Markets, COVID, Twitter, And Crypto

trains on the four f one fifty truck. We want to talk to you pre about what your fetter reserve is gonna do here. I mean, we had a pretty strong, solid payroll number on Friday, but boy, there's a lot of inflation out there. How do you think your feederal reserve is gonna react in the weeks and months going forward. I mean, I guess one analogy to your power truck talk before is I think the Fed has to be aggressive.

I mean, you know, policy is very accommodative given the economic outclook right now, and so I think they are signaling that they want to get to neutral fast. I think the big debate in the market is do they have to go above neutral? How much above neutral? Can the engineer a soft landing, or will they force economy into a recession to try and get inflation credibility? But the one clear message we're getting is they want to

normalize at least to whatever neutral is. And you know, neutral for the funds rate, I would say is in the two and a half percent funds rate. So we are expecting the fret to high fifty basis points in May June, then continue with twenty until they get to that neutral point. We also expect them to start QT very soon in in May. You know our part of normalization. Our question of the day on the m Live blog was where is our star? What is it? What is

the neutral rate right now? And I guess, first it depends if you're talking about real or nominal, But um, how do you get to that number? Right And there's a lot of research done on this. It tends to come to the our star, so the real equilibrium rate being somewhere between zero and fifty basis points. But there's a very wide range of estimates around this, uh, this median estimate. You know, there are those that argued its negative.

I'm going to throw another point in here that when the FED is letting the balance sheet run off, I think our star, even the real number is probably lower than it would be if the FED was not letting the balance sheet run off. So when we run these historical metrics, you know, the balance sheets totally run off once before, and I would argue that the FED did overdo it last time when they took the funds rate to two and a half. So I would say, is it closer to zero is what we would call neutral?

But you know, the FED is humble and we're all humble as we're figuring out what neutral is. I think that's why the FED might want to maybe speed it up in the near term. That's why we've got the two back to back fifties, and then slowly get to that neutral, because then the economy should show signs that we're nearing our star, even if we don't have a

great sense of what it is. You know, beforehand, we should see the consumer start to slow down and corporate start to slow down, and that'll be a sign that we're getting close to neutral. The fight should start to get you know, slow down, then become more cautious. There was a great tweet I think it was over the weekend by UM Roberto ap Peary, who worked at Piper works at Piper Sandler UM. He shows a chart his his estimated nominal neutral rate is charted along with the

FEDS funds rate since nineteen sixty one. And every time UM it seems the FED funds rate touches or gets beyond the nominal neutral rate, it drives us into a recession. Do you expect a recession? So we don't expect a recession because we don't expect to fit to go much above neutral. So it's, you know, the two we have.

You should be consistent for those who argue that the Fed's going to go to three and a half for above three percent on the funds rate, and the market is now pricing in three point one as the end point of the hiking cycle, I think then it's very reasonable that the economy slows down significantly and the Fed

may have to cut right after that. And that's why you look at the yield curve or just just uh, you know, forwards pricing in almost three rate cuts, UM, you know, after terminal rate has reached, because we have the FED slowing down as they approach neutral and not going much above neutral. We're sort of expecting that the FED will engineer the soft landing and they don't. We don't have a recession, they don't need to cut. But

there are these two possibilities. There is a case where inflation forces them to go above neutral, and then I think the economy slows down, perhaps goes into recession. I'm somewhat sympathetic to the idea that if the unemployment rate rises a little bit, hard to prevent that from just rising a little bit, and that's when you do, you know, the Psalm rule kicks in and you actually go into a recession. So that's a reasonable, uh, you know, possible

outcome right now. All right, Priya, thank you so much for joining us. Really appreciate getting your thoughts and perspective here as our freder Reserve UH continues on its rate hike UH plan. Here Priamra Managing director and Global head of Rate Strategy at t D Securities. You know, Matt Sin's the beginning of this pandemic thing. We've been leaning on this dude name Sam Fizzelli. And who is this guy, Sam Fizzelli. He's been on Bloomberg News. He writes stuff.

He's on TV's on radio. Why Sam Fizzelli, Well, here's his day job. He's ahead of the European research, all of research for Bloomberg Intelligence in Europe. So he's got like fifty seventy five people reporting to him. So he's in theory a manager but that's debatable. But his big call to famous, he's a Paul likes to dump on managers. Just f y I exactly. But his claim to famous, he's really really made his chops. He's one of the top pharmaceutical medical medical analysts in the city of London

and occasionally he comes to New York to share his expertise. Yeah, he's crazy. He does a wine thing. He's a wine o two so we've got that going from. But he's actually in the Bloomberg Interactive Broker studio today, Sam, thanks what for joining us. For me? The pandemics in the rear view mirror am a little bit. I've been seeing that for months. Yeah, I think that was Paul's wish every morning or every evening before going to bed in

Neil Place bed and did this. But first of one, kind of just say how nice it is to be here together with you in the flesh, so that already and there are a lot of people in the office today, and that gives And it's a Monday, right, suppose three Mondays and Fridays should be light. But that to a degree place to your comment in that I felt comfortable enough to get on the plane to come here. I looked at case counts here. Okay, they may be going up a little bit, but nothing like what we had before.

I thought, this is my opportunity. Hopefully will never go back to what it was before. I don't think the virus has quite finished with us, but still we're in a period where we are able to manage all this pressure. With the vaccines that we've all had and the drugs that we've got. We certainly see well, it feels like the mutations are less deadly. Um since delta right? Um? Is that the case for viruses? Do they mutate in

less and less deadly forms? Or is it possible that what some mutation comes along that is again, um, severe in terms of the disease it causes. Yeah, man, I think we looked out there a little bit. We've got it. We've got a variant that was much more transmissible and through that it also changed the way that infected us, so we ended up getting upper respiratory tracts, so called infections, rather than deep lung, which is where the trouble starts. So but I have to say, in an unvaccinated person,

this is not an easy infection, right. We're just lucky that we all have Most of us have been vaccinated or prior infected, so there is no rhyme or reason the virus. Once it's infected you and infected the next person, it doesn't care what happens to you. I mean, not that it's but we are kind of holding to the same schedule as the Spanish flu. I know that's a misnomer now, and my wife who's from Spain hates it when she's like, it's the Kansas flu. We called it

the Spanish that's hung around for like two years. Right. It was deadly at first and then got less and less deadly, and now it's the flu that we all you'll get. But it's immunity, that's that's the difference. Over those two or three years. You build up immunity either through an infection, which is not the ideal way, or through the vaccines that they give us, which was great. So that's what the difference is, and I think we

have we can't separate the two from each other. Is it possible that another variant turns up that's back to the high virulence of the previous Delta variant and more transmissible. Yes, I mean it's all random as far as the virus is concerned. Once you're infected and it's had the opportunity to jump to the next victim. Whatever, it doesn't care what happens to you. You can go and die whatever. It makes no difference, right, that's the critical part here

that can happen by accident. Hopefully it won't. Hopefully our immune system gets us controlled Delta. I mean, if you look at everyone says o Acron's less virulent or less problematic, look at Delta. The death rate per case for Delta was already pretty low. So it's the vaccines. So are we back? Are we back to? Are we back down to a level that is more like the traditional flu in terms of case fatality? Not really, because it all depends on which country you look at and what age

group you look at. That there are age groups where the number of deaths are still high and perhaps would benefit from a fourth shot, which sure is the next thing you gonna ask exactly? I mean they present. Biden came out recently said that those over fifty in this country, I think I might be a to check my license. I might be above fifty. You can get a fourth booster, get a fourth shot, another booster? Do I need that? I'm I'm getting in line, by the way, when they

start offering it, I'll be the first in line. You can go get it now, dude, can one's checking your ID at CVS? Okay, you just walk in and get a shot. All right, we'll do that. Yeah. No. So, so the thing is, do you want to play wackam all with this forever? If we talking about preventing severe disease, you not getting bad disease below the age of seventy. I don't see the data. There's no There seems to be no difference if you had a fourth or a

third shot based on current data. Remember that's been an important thing for us to remember every time we talk about this. The data evolves because it's you know, we're literally building the ship as we're trying to say it. Um so below the age of seventy, I haven't seen data that convinces me a fourth shot makes a difference

to severe disease. If you want to have three or four months of cover not to catch it, you probably could do with that, and you get this boost in antibodies that will contract again, so that whack a mole game? Or do you want to prevent severe disease? How about our friends in China. I don't see that ending while there. I mean, they've had such a zero tolerance policy which arguably worked for them in terms of the disease. Maybe not so much further economy and the global economy, but

certainly for them and the disease. But Armicrons seems like it doesn't really care about that. What what changed for them was Omicron. They did everything right. They had a great I mean, they had a fantastic track record in terms of a number of people who died compared to us or in the UK. But what changed was Omicron. I mean, they did everything right in terms of keeping people alive. You mean, right, right, right? Oh, no, probably sucked.

Mental health is a totally different conversation for us to have the impact under healthcare in other areas. But now Omicron is not playing by the by the right by the right room. But fortunately not. I was gonna say not as deadly, but you met. You pointed out for

for vaccinated people, how many people they are vaccinated. So the numbers I'm hearing is that only thirty or of people that are in the risk group of more aged older people are only ever arm right, right, So what they need, which is what we argued in a piece we wrote with the Economist team, is to get an m modern a shot into those arms or something equivalent

in terms of is that going to happen? You think, well, I've just seen news over the weekend that they're starting excuse me, two trials with different The modern dy vaccine is homegrown. But why do that rather than going somewhere where there's an enormous body of data that tells you exactly what to expect if you gave them a biolome when love to go in there and put jobs in a couple of billion people, why not? But also, Biotics

already got a partner in China. They already filed the data in China to my estimation, at least six months ago plus with corporate espionage, they probably have all the data anyway, right they look but at the end of the day, go with the vaccine that you know does what I tell you. We complain about these big farmer companies gouging us on drugs, but boy, they came through here in this pandemic. I mean they really did, in

my opinion. I mean they one year, these guys came out with this stuff and they got it into people's arms. And hopefully we can do it in some of these developing countries as well. Sam Fazelli, thanks so much for joining us live, Yes live in our Bloomberg Interactor Broker studio comes to us live from London, usually on the phone, but we got him here in New York. I guess I gotta buy him dinner tonight. He's had a European research for Bloomberg Intelligence, big time farmer analysts over there

in the city London. He's a real hot shot, but we got him in our studios. I think Elon Musk has some restrictions on actually being on Twitter tweeting, but doesn't stop him from buying Twitter. I have to admit it doesn't stop him from tweeting either. Yeah, he didn't care about silly sec but I'll say I did not see this news. This morning him taking a steak in Twitter.

Maybe somebody smarter than us did see this, Hey, Dan dan Ives, Managing Director Senior Equity Alice at web Bush Securities, and a proud Penn stater or joins us day before we get to that. Actually, Dan, I was thinking about you this weekend. I went back to my mom's garage and Graham Bell, Ohio to pick up an older classic Duccatti Monster S four R S sure, and I drove it back here to New York as I was, I don't. I thought it would be fun, and it actually wasn't.

But it was one thing that was cool was I did stop in State College in Happy Valley and I thought about Dan dan Ives. Uh, Dan, what do you make of this? What's Elon doing here? Look? I think this is really the start of what's going to be a shake up at Twitter. I mean, Musk doesn't just do a passive nine percent stake for fun, So I think this is ultimately the start of a broader role at Twitter. And you know, this is really ultimately Musk

expanding the ecosystem. That's why the streets reading this as basically this is the start of something much bigger that Musk is leading. But so we were taking passive as meaning he won't take a board seat or you know, tell um the C suite what to do. But does passive means something else? Yeah? I mean, look, there's a better chance to meet playing Augusta this weekend in must keeping, but then must keeping just a passive steak. I mean, this is going to go active above the ten percent.

It's a matter of their conversations with the board and do they ultimately play ball. But I think that's really the view. Is that especially Twitter, which has been the right lane, I mean where others have passed him in the left lane the social media from a monization perspective, it's been disappointing. And of course Musk is is there's not no secret in terms of his criticism of Twitter. So it's a look, if if the bank has your house, then you can just buy the bank. And I think

he's going down that path. We got to see which direction it goes. But obviously for Twitter it's bullish because clearly that he's going to shake things up. Dan, what do you think he could do here or should do here? What I think he could do is at least board seats get more active, a new suite of directors and then ultimately will to either change some of the policies, you know, by being on the board, and then eventually, depending on how it all shakes out, I mean, this

could ultimately lead to a sale. You know, obviously private A quickly get involved. And I think that's that's the view here, is that this soap opera, this is just a start of what's going to happen with Musk and Twitter. And because as we all know, I mean, Musk is not someone that just puts one tone the water, right, and I think he's gonna be a lot more aggressive, you know, I think in the coming months and year, especially as it comes to Twitter. What does he want

to change a Twitter? What has he been unhappy about? Well, clearly, I mean that there's a lot of criticism that that he's talked about in terms of freedom of speech and others on Twitter. I think it's led to you know, his view that he was really gonna try to create his own social media platform, which is we all know

that's extremely difficult. And obviously you know, he looked at and his advisers looked to the situation, but doors he'd go into the background, you know, with a lot of sort of passive steaks in Twitter, I think there was an opportunity and he recognized it was now or never to to really go after Twitter. And I think this is the start, right in terms of a passive ownership stake, which likely goes to active and now it's a matter

of what the next step is. Danny, you followed Elon Muskin and Ted Tesla and his career for a long time. What do you think is this from a portfolio perspective, his personal portfolio of assets. You know, some people are suggesting this is the beginning of him trying to diversify a little bit. You expect him to be spreading more of his wealth out into other companies, other industries. How do you think about that? Yeah, And remember he's not an activist like in the sense like an icon or others.

He doesn't view it like that. Just getting into his mind, right, I mean, the way must us this is that just like he did on EVS, just like he did with Space, He's like he looks at social media like something's wrong here. From his viewpoint, this needs to be changed, and I'm going to change it. And I'm the rich personal world and I'm going to start that, and I think that's that's what he's really going down with Twitter. Now. The conversation is like, what's the next step. Can you change

monization of the platform, algorithms advertising? Right? These are all things from an investor perspective, it's not just the whole you know, chronic Freemer's speech issue. So I think that's really going to be the focus going forward to what the next steps are. But you know, this is one where I think for Twitter from an investor perspective, they obviously welcome this because there's very few that could rock the boat like this, and Musk is obviously one interesting stuff.

I don't know what. I just don't know what this guy's gonna do with this thing. It's it's it's really amazing and uh I didn't see this coming at all. But anyway, exciting though, right, good stuff. Yeah, it's great for Monday. Hey, Dan, thanks so much for joining us. You always appreciate getting your perspective. Dan ives he's a managing director, he's a senior equity analyst, covers all this

tech stuff, all the Internet. I think Elon Musk has some restrictions on actually being on Twitter tweeting, but doesn't stop him from buying Twitter. I have to admit it doesn't stop him from tweeting either. Yeah, he didn't care about silly sec But I'll say I did not see this news this morning, him taking a steak in Twitter. Maybe somebody smarter than us did see this. Hey, Dan dan Ives, managing director of Senior Equity anlyse At web Bush Securities, and a proud Penn State or joins us

day before we get to that. Actually, Dan, I was thinking about you this weekend. I went back to my mom's garage and Graham Bell, Ohio to pick up an older classic Duccatti Monster S four r S and I drove it back here to New York as I was I don't I thought it would be fun, and it actually wasn't. But it was one thing that was cool was I did stop in State College in Happy Valley and I thought about Dan dan Ives? Uh, Dan, what do you make of this? What's Elon doing here? Look?

I think this is really the start of what's going to be a shake up at Twitter. I mean, Musk doesn't just do a passive nine percent stake for fun, So I think this is ultimately the start of a broader role at Twitter. And you know this is really ultimately Musk expanding the equosystem. That's why the streets reading this as basically, this is the start of something much

bigger that Musk is leading. But so we were taking passive as meaning he won't take a board seat or you know, tell um the c suite what to do. But does passive means something else? Yeah? I mean, look, there's a better chance to meet playing in Augusta this weekend and must keeping, but then must keeping just a passive steak. I mean, this is going to go active above the ten percent. It's a matter of their conversations with the board and do they ultimately play ball. But

I think that's really the view. Is that especially Twitter, which has been the right lane, I mean where others have passed him in the left lane? There's social media from a monization perspective, it's been disappointing, and of course Musk is is you know, there's not no secret in terms of his criticism of Twitter. So it's a look, if if the bank has your house, then you can just buy the bank. And I think he's going down that path. We got to see which direction it goes.

But obviously for Twitter it's bullish because clearly that he's going to shake things up, Dan, what do you think he could do here or should do here? Where I think he could do is at least board seats, get more active, a new suite of directors, and then ultimately will to either change some of the policies, you know, by being on the board, and then eventually depending on how it all shakes out, I mean, this could ultimately lead to a sale. You know, obviously private acquickly get involved.

And I think that's that's the view here, is that this soap opera, this is just a start of what's going to happen with Musk and Twitter. And because as we all know, I mean, Musk is not someone that just puts one tone in the water, right and I think he's gonna be a lot more aggressive, you know, I think in the coming months and year, especially as it comes Twitter. What does he want to change a Twitter?

What has he been unhappy about? Well, clearly, I mean that there's a lot of criticism that that he's talked about in terms of freedom of speech and others on Twitter. I think it's led to you know, his view that he was really gonna try to create his own social media platform, which is we all know that's extremely difficult. And obviously, you know, he looked at and his advisers look to the situation, but doors he'd go into the background, you know, with a lot of sort of passive steaks

in Twitter. I think there was an opportunity and he recognized it was now or never to to really go after Twitter. And I think this is the start, right in terms of a passive ownership stake, which likely goes to active and now it's a matter of what the next step is. Danny, you followed Elon Muskin and Ted Tesla and his career for a long time. Do what do you think? Is this that from a portfolio perspective,

his personal portfolio of assets. You know, some people are suggesting this is the beginning of him trying to diversify a little bit. You expect him to be spreading more of his wealth out into other companies, other industries. How do you think about that? Yeah, and remember he's not an activist, like in the sense like an icon or others. He doesn't view it like that. Just getting into his mind, right, I mean, the way must us this is that just like he did on EVS, just like he did with Space.

He's like, he looks at social media like something's wrong here. From his viewpoint, this needs to be changed, and I'm going to change it. And I'm the rich personal world and I'm going to start that. And I think that's that's what he's really going down with Twitter. Now. The conversation is like, what's the next step. Can you change monization of the platform, algorithms advertising? Right? These are all things from an investor perspective, it's not just the whole

you know, chron quote Freemer's speech issue. So I think that's really going to be the focus going forward to what the next steps are. But you know, this is one where I think for Twitter from an investor perspective, they obviously welcome this because there's very few that could rock the boat like this, and Musk is obviously one interesting stuff. I don't know what. I just don't know what this guy is gonna do with this thing. It's it's it's really amazing and uh, I didn't see this

coming at all. But anyway, exciting though, right, good stuff. Yeah, it's great for Monday. Hey Dan, thanks so much for joining us. We always appreciate getting your perspective. Dan ives he's a managing director, he's a senior echoity analyst, covers all this tech stuff, all the Internet. Uh. And he's been, you know, really bullish on Tesla and really right on Tesla. And now we've got Elon Musk again taking a nine point two percent steak in a Twitter. Some exciting news

for a Monday morning. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three. Put on fall Sweeney I'm on Twitter at pt Sweeney before the podcast. You can always catch us worldwide at Bloomberg Radio