tv Bloomberg Surveillance Bloomberg July 16, 2021 8:00am-9:00am EDT
>> we think that the fed is correct, that inflation is transitory. >> one of the key questions is are stocks in a bubble. i don't think they are in a bubble, but they are expensive. >> we don't want to jar markets, but i think it is time to end these emergency measures. >> when they looked towards tapering their asset purchases, a lot of traders are going to be caught off guard. >> we are looking at a secular passive low growth around the very low range and yields. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa
abramowicz. jonathan: economic data incoming. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside lisa abramowicz, i'm jonathan ferro. tom keene is back with us next week. with us now is kailey leinz. we advance a little more than 0.1%. 30 minutes away from retail sales. lisa: the key question in my mind, what data matters? does this data actually have significance that other data points including much higher-than-expected prints does not? jonathan: and how much tolerance is there for higher prices that are being passed on to the end consumer? lisa: i think that is a really key point. how much does the inflation we have seen so far lead to slower growth longer-term? we have seen this with lumber prices. with high prices, people buy
less of it. how much of that day we see in the data comes out in 30 minutes? jonathan: have we seen scarcity on output? that's one to watch, too. lisa: how much are goods purchases declining simply because they are not the goods available? someone put out a photograph of dick's sporting goods, looking for a kayak, and there were just empty shelves. jonathan: and trying to find people to get out of that kayak and go to work, that may be an issue. [laughter] you are going away next week, so we can't get you to work. kailey leinz, is there a clean story to talk about? kailey: i don't think there's been a clean story for quite some time. the data is incredibly messy. i'm interested in the consumer and pricing pressures. your dollar just isn't going as far in getting you the goods that you want right now. when you look at disposable income, it is at lowe's we have not seen since before the financial crisis. the consumer is seeing their spending power really taking a hit. when is that actually going to show up in the spending we are seeing in this u.s. economy?
jonathan: we have a big conversation to have. here's the equity market, shaping up as follows this friday morning. equity futures, 4359, up seven points. we advance a little more than 0.1%. yields are higher. the curve is steepening just a little bit after being flatter. yields lower through this week again, 1.3210% on tens. on euro-dollar, 1.1795. we keep coming back to it, this 10 year yield getting comfortable in and around 1.30%. lisa: there's a question about why. is it because of a fed policy error, or because growth is going to revert to a new normal because we cannot afford higher rates at this point? jonathan: let's asked that question to robert tipp, pgim chief investment strategist.
what do you say? robert: i think we have seen the peak in rates probably for the cycle. there could be another between peak -- another twin peak later on, but there could be one of the underpinnings of the long-term declines, the secular decline in rates, aging demographics and high debt burdens. economies that are incredibly indebted, and there's been a secularized in debt to gdp ratios across developed worlds, the upshot of that is that you cannot afford the higher interest rates you had before. so it is entirely reasonable to expect we will get a lower peak for rates and the cycle than last time, and we have probably already seen that. jonathan: is that consensus -- lisa: is that consensus at this point? that is a pretty bold call, that we have seen the peak in 10 year treasury yields for this cycle. our people compared for that? robert: if you ask forecasters,
and forecasters have been consistently to bearish on the market, they would say no. that is entirely reasonable given the economic picture that you are looking at. but if you look at the market, you look at the price action in the market, you are seeing something that you haven't seen for decades or even hundreds of years, which is an interest rate cycle that runs almost exclusively through the front end of the yield curve. so when you are on the gold standard, there was faith that the central bank would control inflation because the fiscal could not get out of control. the back end of the yield curve would be relatively stable and short rates would go up and down. we didn't see that in 1994. he didn't see that in 2013, when there is a fear of the fed raising rates and the entire yield curve went up. what we have seen this time with the. what, and the dot plot has been a nuisance for the fed for a long time and a lot of ways, or at least for people trying to expand what is going on there, but seeing those scenarios where
if you have high inflation, the fed is going to get into action, you already have a large swath of the participants in that meeting that are ready to go, and what you saw in the back end was we have faith that in an overheating scenario, the fed is going to contain inflation, and therefore long rates do not need to go up. and in fact, if the fed is a balanced group, and up until this point i think the market had been leaning towards letting inflation getaway, if this they balance group, we are going to have lower growth than we expected six months ago in the long run, and you will have lower rates in the long run. kailey: let's talk about real yields. we are sitting in the ballpark of -105 basis points. will they go even more deeply negative? robert: i think the thing people have to wrap their mind around is you are kind of in a new permanent area for real rates.
in my view, the fed funds rate is just about zero now. the peak of the last cycle was around 2.3. if you are averaging a fed funds rate that is may be 0.5% or less , the cash rate in real terms is going to be significant play negative the vast majority of the time, and you have to get used to seeing a negative real yield term structure. so yields are going to be in this lower range. when things are really bad, with the tenure rallies to 0.5%. asked the 10 year rallies zero point -- the 10 year rallies 0.5%. he might get a 2% tenure. if that is the case, there's going to be a lot of real -- you might get a 2% 10 year. if that is the case, is going to be a lot of real rates. jonathan: i want to get your
position on credit and how it relates to that view and making that cycle call already. robert: what we have typically seen is that you get economic recovery, you have a big tightening of spreads, but as the economic recovery progresses, spreads tend to stay fairly narrow, and that is likely to be the case this time. the one thing we haven't talked about is that paper. -- that taper. i think that summers are a difficult period for the market, and what we are setting up for right now is to get to august, have interest rates pretty low, have the fed shock the market with their taper announcement. i think this is going to be a transition year. that has been our view all year. i think we have seen the highs, but it is not going to be a completely smooth ride as we go forward. that will jar credit a bit as we go through. but in general, looking 12 to 24 months out, i think you're going
to get some additional outperformance from credit, and the surprising thing we have been saying and believed to be the case 12 to 24 months out is that the yields will roll down that the ration portion of the bond market and is also going to contribute, and peopl staying in their strategic asset allocations will probably get the best results. lisa: people have probably thought it has become the bond show today because that is where their focus has been, but that's where the focus has been for equities, too. we say that monetary policy may be egg acute it entirely on the front end in this cycle, it makes me think that we are going to see a flatter yield curve going forward if that is the case, which is a bad thing for banks which has been a big call for a lot of equity investors. is that what you are saying, that we have already seen the peak in yield curve steepening? robert: i think so. long rates on the 10 year are going to be peaking sub 2%, bouncing around in this area,
typically financials like to see higher yields, and that doesn't look to be in the cards. it looks like we are going to have stability. the one thing that the credit cycle has going forward, and that would include financials, is the really good asset performance. there are concerns about asset quality at the early stages of the crisis, and i think a lot of those concerns are falling by the wayside as we go forward and as we get information from the banks going on here. i think the underlying fundamentals of an expanding economy, of corporations that have liquefied that are able to roll out debt, extend their maturities out, continues to provide a lot of opportunities across the credit spectrum, from local and hard currency emerging markets, investment grade and high-yield corporate bonds, as well as structured products. jonathan: good to catch up.
i love the team at pgim. good to hear from you. that is a real call, cycle peak for yields, cycle big maybe for the yield curve, too. lisa: these are some of the behemoths in debt markets. pgim fixed income, which has gotten it right notably quite consistently throughout the year. what does it mean for the financial play? jonathan: what do you need, high yields, or yields to stop going lower? they are higher this morning by a basic point or two to 1.3121%. alongside lisa abramowicz, i'm jonathan ferro, together this morning with kailey leinz. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. the biden administration today warned u.s. companies about the risks of doing business in hong
kong. an advisory said that china's push to exert more control over the financial hub threatens the rule of law and endangers employees and data. today's move underscores how quickly beijing's promise of one country and two systems in dealing with hong kong has come to an end. meanwhile, president biden and xi jinping will address a peck leaders today. while the virus is the topic, the meaning is bound to reflect rising tensions between the u.s. and china. there may be an upside for republican candidates criticized by former president trump. three of them who have faced his wrath raise more money in the second quarter than the challengers in their races that he endorsed. they include senator lisa murkowski of alaska, congressman anthony gonzalez of ohio, and katie britt, who is running for senator from alabama.
and germany, more than 100 have died in the worst flooding in decades. many more people are missing. there are at least 15 deaths in belgium and other parts of western europe have also been hit. several days of heavy rain forced rivers to overflow. people climbed onto rooftops and into trees after their houses were inundated or collapsed. pj solomon is the latest wall street firm to raise salaries for young bankers. new salaries range from $100,000 for first year analysts to $225,000 for third year associates. citigroup, j.p. morgan chase, and barclays are among those who have also increased pay for junior bankers. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪
that is in process now, and i will be able to answer that question within the next several days. i am waiting to hear from our folks and our covid team as to when that should be done. jonathan: that was the president of united states. several days and you might have some kind of answer. we didn't really get a clue. from new york city this morning, good morning. alongside lisa abramowicz, i'm jonathan ferro, together with kailey leinz this morning. in the fx market, one dollar 18 cents. we are -0.1 percent on euro-dollar. in the equity market, we are positive 0.2%. in the bond market, yields are higher to 1.315 4%. the president responding to a question about whether the travel ban would end. we didn't get brushed aside as we sometimes do with that question. we actually got a bit of an answer about when we would get an answer. lisa: we will get an answer may be in a couple of days. i love your skepticism, which is he didn't actually tell us what he's going to do, but at least
he addressed the issue, which is may be giving people optimism in the shares of the airlines. jonathan: let's get to them. in the premarket, there's a lift here. we are up 1.5% on delta, united up a little more than 1%, and american we advance 1.22%. kailey: not quite the lift you are getting for some of the european stocks. it is travel and leisure leading the way in the stoxx 600 today. the likes of iag are up about 3% because those international carriers, those on the other side of the atlantic really have been hurting for quite some time, waiting for the day that they can once again bring european passengers back to the u.s. with no problems. still, that day is not here. maybe it will come in a couple of days. jonathan: let's bring in bloomberg news' u.s. airline reporter. how important is the answer to the question yesterday for these airlines? mary: it is very important for the airlines. domestic travel has come back really strongly, but they
desperately need the international component. they are focused on the travel between the u.s. and europe. inbound traffic from 26 european countries and the u.k. has been blocked since march of 2020, so they really want that valuable traffic act. once those bands are lifted, people can start traveling, and that hopefully will lead to the resurgence of international business traffic. jonathan: the business line is the important one. who is this more important for come out of united, delta, american, jetblue? they will be launching over in london i believe. just walk me through that is important for. mary: really for delta and american, a little bigger across the atlantic. for jetblue, just the fact of whether they will be able to start those routes to london from new york, that is critically important for them. they have but a lot on doing that. lisa: how strong is the lobbying
arm of some of these airlines that have been talking to the white house, saying can you please give us guidance on what your criteria are and what you're singing is? that's what you're thinking is? -- what you're thinking is? mary: it is pretty strong and pretty effective. even just this week, delta's ceo expressed frustration. he said we have been lobbying for months and months to at least open some travel corridors between the u.s. and the u.k. and the u.s. and europe, and ed bastian said we have kind of done all we can do. we have been giving them information, and he was frustrated that u.s. travelers who have been vaccinated can go to europe, but they can't bring those people back to the united states. lisa: that has definitely been an issue. or u.s. citizens can go over to europe, like kailey and i went on the same plane. i don't know if you noticed, but it was packed. even though people are concerned about the covid crisis and wearing their masks, every seat
is filled. you wonder how long that is going to continue. kailey:kailey: for all of our viewers and listeners, lisa was about 30 rows ahead of me on the airplane. [laughter] lisa: all right. jonathan: we don't cut people off on this program. tom does that. carry-on. kailey: i was in the middle of the middle row, and all of the seats around me were full, so there were definitely a lot of people traveling. mary, on that flight to, what i paid for for that round trip ticket to athens is only a little bit more expensive than what it cost to buy a plane ticket from new york to denver for my grandma's birthday. let's talk about the pricing power and the fares that some of these airlines are charging. how are they able to exercise such intense pricing power right now? mary: it is all a matter of supply and demand. the airlines parked a lot of planes during the pandemic. they let a lot of staff take leave. so they are still bringing backplanes. a lot of them don't fully have
their fleet back, and the demand is so high that it is all a matter of supply and demand. if people pay the prices, they are going to raise the prices. they have been losing a lot of money since the start of the pandemic, and only now starting to return to some profit with the help of the federal aid they got. kailey: you talk about the employees they had to put on leave at the height of the pandemic. there was a struggle in getting those pilots, those flight attendants back. is that still a big issue? mary: the problem is the training that they required. pilots who have been on leave for six or nine months, when they come back, they have to go through their certification training again, or maybe they were moved to a different aircraft. that happened a lot at american. so they have to be trained on a new aircraft as well. that takes time. most of the airlines have their simulator training going around the clock are pretty close to that. they are trying to get the pilots trained. american said they would have all of theirs trained by the end of june, but we know that is still ongoing. that is more the issue, not so
much the number of pilots as it is getting them through training. jonathan: mary, always good to catch up with you. we appreciate your time this morning on an important issue. just some plotting the chart on the s&p 500 airlines, 19.25% off the highs of the year. that is a real correction that is developing for the airlines in america. lisa: the deflation of the reflation trade, to talk about the consensus around the consensus falling apart. talk about the derivative terms here that have been a theme. you do wonder how much of the recovery trade has already been priced in. i wonder how much this hangover effect of the debt, of some of the extra costs these airlines have to pay in order to make their cabins safe, which for all intents and purposes, they have been proven to be, you wonder how much that will weigh on their profits. jonathan: we can turn around to the profit story in a moment, but the move itself off the highs, is that because we are
not where we thought we would be 12 months ago? is it the delta variant and the way that is developing? kailey: it is may be words that ran too far ahead of itself at the beginning of the year, now starting to unwind as it meets reality a little bit because a lot of these reopening plays had run so far, so fast, and we see them lose some steam. it is true with those cyclical plays as well. you saw a very similar phenomenon playing out with the russell 2000. jonathan: we said this repeatedly coming into the year when we saw cyclicals really pick up, small caps absolutely surge. the distinction between a cyclical reopening trade that is shorter in duration and the longer-term sustainable cyclical play, and the near term it doesn't matter if you are making two different calls. in the long term, it absolutely matters. lisa: if you pair what we are seeing in cyclicals with what we are seeing in bond yields, the story you're getting is that we are going to revert to the old normal of slow growth, and perhaps even slower growth because of the that overhang --
jonathan: from new york city up, live from new york for audience worldwide, on radio and tv this is bloomberg surveillance alongside lisa abramowicz i'm jonathan ferro. together this morning with kailey leinz. waiting for economic data in america. clearly we all need to get to the weekend. lisa: amen. jonathan: michael mckee, the data still not out. run me through what you're looking for. michael: we are looking for a slight decline in retail sales. retail sales are always difficult to forecast because they get adjusted and revised quite often. only half the data is in by the time they put this report together. we will look not only for the monthly number but the revised number. here they are. retail sales up .6%, that is
much better than the .3% anticipated. it looks like this month we had a strong showing by the american consumer. retail sales ex autos up 1.3%. autos has been a tough spot because the availability of cars has been very small. you look at the control group. i do not have that out yet. there we go. 1.1%. that is the number that feeds into gdp. that is better than the .4% expected and better than the decline of .7% we saw last month. a very good report on retail sales that adds to the debate about what the fed should do. this is better than expected. all of the data coming in stronger as the economy reopens. this is not a month where people got stimulus checks. probably spending down some of the money they put into the bank. jonathan: just quickly, this is
how the market responds. yields higher, through the curve . up a couple of basis points. up two basis points on 10. 1.94, pushing 1.95. an upside surprise on cpi. an upside surprise on cpi -- on ppi, an upside surprise on retail sales. summit up. -- sum it up. michael: the economy is strong. what we do not know was how everybody would react out of the pandemic recession because we've never seen anything like this. the feeling was a reopening would be a gradual rebuild as people got more confident in going out. you look at some of the numbers from may to june. i am trying to make sure i did not get this wrong. food and drinking places, we
weren't about whether people would want to go out in public, they are up 2.3% which is quite strong. from last year, up 40%. people going back to get out and enjoy a good time. the other numbers that might be considered big, gasoline up 2.3%. clothing and accessories up 2.6%. general merchandise stores up 1.9%. department stores 5.9%. a lot of spending in june and it looks like americans are trying to get back to normal as quickly as possible. jonathan: michael mckee, thank you. keep saying come enjoy yourself wherever you are, that undisclosed location. let's run through the data. upside surprise 1.1% against an estimate of .4%. the previous month revised lower to -1.4%. it is hot. that is the story. for the consumer, prices higher.
the spending, consumer price tolerance in the mix we have to take note of. jonathan: i one time -- lisa: i want to highlight that the yield curve flattening further. tighter on the day. this goes back to robert tipp's point, where he says any reaction in monetary policy will be on the front end. the end result is still a slower economic growth picture. jonathan: and stoner premarket doing ok. up 10 points -- and still in equity market doing ok. we advanced. kailey: we do indeed. feeding onto the risk on town. your point about the consumer and their spending resilience is interesting. we talked about the fact they are facing higher prices at the grocery store come at the gas station, could b's -- when you adjust for inflation, consumer
inflation is going down but they are still willing to go out and spend. jonathan: let's turn to david page. your response to the data through this week? david: i think you have a very mixed bag. consumer is coming in solidly. we have seen a weak month on month quarter across q2 after seeing the huge surge in march. what caught our eye has been the drop in weekly consumer confidence as well. we have seen the fastest retracement in consumer confidence over last few weeks we have seen since december. you are seeing price pressures come through, but those we recognize to be friction, not something necessarily reflecting strong demand or a headwind to growth. yep industrial production softer than expected. manufacturing for the second time in the quarter. some of the surveys, empire state survey yesterday through
the roof. others trying to come off. we think back to the nonmanufacturing ism which included a sharp drop in the employment number. there are mixed messages. the backdrop is q2 gdp look solid. we have been looking for 8% annualized. it will be slightly more challenging for q3. that is one of the things the fed will be watching when it thinks about trying to send that signal. jonathan: as you say, it is hard to read the data, it is hard to read what it could mean for the bond market. yields are higher by a couple of basis points. on the week we have had a hot cpi, the hot retail sales print come and yields are still lower on the week. earlier today we asked robert tipp of pgim whether he thinks we have seen a cycle peak in yield. robert: i think we have seen the peak in rates for the cycle. there could be a twin peak later
on. that is one of the underpinnings of the long-term secular decline in rates. aging demographics. jonathan: david page, your reaction? david: i think that is little bit pessimistic. one of the key issues is what comes through in terms of spending. we are expecting to see a large stimulus package come through, not as large as biden thought it might've been, but we are expecting in september the government puts significant spending programs in, which we think will look growth for the u.s. going forward. it is not a deficit finance argument, this is something we think is money going where it needs to go in the u.s.. that will support the outlook. if we take a step back, the fed thinks the rate for fed funds is 2.5%. we gavin argue on that 25 basis points side to side, but it is
unusual to see bond yields -- we could have an argument on that 25 basis points on either side. as time goes by and it gets close to that point, we think that happens in 2023 and not any time later. you get closer to that and the 10-year gilts and that and the 10-year gilts and the two yield will suffer. -- and the two year -- the 10 year yield -- i think we will see them climb higher. lisa: what is the deciding factor? is what i'm hearing is it is more important to look at washington, d.c. and what plan they might pass than any data that come in hotter than expected or have been for the last two weeks? david: what we are seeing from d.c. is going to give the economy a significant rebound this year. we've been tailoring our forecast lower. we think 6.4% for 2021, but by
and large seeing a strong rebound come through. we'll see the economy move into a position of excess demand -- i think when we look to the longer-term there are questions about whether or not there is scarring in the economy and how much readjustment the economy will take to get over this pandemic. that is where you start looking at those longer-term spending plans. there could be some downside but there's possibly upside from there as well. in terms of what we are likely to see from the fed and what we are likely to see from the economy, stimulus has been injected into the economy already. markets will always be forward-looking. jonathan: david page of access investment management. good to catch up on this data. this data has been hard to read, but for the big prints this week you want to know where was cpi, where was ppi, and where was retail sales?
they came in incredibly hot. kailey: we were looking for retail sales to fall .3%, instead they rise by double that . when it comes to the fed, we know they are paying attention to the data. my question is does this data matter yet or is it waiting for some of the noise, some of the confusion around it to come out? are we looking at the prices and inflation and retail sales numbers and those are the points that will matter more? jonathan: it is the later point that you've nailed. it is the calendar, it is september, it is october before we get a clean read on some of these issues. some of the distortions start to fade. lisa: i think david page edified where we started the show, which is consumer sentiment will be more important than retail sales. he said that will be softer. at 10:00, that is when we will perhaps get a key data point that will matter more.
this is interesting because it has more of a forward look, particular consumer expectations. jonathan: i understand. you use the whole show to violate what you've already said. this is what lisa does. [laughter] kailey: she does it very well. jonathan: she will not be doing it next week because she is a week away. this is something she does. lisa: i'm joining the bears in the in around backs. jonathan: returning to your constituency. alongside lisa abramowicz, i'm jonathan ferro. special thanks to kailey leinz. i will run over to the tv studio. on this bond market, priya misra of td. that is a big conversation coming up on "the open." this is bloomberg. ritika: with the first word news, i'm ritika gupta. in california, los angeles
county told residents they must wear masks indoors, even if they are vaccinated. authorities are reacting to a surge in covert cases and the spread of the highly contagious delta variant. delta county added 1000 new cases yesterday for the seventh day in a row. 10 million people live there. in cuba the communist government is promising it will learn from the mass protest over the weekend. authorities will temporarily ease restrictions on food and medicine imports. thousands of people took to the streets to demand freedom and food. cuba's economy shrank 11%. the u.k. is holding out the prospect of restoring pandemic restrictions. that comes three days before it plans to drop all social distancing rules. the number of people hospitalized in the u.k. with covid has risen 43% in a week allowed. the country says if the situation becomes unacceptable,
some restrictions could be reimposed. mike darda is set to open -- moderna's sent open at another record today after being added to the s&p 500. -- exploring a detail -- the company could be valued at $30 billion. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪
people are anxious to travel and enjoy things again. they have been on lockdown. there is a lot of excitement and interest. lisa: chief executive officer of carnival talking about three opening trade in travel. three opening trade in cities as big wall street firms try to tell people to get back to work, if not now, starting in september. lisa abramowicz and kailey leinz. jonathan ferro has gone up to his next property, the open. we have one of the most interesting interview of the week. that is three opening trade in new york city. at a time we have all of the housing prices climbing to record highs, the housing shortage across america is not the case in the big coastal cities. jonathan miller has been covering the city for decades. he has incredible data and insight into the trends.
we have a housing shortage at this point in the big cities given we are starting to see a little bit of interest, or is there still a massive plot that needs to get filled -- a massive glut that needs to get filled? jonathan: i think it is in between. in new york we saw since january when we had near record inventory, we have seen inventory fall 25%. the way to look at urban markets is the suburbs get all of the attention. that is where the outbound migration was initially. i would look at the cities. i do not think we have returned to normal, but clearly elevated inventory levels are coming down and we are seeing -- is clearly not as tight as the suburbs are at record lows surrounding new york and other markets we cover. they are seen in tory fall sharply -- they are seeing inventory fall sharply in the cities because the demand has
skyrocketed from year ago levels, which was the lockdown period. even when we compared two years ago, we are looking at in manhattan, sales are up 15% over second quarter 2019 numbers. lisa: that is because everybody wants a deal. have we in the bottom and prizes or are these the bottom feeders trying to get -- have we seen the bottom in prices or are these the bottom feeders trying to get in cheap? jonathan: if you look the numbers you're talking about a market that is 3% to 5% low what was in the same period does go years ago, which would be the pre-covid benchmark. that is compressing. the one thing about the city, cities in general, is rental markets are generally hit much harder than purchase markets because renters are more flexible.
they do not have to sell a property during a global pandemic. what we are also seeing is in manhattan, specifically, we are seeing new leasing activity for the last three months at all-time record levels. what that is doing is burning off the significant inventory, and some zambians -- and some segments of the rental market, we are actually seeing bidding wars on rental properties starting to emerge, which is highly unusual. kailey: you're making me so glad i re-signed my lease when i did. when i did it in the spring, i got a couple months off, i got my rates lowered. if i were to try to do that now they would send me out the door because someone else was willing to pay more. i have lived in the financial district, it has gotten a lot busier. our people like me who want to live close to offices, close to people -- close to places where
people work, are we seeing even within the city difference? jonathan: that is an excellent point. we are seeing wall street firms, number of the big ones basically say come back to work five days a week. they are sort of ahead of the pack. one of the things we have to sort out -- i think we will have corporate callbacks for employees will really ratchet up in september and throughout the fall that will breathe a lot of oxygen into street-level retail. right now, as i always say, we are at peak zoom. everything is being recalibrated. one thing that is a misunderstanding is that work from home, that phrase implies to many work from the suburbs at home. that is not true. you will have plenty of people
working remotely a couple days a week from the upper eastside or whatever neighborhood because of the sheer density of workers in the city. kailey: lisa and i are biased and we think new york is maybe the only market that matters because it matters to us. you cover a lot more, including south florida. we talk a lot in new york about the flight to florida. to what extent has that taken shape? what is demand looking like down there? lisa: florida -- jonathan: florida has a clonic -- florida has a chronic lack of supply. monthly supply for luxury condominiums in miami two years ago was something like three to four years to sell off. now it is about eight months. there's is been a tremendous absorption of all price points.
even the most problematic, which had been the high end market. a big reason for that, i think the escape from new york narrative is a little bit overblown because essentially i think zoom or remote working has given corporate executives much more flexibility on where they have to be at any given time. way i describe it is the tether between work and home has been infinitely longer. there is a lot more flexibility. what is different in florida is besides the low inventory is we are seeing an inversion of what is performing. instead of softest at the top, is inverted and we are seeing the upper half of any given market. we are seeing the big fed pricing in markets we might not
have seen before. it is not just a couple of locales. it is a big footprint. lisa: jonathan miller, thank you so much for that insight. jonathan miller of miller samuel. fascinating to see how people are readjusting their sense of a post-pandemic reality. perhaps working from home, perhaps the four bedroom townhouse types of homes getting more attraction than some others. kailey: and getting more expensive. if you wanted to buy one a year ago, you would be a lot. now not as much. lisa: missed the boat. congratulations on signing your lease and getting those perks. in the market we are seeing strength across the board. are we moving back to where bonds and stocks trade in tandem? you see bonds come as they get stronger, stocks get a boost. we see bonds a little bit weaker. the 10 year three basis points.
(announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com.
>> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ jonathan: from york, we begin with the big issue. we have a hot economy and chair powell is defending his policy agenda. >> what chairman powell has laid out. >> inflation will be transitory. >> p thinks inflation is transitory. -- he thinks inflation is transitory. >> this debate about tapering, when to do lived off. >> the pressure is building meaningfully. >> people are worried about a policy mistake. >> the fed will be patient.