credibility of policymakers to follow through on the commitments they've made. >> the market has gotten really negative about the prospect of future inflation. >> you are going to have a pretty big decline in real disposable income in the third quarter, and the reason is you pack so much of that stimulus into the second quarter. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: for our audience worldwide, good morning. this is "bloomberg surveillance ." we are live on bloomberg tv and radio. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. you've talked about the crosscurrents through this week. on one side, the better-than-expected economic data. on the others, signs of an outbreak in beijing, china. tom: there's no question on international relations. it is tangible. we just spoke with stephen roach, an expert on the fabric of china, from shanghai all the

way to the indian border. there's tangible issues. no question they are flexing their muscle right now. what i would notice in this market on a quiet wednesday, i know you will do the data check here. publishing moments ago this bullish consumer view, and that was a game changer yesterday with the retail sales report. jonathan: we will catch up on the geopolitics a little later in the hour. equity futures up 19 on the s&p 500, focusing a move higher over the last several weeks, up by 0.6%. just surprise after positive surprise. the economic surprise index in the united states is absolutely flying. and: it is at a record high searching higher after yesterday's retail sales beat. it was just an absolute trout. today -- absolute trounce. today i am going to be watching the u.s. may building and

housing permits starts to get a taste of what we may expect. u.s. loan purchase applications hit an 11 year high last week, so that should be some sort of indicator. 12:00 p.m., fed chair jay powellcome a to -- jay on the hill, day two. and robert lighthizer appears before the senate finance committee. i am very interested to see whether we see a ratcheting up in tensions between the u.s. and china, a potential risk at a time when the fed seems to be stepping out any concerns about the lingering effects, even though they are very real amid better-than-expected data. good point. is a it has fallen off the radar a bit. it was there about a month ago, ramping up tensions with china, but fading as we come into june. tom: there's some serious issues out there, and that makes this

bull market rally even more extraordinary. i know you bought at the bottom in march. you were listening to michael leveraged the triple ferro fund in the middle of march. you are up 350%. that is not bad. jonathan: i wish we had listened to mike wilson of morgan stanley. i am pleased to say we start this morning's program with the chief equity strategist here in new york city. fantastic to catch up with you, sir. it has set you apart for me in the last couple of months is your willingness to say the recession playbook is still intact, and there is nothing different about coming out of this contraction compared to the other contractions. would that be a fair characterization? mike: thanks for having me. i think that is a fair way we have positioned ourselves. you have to put the blinders on

a little bit when you go into a recession from a financial becausetandpoint markets tend to anticipate these things. we have been talking about this set up for over a year or two. i came into this year more negative than most, expecting the risk of a recession being higher, so when it happened, the market was actually already ready for that. the only thing that is different this time is that we are in this financial period of repression. that is obvious. one thing i have learned the hard way is that when risk premium appears, you have to grab it. that appeared in march. we've written about this extensively. we were as cheap in march as we were in march of 2009. you may say, how could that be? it is because rates had fallen that much. markets had become attuned to that, and they reacted, and

investors had stepped end -- investors have stepped in. jonathan: many people anticipate the bounce we are seeing in the economic data to flatten out later this summer, and for that reason, they are not willing to extrapolate recent upside surprises too far, too quickly. some people are willing to disregard the bounce we are seeing coming into june. what do you say with those people when you have those conversations at the moment? mike: part of the reason why economic surprises are bouncing so much is because expectations is collapsed. that is also part of our view. you are getting a v-shaped recovery because your comparisons are so easy. of course, it is going to have to flatten out because every better, data comes out the expectations rise. so the bar gets listed as well. it will flatten out, but we think the rate of change will continue to be positive through the rest of this year.

we are not expecting us to be back to where we were in the fourth quarter of 2019 until the end of next year. there's still a lot of runway from here to there for the rate of change to continue to increase. that is what the markets will focus on. as long as growth is moving forward, the market will continue to look forward. it is really hard to think about this way. that means i don't have to worry about recession. , like it was perhaps in december and january, not knowing how this is going to play out. we know how it is going to play out now. it is happening. you could argue, given these stocks are long-duration assets and you have removed the immediate risk of recession surprising us, you can start discounting the future. tom: how do we rotate in such an unusual, and particularly with the fixed income market, odd market? how do we rotate from seven or

eight stocks showing profitability to those that are ,t a 12 multiple, a 15 multiple dare i say a 70 multiple -- a 17 multiple? what would be the catalyst to have those improve on a relative basis? mike: that is the right question. my experience has been that when the relative earnings revision breadth start to favor those cheaper companies, meaning the earnings start going up at a faster rate for those more cyclically geared companies than ,hese wonderful secular growers how could that possibly happen? because the earnings were so lousy over the last year or two that they can grow mark -- that they can grow faster. and the expectations have come down more. one of the things i worry about, they work from home beneficiaries that did well in the early part of this recovery, they didn't really lower their expectations. analysts continued to keep

expectations high. there's not as much surprise facture potentially as the economy continues to recover, and there could be a little bit of payback from the pull forward on the work for home dynamic. one reason i love reading your reports is your view on the short-term, talking about last week's selloff, saying it was healthy, overdue, and could be due for even another 5% to 7% decline in addition. i want to talk about the risks to that outlook, one being the potential increase in trade tensions between the u.s. and china, especially as we see robert lighthizer heading to congress today. how significantly detentions have to ratchet up for you to reassess your call? mike: this is definitely still a concern that is out there. the market doesn't seem to be too focused on it anymore. i think the market is focused on it, it just has so many things to focus on from day-to-day.

there's no doubt that trade relations are still fragile. i would put it that way. we have far from resolved all of the issues that have been debated, and i think a phase two trade deal is off the table. is that we risk now roll back phase one trade deal. we think phase one is ok for now. becomes af this situation where either candidate can use to try and bolster their poll numbers, that is where it becomes a bigger risk. i don't think it is an issue right now. to go inther things the right direction, but if they decide to use it as a lever to bolster the polls, that is where it becomes more dangerous. once you start saber rattling, it is hard to pull back in. so we've got to monitor it

closely. the one of your joys is fantastically concise reports of betsy gray sick. -- of betsy graseck. what is the view of american banking given what you see from ms. graseck? mike: banking has been a tough gig for the last 10 years, post what aal crisis, in period of financial repression has done. i think back end rates should move up and increase the yield curve. that is potentially a positive tailwind. i think secondarily, everyone is talked about deregulation over the last few years. it hasn't really lead to any big boost in activity. one thing i would say is different now is during the post

financial crisis period, we had what we call the shadow banks intervening and doing their job as the regulated banking system had been compressed, not being able to operate as effectively for a lot of different reasons. there is a positive argument to be made that some of that business, there could be share gains coming back towards the regulated banking the stump -- backing system because the fed needs banks to be operating efficiently. banks are the ones who create real money in the economy. we could see a steeper yield curve, we could see more deregulation and some share gains. that is why we are constructive on the american banking system having a rebirth here as we get reflation and have a recovery. jonathan: you've been constructive, and so far, you have been right. mike, always good to catch up with you. my best to you and the team. equity futures up 19 points on

the s&p 500, up 0.6%. beijing wrestling with another outbreak. we have to be laser focused on whether this constrains the economic data as we try to reopen and whether we really start to test the tolerance of the policymaker, not just in china, but here in the united states, as we also experience small outbreaks in various states. tom: not only that, but let us not forget the koreas. if all of this other stuff wasn't going on, the lead story would be the tension on the west side of the demilitarized zone. i would add that into the mix. jonathan: we will cover that next. we will catch up with richard haass. from new york city this morning, good morning. this is bloomberg. ritika: with the first word news, i'm ritika gupta.

federal reserve chairman jerome powell is sticking with his message that there will be an uncertain path for the u.s. recovery. powell has a second day of video conference testimony before congress today. he told the senate banking committee the economy may be entering a period of significant improvement in implant, but warned it will leave the labor market well short of where it was before the pandemic. brazil has reported a record number of daily cases from the coronavirus. there are almost 35,000 new infections, bringing the total to more than 900,000. brazil is second only to the u.s. in cases and deaths. meanwhile, the city of beijing has escalated containment measures to deal with the growing outbreak. more than 1200 flights in and out of the city were canceled today. south korea is warning kim jong-un's regime against further provocation. north korea said it would send do militarized

zone between the two areas. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> there are parts of the economy that will struggle to return to their old ways of activity because they involve getting people together closely in large groups, so if we don't

-- so it will take some time to rebuild confidence. jonathan: jay powell on day one of capitol hill. day two coming up. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. this is "bloomberg surveillance ," live on bloomberg tv and bloomberg radio. the shape of this market right now, we add some weight to the three-day rally on the s&p 500, up another 17 points. we advanced by around 0.5 percent, coming off the back of a huge upside surprise on retail sales in america. in the bond market, unchanged on the tenure. 0.75% on a 30to year yield, up by not even 0.5% to 1.5 5%. at the moment, shaking off a lot of tension not just on the pandemic data in places like beijing, but also on foreign relations. you have been on top of this last couple of days.

china, north korea, south korea, a couple of hotspots starting to bubble up in the last few days. tom: let me say right now, this is my book of summer. there's no question about it. booktioned other day the on communities, "the third pillar," but richard haass has written a jewel called "the world, a brief introduction." you in your book on order and to stash you end your book -- you end your book on order and disorder. echo -- whereow are we now? unfortunately, we are pointing more and more towards disorder. whether it is u.s.-chinese relations deteriorating or the increase in poverty around the world, the increase in the number of refugees, you could go on and on, but so far, this is a cloud without a silverlining. jonathan: if we can talk about

some of the immediate friction of the last couple of days, i think people are trying to figure out what it all means, particularly market participants that might be willing to disregard this. what is the significance of what has happened with india and china over the last 24 hours? richard: these are the world's two most populous countries. they've had essentially a demarcated border forever. they fought a war over this 60 years ago. two armies, cheek by jowl. i don't think either government necessarily wanted it to come to blows, but anytime you have over contested areas, that is a risk. both areas now are increasingly nationalist. we are seeing this as a trend, whether it is to distract with problems of coronavirus or its economic aftershocks. so this was something that could have happened. think the real question now is

whether the government's step in and calm things down. they won't have any solution, but the question is whether you have some sort of mutual pullback. jonathan: do you sense that de-escalation is the path forward at this point? richard: i think it is more likely than not. how it so interesting is was almost primitive with clubs and fists, hand-to-hand combat that we haven't seen since times like the korean war. so this was really localized. i would bet that there is a pullback, so you don't see anything like a full-scale war. that would be my bet. lisa: the hand-to-hand combat you're talking about perhaps is why some people are shrugging it not aaying at least it is nuclear threat. but over in korea, you have the of some altercation ther the bombing of

diplomatic entity. i wonder if there is some sort of input asian for all of the percolating of geopolitical tensions. for allof implication of the percolating geopolitical tensions. richard: look at the united states. we've got covid, we've got the protests, we've got the economic problems, and it is quite possible that countries around the world are looking to take advantage of a divided and distracted united states. so north korea might see this as an opportunity to pressure the south to relieve sanctions. north korea wants economic relief. the south korea relationship is bad because the u.s. has been hammering them. it is possible the north koreans decided to put pressure on the south to see if they couldn't cut a better deal. i know you know, and this

is the legacy of the wright college -- oberlin [laughter] physics for poets, tom. an oberlinow, as physics giant, that there is a vacuum out there, and the vacuum is president trump and his foreign policy. what happens after one term trump or two to trump when we try to close that vacuum? richard: i think there is a vacuum. there is a pattern of serial withdrawal, a pattern of isolationism and unilateralism. i would look at the vacuum as being allowed to fester. china is not in a position to fill it. the europeans would like to, but they lack the power. what is likely is things get messier.

the united states doing less, we have been in some ways the general contractor of global order for generations now. i think there's also a big difference between a one and two term trump presidency. two terms, i think american alliances might not survive. if they survive, they might be fairly empty. one term, i think a president biden might restore things. the problem is he will inherit a country that really wants to face inward to deal with domestic challenges and one of the most daunting, demanding inboxes any president has ever inherited. that, nation means it won't be easy for anyone, no matter what the intentions are, to turn things around. it will be difficult. jonathan: richard haass, always good to get your thoughts on this program. the council of foreign relations president and author of the new york times bestseller "the world, a brief introduction."

the eu proposing m&a curbs in a -- challengetiny to chinese takeovers. very much a goal of not just the united states, but i go that the eu shares. the way the continent goes about doing that over the next several years is going to be key, and whether the share in the effort is going to be a critical effort of that as well. thisyou see interdependency of the developed countries and how they react to china. , thatd go back to obe they will be overcome by events. i don't know what those events will be, but you have to be ready. am uncertain how ready we are. where is the response even to hong kong? jonathan: much more still to come on this program. up next, kevin warsh, former federal reserve governor, next on the federal reserve and monetary policy worldwide.

with equity futures advancing, good morning. this is "bloomberg surveillance ," live on bloomberg tv and bloomberg radio. ♪

♪ jonathan: from new york city, this "bloomberg surveillance." we are live on bloomberg tv and bloomberg radio. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. two hours away from the opening bell. we add some weight to the rally of the last three days. the s&p 500 advancing by 18 points, up around 0.6%. really muted price action in the bond market. treasuries go nowhere. your yield on the 10 year, 0.775%. in foreign exchange, mixed session for the u.s. dollar. a little weaker against the aussie, stronger against the euro. we wait for day to of chairman powell -- for day two of chairman powell on capitol hill. tom: we've got someone here right now, wonderful to speak to. i want to take you back 14 years to january of 2006, where

president bush made a brilliant set of two appointments. one was randall kroszner, a great financial economist. the other guy was out of newman "butch cassidyd and the sundance kid." who is that guy? he was the youngest guy appointed ever at 35 years old, and there was a lot of grumbling about kevin warsh. i will tell you this, kevin warsh had a distinguished term at the fed as everybody was saying when he was leaving, why does that guy have to leave? jonathan: we all know him now. kevin, always great to catch up with you. i just want to go back to february. the fed can't wait to respond to the coronavirus. that was you in "the wall street journal." i think everyone on this program agreed with you. now the conversation has switched almost 180. has the fed stepped in too far?

has the fed done too much? how do you respond to that now? kevin: it is a great question. tom, good to be with you and jonathan. first, when the regime changed of february this year, it is a job of the central bank to be super aggressive. the earlier you can be aggressive, the less you have to do later. so they moved not with the speed i would have liked, but historically speaking, pretty quickly. when you look at where they are now, they seem to be moving with overwhelming force. they seem to be incredibly aggressive, even as risk assets are at incredible highs. i wish that same aggressiveness were being felt in the policies they were putting on main street. in main street, their policies seem to be late, delayed, cumbersome, and not terribly effective. so the chasm between the aggressiveness to push up risk assets and push down bond spreads doesn't seem to be matched on main street.

jonathan: do you think the focus on one or the other right now is leading to market malfunctioning? they say that every single point objective is about market functioning. i just wonder whether the efforts now are impairing market functioning. kevin: it is hard for me to say with a straight face that markets are functioning well. that rationale for policy action was astute 60 or 80 days ago. it is really hard for me to say that the aggressive policies, the doubling of the fed balance we nevertering markets thought about entering in the last crisis, we do that because markets are functioning now. that explanation is in great. monetary policy matters at least as much for the reasons it gives as the decisions it makes, so i think that rationale is certainly in need of some updating. if i look at what is happening in markets with the fed having this kind of massive and

on markets, it is easy to see how they are moving around financial assets, but what ultimately matters is what about the real economy. again, it doesn't appear to me as though much of this is trickling down to the real economy it a meaningful way from the federal reserve. lisa: is that the fed's job? the main street lending program is very new for the fed because they will be taking on credit risk and becoming responsible for who to lend to, how to lend, when to force some companies into bankruptcy. should the fed even be doing this, or does the responsibility lie elsewhere? kevin: the responsibility lies with congress to find out what can be done for the real side of the economy. that is the treasury secretary and the exchange stabilization funds. the treasury took much of their authority and devoted it to the

federal reserve stand up this facility. jonathan was kind to talk about a "wall street" op-ed that i wrote about three months ago. was is principle there something they haven't adopted, which is provide ample and immediate liquidity to all solvent commerce on main street with immediate collateral, but that is not the way the main worked.acility has i think you are right, it is not the fed's job to be deciding on every loan, but they have to regulate 5000 banks. that is their job. so if i was to define that facility, the fed would have regulated the banking institutions, who would have provided loans to their typical clients against good collateral, based on their solvency before the crisis. the only job the fed would have

would be to ensure that the banks have done proper underwriting. . if it would have underwritten the loan january 1 and follow this i'm -- follow those same underwriting standards, any losses would be offset by the money that the treasury department had granted the federal reserve. i prefer that kind of ample liquidity to this kind of picking and choosing, and this sees aggressiveness in financial markets and the lack of aggressiveness makes me quite concerned about the real economy. lisa: let's talk about what is going to happen in the future, not perhaps just taking a look at what they should have done. you wrote in "the wall street journal," that if policymakers get next steps wrong, "2020 will look a lot like 2008 in terms of the sanguine feeling turning to

catastrophe later in the year." do you see policymakers on that path right now? kevin: we should begin with pearman charles -- with chairman powells word at the moment. we have to start with epistemic humility about the efficacy of these tools. i feel a lot better about the state of play and the risks over the second half of the year. if we had used the decade before this crisis putting our house in order. it would've been better if congress had been more fiscally responsible in the decade between these crises, so we would have plenty of credibility and flexibility. i think the same is true of the federal reserve. principlecertainty been talked about between 2010 and 2020, the fed would have commended this process with a lot more traditional ammunition.

it wouldn't be having to reach into all these new markets with uncertain effect. i look at the second half of the year, and what i say is a w looks awful lot like a v until it looks like a w. none of us really know the contour of this economy. i guess what i would say as a final word on this, if you were to take an olympic swimmer and a novice swimmer, and locked us up at the bottom, we would both be racing to the surface, but that would not tell you who is the olympic swimmer and who is the guy just trying to get his head above water. tom: i've got this image of you on the stanford water polo team, just getting it done out there against pepperdine. kevin, you are identified more withany economic official republican politics and the storied family you married into.

i don't know if you grew up on third base, but you are decidedly living on third base. from your view and with the honesty you've had for decades, are we moving ourselves towards an ever more gilded age? is the price of all of this funny money and policy that in 2025 or 2030, we are going to be ever more unequal? kevin: i should first disabuse you of your visual, not least of me on the water polo team. i can hardly swim. and i grew up in a regular family in upstate new york and had parents that are probably so excited to be watching you on tv right now. but in terms of the substance of , we are at this moment of consequence where we should really be focused. because we had an aggressive central bank, not least in times of crisis, where we need the central bank to be an emergency authority, but in ordinary

times, treating that like an emergency. like we have had an emergency every day since the darkest days of 2008. these aggressive policies do lead to miss allocations of capital, financial assets that trade better than real assets, and there is a certain unfairness to that. that is why this is no time to be having a whole philosophical discussion within the walls of the fed, but may be fine tuning between 2010 and 2020 instead of thinking ahead to what are the risks. you end up with policies that tend to take the income inequality and balance sheet inequality and make it somewhat unfair. half of our fellow americans have not been able to benefit because they don't have equity in a 401(k) plan, they don't have equity in their house. they look at the run-up in these markets and ask themselves, what is in it for me? that's why the fed is focusing on the real economy.

we will let financial markets take care of themselves. jonathan: i am being told off or squeezing and one more question, but i got to. what about fiscal? you touched on that. is that another way of saying that tax cut a couple years back was a mistake? kevin: what i would say is fiscal policy has a really important role to play, but too much of the discussion is how big should the next stimulus bill. of the, the size stimulus packages mean a lot less than the design of them. when i think about tax policies then and tax policies today, tax policy and fiscal policy more broadly needs to be designed to encourage investment back in the services sector of the economy, back on the real side of the economy instead of financial flows chasing the s&p at these historic levels. as i think about the next stimulus bill between somewhere

august,ourth recess and my overlying counsel to the authors of that is to make sure there's incentives for real people to reengage back in the workforce because they have been displaced, and real investment find its way into real property plant and equipment. i shouldn't say this in front of a new show where so many of your viewers are investors. i don't really worry about the s&p. jonathan: i had a feeling i might not get a straight answer to that question, but i appreciate your response nonetheless. always great to catch up with you. in this market, we advanced 0.6% on the s&p 500. citi on themorse of commodity market and the huge oil rebound over the last couple months. this is bloomberg. ritika: with the first word news, i'm ritika gupta. there's growing concern that

some of the biggest u.s. states are facing a new wave of coronavirus after lifting lockdown orders. texas reported a record number of new cases. on a weekly basis, florida also set a record for new infections. governor ron desantis says he has no plans to roll back the state's reopening. to stopt trump plans former national security advisor john bolton from publishing a tell-all book. publisher simon & schuster called the book "a book donald trump doesn't want you to read." it is due out next week. the u.s. has spent $500 billion in economic rescue funds, but little of the oversight is money --to keep the places. president trump remove the official who was to lead at the

accountability commission. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> for me at least, and i have studied it as carefully as i can come of the jury is out as to how effective they've been and whether they've actually helped

growth. in addition, there are side effects to negative rates. jonathan: fed dallas present robert kaplan responding to a question about negative interest rates after day one with chairman powell on capitol hill. hopefully we can put that to bed before we get to day two. good morning to you all. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. one hour and around about 42 minutes away from the opening belly new york city, with equity but we fade just a little bit. in the bond market, really needed price actio going into the opening bell. prices up by not even 0.5% on the long end. on the 30 year, up to 1.55%. the tenure down to 0.75%. chairman powell said the following with a straight face. --don't see us as running to

as wanting to run through the bond market snuffing out price signals or anything." wouldn't you describe the federal reserve's presence in the bond market, both in terms of the actual presence and the announcement of them being in the bond market, as an elephant running through the bond market? he said that yesterday with a straight face. and they are doing the ballet here about what they say versus what they do. to that point, are we going to see negative interest rate chat tomorrow from the bank of england? jonathan: i hope not. i really hope we don't go that way at the bank of england. i think the focus is on the size of qe, and there's also a hint in the last couple of weeks that they start to discuss yield curve control in the way the fed has started that process as well. tom: right now, let's get to a guest today. ,ow edward morse of citigroup

head of commodities in oil. oil war between saudi arabia and russia. ed: that war is kind of over for a while. as a truce imposed partly by donald trump, partly with the volleys associated with their actions in march. so they are coming back to reality. each country is seeing a , andndous drop in spending they are tight their belt -- they are tightening their belt. i want to talk about the price of oil, which has been so hard to get right for a lot of this year. it went from its demand story to a supply story, and now perhaps back to a demand story, as beijing closes schools and we see a pickup in virus cases in please is like florida and texas

in the united states. of oil you see in terms demand that could send prices well below where they are currently? edward: when we look at the dynamics between the supply and demand side now, the actions taken voluntarily, involuntarily in the united states, canada, all of the opec countries and the non-opec countries associated with them, those supply actions are going to dominate. no matter what happens, we are moving from record inventory accumulations and builds to what is going to be a period of strong, if not record inventory draws. the cups are not -- the cuts are not being seen yet. the api data yesterday had a growth that could only be figure today because of the armada of tankers sent out by and others of these countries in march through may.

reale seeing cuts that are , taking 4 million or 5 million barrels a day out of the market, and the demand increases are there. the underlying demand factors are not as strong as the supply factors. tom: with the may equilibria of the supply -- the many equilibria of the supply and demand of oil, what is the optimum price right now? i have no idea where a arrow should be. edward: i will try to be brief. it really relates to the cost structure of the world for oil. if we look at the data that have to $45, we are in a $40 environment. if this were working the way the market should be working, that is where we expected to eventually get to, but there is a lot of inventory

to try and sort that out. jonathan: ed morse of citi, the head of global commodity research, always great to get your perspective. your i want to pick up on point about the outbreak of infections in beijing and why the market will or won't respond to this. the equation has shifted. a couple of months ago, we had an outbreak that led to one thing. lockdowns, shutdowns, and a broken economy. this time, the tolerance of policymakers has changed and somehow, they can almost ignore the outbreak and push it to one side. maybe they don't need to lock down again. i just wonder if it is the higher tolerance levels of governors in the united states that has shifted the equation in the last couple of months. lisa: you have seen in the u.s. a reluctance to shut things down again given the economic carnage, the fact that we do

have more testing and tracing and things that can possibly mitigate hospitalizations. that said, that specter is still on the table. an even bigger uncertainty is the consumer confidence to spend, go out to eat, even if you have an uncontrolled virus spreading. so far we are not seeing that from preliminary data in florida , but i wonder at one point consumer behavior factors into the roads here. jonathan: right now, the data looks good relative to expectations. if you see in those states where we are experiencing outbreaks right now that start to damage on consumer and business confidence, that is where you get this market to really pay attention. is real life.s this is a health issue, but for the markets, they want to understand what it means to the economy, what it means for the data, and will policymakers slow

the reopening process. in the united states, we haven't seen that yet. tom: no, but i would go back to the age dispersion with great attention on florida, where there are so many elderly. in some of these developed states, it is a belief that they care.ve the medical even if the statistics are not that grim, the theory is that they can withstand these shocks of medicine better than what we saw in new jersey, better than what we saw in new york. jonathan: i will emphasize your use of words. the theory. it is very much theoretical right now to see how it plays out. in this market, equity futures climbing near session highs, up 0.6%. heading for a fourth day of gains. much more still to come on this equity market. up next, jill kerry hall of bank of america will be joining us.

two morning to you on day on capitol hill from chairman powell. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. this is "bloomberg surveillance ." you doing okay?

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thet's important for credibility of policymakers to follow through on the commitments they've made. >> the market has gotten really negative about the prospect of future inflation. >> you are going to have a pretty big decline in disposable income in the third quarter. the reason is you've had so much of that stimulus in the second quarter. >> this is "bloomberg tom keene,e," with jonat