>> welcome to bloomberg markets. traders positioning ahead of the shortened trading week. the final few days of the quarter. let's take a check of these markets. the s&p 500 trying to stay positive. if this holds that would break three straight days of losses. the s&p 500 2/10 of a percent higher. you take a look at big tech. it is underperforming the nasdaq 100 currently off to the tune of 2/10 of a percent. not huge moves either way. we are toward the end of the quarter. we will see if things get

strange as we get closer. take a look at the bond market. yields falling. the two year treasury yield lower by three basis points. . the tenure yo -- the 10 year treasury, three basis points. we want to get to submit day movers on the equity side. we will start off with merck having a good day after winning u.s. approval for a new treatment for a rare dangerous form of high blood pressure. it is expected to be among the company's hits as sales from successful older drugs begin fading later this decade. we want to check in on carnival. shares slightly higher after raising its outlook for 2024 amid record-setting demand for cruises. the company did say a negative impact related to the red sea and of course the bridge collapse in baltimore yesterday. speaking of that collapse, it is set to have ramifications across

supply chain and of the academy. earlier today marilyn governor wes moore spoke about the follow-up. >> it is a huge economic impact for the country. this is not just impacting maryland. this is impacting a farmer in kentucky. it is impacting the auto dealer in michigan. it is imperative we get this bridge rebuilt. it is imperative we get the port of baltimore up and going. it is not just how we are supporting maryland. . it is how we support the maryland economy -- the american economy. katie: let's bring in bloomberg balance of power cohost kailey leinz live from baltimore. you have been there since yesterday. what is the latest on the ground? kailey: we are about six hours into a recovery effort that began at 6:00 a.m. eastern this morning. they are trying to recover the six individuals, construction workers on the bridge at the time it collapsed and fell into the water. they are trying to recover them in what wes moore is an effort

to provide closure for those families. that is with the governor says is the top priority. conditions for this effort are not great. . it is pouring rain. it is windy. visibility is low. all of that is making the effort all the more difficult. not to mention the massive amounts of debris in the water because of the collapsed bridge and the shipping containers damaged when the collision happened. it is not just the first responders, those looking into the recovery effort working today. the national transportation safety board is on site ready to board the vessel as they conduct an investigation into what happened in the moments leading up to the collision. that investigation will be ongoing as they look at the data and recorders on the ship as well as conduct interviews. at this hour had the timeline for when this could be wrapped up, the port cleared the debris as well as the dali itself and the port of baltimore reopen remains unclear.

know if already has been able to put an estimate on the timeline. katie: after the port is open, the question becomes when might the bridge be rebuilt? we heard from president biden on the topic yesterday saying he directed his team to rebuild the bridge as soon as possible and the federal government will pay for the effort. that has to go through congress. what have you learned from your reporting about what that might look like? kailey: it is likely to take some time. it will require congressional approval to secure the funding needed in order to get this bridge rebuilt. something that is likely to cost lien's of dollars. i did speak with two sitting members of congress. senator ben cardin and senator chris van hollen. both expressed that funding will come through. there is the question of what funding could be released at the state level. there has been something drafted in the maryland state

legislature. a bill that would put forward emergency aid to the thousands of workers whose jobs will be affected by the closure of the sport. there are many different funding pools. some more immediate to address the concern of workers and longer-term for the reconstruction of the bridge. no timeline is clear on the reconstruction. in less than an hour at 1:00 p.m., the white house press briefing is scheduled and joined by the press secretary will be transportation secretary pete buttigieg. we will look to get any updates on he will give on time and cost going forward. your one day out from this tragedy occurring. katie: when we think about the timeline, that matters for the economic impact. a prolonged shutdown of the port of this route obviously causes a bigger ripple effect. what is the thinking about how this might be modeled out? kailey: clearly all the cargo

that was attempting to come in and out of the port of baltimore cannot do so. of the many vessels inside the harbor unable to get out, they cannot go anywhere. for all the companies trying to get cargo in, they are having to send that elsewhere. we have heard from automakers who talked about rerouting their supply in places other than baltimore. maybe up to new york orchard -- or new jersey, maybe south to norfolk. it is going to be a lot more capacity that has to be handled by those other ports. it is not just seaborne transit but vehicular transit as well. freight, cargo, commercial goods that were moving over this bridge every day are not able to do so. and they will have to do longer routes around. that is what we heard governor wes moore alluding to that this does have a localized economic impact in terms of the workers affected, the lack of activity at the port but it could have ripple effects across the supply chain. something senator van hollen

made clear to me yesterday was while we have seen companies have the ability to divert things, to adjust, he wants to make sure at the end of this, all of that transit comes back to baltimore. that the port of baltimore will still be receiving these flow of goods and will be the economic engine for the state it has been even if that engine is not revving today. katie: appreciate your reporting. our thanks to kailey leinz from location in baltimore. and the collapse of this bridge in baltimore has big implications for the energy industry. alix steel is bloomberg tv's energy expert should she has covered the sector for more than a decade and she is sitting to my left. let's start with coal because a lot of coal passes through the port of baltimore. alix: the u.s. exports about 74 million tons of coal last year. on a global scale, baltimore is only responsible for about 2% of global seaborne coal. 2% might not seem like a big

deal but it is still 2.5 million tons. that could be disrupted for anywhere between four to six weeks. this comes from x coal and energy resources. they were mentioning that it is the type of coal. this is mostly thermal coal used for electricity versus medical which is in terms of making steel. that goes to china. -- excuse me. india. that becomes more of an india issue in terms of getting that type of coal. katie: this conversation we are talking about the bridge. we are talking about the port. stopped about the routes around the bridge. have i 95, i 695. what could the impact on trucking and transport look like? alix: that is quite interesting. consol energy is a coalminer but it has a marine terminal. that is where the export the coal. . norfolk southern and csx ring the -- bring the coal to the

terminal. csx says they have excess capacity where they can add on routes and trains to move some of that coal. after that, what happens? you have an analyst at be about a security saying after a month of lost shipments, console should be down by about 1%. you could reroute to virginia. there is the capacity there but it cannot make up all that capacity. it is able to do to million tons. it cannot do the 2.5 million tons from baltimore. you may reroute it but that might cause something. you barge it somewhere else? that is going to cost more money. a lot of other stuff can go to the west coast on train lines but is that where you're going to export coal? katie: it is a good perspective because we keep talking about the rerouting. it is not a perfect one to one solution. what's talk about your specialty and that is will products. what is happening there? alix: there is not a lot of fuel imported in terms of gasoline

into baltimore but there is some . we heard from colonial pipeline which is the main pipeline that fuels the region in terms of products and they are saying they are rationing space which means there is more demand than there is supply in terms of space on their pipeline. we will have to see next week's inventory numbers. that is definitely going to be somewhat of a problem. katie: appreciate your insight on this topic. that is bloomberg's alix steel. coming up, this bridge collapsed in seconds but the economic impact of this tragedy could last for several weeks. we are going to be speaking with a senior economist from bnp paribas about that. this is bloomberg. ♪ personalized financial advice from ameriprise can do more than help you reach your goals.

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katie: this is bloomberg markets. the collapse of that major commuter bridge in baltimore sending more pressure to supply chains already strained and the economic impact could last for months. joining us with more is a senior u.s. economist at bnp paribas. a lot of this comes down to timelines. how long the port of baltimore is shut down. how are you thinking about the potential economic impact from a more prolonged shutdown? >> the loss of life is always a tragedy and those things when they happen whether it is a natural disaster or technical disaster is always a tragedy. in terms of economic impact, we don't think it is going to be a big deal in the scheme of things. simply because of the timing of

that. there are two stages as you alluded to. they need to clean it up and they need to rebuild the bridge. the first stage is not going to take too long. maybe a few months or so. that would be my best guess. once the ship start coming in and out, that is going to alleviate pressures for the local economy. the other thing is obviously the vehicle traffic. that is more complicated but that can be rerouted even though it will cause a lot of congestion on other routes. i think you need to look at how big of a share that is. the imports of baltimore from the port of baltimore is 3% of overall east coast imports. it is not a big share. a lot of it could be rerouted such as auto imports and that could be rerouted to savannah or newark.

that is where the ships stopped before going to baltimore. it is doable. the big thing is that it is happening at the time when supply chain's have healed substantially. if it was happening in 2020 or 2021, it would have been a big deal. we may see a little bit of an impact in claims data in state-level claims data i don't think we are going to see much of an impact in economic data. katie: that is an interesting point about the experience of the pandemic and i keep reading this up but i spoke to the cfo of ford yesterday who made that exact point. it might lengthen their supply chain. you're going to have to go to destinations and drop things off or you don't. >> they got better at this. katie: the experience of the pandemic it appears supply chains are more flexible than a couple years ago. yelena: i think that is an excellent point. we may see movement in the supply deliveries, types of

indexes in survey data. i don't think that is going to impact inflation or inflationary readings in the next few months. that in turn is more affected by wage pressures rather than supply chain issues. that has seen a lot of healing. katie: i want to get your perspective on something that came from andrew hollandsworth about what this could mean for the fed should he said the worst thing that can happen for the fed, the worst thing that can happen for the economy is the supply side shocks because what they do is reduce the productive capacity of the u.s. economy. they boost inflation at the same time. i'm curious for your thoughts on that. yelena: that is what happened with the pandemic. the scale matters. the length matters. i think the way we should inc. about it is when they will -- when the ships will be able to,

in and out. that will help a lot and we will get clarity in the coming months scale katie: matters here. and i'm curious if the impact will be disproportionately impacted by specific sectors. you bring up autos and a lot of automakers use that port of baltimore specifically. the scale there matters much more to that industry than it does to others. yelena: or coal. coal exports. you were talking to alix earlier. that could be a hard one to reroute because of the specifics of the industry and the way it is easier to reroute a car than coal shipping. those sectors could see -- and cruise ships too. that again, you can cancel a couple of cruises. you can reroute them going forward. katie: let's broaden this

conversation and talk about the economy at large. it is a little bit dull right now but the most exciting data point of the week comes on friday when u.s. markets are closed. we are talking about pce. what are you expecting to see because we had a little bit of an uptick when it comes to recent data releases? yelena: i would not be surprised if we see a similar reading to what we saw in the last couple of months. at the same time we do expect some deceleration. even if we see an uptick or a little bit more of the same, i think it would be fine for the fed. it would be fine for chair powell who is speaking the same day when the markets are closed in a moderated conversation. he will probably dismiss it as volatility. a little bit of bumping us in the inflation path that we are observing as of now.

the press conference, the last press conference, he mentioned inflation has subsided so significantly during the second half of last year so you have to look at things in that perspective. we are getting there in terms of inflation should we are approaching the 2% target. it is going to take some time. it is not going to be smooth and that is fine with the fed i think. katie: this is the appetizer course for when we get the employment data next week. about the fed's dual mandate. it is hard to find something to pick apart. yelena: friday's data. it is going to be interesting and i think we are going to see more of the labor market rebalancing in the upcoming report. we are at 180 in terms of payrolls. we think in the deceleration in the pace of hiring is a good

thing for the economy because it will help inflation to subside to the level which will be comfortable for the fed. we are going to see payrolls. pace will decelerate this is our view and we think the unemployment rate will tick down. katie: you added altogether in your best case is june? yelena: june, three cuts and three cuts next year. not necessarily a speedy easing cycle but a cutting cycle as we would call it. it is an adjustment. similar to what we saw in the 90's and what we saw right before the pandemic in 2019. katie:katie: really appreciate your time. we do want to bring you some breaking news and that is on new york's congestion pricing tool.

it has been approved by the mta board. it would charge most cars 15 dollars for entering the borough south of 60th street during peak times. this plan has been approved the board of the mta. we are going to bring you more details. this is bloomberg. ♪

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katie: this is bloomberg markets. let's get back to that breaking news from new york city's mta. the board approving the proposed congestion pricing tool in manhattan. joining us with more details is michelle caskey who has been following the story. walk us through what was approved today. michelle: what was approved today is new york's metropolitan transportation authority

approved a pulling structure for congestion pricing. passengers with an easy pass will pay $16 into the congestion pricing zone which is if you are driving south of 60th street. this is a first of its kind in the nation. katie: this would be on top of what you pay to get through the tunnel to come over the bridge. i have to imagine this is facing a lot of opposition to put it mildly. michelle: there is definitely some pushback from for instance new jersey commuters. some of them do already pay tolls to get through tunnels or bridges to get into manhattan. there will be credits for -- for drivers who already pay tolls on some tunnels. on some tunnel crossings. there is some relief to help

lower the cost of this new ingestion pricing told on those drivers. katie: it is estimated this could bring in billion dollars a year if this actually comes to fruition. what with the city do with that money? what is the plan? michelle:michelle: the money will go towards the mta. it will improve the city's transit system. subways, buses, the commuter rail line. the subway system is over 100 years old. there are subway signals from the 1930's that need to be modernized and upgraded. this will help bring the whole transit system into our current age. it has suffered neglect over the years. it definitely needs modernization pick katie: a lot of people would say that is an understatement. walk us through what comes next. the mta board approving the

structure but what still needs to happen? michelle: what is going to happen is there is -- the federal government will have a final signoff on this. that is anticipated to happen. the mta is looking to start charging drivers in mid-june of this year. what could postpone that is there are a few different lawsuits out there. governor murphy is pushing back against this. either to delay or stop altogether the congestion pricing: plan -- pricing tolling plan. we will see what happens with the lawsuits and if that is going to delay the mid-june start. katie: really appreciate your instant reporting. coming up, we are going to take a look at the vix and what might be the calmest stock market in years. we are going to do that with

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katie: this is bloomberg markets. it has been the calmest stock market since 2018. there is a debate over whether or not it is being fueled by the boom in option selling etf's. joining us to help find an answer, i'm pleased to say we have mandy xu, head of derivatives market intelligence at cboe. let's kick off on that debate if you are not tired of talking about it. the jp morgan view is to have this big boom in the option selling etfs. overseas to billion dollars at this point. they think that is suppressing volatility. you take the other side of that.

mandy: the key thing to keep in mind is correlation does not mean causation. just because two things have been happening at the same time, the a um and the funds have been growing at the same time the vix has been falling does not mean one is leading to the other. to dig into the impact, what you want to see as the impact on the volatility surface. if these funds were having a disproportionate impact on the volatility surface, you would expect the volatility risk premium to start to drink and the second is you would expect out of the money call options to decline relative to at the money call options given the majority of these funds are overriding calls. we are seeing the opposite. the volatility risk premium has grown over the year. out of the money call options have been historically rich relative to at the money. as you are looking for the dominant force in the derivatives market, it is not the over writers. it is the call buyers that have been drying deck have been

driving the dislocation under the volatility surface. abigail: in terms of the idea of the vix signals a solid economy, you have written recently immaculate disinflation and economists warned was impossible turned out to be possible. what does this mean for the volatility picture and stocks and investors who may not be so happy or they be reluctant to buy after a robust rally? mandy: that is a great point to when i get asked questions like why is the vix so low, i have to point to the macro picture because low volatility is not something we are just seeing in the equity market. it is what we are observing across all asset classes should wait volatility off the highs we sell the last year. effects volatility at a low. i can go on. that signals the reason why volatility is so low is because of this positive turn in the economic outlook. we went from fearing recession to expecting a soft landing.

for investors who at this point in the market where we are at all-time highs, using options to manage your risk whether it is to the upside or downside presents a great opportunity given the low levels we are seeing in terms of the volatility. abigail: the vix may be low but not so much for single stock volatility. what does this mean? mandy: that is a great point. we are seeing robust volatility underneath the index surface so single stock volatility is very high relative to index volatility. you see the vix at 13. average single stock volatility in the s&p trading around 30. that spread is near all-time highs. that tells you the main story going on in the equity market is about tech. it is about a i. it is a lot of these idiosyncratic risks. that is what you are seeing elevated volatility in those spaces pick katie: you mentioned the spread is the highest it has been in long time. if we look at past periods when you had the dislocation, does

that portend on how that could turn into volatility at the broad index level? mandy: it is not a leading indicator. levels have gotten very extreme. the flipside of very high single stock volatility is saying correlation in the market is extremely low. investors are still expecting this year to be like last year. a year about stock selection. a year about sector rotation. what sectors outperform relative to the other. there is little macro risk being priced into the vix, the index volatility market. the above the other side of this. if we are wrong, if this optimistic outlook is wrong, we do end up going into a recession or recession risks start rising, you could see a dramatic repricing in the vix and index volatility. the correlation level will start to pick up. that is something we are keeping

an eye on. abigail: it sounds like you are not that concerned. are you seeing any signs any the world of derivatives that something along these lines could happen? risk off or correction or even a bear market out of nowhere? mandy: we are not seeing much demand for i would say the vanilla portfolio hedges. people looking at protecting a five to 10% more modest drawdown. the view from investors we speak to is there is still a lot of money on the sidelines. this would be a good buying opportunity. where we are seeing elevated demand for hedges is the vix option pit protecting against a small correction but a crash or blocks want type of event. vix call volumes this year is higher than last year. last year was already a record year. we are seeing a lot of demand for the tail risk protection even though i would say people have gotten a lot more constructive in terms of what would happen on the modest drawback. abigail: what is the last time you saw that and did it prove true in some sort of blocks one or many swan event?

mandy: the last time we have seen this elevated demand for vix options we go all the way back to 2017 should it was a record low volatility europe should that was the year -- a record low volatility year. i would not say we were in a similar set up now even though there has been this growth and it is sure volatility trade. there is no embedded leverage in these. people ask is this a potential catalyst for a vol armageddon? i would say no because these strategies are not levered. katie: same thinking behind the trade but much different potential outcomes. we have to leave it there. enjoyed this conversation. our thanks to mandy xu of cboe and abigail doolittle. coming up, robinhood going for gold. the trading platform entering the credit card industry as it continues its expansion. more on the gold card next.

this is bloomberg. ♪

katie: this is bloomberg markets. time now for our stock of the hour. robinhood is unveiling a new credit card the gold card. it offers 3% back on all purchases and the company ceo spoke to bloomberg in the last hour. >> even though it will be great for customers paying off their balance in full, we also think it is going to be an incredible card for people building credit and getting started on their journey. there is an ecosystem benefit to having all of their finances in one place not just for the customers but for robinhood the business.

we think that will accelerate with the credit card. katie: joining me now, i am thrilled to say is ed ludlow who of course did that interview. 3%. how are they going to make that happen? ed: the mechanics are important. to get access to the gold card, you have to be a gold subscriber. five dollars a month on a subscription to the argument vlad 10 of and robinhood are making is most premium users are going to be able to be able to afford the subscription. the point he made in the soundbite is interesting. they're going to be people who pay the balances and each months but there will be also those who pay each interest. 3% cashback is going to be offset on the money robinhood is making on the interest along with saying look at the things you can do on robinhood. now we have a credit card. what don't you use all these other financial services beyond the legacy of the platform which

is commission free trading? katie: they have the trading business. they have this credit card. they have a retirement product. what is the grand vision for robinhood? what are they trying to be? ed: i asked that question almost to the letter. what is the big picture vision for robinhood to this point i think it is a more encompassing financial services offering. what we have seen from others is you have to make consumer credit a mainstay and for those that have savings, a deposit base, have the ability to have them all in one place. on the technology side, they touted quite a lot of security functionality. the idea within the app you can have temporary card numbers that are less accessible. katie: so grand ambitions at robinhood. as vlad seen dumb money?

ed: he has seen dumb money as you action was white as they call it dumb money. i asked if it was net positive for robinhood. i think the answer was yes. his pretrial. he said it did a disservice to the retail investor. by calling it dumb money you are not giving kudos to the retail investors and the role in the markets of the last three years. i thought that was interesting. katie: it is kind of a rude label. great interview. it was great to talk to you. bloomberg technology cohost ed ludlow. coming up, blackrock ceo larry fink warning of a building retirement crisis in the u.s. we are going to be speaking to ed murphy, the empower president and ceo on what he sees underway in the retirement industry. this is bloomberg. ♪

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>> the acute problem in the united states is we have still 57 million americans who don't have any savings or any retirement plan. social security is a fantastic foundation for retirement but if that is all you have when you retire, you are going to be living in poverty, below the poverty line. it is supplemental but it is not meant to be the totality of what you have in retirement. katie: that was blackrock ceo larry fink warning about what he calls the upcoming retirement crisis. that was the focus of today's wall street beat. we are joined by the host of wall street week david westin. when it comes to this retirement crisis think sees -- fink sees, comes down to bloom -- two boomers.

david: i said is this basically saying we are responsible. this was a subject of his annual letter to investors. it was mainly about retirement crisis as you put it. he said he is addressing it because as he goes around the world, he hears this all around the world as one of the main issues on people's minds. katie: did he have much to say about the fact humans are living longer? you are in retirement for longer. you need more savings. david: it is part of his point. we invested an awful line making sure we live longer. we have not invested in making sure we had money to live longer. we see that in social security. which about that because he loves capital markets. i said shouldn't we take all of the social security trust fund and move it to capital markets he said that might be a good idea but that is the starting point. think you have to go farther than that to encourage people to save more for retirement and help them know how to deal with it. both saving the money. katie: that is interesting about how you prevent, possibly fix this crisis.

there is some solution he has bandied about but what do you think -- what does he think it would take to stop this from becoming a crisis? david: i think we are on the cusp of the crisis i'm not sure how much we can do to stop it at this point there are various things he would say we have to do a lot of different things. this is what he would say. we have to take a look at the age of retirement. social security is set up at a time when life expectancy was much shorter. we have to take a look at that. have to take a look at means testing, who gets the benefits. he says the capital markets can help us fix this problem if we can get people investing. half of blackrock's assets, the largest asset manager in the world actually tied up with retirement responsibilities. katie: i think that amounts to $5 trillion so definitely they have a lot of skin in that game. great interview. that is bloomberg's david

westin. for more on the state of the retirement industry, we are going to keep this conversation going with ed murphy, the president and ceo of empower which is recognized as the second-largest retirement services provider in the u.s. great to have you with us. that is the larry fink view we have this ring retirement crisis. people are not saving enough for retirement, particularly the younger generations. . you have the unique view from your perch. where do you fall on that argument? ed: i would not call it a crisis but certainly there is a lot of work we need to do as an industry. if you look at our business, we have 18.5 million customers, one point 5 trillion in retirement assets on our platform. people are saving at a rate of about 8%. the challenge has been you have 22 million small companies, typically companies with 50 employees and less who don't offer workplace savings plan today. what we know is if you don't

have access to workplace savings through payroll deduction, you just don't save. that is something we are focused on and congress is focused on. a lot of bipartisan support and legislation through the secure act to encourage small businesses to offer plans. katie: it is an interesting chicken and the egg situation. when it comes to the bare fact younger generations are not saving enough for retirement, is the appetite to save not there? are they spending money on other things? the cost of living has gone up dramatically. as if they don't have access to those retirement plans? ed: that is an interesting question and certainly inflation has been a factor. we have seen that play out where in some situations people are less able to save because they are covering other expenses. i will say in study we did and we looked at people making $35,000 a year.

if they had access to workplace savings and they were using payroll deduction, 75% of them are saving. for those that made the same amount, the same cohort did not have access to workplace savings, less than 5% were saving. that is why we launched this digital first product called retirement select where we are focused on that small micro plan market. that is where we have the greatest exposure where we just don't have the plans in place for people to save. this is a significant opportunity. there is a lot of innovation and good work being done in the industry in this area with the formation of auto iras and acted in several states. old employer plans at the micro 401(k) market. i will say from empower's perspective, this is an area of real focus. i do feel at times there is a tendency to dismiss what i

believe is arguably one of the most successful public-private partnerships we have seen in this country. their 115 million americans in the system to their is 9 trillion saved. we can take this to another level. we can improve outcomes and expand access. katie: i want to get your thoughts on the future of the 401k. there is an interesting columnist out by bloomberg opinion columnist allison trager last month. she said 401(k)s are going to be gone within the decade and her thinking is you have scholars on the right and left side of the aisle questioning the value and you have the overall government increasingly desperate for new sources of revenue and the tax treatment of 401(k)s is a likely target. tort of two questions. do you think the 401(k) could be going away? what is the future and is there a future where we shift to some sort of different structure?

ed: i think there always improvements you can make. it is not a perfect system but i don't see it going away. if you look at this question around tax treatment, it is a tax deferral. it is not lost revenue to the government. when we survey customers and we ask them and these are people making between 50 to $75,000 a year. if you were take away the tax incentive, the tax treatment of contributions, would it adversely impact or impact your willingness to save? the answer was unequivocal yes. i can tell you in my conversations with policymakers on the hill there is strong bipartisan support for the system. but there's also recognition we need to improve it. that is why companies like mpower are investing in our capabilities. we are going to expand access. we are seeing this now. we have about 30,000 plans under 50 employees. we are continuing to see that

grow. a lot of them are new plans. new formation plans in the marketplace. it is incumbent upon all of us to continue to work with regulators and legislators to advance the system. one other comment i would make on this issue is and i have been outspoken on this. i think we need some type of a mandate that requires small businesses to offer plans. that is the only way we are going to solve this issue. congress has taken a number of steps including offering tax credits to small businesses to set these plans up. the incentives are there. it is the right thing to do. we are going to continue to advocate for that. katie: i have a little bit of a curveball for you. i cover etf's pretty closely. i've been doing that for four years. the industry has grown by a fantastic amount in part because it is such a tax efficient wrapper. the incumbency advantage mutual funds have is that is what is

used in 401(k)s. the narrative is that when it comes to etf's, they don't work in the 401(k) structure and there is not that desire to lobby to put them in the 401(k) structure. my question to you is you think etf's will ever get into 401(k)s? ed: it is possible but i agree. i don't think it is a great fit for a lot of the reasons you cited. if you look at the evolution of the investment products in 401(k) plans today, you are seeing an increase prevalence of collective investment trust, insurance separate accounts that have brought the expense ratios and the investment expenses down materially. when i think about the 80,000 plan sponsors we have from the largest corporations in america to the very small companies, i see little demand for etf's. katie: that is a good place to end it. enjoyed this conversation.

our thanks to ed murphy of mpower. let's bring you some breaking news. media giant paramount global has been cut to junk by snp. the down grade said to be due to the degradation of credit metrics from the exhilarating declines and a linear media and the shift to a more competitive and less certain streaming model. remember that it was reported recently apollo is said to have offered to buy paramount hollywood studio for $11 billion. in more breaking news, we learned amazon has announced they will invest $2.75 billion in ai start up anthropic. it is their biggest investment in the company which competes with openai. a lot to chew on of course. you can see amazon stock not moving too much. we will bring you more details throughout the day on bloomberg television as we have them. i'm katie greifeld. that does it for bloomberg markets. this is bloomberg. ♪

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>> from the world of politics to the world of business, this is balance of power.