Across this nation and worldwide. In morning on bloomberg television. Coming up, an important conversation with the vice chairman of the Federal Reserve system, Richard Clarida of columbia university. Jon, were way out front on the collapse of the United Kingdom suffered on the pandemic. But the bombshell you and i didnt see was the Prime Minister taking this Natural Disaster out to march of next year. Jonathan and maybe beyond. We certainly didnt see that in march 2020. We had three months of happy talk around europe versus the u. S. Many people have come on the program and talked about it. The data is not great either this morning. The service data softer than people expected. Manufacturing data ok. Do we start to hit some road bumps not just on the policy around covid, but also on the economy and this recovery . Tom what is your measurement of the American Economy now, in the many conversations you have on this . I am getting the sense of down big, up big, but i dont understand where q4 and q1 is within market economics. Lisa it is the word permanent, the idea that temporary layoffs have become permanent. That is where we are seeing a growing number of the data showing us. The data is messy. It is really hard to track this market. But that permanency of the job cuts really laying into the economy, what does that do to confidence and consumer spending, especially without more fiscal support . Tom we are going to do a little less data check here to get to the vice chair. I want you to set up, if you would, the path from the virtual jackson hole, the speech of chairman powell threw two the different fed speak we have heard before we get to this moment with Richard Clarida. Jonathan it feels like an exam. Ive got to explain what the fed has done. [laughter] tom im sure you are going to nail it. Jonathan the reaction function of the fed has shifted, and i would say it goes back about 12 months. If i wanted to make it really simple for our audience beyond wall street, the message from the fed is as follows. When things used to get better and inflation would pick up, we would do something. The message from the fed now, we are going to wait. We learned some things over the last 10 years as well. Employment can come lower. We can accept a higher inflation rate, perhaps north of 2 . I think that is the basic message coming from the fed right now. We will stand back and let it continue to improve. Tom nicely explained. You nailed that, jon ferro. That is a good introduction to the vicechairman of the fed. Somebody has to go out and construct a 10, 20 page paper or speech that actually describes the aspirations of a given central bank. On august 31, Richard Clarida of columbia, one of our great monetary theorists, did that without imposing at the peterson institute. We are thrilled that the vicechairman could join us this anding to really reform understand where this fed is dissents at the last meeting. Thank you so much for joining us. What is the aspiration to reflate . How do we get to inflation that is desirable . Mr. Clarida thank you, tom, and happy to do your show. We have the same goals weve always had. We want maximum limit and price stability. We recognize the world looks a lot different than it did a decade ago. Ont puts downward bias inflation and upward bias on unemployment. To offset the highest, that new normal offset that bias, that new normal, appropriate Monetary Policy when you come out of recessions and into recoveries will not view 2 as a feeling. We want to actually spend some time above and below 2 so we can anchor Inflation Expectations. We gained some very significant Forward Guidance at our meeting recently. What we said is that we expect we will keep rates at the current level, which is basically add zero, until we reach maximum on an maximum employment and until inflation has reached 2 . We have given some observable metrics that will indicate when that liftoff can happen. Tom the modesty of the vicechairman is some. In 2014 ash is simple. In 20 is simple. 2014, vice chair claret drove forward the phrase the new neutral, which was really prescient. It is real simple here. We want to know, on the glide path, where you step in. Do you wait until you finally see a substantial inflation . Do you begin to act along the way . Or is there somewhere in between . As megan greene says up at kennedy, is there a place where you see the whites of inflations eyes and you act . Mr. Clarida in our meeting, we indicated that we expect rates will be at the current level, which is basically zero, until actual observed pce inflation has reached 2 . We could keep rates at this level even beyond that, but we are not even going to begin to think about lifting off. Until we actually get observed inflation and measure it on a year on year basis equal to 2 . Also, we want our labor market indicators to be consistent with maximum employment in the labor market. We have been very clear about that. If you will, that is the whites of their eyes. We want to see actual inflation at 2 . Jonathan this is really important. Is it fair to say that an overshoot of 2 is not a prerequisite for liftoff . It is just 2 . Mr. Clarida what we have said is that inflation in our judgment, looking at a range of indicators, needs to be on track to moderately exceed 2 for some time. That will be a judgment we make as we get closer to that number, but our guide is very clear. We want to see actual inflation, and we measure it on a yearoveryear basis, at 2 , and we dont wanted to be a fleeting quarter and done. At that point we will assess whether it is the appropriate liftoff and the timing, but that is really down the road. The liftoff is not until we get actual inflation and maximum employment in line with our objectives. Jonathan on wall street, there was always some confusion because there are various fed president s coming around and saying what they are seeing. It is whether the fed is willing to tolerate and overshoot in the future or is using policy to drive one, so be clear if you can. Mr. Clarida i will be as clear as i can. We said in our new framework statement that was unanimously approved in august that appropriate Monetary Policy following periods when inflation has been consistently below 2 , appropriate Monetary Policy will aim for the inflation rate to moderately exceed 2 for some time. That is an important difference with our prior framework, and which we thought 80 ceiling was great. We nap thought a 2 ceiling with great. We now think to anchor expectations at 2 , we need to spend some time above 2 to balance off those times that we have been below. Jonathan so how do you reconcile that with the forecast . Mr. Clarida it is very simple, and im glad i am doing this show to make a very obvious but important point. The economy has taken the most severe hit since the great depression. We had a 30 less in economic activity. Inhad a 22 million increase unemployment. Absolutely staggering numbers. The economy is now beginning to recover. Our projections that we released with our September Sep indicate thatour baseline view is within about three years, we are going to get back to a very low Unemployment Rate and inflation at our 2 objective. In the prior economic downturn, that took nine years. So we actually see relative to historical experience a pretty impressive return in our baseline projections. That said, we have to support the economy to get twofold to get to full employment, to get to our 2 objective, and at that point we can Start Talking about what happens be on that. But lets dont forget the deep world has been put in. Jonathan i think you will appreciate that for some people, because it is not in the forecast, they believe that perhaps policy is not calibrated appropriately to generate that rshoot, this defendant that overshoot, that if they fed wants to overshoot on the horizon, they are not doing enough. Mr. Clarida perhaps if we were back in february, then obviously getting to 2 and moderately acceding to percent would be within our forecast horizon. But because of the depth of the shock, the economy has to recover. In our baseline, that recovery relative to the last downturn will occur within about three plus years. But until we get to that point, overshooting is just an academic point. Point we think, along with fiscal support, that that can happen. Lisa meanwhile, fund manager after fund manager has said we are at risk of creating an asset bubble. How does that factor into your calculus of how to tighten policy . Mr. Clarida that is a good question, and obviously Financial Stability is always an important consideration. We get regular briefings on Financial Stability. We are very attentive and attuned to that risk. We have a dual mandate assigned from congress, which is maximum employment and price stability. If we were to become concerned that our goals were not risk, our goals were at risk, we would have to factor that in. We believe Monetary Policy lowering or raising rates is a pretty blunt instrument. Our goal at the fed is to work with other agencies on supervision, bank liquidity, and other divisions to deal with Financial Stability. Lisa how effective can the fed that aout fiscal support substantial, that directs aid to companies, to individuals . Mr. Clarida as chair powell indicated, we do believe fiscal policy is for the congress and executive branch come about when asked, we will say that additional fiscal support will likely be needed. It is very clear that the c. A. R. E. S. Act was really a historic government sponsored to a crisis. A 3 billion package providing significant support to the economy. The economy has made a lot of , but there is still a deep hole. We still have a very high rate of unemployment. We have a lot of small and mediumsize businesses, so fiscal support will be needed. Tom i want to go back to your work from the 1990s which talked about the dynamics of our system away from the static models of the previous century. Vicechairman caretta vicechairman clarida, we have been shocked by onceinalifetime events, and one is the new digital dominance. Our nation is being crushed by the shocks of technology. In what you are grinding through day today at the fed, how do you adapt to the shock of this new digital dominance . Mr. Clarida it is a great point, and a quick bottom line is that improvements in technology and productivity are disinflationary. If you dont offset them, they tend to push inflation down. You would need to run a very accommodative policy, otherwise he would get deflation. So the factor that has been , i think downward bias they are all working together to create disinflationary pressures across the globe. The fed that we are trying to offset with our policy framework. Tom it is important to know that the people are listening. A gentleman named Michael Mckee emailed in and said there seems to be a fiscal divide here between bullard of st. Louis and powell. I know everyone has their opinion, but the fiscal urgency right now, how do you fold the shock of increasing deficit, the delta, the first derivative of fiscal shock, how do you fold space . To your fiscal mr. Clarida that is a decision for the executive and the legislative branch. Is i will say about that that the economy is recovering robustly, but we are still in a deep hole. We are growing, and growth will probably be very rapid in the Third Quarter, but the whole is h but theo but the hole is very deep. Long term, the u. S. Needs to get back on a sustainable fiscal path, but you dont want to start that in the midst of the worst economic hit in 90 years. Tom Richard Clarida, thank you so much. Thank you for this follow on to your important paper of august 31. He is the vicechairman of the Federal Reserve system. You know they always ask him a question late in the press conference after the dust has settled and the debris. Michael mckee is very good at bringing a press conference to a quiet. He has been listening into our conversation. What did you learn . Michael i think we learned where rich is in terms of fed officials and where they think they are on left off. Where they think they are on liftoff. Others suggesting the fed could already be above zero by that time. You will have some disagreement on where the actual liftoff point is, but like charlie evans, said this is two or three years down the road. That kind of take you to where rob kaplan was the other day, dissenting on the guidance because he said we kind of need flex ability because it is two or three years down the road. Jonathan where are we lacking clarity . What didnt you get . Michael what would have been really nice to see is if rich had given us some idea of what his models show for fourthquarter growth. We know Third Quarter growth is going to be strong, but does the fed think that we are going to see a slowdown in the Fourth Quarter like the alternative indicators suggest that would require additional action . They can raise the alarm if they really see things going pearshaped. So what do they see going ahead . That is a question we hope to get an answer to from a lot of fed officials speaking this week. Lisa theres a lot of nuance into how the fed looks at inflation, measures that, and decides how to calibrate policy around it. , andhey out of tools really have to allow the economy to run hotter than they have in the past . Michael that is pretty much correct. The fed moves Interest Rates up and down. That is their basic tool. What they have done is try to plant in the markets mind that they will be lower for longer, that they wont have automatic liftoff when employment gets to a certain rate and inflation starts to rise. That would help hold down Interest Rates. It doesnt put more stimulus in the economy. It keeps the same amount of stimulus available. They could do more qe in the way they did in the great financial crisis, trying to put more money into the stock market to generate a wealth effect, but i think they realized that danger at this point. So it is about how you keep rates where they are right now rather than doing more. Tom i want to go back to your interview with mr. Kaplan, this idea of the great dissent. Can you ask plane to the general public on radio and twovision whytwo why people dissented . Michael it was really semantics. Robert kaplan suggesting they should stick to more ambiguity because the world is going to look different in two or three years when they finally get around to it, while Neel Kashkari was saying we should be stronger in our guidance and say we wont liftoff until we are above 2 and start averaging. But both of them are saying a couple years from now, we are still going to have rates lower for longer, so there is not much difference. Its try to make a big deal out of it, but you are not going to see any rate moves for quite some time until we get a real inflation surprise, no one is expect and that no one is expect and that. Tom i think you should get two or three questions at the press conference. Jonathan that would be a good solution. I think we should do what we do at the ecb, which is ask those two questions and hold onto the mic to ask a followup as well. Heres the price action going into the opening bell this wednesday. On market doing nothing, 0. 6 8 . The fx market doing something. 1. 1693, downr, about 0. 1 . Not with theet enthusiasm we saw a few hours ago. , 127. 31. Is a proxy right now we want to shift, staying with washington for you on radio and television. Groupan lieber of eurasia really looking at policy. Thank you so much for being with us this morning. What is the likelihood of a fiscal solution, whomever the president is at the beginning of next year . Reasonably high. I think for biden, this is going to be a hugely important piece of his first 100 day agenda. They already have the heroes act that the house has passed. They have an infrastructure bill that the house is already past. There that can get cash into the economy quickly. With trump, it is slightly. The political impetus to do something is just diminished. Showing notans are a lot of interest in fiscal stimulus right now, and have started to indicate they think that the government is running up against its political borrowing limit. Lisa theres a question about the fiscal support, will they or wont they put a package through , but what type of fiscal support are we talking about . Is there any consensus around state and local government funding that a lot of people are saying is crucial . Mr. Clarida theres consensus theres consensus among the democrats, who want to do about 2 trillion of state and local funding. If you break it down by fiscal year, youre looking at maybe 250 billion or 300 billion in the fiscal year. I think republicans would probably do that if they came to an agreement on a fiscal package , but the overwhelming likelihood is that the only way this gets done is in a democratic sweep situation, where they control the levers of and do something in february or march. Lisa youve had extensive experience in the negotiations. Is a lot of this politics, or is it a fundamental breach in understanding the economy right now . Basically, republicans are saying momentum is there, and democrats are saying it is not. Jonathan l both. Theres enough republicans amongst Senate Republicans who are more concerned about the longterm outlook and deficit picture and think the government has done enough that they dont need to provide more support for the economy. That is maybe a majority of Senate Republicans right now. There is still a minority of Senate Republicans who see the need for fiscal stimulus and really want to get something done, but on the house side, nancy pelosi has been insisting on her way or the highway and doesnt seem that interested in doing a big fiscal stimulus a couple of weeks before president trumps reelection campaign. Tom i am not an expert. I dont think you are an expert either, but you are in the beltway, so we will consider you an expert for the next few minutes. Are the polls accurate . Jonathan l the polls are the best snapshot we have of the mood of the electorate at this point in time. To the extent they arent accurate, theres changes in the electorate that we just cant see. In 2016, that dynamic was the shift between collegeeducated and noncollegeeducated voters that pollsters didnt see coming, and the kind of missed it in wisconsin, michigan and pennsylvania. It is entirely possible the polls are missing something this time. However, i would say they have been unbelievably consistent across posters that biden has a 7 to 9 lead nationally. They have been pretty consistent. Hes got a lead in michigan, and wisconsin. It is closer in florida and north carolina. Do i trust the polls . Yes, i think they are the best analytical tool we have, but youve got to layer on other factors. The economy, trumps overall approval rating, the advantage of incumbency, and a lot of other factors when it comes to the election. Jonathan f where is your blind spot right now . What do the posters find it difficult to pick up the pollsters find it difficult to pick up on at the moment . Ginsburg is not really making any difference. Black lives matter is not making any difference. A polling error could go either way. It could mean a close election and biden is going to win, a close election and trump is going to win, but we could still have a blowout election biden. I think anyone of those three possibilities is still out there , and within a very close polling margin of error. Jonathan f jonathan lieber, great to catch up with you, just weeks away, and a debate six days away. You heard him talk about the polls just a bit. Thats been the story over the last several weeks, just the stability even with all of these vents percolating around. Tom we are not pros on this come up the undecided percent i would say has gone from 10 to 13 . It has really migrated, if i could do the level on radio again, from a 13 much closer to the 10 level of undecided. Right . D that, jonathan f it was great for our listeners on radio, truly. Coming up, Mike Shoemaker Mike Schumacher of wells fargo. This is bloomberg surveillance. Give you my world how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Jonathan from new york and london, good morning. The wednesday market open one hour away. This is bloomberg surveillance. Alongside tom keene and lisa abramowicz, i am jonathan ferro. Equity futures bouncing back a little bit. Elevated on the s p. In the bond market, nothing. 67 is your yield on the 10 year. Of 1. 17. R just south data mixed earlier. Services not great. Manufacturing ok. U. S. Pmis in about one hour and 15 minutes. On the economy, the outlook for recovery and the need for fiscal stimulus, the fed buys chair Richard Clarida had this to say just 30 minutes ago on bloomberg surveillance. Because of the depth of the shop, the economy has to recover. In our baseline, the recovery relative to last downturn will occur in three plus years. Until we get to that point, overshooting is an academic point. We want to get to the economy to 2 inflation. We think along with fiscal support that can happen. Keene, there is the punchline. We think along with fiscal support, that can happen. Will we get that support . Tom that is a huge question. We heard that from chairman powell yesterday. Mentioned notman once, not twice. Lisa was absolutely rude. He did not miss any words. He made it clear we need fiscal support. What we will do is link this into the markets with michael has a brilliant career looking at macro strategy , but folding all of this mumbojumbo into the markets. He holds court at wells fargo and we are filled Mike Schumacher we are thrilled Mike Schumacher could join us. Equities of foundational belief and a recovery in three years, is that the Core Foundation of Equity Ownership . Mike the Core Foundation is simple, it is the Central Banks have your back. When the fed came in in march and announced program after program, just about every day there was something new, they made it clear they were taking out awful scenarios. That is why we think the risk assets have done so well. On top of that you have the fed and various Central Banks buying corporate bonds. That is the push. It is not the longterm economic view. Tom will that push continue . Central banksget that leak promised to stay on hold a long time as the fed has done and Richard Clara emphasized a few minutes ago. When you think about additional policies, it is difficult to see a lot of incremental work. The fed could buy more bonds, maybe that happens. The fed could make promises to , butrates low even longer in terms of something radically new, it is hard to see where that would come from. Lisa meanwhile and washington, d. C. Not making a lot of progress. As the talks drag on Inflation Expectations is sagging. It has bled downwards in a steady drip lower. Is this the main driver of inflation . The fiscal support . In the fed is not that capable of choosing price increases from here . Mike it is interesting. We look at inflationary expectations from a market perspective and focus on breakevens it sounds a bit arcane. In general they are driven by two things. As equities have gone up, breakevens have gone up with them. Secondly they respond to realized inflation. I think the second point is the one you are hitting on. Realized inflation does not look like it is going up dramatically anytime soon. Until that picks up quite a bit, it will make it tough for Inflation Expectations broadly to increase. Jonathan i said earlier on this bond market was a total snooze. We have been stuck in this range for so long. Youve been looking for the high yields for quite a while. You and i have been talking about it for months. Are you still of that opinion . Mike we think yields go up but we are not in the camp they go up dramatically. For instance, by the end of this year we say the 10 year yield gets to 90 or 100 basis points. Next year very dependent on the path for covid and the elections. , 1. 25 toof a baseline 1. 50. The chance of getting to even 90 basis points, that seems simple. If you get a move in the election toward trump, that should do it there, and if trump were to win you would see yields go dramatically higher. There is a scenario that gets there. It has been often on the bond market for some time. Jonathan i wonder if rethinking the outlook for the u. S. Economy , and the Federal Reserve and the policymakers, but also the ability to generate a recovery that actually leads to high yields on a sustained basis, actually yields to a hiking cycle, that may seem absurd, but we have seen this play out in europe or japan. Why cant it play out in the United States . Mike because we could wind up in a situation where yields stay low for a long time. Think about Mario Draghis term at the ecb. Jay powell has already hiked a few times. You can imagine a case where there is no traction economically. Lets hope thats not true. One benefit the u. S. Has versus europe and japan is the economy is much more flexible, more flexible labor rules. In terms of ramping up, it is probably the u. S. Farther ahead. We have not seen it kicking just yet. Lisa earlier in the show jonathan was saying he needs a red bull as he looks at the bond market. He is not alone. A lot of people saying they need stimulus to get through the date and looking at the snoozer in the bond market. If there is a breakout in the bond market, which direction you see it going . Mike we think it is more likely to go up, but i will caveat that. If the Election Results are a mess and delayed for a couple of weeks, we think yields could drop dramatically and very quickly. In that case it is useful to look back to 2000, but putting it in todays context, we think a 10 year yield if the results were delayed could fall toward 40 basis points. That would be a wakeup call, probably worthy of a red bull or two. Tom Mike Schumacher moving the red bull debate forward. Fed policy and the hope in the prayer. The gear the great conundrum to richardmentioned clara, his fear of asset bubbles. Mike does not sound particular cheap, does it . Tom i am you seriously. These valuations are extraordinary. To lisas question, are these asset bubbles . Mike the bubble term is interesting. People talk about it quite a bit. It is hard to define it. What is a bubble . A bubble is something where prices explode outward with no tide of fundamentals and no clear link to policy changes. What we have had in the past six months is different because policy shifts have boosted assets dramatically. It is too soon to tell the Federal Reserve or the ecb that they have put forward a bubble, but that could happen in six or 12 months. Lisa there is another way of looking at this. We reach a point where low yields are no longer an excuse to going to riskier assets and we got a flavor earlier this week with the threat of no fiscal support from washington, d. C. Are we reaching that Tipping Point of Inflation Expectations continue to go down . Mike it was interesting. Talking to our traders, one has a good way to put it. Nobody wants to buy 30 year but somes at 150, people simply have to do it. The way to think about it is how many investors still have to do that trade . I would think the number has dropped pneumatically. Has dropped dramatically. Jonathan a few people smarter than me have said the price of Financial Stability is eternally vigilant. I wonder whether the new price function of the fed sacrifices some of that vigilance . It is a slow say look at vigilance. The fed will still care about the path of inflation, but it does mean it is a lot less interested in fluctuations, meeting quarter to quarter. You make a good point. Probably not as much of a ruckus around every press conference or commentary from jay powell or Richard Clarida, but it will be more evident what path the fed is on well in advance. Jonathan great to catch up. Mike schumacher of wells fargo with the bond market and fed policy. It was always operated make it boring. For the last 10 years every central banker wanted to make it boring. Unfortunately, that became the only game in town, in the words of Mohamed Elerian. Tom in the middle of this, as we were flailing around with the vice chairman, i was going to write a Mohamed Elerian banner, saying the unknown unknowns. Part of the reason they have moon they have moved from the greenspan measured space is the unknown unknowns are incalculable. Jonathan you understand i wonder if you understand the sequencing . Tom i have a lot of questions on this. This goes back to an interview with richard timberlake, the giant from georgia years and years ago. He came up very elderly, wonderful with his plaid bowtie. All institutions by definition are ex post. This is religion among the crew of alan meltzer, they all react after the fact. I headed dinner with Richard Berman of morgan stanley. They were over communicating into a Forward Guidance. Richard clarida and the others are trying to bring them back towards looking at it in a more ex post fashion instead of trying to get out front and game it. That is what this is about. Jonathan what i am trying to say is i think the 2 piece, the ex post piece, the overshoot is the ex ante piece. That is what is confusing people. We get to 2 and then we have an outlook that shows something north of 2 . I think the confusing part is the sequencing around lift off. Tom blanche are is great on this. I would not take it that way. I would say you are get on about the 2 and there is a mystery of what the overshoot is and how to handle that as an institution. Like three lose quarters of the audience . Jonathan we often do that. Lisa you nailed it. Tom lisa, take a red bull. Jonathan up next, the mystery of 2021. Dr. Jonathan quick of duke university. Ritika with the first word news, i am ritika gupta. Theary clinton says republican rush to fill Ruth Bader Ginsburg seat on the Supreme Court could spell the end of obamacare. Clinton spoke with bloomberg in an interview taped for todays bloomberg equality summit. Seat filled right now, as opposed to waiting until we know who the president is, could very well mean the end of the Affordable Care act and the loss of health care for millions of americans who have suffered from covid19. Movea clinton calls the an unfortunate display of partisan power. She says she would not favor a strategy being discussed by some democrats doing priest the size of the court to dilute the conservative majority. Some democrats to increase the size of the court to dilute the conservative majority. She thought that a step too far. You can watch on bloomberg tv or at Bloomberg Live . Or at Bloomberg Live go. Alexey navalny is out of the hospital. Gaugeyed is too early to longterm effects of his poisoning. Doctors say it is too early to gauge the longterm effects of his poisoning. Vladimir putin told the french president that Alexey Navalny could have poisoned himself. 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. We will spare no effort in developing vaccines, treatment, new forms of mass testing. Unless we palpably make progress , we should assume the restrictions i have announced will remain in place for perhaps six months. Jonathan Boris Johnson shaking things up with that last line, that last phrase, perhaps six months. ,nto next year on the market looking forward to a conversation with katie koch, goldman head of global in about 42 minutes. Tom it will be good. Drive for the conversation, with bonds asleep. Fascinating to see what the mix will be. We will have conversations. Listener avid mentioned Richard Clarida and they wanted some clarity. This is a series of papers the vice chairman did years ago with Brown University and new york university. They were changing papers on how we look at the dynamics of our markets. Thank you for mentioning mark ler. Lark mark gert right now we go to Jonathan Quick, he is with the rockefeller foundation, truly an expert on epidemic, reaching out to pandemic as well. Dr. Quick, it is no surprise to you that without a vaccine, pandemics continue. How long is the Jonathan Quick continue without a vaccine . We need to continue to practice those basic personal protective habits that have not only flatten the curve but sent it to near zero in countries. Future reseeable but we well. I am confident we will have a vaccine. That will be in the next year and it will take several years to get Global Coverage with the vaccine. In the meantime, those basic habits of masking, distancing, handwashing, crowd avoidance, those are habits that will keep us safe. Ago,with your work years you knew Gordon Douglas and the people working on bacteriology, virology, and such. We completely underestimate the complexity of the process to make a vaccine . The end process of a good idea for a vaccine and a vaccine that is proven safe, effective, and is in largescale production, that is a complex process. That said, it is a process we know, and it is a process for which we are now seeing historic innovation. We have never had a situation. We have 40 vaccines in human testing. Those in theen of later stages. To do that in a period of eight months is stunning. Unimaginable even a few years ago. We are just seeing technology advances, and i think with the number of vaccines in have, i am will confident we will have at least a couple, if not more that will prove safe and effective. Lisa in the meantime, Boris Johnson coming out and saying he recommends people work from home through march 2021. Some people surprised it is that far out in the future. Is this the new reality, that really cities around the world need to be facing . Dr. Quick they need to be prepared for it. Are ay thing is the u. K. Little bit slow at the beginning, and they had a challenge containing it, but they are three times the level of countries like italy, germany, sweden. We know if you get at it and the is following the personal protective guidance, you can tamp down the level of viral spread. We have done it in this country, in state after state. York,rsey, oregon, new they have all kept the levels down. Those sortsfacing of more severe measures if people will not follow those basic protective habits. Lisa why dont we have better testing that can give us results quickly and we can distribute en masse . Dr. Quick the trajectory is stunning. It took a while to get going. For the first eight months, we have been relying on the labbased testing in the u. S. , which is a cumbersome process. Cusp of a dramatic takeoff in testing. We now have a half a dozen tests on the market. We are seeing they are getting affordableient, more , and more accurate. Mappedockefeller have six or eight of the producers, and they have the capacity by january to be producing 200 million tests a month. We have that. But we have to commit the resources, we have to get the federal and state commitments to purchase those tests comment we are seeing that now and working with 10 states that have made a commitment for 5 million tests purchased, but we technology is advancing quickly. We have to provide the resources to help states and the federal government understand what needs to be done. Michael in the trenches tom in the trenches of trying to find a vaccine. Jonathan quick with the rockefeller foundation. His book is truly transient and immediate right now. Any number of things. I want to get to Richard Clarida. We have had an important sequence of conversations today on red bull. I did not know this. A guy in germany figured out a drink in thailand and theernized it, and i guess translation out of the thai. Lisa you always pick up on the important things. Red bull. The genesis. Mike schumacher saying we may need two or three rebels three red bulls come the election. Tom thank you for bringing that up. That shows exogenous shocks. What did you learn from Richard Clarida . Lisa the idea it is difficult to gauge inflation right now. He is taking a dump or stand. There is it he is taking a dovish stand. There is a difficulty communicating what they mean. Charlie evans saying they could hike rates before that. He tried to walk that back. A delicate balance. Tom our delicate balance is to tell you it is not about lisa abramowicz, jonathan ferro, and tom keene. We have to thank all of our Economics Team led by Simon Kennedy for literally writing out my questions. How do you spell that . Do you drink red bull . Lisa you drink red bull . Tom you drink red bull . Yeah. Stay with us on bloomberg television. Good morning. From new york and london for our viewers worldwide , good morning, good morning. The countdown to the open starts right now. 30 minutes until the opening ballot. Equity futures update on the s p 500, we advance. 2 . Fed chair jay powell beginning a marathon on capitol hill. Love you the recovery process. Looking at the recovery process. Equityite the fact the markets might have you think. We are still expecting economic recovery to continue. It is too early to make that call. Still worried about the Fourth Quarter. That would motivate the white house to get this package through. As we work to layer on fiscal stimulus, it would be a tailwind. Getting a deal out of congress is an uphill battle. Our base case is not expecting any. Jerome we