Distribute 300 million doses of the Coronavirus Vaccine in india. Says it is paired with an Indian Company to conduct phase three trials in india. A top Indian Health official calls the partnership a winwin for india and the world. In lebanon politicians have missed a deadline to form a new government. The deadline was set by Emmanuel Macron who has been pushing lebanon to an act urgently needed reforms. Lebanons struggling economy took another hit when an explosion killed nearly 200 people, injured thousands and caused losses worth billions of dollars. 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. It is 1 00 in new york and 1 00 a. M. In hong kong. Welcome to bloomberg markets. Here are the top stories. It is fomc decision day. Unveiling a strategy on inflation. Today they have the opportunity to back up their plan with details as they look to accelerate the u. S. Economic recovery. Berkeley economist and political hasntist Barry Eichengreen been refracting on the pandemic. His thoughts on why october could be the most dangerous month of all. Washington lost a trading heatingthis week and is calls on aluminum tariffs after canada was ready with retaliatory measures. Theghts is our from president of the National Foreign trade council. Lets get to the markets because we are seeing markets just calm off a little bit. The nasdaq is negative. The s p 500 up above one third of a percent. Ipo, we willessful get to in a moment. The dollar index is below 93. We will ask Barry Eichengreen about the dollar in a moment. Crude oil back about 40 per barrel. Many elements to this. Trader is commodity saying now is the time to get into commodities in general. No doubt that supplied a bit of a bid. I want to point out snowflake because we saw the ipo today. It is hugely successful. 110 . It is valued now at more than 33 billion on the outstanding shares listed. As compared to 12. 5 billion in a private funding round in february. 18 companies took on u. S. Exchanges this year in this space. Debut, it looks like snowflake will add to that list. It is the biggest ipo this year excluding the 400 backed by bill ackman. Both in terms of Public Health and the economy. He writes this in the guardian. There is a more perilous phase for the economy. In march policymakers pulled out all of the stops, but there will be less positive support now if the economy goes south. Barry eichengreen joins us now. Suggest that you think the danger belies the Economic Health we are experiencing. Give us your forecast for the last quarter of 2020 and into 2021. Barry the economy will probably its the covering recovery will continue to slow moderately. More physical more fiscal stimulus or not, the picture is clouded. Number two, what will happen with virus in terms of renewed spread in flu season and in the longer run in terms of efficacy and the takeup of a vaccine. What should the Federal Reserve do given that there is no movement from washington . Nancy Pelosi Says Congress will not leave until there is stimulus and yet we dont see anything coming down the pike. Barry neil irwin has an interesting article about the more policy moral hazard caused by the fed, the more stimulus, the less Pressure Congress feels to do anything. The fed has to do what it has to do and i think disregard the congressional reaction at the end of the day. But i expect the fed to remain squarely where it is at the moment that its recent policy tweak is simply a tweak. It is another form of Forward Guidance and does not change anything fundamental. Vonnie what would be your prescription for the Federal Reserve . Dohas an opportunity to something different. It is the first time it has had this opportunity in a long time. The market is expecting something different. What would you tell the fed chair to say . Noty i would urge him to overpromise, that i dont think the fed has additional ammunition, new instruments relative to what it had before. I think the new policy framework is a modest innovation relative to the old policy framework. Hopes get the markets high, it ends up being disappointed. He need to provide Forward Guidance and new policy framework that enables him to change his rhetoric as a way of doing that. Vonnie in terms of the Public Health aspect, we are getting different forecasts for when a vaccine would be widely available. Generally the thinking is it is going to be further away before everybody gets vaccinated rather than closer. What is a longer period of time before vaccination mean for u. S. Economic growth . Barry it means that the recovery is going to be very ushaped at best. People are going to be reluctant to get back on airplanes, reluctant to go to Indoor Dining establishments until vaccine is widely available. Importantly until many people have taken it. Until the person sitting in the airplane seat next to you has been vaccinated and is not carrying the virus either. From what we know from epidemics passed is that people become increasingly skeptical about the efficacy of vaccination having lived through an epidemic. They fear officials overpromising about the safety and effectiveness of vaccination and they react to that. I fear we are already seeing that reaction. Vonnie given that we also have the uncertainty of a president ial election coming very soon after october, the month you mentioned in your writing, what is the worst Case Scenario . Do you see the economy with a negative gdp in coming quarters . Barry i think a negative print in the First Quarter of 2021 is entirely possible. We need to remember that there is a period of uncertainty between now and the election but there is even longer period of uncertainty between the election and the inauguration and that could be a period of Political Economic and financial volatility as well. Vonnie in terms of getting something done in washington, there is a line of thinking that no more fiscal stimulus is needed. There is also a line of thinking that it is very much needed in order to stop certain people from actually starving, from not having enough food to eat, never mind getting back to jobs. What would be a middle ground, something that you see happening between now and the end of the year . Bery a middle ground would 2 trillion halfway between the initial democratic and republican opening bids. One hears talk about 1,000,000,000,000. 5 1. 5 trillion at the moment. I think that action is needed. The cases is found on economic grounds. I am 3000 miles out of the beltway and it is hard to see clearly from here how the two sides of the ill get to an agreement. The pressure on them to agree is intensifying. That does not mean anything will be down done between now and november. Vonnie in some ways it feels like a lot of things are going s isg and a lot of the onu on municipalities and states to fix this. Is there an argument for state spending and not worrying about the tax . Barry states can do that to a limited extent. They have legal restraints on their ability to run deficits. If california runs a bigger deficit and plans to pay for it by raising taxes in the future, people and business move to neighboring states. This is really first and foremost a problem that has to be solved, deficits that have to be financed by the federal government. There is no way around that. Vonnie we are already seeing some move to nevada. A great story about how home prices are going higher on the anticipation that people will move to the no federal tax state out of california. Talk to us about the dollar in the few minutes we have less we have left. We saw it back again below 93. How much does this impact the dollar . Barry i dont think it is one of the leading problems for the u. S. Economy. If anything it is more of a problem for a more exportoriented european union. What we are beginning to see now is ecb officials pushing back against the strong euro. It takes the European Central bank and while, longer than the fed, to get its act together, to get its messaging together. They are all over the map at the moment. They are swinging toward the view that steps need to be taken to keep the euro from strengthening further against the dollar. I think they will eventually do tot and the dollar is likely stabilize against the euro on that expectation. Vonnie this is obviously a global problem. We tend to concentrate on the economic effects in the u. S. But beyond the fact that there are primary economic effects on nearly all of the other countries in the world, there will be secondary effects from the u. S. , gdp wise. Are there areas in the world that you are concerned about . Barry i am concerned especially about latin america where politics are fraught. Where the virus has hit very hard and stretched health systems. If you compare east asia with latin america, it is almost night and day in terms of economic prospects and the health situation. Vonnie thank you so much for joining us today. Always appreciate your insight. Barry eichengreen of the university of california berkeley. Coming up, counting down the fed decision, less than one hour away. We dig further into the Central Bank Policy framework in a moment. This is bloomberg. This is bloomberg markets. I am vonnie quinn. It is time for the stock of the hour. Fedex has been keeping busy during the pandemic. It showed in q1 earnings. Here is a look at how good it was. Very Strong Quarter for fedex. This is not really surprising. We are in the middle of a pandemic. More people are staying at home and Online Shopping to get goods delivered to their home. That is where fedex is benefiting in a huge way from that phenomenon. Sales in the ground delivery unit are up 36 to 7 billion. Overall revenue up by 13. 5 to a quarterly record for the company. Att led to a profit now 4. 87 per share which is well above analysts estimate. Where the progress is coming from is fedex is seeing such Strong Demand it has been able to exercise significant pricing power. It has added an additional surcharge to large ground delivery customers that helped package yields rise. That makes some of the things that were lower margin more profitable. Was the stock was performing well going into the printer. 175 andmore than continuing gains today. It is now trading at its highest in two years at this point. Vonnie what do we think of the outlook . Analysts had high expectation going into the spring. Clearly not high enough. Reweighted their expectations. The average target was 2. 17 per share. Now it is 206 to five dollars per share. And the of 22 . I want to highlight some commentary from one analyst who said covid has changed the outlook for parcel carriers such as fedex. He pointed out that the growth is trading at or above peak levels well ahead of the usual isiday peak so that says it more consumptive going forward. Vonnie kailey leinz with the stock of the hour. Appreciate it. U. S. Employers grappling with the issue of how to bring employees back to the office. Davidphabet ceo tells rubenstein that innovation is fostered when people Work Together flexibility is key. Have a listen. We look forward to having people back in the office. What we are looking at is the productivity you get as people work from home sundays and be in the office with the rest of their team. If you can save people commute time, you have better access to talent because you are solving what people want in their personal life that will result in a better outcome. What that means for real state, we are still figuring out. Vonnie catch the whole episode on the David Rubenstein show at 9 00 eastern. Still ahead, will the Federal Reserve move lower will make it that latest summary of Economic Projections in the next hour. Just 40 minutes away. We will discuss. This is bloomberg. This is bloomberg markets. After announcing its new framework, the fed is expected to follow through with updated guidance when it announces its decision at 2 00 p. M. Eastern. Joining us now from princeton ath more on what to expect is strategist with bloomberg intelligence. I have been saying for most of the day, it is a chance for the reserve chair to Say Something different. What might we get from him . Ira i dont think we are going to get anything different than what we heard at jackson hole. Maybe we will get into some more specifics and detail. As you mentioned, i think that the longterm could come down a bit. Aen though they have not been great predictor of where Interest Rates will be longerterm, i think they do go into what the fed is thinking about and how low they expect to keep Interest Rates. That could be an important signaling tool for them. I also think that the statement which has gotten pretty long can actually change. There is one paragraph where they talk about what they are looking at on a forward basis and that is an opportunity for the fed to clarify and codify within their operating framework what they are going to look at of theirtion and both mandates have to be met in order for them to move interest rate. Vonnie we were just talking to Barry Eichengreen and he was saying the fed should be careful not to overpromise, that there are some things only some things fiscal support can do. Is there a danger with overpromise today . Ira i dont think so. Chair powell and other advisors have discussed that there are limits to Monetary Policy. Even cutting Interest Rates to negatives they have in a lot of the world has not necessarily boosted loan demand and has not seen an significant uptick in inflation, spending or growth in the economic situation. I think jay powell will say that again and say there are limits to Monetary Policy but we are going to do whatever we can and that means committing to keeping Interest Rates low. I think it is that prolonged period of time type language that you have to look out for because that is the difference between the new operating framework and the old operating framework. Vonnie you mentioned changes to the statement. That would be a pretty significant change. It has been a long time since the template has changed. Can you give us detail on what you anticipate and how it can move the markets because treasuries are not going to break out anytime soon. What part of the market might we see move . Ira i do think that depending on how they couch the language, it is possible we could see some flattening of the yield curve. That is long yield curve treasuries like 10year year and 30 year treasuries. They might come down a little bit. The front end is not going anywhere and it is not going anywhere for how long, that is what the market wants to see. It is not that the fiveyear will move, but it is expectations of where will the fiveyear be five years from now. I think that is what the market will be looking out for and the important language you mentioned in the statement. Every single word, that is what we do these days. Vonnie one question for the fed chair . Ira i think you want to ask him what is the symmetric mandate. How is 2. 5 inflation going to be handled if it is there for a year . How long is that period of time that they are going to tolerate longterm inflation . Vonnie just checking out the fiveyear forward as we speak. Thank you for your intelligence. Ira jersey of bloomberg intelligence. Coming up, 35 minutes away from that fed decision. With nickeak maroutsos, head of bonds at Janus Henderson. I want to point out we are seeing Market Movement before the fed and also as we see snow started trade. The downside is picking up for the nasdaq. We are still positive for the s p 500. In terms of the dow jones, it is at highs of the day led by chevron because oil is trading above 40 per barrel for the first time in a while. A nice pickup following the blank lines. This is bloomberg. Mark i am Mark Crumpton with bloomberg word news. Top u. S. Health officials are giving conflicting information about a covid19 vaccine. Atop health and Human Services official said today everyone should be able to get a shot by the end of march, but in senate testimony, the head of the cdc said a vaccine would likely not be available until late spring or summer of next year. That timetable is more in line with that of the nations top Infectious Disease expert, dr. Anthony fauci. Who has said americans should not expect a vaccine to be widely available until mid2021. British pm Boris Johnson is defending his countrys troubled covid19 testing system after what officials call a colossal spike in demand. He was questioned in the house of commons today following reports of many u. K. Citizens being unable to get a test. What is happening, mr. Speaker, is that the british people, quite understandably, art responding to that system with a huge, huge, surge in demand. It is very important that everybody follows the guidance about when they should be getting a test. Mark johnson also faced criticism over the turnaround time for covid19 tests. In june, the Prime Minister promised that all in person tests would be back within 24 hours. The u. S. Supreme court says it will begin its new term next month by hearing arguments over the phone. The justices, who heard arguments by phone for the first time in may, said they will do so again for the two week session that starts october 5.