David Weston, Bloomberg World Headquarters, Abigail Doolittle discussed on Balance of Power


Reality that we must face our city and school system must open to the world of business We still think that the economy once we on the other side of this omega will still be looking very slow This is balance of power with David Weston From Bloomberg world headquarters in New York to our television and radio audiences worldwide Welcome to ballots of power We're going to start today once again with a check on the markets and where they are today joining us is Abigail Doolittle So evident what are we seeing today that's different Very interesting action In fact I divergence between the growth and cyclical trade today in favor of value or the cyclical trade and not tech We have the S&P 500 at this point actually down earlier putting in an all time high The Dow is leading It is up at this point about 7 tenths of 1% On the other hand the tech heavy index is they are down down down more than 1% This has everything to do with rising yields Over the last two days the ten year yield backing up about 15 basis points may be a delayed reaction to the fed's message in December as folks seem to be a little bit less worried about omicron So here we are putting 2% back and play I know you have a well maybe you were talking about 2% getting you a tough time and I'm not making it 2% 1.7 if we get there as closer to 2% no question about it But sometimes what's the volume like Because obviously through the holidays it was very thin Yeah it's really interesting It is 50% above the 20 day moving average So if you factor in last week that of course would take down the average but even so it is way way above So a little bit of selling that we're seeing today means that those investors are fairly serious especially in terms of selling tech and apple is still down It's down 1.2% So not making that $3 trillion market again at least today I'm worried about alpha being under $3 trillion Thank you so much to do a little for that report on the markets As we enter 2022 the rebounding economy is facing a good deal of uncertainty over jobs or inflation of the fed pace of fed tapering Take us through it all We welcome Stephanie kelton Professor of economics the state university of New York at stony brook doctor kelton earlier serves as the chief economist the Senate budget committee So doctor cotton thank you so much for being with us As you look at the possible risks out into 2022 what's got your attention the most Well you look you're looking for the headwinds right I mean in terms of the economic outlook it is always a foot race between the tailwinds that you hope are strong enough to propel you forward and keep you keep the economy expanding Allow us to continue to add jobs at the sort of pace that we've been adding over the last number of months now It's been very strong but the risks are obviously you know what you're coming up against in terms of headwinds And David for me the big headwind has been from the very beginning of this The virus itself And as we got vaccines and as we got more of the population vaccinated and we began the reopening we started to see just how resilient the economy had been through this And then of course we get hit with Delta And then here comes a con So you know if we are lucky and what we're hearing from a lot of the experts turns out to be correct that all Macron is more transmissible but less difficult to deal with in terms of the health impacts and so forth And we're going to see maybe after the next three weeks or so will be this will be kind of rearview mirror in terms of omicron So if there's not another mutation and another variant that we have to deal with And I think the outlook looks pretty good to me The big headwind is the virus From your mouth to God's ears basically on the vaccine really taking care of the problems for us We're getting past the oh my At the same time as you look back at what we saw last year is the virus hitting the supply side of the equation of the demand side more because I think one thing that surprised some people was how much it hit the supply side which really drove inflation I think that's absolutely correct I mean there are both things are at play here right It is the case that we had extremely robust fiscal support this time unlike after the financial crisis and the fiscal fiscal response from Congress that after the 2008 economic downturn this time was much different We had much more robust fiscal support People had more money They had more income to spend coming out of the sort of reopening part of all of this And so there were demand impulses there at play that helped to allow consumers to go racing back in And it's really been a question of what people are trying to spend money on You know it isn't the case I don't believe that what we have is just a generalized case of too much money chasing too much too few of everything else right Goods and services People have been trying to buy a lot of goods And we still have been reluctant to go back into restaurants and on airplanes and hotels and the vacations and all the other things So you know the supply side has revealed a lot of vulnerabilities And we've seen it at the ports and we've seen it with freight and trucking and all the rest of it And so the supply side I think overwhelms the demand side contributors to the inflationary pressure that we're currently dealing with And of course it's not just goods and services that there's a lot of demand for it not allow supply And there's also workers We've had some difficulty with that What do you make of the job picture right now looking forward to those jobs numbers on Friday And the increasing wages we're seeing across the country Yeah so you know we got some numbers out today with the jolts report Now this is a look back right These are November numbers So this is really pre Al Macron but these numbers look really good I mean this is a labor market that continues to I think display a great deal of strength You continue to see high levels of quits That's true about four and a half million workers quit jobs in November But we added right 6.7 million higher And so while quits are really near historic highs it's also the case that on balance we are adding tons and tons of jobs in this recovery And so that's a really good news Most of the people who are quitting are quitting because they're taking more different jobs right They're not quitting and leaving the labor force In fact the labor forces continuing to grow Labor force is strong by 1.8 million over the last 9 months So we're adding back jobs We've got a lot of strength in the labor market Yes some workers are enjoying by virtue of having a little bit of additional bargaining power the ability to leave a job they didn't like move into a better job a better paying job and to the extent that this labor market is allowing people to enjoy that sort of increase in wages along with an improving economy I think that's a good thing What does this all say to the fed as we enter this new year The feds indicated they're going to are in the process of tapering their bond buying purchases We don't know yet about the rate hikes What do you anticipate in 2022 Well look I think we know that the fed would really like to be able to raise rates probably would like to be able to get in three hikes this year whether that turns out to be possible or not I think again we got to come back to the virus.

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