Vice President Biden is just six electoral votes away from the white house. Bloomberg chief washington correspondent Kevin Cirilli joins us for more. What is the vote count . What do we get over the next couple of hours . Kevin joe biden is just six electoral votes away from reaching the magic number of 270 electoral votes, which would put him at the threshold for the presidency. Within the next 30 minutes, georgias secretary of state is going to give a News Conference, and which they are going to provide an update on what is going on in the battleground state of georgia. 15 electoral votes, that would put him over it he is able to beat trump in georgia. In the noon hour, we are going to get an update from clark county, nevada, where the over and willing the overwhelming majority of electoral votes are cast in that state. This evening, not a clock eastern time, arizona, Maricopa County is going to provide an update. In terms of the dataflow on the president ial election front, we will have new information throughout the day. Meanwhile, cross over to the senate and the house. We should potentially also get some updates on what is going on in North Carolina. Remember, North Carolina senator thom tillis up for reelection there against cal cunningham. A tough reelection battle for the republican incumbent, but so far in the senate, Mitch Mcconnell has won reelection. Whether or not he is the majority or minority leader, we are going to be waiting to find out. But the key members of his coalition have also been reelected. Joni ernst, susan collins, as well as lindsey graham. Thank you very much, indeed. Kevin cirilli on the latest when it comes to the vote count, getting very close now. Joining us now is peter fisher, Dartmouth Tuck School clinical professor. Thank you for your time today. Equity markets are flying. People arent afraid, it seems, of divided government. What is your take . Peter clearly the equity market likes something it sees. Maybe it is just the election is going to be over sooner than later. I think it is likely to face up to a reality of how nervous the market was last spring when covid was surging and death rates were surging. We faced that here in north america and across europe. There is something hanging over the market it is not focused on, and the economy is certainly going to be paying attention to how much of a burden the rise in covid is for us all. Alix is there a possibility that the blue waves can still live . It might be a slight, small blue wave, but stimulus in the trillions might not yet be off the table. What do you think . Peter i dont know. I think congress is likely to want to do something, regardless of the constellation of blue and red, so i think you are right. But i think a blue wave doesnt seem to be there, so it is not going to be the original proposal the biden camp had. We are not going to look at that much stimulus. I think a deal will feel a little different. But i am quite focused on the problem of mortgage forbearance and rent forbearance. A lot of people are still unemployed, and the rules have been set up to let them not pay their rent and mortgages. Those are going to expire sometime, in all likelihood, in the next six months. The path of fiscal support for income is a huge sequencing problem, even if there werent political realities in congress that will make figuring that out hard. Guy do you think the virus will force politicians hands in washington . In the u. K. , we just extended our furlough scheme. Seeing a response to the virus as the second wave crashes over europe. There is a does a similar thing happen in the United States . Er down to happen sash something is bound to happen. That is Something Congress will have to enter. They are going to have to do something more to support the Health Care System, support state governments. Whether that flows to income support and the sort of furlough schemes you have in the u. K. And what we have done here, there will probably be some support, but the 1200 check, if that comes back again but i have to start paying my mortgage or my rent, it is still going to be a dampener for consumption. It is still going to mean a very slow recovery. Ifx i have to wonder then, the move in yields we have seen over the last few days, the story was they were pressing out this reflation thing. Is there a story to be made of a safe haven bid based on the indicators you were looking at . Will be dont know, i honest. I dont know whether it is a safe haven bid or not. I think it is the trades coming off in the election confusion of the story that is more compelling. The economy might not be as strong as people think. Aam still worried about stagflation economy. I dont know why we cant have high unemployment and prices pressing up. It looks to me that businesses are going to try to push through price increases where they can. This mornings papers talk about the Health Care System pushing through covid fees and cramming those down their customers thro ats. We may get a funny mix of price pressures and still low still high unemployment, excuse me, and i think that is going to be very difficult for the fed to navigate. Guy where does inflation come from . You talk about stagflation. Where does the inflationary impulse come from . I appreciate what you are saying about pricing pressure, but i would be stunned to see if Companies Really do have pricing pressure, significant pricing pressure Going Forward from here. It strikes me that covid is changing the narrative on so many things at the moment, and most of that pressure is deflationary. Peter i think of it is the stop go economy. There are places where production can ramp up and beat demand. There are other places where it cant. I think it is just the reallocation of resources, both supply and demand in the economy is still going to be a transition. There will be a lot of noise. I am not worried about rampant inflation, but i think theres going to be some places where we see pockets of it, and that is going to be hard for the fed to fathom. Just catching up on the data, the way inflation is calculated, the basket that we consume has changed dramatically. The inflation calculators have not caught up with that. I think theres just a lot of noise in the system. Alix i wonder what using that means for the dollar. The bloomberg dollar index is the lowest we have seen since 2018. How can yields keep going lower and the dollar go lower at the same time . What do you think . Peter they can both go lower at the same time. Of course they can. I think there is something that has been missed, which is theres been noise in the last few days that has come down, but the spread from two to 10 year yields has been rather steep compared to any time the last few years. It is all at very low levels, but the yield curve has been steepening over the last several months. It is something people have to focus on, both the slope of the curve, even at these ridiculously low levels. I think there is still going to be a lot of noise in the dollar that we just have to be careful not to over interpret. Guy when does the government pivot from income support, consumption support, to figuring out that we need investment in the capital stock, that we need to figure out which jobs are going to work and which ones arent . When does that moment come . Dont i dont know, and i think congress knows. There is that first transition of income support and mortgage forbearance, and getting that sequence right. The next one is open support for consumption is just not Something Congress is going to be able to do. Tounderstand why we want support people who have lost their jobs, but we dont want to do that on an openended basis and keep borrowing longterm money to do that. Borrowing longterm to support current consumption isnt an make much sense. We got to make that transition at some point. It is going to be very hard for them to do that, and yet they are going to have to make it. Think about the company side of this, not the households. The only thing worse than the government picking winners and losers is openended support for losers. That is not a prescription to get the economy going again. They want to get productivity up. You want to grow the economy through investment. Perhaps we will finally get infrastructure. Maybe we will see it in the next four years, even with a biden government. But congress has got to make veterans us in, and it is going to be very hard even without politics. I dont know how to make veteransish and to make that transition. Alix lasted a whole 10 minutes without talking about the virus, but there is a thought that what we are seeing in europe is going to happen in the u. S. , that we will see rolling lockdowns. 2021 and 2022, how does congress and the white house combat Something Like that, when they are never going to be able to really pivot toward something more meaningful . Peter more lockdowns in our political culture, we see how closely divided the election was , so there will be parts of the country where a government ordered lockdown will be counterproductive. I am red across the river from vermont. They have done pretty well without a lockdown, but by encouraging businesses. So i think we have to be careful to make sure we just dont focus on lockdown yes or no, but on how we manage it. About the me nervous country is it seems we are too late for Contact Tracing and doing a lot of things we hoped we could do. The acceleration is just too great. We are desperately hoping to see some of the states reach a peak and come off of the peak so that maybe we can turn this around, but so far it is just rising, rising. Lockdown is not the only measure, but we will have to see a mix of measures. I think that is something that are big federal government and states will struggle to get right, even with a new administration, if that is what happens. Guy how do you see the next six months on folding months unfolding . Everyone seems very bullish today. Everyone is expecting things to get better from here. They like the idea of a government that isnt going to be able to do very much. Do you see the narrative improving in any shape or form over the next six months . Peter yes, i dont want to be too gloomy. Orn with divided government a closely divided senate, i think there are going to be some things that congress will want a certainprovide level of support to the economy. That is how politicians usually like to spend money. That is going to be vital. What happens to the whole real estate industry, as ive said, is going to be very important and how that affects us. But i think we are going to have a slow recovery. We will see volatility in the stock market. It may be volatile down another day. I think we can put that noise aside when we try to think about the economy. But the pass of the economy is really going to have an effect on household consumption. The savings rate has stabilized around 14 . That has come off the ridiculous highs of last spring, but 14 is still pretty high compared to the 8 we had before covid. You can look at that is glass halffull, so households have some firepower if they want to go spend. You could also look at it as, with covid raging, who is going to go out and spend . Some of those who have savings are going to stay home, and those that have jobs are not going to be a will to spend much. That is where fiscal policy needs to come in to get the transition right. I think there is a good shot we will have congress do something that is helpful in this regard, but there is no guarantee. But then the question is how much does covid rage, and do we all go back to focusing on the death rate, which would be very bad for consumption. Alix i should point out that the u. S. 30 year fixed for Mortgage Loans dropped, so some support there if you are in refi. Peter fisher, you are going to stick with us. You can follow our election coverage on our live blog on your terminal. This is bloomberg. Alix in the middle of the election, it is also fed decision day. Bloombergs International Economics and policy correspondent Michael Mckee joins us now. What are we looking for . Michael we are not looking for a whole lot because the fed has two problems. One is we dont know who the president is going to be, but we have a pretty good idea it is going to be divided government. That raises the question of how much fiscal stimulus will you get. Would you get enough . Even though Mitch Mcconnell made some nice noses yesterday, that is still an unanswered question. The fed still has to figure out how much stimulus might we need, and expects jay powell to ask about that today. The second problem we have is the virus. Lost in all the election news yesterday, 100,000 new cases for the first time ever. An exponential rise in virus cases. A lot of warnings about what is going to happen. Doctors very concerned. That is going to determine how much we need in terms of fiscal stimulus because it will give us an idea of what we were talking about earlier with the number of rolling closures we might see for businesses out there. We are seeing a little bit of that now in the jobless claims numbers today. They were up 751,000. Here is what we are looking for tomorrow in terms of jobs. The interesting thing is the consensus is still 661,000, but look at where the distribution is, between 400000 and 500,000. We have a tail on the right side that keeps the number higher in the consensus, but wall street really things we have slowed down so far. If that is the case, what does the fed do about it . We heard from bill dudley a week ago, saying he doesnt think the fed has many tools left, and in truth, they dont. They raise and lower Interest Rates. These are the Interest Rates for homes, cars, mortgages and car loans. They are already very low, so can they get any more bang for the buck out of it . Youve got to figure they are going to stand back and see what we need, and they are going to ask congress again for help. Guy perfect set up. Thank you indeed. Lets bring back into the conversation peter fisher to get his take on this. Peter, i appreciate that maybe for now, the fed maybe wants to take a step back. But if fiscal is going to do less, can Monetary Policy still do more . Peter not really. They dont want to do that. A lot of mornings but a lot of voices are saying this. They are reaching the bottom of the barrel. Buying more assets is available to them. We saw the bank of england earlier. But that is not really going to change the pass of consumption and savings going ahead. The fed, they dont really want to talk about that they are reaching the end of their toolkit, and they were also caught between an uncertain election and tomorrows employment report. , the newsvid overhang overhang that mike referred to, is really what must have the fed most nervous. Normally, we have a slowdown in Economic Activity in the winter. That is why we have seasonal judgment factors. The slow down could really be dramatic this winter if we all have to stay indoors and worry about transmitting the disease. We can only we we can only order so stuff online. Yes, the fed wants to avoid political spotlight today with the election, but they also just know what corner of the economy might be an area that might rebound or need help. That uncertainty about the distribution of spending that Congress Might do, and as we talked in the earlier segment about the sequence of fiscal support, mortgage forbearance, and shifting to investment, that path is really uncertain, and that is all the more reason for the fed to want to sit on its hands. So are they out of gas . Yes, they are mostly out of gas. Alix lets talk about some tweaks they can get to before they have to go to the gas station. They already reduced the minimum loan size for the main Street Lending program. Is there Something Else they could do their, or the municipal facility the Municipal Liquidity facility . Can they tweak these things to really help . Peter i dont think so. What the central bank could do in a crisis last march, or we think about 10 years ago, it can help liquefy the system when the system is under stress. But just getting people to borrow more and take up more debt when we have corporate debt at a historic high in america today, in macroeconomic terms, there may be some companies that want to borrow a little more. Maybe they can bridge. But the idea of pumping up debt to higher levels now, this doesnt make much sense if we are uncertain about the income stream that can pay for it. So yes, the fed is tweaking the main Street Program, but lets turn that around. The main Street Program hasnt amounted to much in quantity terms. A lot of Credit Demand from that. So yes, they try to make it that little more attractive. But powell has said they can only help lending. They cant help spending. That is really the fundamental problem here. With rates so low and the fed having done so much, getting people to borrow now isnt the most sensible thing. Guy there is one argument that says that qe is now serving a different role, and there is an argument being made here in the u. K. Regarding this, that the role of qe is now to calm orchids to allow governments to be able to borrow, to be able to fund the fiscal programs they are pushing through at the moment. Have we shifted the rationale for qe to that kind of argument, do you think . Peter that is the more cogent argument. If we go back to the Second World War in the 1950s, thats when the fed lost its independence, was managing the yield curve, and the only reason for doing that was to help keep our when costs down while the government was financing the Second World War and trying to pay that down in the years after the Second World War. Central bankers havent wanted to say that. They keep saying they are doing qe to stimulus growth. But it is hard to see the arguments. The fed