yield death real knell -- starts now. coming up, treasury yields lower and emerging markets in the face of china than one white house nominee facing more doubt. we begin with low yields. >> they will continue grinding down. >> lower yields. >> yields moved lower. >> lower bond yields giving the rest attention -- the u.s. attention.

incrediblyontext of low bond yields, they are attractive. >> yuan -- european yields are not going to go up. beif this continues, it will a wide threat. you can see the calls for change in strategy. >> joining me, willie. it feels like a [indiscernible] situation. u.s. corporate borrowing costs all-time low, 30 year treasury low. is that what this is, by everything, get what you can? >> it seems like investors have

a lot of cash. to buy triple c's. we need to put our cash somewhere. issues and all .hings commodity oriented as a whole, if you look at this, last year what you saw was weakening and economic data tightening you saw from the feds. from january on, you saw easing in the market, so now the story is you are seeing the stability and everyone comfortable you're not going into a recession environment.

>> i don't think there is double mentality. verio --hey will do very well. can get some you yields. that is where i am focused now. say -- see when they greece at 1%. how much is irrational? triple the afraid of -- b. people get scared about credit and i come from a high-yield as well. really long-term averages, i think we are stable around here and you will see good companies and that companies.

what is next, i think it will be construction products. on -- afteruestion , the substitution effect is not working as planned. what do you make of that quote right there? you see a pretty significant divergence and also equities to make new highs day over day. i think what we are really banking on this this low interest rate environment is here to stay and you don't necessarily want to have growth in that environment. growtht to have enough

to be credit worthy, but at some point, yields would have to rise and on the other hand, it starts to blowout. that signals there is a real fundamental challenge. >> you bring up a point that it supports the risk asset somewhere. at some point, we start to look at rates and think about why they are low. when does that turn start to happen? does that happen this year? >> i don't think it happens this year. it is all relative. you mentioned qe policy. we had a world that was overleveraged.

the fiscal stimulus the last decade, reduced volatility of economic data and so when you look at growth, the aggregate leverage in the system, but the stability is much higher because of some of those policies so if you're going to try to price asset over long-term, if you look out several years and you have a high conviction, what does it mean for 7% earnings growth? you can put a better price on that. . think it is low growth >> and another thing is the past two years. people look at my entire

portfolio so they are very tired holding equities. that and advantage of that is a ship that has occurred and that allows people to be much more patient. every time stocks rallied, it has been working. >> let's talk about high-yield how much is high-yield in the united states? >> it is probably trading at 50% to 60%. yields,alk about low tighter yields, they are support by the earnings profile and the aggregate total return is limited based off of that comes so you will get probably four to 5% where the market rallies.

>> you look at the high-yield market, continuing lower and lower. this year, high-yield prices than in all of 2014 which is the perspective, so returns keep getting more compressed and on the other side of that, the eye market has than given the segment being another heart of the market and new issues into

the loan market, so high-yield is inflated. >> i think high-yield needs to credits.he triple b i think there is some value because the double have been -- of if you're a >> coming up, the auction block, the u.s. issuing 30 year bonds. this is bloomberg real yield. ♪

>> [no audio] europe, deutsche bank sinceg for the first time 2014. turning to the rest of the world, still making the argument to look outside the united states. >> the u.s.'s price to perfection, so if you want to have meaningful gains, you need to see earnings pick up. the stability and a market downturn-- in a market because it was hated for so long.

>> let's turn to you. there was an appetite to get out of the space and then a real growth scare. what do you make of that? >> i think there will be some the things that go on. what i'm looking for, we were arty starting to see people close to supply chains out of china and i think that will accelerate. there will be emerging companies that benefit from that spirit we see a lot of issues in turkey and always found that iran would .ot retaliate right away there will be something in the cyber area. i don't know when the right time will be to local currency will be interesting. >> [indiscernible]

>> i think it will take much longer to resolve and everyone is talking about supply chain. to me, it is really about tourism. china has become the biggest outbound of tourism. they are shut down. flights cannot come in or out and the whole focus of the supply chain, that may or may not get resolved quickly. amplifies what we see in china with the trade war. really urgently trying to figure out how to deal with issues like epidemics. revolving and the information is slow to come out, but at the same time, i think there is this big opportunity.

ultimately, it will find its way into the emerging markets and you will see some level of cyclicality. you will see bounce back post corona virus. we talked about commodities and significant impacts. that being said, in a low growth environment, there's opportunities and you can find decent returns and yields relative to the market. what ishink about lacking at the moment, it is commodity, the base levels. , thereu speak declines is a sense of recovery. to get into the commodities trade or the things attached to it. if you believe china will go through with stimulus, why would that not be a trade you want to get behind? >> i think around the chinese

economy -- the rest of the world has had a drag. if you look at this, i think you'll see a recovery. this will be more prolonged and have an impact on certain sectors. you have an agent economy that is still growing and you will see bounce back. i think the further recovery you will see and from a commodity standpoint, there is a correlation related to that. , you've had ay supply impact over the last five years and i think that is a bigger issue. sad realities is

the fed has shown a strong ability -- asset classes. financial assets are responding well. in the immediately financial aspects and harder to push the finance aspect. where yields are relative to inflation, is there much capacity to ease an emerging markets at the moment? but would like to say no, they continue to push lower and lower. stat that there was 8000 central bank easing. [inaudible]

not started that way. >> i think the intriguing part is the emerging markets, so i think they will shift away from china. everything got thrown out and i think there is opportunities if you sift through the rubble. ahead.l ahead, the week mrs. bloomberg real yield. -- this is bloomberg real yield. ♪

is bloomberg real yield and it is time for the final spread. a monday,ts closed on a long weekend for president's day. friday, richard target --

richard clarida speaking here in new york. a hearing taken place in a moment for two white house bed to the other one a bit more complex. i just want to gauge for you. place, would it shape anyway or form? >> clearly everyone take the lead and fall in line, so i'm not worried about it. >> i would not challenge the independence. or moreaturally hawkish dovish and i think that is a focus of mine. -- mind. >> with u.s. deficits as they are, they have to look at the real-time borrowing costs for the u.s. and if we keep the

yield low, that keeps the u.s. economy stable. >> your thoughts on where policy is going? why there has to be a massively high bar. havethink we are going to a few months -- a few months of rate cuts. androwth continues to hover the coronavirus is contained relatively shortly, i don't think the fed will be up against the wall for a rate cut. we are monitoring the shape on the front end. it is something the fed is probably trying to consider. >> i don't think you'll see a rate cut this year and i think growth will be supported in the risks are a prolonged coronavirus.

it is naturally that we will see liquidity infusion in china, so i think the fed will watch. if you look at u.s. growth and data, i think it is towards stability and i don't think you --l see the fed quit the fed will put liquidity. unless it turns up much worse, it will be a drag on the economy and if it goes away quickly, we should be back to 182%. so ive had decent numbers, think -- >> is this week a couple of cracks? it is actually quite difficult to get your hand on.

there are certain things you struggle to reconcile. growth, at the drop rocksolid. how do you get your hands around the economy at the moment? >> december, we did not know we would have a phase one trade deal with china. i think it is very difficult. what is it like the last three or four months? nothing really seems to be changing. >> i think you will see cyclicality in the market. regions or industries and that will play into the numbers. if you smooth them out, we are in a low growth environment. >> as people moved to different

regions, you are going to see this give-and-take across the country, so moving things out is really the only way you can get a sense of where we are headed. yieldst question, 10 year around 160. what will we see first? 140 or 180? >> 180. >> 180. >> 140. >> the barclays spread around 340. where do we go? >> 360. >> 320. around 1%, dewey go back to 50, what do we see first, 50 basis points? >> 50. 150.

. >> thank you very much for joining. from new york city, that does it for us. if you are here in new york or stateside, i will see you next friday. yield,s bloomberg really bloomberg tv. -- real yield, bloomberg tv. ♪

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