To the week. We are now focusing back on the virus rather than the vaccine. The german tenyear, some very weak inflation data out of germany today, sending yields lower. The price is coming up higher as well. You are also likely to have a scarcity factor coming into play as well. Yesterday indicating that the ecb is going to be on the bed, buying bonds. Hes got to think about what is going to happen in the bunds story as well. When you look at what is happening with treasuries, greece now has at the front end of its curve a negative yield. Just well on that for a moment. Greece is now a negative yielding country, albeit at the front end of the curve. Nevertheless, an amazing turnaround in a relatively short time. Alix an amazing eight year difference that makes. I was just reflecting on the sovereign debt crisis yesterday, so that is an amazing stat. New virus cases may be easing in some parts of europe as virus hotspots could offer a glimmer of hope and some of the worst hit countries. Joining us with more is maria tadeo. Are cas is speaking es peaking . Is it Getting Better . Maria it is very difficult to say if the worst is over. That is still the message from. Uropean government some positive data, but of course, that doesnt mean this is going to go away anytime soon. It doesnt mean we are going to lift lockdowns anytime soon. The message is that we are going to have to be very cautious in the runup to christmas. Governments have made it clear they do see an opening up and the date around the christmas holidays, but that is it until we get that vaccine. There has been optimism especially out of the European Commission when it comes to the Pfizer Vaccine. , there that yesterday was indian they are working with a number of other countries to make sure that as soon as we can, we can get people vaccinated very quickly. But i would stress it is still very early to say whether we see it in the second wave commode is what governments are stressing. We do not have a treatment for this. Do not expect we are going to relax restrictions anytime soon. Guy and people are now becoming incredibly worried about whether or not we will see mutations. We are watching what is happening with the minsk story very carefully. How is italy performing versus germany, france . I am curious as to how different parts of the continent are faring. Maria when you look at germany, i know that some of the data did. 2 that we are seeing data becoming flat, so that could infection rate could bring back down under control. Number of deaths climbing. There were almost 600 people in the space of 24 hours, numbers we hadnt seen since april. There was pressure on the Italian Government for a bigger lock down, but what is key is Giuseppe Conte set at this point, it is pretty much the only european leader that has not gone for a full lockdown. The italians are very worried about the implications it has for their economy, and they are trying to keep that up and for as long as possible. Italy havebers in become much more concerning than they were a week ago. Guy maria, thank you very much, indeed. Joining us now to talk about what is happening in the market pictet assetnon, management multiasset strategist. We started off with a huge and violent rotation to value as a result of the Pfizer Vaccine news. Now we are back to focusing on the virus numbers we are seeing, particularly in the United States, which are climbing rapidly. As an investor, what do you do if the market gets whipsawed in this way . Supriya as an investor, when navigating much of the same thing as society as large, basically this tugofwar between the rise in infections necessitating further restrictions, i think it is only a matter of time before they have restrictions in the u. S. As we have seen in europe. Looking through that to the positivity around more vaccine related developments, potentially from others like moderna and the other vaccines currently being researched, but the question is can we look through the negativity on the virus infection rate . Basically, we are in a situation where the fourth quarter, we will get a dip in growth, so we are expecting negative growth in the u. K. And the euro area, but then we look through to the middle of next year and you have the potential for a gradual return to normality. The other aspect of course is the rotation you alluded to. It has to be said that while the rotation was clearly really onlent, if you look at it a one or three day basis, it is still a minute comparison to the significant underperformance of value versus growth that we have experienced in the past months, and indeed years. So the question is do we see a more sustained rotation into value . I think that is a question mark, but it does necessitate a diversified portfolio, having a good selection of growth and value. Alix is it that simple, or is it more like you are going to see Growth Stocks suffering just a bit, but really it is the outperformance of value that is going to be different, not necessarily the decline in tech . More outperformance of value. Supriya yes, i think it is an outperformance of value. There is some potential for outperformance of value, although i would question how sustained that will be. We have seen a number of technical bounces over the past year. I think you just need to get a steady rise in real yields for that to be sustained. So i think it can happen, but it is not an inevitability. I think it does mean that while we favor secular growth, and i do think the fundamentals are better for those secular growth time morehave over exposure to cyclicality, to the consumer, and now looking at more exposure to value and places like europe, the u. K. , and emerging markets. Say that it would rotate completely that we would rotate completely into value at this point. There are still question marks about whether it can be sustained over time. Apollorsten slok over at sent me a note, and within that was a chart that showed that global stock market cap is now at a record high, 95 trillion. A little bit later on, we are going to hear from Christine Lagarde, jay powell, and Andrew Bailey. Are those three going to continue to drive risk assets higher . At the moment, they look like they are the only ones in tow n that are going to have an effect on policy. Monetary policy is still there. If i look at equity markets, are they just going to go higher driven by more and more money supply . Supriya clearly there has been clearly that has been a big driver. Monetary policy was the first mover, and centralbank action stopped the negative downward spiral. But at the same time, you also have cyclical quality stepping in. You have fiscal policy stepping in. This year, the amount of fiscal policy as a percentage of gdp was roughly double what you got in the great financial crisis. So there has been burden sharing. The question is can they continue to be, and with hopes for more from the u. S. As we get a divided government, there is fiscal policy expansion in europe. Fiscal policy in the euro area is again, double than what we got last them around, so there is burden sharing. Gapas we need to bridge the threw two when we get the vaccine, we need Central Banks to step in with a little bit more. That is what lagarde was alluding to yesterday when she hinted at the expansion of the pandemic emergency Bond Purchase Program and so on. We will see more from the others there is atertainly least a need for burden sharing between fiscal and monetary, and where we will get a lot of Monetary Policy, we will get continued expansion of Balance Sheets next year. It will still be much less than what we got this year, so the markets will have to come to term with that. Alix a popular theory is becoming just go buy em assets. You dont have the kind of political nightmare that you have in the u. S. , i slow burn in europe as well. Do you agree . Absolutely. , we have preferred emerging markets. If you look at cyclical exposure regionally speaking, we have preferred to have that in emerging markets, so we have been very positive in asia in particular, and china. I think that is still the right way around. In china, we have seen Economic Activity recover to prepend them at levels, and the regionals benefit from a return of strong export growth, for instance. Its got this good mix in terms of composition in the indices between secular growth and cyclical exposure. That has been the right way around for us. We continue to have a high level of exposure to emerging markets and asia in particular. I think that if a strategy that would not change. Alix thank you very much. Good to get your perspective. Just want to do some breaking news for you. Crude oil inventories, the headline was pretty bad. You saw a substantial build in inventories that the market had not expected. You did see pretty strong gasoline demand and gasoline draw that help support the market. The reason you did see a substantial build of about 4 Million Barrels was because of less refinery utilization. It is hard to say what part of this is storm related. We have seen a lot of storms hitting the gulf coast. Littlee was whipsawed, a lower, now pretty much holding on, finding support at about 41. 65. Guy coming up, we look at the power struggle of Boris Johnsons inner core, the support he has from the vote leave crew within 10 downing street starting to fracture. We will talk about the implications of that next. This is bloomberg. Ritika lets check in on the bloomberg first word news now. All the republicans in congress are mostly standing by President Trumps attempt to overturn the election results, some key conservative voices are speaking up. Oklahoma republic and senator James Lankford says he will intervene if the trumpet ministration does not start offering republican senator James Lankford says he will intervene if the Trump Administration does not start offering Transition Resources to the biden team. Recovery in the u. S. Labor market is recovering despite the surge in coronavirus infections. Applications for state and plymouth benefits fell by the most in five weeks to for state Unemployment Benefits fell by the most in five weeks. There is a power struggle inside prime mr. Boris johnsons office that threatens to destabilize the british government. About thequestions future of johnsons most powerful and controversial advisor, dominic cummings. All of this comes at a time when johnson is dealing with a new lockdown and brexit talks. 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. Guy thank you very much, indeed. Lets get more on the turmoil in johnsons circle. Lets bring in bloombergs david merritt. What is the significance of what is happening here . David it is significant because you might just think people working in the background in johnsons staff, a little bit sh, but this is a key Pivotal Moment for johnsons government. We have huge questions raised about his handling of the pandemic. England is back into a monthlong lockdown. We are weeks away from having to make a final decision on whether to make some big compromises on brexit to get a deal or to walk away and crash out of the european sigel market at the end of december without a deal, and all of those consequent is that would have. More signs of instability at the core of johnsons team is very significant, and it may well , andan impact in brussels the strategies the government is going to take to navigate the country through the rest of this winter, where the pandemic is still raging. Alix in the u. S. , President Trump has had a million chiefs of staff. It hasnt caused mass disruption, and weve moved on. Why is this one significant . David it is a very good point, but it is not so common for there to be the sort of turmoil in downing street. This is about dominic cummings. He is such a huge figure in johnsons thinking, and his strategy, and the impression is that he is more powerful than anyone else in johnsons cabinet , and really does have enormous sway. So any suggestion he might be able to he might be about to leave, that is what is gaining so much attention here, that it may presage a bigger shift in the entire strategy of the government rather than just another key member of staff. Guy would this be welcomed i the conservative party . David ive heard messages from conservative mps saying they were delighted that mr. Kaine is gone. He was not popular amongst the rankandfile, nor is mr. Cummings. They are both known for their abrasive style. They dont hold any prisoners. Chancellor,e former mr. Sunaks predecessor, quit because he was forced to do away with his special advisors on. Ummings beshest there may be a more centrist approach, particularly once brexit is done with, to broaden their appeal to the country. Alix so what is the conversation on brexit . Is it done with by the end of next month . Where are we . David you know, the deadlines keep stepping, dont they . Ive given up saying that the next deadline is the real one. The only deadline that really counts at this point is december 31. At that point, they will leave the european sigel market. We dont know one what terms. Thats the european Single Market the european Single Market. We dont know on what terms. Im afraid weve got to hang on for a little bit longer yet, but we will have an outcome by the end of december. Alix sure, ok. [laughter] david merritt, things a lot for joining us. Coming up, we take a look at how africas largest insurer is navigating the pandemics tough environment, our conversation with iain williamson, ceo of old mutual. This is bloomberg. Alix live from new york, im alix steel, with guy johnson in london. We want to turn now to south africas economy. Officials say the easing of lockdown restrictions allowed more people to look for work and be counted as jobless. Earlier today, we talked with iain williamson, ceo of south African Insurance company old mutual, and he says there are signs of a rebound. Iain the operating environment in the Second Quarter was the toughest i have ever seen. But the recovery has been quite strong, and you see that in banking data on things like pointofsale transactions in the last few months are back up the levels they were precovid lockdown. A lot of the First Quarter of this year, for economic reasons, was not the strongest ever. We seem to be broadly back at that sort of level and on an upward trajectory. Ive seen they have been surprisingly resilient, and the front end of our business is mirroring that much better. Of uncertainty in the outlook. Obviously given whats happening if you are desperately worried about a potential second wave impact, and we have with the media has taken to be calling the south african family meeting last night with the president , where the president talked to the nation, and very much a stern around how we are expected to behave. Wear your masks, practice social distancing come all of those things. And if we dont, there is a risk of having to restrict movement again because of a potential second wave. I think that is the thing everyone is worried about. Alix you are right, everyone is worried about it in the u. S. As well. We have already seen it in the what in europe. If it does come to south africa, what is the impact on the business . What would you forecast based on what we saw in march and april . Iain what we are forecasting is that we will not go back to our most stringent level, and that we would just have a much more considered restriction of movement. I think like a nighttime curfew, certain kinds of businesses perhaps being restricted. But in our world, we think that broadly, Economic Activity would continue at decent levels. Guy bank of america, talking about your stock, said that the heavily depressed levels are probably now at the point where most of the challenges that the business faces are now priced in. Would you agree with that . It is upside from here . Iain that would certainly be my view. Guy that certainly put a smile on his face. Iain williamson, ceo of old mutual, speaking a little earlier today. Lets take a look at where european markets are. We are few minutes away from the close in europe. Banks are the underperforming sector. What a change it has been since the beginning of the week. We are starting to perform on that steeper yield curve. This starting to become unstuck today. The ftse 100 down a little bit less. We have a negative pound today. We will continue to see what is happening in 10 downing street to see whether the pound could pop on the departure of dominic cummings. We watch the politics with interest, as ever. More details to follow. This is bloomberg. Guy wrapping up this thursday in europe. It is a negative session. Beginning of the week, we were so focused on the vaccine. Now, we are focusing on what is happening with the virus and some of the data across the continental european banks fitting the charge. A positive start to the week. Down by. 7 . The ftse down by. 5 . The dac is the big outperform her, down by 1. 1 . Seeings of what we are with the ftse 100, we are focused on the pound. Within the last few minutes, we have seen data showing the u. K. Has had the biggest daily case count climb, just north of 33,000. The pound trade, 1. 3136. I want to focus on what is happening in greece. Greece has a negative two year. The power of what is happening with the Central Banks in europe and around the world. We will be hearing shortly from Christine Lagarde. The german tenyear, i want to talk about what is happening here. The bucket of cold water thrown over the idea we are getting inflation out of europe. I also think there is an argument that says that maybe we will see yield from the supply shortage that the ecb potentially aggressively steps back into the market. Well talk more about that. Team, 13private equity billion the price tag. The stock rocketing on the back of that. Creed, assassins successful launch for this games platform. The stock is up 4. 14 . Very wellks do during the lockdown. Bmp, part of a payment being investigated as part of a purchase from deutsche bank. That has caused a few regulators to have concern. Bmp under the microscope. The stock down by 3. 7 . You can feel the effects of Central Banks in these markets. You can feel the effects of what is happening with the virus. Alix joining us now is paul donovan. Chief economist. Highlighting some news we are getting in the u. S. , according to people familiar, the Trump Administration is stepping back from negotiations on a stimulus package, leaving it up to mitch mcconnell, who is speaking on the senate floor. He is not interested in a dramatically larger stimulus. Bet on more really stimulus what or will it be about central bank . Paul this is a crisis that does not need Central Banks, it does need fiscal support. For the last 40 years, we got used to the idea of Central Banks riding to the rescue. For the last 40 years, most of the problems have been about credit and liquidity. Central banks are designed to deal with problems about credit or liquidity. This is not is what is wrong this time. What is wrong is the government took your money away, stop you from working, told businesses to close. It is down to fiscal policy to replace that lost income. Secondary role for Central Banks , the primary focus has to be on fiscal policy. She is going to facilitate that. What she said was she will continue to drive money into the system. That money was likely to be used to buy things to encourage yields to go lower and encourage governments to spend money. Paul there is a case for this. Part of the problem in europe is , even with the recovery fund, we do not have a properly functioning union with fiscal authority. Absolutely. Central banks are there to provide orderly markets, but this is their junior role. It is not up to them to say this is how we inject money back into the economy. Central banks have printed about 7. 5 trillion over the last nine months. That 7. 5ion of trillion is still in the Central Banks. They need to support and provide liquidity. It is up to the governments to implement stimulus and the wider economy. Alix i hear you and we can agree with you, but if you do not get it, what are some levers the Central Banks can pull . Tweaks theome connecticut difference . Paul we are coming back to the problem we do not have a credit crisis. It is not like a lack of credit in the economy. We have ongoing structural changes. These are not problems Central Banks are designed to deal with. There is no point in taking a sledgehammer when you need a screwdriver to do the job. That is basically where we are at the moment. There is a significant limit on what Central Banks can do. It is not that they have run out of ammunition they have plenty of ammunition but they are fighting a different war than the one we are facing. Guy in a few minutes, Andrew Bailey will be on stage with Christine Lagarde, president of the ecb, and the fed chair, jay powell. I am interested in your assessment of the challenges those central bankers face. Story forent is the the other two central bankers . Paul it is very different. The problem is for the ecb, we do not have a proper functioning monetary union. Who do you call if you want to speak to the European Finance minister . It goes beyond that. At the moment, who do you call if you want to speak to the u. S. Secretary treasury . Plus, of course, how much influence does Steve Mnuchin have with regard to the senate and republicans in the senate . That is an issue when dealing with fiscal policy. With noity of europe Central Government equivalent and the United States with the extreme separation of power and what is turning out to be a fairly chaotic transition to the next administration, both of those central bankers have more problems in coordinating properly the policy measures, which is why said chair powell which is why fed chair powell has been public and demands for fiscal stimulus, unusually blunt because of the need to get that message across. Alix what kind of stimulus when we talk about it do you mean . Is 1. 8 trillion enough in europe or in the u. S. Excuse me, 180 billion. Paul we have different situations. Europe, you have a functioning welfare state. That is not stimulus, that is already there. That is existing welfare policy. When talking about stimulus, it is on top of the automatic stabilizers. What we saw in the United States was President Trump scrambling to build a europeanstyle welfare state, which is what he did until the end of july. That was timelimited. We have lost that again. The question is you go back to the automatic stabilizers europe has, which is 750 billion or so of spending, or do you try to stimulate on top of that and get the economy going . It is worthwhile to point out that right at this moment, particularly in europe, talking about stimulus is worthless. You cannot stimulate the Economy Today because governments are trying to reduce Economic Activity. If the ecb was to do stimulus now and it work, or government were trying to do stimulus now, they would encourage the spread of the virus and reversing the restrictions we have in place. When talking about stimulus, we have support, Unemployment Benefits, and then we have stimulus in the stimulus part needs to happen next year, not right now. We need to get beyond this period of restriction and the virus being suppressed. Seconds, it will stay there, asset prices go higher. Paul this is still supportive for the time being. Risk,ays have political but, yes, the policy environment is broadly supportive at the moment. Guy stick with us. Thank you very much indeed. Talkingrtly, we will be or listening to the three key central bankers. A negative session delivered here in europe. At the top of the hour, we will switch over to the cable show. Will be listening to that panel that is about to take place. When you have lagarde, bailey and powell having a conversation at the same time. This is bloomberg. Isx this is ritika this Bloomberg Markets brent coming up later today, on bloomberg technology. This is bloomberg. Ritika check in on the bloomberg first word news. Joe biden has started his Transition Team with policy experts and former Obama Administration officials. Ens Team Includes liberals are concerned about the number of tech executives. Says it study has accumulated more than 53 infections that will allow Harvard University can continue decisions part a federal Appeals Court rules it is not as commanding against asian americans. Make harvardued to abandoned the practice and lost. 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 ritika gupta. This is bloomberg. Guy thank you very much. Lets talk about the panel that is about to happen with the ecb policy that will include Andrew Bailey, Christine Lagarde and jay powell. Us, paul donovan of ubs. And joining us now, mike mckee. You. E start with paul was laying out that he thinks basically we are dealing with the wrong problem if we are focusing on Central Banks at the moment. Central banks will continue providing stimulus that is needed, but we are looking the wrong way because fiscal policy is the most important factor. Have we reached the point where these three matters significantly less . Mike it depends on who you are talking about. If you are talking about the general public being affected by what happens with the virus, yes, they cant do a lot more. If you are talking about people on trading desks, this could be an important panel. This is the Central Banks panel, which is why it is all central bankers. Conference,he Christine Lagarde said with able to next is additional qe and longterm lending into the economy. That,n get more detail on that could affect some trading strategies. Jay powell, maybe they get him to talk about terming what the fed is buying. Andrew bailey might suggest what they will do, because they are dealing with the possibility of a hard brexit. , if theyl, for the fed are going to let the economy run hot or for longer, what is that say about yield . Paul the fed has a lot of control over the short and of the curve. I do not think the fed is going to suggest they will be targeting the long end, but that is probably a step too far. They can allow the economy to run hotter. We have seen consistently from the Third Quarter on the u. S. Economy outperforming economy spread the labor market has recovered earlier. I think the fed will be content to allow existing momentum to run its course. Guy mike, you mentioned it is important for financial markets. At what point do central bankers become concerned the price mechanism is no longer useful and actually they are in danger of creating a situation where stability is a risk . Mike it is out there somewhere and they have knowledged it is an issue. Nobody can put a number on it. When is the last time we really knew the value of the u. S. Treasury . Has affected things but not significantly. It is a good question that nobody can really answer and i dont think they want to answer, because they do not want to upset the markets, but it is something to have to keep an eye. They reassure us they are keeping on top of asset market pricing. Alix did they like what we have seen and the last few days . Does it mean more growth . Mike i dont think at this point you can separate it out that it definitely means more growth. It is an environment in which we have seen faster growth because we have been coming out of such a deep hole but they dont know if we will start slowing down. The moves we have seen have been within 10 basis points one way or another. That is not a significant move given the long end of the curve. I think they look at this as volatility, marketbased, rather than a sign of anything. It would take a longer period of time and a steeper curve to get them to think something has changed in the market. Donovan, thank you, michael mckee, thank, as well. Jay powell is being to speak right now. Still have 10 Million People out of work. I would say the main risk we would see today, we do see the economy continuing on a solid path to recovery and the main risk we see to that is the further spread of disease in the United States. We have new cases at a record level. We have seen many states reimpose them at it activity restrictions and people may lose confidence. We have said from the beginning the economy will not fully recover until people are confident it is safe to resume activities with crowds of people. Imagine the vaccine. That is good and welcomed news for the mediumterm, though uncertainties remain about timing, production, distribution and the efficacy for different groups. From our standpoint, it is too soon to assess with any confidence the implications of the news of the path of the economy, especially in the near term. With the virus spreading come of the next few months could be challenging. You also asked about the election. You will not be surprised to find i am reluctant to comment. Ms. Lagarde i will not be surprised but i will be disappointed. This is a good time to step back and let the democracy do its job. We will continue to do what we do every day, that is to serve all americans and support the economy. Lagarde governor bailey, i will ask you to comment on the same question. You are a bit more free than pale power to come chair to comment on the election. We will just watch and see how it plays out. Is good news, obviously. It is encouraging. We need encouraging signs. It is not here yet in terms of the implementation of it. Week on the last basis of improvements. Is news that is supportive of that. I would emphasize that this year , we have seen high levels of calibrated uncertainty in the economic outlook,. Is gradually,ant as we get more news on the vaccine situation, i hope that not only will that give encouragement and hope, it will start to begin to reduce that level of uncertainty. We are not there yet. For monetarytant policy because we are having to make policy in conditions of extreme uncertainty. Lagarde, i cannot see you on my screen right now but i know you are there. How encouraged are you by the vaccine . How encouraged are you . Lagarde it is perfect. We were nine months ago, as you said we were facing a sea of uncertainty. Everything was uncertain. As a result of that, forecasting the outlook of the economy was more than an art, it was aseptionally difficult exceptional as the economic crisis that was a result of the Health Situation we narrated. We are clearly seeing a little less uncertainty on several fronts. The fact that the u. S. Election has now taken place has removed some uncertainty. The fact that brexit is notressing has probably removed the uncertainty yet. The fact a vaccine has been announced and seems to be 90 efficient and likely to be is also in early 2021 removing some uncertainty. Uncertainty,er of we see the other side. What i think will be critically important Going Forward is that the policies that have been in place, which have been extremely helpful, both Monetary Policy bridgecal policy, help over to the other side of the river and continue to support the economy so there is as little longlasting damage as possible. But i do not want to be exuberant about the vaccination because there are still uncertainties about the logistics, transportation, rolling out, fabrication, the number of people that will be vaccinated in 2021 so we can reach herd immunity, which will then give us more certainty from the health point of view, which in turn will facilitate not only our economic forecast, but the decisions that will be made by Economic AgentsGoing Forward in terms of consumption, investment, jobs, of course. I think your word of caution is important because we saw the Market Reaction to the vaccine news. Just anecdotally, the mood seems to have changed, at least around me with the people have seen, suddenly people see an end to the pandemic. Staying with the macro outlook and with you, president lagarde, you said yesterday that the second wave poses no less danger to the economy than the first. Because, wondering, surely, there have been some adaptations, businesses have adapted, supply chains have adapted, and we now know how to work remotely. Lagarde we have learned from the first wave and there are things we can do better, anticipate better, governments have learned, in this part of the world, a complete lockdown is not the most efficient way to deal with the second wave we are facing. What i was referring to is different. Risk that consumers, investors, Business Owners do not regard that anymore as a one off, a big hurdle we had to jump, a twomonth lockdown. It continues to be a lasting matter, with reoccurrences of pandemics, with reoccurrences of contagion waves, with new lockdown measures. As a result of that, the behaviors and decisions be impaired, people go back into more saving of a precautionary nature. Those businesses that have managed to last and sustain themselves thanks to various loans and availability of financing eventually decide it is no longer worth the effort and give up. That is the risk i am concerned about. Of course, it can affect the labor market as a result of waves that would last long and that would really disrupt the economy. Governor bailey, i wanted to ask you, realistically, how much power can still come from stimulus, whether it is qe, negative rates, given the already extremely low rates of expected future Interest Rates . Gov. Bailey we have had to change the way in which we think about Monetary Policy operations. If we can remember it, we used to have a world where there was essentially one instrument and the decisions were around the setting of the instrument rates, other words print it changed in the post financial crisis and changed even more in the course of the last year. We have to think about how we calibrate an instrument but what we have in the toolbox, and which ones we bring out and used, and that is a very different world. Thing ihad to the think is most interesting is when i go back to what we were saying and your question back in february, it seems like a period of prehistory. It was radically different than today. Can see a real constraint on policy we did not see precovid. Way free of that constraint in the last five months, we have had to innovate in the world of qe, the world of guidance. We have had to innovate in the world of qe not only in the scale of it, but thinking about the pace of it and what is it that we are responding to and what state of the world are we in and how do these tools work . Borrow a phrase, we have had for the about qe Financial Sector or quantitive measures for main street. Many of us have introduced new instruments directly in response to that. Toquestion is, we have had innovate and go on innovating. We have to look hard at the toolkit we have. I am optimistic on that front based on how we effect to respond this year. I hope as we begin to see progress on the medical front that will become less of an issue. I want to come back in a minute to the longterm consequences for Monetary Policy. But first, i want to turn to chair powell and ask you about the coordination between response,nd fiscal which has been impressive in europe. Been lesse fed successful in pressing congress and the white house on fiscal stimulus . We have said from the very beginning that this crisis in particular is one that will require a response from all of government. That is because it is not atypical downturn. It is a downturn where in economy is experiencing mass