Have to act. Unless we get more support, i think the u. S. Will go back into recession. Isathan joining us now gershon distant belt. People, hey for many was asking fiscal policy makers to do more. Iu were the one person that have read in the last couple of days that believes that was a dovish news conference. Tell us why. Do agree with a lot of the clips you pointed out, ive been saying it for a long time. You need fiscal support. This belief that the fed or Central Banks can solve problems by themselves is silly. This is not a classical recession. There is nothing Central Banks can do to get people to go there is a supply shock aspect as well. Restaurants are not fully open. You cannot go to the sporting event. The fed can do all that wants but you need the fiscal side. In terms of the relationship to the dovish side, there were several indicators. The fed was clear, chairman powell was clear he was willing to do more quantitative easing if necessary. He didnt say anything about pulling back on it. Definite signs, in terms of the framework for how they would gauge inflation, that the mathematical components of it were that they would be slow to raise rates even in the out years, perhaps 3, 4 years from now. Definitely a dovish tone. They gave us this guidance now and many market purchases beds were expecting it in december. That is a dovish tone. Jonathan how do you push this through the yield curve . The flexibility is that the longer end of the curve but that has been extremely range bound. How do we think about the evolution of the shape of the Treasury Curve . Gershon it has been range bound but if you look at the ratio of the implied volatility of the 30year to the 10 year, it is at alltime highs. You see that when the front and is anchored and the long and is not. That is telling us, as you point out, the front and cannot do much. The fed isf successful at creating inflation, you will see the long and selloff, and that is what we see in the volatility markets. The question is can the fed generate inflation . Dont get the demand created, fiscal stimulus, you will have a hard time getting inflation, and even by the feds own numbers, they dont see inflation getting to two percent for at least three years. Jonathan they dont see the overcast in the forecast. Do you think that asymmetry function is conducive to a steeper yield curve . Gershon in general it is. The milliondollar question is what is the appropriate level of steepness . That will also get into the appropriate level of credit spreads. Knowing you, i know that we will talk about that in a moment. Jonathan we will. Gershon it is very hard to gauge. Isn we say the short and anchored, what does that mean . Controlsnly directly the very short end, but indirectly, some might say directly because they are buying securities, they control other parts of the curve now as well. Jonathan looking at the equity market falling out of bed on the back of this fed decision, interesting to see pretty isolated in equities, resilience in credit. Thinkingat you are about this parallel between the u. S. And europe and whether the u. S. Is taking on european characteristics. For people not familiar with the argument, can you take us through it . Gershon let me put on my american face mask here. Jonathan there you go. About to answer with an american face mask . Gershon no, i am alone here. Particularly in the highyield market, we are at a high inflection point. The quality of the market has increased a bit. It is 55 bb. Is 3. 7wth in cccs. Rillion of just bbb debt that is more than double the size of the highyield market. The question is, if you look at the highyield market with yields about 5 , is it a yield market or is it a spread market . The reason that is so important to talk about, historically speaking, despite the fact that we talk about spreads a lot, highyield has not treated as a spread market. The correlation between spreads and underlying treasuries has been weak. When yields got to these levels in europe, people said highyield is not attractive, it cannot rally more. How much lower can yields go . We have joked about this in the past. Look what happened. Wentlying bond yields lower and lower and eventually negative. What will happen in the u. S. . Go . Much lower can yields or will it be a spreads market . Not that treasuries will go negative, a lot of reasons why they will not, but if they stay low for a long time, especially at the shorter and, which is where highyield is at, it will be a spread market, and the spread will keep on narrowing. We will see price appreciation in highyield. You have always gotten more return than just the loss embedded in default. Is there an opportunity in highyield, is there not . It is a potentially relevant question now. Jonathan that is the question, lets talk about how the answer is developing. What are you looking for to draw that distinction . Is different here, when europe was going through it, europe was in recession. Brought a statement, obviously, with different countries. But the question was how would demand come back, what would be the reaction of the central bank . Here we spoke at the outset, it is different. Look at the cruise sector. The cruise sector has essentially no revenue right now. They are able to borrow a lot of money because people think it some normal level of business at some point. That has to actually happen. A lot of companies are getting financing on the belief that this is temporary. It has gone on for a number of months, it will continue. There is still a lot of uncertainty. Secondt know about a wave of the virus. A lot of uncertainty around the election in the united states, a lot of civil unrest, uncertainty about whether we will get the further fiscal stimulus we need. Markets are still pricing in a lot of good things but they have to happen to support current levels and have them go higher. Jonathan before we go, we have to do the rapidfire around. I have to followup and followthrough. How yield spreads around five basis points from august to september, do you expect to see 401st or 600 . Be surprised. L i think 400. Jonathan a lot of people would answer in that way. 10 year treasury around 70 basis points. , 50, abouthe range 90 in june. Do you break out to the upside or the downside . Come on, john. I would have to flip a coin. You know me better than that. Jonathan you mentioned that fiscal package. Do we get one, yes or no, before the election . Gershon i would have answered yes a couple months ago. Now i will say no. Me,ever ceases to amaze even an election year, both sides should be tripping over to get people what they need. The hostility is such, i dont think they will get it. Jonathan love to catch up with you. Too. The mask, gershon distenfeld, good to see you. Coming up next week, it is all about the fed with president evans, master, bullard speaking through the week. Appearing forl three straight days. That does it for us. Enjoy your weekend. This is bloomberg. Vonnie welcome to bloomberg markets. Im vonnie quinn. Over the next hour, will be speaking with sarah hindlianbowler about tiktok. And restaurants in dire straits. Tom colicchio about what the future looks like as pandemic restrictions continue to eat into profits. Gosin joins us to talk about real estate as new york tries to welcome employees back to the office. Lets get a quick check on the markets. It is quadruple witching, so we expect a lot of movement at the end of the session. The nasdaq down 1. 7 . The s p lower by 1. 1 . The dow jones down by. 6 . 7. L holding up at 41. 0 the vix at 26. Oracle is down. 7 . The u. S. Looking to expel wechat and tiktok from app stores by sunday. Joining us for perspective now is sarah hindlianbowler macquarie capital. The u. S. Is asking oracle to fix social media. Why would it do that when it is not asking u. S. Companies to fix social media . Sarah thats a great question. I think the real issue here is political. Whenever you are dealing with an m a situation such as this one, even when it is a forced sale, and you have political tensions on both sides, usually they are some talented bankers out there who can make it work, make the outcome desirable for all parties. In this instance, this is much more about politics. There is nothing unique about what is in then press this week, in regards to how oracle, walmart, and the conglomerate of venture capitalists seem to have put forward a proposal for a deal. For us, it looks quite favorable. Thisu were looking at without the politics, this deal would be something that would mands. Oth sides de but because we are in a trade war, we are seeing it pushed out until november 12 from the administration. We also dont know what the reaction will be from the chinese government. Is reserving. S. The right to reverse the decision on tiktok, and there is now more time to do that. Why doesnt the usa exactly what it wants . It seems a little passiveaggressive here, and answer in the waiting, and then the administration is just waiting for oracle in beijing to happen upon it. The issue is that what beijing in the Trump Administration have said are two contradictory things. Therefore, a resolution may not be possible to reach. What trump has said specifically is that the tiktok algorithm, or the ability for the chinese to ever look at u. S. Consumer data, will be a problem for this administration. We understand and agree a lot with a rationale about that. Oracle put forward a way to prevent that from happening, but it doesnt seem farreaching enough because the u. S. Owners will not have primary control over tiktok. This still leaves the for user data in the future. Perspective, as soon as they added the inability of companies to export algorithms, or the ai, which is the driver behind their success, we knew it would be difficult to get this deal closed by beijing. That is why we are where we are today. Concerned,china is and it is up to no good, as objected by the u. S. , isnt it time for china to increase those efforts before everything is banned . If it is not doing that, why shouldnt we trust china . Know that this is about what they are doing right now, that they are doing something the various right now, so much as something could happen in the future. If we didnt have these escalating trade wars going on, we wouldnt be having this conversation. Because we have a trade war that is fair to say, one of the areas that trumps base agrees with him, where he has support on is increasing nationalism. This is one area that he can continue to win, by pushing back harder and harder on beijing. That is why we are having this conversation, that we would not be having any other way. If the chinese were actually doing something nefarious on tiktok right now, it would be closed instantly. Instead we have a sunday deadline for downloads on the google and apple app stores, and then a november 12 deadline for the users to be impacted. Continues. The saga thank you. On theup, tom click you state of restaurants, and what is needed to keep restaurants alive. This is bloomberg. Loomberg. Vonnie this is bloomberg markets. Im vonnie quinn. A report from the National RestaurantAssociation Shows one in six restaurants have either closed for the longterm or permanently. 3 million restaurant workers still unemployed. Craft owner and founder is with us now. Can you tell us about your immediate plans . We heard from eric rippert. He is opening for Indoor Dining as soon as he can, he has the means, but other independent chefs who may not have decided not to. Tom sure. I am currently serving outdoors. We plan to do Indoor Dining when we can. Is going to police that carefully. Meaning if you are not eating, you must have a mask on in the restaurant. My staff wants to get back to work, but they also want to be safe. That is the number one goal. I think that is the most difficult thing. People come in, they take off their masks, and when the waiter comes to take their order, they refused to put it back on. That is something we cannot stand for, but we do plan on opening for indoor service. The problem with some restaurants, they are very small. With 25 capacity, you are seats . About six when i open up indoors, i will have fewer seats than when im operating outdoors. It is not sustainable at all. Most restaurants that opened up with 25 capacity will lose money. You have two issues. Having enough money to just get open and get through this, and then you lose money, going deeper into debt. It is not sustainable. Vonnie not every restaurant is on board, but there appears to be some progress. If you can believe nancy pelosi speaking a couple hours ago possibly some help for restaurants. What are you hearing . Bill hasrestaurant nearly 2000 cosponsors in the house, 40 of the senate on board, it is bipartisan. We have a republican in the senate who wrote the bill, roger wicker. Earl blumenauer from the portland area wrote it in the house. Any bill with this much bipartisan support would get passed if it was regular order, but we are not right now. We are hoping this gets added to the stimulus. We hope that the two parties can get together and agree on something. The American Public is hurting right now. Restaurants are hurting but people who have been laid off are really hurting. Up need unemployment plussed again and we need both sides talking. That is the only path for sustainability for the restaurant industry. 11 Million People work in the independent restaurant industry. When you factor in farmers and fishermen and the like, so many people that play a supporting role. There is a big part of the economy at stake. We really need to get this done. We need both sides to get together. Vonnie of course, everyone in a different situation regarding rent. Time but i want to thank you very much. We hope that you can rejoin us again, hopefully after everything has reopened. Of colicchio, owner and chef craft hospitality. The hopes fore on new york citys recovery. We will discuss the state of the commercial Real Estate Market. Barry gosin will join us. Quarterlyeck on this quadruple witching day. The dow down 1. 9 . The s p 500 down 1. 4 . No movement in treasuries. Gains. Il hanging onto this is bloomberg. Mark im Mark Crumpton with bloomberg first word news. House Speaker Nancy Pelosi says the duration of the stopgap funding vendor is still undecided. Is apeaker said that question that we are still negotiating. I have said for a while that we would keep government open and we would have a clean continuing resolution. The secretary of the treasury has made a similar statement. Now were just working out the details. We hope to have it today so we can bring it to the floor early next week and then go to the senate, which usually takes longer in terms of their process. Secretary mnuchin says its possible to resolve all disagreements of the stopgap by the end of the week. The House Rules Committee is scheduled to meet monday to set terms for the considerations. The Trump Administration will appeal to the Supreme Court in an attempt to exclude undocumented immigrants from the census count. Statesy groups and including new york sued over the president s plan, saying he was trying to deprive democratic leaning areas with immigrant populations of congressional seats. The panel ruled last Week Congress had not given the President Authority to make that policy. Last year, the Supreme Court blocked of the administrations effort to include a Citizenship Question on the census. Canada is extending the agreement to keep the u. S. Border closed to nonessential travel during the coronavirus pandemic. The delay will stay in effect until october 25. The restrictions were first announced in march and have been extended each month since. Many canadians fear a reopening. The u. S. Has more cases and deaths from covid19 than any other country in the world and canada has seen an uptick in cases in recent weeks. 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. Amanda live from toronto, im amanda lang. Vonnie from bloomberg World Headquarters in new york im , vonnie quinn. We are joined by our bloomberg and Bnn Bloomberg audiences. Here are the top stories we are following from around the world. The Commerce Department readies alphabet an apple to delete tiktok from their app stores sunday but reserves the right to reverse the move. We will bring you the latest and how it affects any deal with oracle. Business is anxious over the big apples future. Letters leaders sent a to mayor de blasio asking him to take more action to halt the citys decline. One executive behind the letter, barry gosin, joins us. Credit is starting to flow to Smaller Companies, it seems. Supply is boost trickling down, we will have details. It is negative sentiment for the markets today. We are on a quadruple witching day. Volume, may be less volatility than in other months, but we can certainly blame some of that on that. The s p 500, financials and health care are holding up, but otherwise you are seeing negativity. Since it stock split, so when interesting move out of those big names. Still holding at high levels. We are watching the price of crude oil, still weak for many north american producers, but above 40 on some optimism on the Global Growth outlook, despite fears of a resurgence in the pandemic. The 10year yield holding in their. There. A story that speaks to what a lot of people are talking about, the move by the u. S. To take off ofand wechat apps stores if an agreement is reached. This as tiktok appears to be edging closer to a deal that would have its approval and allow oracle to take over its u. S. Operations. Josh wingrove is with us now. I think the story gets more interesting, and in some ways im surprised there has not been more outrage at the moves taken against these chinese companies. Lets start with the security concern. Doesegitimate is it, and this mean there is a security issue . It is not all that much appferent from any other that you have on your phone. They all harvest data that would make many folks uncomfortable, but the question is whether it goes to the chinese party, and that is what the Trump Administration is worried about. I have to say,