A lot of the focus has been on what mr. Powell said yesterday and what we heard from the fed. We are seeing a bit of Movement Across the board. If you look at some of the european stocks, they are actually retreating after jay powell highlighted uncertainty about the economic rebound. We sought asian shares falling the most in a week. Treasury yields, that curve steepening slightly on wednesday after mr. Powell stopped short of offering specifics on the feds approach to the monthly bond purchases. Lets get straight to the bloomberg first word news. Here is leighann gerrans. Good morning. President donald trump is not happy with what he has heard about the terms of the oracletiktok deal, but says he briefed on the details on till this morning. Sources have told bloomberg that the Top White House officials have raised concerns about the proposal. They say it falls short of Satisfying National Security concerns. President donald trump says a Coronavirus Vaccine could be widely available as early as october, contradicting his top health officials. They have made estimates ranging from a mark to the end of 2021. Expert Anthony Fauci told bloomberg he is reasonably confident a vaccine will be available by the end of the year , with that widescale adoption but that widescale adoption does indeed take time. Here, Prime MinisterBoris Johnson is making key concessions on his brexit plan to get it through parliament. He has agreed to give the house of commons a veto on whether the government can override parts of the divorce agreement. It comes as one of the governments most senior Legal Officers resigned over the controversial proposal. The European Central bank is giving lenders temporary relief on their leverage ratios. The ecbs new measure allows the bank to include centralbank exposure from the calculations based on data from the end of march. That will raise the average ratio by about 0. 3 . Global news 24 hours a day, onair and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am leighann gerrans. This is bloomberg. Francine bank of england officials are expected to laid the groundwork for more monetary stimulus. That is as optimism over the u. K. s economic rebound officials out. Forecasters widely predict the banks Bond Buying Program will be expanded again before the end of the. The market expects the key base rate to be cut below zero in 2021. Joining us this morning is Deanne Julius, distinguished fellow at Chatham House. Thank you so much for joining us today. If the bank of england, how dovish can the bank of england actually turn today, given all the headwinds we are facing . Deanne i think they will sound uncertain rather than dovish. It does seem to me that there is a huge amount of uncertainty around at the moment. Remember, the strategy that they laid out, that Andrew Bailey laid out early on in the covid crisis was to go fast, go big, as he called it. They did their big rate cut then, increased the amount of qe that they would be doing at that point. It is still the case that that is fueling the economy. We have had some pretty good Economic News relative to their forecast. The bank of england is making its decision based on the strength of the news it has had since the last forecast, since the last meeting in august. I would say the news has been either neutral or positive compared to that forecast. There is not a big urge to change. That wasiece of news perhaps surprising to some was that our inflation rate, the cpi rate that they monitor, went compared month to 0. 2 to the target of 2 . Of course, thats pretty low. You might think that would cause them to think about additional stimulus. It was forecast in their last policy meeting, in the last Monetary Policy report that the inflation rate would go down to Something Like 0. 2, 0. 25. That is not unexpected news. It is due largely to some oneoff features that they will be well aware of. I expect commentators will actually argue about whether it is a debit or hawkish stance dovish or hawkish stance. Francine what exactly is the perfect time to add more stimulus . Do you have to front it and do it air little bit before there is a sharp downturn . We also have that little thing called brexit looming. Deanne when there has been a significant and rather unexpected downturn, compared to forecasts. There are also some tactical considerations here. The bank will be making its next forecast update in november. Thats when the next mpc meeting will be held. The mpc meeting will be two days after the u. S. Election in november. That could put a significant amount of uncertainty into the marketplace. Additionalneed some liquidity support if it really disturbs the natural markets. But also, remember that the previous vote of the mpc was unanimous. So even though there are a couple of dovish sounding people i think it will be quite a while yet before the whole Committee Moves, or a significant majority of that Committee Moves into that state. There are upsides and downsides. Morehaldane is a little optimistic about the state of the economy. But every market has been doing reasonably well. We are getting to the end of phasing off our furlough scheme so they will have to watch that pretty closely. Some of the members watch that. Our broad money supply is up 25 compared to july last year. There is all kinds of Economic News in the market and it is a matter of balancing them out and then taking account of anything major thats hitting them from the side. That could be brexit news, good or bad. It could be the chancellor, who i think is going to be coming up with a budget before the november mpc meeting, although he has not firmly confirmed that. There is lots happening. I think it will be events that drive eventual stimulus, if indeed that does happen. Francine do we need an extension of the furlough programs . And a lot of concern about risk to the downside is indeed about the labor market. Around,there is support particularly on the u. S. Side union side, for extending the furlough scheme. Sunak has been pretty clear that it is a temporary scheme. He has been phasing it out for the last few months. It is due to end at the end of october. It is still around. At the same time, people have come off the furlough scheme and gone back to work in the last two months. Data is notrket that negative. I would say it is not positive, but no one expected that. It seems to me what is more likely than extending the furlough scheme is probably to extend the Additional Support that comes through jobseekers allowance and whats called the universal credit, which is then targeted at those people who really need it. Than being an across the board, very expensive extension to the furlough scheme. Francine how much pressure will the bank of england actually get from markets to talk a bit more about negative rates . What will it take for the bank of england, if anything, to go into negative territory . Deanne i think it will take a significantly worsening economic situation. It seems to me there is quite a bit of reluctance on the part of certainly Andrew Bailey and some others on the committee to cross that rubicon. There is not a lot of economic evidence that it does much good. The swedish experiment, which is the longest running one that we have had, in europe anyway, has moved back from negative rates. It does create some strain to the banking system, and the financial policy committee, which Andrew Bailey also chairs, is looking at those sorts of issues around negative rates. They havent ruled it out. They certainly are keeping it on the table as an option, but i think it is an option that would be not quite last resort, but it would come after additional qe in this case. It certainly has negative consequences on the banking sector. Anna thank you so much francine thank you so much. Deanne julius from Chatham House stays with us. Three more years. Jay powell says u. S. Rates could stay near zero until at least 2023. We will focus on the fed next. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance lets get straight to the Bloomberg Business flash. Here is leighann gerrans. Itsnowflake soared in stockmarket debut. Its share price was up as much as 160 6 , giving it a market value of more than uber, dell, and general motors. Snowflakes 3. 4 billion dollar ipo is a record for a Software Company and the biggest in the u. S. So far this year. The ipos price discovery process is a price discovery process. We were after people that can hold multibilliondollar positions. They are willing to hold them for five or 10 years. Most were people that dont or down. Entum, up the latest version of sonys gaming console, the playstation 5, will go on sale november 12 in the u. S. For 500. That matches the price of microsofts upcoming xbox series x as the two Companies Battle for market share. Pricing is often an important factor of success. Historically, the less expensive systems sell more, driving an increase in revenue from games. And a citigroup employee has been placed on paid leave pending an investigation after revelations he operated a prominent qanon Conspiracy Theory website. A Fact Checking service identified him as running the site, which has since been shut down. No comment from the employee or citigroup, but the bank says employees need approval for any outside business activities. That is your Bloomberg Business flash. Francine three more years that the fed predicts rates will stay near zero to help the economy rebound. Chair jay powell says while the recovery has been faster than expected, activity remains well below prepandemic levels. We believe particularly this very strong Forward Guidance, very powerful Forward Guidance will provide strong support for the economy. Rates will remain highly accommodative until the economy is far along in its recovery. That should be a powerful statement in supporting economic activity. We will aim to achieve inflation moderately above 2 for some time so that inflation averages 2 over time and longerterm Inflation Expectations remain while anchored at 2 . The labor market has improved, but its a long, long way from maximum employment. My sense is that more physical support is likely to be needed. Of course, the details are for congress, not for the fed. We believe the strong policy guidance we are providing today will serve the economy well by promoting our goals through the many possible paths the recovery may take. Francine still with us is Deanne Julius from Chatham House. How did you take what we heard from the fed chair yesterday . It is setting out somewhat of a new policy, but actually it had mixed reviews. I dont know if everyone interpreted it in the same way. Deanne i thought it was very clever, actually. The fed has been saying for a long time that they were in the process of reviewing their framework for Monetary Policy and we were all speculating if they would go to Something Like gdp targeting, nominal gdp targeting, something else. Socalled new framework of average inflation targeting provides them with a lot of flexibility, and a lot of wiggle room, if you want to put it that way. They can to be tied down with t be tiedt they can down with additional calls for stimulus month after month. Particularly with the election coming up, i think to have a wider canvas on which the fed can frame its policy is a good idea. Extent,lso, to some takes off the table the idea of negative Interest Rates in the u. S. He talked about additional stimulus to keep the economy growing at a more sustainable rate, but that can easily be changes inancial financial parameters around banks or even in more qe. I did have a look to see what average inflation actually might mean if one looked backwards. Rather strangeat metric of the personal Consumption Expenditure deflator without food and energy. If you just take that data, if you went back to 1980, the beenge core pce would have 2. 78. The average from 1990 was 1. 9. If you take the average from 2000, 1999 actually, it was 1. 7 . 2 , ifnot too far below you take that kind of fairly long run period to calculate the average. In a way, it might be more significant that powell did not firmly place his new framework on the pce. The fed does talk about monitoring different types of inflation indices. The pce, this old favorite, or at least the one that alan 0. 3 inn stuck to, was july, compared to the cpi, which was 1. 6 . There may be an additional debate to be had here around, what is it that they are averaging and aiming for . Francine does the more specific guidance actually help in reaching those targets just because they are more specific . Or does it mean that they will have to deploy more aggressive tools to try to get to those targets . I think it will depend a lot on which direction, not just the level of the inflation rate, but which direction its going. I think at the moment, there is so much volatility in the data itself with the lockdowns in different places and different states having different issues that it is a little hard to place much faith in any of the data. Policy tohange in average targeting as opposed to point targeting on balance does indeed give them more flexibility and perhaps less pressure to move in the direction until they are ready to move. I mean, it is also interesting that powell has made the case, at least at jackson hole, that the fed should place equal weight on the unemployment part of its mandate as the inflation part. That seemed to come true yesterday in his statement as well. In addition to watching inflation and different measures of inflation, they will be really pulling apart the data on the labor market, i suspect, in deciding to put additional stimulus into the economy. Francine thank you so much for joining us today. Deanne julius, distinguished fellow at Chatham House. Job losses are on course to be the deepest and half a decade. We have all the details next. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. Job cuts are back at the worlds biggest lenders. They have begun to slash their workforce. Here with the details as dani burger. Dani about 60,000 job cuts so far have been announced for the year. Youell on pace, as say, to beat last years levels. That means we will have the steepest reductions in lender workforce since 2015. This is just the job cuts that we know about. Lenders do not always announced to the market how many jobs they are cutting. Part of the reason we are seeing it so steep is the desire to cut costs when we have these piling loan losses, we have regulations that banks need to spend to keep up with and some of the digitalization these banks are doing. Here is a place where they can save costs. When we dive into that number, you can see that the majority of cuts are coming from european lenders. This is about 78 coming from the region, much smaller than north america. Within this nearly 50,000 job cuts coming from europe, 35,000 of them are from hsbc. Thats where the bulk of it comes from after an announcement in february. We cannot forget the human cost of this. It is a tough year for bankers to find new jobs. Jobs posted in london last month sunk by about 40 . There are definitely less listings for new jobs for bankers. Francine thank you so much. Dani burger with the latest. Dr. Anthony fauci says it is unlikely a covid19 vaccine will be available to the public by the date of the president ial election. We will have plenty more from the top. Markets. Jay powell upending some of the things that we saw in terms of asset classes. U. S. Futures down after jay powell highlighted uncertainty about the economic rebound. Looking at treasuries, they are actually ticking up. I am looking over at some of the industries in europe that are under pressure. We sawers slumping after data showing european car sales plunged by nearly 1 5 in august. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. Lets get to the bloomberg first word news with leighann gerrans. Leighann the Federal Reserve sees rates staying near 04 near three years. Staying near zero for at least three years. At its last meeting before the president ial election, the central bank vowed to delay any hiking until the u. S. Gets to maximum employment and 2 inflation. Particularly the strong Forward Guidance, this powerful Forward Guidance we ,ave announced today effectively we are saying that rates will remain accommodative until the economy as far along in its recovery, and that should be a powerful statement and supporting economic activity. Leighann joe biden is warning about the impasse of the latest plan on a potential trade deal. He says an agreement depends on the continued respect for the Northern Ireland peace protest and the good friday agreement. The governments plan may make other deals more tricky. Deutsche bank has told its new york city staff they can continue to work from home until mid2021. That is in contrast to rival to theeeking to return office. In a memo, Deutsche Bank says workers only had to return when the bank moves into its new offices, which is happening in july. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im 120 countries, leighann gerrans. This is bloomberg. Francine top u. S. Infectious disease expert Anthony Fauci says it is unlikely a covid19 vaccine will be available to the public by the president ial elections. Rubenstein. H david the department of health and Human Services says its plan is to have everybody vaccinated by the end of the First Quarter of 2021. Is that realistic to occur . Is possible, but to get everyone vaccinated, logistically that is going to be tough. There will be tens of millions of doses available by the end of the year, and as you get to the end of the First Quarter, there will be hundreds of millions of doses. Whether or not you can get injection into everyone remember, it depends on what the vaccine is. It is if it is the moderna vaccine, it is the prime followed by a boost 28 days later. It will be aspirational to do that, but i think it is more toward the middle to the end of the year that you can get people vaccinated. David are you reasonably confident that by the end of this calendar year, 1, 2, or three vaccines will have been approved by the fda . Dr. Fauci they will have been made available in the sense of formal approval or by emergency use authorization. To repeat your question with a firm answer, by the end of 2020, november or december, i feel reasonably confident that there will be one or more vaccines be madel be begun to available to the american public. Francine that was dr. Anthony fauci speaking to bloomberg for the equality summit. Lets keep the conversation on the pandemic. Life sciences are up. Nasallydministered hopes that can reduce the risk of respiratory failures. Cerrone, it is early to see what will come out of it and what we will see in the future, but overall, the biotech industry has really been seeing huge swings. Do you feel there is enough scrutiny on what the industry is doing . Mentioned, we spoke back in june, francine, there has been a big rush to get the vaccine and other therapies to the market commonly associated with political agendas. And i am concerned that there is not enough Clinical Data to meet these rapid deadlines to introduce vaccines to the market. Do we need to hear from the regulators more . When it comes to the vaccine, which i know that tiziana life, a lot of people may not want to take the vaccine unless we hear not from chief executives but from the regulators, the people who say it is safe to take it. Does that need to change . Do we need to have a stronger dialogue with the people that get the green light . Gabriele unfortunately, it is hard for the general public to with therect dialogue food and Drug Administration because it is regulated directly by the white house, and you have seen a lot of battling going back and forth between the Trump Administration and the food and Drug Administration with respect to how lenient they would like to be with allowing new therapies and vaccines to come to the market. Unfortunately, the general public does not have a direct line. We need the fda and other european governmental regulations to act more independent in the best nature of the safety of the general public, especially considering we dont know enough about the virus. It has been around for eight months, and there are side effect risks that cannot be truly looked into deeply after only seven or eight months of testing of the vaccines and drug therapies. What is the state of share prices in the biotech industry right now . Is there a danger that part of your business or part of your industry is in bubble territory because of the appetite, because of what you are trying to do and everybody waiting for these vaccine therapies . Split it intould two areas. I think there was quite a bit of covid double back in the end of june and all of the month of july. But with respect to the overall biotech sector, i do not believe we are in a bubble. I believe we are in the beginning of a bull market. The vaccine and russia was announced back in midaugust, there was a massive selloff in covid19 related stocks, and that in turn drag down the general biotech index. That being said, we are looking at, in my opinion, the beginning 18month to twoyear bull market. Primarily because in this kind of environment when fund managers, the greatest wealth on the planet need to move their money into sectors, they are ready to invest in real estate, leisure, real estate. Investing in biotech and pharma is a natural know blaine or a natural nobrainer because it is an area that will go from good to better. Francine give me a sense of whether because of this renewed investor appetite or investor spotlight you think it will lead to a lot m a in the industry. Gabriele we just saw two days ago Gilead Pharmaceuticals for 21 billion. This is the biggest acquisition of the year and the biggest acquisition in the history of gilead. And gilead has been one of the more successful Biotech Companies of the decade, virtually curing the hepatitis c virus. It is their biggest acquisition. I think it is the beginning of many to come. We are excited about the 21 billion dollar investment into the Breast Cancer feel because the Life Sciences announced back in may that we have the most forrate prognostic test predicting whether Breast Cancer patients will risk getting the cancer again. So we are excited about gileads 21 billion spending in the Breast Cancer space. Francine give me a sense of whether you have been approached for m a. Have you had people circling disease and a Life Sciences . Circling tootsie on a life tiziana lifeto sciences . We decided to separate into a separate vehicle and list on the london main market this november because we want a plan longterm that if there is an m a approach, that we separate assets, which will create the most value for our shareholders, given that we have an ample therapeutic pipeline. We have decided to separate our prognostic and diagnostic pipeline into a separate company which we will be listing on the london main market and the nasdaq and the first order of 2021. Francine do you feel pressure from governments to come up with some of the therapies . Do you sometimes feel like there is too much pressure to get things done too quickly . That ie well, i believe feel pressure with myself and my company to develop an alternative to vaccines, and that is what we are doing. As i mentioned, we spoke back in june. I believe there continues to be too much emphasis on the on developing a vaccine, and from the results that were announced by astrazeneca last week, the side effects, i think this will exacerbate what is already a large fear in the general population to taking vaccines. I feel a lot of pressure to develop therapeutic alternatives, and that is what we announced today, that we are going to be able to get into human Clinical Trials almost a year earlier than we expected at to testLife Sciences our naval spray are nasal spray to treat covid patients. Francine in treating certain types of cancer, do you think that in treating covid19, that is a danger that as Companies Race to treat this, there is not the urgency to develop other lifesaving drugs the ec . Gabriele this question has come up in the last six or seven months. Pandemic is no, if the continues for another year, the diversion of concentration on developing new oncology drugs could in fact be dangerous, as you highlighted. If the pandemic were to be reducing itself in six months, i think the damage that would have been done in the research and Development Field from having diverted research and development for one year is recoverable. Francine thank you for joining us. Gabrieleron cerrone. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. We are getting headlines from the Vice President of the European Central bank saying they are watching the euro closely, and he says the inflation outlook will determine ecb policy, not the level of the euro. This is one of the concerns the market has, that at the last press conference madame lagarde was not as forceful in saying be athe euro could concern. Lets get to the Bloomberg Business with leighann gerrans. Leighann european car sales plunged by nearly a fifth in august, dashing hopes of a recovery, suggesting the market could remain depressed until the end of the year. The results snap a threemonth streak of easing declines. 3. 7 in july from a year earlier. On beatty a says it is selling french chain a maker, closing the deal earlier than expected. The new terms are reduced on firme on a the shares rose on the news. Rollsroyce is continuing to bolster its coffers after the pandemic slump in aviation revenue. The u. K. Maker of widebody debt or may issue a new equity. It has been hit hard this year with a price down two thirds. That is your Bloomberg Business flash. Francine . Francine Climate Change policy will be one of the many Critical Issues facing voters in the upcoming u. S. President ial election. Democratic candidate joe biden has proposed an ambitious and expensive plan to combat Climate Change and shift the nation to renewable energy. Bill gates was asked in an interview what he thinks of it. Bill i think ignoring Climate Change is a gigantic mistake. It is a tough problem to start and it is one you have to start many decades ahead of when you want the solution deployed because youre talking about changing most of the physical economy of the world. Transport, industry, buildings, electricity. All of those things and agriculture contribute to those emissions. Many of these sources of emissions, we have no solution. Think of this we have a lot of innovation power, that we can be clever about designing policies and incentive to take things like steel and cement, which are very difficult, and find a way of making those without a big premium and cost, and yet having those be green products. You are a realist, especially when it comes to science. How realistic is bidens 100 clean energy in america by 2035 . Be verythink that will difficult to achieve because it is a great goal. We should do the model of the grid to see how you maintain reliability when you are increasingly reliant on the intermittent sources. Storage is still way too expensive. I and many others are finding lots of storage breakthroughs. We are also funding clean , if wees like fission made that less expensive and could play aat significant role. We dont really have that blueprint. There is an open source model that anybody can plugin what they think that will look like, and we will see what is the cost, what is the reliability. But without innovation, a lot of innovation, we will not be able to get there. Francine you can catch that full conversation later today, plus more throughout the day from the bloomberg green festival. Coming up, we talk tech. The alphabet chief officer. That is coming up next, and this is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. This is what we heard from the Vice President of the ecb, talking about euro, looking at euro levels. Look athave a bit of a what we have heard from him. Eurodollar, let me bring it up. Eurodollar, currently you can see it not budging much. Lets talk tech and the challenges of working from home. The coronavirus pandemic has cost billions around the world caused millions of people around the world to work remotely. David when you started working remotely, did you ever worry it would be a problem because you have all these people but you are technically very savvy. When we started the move to work from home, it did seem daunting. I put strong governance around how do we get people to move to working from home with a global team, a regional team, and that worked well. We were most concerned about the impact on productivity and wellness. Our chief medical officer said more people would be affected by Mental Health issues than the physical disease itself, so we focused on those, and i think that was important. The other thing is google is about the people and the ability to deliver for users and communities because of our compute capacity, and one of the things we did not have to worry about was our ability to deal with the surge in online activity. That was because of the investments over many years and all the testing for what could happen, in a crisis scenario. I think it is an important point because you cannot solve the Risk Management issue in the middle of a crisis, you obviously need to solve it ahead of time. David many comedies are saying now that i have learned that my people can work from home, i dont need all these people in the office or i dont need all these people. Is that your view, that you dont need all the people or you dont need them all in the office . Ruth we believe that collaboration helps support innovation. Within teams and across teams. It is collaboration and it is serendipity. We do look forward to having people back in the office. We are looking at the productivity lift you get if people have the ability to work from home some days, be in the office in particular when their team or more broadly, teams, are in the office. If you can save people commute time, you have better access to talent because youre solving what people want in their personal life, and it result in a better outcome. What that means for real estate we are still figuring out. David early on, google was known, among other things, free food. If they are working from home, do you give them free food showing up by delivery somehow . How do they compensate for that . Ruth we are not doing that. A lot of people focus on food when what we have been trying to magicals a fun, quirky, campus. It is more than just about the free food, it is the experience on campus. When we moved everybody to home, the community to a virtual delivery. For food, you can do a oneonone session with a chef, you can do a cooking class. We took our fitness classes and moved them to virtual fitness classes, and some goofy google style ones like yoga with your dog. Francine that was the alphabet officer, ruthl porat, speaking with david rubenstein. Bloomberg surveillance continues in the next hour. Tom keene joins me in the next hour. Remember not to miss more from the bloomberg green festival. That is later today. European stocks are down. This has to do with what jay powell said yesterday. Im looking at some of the things that also would move on the back of a fed statement. You can see the u. S. 10year point 2822. O 0. 6822. Automakers are slumping. This is bloomberg. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save up to 400 a year on your wireless bill. With the carrier rated 1 in customer satisfaction. Call, click, or visit your local xfinity store today. Francine three more years, the fed predicted rates will stay near zero through at least 2023, but jay powells caution on the economic rebound ways on stocks. Stencil expected, dovish noises from the bank of england today. Even as rates go nowhere in westminster, Horace Johnson attempts to get his brexit plan through Boris Johnson attempts to get his brexit plan through parliament. And President Trump says a vaccine for coronavirus could come by october. The death toll approach is one million. Good morning, everyone. This is bloomberg surveillance. Im Francine Lacqua and london, tom keene in new york. We heard from the Vice President of the European Central bank, saying they are looking at euro levels and the ecb also offering a bit of capital relief, or capital relief to banks in order to cope with the pandemic. Away,hey are all flailing and you felt that yesterday with mr. Powell. It was under