician at the Johns Hopkins Center for Health Security. That 0:07:27.320 --> 0:07:31.000 is a pretty stunning turn of affairs. We we knew it, 0:07:31.080 --> 0:07:33.080 but to hear somebody who has treated patients, who has 0:07:33.120 --> 0:07:37.440 released patients, who you know largely is you know, watching 0:07:37.440 --> 0:07:40.360 what's going on and assuming the best, to hear this 0:07:40.520 --> 0:07:43.600 is pretty stunning, Paul, It really is. It just flies 0:07:43.840 --> 0:07:45.960 in the face of all the science that we know 0:07:46.280 --> 0:07:49.880 that we know has worked so well, which is you 0:07:49.920 --> 0:07:52.840 know where your mask keeps six ft apart? Wash your hands. 0:07:52.840 --> 0:07:54.320 We know that here are the people in the Metro 0:07:54.360 --> 0:07:56.840 and York area no better than anybody, and not to 0:07:56.840 --> 0:08:02.000 see it followed by our leaders is frustrated. This is 0:08:02.040 --> 0:08:06.360 Bloomberg Markets with Paul Sweeney and Bonny Quinn on Bloomberg Radio. 0:08:07.600 --> 0:08:09.880 During these tough times. Do you find yourself looking for 0:08:09.960 --> 0:08:14.280 images of puppies online? Well, if you do, then you 0:08:14.320 --> 0:08:17.160 definitely want to listen into our next interview because we're 0:08:17.160 --> 0:08:20.680 speaking with the CEO of Petco who joined the company 0:08:20.720 --> 0:08:24.320 in two thousand eighteen after having worked for HP PepsiCo 0:08:24.440 --> 0:08:27.760 for decades, So a lot of experience in corporate America 0:08:27.920 --> 0:08:31.040 and a little experience with pets. I'm sure let's welcome now. 0:08:31.320 --> 0:08:35.000 Ron Coglan, against CEO of Petco. Ron talked to us 0:08:35.000 --> 0:08:38.319 about the rise and pet adoptions and fostering during the pandemic. 0:08:38.559 --> 0:08:41.040 It seems like it might be a good idea if 0:08:41.040 --> 0:08:42.520 you're ever going to do it, to do it now 0:08:42.559 --> 0:08:46.760 when you're probably more likely to be at home. Absolutely well, 0:08:46.760 --> 0:08:49.240 first of all, great thanks for having me. Um. If 0:08:49.280 --> 0:08:52.320 you look at people at home, people may be looking 0:08:52.520 --> 0:08:56.000 being a little disconcerted through the pandemic pets for a 0:08:56.040 --> 0:09:01.920 way to have accompaniment and nurturing and seeing growth like 0:09:02.000 --> 0:09:05.880 we haven't seen in years in pet adoptions, pet fostering 0:09:06.160 --> 0:09:09.600 and new pets and households. Bank America just did a 0:09:09.720 --> 0:09:13.000 study and thirty seven percent of households and that study 0:09:13.040 --> 0:09:15.960 reported having a new pet. We have people calling our 0:09:16.000 --> 0:09:20.559 stores waiting to see when we'll have new reptiles, birds, fish, etcetera. 0:09:20.720 --> 0:09:26.680 So that's so ron just give us a sense of 0:09:26.679 --> 0:09:30.199 how your company, Petco has been dealing with the pandemic 0:09:30.280 --> 0:09:32.600 and and maybe some changes you've been forced to make 0:09:32.679 --> 0:09:36.920 and how you're thinking about your business. Yeah. Well, first 0:09:36.960 --> 0:09:40.359 it started with keeping everyone's safe, whether it's our customers 0:09:40.440 --> 0:09:43.280 or whether it's our employees. We put a lot of 0:09:43.320 --> 0:09:48.360 effort into shipping swimming pools of sanitizers, football fields of 0:09:48.520 --> 0:09:52.439 masks um in New York. We shifted our format, closed 0:09:52.440 --> 0:09:54.440 the front of the store. I went to Delhi order 0:09:54.520 --> 0:09:58.280 format where our team members shopped for you. So we 0:09:58.320 --> 0:10:00.760 did all that and I was very out and I'm 0:10:00.800 --> 0:10:04.760 proud that our COVID penetration amongst our team is one 0:10:04.840 --> 0:10:08.800 third the national average, despite folks interacting with humans all 0:10:08.880 --> 0:10:11.400 day long. We also stood up curdside pick up. In 0:10:11.480 --> 0:10:15.760 two weeks, we added five hundred ship from store locations, 0:10:15.760 --> 0:10:19.640 so our stores now are mini distribution centers. So a 0:10:19.720 --> 0:10:23.640 lot of fast work. But what this really solidified for 0:10:23.720 --> 0:10:25.719 us is we have a role to play take care 0:10:25.760 --> 0:10:30.000 of pets and our mission of improving lives and being 0:10:30.000 --> 0:10:33.599 a health and wellness company for pets. Ron, what's the 0:10:33.679 --> 0:10:39.200 update on I p O plans? Listen, we have more 0:10:39.240 --> 0:10:42.200 customers coming to us for more reasons, which is good. 0:10:42.200 --> 0:10:45.120 And whenever you have success, people start talking, but we 0:10:45.160 --> 0:10:49.000 don't comment on any such such things. So Ron talked 0:10:49.000 --> 0:10:53.080 to us about you know, how, how's how's your business been. 0:10:53.360 --> 0:10:55.480 I'm guessing its sales are up. We see the industry 0:10:55.520 --> 0:10:59.760 sales presumably a pet sales or pet adoptions and pet 0:10:59.800 --> 0:11:04.400 owners ship is up. Is that translating into your business? 0:11:04.440 --> 0:11:07.240 Like I said, we have more customers coming. Um, they 0:11:07.240 --> 0:11:11.599 are buying more food, buying more grooming, vaccinations. One of 0:11:11.600 --> 0:11:13.760 the things that's interesting is people are home all day, right, 0:11:13.960 --> 0:11:16.760 so they know that Fluffy needed to be groomed. They 0:11:16.800 --> 0:11:21.240 remember that Rover needed a vaccination. Uh so Um that 0:11:21.559 --> 0:11:24.120 the explosion of pets and people say more time with 0:11:24.160 --> 0:11:27.040 our pets has been good for us. But one of 0:11:27.040 --> 0:11:29.760 the things that you know, we take very seriously is 0:11:29.760 --> 0:11:34.119 our role. And today we're announcing that we are eliminating 0:11:34.160 --> 0:11:38.640 shock collars. Um. We codified our mission of being all 0:11:38.679 --> 0:11:41.920 about improving lives and pets and pet parents, and we 0:11:42.040 --> 0:11:44.960 just decided that shock collars aren't consistent with that. So 0:11:45.240 --> 0:11:48.559 we are eliminating shock collars from our stores starting today 0:11:48.679 --> 0:11:52.240 and actually starting a petition to have other retailers do 0:11:52.400 --> 0:11:57.960 similarly and offering folks um free training class online to 0:11:58.080 --> 0:12:01.000 replace it. Well, that sounds very reasonable. I'm sure pets, 0:12:01.040 --> 0:12:04.199 even in the training process, will be happy not to 0:12:04.240 --> 0:12:08.760 be shocked. Seriously. But that said, that just brings up 0:12:08.800 --> 0:12:12.400 the idea of people getting sort of you know, having 0:12:12.400 --> 0:12:14.839 strange tastes, let's put it that way. And I wonder 0:12:14.880 --> 0:12:16.920 after the launch of Tiger King on Netflix, did you 0:12:16.960 --> 0:12:19.720 see an increase in requests for sort of strange animals, 0:12:19.760 --> 0:12:25.640 wild animals, unusual animals. Yeah, our our companion animal business 0:12:26.400 --> 0:12:30.400 is doing very well. Uh in terms of strange animals, 0:12:30.720 --> 0:12:32.960 will leave that to the to the Tiger King. But 0:12:33.320 --> 0:12:35.440 are our folks in our stories do a great job? 0:12:35.559 --> 0:12:40.000 You said reptiles, they're pretty strange to me. Well to come, 0:12:40.000 --> 0:12:43.719 they're strange to others. Their their accompaniments, and we're very 0:12:43.760 --> 0:12:47.400 proud of the teams that handle those products. Ron, how 0:12:47.400 --> 0:12:49.800 do you gives a sense of how pet Co competes 0:12:49.840 --> 0:12:52.640 with some of the big Amazons of the world and 0:12:52.760 --> 0:12:55.560 some of the big chain department stores, where the pet 0:12:55.600 --> 0:12:58.760 department is just one department of a overall bigger enterprise. 0:12:58.800 --> 0:13:02.439 How do you traditionally compet against those bigger players. Yeah, 0:13:02.480 --> 0:13:03.839 so let me let me start at the top. I 0:13:04.360 --> 0:13:07.480 talked about our mission of improving lives of pets and 0:13:07.520 --> 0:13:11.319 pet parents. No other company in UM, whether it's the 0:13:11.360 --> 0:13:13.680 general merchandise like the ones you mentioned, or even in 0:13:13.720 --> 0:13:16.720 the pet space, is dedicated to health and wellness for pets. 0:13:17.000 --> 0:13:19.040 So I think of us as the CBS or the 0:13:19.080 --> 0:13:21.200 Whole Foods in the pet space, and we think that's 0:13:21.200 --> 0:13:25.840 a unique place. One two. Nobody else has a fully 0:13:25.880 --> 0:13:30.440 integrated solution from the training, to the grooming, to the 0:13:30.520 --> 0:13:35.520 veterinary care to UM food that has no artificial flavors 0:13:35.559 --> 0:13:40.199 and colors. Nobody else carries that whole has that whole 0:13:40.240 --> 0:13:43.120 suite of services for a one stop shop for a 0:13:43.120 --> 0:13:46.480 pet parent that's looking for health and wellness products for 0:13:46.559 --> 0:13:50.480 their for their pet. And what we launched last week 0:13:50.760 --> 0:13:54.600 was vital Care, and that is a membership program for 0:13:54.600 --> 0:13:58.400 a monthly fee. You get that nail trim, you get 0:13:58.440 --> 0:14:01.040 that vaccination, and you get the counts on your food. 0:14:01.360 --> 0:14:03.760 And nobody else can do that because nobody else has 0:14:03.800 --> 0:14:06.800 a fully integrated solution. Briefly wrong because we're out of time, 0:14:06.840 --> 0:14:11.240 but any COVID nineteam protection products or any inquiries on 0:14:11.280 --> 0:14:16.760 those things, um in terms of our our stores and 0:14:16.760 --> 0:14:22.640 our partners, absolutely, you know the pieces about COVID and pets. 0:14:23.880 --> 0:14:26.560 It's it was one in a million anecdotal. So we 0:14:26.600 --> 0:14:29.440 have not seen that as any issue that people need 0:14:29.480 --> 0:14:33.280 to worry about. That's good. Ron Coughlin, CEO of pet Co, 0:14:33.440 --> 0:14:35.240 joining us to talk to us about how the pet 0:14:35.280 --> 0:14:38.840 industry is doing in the pandemic and pet adoptions uh 0:14:38.880 --> 0:14:41.080 and sales up of four percent. That's kind of the 0:14:41.080 --> 0:14:46.080 headline for me. We're going to consult Ira Jersey right now, 0:14:46.160 --> 0:14:49.920 chief US Interest Rate Strategies for Bloomberg Intelligence. All right, 0:14:50.000 --> 0:14:51.880 we had a little bit of a move yesterday sort 0:14:51.880 --> 0:14:54.640 of walk everybody up, but that looks at the bond markets. 0:14:55.040 --> 0:14:58.560 It wasn't massive in historic terms, but it was good 0:14:58.600 --> 0:15:00.840 five basis points for the ten year and you know, 0:15:00.840 --> 0:15:03.760 another few basis points for the thirty year. But we're 0:15:03.800 --> 0:15:07.320 back to sort of stagnation again today. Do the bond 0:15:07.320 --> 0:15:12.080 market price in a less contested election and now we're done. Yeah, 0:15:12.080 --> 0:15:14.080 I don't. I don't know if it was as much 0:15:14.120 --> 0:15:17.400 as uh, not contested election, but I think the market 0:15:17.480 --> 0:15:20.040 is thinking that there's a higher probability of a Biden 0:15:20.160 --> 0:15:23.640 victory and and and so what that means is you're 0:15:23.800 --> 0:15:27.200 going to have, uh if, if Joe Biden wins, more 0:15:27.280 --> 0:15:30.000 likely a larger fiscal stimulus plan. And that's going to 0:15:30.080 --> 0:15:33.320 do two things. One it should theoretically be better for 0:15:33.360 --> 0:15:36.160 the economy in general then um then then say a 0:15:36.160 --> 0:15:39.400 smaller fiscal stimulus that you'd probably get with the split government. 0:15:39.760 --> 0:15:42.440 And two, and I think this is just as important, 0:15:42.960 --> 0:15:46.000 is um, if you do get that larger fiscal stimulus, 0:15:46.000 --> 0:15:48.000 you're gonna need there's gonna be more bonds out there 0:15:48.000 --> 0:15:50.760 are more supply. So so that's one of the reasons 0:15:50.760 --> 0:15:52.960 why you saw that steepening of the yield curve. And 0:15:52.960 --> 0:15:56.120 and we we broke some pretty important levels Fannie. So 0:15:56.120 --> 0:15:59.040 so one point five seven on the thirty year bond 0:15:59.160 --> 0:16:03.520 was h is the high from the post covid Um 0:16:04.320 --> 0:16:07.200 crisis period. And now that we've broken that, we now 0:16:07.320 --> 0:16:10.440 target yields that are actually about twenty basis points above 0:16:10.480 --> 0:16:12.840 where we are now. So so I think that that's 0:16:12.920 --> 0:16:14.720 like that those are the numbers you have to think 0:16:14.720 --> 0:16:16.840 about now as we get closer to the election. If 0:16:16.880 --> 0:16:19.880 it looks like Biden wins um, you know, we might 0:16:20.040 --> 0:16:23.960 creep higher and yield with the yield curves deepening. So 0:16:24.360 --> 0:16:28.240 we pat Chairman Pal speaking to a group of economists today, 0:16:28.280 --> 0:16:31.360 which sounds just like a hoot. I'm sure, Um, I've 0:16:31.360 --> 0:16:35.080 been there, yeah. Um. It seems like we hear from 0:16:35.160 --> 0:16:37.680 Chairman Pal almost on a weekly basis here, so I'm 0:16:37.720 --> 0:16:40.400 not expecting much here. But is there anything different here? 0:16:40.440 --> 0:16:44.000 Is this an audience that wants to hear something perhaps different, 0:16:44.200 --> 0:16:46.480 or has the ability to ask questions where we might 0:16:46.520 --> 0:16:49.120 get some news out of this. I don't. I think 0:16:49.160 --> 0:16:52.040 that he'll continue to be pretty coy and and basically 0:16:52.080 --> 0:16:55.040 reiterate what has been said at press conferences. I mean, 0:16:55.120 --> 0:16:57.120 one of the things now, Paul, is because we have 0:16:57.120 --> 0:16:59.440 press conferences at every single meeting, it's going to be 0:16:59.800 --> 0:17:03.080 really difficult for the FED chair in particular to say 0:17:03.200 --> 0:17:07.000 anything that's significantly different than what he said just you know, 0:17:07.240 --> 0:17:09.680 just a week ago or two weeks ago at at 0:17:09.720 --> 0:17:12.760 the at the press conference after the last meeting. I 0:17:12.760 --> 0:17:15.400 think it's so important to listen to the mosaic that's 0:17:15.400 --> 0:17:18.399 coming out with all the different FED members because you know, 0:17:18.480 --> 0:17:21.679 having an idea about what each member is thinking about 0:17:21.840 --> 0:17:24.800 for future policy matters, so you know, what are their 0:17:24.880 --> 0:17:28.760 own individual tendencies when it comes to how long that 0:17:28.880 --> 0:17:32.480 they'll let inflation run hot before they want to be hawkish. 0:17:32.600 --> 0:17:35.760 So obviously some some members of the committee or are 0:17:35.760 --> 0:17:38.119 going to be more hawkish. O there's more devish and 0:17:38.119 --> 0:17:42.119 and understanding the dynamics between those individual players will what 0:17:42.200 --> 0:17:44.440 will be key. But but to your point, I don't 0:17:44.480 --> 0:17:47.120 think Powell today is going to say much much that's 0:17:47.119 --> 0:17:49.320 gonna gonna be new. He will have to give his 0:17:49.359 --> 0:17:52.040 opinion on this bond market move though, right, I M 0:17:52.480 --> 0:17:54.960 not just that. But Charlie Opens is out yesterday sort 0:17:54.960 --> 0:17:56.960 of saying two and a half percent. At some point 0:17:56.960 --> 0:17:59.159 we'll need to know exactly what Powell things beyond two 0:18:00.240 --> 0:18:03.000 Well yeah, yeah, So so certainly Powell as a member 0:18:03.040 --> 0:18:06.399 like he'll wind up maybe saying something like, um, you know, 0:18:06.440 --> 0:18:09.720 my personal opinion, this is not the opinion of the committee, 0:18:09.800 --> 0:18:12.280 is that we should let it run hot until it 0:18:12.320 --> 0:18:14.840 seems like it's sustainable and we'll have to hike. But 0:18:14.840 --> 0:18:17.960 but you know that's gonna be you know, kind of um, 0:18:18.240 --> 0:18:20.600 nondescript enough that it's not going to give us that 0:18:20.680 --> 0:18:24.639 much new information. Um. When it comes to you know, 0:18:24.680 --> 0:18:29.040 the the bond market move, it's still within mostly the 0:18:29.160 --> 0:18:31.879 ranges that we've seen. So, you know, the tenure yield 0:18:31.920 --> 0:18:34.280 is still well within the ranges that we've seen over 0:18:34.359 --> 0:18:37.399 the last four months. So UM, So I don't I 0:18:37.400 --> 0:18:39.520 don't think that they'll he'll talk about it. I think 0:18:39.520 --> 0:18:42.320 that maybe he'll couch the steepening of the yield curve 0:18:42.359 --> 0:18:45.159 as a positive sign that the market thinks that the 0:18:45.280 --> 0:18:48.680 growth and inflation are going to be higher in the future. Um. 0:18:48.800 --> 0:18:51.920 But um but but you know, other than that talking 0:18:51.960 --> 0:18:54.399 about it being optimistic and optimistic view, I don't think 0:18:54.400 --> 0:18:56.359 you can say much more about the bond market move. 0:18:57.320 --> 0:19:00.720 I wrote, what is this reserved actually doing in terms 0:19:00.720 --> 0:19:04.119 of being in the market buying bonds? How active they've did? 0:19:04.240 --> 0:19:07.000 What have they been buying? Yeah, so so well, they 0:19:07.000 --> 0:19:09.320 haven't actually changed very much at all. We put out 0:19:09.359 --> 0:19:11.960 a weekly note every Friday with what they've purchased in 0:19:12.000 --> 0:19:17.160 that week. Um, and the basically they're still just buying 0:19:17.320 --> 0:19:20.560 every day a little bit and uh, all throughout the curve. 0:19:20.600 --> 0:19:22.800 They haven't changed that, and most of their purchases are 0:19:22.800 --> 0:19:24.440 actually in the front end of the curve, so they're 0:19:24.480 --> 0:19:29.280 in low risk, shorter maturity bonds and uh so, so 0:19:29.440 --> 0:19:32.320 you know, that's keeping that part of the yield curve 0:19:33.040 --> 0:19:35.159 very tame and timid. So even though you had a 0:19:35.160 --> 0:19:37.359 pretty decent move yesterday and say the tenure in the 0:19:37.359 --> 0:19:40.000 thirty year, the front ends still didn't move very much. 0:19:40.160 --> 0:19:42.520 Um partially because interest rates are expected to be low 0:19:42.560 --> 0:19:44.720 for a long period of time, but also in part 0:19:44.760 --> 0:19:48.320 certainly that because the Fed is buying just about everything 0:19:48.640 --> 0:19:51.000 that it can in uh in that kind of five 0:19:51.080 --> 0:19:55.639 years and in maturity range. So I what would you 0:19:55.680 --> 0:19:59.159 anticipate after the election, say we do get that Biden 0:19:59.560 --> 0:20:01.480 when at the bond markets pricing in do we not 0:20:01.560 --> 0:20:04.480 see much movement? Then yeah, I think you'll see still 0:20:04.480 --> 0:20:06.159 see a little bit. I mean, I think the market 0:20:06.200 --> 0:20:08.239 is still going to be a little bit um on 0:20:08.400 --> 0:20:11.520 edge and not fully pricing a Biden victory unless it's 0:20:11.560 --> 0:20:14.080 absolutely obvious. And I do think that the market is 0:20:14.080 --> 0:20:16.080 a little bit concerned about whether or not there'll be 0:20:16.119 --> 0:20:19.280 some hiccups, and you know, counting ballots and and uh 0:20:19.400 --> 0:20:21.879 an account by mail. Uh. So, I do think that 0:20:21.960 --> 0:20:25.040 once it's there's a declared victor, regardless of who it is. 0:20:25.080 --> 0:20:26.960 I do think that the bond market will reprice a 0:20:27.040 --> 0:20:29.280 little bit um. You know how much that is is 0:20:29.320 --> 0:20:33.320 always a matter of subjectivity. Um. But I do think 0:20:33.359 --> 0:20:36.119 that we could reach For example, certainly the yield highs 0:20:36.160 --> 0:20:39.080 that we saw a couple of um um a couple 0:20:39.119 --> 0:20:42.280 of months ago, kind of up near one eight percent 0:20:42.440 --> 0:20:46.520 on the third year UM. So again like constrained but 0:20:46.560 --> 0:20:49.520 not um but not a massive move. Hey, I rank 0:20:49.600 --> 0:20:52.920 so much for joining us IRA Jersey, chief US interest 0:20:53.000 --> 0:20:56.400 rate strategist for Bloomberg Intelligence. He covers all things for 0:20:56.520 --> 0:20:59.359 the FED, all things in the treasury market. Uh he 0:20:59.400 --> 0:21:01.720 puts out there only note he has a weekly Lots 0:21:01.720 --> 0:21:04.000 of great stuff in there, all available on the Bloomberg 0:21:04.080 --> 0:21:09.400 terminal by typing b I go. It is time now 0:21:09.480 --> 0:21:12.240 for as you heard, Bloomberg Opinion. We want to get 0:21:12.280 --> 0:21:16.639