If demand for that paper does not come back in the coming months, what is the longerterm implication for Interest Rates . I know you are reticent to give any forecast on Interest Rates, which i understand. Give us a tone about the correlation there. Chair powell there seems to be plenty of demand for our paper. I would not want to speculate on what Interest Rates might do. They are the worlds reserve currency, and particularly in times of stress people want to own u. S. Treasury. That is been the way it is for a long time. Even if some of the problems, as in the last crisis, love the problems originated here, people wanted u. S. Treasury, and that is because we have the strongest economy, the best institutions, the most liquid markets. One last question. Youve been very gracious with your candor and your time today. I have heard a conversation in this hearing about labor. I hear all over my state, our state was one of the first ones to reopen. One of the inhibitors to supply and demand that i think is out there and we are proving that is getting people to come back in the workforce. Unemployment structure is grading a disincentive. I want to make sure we protect the people that need to be protected, but how do we inive the people who georgia we have a number of job openings going unfilled because people are not coming back yet. Chair powell i know that is something you will be considering as the enhanced Unemployment Insurance program runs out at the end of july. Youuld not presume to tell what the fed thinks you should do because it is not our role. I think youll want to continue support for workers in some form. I think therell be an awfully lot of Unemployed People for some time, even though we have 25 million newly unemployed or partially employed people, and even if we start putting people back to work fast, which may happen, there will still be plenty of people who do not have jobs and they may not have them for a while because there are no jobs in travel accommodation. I know there are a lot of interesting ideas, but i think something will likely wind up being appropriate. Thank you, mr. Chairman. Senator smith . Thank you mr. Chair, and thank you chair powell for being with us today. Nice to speak to you again. We are more than three months into the economic crisis caused by coronavirus and more than two months to the passage of the cares act, which provides urgent and Emergency Support for families and for businesses and for health care systems. I think we all know, and you acknowledged yourself in your Opening Statement that covid is not the great equalizer. In fact, it hits hardest those who are already struggling because they do not have a safe place to live, because of lack of access to health care, because of low wages and chronic blacky, and especially and brown and Indigenous People and the systemic racism, and even their lives. I think that in this moment, it is essential Congress Takes up its challenge and fulfills the promise of america. Talkt to have a chance to with you about this. I think there is a rising narrative we hear from some, including the president , that things are improving. We need to reopen the economy and before we know it we can all get back to normal. What i am worried about this we are burying our heads in the sand when it comes to the viruss continuing spread, but also we are looking away from the impact covid is having, and in fact if we are not careful, we do not change the way we are doing things, we will not back to normal, we will get back to a worse normal. A normal that exacerbates these inequities. Let me focus if i can on the question of housing and rental housing in particular. See a badthing i trend on in minnesota. The star tribune, my hometown newspaper recently published an article analyzing what is happening with rent collection in the twin cities. 95 of class a apartment buildings, the expensive ones where the people who have a lot of money can live , 95 of those renters are making their rent payments. Renters in the Affordable Apartment buildings, the older ones, are able to make their rent payments. I think we can see it always helps if you have more money we are seeing the impact of this on low income people, and also think we are seeing the impact of Unemployment Insurance and other help we have provided to make that 80 number not be even higher. Let me ask you about this. I know you do not want to comment on specific proposals, but what would be the impact on the housing market, especially the rental market, if congress does not provide some sort of longterm rental assistance to people . What would be the impact . Peopleowell i think if need to get evicted or theirosed upon, even ability to get back in the labor market becomes very challenged. Moral issue and also an economic issue. Weause of the likelihood have fairly Large Population of people who are not able to go back to their old jobs or even to find a new job in their own industry. I think those are things worth considering as you think about what support to provide. Would you expect that if that were to happen, that would also put incredible pressure on the landlords, sometimes Public Private partnerships that own the Affordable Housing units because they lose their 11 new their lovethey lose they lose their Revenue Streams in order to keep the buildings up and running. Would you agree with that . Chair powell you can see pressure on the ownership as well. Is auld you see this stunning specific from my home state. Only 25 of black families in minnesota on their own home. The number 76 of white families. Agree that if we did see a surge of evictions, even eviction forbearance expired, that this would end up exacerbating the racial inequities we see in our economy right now . Chair powell yes it would this pandemic, the way it hits our economy, the way it hits the Service Economy has been a real inequality increaser for the reasons we discussed earlier. Are tolosing their jobs a large extent Service Economy employees with relatively low wages and relatively high percentages of minorities. That is who is bearing the brunt of the spirit who is bearing the brunt of this. I think this makes the case for eviction forbearance, but also for why the bill that senator brown and many others are working on to provide 100 billion of Emergency Assistance so these families do not have to lose their housing, therefore making it so much more difficult for us to recover, and also exacerbating these fundamental and systemic inequities we see in our economy overall. Thank you, chair powell. Senator moran . Mr. Chairman, thank you. I appreciate you are putting your intellect and expertise so diligently to work to repair our economy. I appreciate what youre doing, mr. Powell. Let me tell you im concerned. We think ppp, i think ppp worked pretty well for our smallest employers. It has been my hope that main Street Lending programs will be a similar kind of solution for Larger Companies in kansas. It does not matter if you have lost your job, whether you work for a company that employs 9000 people or employs 900. You are still out of a job and we have a lot of work to do in that regard. Chairman, i am concerned, genuinely concerned that we may see main Street Lending programs not have a Material Impact in helping small and mediumsized businesses in kansas and across the country. The result of that is a failure to recover quickly, continuing unemployment, but perhaps a result in which Larger Companies who have been able to raise cash in recent weeks will consolidate their market share at the expense of those smaller businesses that were unable to do so in the commercial market. I have a lot of hope for the main Street Program, and i need to be assured it is going to accomplish what it needs to accomplish. I think the main Street Program is essentially saying it will stand by a Syndicate Partner for a fairly narrow class of credit agreements. As far as i can tell, banks do not need help in syndicating profitable loans, and neither do ,hey want any part of even 5 of unprofitable loans. To me it appears there is little in the program that actually incentivizes banks to originate these loans for new customers, so i am nervous, especially because if we have to make changes, the changes come so late, months from now, it will be too late for many of my constituent businesses who employ lots of people in kansas. Can you give me your thoughts concerning my concerns and try that my concerns are unfounded . You do put your finger on some of the challenges with approaching the diverse main street space, which has different appetites for credits. It is heavily bank dominated financing sector of the economy, or series of sectors of the economies. That means bank credit agreements, which are all individually negotiated. It is not like the bond market where there is standardization. It is a challenge, and we had no choice but to go through the Banking System. Diligence ondue millions of companies. We are not set up to do that. The Banking System is exactly what they are set up to do. That is what we are doing. The banks do have incentives. They get to serve their customers better. They also get a generous origination fee. We feel there is substantial interest on the part of bankers for this. It is also the case, as it was with other facilities, that the amount of Financial Stress overall in the aggregate, there are companies that do not fit this, is lower than it was in march and april. We realize there are still plenty of companies. The main street facility is now open. The lenders are registering. They can make loans right away, and within a week or two those loans will be bought by the facility itself for 95 interest. The banks will be left with 5 . They will keep their origination fee and we will know a lot more about the level of demand. We do have it is not just joining an existing syndicate. ,e do have a new Loan Facility so we are open. We have three different facilities. We are opening one soon enough for nonprofits. As we have been since the very beginning, we are very open to learning and adapting. We have made repeated changes to these facilities to try to make them better structured to achieve their goals, and will continue to do that. Optimismeciate your and im reluctant to be the pessimist. I hope you are correct. Is there a plan b, or is that something that would just work out as we react to the markets, to the demand . Chair powell for all of these facilities, we will be watching curate if we are hearing about companies for whom the loan is the right answer who do not qualify for main street loan facilities and should, then we will be adapting to that. We will certainly be adapting curate let me raise we will be adapting. Let me raise one other topic. I cannot see the clock. The quick. Earnings talk about interest taxes and amortization. That is a component of the main Street Program. There will be industries and businesses in which that is a detriment and perhaps disqualifying for them. I particularly raise this in the hotel industry, where it would to be ableantageous to rely on their 2019 net earnings. I am interested in your thoughts in that regard, and i am also worried about the indication by treasury and fed that we will operate under the cares philosophy of spirit and purpose of tears we will operate in the main Street Program under the spirit of cares, which is a pretty uncertain term, and i am looking curate our businesses are looking for more certainty this the nature of how program will work. Can you help alleviate the uncertainty that surrounds this in any thoughts about a beta . And if you could be brief on this answer . Chair powell i will. In terms of eva. , we are look in terms of ebida, we are looking at last years curate we appreciate that for some and in terms of last years industry we appreciate there may be some our focus has been on getting the facility open. That has been the main focus for now. We are looking at the past three pandemic the past three pandemic earnings. We are not taking the past prepandemic earnings. Thank you, chairman powell. Senator van hollen . Thank you, mr. Chairman. Welcome, chairman powell. I am late to the hearing. I was just on the floor of the senate calling for us to take up the justice and pleasing act and address in an urgent way issues of systemic racism. I am glad you made the statement you did in your opening remarks. I want to ask you about a statement made by rafael bostic, the president of the atlanta fed, where he wrote on friday systemic racism is a yoke that drags on the American Economy and a commitment to an Inclusive Society also means a commitment to an inclusive economy. You agree with that statement . Chair powell i do. Absolutely. Is urgent we use all the tools at our disposal to address that issue. I saw President Trump celebrating the other day that the Unemployment Rate in may ended up around 15 . Nothing to celebrate. In that same unemployment report, we saw black americans Unemployment Rate go up compared to the previous month, did we not . Chair powell we did curate over the longer term we see africanamerican unemployment running at upright we did. Over the long term we see africanamerican employment running over white unemployment. That is in all parts of the business cycle. And also these ingrained issues in all aspects of our society, from schools to financial systems. Let me ask you this. I saw wall street has responded favorably to some of the most recent actions that the fed took. When it comes to helping those people who are most hurt economically by this downturn, have you spoken about them, the fact that 40 of individuals with incomes under 40,000 found themselves out of the job . When it comes to those individuals who are hardest hit, would you agree fiscal policy is probably a more effective tool in addressing those issues than the instruments the fed has at its disposal . Chair powell in the short and mediumterm, yes. In the long term, maximum employment is a great thing. What we had the last couple of years is a 50 year low in unemployment was making a difference in those communities and we were very pleased to see that. We were hearing that from people in the communities. For now, fiscal policy in the short term, a lot of those gains were erased in a very short time, and our goal has to be to try to get back to where we work as soon as possible, and then start improving again. When it you agree that would you agree that should be the goal . Chair powell absolutely. And you agree with the letter im not sure what your testimony is as to whether or not you saw the letter, but we have a letter we received this morning from ben bernanke, janet yellen, and over 120 other respected economists about the urgent need to take more physical action. More fiscal action. Given what you just said, do you agree with their statement we need to do more . Chair powell i saw the headline in the first two sentences of the story. Ive not had a chance to read. It went across just before i walked in. I will take a look. Ascal policy, we are not in position of giving you advice, and you have reacted, congress has done the most it has ever trillion,of gdp, 3 we have done the most we have ever done. It is likely there will be a group of struggles to regain unemployment. They are working within those industries that are so strong. It is likely they will need help and they maybe help from the fed and from you. I take it from your previous response that when it comes to shortterm downturns, fiscal policy is the most effective instrument to deal with the shortterm impact. Jobs atlost 1. 5 million the state and local government levels over the last two months. That is a drag on the economy, isnt it . Chair powell yes it is. Government isl one of the largest employers. I think 13 Million People. Shown in all of us using the tools of our disposal tried to stop the continued loss of jobs at the state and local level . Chair powell we did discuss this earlier comment i would say it is certainly an area where i would be looking. State and local governments provide critical services, and they have balanced budget requirements. The layoffs come quickly when unemployment revenues go when revenues go down and expenses go up. That will weigh on the economy. Are you aware of the fact that in many cases, state and local governments are making their decisions as of july 1 as to whether or not to cut back on their budgets and lay people off . Chair powell i am aware. Closing, itman, in would seem to me that congress would be negligent in leaving town before the fourth of july for the break without providing this additional relief. The state and local Government Employees and also others. Thank you to both germans and the Ranking Member to both chairmans and Ranking Member brown. Do have senator Kyrsten Sinema . I am here. Chairman powell, immediate Economic Stabilization as we saw with the ppp program and other Coronavirus Relief funds will continue to be necessary as we shall the economy from the worst effects of this pandemic and work to save lives. Disease experts and other Health Officials warned of a harsher second wave of the virus in the fall. I urge the administration to implement a National Testing and infection strategy to help stop the spread of coronavirus and protect arizonans from future waves. Would you agree a robust infection tracking regime that enables u. S. Businesses to reopen and operate safely would have a positive effect on Economic Growth . Chair powell i absolutely would. Anything that enhances the publics confidence and ability to become ever more confident that it is safe to go out and take part in the economy will have very high returns for the economy. Thank you. The Federal Reserve projects u. S. Economic output will decrease 6. 5 by the end of this year compared to 2019. Does this projection assume our second wave of coronavirus and the accompanying Economic Impacts . Chair powell that number is just the median of the 17 projections by the 17 participants in the fomc. It is not an official projection of the fed or anything like that. It will be based on different assumptions made by different people. Each of the 17 will have made a somewhat different assumption. I would think the answer to your question largely will be no. , and mynot a number colleagues will not have assumed therell be a substantial second wave. That is concerning. Congress will need to find the best path forward as we begin an unprecedented and involving pandemic. Leaderscounts on our for the scientific facts. Businesses and families will need immediate Economic Relief if case counts worsen and for the restrictions are warranted. Would you agree, given the possibility of several future waves of the virus, that identifying flexible economic stabilizers could quickly make impacted businesses and family stable would be beneficial for our Economic Growth . Chair powell i think the question of automatic stabilizers is a classic fiscal policy question, and one you and your colleagues will have to sort out. I think the Response Congress has made so far, particularly in the ppp program, the enhanced Unemployment Insurance has made a big difference in where the economy is now. I want to briefly discuss relief to state and local governments. I appreciate your efforts to provide state and local governments greater access to the Municipal Liquidity facility and i would encourage you to take further actions to allow smaller arizona cities, towns, and counties to act on financing. Economic study show that 2008 recession was significantly prolonged due to shortfalls in state and local government funding. You agree with that analysis and would you agree addressing state and local funding shortfalls will have a meaningful effect on the Overall Economic outlook . Show Powell Research does that in the aftermath of the Global Financial crisis, during the great recession, that state and local government did way on economic activity. There were a lot of layoffs and not much hiring. The government had an even higher percentage of the labor force back then. In terms of what congress should do, i think that is an area worth some attention because of what we have discussed. Thank you, mr. Chairman, and thank you racking member brown. I look forward to working together on a path to recovery, and i yield back. Thank you. Senator brown has asked for one more question, and then we will conclude our questioning. Senator brown . Thank you. One question and a brief comment. Powell. U chair i know fiscal policy is not within your providence, as you say many times, but ive been impressed by her thoughtful answers on state and local government by your thoughtful answers on state and local government assistance. Those are such important issues. My question is simple. Will Congress Make inequality worse if we are not as thoughtful as you have been in our fiscal response . Chair powell that is a hard form of question. I think this whole episode with the pandemic is very tough on low and moderate income communities. I think congress has done a lot compared to other downturns, and is having a real effect. I think there may well be and for us as well. Thank you. I have heard her public statements and i appreciate that. I would add that i will not join senator jones reading one of the most extraordinary pieces of writing i will join senator jones reading one of the most absurd era pieces of writing in american history. To read from dr. Kings letter from a birmingham jail. He reminds us we always make excuses to wait to address racism. I know there is a lot going on, but what we do now matters. I want you to take that seriously. I think you do. I appreciate your thoughtful comments. We cannot ignore how our institutions and policies, and the fed is central to that, have contributed to inequality in this country. My question about your working with us on this i appreciate you saying you would talk to other fed governors about that. I hope you will lead the fed as i Hope Congress will step up as well to address this most basic of american problems. You, andman, thank chair powell, thank you. Thank you, senator brown. That does conclude todays testimony and the questioning. Chairman powell, i would like to join with those who have commanded you on the service you and our Federal Reserve has given to the country in dealing with this pandemic. I appreciate you being here with us today as well. We look forward to continuing to work with you as you implement the various 13 three facilities and the other responses that fall within your to this crisis. And once again thank you for taking your time to give us your wisdom today in the hearing. Submitators who wish to questions to the record, those are due on tuesday, june 23. I ask that chairman powell, you respond to those questions as quickly as you can. This hearing is adjourned. Thank you, senator crapo, senator brown. We have been listening to the Federal Reserve chair jay powell in some testimony before the Senate Banking committee. He said the economy may be bottoming out but at the same time the timing and the strength of the economy remains uncertain, expressed concerns about unemployment. We bring in michael mckee. We heard last week from the and what did we hear new today . Shortest of the answers ever given on television, not much new. Basically consistent with what he has been saying. The fed, like everyone else, is in the dark for how long it will take to get out of this hole. He expects the u. S. Economy to do well eventually between now and then, reputedly emphasized the need for additional assistance. He said congress should consider additional assistance. As to what that should be, he said it is up to congress to decide. When senator van hollen of maryland asked if they should focus on states and localities, powell said that is what i would do if i were you. David he specifically said, we are laying off states employees, and i will be a bigger first contract. He also said it is to be more support for the unemployed because some jobs just to look like they are coming back. Mike even though we had a good employment number, we should see more people go back to work, it will still leave an awful lot of people unemployed. 2. 5 Million People hired in may, but that left 20 million unemployed. Willeds the year is we see rapid hiring and that it will stall out. That is where you will need assistance. We have that fiscal cliff coming up in july when the Unemployment Benefits run out, and they will have to do something about that. Something else he was firm on to more on this assistance those most affected by the crisis, minorities and women. He spent a lot of time talking about Racial Justice in the United States, how important it is to make progress on that. The fed is clearly on born on that. He offered support to lawmakers talking about legislation to help deal with that problem. Racismspecifically said has no place in the Federal Reserve system. Now lets get a check on the markets. They were up quite a bit, have come out some. Abigail doolittle, what is going on, and why . Abigail stocks are once again all over the map, and probably little to do with chair powell. He didnt say anything too much that was new. The s p 500 was up 3 as retail searched in the last month surged in the last month. The dow industrial average almost went negative on negative virus news. Beijing is closing schools because of a virus resurgence. Florida cases have surged to a record. Now we have the s p right in the middle. You can see the stayathome stocks, tech sector doing a lot of it better. Versus financials. The 10year yield is higher. Bonds all over the map as well, but once again lower as investors want out. Up 5 the highs, had been or more. Not long ago was almost negative, now up 1 . All of this against the backdrop of this fed liquidity, which is helping volatility. Butuch uncertainty, hope, uncertainty, which creates this volatility. David lets stay with the senate and turned to senator rick scott of florida. We have a lot to talk about. Lets start with what we heard from chair powell, specifically, that we may need more help with unemployment, state and local. What does that tell you about the need for further fiscal stimulus, and when would we have it . Sen. Scott we have to be careful about how we spend our money. Either you are taxing people now or later. Lets make sure we have liability support, protection for First Responders and Small Businesses. Lets make sure we hope those that have lost their jobs. Lets help our Small Businesses. But what i do not want to do is fix the budget for states that have not balanced for years. They will not fix their pension plans. Florida taxpayers should not be paying for that. We have already spent a significant amount on our states. Lets make sure we get a significant return on everything we are spending and help our Small Businesses. David does that give you a different attitude toward an infrastructure bill . The white house could be considering a 1 trillion proposal. Is that an investment that he would be in favor of . Sen. Scott i believe in investing in our infrastructure. I took our transportation budget from 7 billion a year to about 10 billion a year, and it paid off. As long as you invest in the areas where you accrue jobs, it works. Our Transportation Department says lets spend our money where we will get more jobs. The private sector has 1. 7 million jobs in the state. Butlieve in infrastructure, we have to do it in a manner not just to spend the money, but to help the job market. We need more jobs in this country. David lets talk about your home state of florida, there are reports of an increase of covid cases. Are you concerned that we could be seeing an uptick that may slow down the pace of the economy in florida . The scott everyone knows risks of coronavirus but we have to open our businesses. Employers are saying how do we keep our customers and employees safe. Families are saying quickly can we get back to normal but doing so safely . I know we are doing more testing now, our doctors and pharmaceutical companies are in therapeutics. It is all hands on board but we have to keep our economy open and keep people safe. David lets get your thoughts on the policing situation. You wrote an oped in usa today saying we should not be defunding the police, but putting that aside, are you in favor of reallocating some money , putting more into social services, that may reduce some of the threat of crime . Sen. Scott we clearly have to make changes. What we do from a training program. What we can do to solve the problems. We actually ask the police to do. What i oppose is this concept that we are going to shut down the police. What happened to george floyd is despicable. I talked to Law Enforcement pretty much every day. They were disgusting with one of those officers did, but you dont do it by defunding them, you help them. If there is a bad person, lets get rid of them. If there needs to be more training, lets do that. I have been working with tim scott in the senate on how to keep our communities safe and how everyone has the opportunity to get ahead. David how does that bill that we will perhaps see later on address accountability of police . Certainly, the vast majority are really good people who do the job well, but we have seen the videotape some should not have their jobs. Are you open to the possibility of adjusting the immunity for prosecution for police . Sen. Scott what i try to do as get the return for the dollars we spend. What i have been talking about is, if we want the murder rate to go down, lets allocated dollars to where people get results. If they dont, they should give us those dollars back. I want a result. I want safety for every citizen in my state, i want the murder rate to go down. When i left office, we were at a low in crime. Whenever money we spend at the federal level, lets make sure we say, what are we getting this for . I dont want to just spend the money to feel good. I want to get a result. We have talked before about the role of china in the coronavirus, you have been very outspoken that something needs to be done. Is there any benefit to the economy or Public Health in publishing punishing china right now for the coronavirus . Sen. Scott china has decided to be our adversary. They had decided not to be our friend. It is not the chinese people, it is the Chinese Government, a communist government. Has decided not to be transparent, to not help us. Our intelligence agencies are telling us they are trying to delay our vaccine. Your friends do not do that. What we have to do is call them out, hold them accountable, and hopefully, the Chinese Government will change so we can have a working relationship with them, rather than this cold war that xi is creating with the United States. David thank you so much, rick scott. Coming up, we will speak to Chuck Grassley of iowa, also a republican. David this is balance of power on Bloomberg Television and radio. Im david westin. It is time for first word news with mark crumpton. Thank you. Beijing is seeing a resurgence of the coronavirus. The city has ordered all schools to close in an escalation of containment measures. The Chinese Capital is also lifting its Emergency Response to level two, and set people will have to be tested for the virus before leaving the city. The total reported number of infections has reached 106, according to the National Health commission. There is progress in the search for a coronavirus treatment. A widely used lowcost inflammatory drug has been shown to improve survival in patients who need breathing assistance. That is according to a study from the university of oxford. Meantime, the u. S. National institutes of health says it will continue Clinical Trials on hydroxychloroquine even though the fda has revoked its emergency authorization. As david and rick scott were just talking about, florida is seeing its worst coronavirus numbers since the pandemic began. Officials reported more than 80,000 total cases today, of 3. 6 from a day earlier. Florida has seen more than 14,000 new cases, its highest level ever. Governor ron desantis has attributed the uptick to isolated outbreaks in agriculture communities and increased testing. Nato is downplaying concerns the u. S. Will rush to pull thousands of its troops out of germany. Said todayrygeneral there has been no decision on how or when a troop withdrawal will happen. President trump says he is ordering a major reduction in u. S. Troop strength in germany. Monday, the president criticized germany for failing to pay enough for its own defense and called the nato ally delinquent. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. David thank you so much, mark. The fed chair jay powell just completed his testimony before the Senate Banking committee. He said there is a recovery coming but he is concerned about how strong it is and the timing. Two things he was concerned about is the continuing unemployment, and the possibility of laying off state and local employees if they dont get some help. Grassley, now chuck chair of the Senate Finance committee. Lets address what chair powell said specifically with i want. What is the situation with unemployment, your local budgets, will there need to be concerns laos that you are concerned about . Senator grassley the Legislature Passed a budget for 2021 and did not have to get too far into raining day funds, they did not have to cut back whole lot. From the standpoint of the state budget, it is pretty good. Billions of dollars from the federal government, the first 150 billion that went to states. Whether it is iowa or other states, we will want to know how much of that money has been spent before we decide how much money we ought to give to state and local people in july, when we do another cares act. David that is what i was going to ask. Do you expect there to be another cares act by the end of july, august . Sen. Grassley the answer is yes, sometime after the fourth of july but before Congress Goes out on summer break august 7. I think there are several things we want to take into consideration that the house and the pelosi bill did not take into consideration when they passed 3 trillion that has a lot of things in it that are unrelated to the pandemic. For instance, a bunch of things about federal election laws. Let me explain, number one, how fast the economy has turned around. The faster it turns around, the less there will have to be consideration in the second cares act. Saiddly, i have already 150 billion going to states. How is that being spent . If it is not being spent, you can probably give them flexibility to spend it any way they want to, other than covid19. The other thing is, we still have tens of billions of dollars in Health Care Part of cares that has not been spent by the states, or even out to the states. We want to see what the impact is there. Is, just to get a feel from the economy growing or not growing, how much short state and local budgets will be from the income they are supposed to have. David you have address that with respect to the state of iowa. Is the economy coming back, what is the level of unemployment, how is the state doing . The state is doing well except for low prices and agriculture, some of the problems we have had with meat packing. Although i think it got down to where a lot of plants were closed. I think we are back to 95 production of what it was a year ago. That will make sure we have a good supply of food for the consumers in america. We have a great insurance industry. I think it is pretty strong. We have Good Community banking that is strong. Manufacturing slowed up a little bit but Governor Reynolds did not shut down the state as much 80 ofrs did, so about our workforce was considered essential. She is now opening of the Small Businesses and the restaurants so they can go back to work. Hospitalsmall county that were hurt, where they get most of their money from elective surgery, that is picking up again. Is still some reluctance for people to go to restaurants because of covid19. I have been to a few restaurants in the last two weeks and they are very sparse. Be a lot before they can make money, but it is turning around. David there was a time before the pandemic, if we can remember, when the concern with the Agricultural Industry was imports from china, our trade relations with china. Is that still a pressing issue, have other things taken over it . Sen. Grassley i think other things have taken over from this standpoint. Prices of agriculture products are still very low but we have that agreement with china. Oftook affect the last week february. I have been watching it ever since. Also getting reports from bob lighthizer, our special trade representative. It seems to me china is trying to live up to their agreement, buying what they are supposed to , but the only downside with them not keeping up with their premises is the chinese economy. Shape,ot in very good definitely not in as good shape as china wants us to think they are. David appreciate you being with us, senator Chuck Grassley, republican of iowa. In the meantime, politics go on. No,re bringing in june is a professor of Political Science at iona college. There is chair powell, the coronavirus, but lets check on politics. One thing that we are starting to see is holes in some of the border states, the key states for President Trump, moving away from him. Is he starting to get dinged by his performance . Jeanne he is. We are now three weeks in and his Approval Rating has gone down according to most trackers. That is a result of this twin hit he is taking. Number one, his handling of the pandemic, and number two, his response to the protest. Both of those things have hurt him, people dont like the way he is handling those things. We have not only seen it across the country in his Approval Ratings but in these swing states. The biggest concern for his campaign has to be the number of swing states is expanding. He is now having to focus on states like texas and oklahoma, states that he should not have to focus on, where he is now potentially vulnerable. As that number increases, it means it will take more of their energy and resources at a time when it is hard to get out and campaign that he likes to. Thed in so far as president facing challenges, what can he do to turn that around . Bloomberg has reported the administration is considering a 1 trillion infrastructure package. If they come up with Something Like that in september, does that do them much good in november . They cannot get any jobs created in that time. Jeanne he is running up against the calendar now but i think its strongest area remains, if you look at the economy, his handling of the economy, people have more faith in him and the republicans than the democrats and biden. He should focus like a laser beam on that. The infrastructure plan is something that we keep on hearing over and over again but im not sure that he can tout it , if you can get it passed. As far as impact on the economy, it is difficult to imagine that we would see Something Like that by november. It will be a challenge for him. It will be more of him talking about it from a pr and marketing perspective than seeing the impact on the economy, jobs, which as the chairman just talked about, is the main concern at this moment. David people have underestimated donald trump before, and he has pulled it ou t, including becoming president. His best path to victory. What heis he can repeat did in 2016 by going through the rust belt. That will be more challenging now with joe biden as his opponent, and given the fact that he is the incumbent. Best is still through the rust belt, focusing on the economy. He can make the case that even given the pandemic, he was able to bring the economy back to numbers that are percent respectable. Next year, as we keep hearing everyone say, will be a strong year for the economy. And to point to the stock market, which has not been doing badly. Race play a significant issue in this election . Absolutely. That is why we are here from the president today, releasing this executive order. They are trying to have an impact. He will also talk again and again that under his watch africanamerican unemployment went down. He did pass a huge crime bill when he came into office, so he has victory to talk about, but his rhetoric makes it all the much tougher for him. , terrific to zaino have you with us. In the second hour, we will be talking to the aflcio. This is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Vonnie it is 1 00 p. M. In new york, 6 00 p. M. In london, and 1 00 a. M. In hong kong. Welcome to bloomberg markets. Im vonnie quinn. U. S. Stocks are rallying, the s p 500 gaining more than 2 right now. Jay powell says the u. S. Economy may be bottoming out as retail sales jumped by the most on record. Investors applaud the feds move to buy individual corporate bonds. Optimism even as florida and texas see coronavirus hospitalizations surgge. Beijing is also shutting its schools, signs that the outbreak is worsening in parts of the world. And we speak about the Recovery Efforts with the coo of fedex office. A glimpse into how regions across the United States are getting back to business. Lets take a quick check of the markets. We have indices rallying 2 or more. The dow is up 2 . The s p 500 at 3