Want to highlight energy. It is at the bottom of the barrel, down 1. 6 . Part of thousand of cyclical trade we saw the beginning of the week on monday. 8 also have oil lower today. I want to stick on oil. Even though it is lower today, it is still up in a massive way on the month. It has gained nearly 80 in may, the best month on record. Supply and demand in the market starts to look more balanced and wti is ending the month around 33 a barrel. David . Waiting to hear from President Trump. We have already heard from jay powell. Earlier today our colleague Michael Mckee sat down in an exclusive interview with Loretta Mester, the cleveland fed president. They talk about euro curve control. Yield is flater at the short end, so maybe with the Forward Guidance it is not necessary to do something to emphasize the Forward Guidance. I do not want to take it off the table is something for me to think about as a possible tool. I do not think we needed at this phase, or do i see so much forward we would need to use it. If we were to use it, i would view it as a reinforcement for Forward Guidance for the short end. David that was Loretta Mester talking with Michael Mckee. ,ow we have Michael Mckee archie economics and policy correspondent. That was Loretta Mester. Chair powell did not talk much about yield curve control. He did say read my lips on negative rates. Michael that is a message they keep having to deliver to the markets and im thinking they are getting annoyed. They tell us over and over we will not do negative rates and people in the markets do not believe them. They have a history of giving into what markets demand. Once again, it is bad for the banks, it is bad for our money market system, and we do not think it will work. He poured more cold water on the idea of negative rates and went back to what the fed has been saying all along its next move would be. Forward guidance and using the qe process. Yield curve control is a little bit of a variation on that. Loretta mester said she is not convinced yet, but it is certainly something they are looking at, which is what John Williams told us earlier this week. David he also talked about a risk of a second wave of the virus and they might need some of those tools. Michael that was one of the key takeaways. He emphasized as others have that the key to getting the economy back is the confidence people have in going out, in shopping, in spending money and going back to work. Confidence they are not going to get sick and die because they do that. He is worried that if you had a second wave, the confidence we are starting to see would go away rapidly, and that would have a major impact on the economy going forward. Finally, this main Street Lending program is really coming. A matter of days. Michael they will change the name to the gadot Lending Program. [laughter] he says in a few days, so i assume by the end of next week. The fed has been worried about setting up an entire Lending Program from scratch. Banks normally have relationships with their customers and companies, especially nonpublic companies that are not rated. They know whether they are good credits are not. The fed does not know whether or not to land. They have to set up a system to figure that out and see who is a good credit and what the price should be to make sure they get their money back, which is a requirement of the program. David a whole new business for the fed. Thanks to Michael Mckee. Great reporting and in that interview with Loretta Mester. Here we will be talking to new Jersey Governor Phil Murphy about the struggle they have with the coronavirus and how they can budget role they have to fill. That is coming up on balance of power on Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. We turn to Mark Crumpton for first word news. Mark scientists are raising questions about a study published in the Lancet Medical Journal last week that late antimalarial drugs to increased heart risk and death among covid19 patients. A group of researchers is pushing out inconsistencies and asking for more details about the analysis. Researchers are skeptical of the death rates reported from africa and they say some of the doses used in the United States seem too high. In the u. K. , people are broadly abiding by the 10weekold lockdown but are still worried about contracting covid19. They are also increasingly fearful of losing their jobs according to a new study for kings college, london. It found 41 of adults left their homes fewer than three times in a seven day period. 14 did not leave home at all. Fear of catching the virus was a primary factor. South africa has a backlog of nearly 100,000 unprocessed coronavirus test. There is a shortage of kids. South africa has conducted more tests than any other country in africa. More than 655,000. Than 2 million tests have been conducted across africa, which is home to 1. 3 billion people. There was a third night of violence in minneapolis over the death of a black man in police custody. Hundreds of people protested and set fire to police station. President trump tweeted the demonstrators were thugs and threatened to send in armed troops. That led to twitter flagging the tweets, saying it glorified violence. That was hours after the president signed an executive order targeting twitter and other social media. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. David . We satlate yesterday, down and talked with Governor Phil Murphy of new jersey about his states battle against coronavirus and what lies ahead. New jersey has led this pandemic, someways in a good pandemic, someways in a good way with the number of cases, and in some ways the rest of the world and the smartest way to start to reopen . Gov. Murphy i do not want to pat ourselves on the back. We have lost 11,401 souls. We have been pancake. Folks what we can offer themes, which is public ,ealth creates Economic Health and as much as we are all chomping at the bit to get everything open, if we transpose those steps, or we jump the gun, i think we throw gasoline on the fire. We have been deliberate in the second handed glove with that. We say all the time that data determines dates. Inasmuch as we do not want this to be abstract we eulogized a handful of people every day. I call families every day to is this is moneyball. This is what the data is telling us. This is what the date is allowing us to do. I hope we get that right. So far, so good. David you also gave credit to people in new jersey for complying with restrictions not easy to comply with. You mentioned chomping at the bit. As you start to back off, and it is not just an onoff switch, it is by measures, how do you ensure compliance . It will get harder and harder. Bothmurphy i have to say individuals in terms of staying away from each other and wearing face coverings as well as businesses, both big and small, the compliance has been overwhelming relative to any expectation. Clearly, since the weather has gotten warmer, as the clock has continued to take, as folks see other states less hardhit new jersey and new york, that is all human nature and i get that. Are there more folks today than there were a month ago saying i will open on june something . There are some more, but i will say this the other point i would make is we have started to open up. We recognize that we need to take steps over the next few days and over the next few days we will announce a lot more steps. For the most part, folks have done the right thing. David what about the politics of it . We have seen a fair amount of politics involved. People are not just clamoring to get back but pretty active in it. What is the politics in new jersey . Do you have the legislature with you . Do you have the politicians backing you . Of been somethere demonstrations. Nothing like the scale we have seen in michigan, but pretty regular demonstrations. I do not begrudge that. We would prefer folks did virtually and they do not congregate, but that bothers me more than the demonstrations. There is always exceptions with any legislature, but we have had a grudge a good across the aisle giveandtake, we have needed them. We need laws to get past. We need and ability to borrow money to fill up the normas budget hole we have to fill up the enormous budget hole we have. Naturally in any democratic reality there will be folks who do their own things, but for the most part we have been in a good place. David one of the tricky things is reopening schools. Fortunately, most people are not going to school anyway, but you have the fall coming up. A lot of uncertainty about how that will work. As you approach that question, what are the things you are considering about how and when to open your schools . Gov. Murphy we have promised folks by mid june we will give the guidance on prek12, and we are clearly talking to the university and Higher Education community constantly as well. My bias is we get back to school. We have done the virtual stuff as well as any american state, but there is a whole host of reasons, including mental health, the richness of the experience, i want to see us back in school. It has to be a new normal. If you asked me a different question but relatedly, what is the hardest not to crack, i think it is going to be the asymptomatic, unwitting student who could pass this virus to an older educator, administrator, someone with Underlying Health challenges. That will be the one piece of this we have to get right. I think we can with social distancing, face coverings, maybe virtual instruction, even within the bricks and mortar reality. We have to make sure we get that right. Of the things you said is a challenge in new jerseys longterm care facilities. What are you doing about that . How can you protect some of our elderly, people with underlying conditions . Gov. Murphy we have been clobbered in longterm care. We are not alone, but of the 11,401 deaths, almost 5000 or from longterm care facilities. Either way, early on, what i just mentioned about schools, early on that was the spark that created the fire, the asymptomatic, unwitting, heroic Health Care Employee or loved one visiting and unwittingly passing it on. We are throwing the kitchen sink at this, including the uneven operator performance. The attorney general has an investigation outstanding. The national guard, i am happy to say the president has reupped the funding. They are in a lot of our longterm care facilities. The federal Veterans Administration has helped us out not just in our veterans homes, which have been hit, but also another homes. We hired a nationally renowned firm. We are now in the process of universal testing and retesting, separating patients, positive from nonpositive. We have learned a lot of lessons. That industry has learned a lot. , the hard way, unfortunately. First and foremost, this is a health issue. You pointed out in every one of your briefings as you put the photos up of people you have lost in new jersey. It is an economic issue, without a doubt. We are getting increasing numbers of unemployed. I think it is one in nine you are up to . You see a bottom to this unemployment and its starting to turn back around . Gov. Murphy we see it sooner than later. I think it is correlated with a couple of things. Number one, the continued responsible reopening, that we get that right, that we are going down a oneway street. I do not want to turn the car around and go back the other way. Secondly, i will give you a big game changer. That is direct federal cash assistance to states and municipalities. It is talked about, there are a couple of bills, including bob menendez, one of our great senators and cosponsor with republican colleagues, bill cassidy of indiana, is a good example, Speaker Pelosi with the heroes act. We need that, not just a blue state, not just new jersey, all american states need that. Frankly, that is the biggest potential accelerant that is available to us to reboot our economy and get as close to that long sought after vshaped recovery. That is the biggest game changer available. David give us a sense of those numbers. How much of that is just filling a whole, and how big is that whole how big is that hole and how much is it you need to reinvest and get things going . Gov. Murphy i will give you a couple numbers. We announce the budget for the next four months. We extended our fiscal year to september 30. We are talking about four months in a few days. We had to divert well over 1 billion of expenses. We set the revenue loss as best we can tell, from june of 2020 of 10une 30 of 2021 billion. This is the difference between there is a myth we will just help you because you have managed your legacy realities, your outstanding indebtedness or your structural deficits or your pension obligations, we were doing just fine with that. It is a long slog but we are making a lot of progress. This is about keeping firefighters, police, health care workers, educators employed. The consequence or the alternative to not getting that weding is a lot of layoffs, think 200,000 more at the state level alone in new jersey. David what does that do to services . Gov. Murphy it would got them it would gut them at the moment we could least afford them being gutted. Our residents need those workers, literally, more than ever before. It is unfathomable, which is why the case is so compelling for the federal cash assistance. David are there ways to make up the federal shortfall in other ways, i know you of increased tolls. Are there tolls or license fees so you can get more revenue . Gov. Murphy perhaps. I do mean this. The hole is so significant, it is not just new jersey, i do not think there any amount of taxes that comes close to filling the hole up. We are already estate that is not the cheapest place to live in america. People come here to raise a family. We have the number one Public Education system in america, the best location of any state. We live on talent and location. This is one of these moments where the federal government plays that existential role that no one else can play, and we need that role to be played to its maximum. David what about infrastructure spend. We haverd your heard andrew cuomo say lets advance some of the infrastructure. Gov. Murphy i love that. The tunnel is something Governor Cuomo and i have been pounding away on. We think it is a game changer. This is building two tunnels under the hudson river. The current ones were built in 1910. It is a new bridge on our side. It is reimagining penn station on the new york side. That is a great example. The good news is the trump and ministration just forwarded 99 million of the new jersey side of that, but infrastructure is a potential game changer. It employs a lot of folks. We are proud union state. That is a good thing. We will take that absolutely come as soon as possible. David President Trump has had some nice things about you despite the fact that you may be on opposite sides of the aisle. Have you talked to them about this . Have you got encouragement that is a good idea . He wants infrastructure in general. Gov. Murphy we speak pretty regularly, and we have spoken about the pandemic, but we have absolutely spoken with him and. Is team up and down iestion, infrastructure would not say magic bullet, but it is one of those levers. Fdr pulled the lever in the 30s for a reason. Is youer great thing have not only Economic Activity and employment in the here and now. The great thing about infrastructure is it is there 50 years from now and future generations benefit. It is not a wasting asset. I think theres a lot of potential, without question. David talking about gdp growth, that is a quick way to get it. Finally, give us a sense over the horizon. What sort of changes do you anticipate from the pandemic for new jersey . Do you think people after this is over will continue to commute in daily into manhattan, or might that change some of the patterns . Gov. Murphy a great question. I do not know that any of us know the answer. My guess is we have been changed permanently, from the little but important stuff like social distancing and wearing face coverings to the bigger things. We have a restarted Recovery Commission that i announced a few weeks ago with incredible wise women and men. The former president of princeton is a cochair. The ceo of burke is a cochair. Ben bernanke. These are the sorts of questions they are wrestling with with us. We get about 25 or 30 of our workforce that commutes to where they are going and could, if they choose to, stay at home. Most of them have done just that. There is a huge potential shift in that. You have another group of folks who have no choice but to be close to other coworkers or to the customer. I think that experience will also change. I think we will look back five or 10 years from now. I know this is trite and people say it, but i think it is real. 9 11 in your prior life we will look back five or 10 years from now as we did after 9 11, and things we never imagined or part of our lives and we took them as a natural part of our life, i think the same thing will be true here. David if you will permit me, let me ask a personal question. How are you doing . It is not lost to me that the first day you had a case new jersey you are undergoing serious surgery. You came back. We have watched you keep up this pace. How is your health . How are you doing . Gov. Murphy i appreciate your asking. Knocking on somewhat, so far, so good. I had major cancer related surgery in my kidney on march 4 and i went to the Recovery Room and got rolled into my hospital bed and i checked my phone in the f