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00:00From the world of politics this will be the first time since some in almost a decade where all seven members of the Fed. All seven of those jobs are filled for the first time. There is there will be real diversity on the Fed to the world of business. We can have five G. And we can have aviation that works without massive disruptions. This is balance of power with David Westin. From Bloomberg World Headquarters in New York to hour television and radio audiences worldwide welcome the balance of power. We start with a check on the markets which are good all over the place today. Joining us is Abigail Doolittle. So it's been sort of an interesting first couple weeks of the year. But boy today today is very interesting. But you're right this entire year I mean right now if you were to close tonight the NASDAQ would be on pace would have its worst year since 2008. That's the degree of the selling that we're seeing. But today it has been all over the place. At one point we're looking at greater than 1 percent losses. The S & P 500 briefly touch its 200 day moving average. The question there is is that some sort of capitulation bottom or real finding of support that could support a move back up into the range. Because remember over the last six months or so we've been in a couple of weeks of risk on a couple weeks of risk. So now we've had a few weeks of RASCOFF Will we have risk on. I suspect that will depend on the Fed next week. But yeah it's a brutal brutally volatile right now. The S & P 500 down about six tenths of one percent after being down up now. Down. Yeah I took a pic of the VIX. VIX is up over 26 now again. So it's been spiking back up again. But let's go to your point. Exactly. Next week we do hear from the Fed. What are the odds that the markets really just are looking for some answer. Whatever the answer is let's tell we know what we're doing. That's an interesting point. I think the expectation is that they're not going to really say anything all that new next next week that more likely we'll get information in the March meeting in terms of potentially actually changing policy. I don't know. You know that's it will be interesting to see. I would be surprised if they do anything all that different next week. But to your point on the VIX being higher something to keep in mind with this volatility in addition to the Fed it is of course options expiration. So we have all of these moves. Volume right now is well above the 20 day moving average a 60 percent above the 20 day moving average. So I think that that's a big piece of it. And interestingly going back to the Fed yields are actually down a little bit this week. And for the first time this year it feels like a little bit of a haven play having nothing to do with the Fed. But yes next week the Fed you know that's the big deal. But again I don't think they're going to really say anything. But it has been a real rollercoaster. So thank you so much for failure for us. That's great. Abigail Doolittle on the markets. We turn to New York City now. New York City has a new mayor of course but it also has new leadership pretty much right across the board with Alvin Bragg taking over as the Manhattan district attorney at a time when violent crime is at the top of the mayor's agenda. He has generated some controversy with a memo he issued on his first day cutting back on some prosecutions. We talked with him earlier today and started by asking him what he is going to prosecute. Less and just as important what he is going to point to prosecute more. The top of the list is is done violence. You have a crisis going on with guns particularly in the upper part of Manhattan. That is really destabilizing communities. And so I've you know I've been a federal and state prosecutor. I've done gun trafficking work gun possession work. And that's the top priority of the game is to really use our of our resources particularly gun tracing technology to determine sources of gods and hold accountable elsewhere carry and using guns. In addition you know we just left. I just left a visual for someone dies and we're talking about the entire AP. And deeply divisive or hate crime unit. In addition domestic violence has been on the uptick during the pandemic. So those are the three top things that we're where we're looking at gun violence. He cries domestic violence and sexual assaults. So it was let's go back to that for our guns. IBEX here our big issue. Mayor Adams has already said that that's a big issue for him. Does that mean that we should expect your prosecutors to exercise their discretion to be even more aggressive in prosecuting those crimes and also seeking some very stiff penalties for people who commit violence with guns violence guns. And we've you know we've we've we've seen it. I mean late last year I talked about had a shooting like a lot of you know that is as significant as a gets that we're going to be doing those cases vigorously. We're also going to be building Jesus. Right. Not just being reactors building cases looking where the guns are coming and getting them off the streets or for their use of the tracing technology. Soccer BOVESPA g. Cha cha guide interdiction strategy. And so as you look at the sorts of crimes are you going to prosecute. You talk also about hate crimes. We have a lot of Asian hate crimes actually in Manhattan not just Asian but Asian particular. I've been in the news recently. How are you going to pursue those particularly. Well the first thing is he mentioned some of discretion or resources. So we've got a bill to pass the hate crimes unit that the ISE office has prosecuted. Prosecutors was very small very small ISE break leadership. But what we need to deepen their capacity you know people say sure your budget your charter reflects your anger here your principles. So we have to be more resources there. And we also have to focus those resources both on actual investigations which we are doing and also on partnering with the communities where I've heard as I've traveled around Manhattan is that you know there's a reluctance to come forward to law enforcement from some communities and people are more willing to come forward to a community. So we are focusing on building cases and prosecuting cases. And I'm also mindful that we may not be hearing about everything and we want to be so strengthening our community ISE as well. Mr. District Attorney I'm curious about the message that's sent out from your office in that memorandum. You sent a message whether it was received accurately or not. Are you concerned about that by backing off on some crimes. And I read through the memorandum actually includes things like turnstile jumping marijuana offenses things like that. By backing orphans and things like that you might be sending a message of leniency that might encourage some more serious crimes. Or are you willing to go lost in translation. I take accountability for that. You know the two things you missed have been going on for some time. So that that's not when I'm writing on a blank slate here. But the idea that the train fare issue and the issue with show is some of that's been codified by law. So we want to send a message out that we're going to be enforcing the law in the end where he focuses I think it's appropriate or in that which are the drivers of violence. I do think we need to send the message that we care about everything else to use the full range of government resources. So you know variations. Know it's not like there's no accountability. We're still going to get us. You know some in some of this would be NYPD been doing it for years in Manhattan. And so we're going to continue that. We're going to have government accountability which just given where we are on these issues. I mentioned those big crimes domestic violence and others. You know we really have to focus our attention there. What about resisting arrest. That got a lot of attention as well. Was that a continuation of current policy or was that a change in policy. Because obviously the police some policemen didn't like that that decision much. Yeah. So you know I clarified yesterday by police officers that were going to be tolerated. You know I'm a career prosecutor. I'm mindful. I sit behind a desk and I go for it and our fellow public servants. Then why did he go out of someone's way. So anyone who tries to find a short CAC or otherwise former officer. It's going to be prosecuted and held accountable. You wouldn't have done those kind of cases if you have prosecuted people assaulting police officers. We were talking about a narrow very narrow subset where resisting arrest essentially is the only charge someone has. You know you're not being oppressed or something else. It isn't actually trying to harm an officer. So I thought that was important. Clarification I hope. My partners in law enforcement heard and I'll keep on record repeating that anyone who harms or seeks to harm a police officer will be held accountable. The way we work it in New York you were independently elected. You are official on your own right. You don't answer to the mayor. As I understand it. And yet the mayor has been pretty outspoken on the need to really pursue public safety. How closely are you coordinating with Mayor Adams exactly on the approach on the right balance between on the one hand public safety and also as you say correctly justice. You know that the mayor and I are in very regular touch. You know you talk about the election season. I mean we both talked about very similar trajectories of two young black boys going into bed with experienced police accountability issues in their youth. And she told those experiences into a career in law enforcement. This case as a police officer my case as a prosecutor and now our focus both on on public safety and justice. So you know I'm looking forward to continuing the partnership with the mayor and office of the police commissioner since the relationship for my office to help deliver safety in partnership with the NYPD and the mayor's office. And finally Mr. District Attorney one of the things has gotten a lot of attention obviously is the investigation of the former president Donald Trump which is Alix Steel your office is doing in conjunction with the state attorney general Letitia James's office. How much Army resources is your office devoted to that. And I guess I would ask given the problems we have that you describe for example with gun violence with hate crimes. Is it a sensible use of resources right now to spend a lot of time and energy on that. So first that is a distinct arrest Casey's attorney general's office to make civil. We're doing a parallel criminal investigation. So we wanted to clarify that. And you know we we have a strong issue at hand. You know not just doing street fighting also sweet crime and doing both white collar and street crime enforcement. So we you know we are you know adjusting our resources within our white collar law. So we're still able to do what we can. And as I said in some areas even our capacity for street crimes. Given everything that's going on I mean public safety is our priority. But we've got a history of doing white collar crime enforcement. So therefore we've got personnel and a structure around that. So we've got. You know this is a case that's consequential and takes resources. But calling from other white collar enforcement and you know looking at our are our priorities. And as you know you relatively new to office. And so I'm not in any way prejudging that investigation and obviously mindful of paying attention to it. We're going to follow DAX where they go. That was my interview with Manhattan District Attorney General Dennis Manhattan. District attorney is Alvin Bragg. Coming up more talks today in Geneva between the United States and Russia over Ukraine all trying to avoid an armed conflict. We asked about the prospects of that with New York Times columnist and best selling author Thomas Friedman. This is balance of power on Bloomberg television and radio. This was not a negotiation but a candid exchange of concerns and ideas. Following the consultations that we'll have in the coming days with allies and partners we anticipate that we will be able to share with Russia our concerns and ideas in more detail and in writing next week. And we agreed to further discussions after that. That of course was Secretary of State Tony Blinken in Geneva today after he had met with his Russian counterpart Sergei Lavrov for his perspective on this crisis and what's to be done about it. Welcome now. New York Times columnist Tom Friedman and author of many books but most recently. Thank you for being late. An Optimist Guide to Thriving in the Age of Acceleration is a Tom. Thank you so much for being back with us. You had a column in your times this week. Terrific. Tom. Tom I think the title was something like Marry Me or I'll Kill You. Talking about Mr. Putin the president of Russia. And I guess my question is with all this talk that's going on in Geneva and elsewhere is it going to get us anywhere. Because if in fact his motivation is as you suggest really a need to stay in power by being a wartime president no talking is going to talk him out of that is it. Well you know yes and no really David first of all it's great to be with you all because I think every day that he doesn't go in is a good day because A we don't have a war. And B it suggests that he's really pondering this. It also suggests that some of the steps the United States has taken last week for instance letting the Baltic countries transfer American made Javelin anti-tank weapons and surface to air missiles Stinger surface their missiles to Ukraine. Putin has to think about this. He's not a guy known for taking wild risks. And the biggest risk to him is he goes into Ukraine and it turns into an Afghanistan. By the way once he goes into Ukraine then we have a lot of leverage. He's there. He's stuck. We can be giving arms to the Ukrainians. We don't have to go in there. And if he gets body bags going back to Moscow he's got a problem. Can he get a lot of what he really wants out of this deal without fully going into Ukraine maybe making some incursions really consolidating that eastern Ukraine maybe having a be semi-autonomous and getting some agreements from Ukrainian government. Well really yes and no. Because you know as you said David in your introduction this whole thing is utterly contrived. Ukraine wants to be in the West. It wants to be independent. It does not want to be part of Russia. It's got a new generation coming up built around Ukrainian language and identity. Putin contrived all of this to basically say to his neighbor I'm sorry you can't go away. You're part of us. You are. You're part of Russian history you know hundreds and hundreds of years ago. And in the modern world you know that's really not sustainable. So he can take a bite out of Ukraine. He may consolidate maybe even lop off the eastern part of the country that he's already effectively annexed in collaboration with the Russian speaking Ukrainian and little green men that is Russian soldiers operating there without insignia. He can do that is a lot of things he can do but he could pay a very very high price. And the longer this goes on he's got to move quickly because the Ukraine is not Afghanistan that it's flat. It's very very flat and flat. Icy hard ground is great for tanks. But when the warm weather comes it's a whole nother issue. This is awfully high stakes. I think it would be if in fact there were invasion maybe the biggest invasion across a country line since World War Two in Europe. As a practical matter given the stakes here are we showing our A game. Because let's be frank for example President Biden when he had that news conference I watch it. I'm sure you did. He wasn't crystal clear in his message to President Putin. He tried to come back and clarified subsequently. Yeah I think he cleared that up. You know I think we can really exaggerate what we say and what you and I as journalists see of what Biden says or Secretary of State Blinken says. I'll tell you what Putin is really watching. I would suggest it's stuff we can't see and that's arms. We're flowing into Ukraine to its army to strengthen the arm the armed forces and its ability to resist to turn Ukraine into what Taiwan wants to turn itself into a porcupine where you know the Chinese say to Taiwan or the Russians say about Ukraine maybe not today. Now I have no idea what Putin is going to do. It's all in his head. All I'm saying is that it's a high risk operation for him right now. It matters more to him than it does to us. So he has leverage in that sense. But once he's in there at very low cost we can make it very very painful for him militarily. Let along with economic sanctions time to expand this out of bed today. As I understand it there are joint naval exercises being held by Russia China and Iran. Put those three together. What does that tell you about what's going on in the world. Well there's really a it's a return to very traditional great power politics. And all three of those countries have an interest in basically evicting the United States from their sphere of influence. In China it's the South China Sea. Iran is the Persian Gulf. What they see as their sphere of influence in Russia it's said Eastern and Central Europe and so on. And they're all to some degree you know facing the threat of or the reality of U.S. sanctions. So they have an interest first of all in collaborating more closely maybe creating an alternative to the swift system that the U.S. dominates in terms of bank you know financial transfers that is central to our ability to impose sanctions. They have an interest in it playing off each other. Hey maybe if you start a little trouble here and I start a little trouble there. You know we can really give the Americans threat overload. But at the same time remember one thing. There's only one country the Russians fear more than us. And that's China. It's on their border. It's a giant growing economy. It looks across the Russian border at an empty basically Siberia. And believe me Putin will be very very careful in dealing with China. That's not an natural alliance. Well that's very interesting because I'm old enough to remember when Kissinger and Nixon went to China and really split up the Soviet Union as it then was with China because we thought they were aligned at that point as fellow communist countries. Do you think that those days are just gone that we could not go back to a world where we had to face something of an alignment between Russia and China. You know I think it's possible. I wouldn't rule anything out. That was such a different China though. That was a China really just coming out of a cultural revolution. Economically on its back needing desperately an opening to America to begin to revive itself. So it's just a very very different world. One of the biggest problems you know really you know this is the worst time I can imagine to be secretary of state because it's all about managing weakness really the weakness of our allies the weakness of our country the weakness of other powers. Know all kinds of countries you call up around the world. No secretary of state the leader pulls up the phone and the phone comes off the wall. I mean you know this is a lot of frail states out there. So the days of yore Rohit Diplomacy a Kissinger George Shultz Jim Baker that kind of diplomacy. It's much harder in a world where you're managing weakness not strength. Well that's a really profound thought. Thank you so much Tom. I really appreciate being with us. This New York Times columnist and best selling author Thomas Friedman. Coming up staying on Russia. How strong an economic hand is President Putin playing these days. This is balance of power on Bloomberg television and on radio. This is balance power on Bloomberg television and radio. I'm David Westin. President Putin has shown he's not afraid of confrontation over Ukraine. He is facing potentially one of the biggest confrontations of his tenure. What are the potential economic risks that he faces. For some answers now we welcome critic Gupta. So critic welcome that you've done a lot of work here. Develop some charts showing us what his economic hand is. Well let's just start off with the oil picture because of course it's going to be the biggest part of Russia's economy especially at a time when there is such voracious demand for oil around the world. But Russia is in a really unique position that they're the second largest producer in OPEC plus kind of cartel. But they don't actually have the capacity to ramp up production as much as they actually canceled. They're only actually scheduled or expected I say to meet half of what they need to produce over the next six months. That's a big problem for oil consuming nations like the United States like China like India. Could did you know is that lack of reserves or is that lack of investment to extract the reserves lack of investment. This has everything to do with whether actually it's because in last summer they didn't invest enough to kind of build out their capacity. Then the winter took over especially in those cold Siberian regions and they weren't able to ramp up as quickly. So it really does put the emphasis here on Saudi Arabia and the UAE which by the way are the only two countries in the cartel that do have that capacity to ramp up. How strong is his currency. Not doing very well. And this is why the sanctions piece is so important. You just heard Thomas Friedman on your show talk about Russia China Iran trying to get rid of this United States sphere of influence. Well the reason is because in 2014 those sanctions and of course the drop in oil as well. It was a double whammy to Russia's economy in 2014. You get 35 rubles on the dollar in 20 22 you get about 74. And the ruble has never recovered. So it really brings to the forefront what happens to a lot of that credit risk. In particular how are people positioning for that. And for that exact reason the thing that if they invade it's not going to look good especially for when it comes to Russian debt. And for that reason you're seeing those credit default swaps insurance very look like red swaps. Exactly. Well that insurance risk it's spiking more and more people really hedging their portfolio. The thing to keep in mind is it's not spiking as much as it did in 2014. Great report. Thank you so much Chris. That was very helpful. It's pretty good to report on Russia and the markets. Coming up Cornell University senior Professor Schwab aside and potential central bank digital currencies. That's coming up next. And we are on balance of power. Balance of power is on Bloomberg Television and on Bloomberg Radio. This is balance of power on Bloomberg television and radio. I'm David Westin for Bloomberg First Word News. We go now to Mark Crumpton. David thank you. Bloomberg has learned the U.S. is weighing whether to evacuate family members of diplomats stationed in Ukraine as Russia masses more than 100000 troops on its borders. Under the plan nonessential staff would be able to leave voluntarily while family members should be ordered to return home. Our sources tell us an announcement may come within days. London staff at Barclays can return to the office Monday. HSBC employees were told yesterday that they too can return. Deutsche Bank staff will go back starting January 30 first. Ireland meanwhile is set to drop most pandemic restrictions as concerns surrounding the Omicron variant ease. Local media say the government medical advisers urged removing curbs such as early closing times for bars and restaurants and the need for vaccine passes to access indoor facilities. Mask wearing and self isolation for symptomatic people are likely to remain in place in Texas. A federal judge has issued an injunction against President Biden's vaccine mandate for federal workers. The block in fact some 2 million civil servants. The judge says the mandate is a quote bridge too far. Global news 24 hours a day on air and on Bloomberg Quicktake powered by more than twenty seven hundred journalists and analysts in over 120 countries. I'm Mark Crumpton. This is Bloomberg. Thank you so much Mark. Yesterday the Federal Reserve issued its long awaited paper on a possible central bank digital currency laying out some of the potential risks and the potential benefits and seeking comments on both. Over the course of the next 120 days Eswar Prasad has spent years now but studying currencies both Fiat and Crypto and has written extensively on the subject including devoting an entire chapter to the subject of central bank digital currencies. In his most recent book The Future of Money How the Digital Revolution is Transforming Currencies and Finance. So Professor Persaud thank you so much for being here. There's no one else rather talked about this. First of all why now. What is the pressure on the Fed to really come up with an approach over time to central bank digital currency. There are two sets of vicious. David. One is domestic. The fact that most payments are switching to digital farms although in the U.S. the use of cash to remains much more prevalent than in many other economies such as China and Sweden where the use of cash has almost disappeared entirely. But still the reality is that we're moving towards digital payments. So for the Fed that is an open question about how to keep its money the sort of dollar bills and coins that you still have in our wallets at least in some of our wallets. Still relevant at the retail level. The second pressure is international. The Bank for International Settlements has surveyed about 85 central banks around the world that are saying that they are already experimenting with a planning experiment with central bank digital currencies or at least undertaking serious research on the matter. The central banks of China Japan and Sweden have already initiated CBD experiments. A few other major ones are already beginning to think about those experiments. So I think the Fed was also facing some pressure because of the sense that it might get left behind in this move towards an official digital currencies. If we do move to a central bank digital currency give us a sense of how our lives may be better. And then by that I mean both our lives as just people living in the United States of America but also how the life of the central bank might be there. What might the advantages of this. Understand there are various ways of doing it. Yeah. So having digital forms of payment certainly would make it much harder to evade taxes if you were inclined to do so it would bring a lot of economic activity out of the shadows. It would make it harder to use central bank money for illicit purposes. But going beyond that there are many advantages. If central bank money took the form of digital wallets that the central bank could directly put money into it could make things like don't any stimulus payments much easier. You know most people who had access to bank deposits that they could get because their information was on file with the IRS got the stimulus payments easily. But for many others the government had to send out prepaid debit cards checks and so on which were quite a hassle. But more importantly if such digital dollars were available it would essentially make a low cost digital payment system easily accessible to everybody in the US. I know you and I David could use Apple Pay or Google Pay but we have to link that to a bank account and a credit card. If the Fed provided what is effectively a digital payment system and did so without any constraint such as having to have a bank account it would make digital payments much easier to access even for low income households. It could potentially also make cross-border payments a lot easier. So there are a number of benefits to be had from a CBC or digital dollar. Those are some benefits. How about some risk. I know though that the Fed laid out some one of them for example. I think it's privacy. Certainly from a societal perspective. That is a question about whether we want to live in a world where are you. And I could not buy each other a cup of coffee with out either a private provider such as a credit card company or government agency a.k.a. the central bank knowing about it. So there are some serious issues here. No it don't say the technology is evolving to a point that you might be able to have some degree of transaction privacy. In other words low value transactions such as buying a cup of coffee. Maybe one might still be able to do that using a digital form of payment without necessarily revealing one's identity. But you know there are other questions as well that the Fed is grappling with as are other central banks contemplating CBD seats if CBD see digital wallets were available. These would be non-interest bearing digital wallets sort of like digital accounts that we have in the banks right now that are interest bearing these digital wallets may be preferred to bank deposit accounts. We might end up in a situation where bank deposits move into these central bank digital wallets. We may also have much less innovation in terms of payments. If you have the government in a sense being a low cost digital payment system after all who can compete with the government. So these are the sort of risks in terms of changes in the financial system that could make the central bank or the government play even more intrusive roles in the economy and finance. So the Fed is rightly pointing out that there are risks although I think that are technical as well as conceptual design choices that can certainly mitigate although perhaps not entirely eliminate such risks. Is it a feasible alternative for the Fed not to move forward at some point or maybe take a little time. But at some point move forward or to put it the other way around. Is there a risk that actually we could erode the position of the US dollar as a reserve currency. That's a very important question. David I think the Fed has the luxury of waiting. Unlike certain other central banks in the U.S. as I mentioned the use of cash is still quite widely prevalent. And of course the U.S. dollar remains the dominant currency in global finance. If China were to move forward with the digital yuan if the European Central Bank and other major central banks were to move forward a digital versions of their currencies it could make it harder for the dollar to compete as an international payment currency. But you know it's a reserve currency. I think there are other things that mattered a great deal its economic size and financial market depth certainly. But more importantly an institutional framework including an independent central bank the rule of law an institutional a system of checks and balances that that all very important for a reserve currency. So even though digital yuan might rival the digital dollar in terms of are not digital donor in terms of international payments I don't think it is seriously threaten the dollars at all as a reserve currency. But certainly the Fed getting left behind if every other major central bank moves through digital forms of its currencies could mean that the U.S. stops being important in terms of at least setting the technological standards that the rest of the world would follow in terms of official digital currencies. Finally you briefly hit the end. Do you think the central bank digital currency could pose a threat to existing crypto currencies such as Bitcoin. We know for example in China and now in Russia they're trying to suppress independent crypto currencies. Certainly if we had digital currencies available issued by a government agency that will certainly affect the valuation of decentralized crypto currencies such as bitcoin but even stable coins because the whole user case of stable going as it is supposed to provide more efficient payments if the central bank does that by itself what do you suggest. That is what a stable coin is not obvious at all. OK. Sure. It's really great to talk with you always in particular on this subject. That issue are precise. He is Cornell University. Tom Lanning senior professor of trade policy. Coming up what the government is getting right and perhaps not so right in its battle against Covid with Dr. Celine Gounder of Bellevue Hospital. This is balance of power on Bloomberg television and on radio. This is balance of power on Bloomberg television and radio. I'm David Westin. It seems that almost every day we get new guidance or initiatives from the government. Covid. Whether it's the White House HHS NIH or the CDC. And frankly they can for some of us seem confusing at times even contradictory. Tell us sort it all out. We welcome now Dr. Celine Gounder. She's infectious disease specialist and epidemiologist at Bellevue Hospital here in New York. Dr. Gounder served as a Covid advisor to President Biden's transition. So thank you so much. Dr. Gounder for being back with us. So I mean it's easy from outside to second guess what's going on within the government but give us your sense about what they're getting right and what maybe they could improve on. I think the first six months of 2021 went spectacularly well with respect to vaccine rollouts. But then I think we stalled out in terms of our Covid response. We saw a plateauing of vaccination rates around May June and really have not been able to raise vaccination rates much beyond about two thirds of the population now fully vaccinated. And at the same time we also started to see more breakthrough infections. This is something that many of us had actually anticipated would happen. Vaccines are designed to prevent severe disease hospitalization and death. Not all infections but I think people really misunderstood what that was going to mean for the future. The combination of having vaccines that are not perfect but very good and not enough people vaccinated does mean you're going to have to resort to other tools layering other interventions to really control stars Kobe to to a level that health care systems for example are not being crushed. The science is complicated. That's why a lot of us went for liberal arts education science education. So it's inherently complicated. But is it as complicated as sometimes the government making had to be. Because sometimes it does seem like they're changing their minds rather than Jihye Lee clear why they changed it from 10 days to five days for the isolation. Could they do a better job of just laying this out for us all. I think they should have communicated from the very beginning that look our guidance is going to change because the science and our understanding is going to change. But I do think where their messaging goes wrong is not. It is when they don't lay out all of the considerations clearly. So they are weighing what are the public health impacts the science. But they're also weighing the social societal economic impacts. And so I think that's where more transparency into what are all the factors being weighed how they're making those decisions would be really helpful in terms of clarifying why they are changing the guidance when they do. Yes. Dr. Gupta I must say just as a recipient of this information at the beginning I thought the goal was to eliminate the virus. I'm not sure anymore whether that is the goal or not whether that's doable. We've done that all the talk about herd immunity and things like that. If the goal actually has to be we're going to live with this virus. What does that look like. Yeah I think that's become very clear that we are not going to be able to eliminate or eradicate source. Could be to the best we can hope to do is control it. And then it's really a decision of what are our goals in terms of levels of control. I don't think any of us want to continue seeing the kinds of huge surges we've seen in cases hospitalizations and deaths as we have seen over the last two years. Again hospitals are being crushed by that level of disease to the point where we keep having to put a pause on things like elective surgery and elective surgery. To be clear it is really essential surgery. We're talking about you know just as one example women who have breast cancer who need a mastectomy. That is something that is essential but is getting paused because the hospitals are so full with Covid patients. So what we really need to do is layer the combinations of vaccination with at least certain times of year in public indoor settings making use of masks improving our indoor ventilation and air filtration which is really important because it also does not rely on individual behavior or action. And it's something that will protect all of us not just against stars. Could be too but also other viral respiratory infections. And then finally making better use of testing to figure out who's who has Covid who should go get treatment. How do we get them. Plug them in for treatment as soon as possible. And if they're contagious so that they know that can take measures to protect transmission to others. So I'm not asking you to be a soothsayer at the same time you know a lot more about this than I do. Goodness knows as an epidemiologist if you were going to guess sort of base case the most likely result three years from now we'd be going through periods where we have to wear masks indoors. Will we be going through periods where we have to stay at home from work and not be near each other. Well I think it all depends on what our goals are. You know we say have to. That really does depend on what is it you're trying to achieve with that what you're doing. I think that the future will be that we will have SA's Covid to Covid as one of many viral respiratory infections circulating along with the flu with the common cold. It'll just be the worst of the bunch. I think some years you'll see Covid around the same time as flu season. I think other years you'll have another variant like O Macron that really throws a wrench in things. And so every few year you will also have transmission all year round with something like NIKKEI. So I think you know we have to be prepared for both the worst case scenario as well as the best case scenario so that we don't find ourselves having to take more draconian measures so that we can keep going on about our lives while still keeping cases hospitalizations and death suppress it just briefly or at the end how is the CDC going. And it's easy for us to criticize them and we're not doing it. And I understand they're going 24/7. They are and I think that's really been underappreciated. How hard these folks are working. They really are working a hundred hours a week seven days a week of going on over two years now. And so I do think while they don't always get things right they really have the public's best intentions at heart here. Have we under invested in the CDC over time. We have we really do need to be investing in staff and resources for them. So things like better laboratory infrastructure better better data infrastructure and then just funding that they funnel down to the state and local level. We really do need to be ramping all of that up to improve our preparedness for the future. Okay. Thank you so much. Really a treat to have you with us as Dr. Celine Gounder NYU and Bellevue Hospital infectious disease specialist and epidemiologist. Coming up we'll hear from Larry Summers the former treasury secretary on the bumpy path ahead for the U.S. economy. This is balance of power and we are on Bloomberg television and radio. This is balance of power on Bloomberg television and radio. I'm David Westin. The Federal Open Market Committee is set to meet next Wednesday. Former Treasury Secretary Larry Summers is my guest on Wall Street tonight. And I asked him what he expected from the fund fed next week. I think they're going to be signaling that a tightening in March. I hope they'll be signaling as rapid as possible an end to Kuti. We got an economy that's looking like it's above the speed limit and that's going to have to slow down. And the Fed's got a very delicate operation now in slowing it down. The delicacy of that operation is underscored by the turbulence in asset markets since the beginning of the year. It's underscored by the softness in some kinds of measures of consumer sentiment and consumer spending. But if we're going to have maximum employment and maximum growth over time we're going to have to control the pace of the growth of total incomes so that more of it can go into more employment and more output and less of it into inflation. Larry as you look at the various indicators do you. Are you concerned at all that maybe we're too complacent about the Fed's ability to do this. The market you say have been turbulent. They're reacting at the same time. You look at the five year five years there's still a like a two point one two percents like that. And also the financial conditions have not really tightened much. Is that because we're just so confident the Fed can do this without really roiling people. Are we underestimating the size of the problem. I think the gravity of our situation is still understated. While the term transitory has left the policymaker discourse the idea of transitory inflation is still very fixed in their mind. There's still a belief that with very limited monetary actions that have not taken full effect we will see inflation slow to the 2 percent range by the end of the year. That certainly could happen but it wouldn't be my bet. Given the tremendous tightness of labor markets given increasing signs that China's going to be a source of bottlenecks for quite some time to come. Given increasing concerns about oil prices given that there's a lot of housing inflation that still has to feed through the system and given how remarkably low real interest rates are I don't think it's the best bet that inflation is going to be coming down to the 2 into the 2 percent range or the twos by the end of the year. And so I think complacency is not appropriate. I think the evidence is that inflation is at rates lower than 7 percent. Don't exit the system without very substantial economic turbulence. So no one's pulling harder for the Fed to strike this balance and get it right than me. But I think it's not going to be an easy one. You can hear more of my interview with former Treasury Secretary Larry Summers coming up on Wall Street week. He's going to be joined by Bank of America CEO Brian Moynihan on his bank's digital strategy. They've been investing three point five billion dollars a year every year for some time. The question is what is that going to do that bank over time and is it enough. And we'll also have on the program former Qualcomm CEO Paul Jacobs about the chip shortage. What has caused it. Possible solutions. Interesting. He advises that in fact the big place to invest right now is not in chip manufacturers but in the people who buy the chips that there's such a shortage of. That will all be coming up tonight at 6:00 p.m. Eastern Time on Wall Street week. Check out the balance of our newsletter on the turmoil online. Today's top story is once again big tech this time big tech under pressure. Certainly we saw that from Netflix with what happened last year yesterday. And so the question is what is going on all around the world as well as in the United States. Coming up the balance of power will continue on Bloomberg Radio. And in our second hour we'll hear from Bonnie Glaser on China in the upcoming Olympics Olympics that are likely to be like none you've ever seen. This is balance of power on Bloomberg television and on Bloomberg Radio.

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'Balance of Power' Full Show (01/21/2022)

"Bloomberg: Balance of Power" focuses on the intersection of politics and global business. New Manhattan District Attorney Alvin Bragg says his main priority is tackling gun violence. Author and columnist Thomas Friedman reviews the situation in Ukraine and says it's the worst time to be U.S. Secretary of State. And Cornell University professor and "The Future of Money" author Eswar Prasad analyzes the Federal Reserve report on digital currency. (Source: Bloomberg)

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