Sockof course is momentum that of course is the momentum behind this rally. Rally seems to be fading, and another interesting piece, we have the Canadian Dollar soaring against the u. S. Dollar with the oil rally. You were mentioning that everything is rallying, and that is true too for bonds. The two year yield carving out a record low and that tells you that bonds are rallying in a big way. While stocks are rallying you have investors going towards the bonds, suggesting they have their eye on the economic picture. The jobs data and nonforeign payrolls coming out tomorrow which will be devastating, not just from an economic standpoint, that from a human standpoint. The question is will we see more of a connection between stocks and the Economic Data or not . Or will we have investors look past the data towards the liquidity that the fed has been providing . Certainly a risk on day. David that is what they have been doing so far. Few mckee got to talk a minutes ago with mary daly, the san fran bank. E any other company in the United States and globally, they are feeling a lot of pain because they have had to shelterinplace, and they know that. They want to do the right thing, but they are feeling the pain. When thinking about getting past this, they are doing everything in their power to get finances in order and take advantage of programs available to ensure that they can get past it. No one who i talked to is looking at a vshaped recovery. They think it will be gradual and it will take time to build confidence for workers and consumers as they reengage. They are more optimistic than you might think. They are ready to reopen and reengage. Want thenow you paycheck Protection Plan to help, but is there evidence that they are doing that . Are doing that . Our Companies Hiring back workers . Hiring backnies workers . Mary it was more about keeping the workers they had and we expect when the economy reopens for those workers to come back and perform work. Most of the country remains in shelterinplace, so we are providing emergency help so we can get through this and to reopen. Mike the main Street Program is not up and running. Is that going to get started too late to help . Mary coleman mary there have been these announcement affects that when we say we will have a facility, the market start to function better, and we are seeing that across the board in areas where there were dislocation. I do not think it will be too late, i think it is already helping markets to the lending that is so important for american businesses and households. Mike i do not want to get into the alphabet business, but you are negative about the idea of any kind of growth this year. You did not see any kind of expansion until 2021, is that still your view . Mary my view is 2020 as a whole. Let us just think an annual data. 2020 as a whole will be a negative year and we will start to see positive years in 2021. That is as good as forecasting can get. Forecasting is always a tough business, but it has become tough right now because it is dependent on the evolution of the virus and what actions we have to take to constrain it. Mike the markets are seeing things differently, i am wondering what you think of that and the idea that a short while ago, the fed Fund Futures Market priced in negative income rates in january. I know that is not a policy procedure you are interested in. What do you think about the Way Investors are looking at it . Mary i think they are looking at it as the coronavirus is with us until we get a vaccine for some nice way to control it and a helpful way to control it, and they see that is distant and price it in. That is what we are all dealing with. Optimistvidencebased and the evidence i am seeing was a strong economic momentum, one of the strongest economies in our lifetimes. Businesses are fundamentally entrepreneurial and we are seeing them start to think about how do we reengage while we live with the coronavirus until we do get a vaccine or some other remediation program. I have a little more optimism there. Finance is inl tatters around the country. What are you hearing from cities and states in your district . Cities and states and states are really struggling. There figuring out where can they cut costs when revenues go down. They are facing tremendous declines in revenues and figuring out where to keep essential services and what cuts can be made. This is just hard, and we are just working actively with states and localities to think about what is the best way to make difficult choices so we can get to the other side of the coronavirus and be wellpositioned to go forward. Dearly t was mary mary gave michael mary daly. Michael is with us now. Rate universe interview as normal. She does think that she will recover based on the fact that companies are eager to get black back to work. Did we not hear from that her colleague that if they did not get back to work sooner rather than later, we would have a depression . Mike she went on to say confidence is key. People need to go out and feel that they are safe before they will go shopping or to restaurants, and businesses have to believe that they can keep people safe before they reopen. That will be the big hold up through the summer, trying to get to that level of confidence that people would be able to resume economic activity, and because of the virus, we do not know how fast that will happen. David what about the main Street Lending program. I am not sure she directly answered your question of why it would be too late . Mike it will take a little while to get out there. This is a Straight Program to keep people on the payroll, although that is a component. It is to keep businesses alive until they can start rehiring and reopen for business, and i guess her feeling is that that money will get out there in time. The fed is having trouble getting it started because there are questions about some of the restrictions that congress put in. David any sense of whether the fed might expand in terms of lending programs . Mike right now they are not giving any indication that they are going to and mary daly did not talk about that. They have the room to do so because they have money in the treasury backstop. We are looking at theppp the ppp program and it has not used up all of the second tranche. If the economy takes another leg down, they can go farther. This is about putting a floor under the economy. When it comes time to do stimulation, seizure she suggested a range of zero to 25 basis points and ceased and she suggested to go to zero and then adapt Forward Guidance and give more stimulus. To talkhe does not want about quarter by quarter, that in terms of years they would have it we will have a negative number. We will get a positive number next year. That is not terribly encouraging. Mike she is among the more pessimistic in terms of how fast we will see growth again. She thinks we can see it into the fourth quarter, a contraction into the fourth quarter. In 2021 we will start to see growth. The problem with mary daly, she has been an economist for many years, and the problem is that it is too hard to make a forecast and there are too many variables. David fair enough, thank you so much. That is michael mckee. Great to have you with us. Coming up, we will talk with dick durbin, the Senate Minority whip, the second most powerful democrat in the summit in the senate. David welcome back to balance of power, i am david westin. We welcome senator did durbin, durbin,iment this the Senate Minority whip. I want to start with the coronavirus and the human toll it is taking. We have on more unemployment reported and we have the disease and the deaths. You talked about the situation in the state of illinois and we talk about these terrible numbers but they are disproportionately hitting people of color. Africanamericans, and hispanics. Sen. Durbin we started asking the question when people said there were infection infected, and we found that disproportionately africanamericans and hispanics are coming up with dramatically larger numbers when it comes to the illness. A friend of mine put it well. He said the coronavirus is not going to break us, that it will teach us about what is broken in america. What is broken is our health care system. We have to reach a point where everyone has access to affordable, Quality Health care, and we do not have that at this moment. Time toan we do that in address the issues . Or is this for the future . Sen. Durbin it is for the future, but we can act on it now. I spoke to a doctor at the center for Disease Control and wevention, we said i said need Health Care Workers knocking on doors and talking to people if we will bring this infection under control. That kind of Health Care Investment is going to find the people who have the most susceptibility to develop this infection to stop it from spreading and teach them the conduct that will be good for them and all of us. David there is the health care aspect of this and a personal tragedy and the economic effect as we see so many people out of jobs. Are you sympathetic to President Trumps instinct to get the economy going and get their jobs back . Sen. Durbin definitely, but we want to do it in a smart way. The previous segment talked about when the American People are ready to return, that is an important thing. At this point, there is skepticism, we do not believe we have won completely and we need to keep fighting. We have gone through a terrible experience. We have done it wants and we do not want to do it once and we do not want to do it a second time. Let us pay a tribute to the Health Care Workers and show some sacrifice on our own part. David there is talk about the democrats on both sides of capitol hill working on a new round of support for the u. S. Economy. What is essential . Sen. Durbin there are several things that we ought to keep in mind. Of early investments we made 2. 7 trillion were unprecedented and geared towards the economy working moving forward starting on july 1 when the Unemployment Benefits end, at least the federal boost. End to where we see an Small Business loans, but i think that is optimistic. Most of us understand that the problems will not end as of july 1. O, we cannot get weak kneed we invested to avoid a depression, i would put additional investment in helping state and local governments through this difficult period and do my best to help the health care with hazard pay. We need more testing, that is the key to reopening the economy. Those are the starting points. David at some point we will have to pay for all of this. We heard larry fink saying that corporate taxes will have to go up. Is he right . Sen. Durbin i do not want to get into that conversation at this moment. We are trying to stabilize the patient, let us not talk about longterm care issues, and we know that we will have to face them. If we decide to give half a dose of medicine to the American Economy we will plunge into a depression more costly than anything. David the coronavirus and the response is not the only thing on the agenda, there is also a nomination for the d. C. Circuit of judge justin walker. Can you explain what the problem is with us nomination and why it is being taken up right now . Sen. Durbin you ought to ask senator mcconnell. He reconvened the senate and brought us back with our staff and all of the people who keep this building running. He would expect he would focus on the number one issue facing america, this National Emergency and Public Health crisis. He wanted to focus on a 37yearold federal judge in kentucky that he wants to give a promotion to. It is an embarrassment. We want to do the business of the people which means. Ddressing this david is the problem with the merits, or the redoing of the federal courts of appeals across the country which has been going on . Or is it a question that we should not get to that right now and we should deal with that later once we have dealt with the pandemic . Sen. Durbin they can see this man is supposed to feel phil does not occur until september fill does not occur until september, and we had to come back here so senator mcconnell can keep a promise to a friend in kentucky. He wants to fill every vacancy at every cost and proved it this week. David last question. In terms of getting the next round of support done, is it important to start with the Senate Republican so you have bipartisanship, or can it start on the house side . Sen. Durbin it starts with speaker pelosi. She is working on a proposal that we will see in a short period of time, i am not certain one. We will sit down with mr. Mnuchin and i have been told he is a great negotiator and a good person to sit down with. He does not give in easily but looks for a compromise. That is what we are looking forward to. David thank you, i appreciate your time. That is senator dick durbin. This is bloomberg. David welcome back to balance of power. Europe is struggling with the coronavirus every bit as much of the United States. Francine lacqua got to set down sit down with Christine Lagarde. Ecb is driven by its mandate. Beingave the privilege of instant independent institutions accountable to the european parliament, to which i report back and am accountable to, and i go every three months to tell about our action, tools, how we measure them. We are also mandate driven, and mandate take dates that we do dictates that we do whatever is necessary and needed to actually deliver on our purpose, which will be a factor of circumstances. To give you an example, we are currently going through exceptional circumstances. The Global Economy in the euro area where i am located in where i have to be active is facing an unprecedented shock. In that case, you clearly have to go beyond the normal including the normal and conventional tools to use things of an exceptional nature, and withhas to be calibrated the appropriate level of deviation and room to maneuver in order to actually deliver on the mandate, whether it is to avoid the tightening of financing conditions or whether to make sure that Monetary Policy is transmitted across all jurisdictions. That is what we need to do. It, we are actually doing and will continue doing so because that is what drives our actions. Francine what is on top of your worry list . Christine it might surprise you, but i fear two ws. W number one is war. On top of everything that we have, that would be the most aggravating factor we can phase. My second w is the second wave. If we ever had a second wave. We look at analogies like the spanish flu, unnecessarily called spanish, the spec the second wave was worse than the first. Those are the two things on my mind from a humanitarian as a person. As i look at the big if i look at the economic consequences, even without those ws, i think we have the most unprecedented economic crisis we have seen in peacetime, and the damage that it is inflicting on our economies around the world is really causing damages to potential output, families, jobs, to the capacity to bounce real and we simply have no good sense of how badly economies are effective and we are working on the basis of scenarios, because we do not know. It will be a factor of how we get out of those lockdown measures, at which pace and sequence, and, if we do, we do not know how fast and how strong the recovery will be, because it will be a factor of the measures that will be taken. So, that is the situation that we have, and in the face of that we have to take all possible measures and policies to help with maintaining the situation and sustaining it for as long as shock,ry to weather the and help families, firms, and governments move into a recovery phase. People, nearly 4 million affected, a quarter of which are in the euro area is on my mind all the time, and i also venture beyond those borders, because i think of all the people in the developing world, which is clearly taking a big hit, and will continue to take a big hit despite the fact that Health Systems are not as solid as they are in advanced economies. David that was madam Christine Lagarde talking to Francine Lacqua earlier today. Coming up next, we will get to talk with the speaker of the house, nancy pelosi. We just heard from dick durbin on the senate side in that she needs to take the lead in the next round of support. We will ask her what that looks like and how she can get support. This is bloomberg. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need saving you up to 400 a year. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. David welcome back to balance of power, on bloomberg tv and radio. Back in town but not back in session. Democrats are undertaking to have another round of support for the economy. We will talk to a person leading the plan to put that together, speaker of the house, nancy pelosi, madam speaker, thank you for joining us, we just talked to senator durbin who said the lead had to be speaker pelosi. Speaker the constitution says Appropriations Bills must originate in the house. Bill, thehe interim bill of consequence, will begin in the house of representatives and it is imminent. What is essential from your point of view . You wanted it to be bipartisan . What is essential . Ourm speaker i am proud first bill on the subject had been bipartisan, overwhelmingly. As we take up this fifth bill, we are following the path of the others. We had state and local in the first cares bill and that is what we have in this. Honor our heroes. Fire, health care providers, transit workers, teachers, postal workers, all the people who make our system work. In many cases, they risk their lives to save others. Now they may lose their job because of revenue loss and coronavirus cost, states and municipalities are suffering. Toif we open up, the key unlocking the lockdown is testing, testing, testing, tracing, tracing, treatment, treatment. Science requires this. Everyone agrees. It is a health issue that will solve the financial issue. Third, we want to put money in peoples pockets, honor our heroes, state and local, testing, testing, testing, address the disparities by identifying where this cruel virus is sweeping. So scary. Third, putting money in peoples pockets. Unemployment insurance, issues related to direct payments and the rest of that, that is what we have to do now. We had all three of those in a previous bill. This is not plowing new territory. It is Digging Deeper with more money. For example, state and local, the support of republican and democratic governors throughout the country. Municipalities and counties, bipartisan support throughout the country. It is a bigticket. It is a challenge. It is only for coronavirus. There are some issues that are philosophical that we have not been able to crack. Food stamps. Snap. For some reason, that is not something we can get the other side to agree on but we have to do it. The American People know we have to do that. Brookings institute put out a report moms say one in four insecure. Re food that has always been a problem, one in 5, 1 in six, now it is exacerbated by this. That are some issues traditional debates we have but there should not be any question. Food stamps, unemployment insurance, direct payments, so many of these things serve as a stimulus to the economy as well. Said,airman of the fed think big. Interest rates are so low, think big. We are taking his guidance on that. David for some reason you cannot get the republican side to move on to sims. Can they get you to move on some of the things they want . Such as payroll tax. Capital gains tax. Are you willing to put on the table adjustments in taxation . Madam speaker if you want to compare the need to change the Capital Gains tax, which ignores the fact that there are people in our country that are hungry and that there is some equivalent so that, i respectfully disagree. Certain things are urgent. Have a discussion of tax policy . Save that for another day and do it in a bipartisan way. Do not draw lines in the sand. David do you have a sense of this point, i understand the plan, do you have a sense of how this, how big this might be . Madam speaker when we went from state and local, that was how we embraced it before. Now it is state and local, separate. It practically doubles what we would be doing. It is a big ticket item. Wayre doing testing in a that has a strategic plan. That is what we asked them to do in the last bill. Testing, testing, testing and our fourth bill, that pass to the house. Testing the most recent bill. We still do not have what the scientists tell us is necessary to reach out in the community with a band of people to do tracing, so we can rid ourselves of this plague. That costs money. , that is aents bigticket item and that is what we are working on. Where do we get the most return for the best help to our people who are desperate . People are desperate. They are heartbroken because of the threat to life. So many aspirations professionally, businesses, Community Involvement and the rest are so stifled by what is happening and we really have to address that. If we dont, it will cost us a lot more money. This is a prevention in many ways. It is preventing a greater loss. You know, it is an opportunity. An opportunity to do something working together that ordinary people, iy to day dont think anyone is ordinary, but they can say they are doing something that really affects me, instead of some trickledown attitude they seem to be used to and does not feel right. David it is clear you find this urgent. On the other hand, we hear from republicans saying lets wait and see how the first bills work out. Can you give us a sense of timing . You are going to chairs, talking about what should be included. Can we expect a plan by next week . Disagree with i our colleagues. I totally disagree. It is urgent. People are dying. People are suffering. We want to open up our economy. People want out. The key to getting out is testing. These are all related. They are related in every way, to data. To data. They did not mind coming back with more money for this or that without any data as to what was working best but when it comes to people, they can wait for that. That is a matter of health and wellbeing of the American People. I completely disagree with that. I think it is important to learn from legislation we passed in every case, but that should not deter us or block us from meeting the urgent needs of the American People. People, when you ask these questions, in the contrary, the bipartisan support for them is overwhelming for honoring our heroes, state and local, testing and the rest, the postal service, all these things have broad support, among republicans as well. We are talking about public sentiment coming to the rescue of our country, our democracy, thebecause so much middleclass is the backbone of our democracy and those who aspire to it and if we are undermining that, that undermines our democracy. Way. In for voting, by the we have money for voting, vote by mail, which we think is a Health Imperative now. Democrats and republicans support vote by mail. Right now, it is imperative. That is a small item. David i was going to ask you, is that essential from your point of view . You have talked about it. Madam speaker everything you are talking about has bipartisan support. Vote by mail does as well. The National Association of secretaries of state, headed by a republican chairman, has written to us to say remove some of the obstacles to voting by mail in the cares 1. There is a recognition to conduct elections, consistent with trends in our country, then also recognizing the danger to health so many people showing up on election day, is something that is not, partisan anyplace except in the congress of the u. S. Hopefully not. They will hear from their constituents, i hope. David i understand the house is not in session. When can it go back in session . How concerned are you about the safety of members . Madam speaker i am concerned about the members, can study ends of the building, the custodians ofe the building, the staffing. There are thousands of people who make congress work. It is not just about us. It is about them. We will come back, we have come back twice for a voice vote one day and another day for a couple recorded votes. Established byn the sergeant at arms and the capital physician and those other terms under which we will come back again. We were going to come this week. They informed us it is better next week because of what is happening in the district of columbia. That is when we will come back. Voting bywant to move proxy, remote voting, for people who should not come back, who we dont want to come back, if they have a fever or something in their home, that can be registered, voting, voting by proxy in a limited way for a limited time. One of the things you fought hard for, sorry. Speaker ker madame its ok. David you file for an Oversight Commission on how the money is spent. There have been members appointed but we dont have a chair because you and Mitch Mcconnell have to agree. Where arbery . Where are we . Madam speaker we have been talking about it for three weeks. I have my proposals and im waiting to hear from the senator. I hope we can resolve it this week. It is essential. I think we can come to terms. I wish we could have done it sooner. I hope we can do it in the next day. That would be my hope. I have made my proposal. Anyway, that will be important to do. In any event, thank you for your attention to the issue. Remember, it is all in investment. A prevention for this not getting worse in terms of the toll to our lives, likelihood, lives of the American People, livelihood of the American People and the life of our democracy. Thank you. David thank you so very much for being with us. Speaker of the house, nancy pelosi. Coming up next on balance of power, we talk about apparently a way that wealthy can pass money to their children without paying any gift or estate tax. David this is balance of power, on bloomberg tv and radio. Im david westin. Low Interest Rates may help the wealthy pass on money to their ldren in a way to avoid that is more tax beneficial than otherwise. The National Taxpayer union senior fellow, maddie, always great to have you on. Rate youa statutory can charge that belongs to your kids . It is sometimes called the death tax. There are also rules that prevent parents from gifting, trying to get around the estate tax by gifting money to kids. There is a law that dictates you yournly give 50,000 to kid every year. That starts to accrue. It is a way to try and keep people from getting around the estate tax by using gifting earlier in their life to pass along wealth to their kids. David under the current situation, i understand the rate of interest you have to charge your kids, if you loan them the money, rather than giving to them, is sometimes below 1 , which allows to lower the 1 , they can invest and make money off of . Mattie this is a reflection on the current interestrate environment. Interest rates typically get higher when the Economic Outlook is more positive. Currently, we are in the opposite situation in this deeply unsettling event, which drives Interest Rates lower. Here on what that does for interest family gifting and the Tax Implications they are in, depends on the tools families are using. There are plenty of tools for states to try to mitigate taxes. The thing to keep in mind is that, in each case, the beneficiary is still going to pay taxes on income inherited when trying to exercise income. If they are inheriting in the trust, a 401 k , ira or that still gets capped. People get wrapped around who is paying that tax. Someone is going to be paying. It is a matter of the gifter or gift ee. David possible stimulus of the economy, we hear from President Trump about the payroll tax. It has come up in this round. He mentioned the Capital Gains tax. Could that help the economy . Mattie it certainly could help. There would need to be part of a bigger approach to stimulus. There are interesting questions about payroll tax in the cbt loan program, you have likely been talking about. The interactions between payroll taxes for employers for whom loans are forgiven is somewhat in question. As the law is written now, and as how the irs interpreted this, if you get that loan forgiven, you no longer qualify for the payroll tax relief already past into effect by the cares act. I would watch whether that entity, excuse me, that component is clarified. Also, there is an ongoing debate as to whether or not wages themselves that employers pay with loans is deductible at all. I would say we need clarity from the administration, that could be much more stimulative, then simply looking at another payroll tax cut. That clarity is what businesses need as they try to get workers back in and tried to get the economy back online. David thank you so very much. Always great to have you on when it comes to taxes. Coming up next, bloomberg first word news with mark crumpton. Mark thank you. All u. S. Airport security screeners soon required to wear masks. Transportation security administration, tsa, expected to make the announcement as soon as today. Screeners havesa tested positive for covid19, including six who died, according to the agency website. The use of masks by employees has been voluntary. Projecting it will have budget shortfall of 54. 3 billion because of the economic devastation caused by coronavirus. The announcement is a stunning reversal for a state that had a 21 billion surplus one year ago. California has been under a mandatory stayathome order since midmarch. The governor calls the numbers jawdropping. Fear of reinfection in recovered Covid Patients in china is going. A new tiny study has found between five and 15 of people in the country, recovered from the virus, may have tested positive again. Scientists are not sure why this is happening though some believe it may lie in inconsistency in test results. U. S. Supreme court tossed out convictions of allies of former new Jersey Governor Chris Christie for their roles in the 2013 George Washington bridge lane closing scandal. Bridgegate created crippling traffic jams in fort lee, new jersey, to punish that citys democratic mayor, for not reendorsing governor christies reelection bid. Global news 24 hours a day on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I mark crumpton, this is bloomberg. David thanks very much, mark. Lossreduced its quarterly last quarter despite the pandemic. We will talk about that, coming up next on bloomberg markets, on Bloomberg Television and radio. David this is balance of power, on bloomberg tv and radio. Ridesharing services have taken a hit from this pandemic. Lyft cut sharply its losses last quarter. Abigail. Of the hour, applico this is interesting. Abigail tuitive this is interesting. Counterintuitive. They beat revenue. Stock soaring. That is what happened. Numbers that had already been lowered. Some analysts call this a head fake, saying it is not as good as it looks on the surface. Active ridership up 3 . Revenue provider up in a nice way. From a volume standpoint, what you have going on, april down 75 , the last three weeks picking up a little. There are lots of questions as to how they will operate going forward. Weeks ago they cut workforce, true for uber. I see the decline in the city, walking to and from work. I might see one tlc license walk. Or walk per a massive decline in cars going around. David what about delivering things as opposed to people going around . The westchester, we use Delivery Services a fair amount. Abigail that is where they need to go. Analysts have identified the business overall in the next year, maybe longer, could be in a world of hurt. If they were to diversify and delivering from grocery stores, restaurants, other stores, they might be able to survive the virus era. It is not clear whether they will do that. That is one of the concerns of analysts. Down in a huge way, ipo, unicorns not doing quite as expected. The virus, not helping. David thank you so much, abigail. That does it for the tv portion of balance of power, but we will continue on radio for the second hour. Bloomberg. Is bloomberg markets, and here are the top stories. U. S. Stocks rallying with major indices off session highs. On track forg loss the fourth straight day of gains as u. S. Jobless claims came in. Seven straight weeks about 3 million. 33. 5 million jobs lost. Andrew bailey saying another round of monetary stimulus could be on the way, saying they could pump more cash into bond markets by next month. Quick check on markets. Gain of 1. 7 p to a with tech stocks doing well. Nasdaq