Air force. You ran against Kamala Harris for state attorney general. There has been some criticism from the left that she was too harsh as a prosecutor. Is that a problem for her with a left wing of the Democratic Party . Rep. Lieu i do not think so. My advice is never run against Kamala Harris. In terms of her record, you do not get to be elected as the District Attorney of San Francisco and then elected statewide in california as attorney general if you were not progressive. She has a record she can put up against anyone, and she will prosecute donald trump in terms of showing his failures and addressing this pandemic, in terms of creating job, in terms of his failures on the Foreign Policy front. She has done that with other witnesses before her in congressional hearings. She will do that as Vice President. Ticketdoes she help the in this respect that President Trump wants to make law and order a major issue, does she pull teeth on that argument a little bit . Rep. Lieu as a former prosecutor and a former attorney general, she understands the risks Law Enforcement personnel take when they put on their uniform every day. She also understands institutional racism has affected many institutions across america, and with the george floyd murder, she was one of the first people to participate in the rallies and marches and introduce legislation to crackdown on institutional racism. David one of the things that strikes me is this is a historic choice. The first africanamerican woman to run for this office, the first asianamerican woman to run for this office, and yet it seemed almost obvious by the time it came. What does that say about where we are as a country . Does it say weve made some progress . Rep. Lieu progress will not be stopped. It says a lot joe biden selected a historic pick in Kamala Harris. It is not just who she is, it is also what she has done. When i was in the California State Assembly i was chair of banking and i worked under these issues in the california state senate. I know Kamala Harris worked with us and fought the big banks in terms of the settlement and extracted a fair and better settlement for consumers. She has the courage and tenacity to not only be Vice President , but to do what is needed to write our country. Our country. David should wall street be concerned about her . Rep. Lieu not at all. The settlement she has with the wall street banks was a fair settlement. Consumers got the things they should have gotten because of the failures of some of the banks during the great recession. One of the issues President Trump has raised is trying to tar Vice President biden and molly harris as they are left and Kamala Harris as they are left. She has taken some positions on universal health care that could troublesome voters, including at one point said she wanted to eliminate private assurance private insurance. She leftist . Is she left of center . Is she farleft . Rep. Lieu it depends on the issue. She supports universal health care. That is an issue democrats will. Ontinue to run on we see how important getting Affordable Health care is for everyone. The Donald Trump Administration is suing to eliminate the only law that guarantees coverage for preexisting conditions. Kamala harris will fight back against that, as will joe biden. If you support health care you support biden and harris. David should we expect more taxes out of biden harris . In place for act several years the Affordable Care act has been in place for several years. We did not see a large spike in taxes. What we saw was a reduction in Health Care Premiums and that is what we are fighting to preserve and protect, in we wish donald trump would stop suing to eliminate the law that guarantees preexisting Conditions Health care coverage. David President Biden has proposed a number of programs that would cost a lot of money, and are indications he will have to tax a lot to get that done. Kamala harris supported a Financial Transactions tax. Im not saying it is good or it is bad, but when deciding whether to vote for this ticket, should we expect our taxes will go up, some of us . Rep. Lieu it is hard to predict what the house and senate will do. What i do know is republican tax law that passed was a large scam that essentially increased taxes on millions of middleclass families and also gave most of the benefits to the top 1 in our country. That is something americans did not expect her want, and i know joe biden and Kamala Harris are opposed to republican tax law. David lets talk about china. Youre a taiwanese american and have strong views on some of the things china has been viewing. Kamala harris also does. What is her position on china as you understand it . Rep. Lieu what china did in suppressing information about the virus is indefensible. That is different than having the president of the united flutes use phrases like kung or chinese virus, that fuels hatred against Asian Americans. Has foughtla harris for all minorities. Across america, there has been over 2000 hate crimes against Asian Americans and we need the biden harris duo to stand up and fight to make sure we do not have any more hate crimes across america targeted at americans who happen to be minorities. David thank you so much for your time and your thoughts. That is congressman ted lieu, democrat of california. Coming up, the trump doctrine. Richard haass is here with his assessment of nearly four years of President TrumpForeign Policy. Ons is balance of power Bloomberg Television and radio. David im david westin. We turned to Mark Crumpton for bloomberg first word news. Mark President Trump called Kamala Harris the meanest and. Most horrible senator it Campaign Finance elections and he go donations in 2011 2013 to harriss campaign for California Attorney general. The records show President Trumps daughter also gave 2000 to harris in 2014. In taxes their questions about the severity of the coronavirus outbreak. The state Positivity Rate surged to a record 23. 9 , but a backlog of more than one million test results may be skewing the populations. The statewide figure is at odds with all of the other major metrics used to assess the health crisis. Texas has had more than 500 thousand confirmed cases of covid19. New Jersey Governor Phil Murphy will allow the states Public Schools the option of all remote teaching when classes resume in september. That is according to cbs news. The decision is a retreat from governor murphys earlier requirement that all districts offer some level of in person instruction. New jerseys Largest Teachers Union and a representing School Administrators say classroom instruction is not safe yet. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. David . David secretary of state dean atchison presided over the creation of the International System after world war ii. His memoir, titled present at the creation. President trump has taken a different course. The title of richard haasss new piece has the title present at the disruption. He is the author of the best selling book the world a brief introduction. This is a terrific piece. A thoroughgoing review of President Trump. It raises the question of are we dismantling what we created after world war ii . Richard the short answer is yes. What is worse, we are dismantling it without replacing it with something better. In some cases we are not replacing it with anything at all. The dismantling begins with international institutions. Weve pulled out 10 of them by now. Different treaties. Weakening alliances. Again, the president is trying to undo a lot of this inheritance, and like health care, repeal without place. David the president has said repeatedly that the United States has been taken advantage of. Other people are benefiting and we are paying the bills. What has this International System done for the prosperity of america . Richard he does think that. When i met with him when he was doing candidate he believed that fervently, that trade agreements have ripped us off and the cost of Foreign Policy, the stationing of troops overseas far outweighs any benefits. What he seems to be missing is that for 75 years there has not been a grand power conflict. To the extent there was a cold war, it stayed cold, and it ended on terms extraordinarily favorable to us. Meanwhile, standards of living in this country have gone up dramatically. By some measures 90 times since the end of world war ii. The average american lives on the order of 10 years longer than he or she lived 75 years ago. Democracy is far more prevalent around the world. I am hardpressed as someone who has trained as a historian to find any other period of history as productive and constructive as the last 75 years. Im not going to sit here and say we did not make mistakes. Of course we did. Vietnam, iraq, and so forth, but on balance this is been a more remarkable run. David even when donald trump came to office, things were changing. China was growing quickly and growing to challenge us as the dominant economic power. Was it inevitable we had to do something other than what was left over after world war ii . Richard absolutely for several reasons. China has emerged and we needed to adjust our policy. The president deserve some credit for calling out china. Where i think he gets the blame as i do not see anything coherent or consistent for dealing with china. Probably an even greater problem with american Foreign Policy is a lot of the institutions referred to are getting long in the tooth. You have a new set of challenges , things like cat regulate cyberspace, what to do about climate change, what to do about chlorophyll or asian about proliferation. There is a shortfall when it comes to International Arrangements. Addressing that has to be on our agenda. The president is uninterested or opposed to International Agreements of those shorts of those sorts. David you mentioned china. Terribly important relationship with United States. Where are we headed with china if we keep going in the direction we are . The president believes if he keeps putting pressure on china he will do something good for the United States and good for workers. Richard two things happen. In the short run i am worried about a military incident between american and chinese aircraft and ships or Something Like the south china sea, the taiwan straits, islands claimed by japan and the pacific. The challenge will be to put a lid on it so incident does not grow into a conflict. In the longer run, i am concerned about a u. S. Chinese cold war. An acrosstheboard competition that at times has us lined up against one another. It is dangerous, it is costly, and it would probably rule out u. S. Chinese cooperation in dealing with north korea or dealing with global help or dealing with climate change. I think we are far down that road. David one of the focal points of our relationship with china under President Trump has been trade. The trade issues are not limited to china, they go more broadly, including the institution of the wto and our relationship with europe. What is happening to our economy because of what is happening with trade under President Trump . Chance toe lost a grow global trade and improve the way it is regulated. If we had stayed in the transpacific partnership, that wouldve deemed us up with countries. We wouldve represented over 40 of the worlds gdp and then put from it is pressure on china to raise its game to meet our standards. We could reform the wto. It is clearly flawed, but then the question is how you make it better. But we are doing is undermining it by not approving any judges for one part of the World Trade Organization that has worked quite well, which is its Adjudication Panel for resolving trade disputes. David we have an election coming up november 3, including the president of the United States. As you look at that possible for been the road, have you look at a Biden Harris Administration with respect to Foreign Policy as opposed to trump pants . Trump pence . Richard the difference would be a willingness to work with allies. They deal with allies and approach all of these regional and global challenges. Youll probably see reentry into various International Arrangements and institutions. The problem for a Biden Harris Administration or the challenge would be their inheritance would be rough. It would be a daunting inbox. Four years ago i wrote a book called the world in disarray. Now it is disarray on steroids. Hey would face that the next president and Vice President will still have to do with the pandemic. Tens of millions of unemployed. A country divided by politics and race, possibly by the election itself. There will be a situation where there will be greater demand than ever for leadership and involvement. At the same time the homefront will be calling out for repair. David you deal with these World Leaders on a regular basis. Is there pentup demand for an alternative to President Trump . I am reminded that at the end of george w. Bushs administration it was thought a reputation was not very good in the world. The Obama Administration turned around pretty quickly. Is that realistic . Richard the greatest demand for change is Something Like a return to what people thought they knew it with our allies. They treasure american reliability and predictability. Consultations are important, so in europe and asia you find the greatest demand for something. Amiliar i would think countries like turkey and russia are happy with what they have got. Arabia wereke saudi uncomfortable with the Obama Administration. China cannot make up its demand. United states has created its mine. Its mind. United states has created holes china has been happy to fill. David what with the alternative be, lets assume we have a second term of President Trump. What does that world look like . What might it mean for american prosperity . Richard in my experience reelected president s double down. They continue. They feel they have a mandate for more of the same or in some cases just more. I would think a second term would be very familiar. Alliances would wither, the United States would become unilateral, aggressively protectionist and bilateral on trade. It would be very familiar. Follow onnk my article would not be disruption, it would be destruction. In four more years he would not have the machinery that has served us well over 75 years. If President Trump are watching this, he would say that is great. I have yet to hear anyone who works for him articulate an alternative that is viable and preferable. My concern is in four years we could face a rough international environment, really turbulent, and for American Business and investors, they would have to factor in what will be a much less predictable or stable world operating in. David what does that do for National Security . You wrote another book sing National Security begins at home. It is our economic strength. Richard it is bad by any measure. Foreign policy begins at home, it does not end there. We are suffering from a pandemic that began in china. On 9 11 it was people trained in afghanistan. Climate change comes from everywhere. Is lesson of the modern era nothing is local or stays local for long. If we have a Foreign Policy that gives short trip to the world, we will pay an enormous price at home. Economysociety and an cannot thrive in a world that begins to unravel. David great to have you with us. That is richard haass, president of the Council Foreign relations and im delighted to say he will remain with us for the second hour of balance of power. A lot more to discuss on Bloomberg Radio. This is Bloomberg Radio this is bloomberg. David this is balance of power on Bloomberg Television and radio. It is time to check in on the markets. Abigail doolittle is here. It looks pretty good. Abigail risk on mode indeed. We have the bulls back out. Stocks are sharply higher. The new york faang index on pays for its best day in two weeks. That is what is leading. Over last week there has been more of a cyclical tilt to stop gains, meeting the financials industrials are in charge. The dow is lagging, just. 9 . The s p 500 up 1. 5 . The nasdaq 100 leading the way, up 2. 7 percent, being helped out by tech. That is the best sector on the day. The worst sector is financials, energy, and industrials. The new york faang index up 3. 5 . This will lead to questions on the part of some folks in wall street. Will we see this years defense and tech trade takeover, or will the cyclical rally continue . It seems to be back and forth over the last couple of months. David a big question in wall street. The question is what is going on in washington. It surprises me we thought we would have a stimulus last week or the week before. Now we are talking about going into september, maybe the deadline of shutting down the government. What is the Market Pricing in . I thought the market was based on their would be a stimulus . Abigail that would be my assessment of the situation, especially since you have the s p 500 1 away from the alltime high. The nasdaq recently made alltime highs. It suggests traders thought the stimulus was priced in, at least 1. 5 trillion. The fact we do have the possibility of a delay, we have delay right now for two weeks, that means not only will some americans being in a world of hurt, but the economy in august, and if it does extent the impasto september, could create an issue into september. Even if the deal was reached now and implement it quickly, we could see another recession. Stocks not pricing that is right now. David one has to be concerned. Thanks to Abigail Doolittle for that report on the market. We will continue the libbyion because cantrill of pimco will be joining us to give us her sense of what that means for the economy and for washington. This is balance of power on Bloomberg Television and radio. This is balance of power on Bloomberg Television and radio. I am david westin. Last week we were told that the stimulus package was imminent. But now it does not appear we will get anything this week or maybe in september. To take us through all of this is libby cantrill, head of Public Policy at pimco. What is going on because we thought we would have it for sure. I dont think they are talking right now, they . Libby good afternoon, david. They are not necessarily talking. There was some optimism last week that maybe some of this was just posturing and we will get a deal by this week. Obviously, that does not look likely at this point. However, the framework for a there is moreand agreement than disagreement on some of the big items. But the big Sticking Point is the state and local funding. Democrats are insisting on funding at 1 trillion. Republicans did not put any money for state and local funding. That is the big area where they are far apart. However, as we are going into the election, Mitch Mcconnell has many folks on his conference who are quite vulnerable and will be advocating for state and local funding. The bottom line here is that even though there is a lot of posturing, there will likely get something done because the political Downside Risk is too great to not do anything. Guess thatour best President Trumps executive orders make things harder or easier to get a deal done . It seems like everybody put their pencils down and forgot about this since he did the executive orders. Libby it is a great point. I think those were in some ways more symbolic than substantive. I think he was trying to rebalance negotiations, trying to increase leverage for republicans and maybe he did that for one day or two. I think the broader recognition is that those executive orders are limited in terms of what they can actually do for the economy. The Unemployment Insurance benefit in particular looks like it will be very hard for states to implement and only lasts for a few weeks anyway. I think there is a broader s didition that these eo not do very much and at the end of the day, congress has to act. Saidr mcconnell basically leaders need to restart talks. Pause on eos put a the negotiations. I would not be surprised if they did not Start Talking again. The bign the meantime, news overnight was the designation of Kamala Harris to be the running mate for joe biden. That will not have an immediate effect. What possible effect could it have on joe biden getting elected, maybe the senate switching, and ultimately on policy . I think senator harris helps his electability at the margin and she pulls well with women of color, with suburban women, with independence. Of her probably helps him and his candidacy at the margin. What we see from a Political Science perspective, his choice of running mate does not make that much of a difference. We all like to talk about it in washington, but at the end of the day, it is not really that important because voters choose the person at the top of the ticket, not necessarily the running mate. In that way, the approach of do no harm, i think he succeeded. As terms of a policy perspective, she has one of the more liberal voting records. He has been in the senate for four years now. She also gets grief from the progressive from her prosecutorial history. From a policy perspective, it is not clear whether it will make that much of a difference. Usually the running mate goes along with the person on the top of the ticket. Her relationship with capitol l will not likely help will likely help biden who has the connections to the hill. I think it is kind of a do no harm choice. In some ways, it was a protectable choice. David thank you so much. Always a pleasure to have you with us. That is libby cantrill, head of Public Policy at pimco. For bloomberg news, we go to Mark Crumpton. Mark thank you. Joe biden makes his first appearing with his newly chosen running mate, Kamala Harris. They will appear at a high school near mr. Bidens delaware home. Y will leave the Country Economic fallout and growing racial tensions. The two will hold an online fundraiser. Russia is brushing off International Concerns about the safety of the worlds first covid19 vaccine. Russian Health Officials say the criticism is unjustified and other countries are unhappy competitiveas advantage. They will start mass inoculation this month before clinical testing is completed. Mike pompeo says the u. S. Will keep working to deliver democracy to the people of belarus. Speaking in prague, secretary pompeo said not the entire nonviolent protesters should be protected and not harmed. Belarus have clashed with police for three straight nights in the battle over alexanders claim for a land find victory in sundays president ial election. The Kentucky Derby will look different this year, at least in the stands. Churchill downs says it will limit the attendance to fewer than 23,000 fans or less than 14 of the attendance record. The temperature checks, medical questionnaires, physical distancing and face coverings will be required. The Kentucky Derby is scheduled to be held on september 5. It is usually the first saturday in may. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. David . David thanks. Earlier today, i spoke with James Clyburn about the nomination of Kamala Harris, the senator from california to run with joe biden. You remember congressman clyburn was one of the earliest supporters of joe biden. This is what he had to say about what senator harris adds to the ticket. Ticket aings to this smokers board a smorgasbord. She performed as a member of the dussehra committee. The kindserienced in of backgrounds that we need sensitivity from in our government today. Won statewide office in california. She has served the u. S. Senate and quite frankly, she has the kind of skill sets that i think are necessary in order to win this year. Tough, no matter what we may have seen at the polls, this is going to be a very tough campaign. We have found out that just being popular and winning the popular vote will not get it. We have done that before. We have to win with strategic questions. I think she gives to this ticket the ability to win in those strategic places. David as you say, it will be a tough campaign. We already saw right away out of the white house a response to the nomination. One of the things they are picking on is she tends to be a socialist and goes to their to collect. She did take the position of limiting private insurance and healthcare during the campaign. She backed off of that some. Is there a form ability that the Truck Campaign can exploit that she is to farleft . Time, thell the country does not move on a linear plane. Goingountry is always back and forth like a pendulum on a clock. It goes right for a while and then left for a while. It went to the left with barack obama. It went right when we elected donald trump. For the moment, people got experience with him, they started back to the left. I always say, going left to right and right to left, it passes through the center. This country camps more in the center then it does to the left or the right. I really believe that this ticket is right where the country is today. Oving back to the left it may move to the right, it may move to the left. But this ticket is right where the country is and i am very proud of this ticket. David congressman, one of the things that senator harris brings is from it Law Enforcement perspective and that might be helpful. President trump was addressing law and order and pushing that button hard. On the other hand, could it dampen the enthusiasm from the Africanamerican Community particularly from males because of her prosecutorial history of being very tough on young africanamerican males . I think that being tough is something that we have to really it is a quantification that needs to be qualified in my opinion. I think when you follow the law, remember, she is adamantly against the death penalty. Some people say that means you are too liberal. She enforces the laws on the books. Some people say, you are too conservative. The fact is, she was a successful District Attorney, a successful attorney general, and an effective United States senator and i think she will be just as good as Vice President of the United States and would make a tremendous chief executive if it were to come to that. David part of my conversation with jim clyburn. Coming up, we will talk with Eric Rosengren. He says that states rushing to reopen will damage the economy. Ons is balance of power Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. We will go to our colleague michael mckee. Michael . Thank you, david and thank you for joining us. Thisld like to start with mornings data, an unexpectedly large jump in the Consumer Price index. That started or at least contributed to a debate on wall street about whether all of the stimulus is inflationary. Some people even talking about the possibility of stagflation. Is it a reasonable discussion . I think it is very premature to be concerned about a significant increase in inflation. I would say i am still actually ourerned that we will have 2 inflation target. Inflation is a sustained increase in prices. I think that we are seeing in some of the monthly reports is some things have been scarce because of the pandemic. Other things in abundant supply. We are seeing things like Airline Tickets in some other areas where it does not really reflect low cost growth but actually reflects the cost rupture that occurs when we have a pandemic. I think there will be relative price changes that will increase and make the reported numbers seem larger. 10 t now we are at unemployment. I am not concerned about inflation growing at a rapid rate. Be ael there seems to growing feeling that we might see a resurgence of the virus this fall and that would hit gdp and growth. You were strong this morning in saying the u. S. Opened up too quickly. Eric the economy is very closely tied to how the path of the pandemic goes. Gave and thehat i charts are available on the boston fed website, i looked at europe versus the United States. Europe ended up taking a big hit because they had very significant shutdowns. But now they are out and about much more than the United States and they have been able to control the pandemic better than the United States as a whole. I compared the state patterns and what the state patterns show is that those regions of the country particularly in the south and west that opened up very quickly and with somewhat abandon ended up getting a shortterm boost that also increased the infection rate significantly. As the infection rate has increased, people have changed their behavior leading to changes in mandates and changes in behavior. They are doing less spending and they are less mobile. We are seeing the data in the Midatlantic States because they are doing better because they had a significant shutdowns and more were more restrained. It will be an important lesson to learn that we need to follow the data very closely on what is happening with the pandemic. If there starts to be an increase, we need to take more significant changes either in our behavior or in the state requiring mandates that require that. Michael one of your colleagues suggested another lockdown. Would you go that far . It is lessnk ideally costly to wear masks and socially distance and not be in big groups in poorly ventilated places. If we follow those guidelines, it is a less coffee solution then a shutdown. If we dont follow those guidelines by the cdc and behavior does not change, in those parts of the country, the pandemic could get severe enough that we run out of icu units and as a result of the capacity at the hospitals have to actually shut down. I think there may be some regions of the country that are pretty close to that right now. Turnshink as the weather and gets colder and schools are back in session, the chance of the virus becoming more severe in the fall i think is substantial. I know the hospitals in the boston area are preparing for another wave in the fall. I think that is probably true of most hospitals around the country. I think this is a time to be vigilant. We highlight that being too relaxed now might have severe outcomes for the health and mortality of citizens but also to the economy as well. If you want a strong economy, we need to take actions against the pandemic that prevent the pandemic from shutting down the economy. Michael given all of that, what is your outlook for growth and unemployment through the end of the year . Have you changed it . Eric i have not changed my forecast much. My forecast is predicated on us having another wave of infection that we are not effective in avoiding person to person transmission in a significant way. I think that will result in either peoples behavior or state mandates that slow the economy more than i would like to see. It is certainly less costly than a shut down then to take appropriate actions now. It seems like our political leaders are reticent to take those actions and with the behavior being what it is, people have been less willing to wear masks going to social gatherings, etc. Michael speaking of actions the fed can take, there has been talk of changing your Forward Guidance come september perhaps to a state dependent guidance that would hike Interest Rates to an outcome like inflation running a little hot for a while. Where you stand on that . Eric i think it would be an appropriate time to have Forward Guidance. I think at this stage of the recession and the pandemic that Forward Guidance probably is only mildly helpful. The reason for that is the longterm rate is quite low. Interest rates are quite low. In that environment, i think people are already assuming it is going to be quite some time before Interest Rates rise again. While it might be marginally helpful, i would actually say that our facilities being run by the new york fed are probably providing more suppose more support because they are giving funds to businesses that i think are more important for what the outcome for the economy will be. Michael i want to talk about lending programs. German pal emphasizes that the fed could lend, not spend chairman powell. Eric they have been quite effective in any respect. The announcement of our willingness to buy corporate securities quickly pushed Interest Rates down and as a result, we did not need to buy very much because the market reacted. I would say Credit Conditions are much better than they were in march or april. I think that has been an important stimulus to the economy. In terms of spending, that has to come from fiscal policy. The u. S. Economy also benefited from the kind of very quick and very significant stimulus provided by both providing better employment benefits, broader unemployment benefits, checks to low income individuals, all of those things have been helpful in preventing particularly low income individuals from being able to continue to make spending decisions over the course of the spring and the summer. I think many of those programs have ended as of the end of july. The pandemic has not ended. The Unemployment Rate is above 10 . Stimulus to continue, i think it is critically important to provide support. Michael have you modeled the impact from the end of that fiscal stimulus . Eric my personal assumption in my forecast is that some form of additional stimulus is going to occur. It would definitely be bad news for the forecast and the economy if we dont do any additional stimulus at this time. Michael back to the lending programs. The fed announced it was lowering municipal lending facilities. Is that a sign that perhaps it was not properly designed . Eric no, i think it is a reflection of how much Interest Rates have moved down. That program was designed as a penalty rate so that if a borrower was particularly stressed, they would find it attractive. But if they were not, they would not find it attractive. As market rates have moved down, it is natural that we move down with it. I think it is a reflection of the success of the program. Michael you supervise the main Street Program. That is perhaps the most controversial. According to your figures, a 56 million in loans. It is a program that could do 600 billion in loans. Does that suggest modifications need to be made to the main Street Program . Eric we have already made quite a few modifications. We had an initial term sheet. We came out with a revised term sheet and then it was revised once again to make the program aoader and more accessible to wider range of small businesses. We also opened it up to the nonprofit sector. While we are not live on that part, banks are perfectly able to start negotiations with the nonprofits. As you know it takes a long time to actually negotiate a bank loan. It is not surprise me that we would start gradual and pick up overtime. I think that is what we are seeing. One reason we are seeing a lot of lending coming from Community Banks and midsize banks is they are probably more flexible and able to adapt more quickly. I would expect that larger banks over time would start using the facility more. The goal is to make sure that businesses that actually need it that are credit worthy in february that had their cash flow disrupted and are likely to be a viable business is after the pandemic is over and able to get that kind of cash flow financing. I think we are seeing uptick in that activity. I expect as borrowers and banks get more familiar with the program, you will see increases. However, we dont see the kind of increases we would expect given the economic condition. We previously revised the term sheet. You can obviously do it again. If the economy were to be worse off in the program was not to expand, that would be a time for the treasury and board of governors to rethink some of the parameters. At this stage, i think it is premature to say that. I think we have been seeing a very significant increase over the last two weeks and i think that will continue. People hope that these programs happen instantaneously. Now you can buy securities continuously. You can buy lots of corporate bonds, treasury securities, Mortgage Backed securities. This program is in a part of the market that is not move quickly. The require the borrower and lender spend a lot of time negotiating. The fact that the Federal Reserve is involved means that there is a separate set of legal agreements tied to the cares act and the 13. 3 facilities. It will take a little while for this to go out and i think we have to be patient. Michael the final question i would ask is how much of this do you think you will end up using in the sense of how bad is the economy going to get this fall that people would be coming to the main street facility . Eric i think you are exactly right. It depends on how the economy progresses. As i highlighted at the beginning of this interview, that depends on what happens with the pandemic. Unfortunately, since i actually think the pandemic is likely to get worse as we get into the fall, that means i am worried the economy will get worse. Mean that earners that we were hoping did not need to access this program come up have to access is program. As businesses become more concerned that a disruption in their cash flow would occur much longer than expected. Michael thank you for joining us today from the boston fed. I will send it back to you, david. David thank you so much to michael mckee. In that rather for reaching interview with Eric Rosengren where he said it is up to the virus. We dont need to shut down the economy. At the same time, he thinks it is critically important that congress does come up with some sort of stimulus package. That is what his projections for the economy are based on. He thinks lending programs are doing rather well despite some hiccups in getting started. That was Eric Rosengren speaking with michael mckee. Coming up in the second hour of balance of power more with richard haas talking about things like iran and foreign alliances. This is balance of power on Bloomberg Television and radio. York, whose0 in new 00 in london. I am vonnie quinn. Youre the top stories we are following. Here are the top stories. We will be speaking with megan crane, phis president ial candidate we have is Kamala Harris chosen by joe biden. We will see what impact that decision is going to have. We will also be hearing from James Clyburn on the subject. Announcingational this years tournament will take place without patrons or guests in november. Zach johnson. Lets get a check of the markets. It is a green market across the board. The dow is up. 8 . The nasdaq is up 2 . The reason for that extra gain from the nasdaq, technology up