Surveillance: Global Vaccinations With Malpass

this pandemic to have parachuting into our Bloomberg building. The World Bank president at David mel Pass I first learned of him at bear Stearns a few years ago. I have said many times in speeches the single best English skills crafted at Colorado College that I know. In Kaylee lines, are are thrilled to welcome the President of the World

Bank this morning. We have so much to talk about, not enough time, but I need to address right away the delicacy of you, as President World Bank managing not a scandal but an uproar with the Managing Director of the International Monetary Fund when she was at the World Bank. You've made some very important public comments on that. Summarize that right now of how you stand in the study of these allegations against Dr George. I think there are

bigger stories for us. This morning puts on a lot of reports and so in there were staff raised questions about the integrity of data dating back to eighteen and so there was an outside firm brought in and a law firm to look at it. The Board of Directors got into it, issued the report last week, so it shows the irregularities and goes through that the report speaks for itself. You speaks for the report. You think the report stands on its own, And yes, and we've discontinued report.

But the World Bank is going to be very, very involved in the business climate of developing countries. That's critical for them in establishing jobs and getting growth, in in attracting new investment, and that's the purpose of the report. The purpose of the World Bank UH is to help countries and the people in the countries move ahead. So

we're still going to be doing that. You're gonna still be doing that, and you have this report come out as well, and we don't need to get into the nitty gritty of who did this or what is further action needed by you on this uproar? Are you saying enough let's move on the reports discontinued and will be forming and looking for new ways to have an impact in those areas, which I think is the most important thing. Now. Time is too valuable. Right now, it's seven dollars a

dose to get a vaccine. Why can't we vaccinate Africa? Yeah, this is on everyone's mind, and it's frustrating the access in the advanced economies where I'm share a task force that includes I, M F W T O and and UH W H O uh. And so that there are two point four billion excess doses in the advanced economies. So the goal would be to have those early doses, the early deliveries go to developing countries where that can

use those particular doses. You know, it's a hard logistics problem because you've got to get the dose from the factory uh to a country that wants that kind of dose. So some want m r NA doses, someone astras in because some want J and J and so on down the list, and then they sit in a warehouse UH, and they're not applied to people, and that I think has to be improved. We're urging and the task forces

urging the advanced economies to allow swapping of doses. So if they have a delivery scheduled into their warehouses in October of this year or November of this year, allow that dose to go to a developing country person and take a later delivery schedule because you don't need it. You've got excess two point four billion doses. Yeah, David

is an excellent point. We're having a conversation now about boosters here in the US when there's many people throughout the world who have yet to receive their initial dose. Do you need the Biden administration to take more leadership on that, Hi, Kyley, You know I don't. I think the world has to come together and find solutions to this problem. Um and the boosters are countries are going to want to do that as needed in order to protect their population. That still leaves huge amounts of excess

doses even in near term deliveries. What we're working on right now is trying to get November and December deliveries UH scheduled so that so that the countries can prepare to deliver that kind You need a specific kind of cold storage or of of of of trained personnel on each kind of vaccine, and that needs. We need much higher numbers of vaccine nations in developing countries and especially the poorest countries. Well, David, of course, the United States

has made pledges on the vaccine front. Also this week at the United Nations, the President doubled his commitment in terms of financial aid for climate change for the developing world. Just how bad is the climate problem in certain areas of the world, and from an economic standpoint, how dire is the situation the from an adaptation standpoint, so preparing for changes in climate the countries are way behind and

that costs lives. The World Bank, the World Banks the biggest financeer of climate change in the among the international financial institutions. In fact, more than half of all of the finances World Bank, and over half of that is for adaptation, to to address countries that are in low lying areas, people who are populations are at risk. The other part of the equation is to identify and priorities is the highest emitters of greenhouse gases and recognize that

those have to be brought down. Uh that that's a small group of countries with big emissions, and more importantly, the projection of emissions into the future. You know, There are nine thousand coal fired power plants today and there are more in the planning stages. The permits are still being issued. So these are big challenges that cost a lot of money and there has to be a plan for actually, what do you do with the workers, how do you change the system so that there's less greenhouse

gas emissions? And what can you impute on China? If China is struggling with us to say the least, and the marginal development of coal, what does the World Bank strategy to assist China to a better climate outcome. We have some programs in China, but you know, it's income

has gone up and we're reducing that. Most of most of our programs are are in the area of of global public goods and space, typically marine plastic abatement, so that because a lot of plastic goes into the oceans from the rivers in in China, and so we're working on that heavily. With regard to COLE we do have one project area in China, but wherever it is in the world, it's hard to decommission an actual operating coal plant.

The USC s that and that's a challenge. So the world's looking to China to do that to to change and I saw yesterday China release the the idea that they're not going to finance coal fired plants outside China. So that's a step around the world. We need all of those steps. We're gonna run out of time, President Malpass, But I want to say that today is a wonderful symbol. You are the first public official to attend with US lives since the pandemic began. It's a great, great moment, fabulous.

It's good to be here, Tom. I wish the times were better because it's chaos across a lot of the developing world. I'm not gonna ask you about FED policy today. David bel Pess, thank you so much. He is a World Bank UH president as well. We're gonna stop the show right now on economics, finance, investment, and international relations and speak to an authority linking economics to ethics. You

cannot do better than Glenn Hubbard. He is the dean emeritus of Columbia Business School, formally with the Council of Economic Advisors. He wants to talk I s l M theory and the rest of it. We don't we want to talk Glenn Hubbard about course B eight five eight three dash zero zero one is you resurrected Columbia Business School. You said we need to teach ethics, explain executive ethics and the idea that senior officials of the FED can

do investment in bond derivative products. Well, the first part maybe easier than the second. On the first part, we do believe in this business cool parctly any top business school, that people need to understand the context of their decisions. Part of that ethics, part of its understanding social structure. The FED obviously does have to take a hard look at its rules as as as Congress, as does the administrations. I think it is a matter for ongoing discussion and

cheer powells and a pretty strong signal. Well, it sound a pretty strong signal. But what should be the best outcome here? I'm not talking about senators and the politicians with feed officials and investment. What seems so germane to me is yeah, they can buy apple. That doesn't matter. Thinking by stock market, even commodities, et F etcetera. But the trading of anything having to do with a fixed income market did that strike you as odd? It does?

I mean, I think the safer route for a feteficial would be to just toll on market measures, no trading of individual stocks or speculation in the fixed income market. You know, part of being an official is an abundance of caution so that people don't challenge your motors. Professor, do you think this is the credibility of the Federal Reserve or not? I don't. I don't. I think it's unfortunate, but I don't think it's certain the credibility of the FED.

The issues for the credibility of the FED really have more to do with it stands on policy, frankly, than that on ethics. I want to talk about policy as well, particularly social policy. Professor. This is the quote from Senator Path to me. He said, I think he's tolerated a politicization. He's talking about Chair and Powell. The FED won't dring into the social and cultural areas where the FED doesn't belong. Professor, Can I have your reaction to that quote? What you

make of that? Well, it's hard you know exactly what the center, to me is referring to the FED does have to think about the broader social construct of the economy. At the same time, in any organization, you want to be clear, you don't have mission creep. The job one for the FED is low and stable inflation and maximum employment and of course financial stability. Some of the social concerns are wound up in that climate change, for example.

But I think the FED has to be very careful to focus on its key jobs and do them well. Confederate Reserve Chairman Jerome Powell continue to do his job well, do you think he deserves the second term? Well, out, of course is for the presidents, is they not for me? I think he does. The FED has had I think a good record during the pandemic period, and I agree with everything, but certainly very good record. Cheer. Powell also has had an ability that's quite distinctive to talk credibly

to people on both sides of the aisle. So I think it would probably be a mistake not to reappointment. Well, let's talk about how he's going to talk at the press conference today. Do you think the FED can credibly separate a tapering of bond purchases month on month versus starting to hike interest rates sometime in the future. Great question. Obviously Chair Power will try to do just that. It's obvious that we have to have some sort of clear

taper signals. There's no reason for the Central Bank to be providing large asset purchases to bolster aggregate demand. What inflation is high and supply is the problem. At the same time, a lot of people realize the dot plots are shifting the possibility of a rate increase into But I would expect Chair Powell to put off that discussion if you can, during the press conference. But you're right, it will come up, and it should. Glenn Hubbard, my book of the year is In Defense of Public Debt.

I announced that quickly yesterday at Granted this is Barry Ike and Green's tour to force on public debt. You are the single greatest spokesman of responsible not supply side theory, but a more conservative theory. He opens his book with a senator from Kentucky, the junior senator from Kentucky, giving a traditional public at fear line. Speak to conservatives in America, what do they get wrong about our ability to solve

this public debt crisis we're in. Well, it's a great question, Tom, and debt for a household, for a business, for a country, whether it's good or bad depends on what you're using it for. So the use of debt for the future, fighting a war, infrastructure, part of even your ongoing budget may make sense. The problem is when debt becomes UH completely wrapped up into large social programs that are unfunded. That's not just an American problem, it's a it's a

global problem. So the issue is not necessarily how high debt is relative to GDP, but what we're doing for it, and eventually, of course that debt has to be UH. The ancient glen, the ancient conservative issue is if the Senator from Vermont comes out with three point five trillion dollars of social programs, whether it's to run doesn't matter, it will not be applied correctly. Do you see where we can have a two part fiscal expansion now where

we can have confidence it will be applied productively. I do, and it's different than what we're talking about. So Part one is already on the table, which is something akin to the bipartisan Infrastructure Bill. Even that bill is more in it than I would call infrastructure, but it's certainly a very good bill. A second part would be more opportunity focused, helping to connect and reconnect everybody to the economy.

You can do that much more cheaply than the vast non means tested expansion of social programs and Senator standards and others or suggest So is the three and a half trillion dollar price tag to high? Glenn? Well, yes, but I don't even think that's the question. The question is not whether it's one and a half or three and now, but what is it? And if it's a massive expansion of the state in new entitlement programs, that's something we ought to ask. Are we promoting work and

opportunity or were doing something else? That to me is the threshold question. But yes, the price tag is too high. There's no credible pay fors for a bill that size. Well, the pay for is being considered are many, and they're higher taxes in many shapes and forms. What do you think the growth impact of that is? If those pay fors do indeed mean that Americans, granted wealthier ones, have

to pay more, what depends on the pay for? You know, obviously the economy of will survive a modest increase in the corporate tax. I don't think it's a good idea of it will certainly be survived. But the small increases in capital taxes that might have a chance of being enacted are too small to really pay for anything like this bill, and assumptions like savings and drug prices are a remaking of a system, not really a pay for it a conventional set. So the numbers just don't add up. Number.

What does Chairman Powell not want to say today? What's a single thing where he needs to be signed? Well, I would guess from his perspective he would rather punt on the discussion of the path for rates as opposed to tapering. He probably also would like to avoid talking about the other taper that's happening, which is the change in the rate of growth of fiscal stimulus. Obviously, that is a taper that will be affecting the economy too, and I doubt he wants to weigh into that. Glenn,

thank you as always fantastic to catch up with. Glen That the Columbia Business School dean emeritus and former Council of Economic Advisors Chairman. It's what's so important here, John, is the idea of will I go full brid We know the measurement of you going full Yank in black rocket. Mr Fink have decided we need the British to go full Yank in America. And our next guest is she's she's gone full You want to have this discussion with a wonderful fund manager. Yeah, she is makes comes strategists

like Marin Watson. You want to do that now, which no, we do right now. We can talk to her about the serious issues. But she's an example of the international zai absolutely. Marilyn. Did you find that you lost your tease early on? Is that what happened? I think I have lost them a little bit. I'm trying hard, not too though. I'm trying to keep them, but trying to slip might slip to Marilyn. It's great a catch up with the Marilyn Watson here with this black Rock head

of global fundamental fixed income strategy. Marilyn, let's just start with today and the Federal Reserved Chairman. Something we've mentioned through the morning how difficult it will be to communicate that the decision ultimately on Que's divorced from a decision on rates doesn't set the clock ticking when the dot plot is going to be in the mix as well. Yeah, I think already they've done a relatively good job of trying to decouple tapering quee with a rising interest rates.

I think they've been trying to signal that, and I think they have done a relatively good job. I think going into today, the market is expecting to maybe hear a little bit more around tapering, but they're not expecting too much. Maybe, um, something will change in the forward guidance about you know, substantial further progress being made UM, and you know, the market, I think, you know, the consensus is that tapering will start at some point before

the end of this year. UM. In terms of the dots, that is something that we and I think most market participants will be keeping a very very keen eye on, particularly as we see um, you know, maybe maybe an adjustment two. It's hard to see, but we'll also get the nuance scored twenty four and at the moment, it probably looks like the Federal still probably be suggesting in adopt loots that you maybe have three great hikes in

twenty twenty three and three and twenty twenty four. But I think that's so far done a pretty good job of keeping a tapering queue and a changing interest rate's pretty well separated. Well. You do a world class job of synthesizing all that you read and fixed income dynamics, what do you anticipate the real you will do well.

So it's interesting if you look at the behavior of the U S real yield versus h you European rates, or you actually see that, you know, in relative terms, actually it takes a little bit higher um and I think if you do start to see it, it depends the messaging taking away from this meeting, and if we do get further guidance on you know, tapering towards the end of the year, maybe the dots as well, if it's perceived to be a bit more dovish, then I do think you will start to see you know, you'll

subb to see the dollar tick down, and you'll see an impact on bill hills as well. But at the moment, I think we would expect to see real yields continue to basically tick up a little bit more if we do get the FED you know, signaling that they are going to continue with the framework of tapering before the end of this year, and also the pace will be

important as well. I doubt Maryland that the dead ceiling in today's decision is going to have any real bearing for the FED, But for the bond market, is there a real fear there around the potential of that suspension not being extended. Well, I think it's definitely another layer of uncertainty to add to the myth mix, and it's certainly another risk. I think, Um, you know, not to be fully discounting it, because it is it is a risk that is still there. But you know, on the

base scenario it is that something will be agreed. But I think if you add that to to COVID, you add it to the news around growth generally in China and elsewhere as well. Um, it's just another factor that I think will maybe contribute a little bit more to the ongoing volatility that we're seeing at the moment, perhaps more in the exuerty market than actually in the fixing com market at the moment. But as you say, I think it is definitely a risk, and I think it

is to a certain extent big priced in. But at the moment um, you know, I think the general consensus that will be some sort of agreement, but most there always is China will deal with it. China will deal with it. Marian, Thank you. Mann Watson. Black Rock Head a global fundamental fixed income strategy. GM four A is standing by he could join in this conversation. Airbus is holding a sustainability day to day down in to lose this clearly ahead of COP twenty six GM. Welcome to

the program. Thank you very much, D for your time this morning. You said this morning, and we'll talk about sustainability first. You said this morning that you are becoming quote more confident in your ability to deliver a hydrogen airplane by twenty five GM. The physics and the chemistry is incredibly complicated. What gives you that confidence. The physics is complicated, but the physics works. Hydrogen technologies are not new.

They are used in in other sectors. We use them in space on our rockets, and we don't need the loads of physics to change to be able to use hydrogen on our planes. So every day we become more confident. But we think we need to have a plane. We need to have the right fuel, the hydrogen available in the right quantity at the right place at the right time, and we need the regulations to be ready. So we really need the work and the collaboration of many people

are on the globe to make it happen. And that's why we have the summit to create that momentum and make sure we have the right level of collaboration to make it happen on time. What problems do you still need to solve, what needs fixing, and what kind of aircraft should we be thinking about. Is this kind of a turbo prop sized aircraft a smaller aircraft all were thinking about a replacement for the eight three twenty family.

The technology needs to be introduced in planes in aviation, so we we need to be able to deliver the fuel at the airport, to use the plane on board, to store it, to burn it, or to use it in a fuel cell um. There's a lot at stake at the moment we are looking at those technologies, so it's not really about solving problem ms. It's about understanding the way we can use the different technologies and then selecting the right ones. When it comes to the plane themselves,

Hydrogen as different characteristics compared to carosine. There is a higher weight density of hydrogen compared to carosine, so it's good from the weight standpoint, but it takes more volume for the same quantity of energy, So the planes we'll have probably a different shape at different architecture, and we will use less hydrogen in terms of weight less hydrogen

on board than with carosin. So we believe we're gonna start with a short and mid range aircraft before it goes to longer distances or other smaller planes at the beginning, which is also something reasonable to consider when you look at the investment that will be required. So smaller investments for smaller planes easier go to market um and more

convenient when it comes to the use of hydrogen. Gim we will just check thing about the North Atlantic and figuring out exactly what kind of impacts President Biden's decision to reopen the North Atlantic is going to have. What is your perspective on this, When do you think that we're gonna start seeing the reopening translating into new orders, new white body orders for Airbus. You make a very good connection between the reopening of the North Atlantic and

the white body situation. Actually, what we see at the moment is a recovery on domestic flights, original flights um and therefore the production increase at their bus on the narrow bodies, on the single lined business the E three twenty family. But we are still at a very low pace when it comes to white bodies. It's the beginning of the process. I hope that the reopening of the North Atlantic we trigger other positive news when it comes to long distance flights, but it's a bit premature. So

we're very happy to see this first milestone. That was the most important one and probably the easier to get UM on the on the long distance UH situation, So very good news for the industry. We need to get it right. I think this is gonna be okay. It's very important for the US and European airlines will very much help in general in the path to recovery. So we're very happy with it. Um Um. Some in the market is starting to believe that you will easily beat

your six hundred delivery target for this year. Um I'm wondering though, whether actually supply chain issues could end up having quite a negative impact. What are you seeing in the supply chain right now? Any chip shortages, any material shortages. What do you think the energy crisis in Europe is gonna mean? Do you think you're gonna have any impact from that? Actually, we continue to operate in a very challenging,

complex and unpredictable environment. We've delivered roughly three hundred planes in the first half, so six hundred for the fullier is something that really makes sense from our perspective. UM. The supply chain situation is challenging. They're really in a difficult spot. As I said earlier, we're working very closely with the supply chain. We're happy of what has been achieved in the last eighteen months against the backdrop of this incredible crisis, but now that we start to ramp up,

we see some difficulties. Our suppliers have challenges in accessing raw material, including on the prices of raw material UM, to reopen plants, to rehire or hire people for the ramp up in this challenging situation, it's not easy UM, and we are prudent when it comes to the speed of recovery of our production. So again we believe the six hundred target we have given to ourselves is a realistic one. Always the pleasure. Thank you for your time.

Thank you for sharing a little bit of what you're thinking about the sustainability story UH and how it's going to progress from here. GM four, the CEO of a US. This is the Bloomberg Surveying Podcast. Thanks for listening. Join us live weekdays from seven to ten am Eastern on Bloomberg Radio and on Bloomberg Television each day from six to nine am for insight from the best in economics, finance, investment,

and international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, and of course, on the terminal. I'm Tom Keene, and this is Bloomberg