Bit of the rising yield. 65 basis points on the 10year. Throughout the day, i think my theme has been trained to gauge investor sentiment. Maintains, stocks can these high levels. If you go up to 1 or one and a quarter, he has to massively rethink his price target. Then you get to the relative trade. Of course, earnings yield lower than the 10 year treasury at the moment. But if it starts to climb a little bit, how does that affect the relative value . Caroline we have had that sort of worry. Mike wilkins at Morgan Stanley also saying, we are worried about rates going higher and what that would mean for stocks. Whiting is still with us. This week, we get a little bit of messaging out of the fed. Are you expecting to hear anything out of powell or any of the other members that would give you a better assessment of where Monetary Policy might go . Steven it is possible. Chairman powell has been relatively quiet about healthy Federal Reserve might adjust its framework for achieving its inflation goals. Pastdea of making up for disinflation. The 10 years after the financial crisis, the inflation measure rose 1. 6 cumulative. Fedargument is that the needs some overshoots and inflation. Index,e the pce price which is almost like saying it things you cant afford. I only bring this up because inflation is high or going to be high, but how Central Banks may target in the future. The most important thing about the fed here is they have not done to do what japan has and target specific treasuries. What is really important is that we have private credit expand and allow the economic expansion to occur outside of u. S. Government borrowing. Of course, the government will be able to borrow as needed by the fed. Depends on private credit. That is what we want to hear about. Hasline the fed of course time and time again tried to shift the focus away from what Monetary Policy can do. You have any sense for if further stimulus will, will come . Steven i think what is important here is that our government has time and time again provided help where it is needed. Cases where there has been some need to expand insurance benefits. The administration found a way to do that. I dont think this is absolutely critical to the path of the economy. Importantrus is still to the path of the economy. Ultimately, if is going to hold back recovery, we will see the government to more. I think people assume there has to be some massive program. The economy is finding ways to adapt. We have important parts of the economy that just cant fully improve until there is some way to pass this virus. Taylor does the fed need to cap yields on the long and to get rid of these 20 and 30 year bond options and help us fund our bond our budget deficit . Atven we started this year a 1. 9 yield. If you had an economy that was able to operate normally, you would not have to cap Interest Rates in the treasury market. If it was the only problem we have government policy failed, we could have lower Interest Rates. What really matters is private credit markets. Ultimately, borrowers have been impacted here. Those borrowers and get things that that get done in credit markets a much more important than treasury yields. Caroline steven whiting, global chief investment strategist at chief economist at citi private bank. More, next. We will be looking at the global inflation story as we move into that virtual jackson hole meeting. The symposium held virtually this year. This is bloomberg. Caroline im caroline hyde. This is Bloomberg Markets of the close. It was inks unless the percentage Point Movement we ended up seeing. For once, we had some breadth. Financials, Energy Stocks pushing up as well. Taylor we have to push that story forward and we do that when we go to jackson hole later this week. Inflation, it is back in vogue. The question, is there actually real inflation. I am hearing a lot of talk from people who nail this every time when they say, yes, Inflation Expectations are rising but that is mostly due to the liquidity premium. You take out that liquidity premium and there is really no inflation. That is part of why we heard from jay powell, saying he does not see demandside offsetting some of the supplyside pressure. Bring in rich miller, covering the economy for quite some time. This is the first time in a while we have Betty Jackson hole meeting that was not actually in jackson hole. Is there a message that you think he is going to give with regards to the trajectory of economic policy, with regards to the inflation targeting, or are we may be putting too much stock in this . I think we will get some broad outlines of what they are doing. For the past year and a half, they have been doing kontaveit route branch review of their policies and practices. I would suspect we would get some broad outline of where they are headed. A subtlel probably be yet pretty important change of how they are focused on inflation. Rather targeting it at 2 , saying it doesnt matter if we have been below 2 , they will probably switch to Something Like average inflation targeting, which will mean that we are willing to take some inflation above two percent if we have had for a long time below. That means lower rates for even longer. Getor except we cant even 1 . Why in this moment would we change to quote averaging above if we cant even get there . It is a good question. It is one thing to talk the talk, another thing to walk the walk. Keeping open that by ,ates very low for a long time by shoveling out a lot of qe, it will overcome some of these strong disinflationary forces that we have seen over the years, everything from globalization to technology. As you point out, theres a lot of people in the markets. Despite the rise in breakevens. Even if you take them at face value, they are still well below the levels the fed is targeting for inflation. There is a lot of reason to be skeptical like you are. Caroline many worrying that perhaps the thursday speech coming from powell might be underwhelming to the markets. The jackson hole symposium has brought blue sky thinking as well at times. Last year, the boes leader as well as the canadian superstar was himself, mark carney, talking about in theory a move toward virtual currencies. Do you think anything like that might come out of a Virtual Meeting or will we be more focused on the virus . The virus is so allencompassing. You hit an unusual situation with carney on the way out so we could basically do a lot of blue sky thinking. The economies around the world were doing very well back then for the most part. Kind ofafford to be that the sky thinking. I think that will be focused on covid and in the u. S. And europe, how can we avoid becoming japan . How can we avoid becoming a country kind of settled with lower Interest Rates for years, but also has inflation that is very low and seemingly always a lurking threat of deflation. Romaine all eyes going to be on the virtual summit, jackson hole , being held by video. Lets get over to Mark Crumpton with the bloomberg first word news. Mark romaine we are having trouble with mark right now. Taylor, you hit on this a little bit earlier about the general sense, the market wants some sense of what that inflation targeting will look like, whether they are willing to let inflation really run hot as most people seem to be pricing in. Taylor i would urge you to check out a Bloomberg Opinion column by brian chappatta, where he breaks down that inflation has gone nowhere. I kept thinking we were in this higher inflationary environment. On some of the dynamics going into some of these gauges in which we measure inflation. Romaine i believe mark has got his tie on now. Scientists believe is the first documented case of reinfection, a hong kong man as contracted the coronavirus for a second time about 4. 5 months after the initial bout of the virus. They determined that the 33yearold had been infected by two different strains. He did not develop symptoms the second time which could indicate subsequent infections may be milder. Thee are new signs that pandemic may be easing in tokyo. Last week, the Government Advisory Panel said japans covid19 wave has more or less reached its nationwide peak. The japanese Prime Minister shinzo abe visited a tokyo hospital today for the second time in about a week amid concerns that he could be suffering from a flareup for any ailment that once led to his resignation. He tried to dilute worries about his health, saying he was there to get test results from his last visit and wants to continue to work hard. Japans longestserving Prime Minister. In belarus, the Prime Minister is vowing new steps to crack down on opponents. Demonstrations brought tens of thousands of people into the streets over the weekend, demanding his resignation. He was seen on state tv flying into his residence in a helicopter carrying an automatic rifle and wearing a bulletproof vest. Thelaims a landslide in election which triggered the protests. 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. Im Mark Crumpton. This is bloomberg. The National Conversation around race and inequality is front and center the the past few months focus has been front and center also on the very few black venture capitalists in Silicon Valley, highlighting the obstacles they face in trying to create opportunity for others. Bloombergs nico grant joins us with a fantastic story really talking about how some of those successful venture capitalists who are people of color are looking at what they have managed to achieve or perhaps what they have not managed to achieve and they would like to. Can you talk about some of the key players and how they feel in this current scenario and environment . Absolutely. I spoke with tyson clark, a general partner at alphabet think, formerly Google Ventures. Of base the cofounder 10, and he actually has the distinction of being the black person who has assembly largest warchest ever for a black vc with his second fund. Garvey. To be inkes, who used the industry and left, is said to me that when she was at nea, a prominent firm here in the valley, she had introduced black entrepreneurs who were very talented and has Great Companies to her white colleagues and she would feel the chemistry in the room sour. She said that they would always use the same excuse that they would not meet that person again for another meeting, which is that they could just not get excited. The same is true about job candidates who come in. There are many vcs thinking that just about their colleagues but also their own role in the Tech Industry not being as inclusive for representative as it perhaps could or should be. Romaine im going to play devils advocate here for a second. There are people in Silicon Valley who have pushed back on this idea that there is any systemic Racial Discrimination out there. Aey to the fact that you have relatively decent percentage of Asian American and asian immigrant entrepreneurs who have managed to get funding and grow relatively profitable or relatively good companies. I wonder, what is the argument that blunts that criticism . This is absolutely an argument that some people say in Silicon Valley. Venture capitalists at mainstream firms, some of them themselves are asian immigrants or Asian Americans. And there is one person i spoke named asked not to be because of the sensitivity of these private conversations, we approachedhis who his white and asian partners at a firm and said, this firm has not been investing very much in black started companies. This firm really should be investing earlier in the process to make up for some systemic issues, the fact that black entrepreneurs may not have a friends and family around. Asianaid, no, i am an immigrant and i was able to make it. This person had to explain that there are very different experiences between africanamericans and blue immigrant to the u. S. Either already quite educated or for their education, for college or graduate school, with in different economic circumstances. Taylor what has really changed in the last four months . Nico i think what really has changed his a sense of awareness and a level of comfort about having these conversations. Which is not to say that they are easy conversations to have. Say we haveow ok to a problem at this firm. It is ok for some people including tyson clark and Google Ventures to say to his colleagues that he is not ok right now, and he needs to take time off. There are many vc firms who have that ok, we acknowledge there is a problem now and we are going to set up these funds. In the case of Anderson Horowitz and softbank, they said they would have these funds specifically for black and brown people. The problem with that is some black vcs say that this is a can to have any separate water fountain and they are trying to fundissues in their own that keeps them from being diverse in the first place. Romaine i really encourage our viewers to check out that story. That is nico grant. Taylor your Favorite Gaming company, nintendo among other 3 billion in market value in tokyo today. They are citing the popularity of Retail Investors on the sites like robin hood. The animal crossing game helped popular switchdy console. Will temporarily shut a factory in michigan next month to install machinery for the redesigned f150 pickup. Bloomberg has learned the automaker is also building a new facility adjacent to its dearborn, michigan, truck plant. They think that it will increase output of the f150 by 150,000 vehicles this fall. The coronavirus pandemic has cut into the vacation plans of millions of americans. Unused Vacation Days are piling up as a result. Some companies are allowing more days to carry over into 2021. Others are requiring employees to take their Vacation Days as soon as possible. We are not taking Vacation Days. We are too committed to our job. So we are all still here. But while were here, we can go see the movies after work. There have been some encouraging signs about people returning to movie theaters. Romaine you have theaters open this weekend, at least on a larger scale. The Box Office Take was not big. Unhinged,e called which is not a biography. It is a fictional movie about a road rage incident. The expectations were pretty low, so 4 million is pretty good considering how few screens were actually open. Atedline also, an rr story. Dont think it is going to go on my family oriented need to watch list. 50 of critics say to avoid it on rotten tomatoes. I am still going long holiday. Taylor joe is standing by, he cant wait. This is bloomberg. Caroline from bloomberg World Headquarters in new york, i am caroline hyde. Romaine lets take a look at how market started the day. Faang stocks, Energy Stocks joining the tech rally. Joe the question is, whatd you miss . Caroline while many in the u. S. Focus on the rnc, the big news from markets this week may be of fed policymakers as they gather virtually for their annual symposium at the artist formerly known as jackson hole. But not this year. Elected officials unable to deliver another fiscal deal here in the u. S. The question becomes, can the fed do enough alone to hold off this economic recovery . Joe it is the key question in the absence of a deal. Lets show some charts for some perspective of how well the market has done relative to expectation. How well measure of the data is coming in around the world versus expectations. At the highest level in history. Haveis how much economists underestimated the pace of the recovery. Romaine it is not just what is going on in the world. The u. S. Has outperformed. The u. S. A index hit a record last month. Since. Been elevated ever he talk about the rebound, you were talking about after a more past rebound this is not going to stay there. But right now, it is giving investors a little bit of hope that maybe we were a little bit too pessimistic heading into the current recession we are in. Joe i want to bring the Renaissance MacroResearch Head of economics. The charts do not lie. We have seen the economic data, whether it is globally, but we are talking in the u. S. Here, has come in significant better than economists anticipated and that explains a lot of the market rebound. In the absence of a fiscal deal, does this economy in your view have the momentum to sustain growth . I dont know that it has been a doubledip. Clearly, that is a risk. I think there are a lot of factors. For example, if all you are focused on is the fiscal cliff, you will be downbeat about the outlook. At the same time, the coronavirus is coming under control in the u. S. We are seeing cases moderate ins in hotspot states like arizona, florida, texas. The state of the virus is improving so the economy is getting better. In the background we have this ongoing job market. In the background, going over the fiscal cliff is bad, but we are seeing employment growth probably in august. It is important to recognize that the fiscal cliff is probably a onetime shock and the growth is likely to be more sustainable. I think there are a lot of moving parts. If you are just focused on the fiscal cliff, you may get sort of your view of the economy i think is going to be much more negative to the markets than mine. That is sort of how i am thinking about it. Economist, what do you and t