♪ >> pandemic is definitely coming under control. economic activity is returning to normal. >> we really need to see the data in the second half. right now it is about projections. >> what the fed is afraid of is that the money starts burning a hole. >> the fed and jay powell have been doing the right thing, and if anything they are going to have to do more. >> they do care if the stock market were to collapse. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: for our audience worldwide, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. the headline dropping a class -- dropping across the bloomberg

terminal, the united states to call for a pause on the j&j vaccine after clotting cases. this coming from "the new york times" in the last minute or so. a quick look at the price action off the back of that headline, equities are lower. a mild move on the s&p 500, down by about 0.2% so far. as we take in the reporting, and i will repeat that, the united states to call for a pause on the j&j vaccine after clotting cases, that is according to "the new york times." tom: we will see it from everybody today. another headline coming out of the joint cdc and fda statement on this. what i would go to is whether it is this or astrazeneca or everything else, it is a measure, and i don't want to editorialize here, of statistical perfection. as the pros we talked to well know, there are standard

ranges. errors are allowed, but how much? jonathan: i think we need the official response from the administration. the cdc to convene a meeting wednesday to further review these cases. this is important. we have seen it play out around the astrazeneca vaccine in europe as well. the good news for america right now is that we still have the pfizer/biontech vaccine. we still have the moderna vaccine as well. the cdc and the fda confirm recommending a pause in the use of the j&j vaccine. that headline just coming across the bloomberg. the cdc and fda confirming a recommending pause in the j&j vaccine. that is the headline that just crosses the bloomberg. the cdc and the fda confirming recommending a pause in the use of the j&j vaccine. tom: yields don't move all that much. it is very much in equity bloom off the rose.

what is important to me is the world cases -- is the word cases. there's obviously multiple involved here. lisa: the question i have from a market perspective is the tail risks that are priced into the market. to so many people have moved past covid. if you look at the survey from bank of america, 15% said covid was not the main tail risk. the pandemic is still here. if we get this news, how disruptive could it be? jonathan: getting some more headlines from the cdc, over 6.8 million doses of j&j have been administered in the united states. j&j stuck in the premarket down by about 2.6%. there it is, the cdc and fda confirming recommending a pause in the use of the j&j vaccine. similar headlines we have seen play out in europe. tom: it is very different nation to nation, and frankly, regions

of nations. everybody has a different story. you feel positive, you feel constructive. certainly we do in america. and there's a set of headlines that give you a real market reversal, unlike we have seen recently. jonathan: the fda reviewing data involving six reported cases of blood clots. that is what the fda is reviewing data of after administering 6.8 million doses of the j&j vaccine in the united states of america. lisa: this goes directly to your point earlier about boxing hesitancy. it is not necessarily about the efficacy of the vaccine or the safety, if we are talking about six cases among the millions distributed. we are talking about getting people the confidence that they are getting the information they need, but they will not be harmed by the vaccines that by many measures seem to have been rushed to market. jonathan: to drain some of the drama from the conversation and report with caution, the cdc

and fda are pausing -- are recommending a pause of the j&j vaccine. s&p 500 futures down by 17 points, off by 0.4%. physically unchanged going into that headline, so the move so far is 0.4%. we come in just a little bit on 10-year year at 1.66%. crude still positive by about 0.4%. so i've got to be clear here, they headline it had -- the headline itself around the j&j vaccine is worrying. i will allow other people to come up with their own risk assessment based on the 6.8 million doses of that particular vaccine that have been administered in this country. but for the market so far, it is not a dramatic move off the back of this since we still have two very effective and safe vaccines in this country.

tom: what is important here is j&j is a one dose vaccine, and you also don't have the temperature issues you have with pfizer and moderna. but i do take your point, that we can continue forward with belief that we are going to get the vaccination. you see the preposterous this -- the preposterousness of the percent. i'm sure the mood is to worry about the seventh or eighth case. that statistic is 0.00 0,000,882%. -- that statistic is 0. 000000882%. that is pray low. jonathan: sebastian price -- sebastien page of t. rowe price joins us now. can we just get your reaction to that headline that crossed the bloomberg?

sebastien: the market focus on the destination and the paths to get there is somewhat rocky. this is a setback, and it is going to make people nervous. you see the market react this morning. but the destination is covid off. we have had 100 million doses already, so in our portfolios, we remain his for the recovery trade -- remain positioned for the recovery trade. tom: i look at where we are, and it is about reaffirming diversification, about making choices, about a portfolio approach. so many people on this show are talking about a barbell strategy , may be around successful pandemic outcome. is a barbell strategy diversification? sebastien: it is to a certain extent, and we are doing some of that tactically right now. we bought a lot of stocks around the selloff. we didn't time the bottom

perfectly. our by price, probably 2700 on the s&p. please don't write a headline saying they are getting out of stocks, but on the margin, we are taking profits and selling stocks. to your question on the barbell, we are short duration. instead of buying bonds, we are putting the proceeds from selling stocks into tips, into absolute return fixed income strategies, as well as bank loans. just like high yield, but with a better behavior in a rising rate environment. notice i didn't say valuation. valuation is puddling at the moment. i would say it is in the eye of the beholder. 99th percentile based on price-earnings ratios going back 100 years. you can question whether data

from 100 years ago is even relevant. however, the big tech companies that are generating those massive cash flows in the markets are producing a price to cash flow ratio that is actually more reasonable. if you just look at price to cash flow instead of price to earnings and adjust that ratio for the level of rates, you get the conclusion that the markets are cheap, actually the bottom 10th percentile. so valuation is in the eye of the beholder. we are looking at sentiment. it is as bullish as it has been if you go back the last three years. so the barbell makes sense on the margin. i think you start taking away from stocks and instead of putting this in duration, you

get a smart way to play the fixed income trade. lisa: basically edifying his view of going to cash with part of that money. what are you waiting for to go back in and more fully going to stocks? a correction? sebastien: what is the probability of a correction? you can always get a correction in markets. when markets are making new highs and price-earnings ratios are that high, the probability is going up. but i would argue the probability is probably lower than most people think because, and this is the environment, the macro picture is just so good. you just had the ism number, 63.7, at an all-time high for services. you had a good jobs number, looking at $25 trillion in stimulus, one point $5 trillion in excess savings in the u.s. -- $1.5 trillion in excess savings in the u.s.

we just sent checks of $1400. this is literally the helicopter dropping the money. so therefore, the probability of a correction is always there, but might be lower than people think. i think on the margin, you move towards the barbell tom is talking about. take some profits away in stocks, and add to some of those lower duration, fixed income -- income like salute return tips and bank income loans. jonathan: joining us on the breaking news of the last minutes, let's repeat that for our audience, as of yesterday, 6.8 million doses of the johnson & johnson single-dose vaccine had been administered in the united states of america. the cdc and the fda are reviewing six reported cases in america of a rare and severe type of blood clot in individuals after receiving that vaccine. all six cases occurred on women

between 18 and 48, and symptoms occurred six to 13 days after vaccination. this is what we know so far from the cdc. they will convene a meeting of the advisory committee on immunization practices tomorrow to further review these cases and assess the potential significance. the fda will review the analysis and investigate these cases. until that process is complete, they are recommending a paul's in the use of this vaccine -- a pause in the use of this vaccine out of what they call an abundant of, -- an abundance of caution. tom: we will speak to experts. sam fazeli joins us right now, with bloomberg intelligence, with university of london pharmacology. dr. fazeli, there is a risk for all vaccines, aren't there? sam: absolutely. one of the things we have to think about is there is reward, and the united states being

extremely cautious here because the rate, at least on the front line of the number, six out of about 7 million vaccinations, doesn't look like a particularly high rate. but this is an odd disorder which just shouldn't be happening. that is the problem. tom: this is really critical. this is a critical distinction, and this is why we love sam's that is ellie -- love sam fazeli. you are making the distinction that a single event of a blood clot is an odd occurrence given a vaccine? sam: yes because this is not any old blood clot. this is a blood clot that also involves another disorder. they are very rarely seen together, or perhaps never. why can also tell you is don't forget that the 7 million doses haven't probably been all followed up for four to 10 days or so, so there's probably going to be more of these rare events. therefore, the number goes higher than one per million.

jonathan: from what you have heard so far, how similar is this news to what we heard from astrazeneca across europe and the last month as well? sam: astrazeneca's numbers are much higher, dealing with one and 100,000. but as i set -- one in 100,000. but as i said, we have different equations to solve here. america has lots of pfizer, lots of butter in a doses -- lots of moderna doses that have not had this problem, so it is critical that we figure out whether this is, even if it is very rare, do you really want to expose people to the side effect? lisa: all six recipients of the j&j vaccine who did develop this rare situation were between the ages of 18 and 48, all women. talk a little bit more about how the u.s. has supplies of the pfizer/biontech, as well as the moderna vaccine, enough to get

to the threshold they are looking for by summer. could we in the pandemic without the pfizer -- could we end the pandemic without the pfizer -- or without the j&j? sam: yes, but i wouldn't use the phrase end the pandemic. we will hopefully get cases down similar to what you have seen in the u.k. in terms of deaths and hospitalizations. this virus is with us for a long time. i don't think the u.s. needs to j&j vaccine to get to its target , and that has been brought forward on a regular basis by the administration. so summer time, i think that is the target that can still be in place. the j&j vaccine. lisa: one of the fears is that disclosing this type of information makes people hesitant to get the vaccine, even if it is a very rare occurrence, like tom was talking about. the percentage here is really small. can we talk about the weighing of transparency versus getting the most doses out to the most

people to prevent this virus from killing more people and harming the world? sam: absolutely critical point here. this is exactly what should be happening, with the cdc doing what it is doing. when you have had 100 million doses in more of mrna vaccines from two different companies administered, and i looked at the cdc database for cerebrovascular, sinus, i couldn't find any cases after the vaccines. so i think we are safe enough now with that many millions of doses of pfizer and moderna to know that we are in a pretty good place with those two vaccines. we don't need the j&j vaccine for the united states. the rest of the world is a different matter. jonathan: just a final question for me. the cdc will convene a meeting of the advisory committee tomorrow, wednesday. i think a lot of people will read that and say why wait until tomorrow. sam: these are 15, 16, 14 people

you have to corral and put them in one place. get them the data so that they can read the cases and understand them. that is critical. there's no point going into a meeting blind, not having been able to study the cases. so one day is actually pretty good. jonathan: sam, good to catch up as always. just to recap that breaking news for you, six point 8 million doses up johnson & johnson administered in the united states -- for you, six point 8 million doses of the johnson & johnson vaccine administered in the united states. the fda and cdc are recommending a paul's in -- a pause in that vaccine because of a rare blood clot condition in six cases. the fda will review that analysis as it also investigates

these cases. until that is complete, this is the headline. we will take a pause on the j&j vaccine. at least, that is what they are recommending in the united states of america. tom: the history of this goes back to 1960, and there is a significant distinction stated by washington and by the fda, the cdc, and all of the institutions that the united states will be different. this was codified in the thalidomide crisis of the late 1950's, culminating in frances kelsey's work at the fda in 1960, where we said we will be more cautious. with us now, the ever cautious jack fitzpatrick of bloomberg government. jack, the heritage here of a cautious washington and a cautious institutional medical washington is tangible. what a shift from the trump administration to the biden adminstration. describe that shift. jack: i think one of the biggest

public shifts, aside from getting the vaccines out in the numbers we have seen, one of the biggest public shifts has been updated rolling deadlines or goals. when biden talked about wanting people in a hesitant way to go to a fourth of july barbecue, they set enough flexible deadlines while warning that things could potentially go badly so that this major setback, or seemingly major setback, doesn't necessarily break the entire plan. every sprinkle of good news has been mixed in with a warning that this might get setbacks, so the expectation does seem to be set that the fast pace of vaccination might not continue or might hit a bump in the road. tom: who should we watch today in washington? you are going to get offset here and focus on the individuals in

the biden adminstration. who should we watch for? jack: it is interesting you asked that. i think the past few months, everyone has been watching for information directly from the president. there's a lot that is going to happen behind the scenes. the scientists at the fda obviously have the most important role in studying this. there has been so much communication directly from bite into the american people that i think that is probably the answer. lisa: sam fazeli was just on, talking about how the u.s. could probably vaccinate a certain threshold of the population without the j&j vaccine, but it does raise questions about the rest of the world. how does this fold into the debate in washington about distributing inoculations, distributing vaccines to emerging markets, two areas much slower with their vaccination efforts? jack: that debate hasn't picked up and gotten really partisan as much of the -- as much as all of the other fights in washington

right now. there's a conversation about getting vaccinations out to other countries. it is important to make sure the virus and more variants aren't brewing out there, even if it is not in the u.s. yet. i am not sure this throws a huge wrench into that conversation, but obviously in terms of speed of the number of people who can be vaccinated quickly and then allow the u.s. to get more of these out to foreign countries, it is not good news. but that hasn't turned out into an absolute partisan fight just yet. jonathan: jack, stay close. just want to get to the price action of the moment. to recap the headline, the cdc and fda recommending a pause in the use of the j&j vaccine out of what they call an abundance of caution. the price action off the back of that looks like this. the s&p 500 down by 12 points, off by around 0.3%. yields were higher, then lower off the back of this headline, backup by a single basis point. the take away seems to be something sam fazeli mentioned

just moments ago, which is that we can still get this done in america, even without the j&j vaccine, which perhaps explains right now the lack of a dramatic move off of that headline. tom: as you mentioned correctly, the elasticity of yield here, yield is really indicating it is abrupt, it is a shock. futures ebbed away, but still above 4100 spx. i really take note of how the yield came back. lower yield bounced back to a flat higher yield. jonathan: j&j down by around 2.7%. elsewhere, pharma stocks still doing ok. you brought up the data. 6.8 million doses of the j&j vaccine administered in the united states of america. we are talking about six cases, six reported cases. the fda and cdc are pouring through the data. this is what europe was criticized for, and abundance of caution around a small number of

cases in the context of a large number of vaccinations that have taken place. same question will be asked to the fda and the cdc as well. tom: i've got the number here. it is essentially meaningless. it is 0.000000882%, and sam fazeli said astrazeneca is at a much worse one and 100,000. jonathan: jack, have we heard from the administration yet? do we expect to see anything this morning? when can we expect to hear from the white house on some important developments around the vaccine effort in america? jack: there hasn't been enough time to get much of a reaction out of washington, let alone the white house specifically. this does seem like the kind of thing we could hear a reaction to relatively soon. i would look for responses to how this affects the timeline,

and immediate response out of washington this morning, but it will probably be a cautious response because so much of it hinges on what fda scientists find about causation in those numbers. jonathan: a recommendation from the cdc and the fda to pause the use of the j&j vaccine. jack, good to catch up. jack fitzpatrick, bloomberg government reporter. we will hear from the white house. jared bernstein, member of the u.s. council of economic advisers, and about 40 minutes. we have to ask straightaway whether there has been any response from the white house to these headlines dropping from the cdc on the fda in the last 20 minutes. tom: they are moving at washington time, jon. it is seven: 24 wall st time, so that first cup of coffee is about 20 or 30 minutes away. if they get into the morning news cycle, we will hear from them. jonathan: i agree with you, but let's be clear, 3.2 one million doses per day.

that is your average amount of vaccinations per day. tom: i just got a tweet that guy is going in for the second moderna shot today. jonathan: the white house needs to address this because we are talking about 3 million vaccinations a day. i agree with you, they will. but the conversation around europe we are having in the united states has well around the j&j vaccine. we talked about an abundance of caution in europe, maybe whether it was too cautious. we will be asking the same questions here as well. lisa: transparency is key when it comes to trust, and getting people to trust that they will be safe getting these vaccines. there is a very delicate balance in making sure that people get vaccinated while also making sure they understand that they are getting all the information. jonathan: we will bring those headlines as they cross the bloomberg. for our audience worldwide, from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equities a touch lower, down by 0.3%. yields a touch higher, up by a sickle basis point on a u.s. 10

year to -- by a single basis point on the u.s. 10 year to 1.6675%. heard on bloomberg radio, seen on bloomberg tv, for our audience worldwide, this is "bloomberg surveillance." ♪

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♪ jonathan: from new york city for our audience worldwide, this is "bloomberg surveillance," live on tv and radio. the cdc and the fda recommending a pause of the j&j vaccine here in the united states of america. equity futures down by about 14 points, 0.3%. no drama right now. let's be clear about that. the pain is felt in the small caps come over you might expect it to be. the russell down by about 0.7%. the cyclical trade was already stalling. switch up the board. let's get to this. crude, cover, and small caps have ripped your to date. the rustle up by 13%. think about where they peaked.

copper at the end of february, crude at the beginning of march, and the russell in the middle of march as well. this is what i want to sit on at the moment. coming into the reopening and the renewed physical effort, before we have even started to see the data, cpi and about 60 minutes, retail sales on thursday, that cyclical trade through commodities starting to stall out about a month or so ago. tom: it did, there's no question about that. we have seen that within the commodity index, and i would say the currency markets have seen it as well. the starla -- the stall out which for reaffirmation tomorrow from j.p. morgan. jonathan: let's get to the price action here and now. in the bond market, off the back of that headline from the fda and the cdc, recommending the pause of the use of the j&j vaccine, yields were lower for about five minute, now higher on

the session by a basis point on 10's. that's your price action off the back of an important conversation. romaine, so far the price action is not so dramatic. romaine: not too dramatic here. this going to be a short-term knee-jerk reaction when that j&j news crossed the wire. we did see about 20 points are so shaved off of s&p futures. we should point out that j&j is a relatively heavy weighted company. i think it is the 10th highest weighted company in the s&p 500. so in this premarket pricing, down about 3%, if that holds into the open, you will definitely see a little bit of a drag, at least in the short term. it might help some competitors. moderna getting a bid, pfizer as well. outside the pharmaceutical space and outside of everything going on with the vaccine, used to have spac deals out in force here.

baltimore -- ultima grabbing a deal. there was a lot of speculation that this was going to happen. then you see on the screen, the other big news out of china, overnight u.s. time, chinese regulators told about 45 companies, you see what we did with ant group. this is a broader issue. they have set out a very clear list of conditions that these companies have to meet over the next month. assuming that they meet them, they won't be fined and been the same fate of jack ma -- and meet the same fate of jack ma and some of his empire. keep an eye on the crypto space. this will be a big week for crypto. that coinbase direct listing coming tomorrow. you are seeing silver gate and a lot of companies involved in the

transactional side of bitcoin and crypto really getting a bid today, as well as yesterday. tom: thank you so much. greatly appreciate it. we welcome all of you across the nation and worldwide on radio, on television. of course, the news that johnson & johnson's vaccine is pushed aside temporarily over blood clots. a distinction we have learned from the experts, including sam fazeli at bloomberg diligence, is -- bloomberg intelligence, is the distinction with astrazeneca . it is not astrazeneca, and that distinction is four zeros after the decimal point for astrazeneca versus the really scant six zeros for j&j. that really sets up a separate, much more cautious tone from washington. we will hear more no doubt this morning. matthew horn buck -- matthew hornbach with us of morgan stanley, head of global macro

strategy. how has the market taken to shocks from the news we learned moments ago? matthew: thanks for having me on. i think this is the headline the markets will be able to move past, but it is not clear to me that the central bank community will look at the headline in quite the same way as the markets might. the reality is central bankers have been very consistent on their rhetoric around the pandemic. we are not out of the woods yet. i think a headline like this will just keep that narrative alive in their minds, and ultimately convince them that it is too soon to start pulling back on accommodation or even beginning to signal that they are thinking about pulling back on accommodation. it is just too soon. we need to get through the summer time and see how the vaccination rate develops, the infection rate develops. i think once we get past that period of time, the central

bank community will be in a better position to make a judgment call. jonathan: something that mohamed el-erian mentioned in the program with us, a conversation about the inflation story and a conversation the markets would have over the next couple of months. can you draw a line between the central bankers that will look at this for various reasons, and the markets? what will that tussle look like over the next couple of months? matthew: ultimately, it will come down to how the central bank community can frame these near-term inflation numbers, which they have already been trying to do, but they really need to continue to hold the line on their communication around these near-term inflation numbers. they are going to be strong. it is just a matter of how long are they strong for, and certainly what we have been hearing from people on the fed is that the strength we are

going to probably end up seeing through the summer time is just not even close to enough for them to start to react to these numbers. they need to see inflation at 2% on a much more sustained basis and what these base effects are going to end up giving us this year. lisa: markets are looking past whatever the fed says and trying to determine on their own. how much are you looking past savings that american consumers have to spend, and how quickly that is getting into the economy to determine transitory or not? matthew: we are talking closely with our economists on this, scanning our marketplace for research, most of it coming from the federal reserve, and what we are seeing is that about 1/4 of stimulus checks are going into consumption. the balance is going into paying down debt.

the thing is, we are incorporating that dynamic into our forecast. our economists do see upside risks to the spending later this year. later this week, and fact, we are expecting a very strong retail sales number. but ultimately, i think you are going to have to get past the end of this year to see whether or not this type of spending coming from the u.s. consumer, this type of inflation that the economy is generating is going to be sustained. i think if we can see that, that will put the fed in a much better position to begin to pull back on that accommodation. tom: so much of this is guesstimating the first and second derivative of yields and the rate. i am absolutely fascinated when you synthesize morgan stanley fixed income if you are focused on the first or second derivative. is the fed focused on a longer x-axis, or are they worried about acceleration in 2021 of yield? matthew: they are thinking about

the medium to long-term. they've got two issues front and center on their plate. one of course is the labor market, and the second is inflation. i think the way they are looking at inflation, it is a much longer-term issue for them. they are not necessarily worried about, and the labor market to maximum employment. they have seen that the economy can turn out jobs if left to its own devices over time. the real issue for them in the medium to long-term is the inflation pass, and that is not something they are particularly concerned about at the present moment. they don't need to see inflation get to do percent today. they needed ash get to 2% today -- get to do percent today -- get to 2% today. jonathan: matt hornbach, good to catch up as always.

looking for retail sales 4.9% on thursday. that data and about 50 minutes. tom: i am going to go to the dynamics of housing. i think the housing mystery here , rent, ownership, all of it is going to play into this. frankly, what i am going to do is talk to david rosenberg. i think david will slice and die this -- and dice this, along with others as well. jonathan: how rents reset, particularly in cities like new york city. lisa: a study came out that said cities will see the fastest rent it increase -- the fastest rent increase when people come back. the question is how much of this cash pile people will put into discretionary spending. this is one of the mysteries, and frankly the distinguishing

feature of growth estimates among economists across wall street. how much of that will get deployed into travel, into leisure, into things people can do for fun? lisa: and what happens -- jonathan: and what happens with that savings rate? 8:30 eastern time, we will get a cpi print of inflation in the united states of america. before we get there, we are going to catch up with jared bernstein, member of the white house council of economic advisors. the conversation with him is not just about the cpi story. it is also about the latest news around the j&j vaccine, with the fda and the cdc recommending a pause in the use of this vaccine. i thing a lot of people in this community, and financial markets, are going through the data and looking at the 6.8 million doses and saying, six reported cases of 6.8 million is a fraction, a very small fraction. the questions about risk and assessing risk are a question we will continue to ask through the day. tom: jared bernstein will say he

is not a virologist, but he can address the sociology, the confidence that breaks with this news. jonathan: we will do that conversation with the white house in just a couple of minutes. live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. this is "bloomberg surveillance." ♪ ritika: with the first word news, i'm ritika gupta. federal health agencies are calling for a halt in the use of the johnson & johnson coronavirus vaccine. six people in the u.s. who received the single-dose vaccine developed a rare disorder involving blood clots. all were women between the age of 18 and 48. or than 6.8 million doses of the j&j vaccine have been given out in the u.s. president biden says he has congressional support for government funding to address that semiconductor shortage. the shortage has forced automakers around the world to

shut down production lines. the president spoke at a white house meeting with more than a dozen ceos. he said that bipartisanship for his proposal will include manufacturing and research. oil output levels in the u.s. are nearing levels not seen since the start of the pandemic. production in the permian bathe and is set to reach a high next -- the permian basin is set to reach a high next month. the u.k. has hit its mid april target to offer the coronavirus vaccine to all over 50. that is key to the plan to unlock more of the economy. people in their late 40's are expected to be invited to get the vaccine over the coming days. bitcoin rising to an all-time high today. the world's largest cryptocurrency smashed through the threshold, breaking the mark it set last month.

a growing list of companies embrace bitcoin. 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. ♪

♪ pres. biden: i've been saying for some time now, china and the rest of the world is not

waiting, and there is no reason why america should wait. we are investing aggressively in areas like semiconductors and batteries, chips like the ones i have here. these chips, batteries, broadband, it is all infrastructure. this is infrastructure. jonathan: the president joe biden on the infrastructure push, trying to alleviate some of the issues around semiconductors and chips as well. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the price action this tuesday morning. inflation in america 42 minutes away. going into that, equities lower by 10 points, off by about 0.25% on the s&p 500 area yields higher i a single basis point on the 10 year -- the s&p 500. yields higher by a single basis point on the 10 year to 1.6801%. crude above $60 a barrel. we can bring to you right now

that we have had six cases reported of severe and rare types of blood clots involving individuals who had received the j&j covid-19 vaccine. out of an abundance of caution, the cdc and fda recommending the pause of the use of this vaccine after administering 6.8 million in the united states of america. tom: it is interesting to see the news of the story forward. we are to seeing at 10:00 a.m. this morning the fda will speak. that will be interesting to see, to say the least. let's drive forward the conversation. drew armstrong with us, senior editor for health care at bloomberg news. i am curious, your reaction when you saw the headline. did you expect to see this debate coming? drew: i would say yes, but in some ways, we have been complacent and have been incredibly lucky so far. one thing i will remind

everybody of is that vaccine develop it is incredibly hard -- vaccine development is incredibly hard. stuff like this goes wrong all the time. the u.s. and other places have gotten incredibly lucky in that two of the earliest candidates worked and appeared to be quite effective. that is not usually the way it goes. yes, i think this sort of thing is to be expected. we will see what comes of it. i think some caution is warranted there, but i think it has been a surprise given how fortunate we have been with the development of these vaccines up until this very moment. tom: in the development of your reporting, for you and your team, how do you define a blood clot? what is the unique distinction of that phrase involved with covid? drew: remember, we are talking about healthy people here essentially. i think we need to learn a lot more from the advisory committee.

they are going to be convening tomorrow, in terms of exactly how these events are characterized. but when you have six apparently relatively young, not elderly people here, women who developed led plots within a week or two after getting the vaccine, that is a worrying sign. it is worth keeping in mind that the rates are what i would still qualify as exceptionally rare. 6.9 million doses of j&j's vaccine have been given in the united states. this probably dates back to the time when the denominator was a little bit smaller because it takes a little while. the safety data is probably a little more of a lag, but you are really still talking about a very rare number. they need to take that, identify exactly what is going on here. if it really is related to the vaccine, or if it is just bad luck, and then identify what do you do about it.

do you stop using the vaccine altogether? do you stop it and some people? do you just say the risk of covid is way worse than the risk of anything else, and continue use? this is a complex decision. lisa: how much can we derive from the mrna vaccines that have not had these such problems? is this basically an endorsement of that technology? drew: it certainly seems like, based on what we know right now -- and again, i really have to emphasize the caution around this -- yes, those vaccines have been given close to 100 million times each, so there's a much longer and robust safety track record. every single one of these vaccines are new. this the difference that we are talking between three months old and four months old. those are not truly meaningful differences.

we haven't even gotten to full approval of any of these vaccines yet, that you would usually get with six months of safety data. so i really want to urge caution in how people interpret this information. it is going to make a ton of headlines today. obviously, it is going to be massive news. keeping in mind that situating this within the risk of the pandemic is the fact that they really do need to be investigated and more needs to be learned before we can really come to a final judgment on this. jonathan: sensible reporting, and we appreciate it. drew armstrong, bloomberg senior editor for health care. the headline out of the last hour, the cdc and fda recommending pause and the use of the j&j vaccine in the united states of america. tom: later in the it :00 hour, peter -- in the 8:00 hour, peter hotez will join us

out of baylor. right now for the white house, jared bernstein, member of the white house counsel of economic advisors. dr. bernstein, what is so charming out of your work from columbia is that you have always gone from the societal effect of america. how does the biden adminstration sustain the confidence of society given the shock of these false steps in our clearing from the pandemic? dr. bernstein: it is an important question, and i do want to make clear that while you're appropriately called me dr. bernstein, i am not a medical doctor. we have a deep staff of medical authorities and public health officials who are pouring over this information. on your question, again, it is always a joy to talk to someone who knows the history of what we are talking about here, if you

look at the polling on the infrastructure proposal, north of 70% of americans are supportive, and more than 50% of republicans are. the reason is when it comes to the fact that there are 400,000 schools and childcare centers wherelea -- where lead leeches into their water, there are a workers facing poverty, these are issues that are well understood by so many people in the beltway in terms of their necessity. governors and mayors understand the cost of this investment in infrastructure -- of dis investment in infrastructure. tom: what is the difference in the trump administration's take on science and the biden adminstration? telus us the science that you observe at 16 ash tell us the

science that you observe at -- tell us the science that you observe at 1600 pennsylvania avenue. dr. bernstein: from the moment president biden took office, facts were back in the mix, and science is a big part of that. dr. velti has -- dr. fauci has continued to play a key role. that is precisely what is occurring as we speak. i want to stay in my economics lane, but that is the fact of the case. jonathan: that is the responsible thing to do, and we expect nothing less from you, but we do have talk about their economy and the reopening effort. does this jeopardize the vaccination timeline of the administration of potentially reopening this economy in any way, shape or form? dr. bernstein: it is a totally

fair question to which i don't know the answer, and i don't think anyone else does either. i think before we can make the kinds of timing determinations you are asking about, we have to understand how disruptive this is, and we just don't know yet. it is the case, as you well know , the rescue plan played a key role industry being vaccines and helping us accelerate the curve of getting shots in arms, 150 million shots in arms, 150 million checks out the door. that is the rescue plan in action, but it is a question which we don't have the answer to yet, and it would be imprudent for me to speculate even the lack of information i have at this point. jonathan: it also fueled a big debate about inflation. we will get that data in about 33 minutes. let's talk about that because i imagine that was really impetus from the white house today around the inflation data in america. i have been asking this question, we all have on this

program. the base case consensus from you, from the, is transitory. how will you know if you are wrong? dr. bernstein: if you look at what me and my colleagues wrote yesterday on the white house blog, we talked about inflationary expectations. for long-term inflationary, understanding the long-term inflation trajectory, it is really an expectations game. one of the things we put in there, people might not have had their coffee yet, so i apologize if i am waxing too statistical, is something called the common expectations of inflation. this is a common nation over 28 indicators -- a combination of over 28 indicators. they have been rising to more

normal levels. i think that kind of an index which incorporates so many different households, survey measures, market measures, is the right way to think about future pressures, whether the anchor maintains or is nudged. lisa: what would you say to people who push back on your idea of transitory and say we are doing something different? this is an experiment of helicopter money, dropping cash into peoples bank accounts while keeping rates very low. what is your response? dr. bernstein: we have done this sort of thing before, and in fact, not only did we see unemployment fall to 50 year lows with a fiscal stimulus that was highly procyclical and last expansion, but inflation continued to miss its target from the downside. so i think it is really not necessarily mystery or magic. you basically have to look at the indicators. we are, as we tried to express in that blog yesterday, pretty

obsessively monitoring the indicators to understand the dynamics, which we expect, helping families get the relief that they need to helping states and localities get the resources they need, safely reopening schools. all of that is going to contribute to economic growth and going to have some impact on prices, as we are seeing. but the key point is distinguishing between heat and overheat. the overheat story, which we argue is something we are going to watch carefully, but is a lower risk probability than the importance of the other measures i talked about, that has to be gauged as well, and i talked about how we take it should be done. lisa: there's a confidence, too, the confidence to go out and spend from that cash pile. how concerned are you about the issues with vaccines slowing growth more materially?

dr. best