Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jai Ley.
Speaker 1: We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot com, and of course on the Bloomberg. The
Speaker 1: first loss in jobs for an entire month since April,
Speaker 1: we are seeing the second wave of job losses, the
Speaker 1: second wave of the coronavirus, and the second wave of pain,
Speaker 1: hopefully jerking Congress into more action. At least that's the
Speaker 1: implication from Marcus Jeffrey Rosenberg Blackport black Rock, portfolio manager
Speaker 1: of the Systematic Multi Strategy Fund, joining us right now.
Speaker 1: Your thoughts, Jeff on this report, Yeah, I think you
Speaker 1: guys have it exactly right. You look at that market
Speaker 1: reaction and you see slightly higher yields on what is
Speaker 1: a very disappointing board. And it's really about looking through
Speaker 1: this report to its implications for monitors for fiscal policy.
Speaker 1: And yes, you know, fiscal policy expectations were high. This
Speaker 1: report just underscores the likelihood that will see significant additional
Speaker 1: fiscal stimulus in the new administration from the new administration,
Speaker 1: from the new Congress, and that's why you're seeing a
Speaker 1: little bit higher yields. You know, the report is remarkably
Speaker 1: weak with regards to leisure and hospitality, down a five
Speaker 1: thousand jobs. That's really what's taking the headline number down.
Speaker 1: And that's just very clearly about the COVID resurgence here
Speaker 1: that we're seeing, and that's just underscoring again the need
Speaker 1: for more fiscal policy. So it's a it's a very
Speaker 1: kind of different bond market reaction, but but I think
Speaker 1: it makes a lot of sense that we're looking past
Speaker 1: the near term weakness towards the policy response and that
Speaker 1: means better growth and and higher rates. And that's really
Speaker 1: higher rates and steeper curve that's been a trend. I
Speaker 1: don't think this report is going to take us off
Speaker 1: that trend. Futures up, nine, futures up, a little bit
Speaker 1: of an ease back inequities at this moment. Jeff Rosenberg,
Speaker 1: I know at Carnegie mel And you took Horse and
Speaker 1: Cart two oh two an important course. The research this
Speaker 1: morning is extraordinary about inflation expectations and how they fold
Speaker 1: into the yield market, about oil surging, about a weaker
Speaker 1: dollar and the presumption of a weekend dollar, which is
Speaker 1: the horse and which is the cart real world dynamics
Speaker 1: like dollar in oil or is it the fixed income market? Well,
Speaker 1: the first of all on on on oil that's going
Speaker 1: to affect the headline levels of inflation markets and longer
Speaker 1: term inflation expectations are really gonna focus on on core. Now.
Speaker 1: The expectations here and the developments are really about a
Speaker 1: reflationary trade rolling through the fixed income markets. You see
Speaker 1: it in terms of market based measures of inflation tips,
Speaker 1: break even measures breaking out to the upside. You see
Speaker 1: it in phenomena yield measures, and see it in the
Speaker 1: steepening of the yield curve. The overall conclusion here is
Speaker 1: expectations for significant monetary and fiscal policy coordination to deliver
Speaker 1: a reflationary thrust to the economy that then flows through
Speaker 1: into financial markets. But it starts with financial markets expectations,
Speaker 1: and that's what you're seeing building. It's been building for
Speaker 1: some time. It's certainly got some acceleration hosts the Georgia
Speaker 1: runoff election results and certainly today UH and this negative
Speaker 1: news is going to be looked through to its implications
Speaker 1: to further the reflationary fiscal policy response. You know, I
Speaker 1: don't want to read too much into the immediate market response,
Speaker 1: but I do think it's interesting, Jeff, that you see
Speaker 1: the bond market reacting more than the equity markets, That
Speaker 1: equities actually took a little bit of a dip in
Speaker 1: futures trading, whereas you saw bonds take a definitive move
Speaker 1: price lower, yield higher on the expectation of stimulus. Have
Speaker 1: we reached a point where higher yields with such a
Speaker 1: lagging economy on the in the backdrop, becomes a headwind
Speaker 1: for stocks. In other words, it sort of threatens the
Speaker 1: thesis of going into stocks at such high valuation simply
Speaker 1: because there is no alternative. Jeff, It's it's a great question.
Speaker 1: I don't think we're there yet. You've got to take
Speaker 1: a step back from these changes in in yield levels
Speaker 1: that you know, from an environment where yields were exceptionally depressed,
Speaker 1: and certainly when we think about the tenure yield being
Speaker 1: significantly below one percent throughout the post COVID environment, you
Speaker 1: know we've recently breached that level, but these yields are
Speaker 1: still exceptionally low out the yield curve, and the FED
Speaker 1: is telling you they're happy to see that now, they're
Speaker 1: not going to be happy to see a disruptive increase
Speaker 1: in interest rates basis points higher on the day. But
Speaker 1: you look at all of the forecast for the year
Speaker 1: and they center around twenty basis points for the year.
Speaker 1: That's fine in terms of fiscal stimulus boosting market expectations
Speaker 1: without the market expectations on doing the financial stability that
Speaker 1: the FED is targeting here. So I think if we
Speaker 1: have these kind of gradual increases in rates, that's not
Speaker 1: going to get in the way of financial stability and
Speaker 1: having to have the FED intervene. Jeff Rosenberg where this
Speaker 1: is black Rock, and also Michael McKee of Bloomberg with
Speaker 1: his wonderful analysis. He says, some time to dive into
Speaker 1: the report. Jeff Rosenberg, Michael McKee mentioned the five hundred
Speaker 1: thousand statistics on bars and restaurants. I think no surprise
Speaker 1: to anyone in New York. Michael McKee, Can you extrapolate
Speaker 1: anyway to the early February report, early February next month
Speaker 1: or a year as January? Can you get January are
Speaker 1: right now? In a sense you can, because it doesn't
Speaker 1: look like any of the lockdown situation has changed and
Speaker 1: as a matter of fact, we're seeing more cases, more
Speaker 1: deaths every day, we're setting records, So it looks like
Speaker 1: we're gonna be perhaps even in worse shape. A lot
Speaker 1: of what happened in December came about in the early
Speaker 1: part of the month UH and the survey has taken
Speaker 1: the week of the that includes the twelfth of the month,
Speaker 1: So at the twelfth of the month in UH in
Speaker 1: January is not looking good right now, and so I
Speaker 1: would imagine that we will not see any additional hiring. However,
Speaker 1: I have people already lost their jobs. That's going to
Speaker 1: be the question if if we lost so many in December,
Speaker 1: do we see a significant number of people who go
Speaker 1: off payrolls or are they just remaining off payrolls. So
Speaker 1: let's just hie us all together and just sort of
Speaker 1: highlight how a pivotal week this really has been, how
Speaker 1: an exceptional start to a year following an unprecedented and
Speaker 1: Jeff Rosenberg we started this segment talking about how people
Speaker 1: have had to rewrite their year, had THECES in the
Speaker 1: past week after just writing them days earlier, after what
Speaker 1: happened with the Georgia election, and given what we're seeing
Speaker 1: with the surprise now with a labor market that is
Speaker 1: much weaker than many had expected. Jeff, are you changing
Speaker 1: any of your sees based on the week's action. Well,
Speaker 1: you know, I don't think that. The thing that has
Speaker 1: happened in the over the course of the week is
Speaker 1: the expectations were already going into the year that growth
Speaker 1: would be better than expected, and so the Georgia elections
Speaker 1: have only added to the confidence that market participants have
Speaker 1: that growth due to fiscal policy support will be better
Speaker 1: than expected. And that's that's providing some cushion, that's providing
Speaker 1: some safety net to the positive sentiment around financial markets
Speaker 1: and for the bond market for the expectations that yields
Speaker 1: will continue to gradually rise. So I don't think we're
Speaker 1: seeing a significant change from that. I think we're seeing
Speaker 1: it reinforced with today's news and with the news on
Speaker 1: the elections in the outlook for fiscal policy. Jeffrey Rosenberg,
Speaker 1: thank you so much. With Blackbrook, greatly appreciate your time
Speaker 1: with us on this job's report, and of course are
Speaker 1: FED meetings as well, string of PLOSO for the discussion.
Speaker 1: It will be an eventful Friday. The resignations of the
Speaker 1: Secretary of Transportation, the Secretary of Education. This morning, we
Speaker 1: were resigned to speak to french Kill, the Republican from Arkansas,
Speaker 1: French Hill of Little Rock, and of course has been
Speaker 1: a consistent Republican voice giving us conversation on Bloomberg surveillance.
Speaker 1: Congressmanni Hill. There seems to be a divide, as we
Speaker 1: just saw from Senator Sass of Nebraska the language at
Speaker 1: the Senator from Nebraska used as compared to the Senator
Speaker 1: from Missouri Holly and the Senator from Texas Uh Ted Cruz.
Speaker 1: How do you bring together a Republican party to be
Speaker 1: in minority with President Biden. Well, happy new year, Tom,
Speaker 1: thanks for having me. This is a critical issue and
Speaker 1: at this moment in American district, I think all the
Speaker 1: leaders in boat parties, on both sides of the Capitol
Speaker 1: and on both sides of the aisle need to focus
Speaker 1: on our peaceful transfer of the presidency on noon January
Speaker 1: and we need to and not add to the brinksmanship
Speaker 1: that we've seen from Speaker Pelosi in the last day
Speaker 1: on the amendment, or that we saw from Senator Cruz
Speaker 1: or Senator Holly on this uh false narrative that somehow
Speaker 1: we're going to have a different outcome on January six
Speaker 1: by action of the Congress, which was never in the Constitution,
Speaker 1: was never going to happen. And I think the rhetoric
Speaker 1: since the election contributed to the disaster we saw here
Speaker 1: the afternoon of January six, where people were misled, they
Speaker 1: had a misunderstanding of what might happen on January six.
Speaker 1: In Washington, d C. It's almost of a Whig Party
Speaker 1: of another time and place, and I would suggest the
Speaker 1: Whig Party not so much associated with Arkansas, but mostly
Speaker 1: to the eastern Kentucky. Do you risk becoming a minority
Speaker 1: party with this great fracture between say Ted Cruz and
Speaker 1: Ben Sas. I think we need to remind our ourselves
Speaker 1: of what the Republican tenants are and go back to
Speaker 1: advocating for those limited government, limited scope of regulatory and
Speaker 1: tax burdens on the American people, equal justice under the law,
Speaker 1: more opportunities for people of all incomes, in a strong,
Speaker 1: robust national security, in leadership in the world. Those are
Speaker 1: the tenants of the Republican platform. I've heard a Senator
Speaker 1: a Cruise speak passionately about them. I've heard Senator Sas
Speaker 1: speak passionately about them. That's what the Republican Party needs
Speaker 1: to get back out and advocate for and step away
Speaker 1: from what we've seen since the election. Congressman, are you
Speaker 1: happy with how President Trump and the Republican leadership has
Speaker 1: handled the rollout of the coronavirus vaccine? Well, look, first,
Speaker 1: let's say that the vaccine will go down in history.
Speaker 1: This development effort from late January to the rollout of
Speaker 1: a vaccine around the first of December is one of
Speaker 1: the great global health initiatives and success stories in history.
Speaker 1: So the CARES acts ten billion dollars for coronavirus pandemic
Speaker 1: vaccine development. The President's quick UH direction of the FDA
Speaker 1: and ni H to work on that is a success story.
Speaker 1: The roll out UH and the manufacturing of it around
Speaker 1: the world I think has been impressive. It's gotten to
Speaker 1: the States, but we need to make sure the States
Speaker 1: focus where it's needed, on essential workers and our elderly population.
Speaker 1: You all, we're talking about incidences of death and you
Speaker 1: look at that compared to accidental death by any choice,
Speaker 1: and again it's concentrated in the older age groups are
Speaker 1: more vulnerable to the coronavirus. So after essential workers. There's
Speaker 1: no doubt that's where the vaccine should be focused. So Congressman,
Speaker 1: that is true. And yet the states really have been
Speaker 1: the ones in charge, and only about a third of
Speaker 1: the vaccine that's been circulated on average has been deployed,
Speaker 1: and there has been reports of, for example, doctors who
Speaker 1: are not in the main lines having to call up
Speaker 1: their pharmacies and their contacts and say, how do I
Speaker 1: get vaccine? Do you regret that there isn't a more
Speaker 1: federally central organized rollout plan that would have smoothed out
Speaker 1: some of these kinks. Well, it possibly could have been better.
Speaker 1: We've never done this before, but the defense logistics getting
Speaker 1: the vaccine with the private sector produced, approved, and shipped
Speaker 1: has been again, I think, an extraordinary accomplishment. In Arkansas,
Speaker 1: speaking to our governor, we're generally pleased with the distribution
Speaker 1: to hospitals and to pharmacies, and we're working hard to
Speaker 1: get that out to the people who needed first. And
Speaker 1: of course, you know, the storage has been a challenge.
Speaker 1: Everyone recognizes that, particularly in the Visor vaccine, and so
Speaker 1: that's limited distribution. With the Biderta vaccine that's going to
Speaker 1: go out to more rural counties, and more regular pharmacy
Speaker 1: used that I think will expand the vaccine. You've been
Speaker 1: faster French show. To get back to the politics of
Speaker 1: the moment, and we consider the two gentlemen from Vermont,
Speaker 1: Lady and Sanders. Maybe we'll have chairmanships within a new Senate.
Speaker 1: Perhaps the Democrats will manage to the middle. That seems
Speaker 1: to be how they won this time around. How does
Speaker 1: the Republican Party within the primary process managed to the middle.
Speaker 1: Another good point. I mean, this is a center right country.
Speaker 1: We saw that with Nancy. Yes, we saw that. And
Speaker 1: it's up to both in both parties. They both have
Speaker 1: a primary challenge from the left and the Democratic Party
Speaker 1: and from the right. I guess you say the more
Speaker 1: right in the Republican Party. We do that, I think
Speaker 1: by again focusing on our basic tenants that I went
Speaker 1: over a moment ago. That's what we have to do
Speaker 1: is do more education and more communication with our primary
Speaker 1: voters about what the Republican Party's goals are. Why are
Speaker 1: we being elected, why do we run? That's our obligation
Speaker 1: as Canada. Okay, but this is so important, carkisman Hill
Speaker 1: very quickly here. This is so important because there is
Speaker 1: a social overlay of social policy and issues over general
Speaker 1: Republican issues, how do you combine those forward to two
Speaker 1: thousand twenty two. In two thousand twenty four and win. Well,
Speaker 1: I think we won with our message of what we
Speaker 1: said was our commitment to America in we picked up.
Speaker 1: We didn't have a single incumbent lose in the House
Speaker 1: this year, and we have a new, diverse, aggressive group
Speaker 1: of new members in the House. I think we'll continue
Speaker 1: that momentum going into two particularly if you see the
Speaker 1: Biden administration, as you say, not government from the center,
Speaker 1: with a divided Senate in a divided House, but try
Speaker 1: to again of interesting of progressive left policies. French Hill,
Speaker 1: have a pleasant weekend after this historic the Congressman Hill
Speaker 1: of Arkansas with us, and we thank you. This first
Speaker 1: week of Nuary, it is about Eurasia group. Dr Bremer
Speaker 1: and Mr coushkinsch Coupchins. I'll get it out. I can't
Speaker 1: talking to Friday folks ever. Uh, they're wonderful. Top risks
Speaker 1: of two thousand twenty one in that is Europe in
Speaker 1: the changing of the Guard of Angelo, miracle. Moving on,
Speaker 1: Mr McCraw with huge issues. Ms Raman joins with an
Speaker 1: update with Eurasia Group. Midge, we haven't talked to about
Speaker 1: enough about the travails of France and mccrawn. Why should
Speaker 1: America worry about the fragility of Mr McCraw Because I
Speaker 1: think Tom Europe's medium term stability depends more on what
Speaker 1: happens in the French election than the German one. That
Speaker 1: you know, the outcome of the German election is kind
Speaker 1: of known. Is going to be a black Green government.
Speaker 1: We don't know who will replace Miracle, but it doesn't
Speaker 1: really matter that much because it will be it will
Speaker 1: be a mainstream leader sitting on top of a very
Speaker 1: pro European coalition in France. In France, you have a
Speaker 1: health crisis, an economic crisis, and a security crisis, I
Speaker 1: think for the terrorist incidents that took place a very
Speaker 1: back end of last year, and they're all converging and
Speaker 1: I think brings into questions the Macron question. And I
Speaker 1: think on top of that, of course, because instability in
Speaker 1: France would be a big problem for Europe in a
Speaker 1: big problem for America. Does France have a Trumpian equivalent?
Speaker 1: I mean Guy Johnson and I folks there for the
Speaker 1: French elections, and the stunning side of Mr McCraw walking
Speaker 1: across that magnificent courtyard, I mean a guest from the
Speaker 1: nineteenth or eighteenth century and in the j RAM. And
Speaker 1: the question is that the right, if you will of
Speaker 1: France does it exist. You've got a very weak center
Speaker 1: right and a very weak center left. Lapen is always,
Speaker 1: as you know, Tom waiting in the wings, and next
Speaker 1: year will be no different. What's interesting is Marine Lapin
Speaker 1: has not really been able to capitalize on COVID. She's
Speaker 1: not really been able to capitalize on the challenges and
Speaker 1: the troubles that Macron has been facing both personally and
Speaker 1: his government. But the question is depending on how he
Speaker 1: deals with potential risk of the third lockdown, in this
Speaker 1: mutant strain that's crossed the channel from Great Britain now
Speaker 1: into France, the glacial pace of the vaccine rollout, there's
Speaker 1: a lot of expectation of high profile business closures and
Speaker 1: math unemployment in the first four to six months of
Speaker 1: this year in France. You know, depending on how Macron
Speaker 1: deals with those challenges could impact the dynamic heading into
Speaker 1: the race next year. And I think most people expect,
Speaker 1: and I think this is correct, that it will be
Speaker 1: a Macron La Penn runoff again in May next year. Mitch,
Speaker 1: you mentioned just across the channel to the UK lockdown.
Speaker 1: There rollout of the vaccine slower as we see in
Speaker 1: many parts of the world. Give us a sense of
Speaker 1: how things are going in the early days of the
Speaker 1: lockdown in the UK. I mean, it's a big mess, frankly,
Speaker 1: because Boris Johnson is just not across the crisis is
Speaker 1: you know, he's not good at taking and leaning into decisions.
Speaker 1: He's waiting until the very last moment. He gave a
Speaker 1: very big interview with a very high profile presenter here
Speaker 1: on Sunday where he effectively told everybody will be fined
Speaker 1: to return to school the following day. That evening he
Speaker 1: plunged the country back into a third lockdown. So I
Speaker 1: think the government's control of the pandemic, Boris Johnson's competence,
Speaker 1: the competence of his administration, his cabinet, they're all really
Speaker 1: I think, in the firing line. And that's on top
Speaker 1: of he has delivered the deal on Brexit, that's correct,
Speaker 1: but now the implications of that deal are really beginning
Speaker 1: to be felt. Delays at the port's delays getting into
Speaker 1: the UK, and I think that just it creates a
Speaker 1: set of questions really about the credibility and competence of
Speaker 1: the government that I think are going to stay with
Speaker 1: Johnson for some time. What type of risk did those
Speaker 1: challenges to Prime Minister Johnson? What are they posed to
Speaker 1: his his government going forward? I think there's not a
Speaker 1: lead a ship concern in the short term, but but
Speaker 1: the pandemic now and I think the government of the
Speaker 1: perception of how the government has managed the pandemic really
Speaker 1: really hangs on the big bet the government has made
Speaker 1: on the vaccinations. So they really got I think, start
Speaker 1: getting jobs in people's arms and getting the population vaccinated.
Speaker 1: And if the government is able to do that effectively,
Speaker 1: So let's say we're moving towards the east to break
Speaker 1: in a large part of the vulnerable population has been
Speaker 1: vaccinated by that time, as the government is claiming will
Speaker 1: be the case, then he may be able to emerge.
Speaker 1: You know, if you're thinking a year, two years down
Speaker 1: the track, relatively unscathed from this crisis. If the vaccination
Speaker 1: that does not work out, um, then I think the
Speaker 1: government's in trouble. And then I think Boris Shawn's in trouble,
Speaker 1: and that will be a question in Mr Rahman, where
Speaker 1: does demand come from in Europe? I mean, basically, it's
Speaker 1: underperformed America for a jillion years. I know there's glimmers
Speaker 1: of you know, real pop and all that, there isn't
Speaker 1: much of a tech sector. Is well, what is the
Speaker 1: might of the European consumer now to help jump start
Speaker 1: everything like happens routinely in the United States. I think
Speaker 1: this is a great question, Tom, And you know senior
Speaker 1: European policymakers I talked to they basically think the EU
Speaker 1: has missed the boat on digitization. I think you're right.
Speaker 1: You know, we don't have that technical, technological, that innovation
Speaker 1: dynamic that you see in the state where the EU
Speaker 1: is now placing it. That is on the green transition,
Speaker 1: on greening the economy, and you'll see the big seven
Speaker 1: hundred and fifty billion recovery fund that was agreed at
Speaker 1: the end of last year is really being used and
Speaker 1: seen as a vehicle to try and promote that green transition.
Speaker 1: And the UK is obviously at the forefront of that
Speaker 1: and will be with the cop climates from at the
Speaker 1: end of the year, are implementing a one billion recovery
Speaker 1: plan that again is very much focused on the green transition.
Speaker 1: So I think that's where the EU sees it, so
Speaker 1: being a possible leader, whether or not will work out again,
Speaker 1: we'll we'll need to see about the area right point
Speaker 1: to that's one of big growth to the Ouropean economy
Speaker 1: over the medium term. Mid Roman. Thank you so much
Speaker 1: and thank you to all of your raising groups. Just
Speaker 1: brilliant work, and we're just going to frame where America's
Speaker 1: economy is. Tiffany Wilding joins from Pimco. Tiffany, I don't
Speaker 1: want a lot of numbers. I just want to know
Speaker 1: what the next six months looks like. You guys are
Speaker 1: acclaimed for the new normal. Is this the new normal? Well,
Speaker 1: I certainly hope not, Tom. I mean, you know, the
Speaker 1: it was clearly a very weak employment report for example
Speaker 1: this morning, which I think you know, clearly show that
Speaker 1: the economy is still hurting from the virus pandemic, you know,
Speaker 1: and as a result of you know, the targeted business
Speaker 1: closures that had to had to happen in order to
Speaker 1: try to contain that pandemic. We certainly hope that's not
Speaker 1: the new normal. But you asked me to to think
Speaker 1: about the next six months ahead, you know. And I
Speaker 1: think we're really you know, we're really optimistic that the
Speaker 1: key word here will be re acceleration. Um. And I
Speaker 1: say that because you know, we you know, we we
Speaker 1: do have a vaccine. We hope that the vaccine uh
Speaker 1: distribution can be rammed up, you know. But in addition
Speaker 1: to that, we have fiscal policymakers in Washington which we
Speaker 1: think will will will certainly support the recovery, continue support
Speaker 1: the recovery. We just got a nine billion dollar stimulus
Speaker 1: bill in late December to help bridge the gap for people, uh,
Speaker 1: you know, while we're kind of dealing with the winter
Speaker 1: and the COVID virus. We think you could see under
Speaker 1: a democratic control of Washington, another trillion dollars you know,
Speaker 1: that could be that could come about in March, and
Speaker 1: that's really going to help the economy sort of bridge
Speaker 1: this and re accelerate into the back end. And I
Speaker 1: don't want you to put a number on it, because
Speaker 1: I don't need the General Council PIMCO calling me up
Speaker 1: and saying I was out of bounds. But Tiffany to
Speaker 1: take Claudius some is just one example the liberal economy
Speaker 1: US in Europe, in America, who are saying, you guys
Speaker 1: are nuts at the margin of this billion or that trillion,
Speaker 1: and we're going to need a certain percentage of g
Speaker 1: d P, which is six or seven or eight trillion
Speaker 1: dollars of aid no matter how it comes. Are we
Speaker 1: closer to that view with the news of the last week, Yeah,
Speaker 1: so we think you could get um another another so
Speaker 1: basically a total of two trillion this year, So another trillion,
Speaker 1: and that's just in COVID relief. UM. And it's certainly possible,
Speaker 1: uh that that Outside of that, you can also get
Speaker 1: you know, some infrastructure spending or investment in education and
Speaker 1: health care UM that you know that the Democrats have
Speaker 1: been talking about, UM, you know, which which would obviously
Speaker 1: be spending you know, over a longer time frame, you know,
Speaker 1: but that would help UM. And I think that's something
Speaker 1: that is certainly needed. UM. It would be positive over
Speaker 1: the longer term. You would hope for things like productivity, uh,
Speaker 1: you know, labor force quality, uh you know, you know,
Speaker 1: things like that. So you know, I think certainly we're
Speaker 1: you know, we're in the right track in terms of
Speaker 1: first let's think about the pandemic. Let's you know, kind
Speaker 1: of help the folks that need it during this time.
Speaker 1: Let's bridge the gap there, let's set ourselves up, um,
Speaker 1: you know, for not having the longer term damage in
Speaker 1: the economy, you know. And then after that focus, after
Speaker 1: we've sort of dealt with that, um we're getting vaccine distribution,
Speaker 1: then let's think about some of these longer term trends
Speaker 1: and what can policy do, uh, you know, to lift
Speaker 1: productivity in the future. Tiffany mentioned, you know, as we
Speaker 1: take a look at some of this unemployment data that
Speaker 1: we received this morning, how concerned are you about, uh,
Speaker 1: perhaps the permanence of some of this unemployment of some
Speaker 1: of these folks who are out of work. You know,
Speaker 1: at the beginning of this pandemic, we kind of thought,
Speaker 1: oh g you know, it's kind of temporary their quote
Speaker 1: unquote furloughed. How concerned are you about the permanent nature
Speaker 1: the damage done to our employment situation? Yeah, I mean
Speaker 1: that's something that that we always have to worry about,
Speaker 1: you know, and we want to try to you know,
Speaker 1: reduce the extent to which you get that permanent damage,
Speaker 1: you know. And I think that the issue here is that, um,
Speaker 1: it is really kind of you know, as as more
Speaker 1: people are unemployed for longer, you have skills that start
Speaker 1: to atrophy, etcetera. So you know, really what you want
Speaker 1: to try to do is when you have these kinds
Speaker 1: of shocks, you want to get people back in the
Speaker 1: labor market, get them working as as soon as you
Speaker 1: possibly can, so you don't have some of that longer
Speaker 1: term damage. You know. I think you know, one thing
Speaker 1: to consider here that's very important that we're monitoring is
Speaker 1: that you will have some what we call economic reallocation
Speaker 1: that happens. You know, in other words, there will be
Speaker 1: some sort of longer term scars in certain industries um
Speaker 1: from this pandemic, you know. But but but there also
Speaker 1: be some some good things probably that come out of
Speaker 1: it as well. So for example of that, you know,
Speaker 1: maybe the leisure and hospitality sector never fully gets back
Speaker 1: to normal, even though it will recover. UM. But on
Speaker 1: the other side of that, you'll have some uh, you know,
Speaker 1: improving trends and kind of things like warehousing, you know, transportation.
Speaker 1: You know, as more people continue to shop online or
Speaker 1: things like that, um, you can do more things that
Speaker 1: are um you know via zoo room or you know,
Speaker 1: tele telecommunications, you know, so I think that you you
Speaker 1: need to be able to bridge the gap for people
Speaker 1: so they can get new jobs and new industries and
Speaker 1: you can get that economic reallocation that happens quickly and
Speaker 1: smoothly and you don't get the longer term damage, you know,
Speaker 1: And we certainly are optimistic that you know, we'll be
Speaker 1: able to do that, you know, given the stimulus that
Speaker 1: we've gotten to date, and you know, on our expectation
Speaker 1: for for more support from the government going forward. Tiffany,
Speaker 1: we're hearing you know, you know, kind of somewhat tongue
Speaker 1: in cheek comparisons to the nineteen twenties. Here, how much
Speaker 1: pent up demand do you think there really is out
Speaker 1: there in the economy. I'm trying to fast forward a
Speaker 1: little bit to kind of June July August. Um, do
Speaker 1: you think people are going to kind of just kind
Speaker 1: of burst out of their homes and apartments and go
Speaker 1: out there and spend um. Well, you know, I think,
Speaker 1: you know, again, like one thing, one sort of measure.
Speaker 1: You know, obviously love to look at data and measurements
Speaker 1: and things like that, you know, one measure I think
Speaker 1: to look at the potential pent up demand is is
Speaker 1: really the savings rate, um you know, and as we've seen,
Speaker 1: the savings rate you know, has gone up a lot.
Speaker 1: And I think that's important. You know a lot of
Speaker 1: you know, we some of the spending and the household
Speaker 1: relief that that people have gotten, they have not been
Speaker 1: able to spend because uh you know, things are shut down,
Speaker 1: um you know. And and so I certainly think that
Speaker 1: um you know, you will get some some pin up
Speaker 1: demand for for that type of spending when when things reopened. Certainly,
Speaker 1: um you know, but again, as I mentioned, you know,
Speaker 1: I don't I don't think things will be quite the
Speaker 1: same as they were prior to this pandemic, you know,
Speaker 1: because I think people have figured out that uh you know,
Speaker 1: they can they can work from home more seamlessly, um
Speaker 1: you know than they could before, for example, and things
Speaker 1: like that. But but I think you will get some
Speaker 1: pin up demand you know, leisure, hospitality sectors for travel
Speaker 1: and things like that. You know, that will certainly rebound pativity. Well,
Speaker 1: and thank you so much with PIMCO. Greatly appreciated after
Speaker 1: jobs report. Thanks for listening to the Bloomberg Surveillance podcast.
Speaker 1: Subscribe and listen to interviews on Apple Podcasts, Sun Cloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keene before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio