WEBVTT - Surveillance: Fed Must Speak, Lyngen Says 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene. Along 0:00:09.240 --> 0:00:13.080 with Jonathan Ferrell and Lisa Brownwitz Jay Ley. We bring 0:00:13.119 --> 0:00:17.159 you insight from the best and economics, finance, investment, and 0:00:17.280 --> 0:00:23.280 international relations. Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg 0:00:23.360 --> 0:00:29.080 dot com, and of course on the Bloomberg Terminament. Marvin 0:00:29.120 --> 0:00:31.040 Low joining us Now stay Street, seeing you a global 0:00:31.080 --> 0:00:33.160 market strategist, Marvin, Let's just start with a bond curve. 0:00:33.200 --> 0:00:35.800 Two's out the thirties. As you looked at things yesterday, 0:00:36.159 --> 0:00:38.239 what was the challenge to the Fed? Yeah, it was 0:00:38.240 --> 0:00:41.320 definitely the belly. UM. The auction, like both you and 0:00:41.360 --> 0:00:45.320 Lesa mentioned, was absolutely awful. UM. It really showed that UM, 0:00:45.360 --> 0:00:48.479 the expectation that buyers might come out because you'll te 0:00:48.560 --> 0:00:51.519 backed up so much loomed up being incorrect. So UM. 0:00:51.560 --> 0:00:53.240 I do think that there is a supply and demand 0:00:53.400 --> 0:00:56.400 UM issue. I think after all of the debt sales 0:00:56.440 --> 0:00:58.240 that we've seen over the course of the last year, 0:00:58.480 --> 0:01:02.080 UM and expectations for continued tail going into this year, 0:01:02.120 --> 0:01:05.479 which potentially get bigger UM is something that the FED 0:01:05.560 --> 0:01:07.760 is going to eventually need to address as part of 0:01:08.280 --> 0:01:11.760 UM its credibility, if you will, in keeping yields within 0:01:11.959 --> 0:01:15.600 kind of low framework while the economy reopens. Marven build 0:01:15.600 --> 0:01:18.039 on that for us the FEDS responsible potential response to this, 0:01:18.160 --> 0:01:20.520 how inconsistent the price action of the last week has 0:01:20.560 --> 0:01:22.880 been with the fetch new framework, the very fact that 0:01:22.880 --> 0:01:25.959 real yields have searched higher. Great height expectations are being 0:01:25.959 --> 0:01:29.440 brought in, but inflation expectations have basically done very little 0:01:29.480 --> 0:01:33.600 over the last week. Yeah, it's absolutely a change in 0:01:34.400 --> 0:01:38.680 UM commentary. I believe UM. There's no doubt that we 0:01:38.560 --> 0:01:41.760 we for the most part, have UM given into the 0:01:41.760 --> 0:01:44.000 FED being able to get close to its inflation target. 0:01:44.319 --> 0:01:45.840 That was the first part of the move that took 0:01:45.920 --> 0:01:48.320 us from January and to the beginning of February, and 0:01:48.560 --> 0:01:52.200 all is good. UM risk assets felt good that we 0:01:52.200 --> 0:01:56.000 were reflating the economy and everything was within the FED framework. 0:01:56.320 --> 0:02:00.000 After that, however, the market started to push against UM 0:02:00.080 --> 0:02:03.360 the FED ability ultimately to hold the line, and we 0:02:03.480 --> 0:02:08.160 moved in from I think it was probably late three 0:02:08.440 --> 0:02:10.960 just two weeks ago, to at one point, based on 0:02:11.040 --> 0:02:13.720 your dollar futures at least UM pricing in a late 0:02:13.800 --> 0:02:17.160 two numbers, so you know, within a week within a week, 0:02:17.240 --> 0:02:19.520 week and a half, that's an aggressive move. UM. At 0:02:19.520 --> 0:02:22.400 this point, I think this morning we're still early three, 0:02:22.440 --> 0:02:24.800 but you know, certainly the market is pushing the FED 0:02:24.919 --> 0:02:26.760 as to whether or not it's going to be able 0:02:26.800 --> 0:02:30.800 to hold the line in UM in the vein of 0:02:30.919 --> 0:02:33.720 all of the stimulus sets coming along. Marvin, how much 0:02:33.720 --> 0:02:35.360 are we trying to create a narrative to fit a 0:02:35.400 --> 0:02:38.120 technical move? Yeah, I think I think that's certainly a 0:02:38.200 --> 0:02:40.840 risk to UM. There were there were these massive price 0:02:40.880 --> 0:02:44.160 caps yesterday. UM. I think that there's a lot going 0:02:44.200 --> 0:02:47.040 on behind the scenes, you know, whether it's convexity hedging, 0:02:47.800 --> 0:02:51.040 whether it's UM kind of these potential changes to SLR 0:02:51.160 --> 0:02:54.079 ruled and bank holding the treasuries. UM. I think all 0:02:54.120 --> 0:02:57.720 of that came into play yesterday. And you know, ironically, 0:02:57.760 --> 0:03:00.360 a lot of those type of technical factors come in 0:03:00.440 --> 0:03:02.600 at the worst time. So it was to certain to 0:03:02.639 --> 0:03:05.320 be fuel to a fire that was already that was 0:03:05.320 --> 0:03:07.600 already burning. Is there a larger point, though, to take 0:03:07.639 --> 0:03:10.360 away from the technical move if this was technically driven, 0:03:10.800 --> 0:03:14.280 that this market the biggest, most deep bond market in 0:03:14.280 --> 0:03:17.240 the world, setting key interest rates that affect for an 0:03:17.240 --> 0:03:20.400 exchange rates that infect borrowing costs for companies and individuals, 0:03:20.800 --> 0:03:23.200 that it is fragile, and then it's getting increasingly fragile 0:03:23.240 --> 0:03:27.200 as you have an increasing number of crowded and leverage traits. Yeah, 0:03:27.760 --> 0:03:30.160 the most important number in the entire world is what 0:03:30.200 --> 0:03:33.160 that tenure yield is. So absolutely, and we learned how 0:03:33.200 --> 0:03:36.240 important was last year when we're in the midst of 0:03:36.240 --> 0:03:38.960 the volatility and we had a similar disconnect on the 0:03:38.960 --> 0:03:42.600 liquidity side of things and how much firepower that SHED 0:03:42.640 --> 0:03:44.720 needed to use just to pull that part of the 0:03:44.760 --> 0:03:47.320 market in. Um it is. It is scary to think, 0:03:47.520 --> 0:03:50.080 particularly given all the liquidity that the FED has pumped 0:03:50.120 --> 0:03:53.520 into it, that we still wind find ourselves in this situation. 0:03:53.680 --> 0:03:57.640 Um So, yes, expect expect that choppiness because there there 0:03:57.640 --> 0:04:00.680 are structural issues at a time when we've got, you know, 0:04:00.800 --> 0:04:03.560 more and more treasury security is being put into the 0:04:03.600 --> 0:04:05.720 into the world that need to be absorbed. Mom And 0:04:05.720 --> 0:04:07.400 I think it's too early to say with conviction that 0:04:07.440 --> 0:04:09.680 the FETs credibility is being tested, but least I think 0:04:09.680 --> 0:04:12.040 we can start to say that in Europe, in Australia 0:04:12.080 --> 0:04:14.200 that that's been the story of the last twenty four 0:04:14.240 --> 0:04:17.200 hours Australia pushing back, coming in and buying three billion 0:04:17.240 --> 0:04:19.520 dollars of Australian bonds at the front end, trying to 0:04:19.560 --> 0:04:21.440 cap the story at the front end because they have 0:04:21.520 --> 0:04:24.159 yield curve control there and they're struggling to control at 0:04:24.240 --> 0:04:26.800 least on top of that the ECB an executive board 0:04:26.800 --> 0:04:30.680 member out this morning once again pushing back against this move. 0:04:30.720 --> 0:04:32.760 We've seen what it raises. A question which you talked 0:04:32.760 --> 0:04:35.080 about yesterday, which is a good one. At what point 0:04:35.120 --> 0:04:37.000 is j Powell banker to the world. At what point 0:04:37.080 --> 0:04:39.480 is the volatility around the world that they're experiencing, the 0:04:39.520 --> 0:04:41.680 fact that they've got a more simular sance their economies 0:04:41.720 --> 0:04:44.600 because of what he says, going to affect his message, 0:04:44.640 --> 0:04:47.160 and so far people are saying he still is very 0:04:47.240 --> 0:04:50.400 much beggar to the United States. His message statement of confidence, 0:04:50.440 --> 0:04:53.000 Marvin statement of confidence. We've heard from them all through 0:04:53.040 --> 0:04:56.240 the week, Chairman Paler, Vice Check Calorada. Raphael Bostick of 0:04:56.279 --> 0:05:00.280 the Atlantic Atlanta Fed President said the following race still 0:05:00.360 --> 0:05:02.960 very low from a historic perspective. I'm not expecting that 0:05:02.960 --> 0:05:05.520 we will need to respond at this point. That was 0:05:05.560 --> 0:05:08.359 in the middle of this mess. What are you expecting 0:05:08.400 --> 0:05:11.480 to change on the communication side, you know what, they 0:05:11.520 --> 0:05:14.680 put themselves in a in a difficult position, no doubt. UM. 0:05:14.960 --> 0:05:18.400 In a lot of ways, their commentary is a glide 0:05:18.400 --> 0:05:22.159 path for traders to continue to try to push yields higher. 0:05:22.360 --> 0:05:25.280 And I think that's going to happen. Um. You know, certainly, 0:05:25.800 --> 0:05:28.880 while we saw volatility come up for the first time 0:05:29.320 --> 0:05:32.760 this year because of yield um, it didn't necessarily bleed 0:05:32.800 --> 0:05:35.640 into all different parts of the market. Credits still is 0:05:35.640 --> 0:05:37.960 holding in fairly well, you know, high yield deals are 0:05:37.960 --> 0:05:40.440 still are still getting done. I think that gives the 0:05:40.480 --> 0:05:43.080 bed cover for for a little bit of broader financial 0:05:43.080 --> 0:05:45.719 conditions are still you know, at the loosest that you know, 0:05:45.760 --> 0:05:48.120 near the loosest that we've seen since um, since the 0:05:48.360 --> 0:05:52.479 last spring. Once we start seeing that creep up UM 0:05:52.600 --> 0:05:56.120 and more volatile days, well let's hope we don't have 0:05:56.160 --> 0:05:58.320 all the days like yesterday, but but the voltilla that 0:05:58.360 --> 0:06:00.440 we've seen over the last couple of weeks, if that continues, 0:06:00.480 --> 0:06:03.640 those financial conditions will start to tighten. And um, you know, 0:06:03.680 --> 0:06:06.480 one one part of the real economy that has been 0:06:06.480 --> 0:06:09.000 affected by this mortgage rates and and and for me, 0:06:09.080 --> 0:06:12.320 at this point, mortgage rates and credit spreads are almost 0:06:12.360 --> 0:06:15.200 as important, if not more important, then where the equity 0:06:15.240 --> 0:06:17.880 market is for the FED because it affects companies and 0:06:17.920 --> 0:06:20.200 it affects the real economy. Mom and great points A 0:06:20.240 --> 0:06:22.400 great to catch ups? What a twenty four hours martin 0:06:22.480 --> 0:06:31.640 low that state straight seeing a global markets strategists and 0:06:31.760 --> 0:06:34.280 then joining us now being our capital markets head of 0:06:34.440 --> 0:06:37.320 US race strategy and great to catch ups. Let's talk 0:06:37.320 --> 0:06:40.279 about it past duration timing running through it the bond market. 0:06:40.560 --> 0:06:44.520 The last DAO sugged well, we've seen a very significant 0:06:44.600 --> 0:06:48.039 sell off in treasuries and it's the type of repricing 0:06:48.520 --> 0:06:52.279 that has historically been linked with a shifted monetary policy. 0:06:52.480 --> 0:06:56.120 The FED needs to say something and whether it's simply 0:06:56.360 --> 0:06:59.720 job owning comparable to what the ECB has done, or 0:07:00.080 --> 0:07:03.560 if there is some action to be taken. The market 0:07:03.880 --> 0:07:06.680 is waiting to hear, and there aren't any scheduled FED 0:07:06.720 --> 0:07:09.640 speakers immediately on the horizon, but that doesn't mean that 0:07:09.720 --> 0:07:12.640 we might not hear something by the the in the today, 0:07:12.760 --> 0:07:15.960 if not into next week. And so we're worried about 0:07:16.640 --> 0:07:20.120 is the FED comfortable with the paste the backup in 0:07:20.320 --> 0:07:23.400 rates and as you pointed out earlier. It really comes 0:07:23.440 --> 0:07:28.160 down to real rates. Ten year tips will yield much 0:07:28.240 --> 0:07:30.560 higher at this point in the cycle than I think 0:07:30.600 --> 0:07:32.840 that the third would want them to be. So here's 0:07:32.840 --> 0:07:34.760 the Fed speak next week. I went through this a 0:07:34.800 --> 0:07:37.000 little bit earlier. I'll do it again. Williams coming up 0:07:37.000 --> 0:07:40.040 on Monday, alongside Bostex, Massa Kashkari later in the week, 0:07:40.160 --> 0:07:44.920 Brainard Daily, then Harker Evans and then chair Pal closing 0:07:44.960 --> 0:07:47.280 out things on Thursday, just before pay rolls Friday. How 0:07:47.320 --> 0:07:49.280 do you think the script is going to change for 0:07:49.400 --> 0:07:51.800 Chairman Paullion, given that we've heard from him literally a 0:07:51.880 --> 0:07:57.240 couple of days ago as this bond market move was developing. Well, 0:07:57.400 --> 0:08:01.720 if he doesn't change the mantra from we're comfortable with 0:08:01.840 --> 0:08:06.560 us backup in nominal rates to we're monitoring and watching 0:08:06.640 --> 0:08:09.280 what's going on in real rates, then the move is 0:08:09.320 --> 0:08:12.560 going to extend because the market will take that as 0:08:12.880 --> 0:08:16.600 a signal that they can push this trade. And keep 0:08:16.640 --> 0:08:20.720 in mind, the one trade was cheaper and steeper, and 0:08:20.960 --> 0:08:24.520 so if we get the endorsement from policy makers to 0:08:24.640 --> 0:08:27.920 let it run, I don't see what will stop ten 0:08:27.960 --> 0:08:31.840 year yields from taking another shot in nominal space at 0:08:32.280 --> 0:08:37.640 one sixty maybe up to the biggest limiting factor is 0:08:37.720 --> 0:08:41.160 going to be the response in equities. If we see 0:08:41.640 --> 0:08:44.600 additional wobbles in the equity market comparable to what we've 0:08:44.640 --> 0:08:47.320 already started to see, that's going to be the feedback 0:08:47.400 --> 0:08:51.720 loop into tighter financial conditions that ultimately gets the market 0:08:52.040 --> 0:08:54.640 concerned that the FET will need to do something. I've 0:08:54.679 --> 0:09:01.640 been amazed, frankly at Powell's uh large indifference toward this 0:09:02.360 --> 0:09:05.240 back up so far. Let's just be clear. I mean, yes, 0:09:05.280 --> 0:09:07.040 we've got a little bit of a sell off, but 0:09:07.120 --> 0:09:09.760 stocks were near record highs or at record highs. We've 0:09:09.760 --> 0:09:12.480 seen an incredible run. I mean, at a certain point, 0:09:12.640 --> 0:09:15.280 how much is this apparent having a very bad job 0:09:15.400 --> 0:09:17.480 controlling a toddler in the sense that, yes, you see 0:09:17.760 --> 0:09:20.680 rates normalizing gas you might not lose as much money 0:09:20.720 --> 0:09:23.320 on the real rate basis if you go into bonds, 0:09:23.440 --> 0:09:25.800 but it doesn't seem like it's actually causing a disruption 0:09:25.800 --> 0:09:27.880 and risk acids. I mean, it isn't a bit premature 0:09:28.120 --> 0:09:31.440 for the Fed to come out now. I would say 0:09:31.520 --> 0:09:33.760 that we would. The Fed has done a very good 0:09:33.880 --> 0:09:37.960 job of getting in front of potential shifts in sentiment, 0:09:38.160 --> 0:09:41.280 and that's the risk. The risk is you're right, it's 0:09:41.360 --> 0:09:45.360 not a ten percent correction in stocks. It's not correction 0:09:45.400 --> 0:09:48.520 in stocks. But if the said waits until the smp 0:09:48.920 --> 0:09:51.839 it is off of the highs, they're going to have 0:09:51.960 --> 0:09:56.079 a much harder job to do in getting the sentiment 0:09:56.160 --> 0:09:58.440 back into risk ass So Ian, what does this mean 0:09:58.480 --> 0:10:00.240 about the Fed's balance sheet? I mean, if it's at 0:10:00.280 --> 0:10:02.719 seven point six trillion dollars and they have to come 0:10:02.760 --> 0:10:05.600 in with at least job owning, if not actual bond buying, 0:10:06.040 --> 0:10:08.840 if there is any wobble whatsoever in markets that seem 0:10:08.880 --> 0:10:11.200 increasingly fragile, does that mean that the FED is going 0:10:11.240 --> 0:10:13.079 to keep a balance sheet that's at seven point six 0:10:13.120 --> 0:10:16.520 trillion dollars or much more for the foreseeable future. Because 0:10:16.559 --> 0:10:20.000 they now are a controlling agent in a more ongoing way, 0:10:21.480 --> 0:10:23.600 I think it's safe to say that the Fed's balance 0:10:23.600 --> 0:10:26.280 sheet is going to continue to expand keep in mind 0:10:26.440 --> 0:10:31.559 that they're actively buying one and twenty billion dollars in 0:10:31.720 --> 0:10:35.920 bonds between treasuries and mortgages every month and that's expected 0:10:36.000 --> 0:10:38.720 to continue into the end of the year before tapering, 0:10:38.880 --> 0:10:43.360 and tapering will take somewhere between six and nine months, 0:10:43.480 --> 0:10:46.240 let's call. And then that gets us in a position 0:10:46.320 --> 0:10:48.920 where the FED will have a very large balance sheet, 0:10:49.000 --> 0:10:52.360 but they will continue to run it like that. Recall 0:10:52.480 --> 0:10:55.480 before the pandemic, when the FED tried to normalize its 0:10:55.559 --> 0:10:59.360 balance sheet, we saw reserve scarcity that stopped that process. 0:10:59.440 --> 0:11:01.480 So I think it's very safe to say the third 0:11:01.559 --> 0:11:03.839 is going to have a large balance sheet for the 0:11:03.920 --> 0:11:06.040 foreseeable future. And I think the question you're raising is 0:11:06.040 --> 0:11:08.400 a really important one. It's not about waiting for a 0:11:08.440 --> 0:11:11.840 repeat of December, and it's about providing the adequate guidance 0:11:11.880 --> 0:11:14.080 to how people understand what the reaction function is now 0:11:14.120 --> 0:11:16.120 on rates. I think they've done that on the asset 0:11:16.200 --> 0:11:19.120 purchase program, I really don't think they have. And earlier 0:11:19.160 --> 0:11:21.080 this week when they say things like it's a statement 0:11:21.120 --> 0:11:24.400 of confidence, yes it is higher real yields is a 0:11:24.440 --> 0:11:26.480 statement of confidence in the forward outlook. But if you're 0:11:26.480 --> 0:11:28.440 a central bank right now, you can also just add 0:11:28.440 --> 0:11:30.520 on the line really simply will be vigilant about what 0:11:30.640 --> 0:11:32.760 happened to the long end in case at least to 0:11:32.880 --> 0:11:35.920 undue tightening of financial conditions and feeds back into the 0:11:35.960 --> 0:11:38.439 economy and that's not an expensive line to fit in, 0:11:38.600 --> 0:11:42.320 is it. No, it certainly isn't, and I don't think 0:11:42.400 --> 0:11:46.440 that it is one that would materially shift the monetary 0:11:46.520 --> 0:11:49.760 policy stands. It will simply be an acknowledgement of what 0:11:49.960 --> 0:11:52.520 has gone on in terms of the price action and 0:11:52.679 --> 0:11:56.480 its potential ramifications. It great to catch up Inn and 0:11:56.559 --> 0:12:04.800 the Female Capital Market's head of US rate strategy. We 0:12:04.880 --> 0:12:06.959 need to get this economy reopen, and we need to 0:12:07.000 --> 0:12:09.040 get Lesa's kids back to school. It's a big, big 0:12:09.120 --> 0:12:11.640 issue for parents across the nation. Joining us now, I'm 0:12:11.679 --> 0:12:15.480 pleased to say, is Congresswoman Ashley Hinston, Republican from Iowa. 0:12:15.679 --> 0:12:17.280 And actually, I know you used to be a news anchor, 0:12:17.320 --> 0:12:18.840 so well, I don't play any tricks. I'll play straight 0:12:18.840 --> 0:12:21.280 down the middle and keep the question. Sure, Actually, how 0:12:21.320 --> 0:12:23.160 do we get this country and the kids of this 0:12:23.240 --> 0:12:26.439 country back to school? Well, Jonathan and Lisa, thank you 0:12:26.480 --> 0:12:28.160 so much for having me, and good morning. It is 0:12:28.240 --> 0:12:30.800 essential for kids to get back to school. My kids 0:12:30.920 --> 0:12:34.080 back in Iowa are about to get up, get ready 0:12:34.120 --> 0:12:35.800 to eat some breakfast, and get on the school bus 0:12:35.880 --> 0:12:38.559 today because our schools in Iowa are open and I 0:12:38.760 --> 0:12:41.160 has led the way on this, but unfortunately, about a 0:12:41.200 --> 0:12:43.520 third of students across the country are still only learning 0:12:43.559 --> 0:12:46.240 from behind screens. So we can get them back to school. 0:12:46.320 --> 0:12:49.720 The science shows that kids can be back to school safely. Um. 0:12:49.840 --> 0:12:52.480 So we need to do that with billion dollars in 0:12:52.559 --> 0:12:56.080 money that's already been appropriated to go to get schools reopen. Um. 0:12:56.160 --> 0:12:58.240 So that's why I filed the Reopen Schools Act. We 0:12:58.320 --> 0:13:01.080 need some accountability on this money to ensure that our 0:13:01.200 --> 0:13:03.079 our teachers get back in the classroom and they get 0:13:03.120 --> 0:13:05.800 back safely, and that our kids get back um. They're 0:13:05.840 --> 0:13:08.760 falling behind. There are mental health challenges that are just 0:13:08.880 --> 0:13:12.160 growing immensely. The number of emergency room visits for our 0:13:12.240 --> 0:13:15.400 young people um are increasing um and that's troubling to 0:13:15.440 --> 0:13:17.400 me as a mom. So we have to get these 0:13:17.440 --> 0:13:19.880 schools reopen, and we can do it with the money 0:13:19.920 --> 0:13:22.959 that's already been appropriated and spent um. And we we 0:13:23.080 --> 0:13:24.880 just need to make sure that there's some accountability there 0:13:24.920 --> 0:13:26.520 so we do get these kids back in the classroom. 0:13:26.559 --> 0:13:28.240 I sent from you, it's not a resource issue. What 0:13:28.280 --> 0:13:31.239 do you think is held in this back? Well, unfortunately, 0:13:31.320 --> 0:13:34.120 I think politics have been getting in the way here. 0:13:34.280 --> 0:13:36.760 And our kids shouldn't be a political football and keep 0:13:37.040 --> 0:13:39.439 if we keep moving the goalposts here, we keep pushing 0:13:39.520 --> 0:13:42.599 back what that that end result is one day in 0:13:42.920 --> 0:13:45.640 a classroom, Um, is not enough for our kids. And 0:13:45.720 --> 0:13:48.120 it's not as easy as just walking down the stairs 0:13:48.200 --> 0:13:51.080 and logging onto a computer for so many families, Um, 0:13:51.120 --> 0:13:53.560 I'm hearing from so many people. You know, they had 0:13:53.600 --> 0:13:55.760 to go to sit in the libraries parking lot to 0:13:55.840 --> 0:13:58.160 access the WiFi to be able to complete their work. 0:13:58.600 --> 0:14:00.559 That's a reality for so many ways, and it's not 0:14:00.679 --> 0:14:03.640 easy to do. And so unfortunately, I think politics has 0:14:03.679 --> 0:14:06.000 gotten in the way. Democrats have actually blocked my bill 0:14:06.080 --> 0:14:09.280 three times already. So, UM, this shouldn't be a partisan issue. 0:14:09.600 --> 0:14:11.360 Of getting our kids back to class shouldn't be a 0:14:11.400 --> 0:14:13.920 partisan issue. We need to be getting our next generation 0:14:14.360 --> 0:14:17.160 UM back where they belong, learning with a teacher in 0:14:17.240 --> 0:14:19.240 a classroom. So are you willing to put your weight 0:14:19.320 --> 0:14:21.520 behind the one point nine trillion dollars stimulus given the 0:14:21.560 --> 0:14:23.880 fact that within that is a good chunk of cash 0:14:23.960 --> 0:14:26.280 in order to get kids back to school. Because President 0:14:26.360 --> 0:14:28.880 Biden agrees with you, he says this is crucial. We 0:14:28.960 --> 0:14:32.360 just need to put the funding behind it well, Unfortunately, 0:14:32.440 --> 0:14:34.240 as the bill stands right now, I don't plan to 0:14:34.240 --> 0:14:36.840 support it. Um. There's an additional hundred thirty billion dollars 0:14:36.920 --> 0:14:38.600 that is set to go to schools, but only five 0:14:38.680 --> 0:14:41.000 percent of that is said to be spent this year, 0:14:41.080 --> 0:14:43.200 which to me means that that's not really about getting 0:14:43.280 --> 0:14:45.720 kids back in the classroom. UM. In fact, about nine 0:14:45.760 --> 0:14:48.720 percent of the bill is designed as that targeted COVID relief, 0:14:48.840 --> 0:14:52.520 but only nine percent is designed to get more vaccinations, 0:14:52.560 --> 0:14:56.040 shots and arms. UM. The accountability there for contact tracing 0:14:56.080 --> 0:14:58.440 and testing. So when you look at everything else in 0:14:58.520 --> 0:15:01.680 this bill, only that is what's dedicated and that small 0:15:01.680 --> 0:15:04.720 amount of education funding that's set to be spent this year, UM, 0:15:04.800 --> 0:15:06.440 it's a signal to me that that's not really the 0:15:06.560 --> 0:15:08.720 priority here. And so so that's why I'm trying to 0:15:08.800 --> 0:15:11.520 make sure that there is accountability here. We're talking about 0:15:11.520 --> 0:15:14.680 a trillion dollars that's still left from that last package 0:15:14.840 --> 0:15:16.520 that was passed at the end of December before I 0:15:16.600 --> 0:15:19.400 was even in office, that hasn't been spent yet. UM. 0:15:19.520 --> 0:15:21.480 So when I look at that, we have to stand 0:15:21.560 --> 0:15:23.320 up for taxpayers and we need to make sure that 0:15:23.880 --> 0:15:25.720 the people who are getting this money, are following through 0:15:25.760 --> 0:15:28.280 on what the intent was, which was to be used 0:15:28.320 --> 0:15:31.240 to open schools and do it safely. Congress Women, A 0:15:31.320 --> 0:15:33.280 lot of people come on this show economists and they 0:15:33.360 --> 0:15:35.360 talk about how we can already see the money going 0:15:35.400 --> 0:15:39.280 into the economy directly that was passed back in December, 0:15:39.400 --> 0:15:42.000 that the aid that has been provided dear to date, 0:15:42.440 --> 0:15:45.360 are going back to to last year helped revive the 0:15:45.440 --> 0:15:48.960 economy and turbocharge the recovery. That will allow more people 0:15:49.040 --> 0:15:52.479 to get back to work. Given that more money, economists 0:15:52.520 --> 0:15:55.400 say will help the economy move at a faster pace 0:15:55.800 --> 0:15:59.880 and get to a good speed quicker. What's the reluctance 0:15:59.880 --> 0:16:02.000 to go ahead with this? I mean, is it bigger 0:16:02.120 --> 0:16:06.160 debt loads? It's very unclear to a lot of people. Yeah. Well, 0:16:06.160 --> 0:16:08.520 I think there's a few elements in this package that 0:16:08.600 --> 0:16:10.840 to me are the poison pill, one of them being 0:16:10.920 --> 0:16:14.400 the fifteen dollar minimum wage mandate. Uh, you know that's 0:16:14.400 --> 0:16:16.600 still in the House version that's going to be passing through, 0:16:16.760 --> 0:16:19.400 and so to me, that's very clear that that's a priority. 0:16:19.600 --> 0:16:21.240 It shouldn't be in this bill. We should be having 0:16:21.280 --> 0:16:24.200 conversations about that in a separate entity, but or a 0:16:24.240 --> 0:16:27.600 stuff an environment. But again, this this whole process wasn't 0:16:27.960 --> 0:16:29.960 It wasn't how process should move. It didn't make it through. 0:16:30.240 --> 0:16:32.080 We didn't we didn't get the chance in our budget 0:16:32.080 --> 0:16:34.400 committee to offer amendments, um, to try to make this 0:16:34.520 --> 0:16:38.000 bill better. Um, you talk about three fifty billion dollars 0:16:38.240 --> 0:16:41.800 bailouts to blue states. Uh. The Congressional Office that it 0:16:41.840 --> 0:16:44.400 was supposed to be thirty five billion. That's what's actually needed. 0:16:44.480 --> 0:16:46.960 So to me, it's just this, it's an overspending, it's 0:16:46.960 --> 0:16:49.960 a spending package. It's not a targeted COVID really filled. Congresswoman, 0:16:49.960 --> 0:16:52.920 you've had experience with infrastructure spending in your home state. 0:16:53.440 --> 0:16:55.760 Given that this bill is likely to be passed, would 0:16:55.760 --> 0:16:58.760 you support an infrastructure bill in addition to the current 0:16:59.000 --> 0:17:02.880 fiscal support fiscal stimulus has been passed. Well, I hope 0:17:02.920 --> 0:17:05.199 we do get to work on an infrastructure package. And um, 0:17:05.280 --> 0:17:07.680 that is something that's passion of mine back home. I 0:17:07.800 --> 0:17:12.040 understand infrastructure is economic development and in the true Iowa 0:17:12.119 --> 0:17:14.000 fashion U the great Iowa line, if you build it, 0:17:14.080 --> 0:17:17.480 they will come. Um. We know that in Iowa, infrastructure 0:17:17.600 --> 0:17:19.840 is a crucial part of our economy. We're an agg 0:17:19.920 --> 0:17:22.280 state and we're a manufacturing state. We need to get 0:17:22.320 --> 0:17:23.879 those products to market, and we need to have the 0:17:23.920 --> 0:17:26.800 infrastructure to do it. Um. I think infrastructure though also 0:17:26.880 --> 0:17:29.800 not just your roads and bridges, but broadband. We've seen 0:17:29.880 --> 0:17:31.960 be such an important issue in the last year. So 0:17:32.080 --> 0:17:34.560 that's something that I'm very passionate about and I want 0:17:34.600 --> 0:17:36.800 to work on for Iowa, and so I'm hopeful we 0:17:36.880 --> 0:17:40.479 get to consider an infrastructure package. But unfortunately this package 0:17:40.520 --> 0:17:43.680 one point nine trillion dollars UM. It's not targeted cover relief, 0:17:43.720 --> 0:17:46.119 which is what we should be considering here. Actually wonderful 0:17:46.200 --> 0:17:48.240 to catch up. Please sty Close come back soon. We'd 0:17:48.280 --> 0:17:50.760 love to tell more. Congresswoman actually hints in the Republican 0:17:51.200 --> 0:17:59.840 from Iowa, there's a question of what the world will 0:17:59.840 --> 0:18:03.080 look like once COVID ends, once the pandemic subsides, and 0:18:03.119 --> 0:18:05.560 not just the future of vacation, which we're all planning 0:18:05.560 --> 0:18:08.360 hopefully in sometime in the near term if we can, 0:18:08.960 --> 0:18:11.280 but also for work. And this is something in a 0:18:11.359 --> 0:18:14.280 subject of a high controversy. Susan Lund has been studying 0:18:14.320 --> 0:18:17.080 it at McKinsey. She's a Global Institute partner there, and 0:18:17.119 --> 0:18:19.639 they're putting out a series of reports on the future 0:18:19.760 --> 0:18:22.639 of work and how it will transform how the COVID 0:18:22.720 --> 0:18:26.280 pandemic has accelerated some of the technological changes that really 0:18:26.320 --> 0:18:29.719 we're already underway. Susan, Can you just talk about one 0:18:29.760 --> 0:18:32.280 of the largest findings from your latest report in terms 0:18:32.440 --> 0:18:35.320 of fundamental changes that you're already seeing take hold and 0:18:35.440 --> 0:18:40.040 what that means for the future of work? Hi, Well, 0:18:40.119 --> 0:18:42.560 what we found is that some of the changes in 0:18:42.680 --> 0:18:45.800 consumer and business behavior that we're forced on us in 0:18:45.840 --> 0:18:49.680 the pandemic are going to stick. And the impact of 0:18:49.760 --> 0:18:52.280 this and the workforce is that we may see a 0:18:52.359 --> 0:18:55.720 lot of jobs that weren't really affected by technology and 0:18:55.840 --> 0:18:59.680 other trends, like those in food service and retail. A 0:18:59.760 --> 0:19:03.800 lot of frontline, low wage workers could find demand for 0:19:04.000 --> 0:19:07.240 their services going down over the long term. But we 0:19:07.320 --> 0:19:09.200 all already kind of figured this would happen, right with 0:19:09.320 --> 0:19:13.320 artificial intelligence and with other technological advances. Is there something 0:19:13.400 --> 0:19:16.800 that structurally has changed or gotten accelerated beyond what people 0:19:16.840 --> 0:19:21.400 are expecting in terms of these jobs going away, it's 0:19:21.440 --> 0:19:25.320 really been accelerated. COVID nineteen has been a massive shock 0:19:25.480 --> 0:19:28.879 to both consumers and businesses, and we were forced to 0:19:29.000 --> 0:19:32.040 do things and try new ways of interacting that many 0:19:32.119 --> 0:19:35.720 people had resisted. So for instance, remote work, I'm sitting 0:19:35.800 --> 0:19:39.800 here on Zoom and many executives had really resisted the 0:19:39.880 --> 0:19:42.399 idea that people could be productive from home. Well, now 0:19:42.480 --> 0:19:45.280 we know that's not true. You look at e commerce 0:19:45.480 --> 0:19:49.960 or telemedicine, usage went up tremendously, And when we look 0:19:50.000 --> 0:19:54.040 at the Consumer Pulse survey results that we do monthly 0:19:54.200 --> 0:19:56.240 around the world, we find a lot of those new 0:19:56.400 --> 0:20:00.320 users that were forced to try a digital interaction are 0:20:00.400 --> 0:20:03.600 finding that it was convenient and efficient, and so it's 0:20:03.640 --> 0:20:07.800 going to stick. So we really saw this step change 0:20:07.880 --> 0:20:11.040 in behavior during the last year UM and that's one 0:20:11.040 --> 0:20:13.720 of the disruption going forward is it's going to be 0:20:13.840 --> 0:20:17.919 different than just the gradual evolution we had been experiencing 0:20:18.440 --> 0:20:21.679