Extraordinary august. We had such important conversations. Lets get to the data quickly. And3, dow futures up 132, we are all casual. Chairman powell was casual yesterday. Im sure mr. Kaplan will be casual for Michael Mckee in a moment. Thein the time of within tumult, everyone is being casual. Lisa are we going to keep the bowtie . This is going to be the question as the fed shifts their inflation their inflation policy. Lisa this is an important conversation, as he spoke to James Bullard yesterday, as we spoke to William Dudley moments ago. Michael mckee advances the discussion with mr. Kaplan of dallas. Michael thank you, tom. Good morning. Thank you very much for joining us today on Bloomberg Radio and television worldwide, and thank you for not wearing a tie and not making, adhere. [laughter] not making tom look bad here. Robert i try. Michael there are those who safety framework review changes all well and good, but what makes you think you can even get to 2 inflation, let alone over it since you have gone a decade without getting there . Robert its possible that it will take a while to get to 2 . Disruption inbled particular are limiting the Pricing Power of businesses, and inflation has been muted for close to 10 years. Articulationpolicy is really a reaffirmation of the situation we have been operating in an hour decision functions for the last few years. It is not a radical shift yet it is an affirmation that we have been in a more muted inflation period. Weve been alert that that could dont you policy articulation as a radical change. It is a reaffirmation of the way we have been operating. Tom the new policy is appropriate Monetary Policy will likely aim to achieve inflation moderately above 2 for some time. How do you define moderately above and how do you define some time . Robert weve left it deliberately undefined. Still rice stability is our dual mandate. It is full employment and price stability. 2 is our best indicator of that. So for me, what it means is if we are in the situation, i hope we do in the next couple of years, where we are running closer to full employment, i am willing to take a little more risk and have a greater tolerance in my Monetary Policy judgments that inflation could run a little bit above 2 , and for me, a little bit means a little bit. 2. 25 , maybelicly, a little more than that. I still think price stability is the overriding goal, and this framework doesnt change that. Michael why isnt this a return to 1960s style fed policy . That didnt end well. Robert that is a danger. It is not that im going to lose a concern that we could have a spike in inflation, and i am not going to lose a concern, and in fact this framework articulates a concern about framework stability, i think those concerns havent gone away. , thist says on the margin is my interpretation, and the way i will be operating on the margin. I am willing to take a little more risk and service of getting underrepresented group into the labor force, a little more risk on inflation, but i am not going to be willing to take risk that will lose price stability, a la the 1960s and 1970s. Michael theres also a concern that an overrepresented group, people on wall street, are going to be the beneficiaries here. Be able toy not stoke inflation, but you sure can pump up the stock market. Robert that is also something we have to be cognizant of, not just on the fed funds rate, but also on purchases of treasuries and Mortgage Backed securities, and the 133 programs we havent lamented this year. I thick it is very clear we articulate that those programs will lapse, and i do think we need to be conscious of Financial Stability and excess that could build as a result of our policies. I will view that as an important consideration as i make judgments coming forward. Michael if you were still at Goldman Sachs looking at your bloomberg terminal, would you think that maybe we see some bubbles forming now . Concernedwould be that when the fed takes the type of actions weve needed to take excesses inou have risk assets. Not just prices. But what i am considerably worry about is debt built up. Part of the issue we faced in and theth the pandemic closures that we had to do to fight it is we have a lot of excesses in financial markets, and it required the fed to step in and do a to stabilize financial market, so those excesses can build up. They are hard to see. And iorried about those, would be conscious of those if i were in the private sector. Michael you do know wall street, given your background, and you know all of the traders are sitting there this morning going, great, but what have you done for me lately . Are you anticipating any kind of change in the statement on september 16, something more to adjust Forward Guidance . I would prefer to wait. I would prefer to get more clarity on the path of the virus. I think weve already given quite a bit of Forward Guidance through our summer of economic projections, which we will do another one in september. Weve already said rates are going to stay low for the rest of this year and all of next year, and i would prefer to show some restraint here. I think weve done quite a bit. Michael we last spoke with you at the beginning of the month, when covid cases were spiking in texas, and the 600 in extra Unemployment Benefits was just running out. What is the economy like now, a month on from there . Robert we had a pretty robust rebound through mid june. We saw some stalling after june. I would say in the last two or three weeks, all of our highfrequency indicators, mobility, engagement indices, are approved, are affirming. So we are not rebounding as much as we would have if we had the virus under better control, but we are still rebounding. I think thirdquarter gdp is going to be 20 plus annualized. So we are growing. We are rebounding. The issue is as long as weve got relatively high levels of virus present, it limits ness to engageling in a number of industries and activities, and that is having a muting effect on the rebound, but we are still rebounding. Michael a week from today we get the august payrolls report. What is the labor market like . What should we expect when we get those numbers . Robert we think that between now and the end of the year, we are 10. 2 unplanned right now. The big 10. 2 and limit right now. The bigger figure i look at, which is unemployment plus discouraged workers plus those working parttime that want to work fulltime, we think it is 8 atto end closer to this point, and that you figureure and the u the u6 figure will also come down for fortunately, unless we have greater resurgence in the virus. Michael you declined to put a numerical target on unemployment because the inflation Inflection Point changes over time, according to the fed. We got down to three. 5 unemployment in february with no inflation. Can we get back there again under your framework . Robert we are going to give the economy every opportunity to do that. The dynamics of inflation will change, and i am attuned to that because of supply shortages. There are going to be further changes in technology and Technology Enabled disruption. There may be changes in the dollar. We will have to see if there is severe dollar we. That could have an impact on inflation. So i thing my own approach is going to be i want to give the labor market every opportunity to get back to that point and not preempt improvement because i anticipate inflation. I am willing to take a little bit more risk in having inflation run moderately above 2 in order to get to fuller employment and bring in a number of these underrepresented groups that i think will really help the country and help the labor market be stronger. Michael speaking of inflation expectations, as a wall street guy who really gets this stuff, what are breakevens telling us now . Theres a theory that while they have been rising, it is really because theres a lack of liquidity in the tips market, and if you take that premium out, you dont see any inflation embedded in the expectations markets. Theres a lot of factors that affect trading markets, as you said. Liquidity is one of them. I would say that the concern about dollar we is reflected in a number of commodities about dollar weakness is reflected in commodities. There are certain groups i would guess in the private sector that are positioning themselves to be prepared for higher inflation then we have had the last 10 years. That may or nay not happen, but youre seeing that concern in the tips market. Michael one last quick question. , will the u. S. Ow economy collapse if there is no football in texas this fall . Robert i think the texas economy and the u. S. Has shown to be very resilient, even if you take a thing take away things we hold sacred. We will adapt to it and continue to power ahead. Michael Robert Kaplan, the president of the dallas fed, thank you very much for joining us. [laughter] tom you see how he answered that . He answered that ik press conference that like a press conference. Michael you dont mess with the all, tom. Tom Michael Mckee, congratulations around the bullard and kaplan conversations. Rnc, on then the president of the United States, rick davis, stonecourt capital partner. This is bloomberg. Ritika with the first word news, im ritika gupta. The longest serving Prime Minister and japans history is resigning. Shinzo abe is stepping down for health reasons. The government has provided few details, but reports say he has been undergoing treatment for a chronic digestive condition. He plans to stay on the job until the ruling party picks a successor. Hurricane laura left chemical fires, wrecked buildings, and flooded roads in its wake in louisiana. There could be more than 15 billion in insured losses. The hurricane has now been downgraded to a tropical depression, and moved through arkansas overnight. Cocacola will offer employee buyouts as part of a strategic reorganization area the program will be first offered to about 4000 employees in the u. S. , canada, and puerto rico, and there will be an unspecified number of layoffs. A Similar Program will be offered in a number of countries overseas. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Pres. Trump china would own our country if joe biden got elected. Theme biden, i will hold fully accountable for the tragedy that they caused all over the world. Our nation ands, the world has been hit by the once in a century pandemic that china allowed to spread around the globe. Tom the president of the United States last night at this most unusual convention. He chose to be at his white house, where mr. Biden, of course not having that opportunity, had a more virtual zoom convention. Rick davis joins us now, our bloomberg contributor, and stretching from the alabama young republicans of the time i think after the collapse of the whig party, and on to his leadership in the mccain effort as well. Rick davis joins us this morning. Rick, i have to ask about the use of the white house as a backdrop. Clearly, the apprentice people were brought in. I thought they were very successful in giving us a tv extravaganza. How will republicans take that, and will it endure . Rick i dont know if it is limited to republicans, but people will have two reactions. One is it was a beautiful backdrop. Beautiful to see the white house and its splendor. Those are beautiful sites that you dont get to see enough, frankly. But then to walk down to crowd of 1500 people, maskless, not socially distanced, not tested, with Huge Campaign signs on the south line of the white house the south lawn of the white house, it is kind of a jarring picture. I worked in the white house for ronald reagan, and i am sure he would be turning in his grave if he saw that. Tom axios was brilliant this morning, noting how any times the president mentioned mr. Biden, and mr. Biden did not mention the president once. Can the democrats win without approach . Win with that approach . Rick i think this is a look at how differently these two parties are approaching the selection. Joe biden focused his speech on a Covid Response and trying to make peoples lives better by trying to get over covid in a way that doesnt endanger a lot of people. Donald trump looked at covid as if it was in the past, rearview mirror. Didnt mention the fact that we are still losing 1000 people a to covid. A day donald trump wants to hire more police, pay them higher, and have them crack more skulls. Joe biden has led a career of moderate politics, much to his own detriment within the democrat party, and donald trump turned him into a socialist last night. The American Public are going to have really clear options come november, and i think that will have an impact over time. I think the public has gotten used to having to put their own filter on the news they hear from politicians, not just allow the press to tell them. Lisa but the press is so polarized. I realize it is ironic, i am saying this is a member of the press, but there is a question of the visibility we have into the popular sentiment given some of the fallbacks we have seen with polings. I keep coming back to this seen with polling. I keep coming back to this article that some online surveys showing that people are reluctant to admit to survey takers that they are planning to vote for the president. Rick i dont know. Im not a big fan of that point of view. I think the polls were pretty much right into any 16. They were exactly right in 2016. They were exactly right in 2018. So i think it is a rounding error. This will be a close election. We have a divided country. It is not a big, wide center of undecided voters. Part of trumps speech last night is to shore up weak republican voters, weak suburban a very and that may be narrow slice, but key slice of undecided voters in pennsylvania, ohio, places like that. Lisa this is going to be a very unusual election because of the mailin ballots. I am wondering, based on your experience, having been the head of john mccains campaign, working on the cross of markets and politics for a long time, using that currently markets are underpricing the risk of an undecided election that goes on for a very long time with protracted legal battles . Rick it is hard to tell whether or not that is baked into the equation. Theres been a lot of vote by mail sweeping around the country for some time. This is not the first election it has become an issue. More and more state legislatures are doing it in an effort to try to boost turnout within their own states. But whether or not theres actually an ability to count all of the votes in a short time around election day is going to be a big problem. We saw in the primaries, the democratic primaries, that vote by mail went way up and actually skewed a lot of elections, and determined maybe weeks to determine who the winner was. It could be days, if not weeks after the president ial election not knowing who the president is. Tom how should the president respond to that, win or lose . Think one of do the hallmarks of our democracy has been the peaceful transition of power. John mccain, when he lost to barack obama, his entire concession speech was dedicated to that concept, and it was used around the world to say this is how democracy transitions power. So i do think the historical nature of this election with regard to the complexities of the campaign and devoting is going to be and the voting is going to be important for these candidates to respect. I dont know if the president will do anything but continue the campaign through the vote count and try to leverage the media to believe he is the rightful president , regardless of what the outcome is. Tom rick davis, dont be a stranger. Thank you so much for your convention contribution to bloomberg surveillance. At the gerald ford museum, theres a chunk of wood like this. For those of you on radio, at looks like a 12 inch, 13 inch 4 x 4, except one end of it is charred, and it is the embers of 1814, when the british attacked the white house. Lisa definitely a lot of history baked in the ceremonial proceedings of last night. Tom keene was doing a tiktok dance showing the wood, except shaking his hands. Tom and we didnt even get to the tiktok story today. We have been so overwhelmed with International Relations and mr. Abe as well. It is a chairman powell data check, as we have seen many are suggesting assets up, curves steepening. Futures up 12, dow futures go 24. To 28,6 and volatility to come. The vix, 24. 82. That is a big change from the 21 level of four or five days ago. The dollar weaker and breaking down. Stay with us. The simulcast worldwide, on radio, on television. This is bloomberg surveillance. Tom good morning. Bloomberg surveillance. Lisa abramowicz and tom keene. Jonathan ferro loving tuscany. We say good morning to jon ferro , living it up in italy. Right now living it up with economic data. This gentleman just off of interviewing mr. Kaplan, here is Michael Mckee. Michael we are waiting for personal income and spending numbers for the Commerce Department to come out. We get the advanced goods trade balance already out, and it as it is 79. 3 billion, which is significantly worse than it was in june, 70. 6 billion. The expectation was for 72. That will weigh on growth in the u. S. The numbers are out for income and spending. Income up. 4 . We will look and see what the components of that is, because it was significantly higher in recent months because of the transfer payments from the government. Last month it was down 1. 1 . Spending up 1. 9 . It was up 5. 6 in june. The forecast was for 1. 6 gain. It looks like we have a significant slowing in spending in the u. S. The question is what happened with services . We knew retail sales had slowed but we did not know what happened to Services Spending and we are waiting for that dated across. The other number everybody wants to see is the pce deflator. Personal Consumption Expenditure favoritethe feds measure of inflation. It is up 1 . A bit of a rebound. It was up when it percent in june. That leaves the year over year at 1 . If they are looking to get over 1 over 2 , they are less than halfway there. Tom i am sorry. My head is spinning with all of these numbers in youre doing a great job translating this. Lisa, can i steal your insight . What is important is the Lisa Abramowicz question, who cares about pce deflator. We are all living inflation in i four and paychecks. Michael inflation is interesting to watch because of the fed situation and what is going on wall street. The fed is concerned if inflation gets too low, which is why they have been watching this number with the hearts in their mouths. They did not want to get into deflation because we have had a big demand shock. Now the question is how fast can we get into a supply shop area where goods are scarce a arely shock where goods scarce and we see inflation start to rise. Until we get more data. We get a summary of the spending numbers. Disposable personal income up only. 2 . Incomes went down in the month. We had been getting a lot more incomes because of the transfer payments, but at the end of july that went away. Disposabledea of income going down is where i wanted to go. I wanted to talk about the inflation we are seeing and Health Insurance premiums we are seeing with respect to food and paychecks. I am wondering what this tells us about that at a time when we do have the extra Unemployment Benefits rolling off, already have rolled off, ended a time when you have the likes of capital one saying they will limit credit lines for individuals because they are so uncertain about what is to come. Michael it will be a problem for the economy because the people at the lower end of the income scale spent the most out of what they get. Their propensity to spend as much greater than those who have more money. These data that are just coming out today to not tell us anything about what happens after the Unemployment Insurance ran out. This is july data. Anecdotally, we have been hearing Grocery Stores are reporting lower sales in the month of august. That would seem to jibe with the story being told of people at the lower end not being able to spend as much money. Tom Michael Mckee, thank you so much. Congratulations on your interviews and the recent hours. Is the single best guest we can have on this decade. Jerome powell and the others have had to adapt to our technology. Not so much to our demand, but to our oversupply. Daniel alpert wrote the definitive book about this about 10 years ago, and it is the rarest of rare things, a even more transient today than it was in 2009. Mr. Alpert working on labor today. Mr. Powell has reacted and everybody says it was no surprise, and yet the market is reacting. Are we reacting to a continued age of oversupply . Daniel absolutely. To 12 years of virtually printing money. The feds ability to get to 2 is very limited, was very limited for the last 10 years, the notion of them getting higher than that is unlikely in this environment. We are swimming upstream. Here we had this massive drop off in in employment. We have 25 Million People either selfemployed or employed by third parties that are on Unemployment Insurance, and the total number of claims in the aggregate for this crisis was 58. 5 million, which is 38 of the workforce. Those people are not all out of work anymore, but we are now seeing rotation. Arele laid off originally being laid off again and there are no benefits for them as the 600 supplement has been cut by the government. This is a big problem. This gets to that point. If you take that 600 a week on a monthly basis, it is 60 billion based on the number of claimants right now. If you then look and say what is that as a percentage of the pce out, ifhat just came you look back to what it was before the crisis, it is 5 of pce. It is a town of money. Aboutand when you talk the backdrop of this labor market and how dire it looks in many ways and you talk about the concept of whether the fed has any ammunition to choose inflation. I want to go to what Robert Kaplan told Michael Mckee earlier, he said the dynamics of inflation may likely change, especially if the dollar keeps weakening. Or if supply chains yet rejiggered. You see inflation tubing beyond what the fed has any control over and moving to a new regime on its own . Daniel lets talk about the rejiggering of supply chains. I watch some week to week data that comes out. If you look at capacity in terms of shipping routes from china to the east and west coast, today you are seeing that capacity having been fully restored from the lamination crisis, yet freight rates are going through the roof because shipments are so enormous. All of the stuff we have had in short supply is all being restocked, and unfortunately it is not being restocked domestically, which leads up to the number might just gave us on trade. We are seeing a repeat of what we had before, in part because , but at the end of the date the notion of restoring is overstated. Tom your wonderful book, the heir of alan greenspan, you talk about the stability that has been the gospel of a measured approach in Central Bank Policy and financial policy management of this nation. Did that end yesterday . Are we going to have a stop go policy of the 1960s and instability policy which leads to the end of the greenspan era . Daniel it is not just the greenspan era. This all started with volcker. When you project forward from there, we have a long run of trying to contain inflation. My entire professional career. Now we are turning in the opposite direction desperately trying to produce inflation. The problem is we are not producing good inflation. We have been unable to do that. What we are getting is inflation and asset prices. Stock market prices are going up. Rent and real estate are going up. At the end of the day, the good inflation we want, which is inflation and income, the price of goods and services that tracks income, that we are not getting. That is the problem the fed faces right now. You can take this new direction and say there is no cap on inflation, they will not raise rates again, and i believe they will not. As a practical matter, unless you can actually generate that good inflation, you are not going to. Tom this goes back to the lifework of Gary Shilling where he talked about good and bad inflation. As mr. Alpert says you have good inflation, and it is not there. Lisa for good inflation you need good jobs and you need people to actually be employed. There is a question of how much power the fed has to create a better labor market at a time when the power rests with the federal government and they are dragging their heels. At what point is fed policy becoming a detractor, hampering doesngoing recovery that not put pressure on washington, d. C. To pass something . Daniel to the extent congress sits there looking at the stock market the same way the president does, yes. At the end of the day, we have gone backwards. The 60 billion a month we are losing and transfers will do just the opposite for the economy that the fed wants to achieve. What the fed wants is for the physical power, congress to spend money on infrastructure and other things, to put money into the economy, not to cut back. Be part of this political process that will play itself out over the next six months to eight months as we perhaps transition. Tom thank you so much for joining us after this historic speech by chairman powell. We will look to mr. Alpert for careful analysis of our labor economy as we move to that late unemployment report scheduled late the first week of september as well. Nine, up, with futures up i want to look at the data. Dow futures up 133. In the dollar space, a weaker ¥105. 44. Euroyen 12542, showing fractionally strong yen against euro. In the fixed income space, all of the fixed income we are talking about, lets get some clarity. Will join us from pimco. Stay with us. This is bloomberg. With the first word news, i am ritika gupta. Prime minister shinzo abe is calling it quits. The longestserving Prime Minister in japanese history is resigning to undergo treatment for a chronic illness. He has been in office since 2012. His Ruling Liberal Democratic Party will predict the next Prime Minister. Shinzo abe is best known for a program aimed at reviving japans economy through unprecedented monetary easing and regulatory reform. President trump wrapped up the Republican National convention i arguing for a second term and a tapping his opponents. The president said joe biden cannot be trusted on the coronavirus, racial strife, and especially on china. President trump chide out would own our country if joe biden got elected china would own our country if joe biden got elected. I will hold them fully accountable for the tragedy they caused all over the world. In recent months, our nation and our world has been hit by the once in a century pandemic that china allowed to spread around the globe. Ritika the president sidestepped the issue of how he plans to finish that fight against the coronavirus. Elon musk has confirmed the tesla factory in nevada was the target of a thwarted cyberattack. According to a tesla news and rumor site, a russian man has been arrested in the case. He is accused of trying to recruit an employee and introduce malware into the companys computer system. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Am ritika gupta this is bloomberg. The dynamics of inflation may well change, and i am attuned to that because of supply shortages. Inre will be further changes technology and technology enable disruption. There may be change in the dollar. We will have to see if there is severe dollar weakness. That could have an impact on inflation. Tom mr. Kaplan of dallas in conversation with our Michael Mckee. The dollar front and center. A weaker dollar today. Clearly a weak dollar trend in place. The gentleman from michigan in chicago joins us, mark kiesel, pimco cio of global credit curate your world changed yesterday. In what way did pimcos world change because of the new framework of chairman powell . Mark i think this is a big deal. It may not be a paradigm shift, but i think this is the fed thinks. If you look at the inflation, the core pce inflation, we have not gotten to the fed inflation target mandate its 2005 to 2006. We have had 15 years of undershooting our inflation in our country. The same things happened in europe and japan. Jay powell has realized this and theyre willing to run the economy hot and i think he will go all in on fed support curate tom on fed support. Tom it is a victory lap for mark kiesel. I have visited newport, you guys, with the leadership of bill and mohamed and following pimcoer the train wreck, has been dead on about a low rate regime. Do you maintain that low rate regime or could you see out two years, five years, 10 years where we get back to the normalcy chairman powell desires . Mark we think we are probably closer to the lows in rates comment that is simply because we are going to get, we think, a big fiscal push. It could happen after the election. Monetary policy is going all in. The fed has been supportive for markets. We think with the mobility data will improve, the economy will start growing again. If we get physical Infrastructure Spending with the democrats, we could see a much steeper curve and could see higher rates. I think we are closer to the lows, even though we did think rates would come down. Now i think we are suggesting with the economic recovery and all of the fiscal and Monetary Policy support at could go higher. Lisa this is a huge call, the idea we could be near the lows after 30 to 40 years of yields going down. What does that mean about investmentgrade credit given that the measure of sensitivity to Interest Rates has risen to the highest level on record. His investmentgrade credit riskier than highyield . Mark what you will see, and if you go back to march, what was fascinating is the opportunity then was in investmentgrade. The fed did this Corporate Bond purchasing program. They announce the secondary Market Facility of 250 billion. They have only used 13 billion. They have used 5 and yet the investmentgrade Corporate Bond market has priced one. 4 trillion of investmentgrade supply. That is 100 multiplier on the governments money. One of the most effective programs in the history of central banking. The fact is, the opportunity was in investmentgrade, but now people are realizing if this economy broadens, you will have to own equities and high yields. We are seeing a transition in the market, and i think as people feel more comfortable flying and getting on planes and the mobility data improves, you will start as investors continue to take more risks. People broadening out. What about you . Are using the opportunity to take pimco money and move it more into the equity like risk away from investmentgrade . Has there been any shift in allocation . Mark we have added 9 million jobs but we still have 13 million more to add back. The Unemployment Rate is still 10 . We still think it will take two years to get to 2 inflation. Where we have been modifying our strategy is in march and april we came out with a ring the bell moment on march 20 and said investmentgrade credit was the cheapest i had seen it in my career, other than once before. We were buying a lot of investmentgrade credit in march, april, may. Back then we were buying health care, telecom, cable, a lot of the defensive credits like technology. Now we think the recovery trade, if it goes through, you could see the travel and Tourism Sector pickup, airlines, lodging, etc. Tom we can do that with a guy from chicago. You are for the end to great moderation. There is aow on small or great agitation that follows on . Mark i think what some people may be underestimating is these Largecap Companies have built up a massive war chest of liquidity. Even if you look at the deeply affected covid hit sectors like airlines, hotels, gaming companies. These companies have 20 to 36 months of liquidity. Any vaccine that comes out over the next six to 12 months as businesses and consumers start to travel again, i think you could see a rebound. That is the next wave of the rally. The first wave was housing and technology. If we get an economic recovery, if this mobility data takes up, you will see the airlines take off, you will see people start to travel. That is the potential nextwave of the rally. Is this a quickly, back you are willing to make now . Youre going to get that gain an airline bonds, airline credit, as well as the rest of the travel sector. Mark we do have an overweight to that sector. We have done it in what we consider to be a prudent way. We have lent airlines through secured bonds, which are basically collateralized by new planes. We have also lent to some of the strongest lodging companies, i am talking about companies that other leaders in their field. Also gaming companies. We think that sector, which has been beaten down significantly, can bounce back. It will not be a straight line, there are clearly risks, there risks the virus and risks with the fiscal, so we are doing this with eyes wide open. Assuming we get the mobility data and travel a comeback we are 30 . The tsa data is 30 of where we were last year. I am willing to say by next year we will be at 50 to 60 . We get improvement. Given the liquidity the companies have, i think you will see a rebound. Tom mark kiesel, this is been wonderful. Thank you so much. This is been a set of conversations from the Early Morning hours. Mark kiesel opened up, and i think people can tell, i agree with him. This speech yesterday was a huge deal for the bloomberg world. Lisa it will be that idea that mark just said. Perhaps we see the lows and benchmark treasury yields. That is a game changer. Om it reverses i go back to my essay last summer, framing out how yields can drive lower. Itll be interesting to see next week what someone like steve major of hsbc says. It has been an extraordinary week for our simulcast. Keene, andwicz, tom jon ferro. Lisa [laughter] from new york city for our viewers worldwide, i am taylor riggs in for jonathan ferro. The countdown to the open starts right now. It is a risk on day. We are eagerly approaching a 3500 on the s p 500 as we have a new regime in the Federal Reserve keeping rates at zero for the foreseeable future. That means we are getting further lived in yields. 73 basis points on the 10 year. A 1. 52 on the 30 year and breaking breakevens are rising. Investors baiting the market implications of a policy shift at the fed. Low rates will be with us for longer. , near zero rates forever and aj. Forever and a day. There is no doubt the fed wants a super yield curve. It is an important shift