officials -- heard fed officials basically beg for fiscal policy the way they are now. >> markets could continue to grind higher as long as we don't have a big negative surprise. >> are we headed towards a cliff? >> i think we are in the midst of a slow moving policy mistake. intentskong is, for all and purposes now, part of mainland china. jonathan: from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. , i'mside tom keene jonathan ferro. lisa abramowicz was meant to have the day off. she must've so much, she came back. [laughter] tom: she comes back to a big market lift. part of this is maybe the

pandemic. some of the pandemic statistics .n case dynamics jonathan: this has been remarkable in the case of talks down ndc totally stolen -- down in d.c. totally stalling. lisa: totally agree. going forward today, we get a read on the economy in the united states. . 8:30 a.m., producer price index data. very interesting to see the divergence between inflation expectations among futures traders versus the absolute bond yields, which keep falling. secretary mike pompeo speaking at an event in the czech republic. we are interested in anything he has to say about china.

three year treasuries are going to be auctioned off. the actual deficit is so unclear because that fiscal support package is missing in action right now. jonathan: let's get to the price action. equities futures are higher. in foreign exchange, the euro stronger. $1.1787, up 0.4%. we break 60 basis points on the 10 year to 0.6%. i will be the one to ask the first stupid question of the morning. do supply matter -- does supply matter? this administration cut taxes back in late 2017 with a 10 year at 2.50%. here we are adding tons of debt with a 10 year at 60 basis points. tom: this is an important conversation and at least a three hour chat. maybe we can do that later on. in the previous hour

made clear he's concerned about this. look at the real yield come in. we had a grim negative real yield. it absolutely crushes gold. that culminated where i went from aaa's leveraged all-cash. from -- went from aaa's leveraged -- went from triple-leveraged all-cash. jonathan: let's bring in tony crescenzi, pimm co. -- tony crescenzi, pimco portfolio manager. does that supply matter this week? ask whenple always will things blow up. i wrote a book about this, the

idea of a keynesian endpoint. we reached the keynesian endpoint almost a decade ago. to find another balance sheet. of course, that was the imf, the ecb, and the rest of europe. japans., europe and haven't been able to engage in transformative activities, which is to say infrastructure or investing in people and things. instead, moneys have gone mostly towards consumption. think of the most recent stimulus plan. is there any major project being created in america today to help the future? now. tom: i think -- no. tom: i think you are dead on. maybe we could see a change in that in the next year. tony: in europe, there's a little bit of that. tom: i will give them some

credit on that. we need a tunnel to staten island. that's what we need. [laughter] tony: instead we've got the 56-year-old bridge that links brooklyn to staten island. jonathan: this got derailed quickly. tom: the show is falling apart at light speed here. [laughter] i want to ask you a lisa abramowicz question, which is really important. i have never cared about treasury supply, full facing credit supply. yet now i really have to, don't i? tony: maybe, but remember, the world population is aging. what do we do as we age? we move up in the capital structure. there's a lot of money that still flows into bonds despite the low yields because people want to protect their savings. let me give you summer reading,

three books real quick that would describe the current situation. let's go back to hundred 50 years, "theback 250 wealth of nations." there's always a need to bridge the current situation with the future. saidwealth of nations" that people will go out and try to do better for themselves and build the wealth of nations. then let's go back 150 years, 150ar street, liquidity -- mbard street, liquidity. book about the idea of uncertainties being so large that people disengage sometimes. lately, that was the case.

in march, the uncertainty was radical. now it is a little less radical, so the dissipation of radical uncertain is helping rockets. liquidity, confidence, and a reduction in radical uncertain he is what is driving market supply. now, butt matter right it probably will matter more in the long end with the pivot point of the yield curve. lisa: tom did read "the wealth of nations," and went out and bought jewelry. you are saying that the european plan to possibly invest in infrastructure is superior to what we are seeing in the u.s., where we are continuing to gridlock, and yet investors have piled into the story. do you think it has gone too far based on the fact that they don't have the tech names to support this in the new era? tony: great point. when you think about investing over the next five years, and which equity market to invest in, you probably want to think away from europe and toward the u.s. and asia.

about 30% of the 750 billion euros in france alone recently approve will go towards green projects. a lot of those projects, let's say electric vehicle charging stations, will use and the sames sectors that would grow for the next five years. it is not going to be the place where money flows, and it will help the euro over time. it will keep it from bailing more than it otherwise would money will flow elsewhere. great point. jonathan: the high issuance we saw, 40% of it priced with the high yield 4% or less. ,he issue that we had yesterday

is that even high yield? [laughter] lisa: for everyone who doesn't know what we are talking about -- tom: i don't know what we are talking about. lisa: there was a junk rated company that sold a bond with a coupon just north of 2%. is that right? 2.85% my belief so come on 10-year note's. the idea that it was the lowest ever coupon on a high-yield bond. jonathan: and they make aluminum packaging. huge demand for it right now. . i am trying to understand. what is high-yield anymore? tony: of course, it is all relative, but high-yield is anything below bbb rated. ratednd 2009, bbb securities, 99.i'd percent of them got their money back -- 99.5% of them got their money back. investors are willing to take , generallycause they

speaking, will get their money back. but one has to be very screwed nest now. there's been a lot of debt issuance. tom talked about at issuance by the treasury, but there's also been lots of corporate bonds outstanding. havetress in 2008 and 2020 a common thread. they both ended chaotically , these the system intermediary isn't playing the role that it traditionally plays , partly because of regulations, partly because of changed business models. be careful because most cycles are going to probably end chaotically, so investors want to have a little more liquidity

and more resilience in their portfolio. jonathan: great to catch up as always. good to see you. tom, did you ever think we would sit here and say that, a high-yield bond with an issue of 2.85%? tom: no. i remember lovely and it would ease at 7% -- lovely annuities at 7%, 8%, even 9%. there's this phrase financial repression. some of the distortions you get are a high-yield bond, whatever you call it, under 3%. it is absolutely bizarre. on a mathematical basis, it is outright frightening. jonathan: all the more remarkable to see that issue in the last 24 hours. coming up on the program, we will talk about the economy with the wonderful diane swonk, grant thorton chief economist.

coming into the session today within 1% of record highs, and on a seven day winning streak. outside of the u.s. and europe, that's where the big gains are. the dax up by 2.7%. from new york this morning, good morning. this is "bloomberg surveillance ." ritika: with the first word news, i'm ritika gupta. president trump says he is seriously considering a capital gains tax cut. he told reporters it would create a lot more jobs. the president can't cut taxes on his own, but some advisors say he could issue an executive order that adjusts the original price of an asset when it is sold, so no tax is paid on appreciation for inflation. the trump administration were ridley may prevent citizens from returning to the u.s. temporarily if there's a chance they have the coronavirus. according to "the new york times," the ban would apply to permanent residence, too. , the police chief has

resigned after the city council voted to eliminate 100 officers and cut the department budget. it is the latest move by a local fundingnt to cut police over the killings of black people. the police chief warned that it would hurt public safety. with jobs of britons declined by 220,000 when the coronavirus lockdown instructions were most severe -- lockdown restrictions were most severe. the government will start gradually withdrawing support for wages darting this month. a judge has ordered uber and lyft to convert their california drivers from contractors to employees with benefits. both companies plan to appeal. reclassifying the drivers could force the companies to pay

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

on capitol hill have stalled. from new york, this is "bloomberg surveillance." alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market shaping up as follows this tuesday morning. equity futures up 20 on the s&p. can we make it eight straight day of gains on the s&p, currently the longest daily winning streak going back to late 2017? all about dollar weakness through g10. the euro is firmer. the only currency the dollar is doing better against is the japanese yen. that speaks to the risk appetite improving. $1.1791.dollar at tom: in the silence of

washington is kevin cirilli, our chief washington correspondent. without question yesterday, the moment for me was mark zandi of moody's framing out a 10% unemployment rate is actually 14%. has a longg, axios dissertation, the granularity of food kitchens around this nation. they are talking about the pandemic depression, and we have radio silence. how will it be broken? hown: i think in terms of the markets have reacted during the past couple of months, contrasted with what you just laid out for the middle class and the lower middle class in this country, are two incredibly different worlds, to say the least. from washington's perspective inside the beltway, it is two very different ideological camps that don't see any incentive for compromise.

compromise right now is not something that would be celebrated amongst various contingencies of the parties. yesterday when i was speaking with sources, not only are they at a stalemate, but it continues to come to this notion of whether or not there is really any calculation to have their be some type of fraud, sweeping -- some type of broad, sweeping deal. where is the gang of eight? where are the gangs to be thrown into a room and look at a compromise? they just does not seem to be an incentive to do so. tom: everyone is talking about the wonderful "washington post" article on mr. meadows. is the president tilting to mark meadows, or secretary mnuchin? kevin: it is a good question. i think both of them have the ofsident's ear, but in terms understanding the capitol hill dynamics, mark does is obviously -- mark meadows is obviously a former congressman, one of the

founders of the freedom caucus. but in terms of those republicans have an opportunity to really negotiate with speaker pelosi, they are the minority party, so they are not really voice is rather, their just not able to be as loud in those negotiations. however, he does bring with him expensive legislative experience. as for secretary mnuchin, he's always been seen much more as a middleman when it comes to dealing with the democrats. he is someone, based upon my who has a working relationship with speaker pelosi. jonathan: have used -- if you speak to anyone from the wall street crew, they will tell you the same thing. $1.5 trillion deal gets done a digitally -- gets done eventually. is anyone talking about the prospect of no deal? kevin: no. inside the beltway, it has been

how, inle to see just the zeitgeist, there is sort of of thiscess coverage fiscal fight, but in terms of the broader trend, at the end of the day there is stimulus that is needed. wall street has baked that into their expectations. the business community, manufacturing community, pharmaceutical committee, tourism, teachers, everyone is really on the same page of some type of more relief. let's not forget, republicans are talking significantly less than what democrats want, but it is still $1 trillion, which before all of this, was still a hefty chunk of change. lisa: you said mark meadows represents the ultra conservative of the republik and party. how does wing feel about president trump's proposal to cut the capital gains tax, given the fact that that would also

add to the deficits in the -- the deficit significantly? kevin: not good, but they also understand in terms of where the president is headed right now. he was dealt this economic situation, and i think the deficit hawk in the deficit fight is going to be had november 4 for republicans. estimates, at the these senators and lawmakers, they are reading the same economic reports that wall street is reading. if you look at the latest estimates of growth for 2021, and the excitation of a vaccine, they understand that more stimulus is needed. kevin: dan quayle. mike pence. really. are we going to get a really on the vp picks? kevin: we are really going to have to wait and see. if there is anything come of the biden campaign -- if there's anything, the biden campaign

wants us to have excitement and diversity, and they want to contrast that with the incumbent candidate. i am told by sources on the president's reelection campaign they have been looking to define whomever -- to defy whomever biden picks. we are on full vp watch this week around-the-clock. jonathan: kevin has got to sleep in the building. he's not allowed to leave the camera until that headline dropped. he can't laugh because he knows it's true. great to catch up with you, sir. do we need to come up with a new definition for a fiscal hawk? we are calling these people fiscal conservatives. they've got a $1 trillion deal on the table. with theew up conservatives and the hawks of another time and place.

always negotiated, always found a middle ground, and there were some real arguments along the way. this is totally different. this is the teachers of the tea party, the house freedom committee. this is a completely different tone that centers around my way or the highway. toathan: i think it is fair say if fiscal conservatism in 2020 is a $1 trillion bill, then the fiscal hawks lost to the argument. we need to get a little bit real about that. governor cuomo yesterday, handing the drowning man an anchor. that is what he said about the president over the weekend. pretty much every governor said something similar. this is the current addled, the president -- the current battle, the president versus the states. tom: i cannot express the anecdotal slowdown. jonathan: we don't see it in the equity market.

in the s&p 500, we advanced by 0.6%. up next on the program, diane thornton cheap economist -- grant thornton chief economist. this is bloomberg. ♪

♪ jonathan: risk appetite looking good this morning. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. this is "bloomberg surveillance ," live on bloomberg tv and radio. here's your price action this tuesday morning. for equities, it's seven straight days of gains on the , up 0.6%.the s&p 500 the dollar weaker against the bulk of g10, including the euro. $1.1792.ar at yields just a little bit higher, up three basis points at 0.6%. risk appetite is good. compare and contrast that to the economy. how many times have we look at that situation, where markets are looking ok and the economy is still looking shaky? tom: absolutely. we are seeing it in great britain today, and across america as well.

september will be fascinating. chicago is not interested in september. right now they are interested in august 11. it has been a challenging summer for chicago. we are thrilled to bring you there economist. diane swonk joins us from grant thornton. thank you so much for coming on today. it is shocking to have the family i have from chicago, to have the grandfather that was in that room at the back of the art institute, that trading room they've got stuck in the back corner, to see this chicago in such disarray. is it just about the slowing and collapsing economy? diane: well, there's a lot of issues going on, and it is really devastating to see what is happening to michigan avenue. clearly people are out of work, they have a lot of time, and the gangs are warring with each other. there's also the looting because the drug business has dried up over the border, which is all

bad on all sides. hard to see, very this devastation to the city. we hope we can make it through it. this is getting harder and harder. tom: depolarization of this is seen in washington. -- the polarization of this is seen in washington. what would be your message to the federal reserve of chicago, to the politicians in washington? diane: i think it would be the same as charlie evans, the leader of the chicago fed. this is now life-and-death. we are talking about a lapse in benefits that is already triggering food insecurity, homelessness, and it is not going to be repaired anytime soon. the governors, both republican and democrat, say they cannot do what the president has offered. they need to get back to the table and in a deal done, and

every minute that goes by is compounding the losses. you can maybe get a loan to make up for the fact that you are -- if you are a business, you can maybe get a loan to make up for the fact that you are deferring revenue, but if you are family, we are talking about food insecurity and homelessness the likes of which we have not seen since the great depression. jonathan: this is the disparity but nice the aggregate figures -- asperity -- the disparity , andth the topline figures he focused on the topline. think we can maintain the latter given what is happening with the former? diane: the dissidents is getting to be deafening between the financial markets, main street and wall street ritika: one thing -- and wall street.

we are talking about an economy where you are shuttering a lot of businesses. at least 500,000 businesses have shut down permanently in the u.s.. that taking away of dynamism, consolidation in a few small businesses, not only undermines the innovation of the was economy entrepreneurship, but the job generating ability on the other side. it is really notable that we have had trouble getting out of even the most mild recessions since the 1990's with job generation. the 1991 recovery was called the jobless recovery. coming out of the great recession, a lot of people thought we would get a big ounce. we didn't because we did not do transfers to state and local governments. we've not learned our lesson, and washington needs to get back to the table if they want to get out of what is now metastasizing to a much more vicious cycle, not just temporary covid related losses. jonathan: the white house

believes we can have a v-shaped recovery. i am wondering from your perspective whether we are closer to a w, given the direction of travel at the moment. diane: we are closer to a w, although we are talking about one quarter of positives. if we just hold at the new levels in retail sales and consumer spending, then we will have a very strong third order. that's kind of a false narrative because that is really plateauing and not showing any momentum over the summer. we can actually lose some momentum in august and september given the lapse in $18 billion a week consumers were getting in terms of enhanced unemployment spending insupport the u.s. economy. as we go into the fourth order, when you've got halloween, the second-largest holiday of the year, no football season, these college towns really scraping by, having to come

back, which could really foment the increase in virus spread, you could very easily dip back into the negative until a vaccine is available. we have seen other countries be able to manage their virus so that their economy can reopen. manage the virus, get the economy going. the health of our population really is the driver of the health of the economy. lisa: there's been a shift in narrative from this recession can be really short, deep but short, to this is a typical recession. it is going to be very difficult to get back to the normal, pre-covid level of employment. the level isys probably closer to 14% unemployment. do you agree, and how long do you think it will take to get back to normalized levels? diane: it is really hard because it is dependent on whether or not congress will just fill the

creating.e we need at least $1.5 trillion without stimulus on the other this. if we get 1.5 trillion dollars with the delays we have seen, we won't get out of this on a level of economic activity until mid-2022. that is a long time, and it is not the snapback many hoped for. that is with some catch-up in 2021 as we try to come back online, but we are really undermining our ability, our potential to grow on the others of this. iceberg.the for us not to be the titanic, we need lifeboats with supplies in the water to divert much deeper waters than anyone expected for longer because we did not manage the virus itself. lisa: there's increasing fear among people that they will see wages cuts or their jobs cut. i am wondering, in the united

kingdom, we saw data this morning that showed wage deflation for the first time since records began in 2001. are we going to see wage deflation in the united states in any meaningful way? diane: that's a great question. some of that is because the people who are employed are not actually employed, and being paid part of their income. so it is a bit of a statistical residual because of the unemployment in the u.k. but it is very important to understand that employees saw a wage cut at the onset of this crisis. never see that before. people thought it was temporary. they cut white collar wages in order to preserve their jobs, to not lose their people, after coming off 3.5% unemployment. what is becoming clear is that we will likely see a repeat of wage cuts and unpaid leaves as we come into the hall. we've already seen several firms start to call for that.

that could further suppress wages in a way that we don't usually see in a recession. that sticky wage theory gets thrown out in a covid recession, and this is metastasizing. i think it is also important to lossesat high wage in employment are now approaching those of the great recession. tom: this is extremely important, as you mentioned, the labor tumbled in the country -- the labor tumult in the country. everyone in the country has to read upton sinclair, "the jungle." are we going back to "the jungle," this atomize asian of our labor economy were -- this atomization of our labor economy where we have the haves and the have-nots? diane: unfortunately, we are already there. what covid revealed was the

inequalities that existed in the u.s. economy in an extraordinary way, and then exacerbated those any oddities. the idea that we've got families that can't feed their children for a week right now in the united states because of a health crisis, this is now metastasizing into a humanitarian crisis, and taking on a different kind of nature of a self-feeding negative cycle that we don't have to do. the reason it is worthwhile to go through these downside scenarios is you can see how you could stop it from happening. there are still ways we could mitigate the spread of covid, especially as we open up students thatlder are highly contagious, we can mitigate that. we need a nationwide testing effort area we need the testing funding that would be in the national $1 trillion plus plan by congress. both sides agreed on that.

i don't understand why we can't move forward on testing. we are still chasing a moving target in that. there are ways that we could escape this becoming a worse situation, but first we need to act today. really, yesterday. the clock has already run out for too many people. we need to get those lifeboats out there to help the economy, but i think it is really important to note that this is not where we want to go, and we have a choice. jonathan: really lucky to have you on the show with us this morning. diane swonk, grant thornton chief economist. lucky to have lisa back with us as well. that 3.9% unemployment statistic is the most artificial number probably in the history of the labor market. tom: why is that? jonathan: because what we have in the u.k. is a furlough program that has accounted for almost 9 billion people. the government has paid about 80% of their wages. it expires in october. if you are on that program, you

are classified as employed. you won't show up in that statistic. what the u.k. faces at the back end of this year could be real trouble. and theprogram expires, chancellor has basically suggested it will come of that is when we see those numbers move more aggressively and away we don't want them to. what it emphasizes and highlights is how important a fiscal response has been throughout all of this to support the labor market and support consumption. -- and i never seen don't consider diane swonk to be political -- but i've never seen so-called conservative economists so on the same page with so-called liberal economists over the need for stimulus soonest. jonathan: it makes it all the more remarkable that we can't strike a deal on capitol hill. from new york city this morning, good morning. , oliver wyman partner

dana penn mom -- partner daniel tennenbaum. this is bloomberg. ritika: joe biden has finished interviewing all ep candidates. he promised us spring that he would pick a woman to be his running mate. russia says the country has come up with a vaccine that offers a lasting immunity. putin says one of his daughters has been inoculated. however, the russian vaccine was registered before phase three trials. president trump told americans their retirement accounts are "doing fantastically." the data shows he is mostly right. according to fidelity investments, the average 401(k) balance in the second quarter. the average balance is for a little more than $104,000. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more

than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> what we don't need is anything destabilizing between now and january. jonathan: john labor of eurasia

group commenting on the situation between the united states and china, and reading between the lines there, saying wait to see if president trump has to leave the white house and former vp joe biden walks in. tom: i don't know where this is coming, but we got huge news flow out of china. huge news flow as well out of europe. you wonder whether the -- wonder where the sanctioned debate has gone. with the biden-trump debate, there is the game theory, the game of chicken on what is next, and it wraps around sanctions. daniel tennenbaum is arguably the best guy in the country on sanctions. he's now at oliver wyman as partner. you know the minutia of this up, down and sideways. when you see that senator rubio and senator cruz have sanctions, translate what that actually means. >> i think it is important to

note that senator rubio and senator cruz have had sanctions levied on them twice in the last result ofterday as a their involvement in the hong kong debate, but also from the response to last months sanctions of certain people in shin jen province on the -- in angn jang -- in xinji province on the treatment of uighurs. they've already sanctioned them. sanctions don't actually have a meaning or any sort of definition in china at the moment. jonathan: how close are we to needing to choose between maintaining presence in china were maintaining presence in the united states? daniel: i think hong kong is where you are seeing that line drawn. right now, if you look at financial institutions, global banks that operate in hong kong and the u.s., especially with the sanctions levied against carrie lam and the others in the

hong kong government friday by the u.s., banks have already begun rejecting transactions related to those 11 designated persons. for the moment, banks are choosing the u.s. over china until china give them reason not to. that flies in the face of the hong kong monetary authority saying that those sanctions have no legal right to be enforced in hong kong. you are seeing global banks ignore that and still follow the u.s. jonathan: what this underlines is the power of the u.s. dollar, and that is the power the united states has right now. as a financial institution have any other choice than to listen to what the united states has to say over and above communist party would ultimately like? daniel: i think banks are still going to follow the u.s. until china give them a reason not to. there is an argument that could be made that compliance in hong kong would be a violation of the newly passed national security law. again, the u.s. is the de facto standard banks will follow until they have reason not to.

this is very much in line with how the u.s. and eu have faced off with respect to iran. there's been anti-eu restrictions for years, but they have never been enforced, so banks follow the u.s. what the bleed through effect is going to be on u.s. banks on wall street, given the fact that u.s. banks use we chat in china doing business. they have been expanding in china. this affects the way they try to have an international presence. how much pushback are you hearing from wall street, from some of your clients to some of these proposals? daniel: i think there's a lot of hope that some dealers reached. i think there's two bigger issues that come off the back of the focus on the social media messaging apps. one, why would foreign businesses want to come and set companies innology

the u.s. for fear of what could happen to their businesses? it also poses a risk to u.s. companies operating in china, where the rivers could happen to them, but i do think the market is hopeful that some degree of a detente is reached, and these apps will be able to continue to function. tom: what would be your advice to the president? it is a massive tit for tat game of chicken. you have been doing this for years. you did it at treasury. you have been cited by the fbi for your work. what is the advice for the president to break the game of chicken? daniel: can't we all just get along? but how can we find a productive way to negotiate with china? there's no disputing that some of the actions of the trump administration on china were long overdue. it is just back to the how they are doing this. i do think if you can go back to the manner with which similar

discussions have been held, like the phase i trade deal negotiations, you would probably have a much more productive outcome, especially since you are seeing china take somewhat more measured responses to the actions by the trump administration. tom: from where you sit, is china delaying, waiting for a biden presidency? daniel: it's unclear what china is waiting for. i do think there's a certain unpredictability and how this administration has handled china. certainly in the last month alone, we have seen a fairly significant escalation and how the u.s. is approaching china. whether they are waiting the u.s. out or to get them back to the table to have more productive discussions is really unclear at this point. jonathan: dan 10 about -- dan tannebaum, great to catch up with you. virtually poring over progress of the phase one trade deal. given what's happened over the

last couple of months, can you believe that that is still intact and has a broken down? tom: exactly, that it hasn't broken down is maybe more accurate. on the show, one of our esteemed guests saying it is over for hong kong. i am mentally not there yet, but certainly that is the mood out there. i just wonder how consultants like dan pick up the pieces for multinationals as they decide what to do forward, not only with hong kong come about what to do with china. tom: whether they want to can -- jonathan: whether they want to continue expanding into the mainland. so far, they do. lisa: i am very curious to see what comes out of these phase one trade assessments on saturday area really interesting to see how much the economic push really presides as the most important point here. in the past, it has meant that the u.s. and china are both prioritizing their economies. president trump's tactic hasn't seemed to indicate that he is

taking a similar approach, and that is raising a lot of uncertainty. jonathan: can you define what progress is when they meet and talk over the weekend for a phase i agreement? lisa: it means that you don't have escalation coming out of that. if you have at least conciliatory rhetoric on both sides, that would be some sort of progress in coming to some sort of agreement, but i don't know. president trump saying the situation has changed, china trying to take a conciliatory approach to wait it out for the next president. jonathan: it is pretty clear that the chinese communist party has not reached those targets they agreed to hit on agricultural purchases. so does the united states sit there and say we are sticking with deal? tom: i don't even think the trade negotiations are feasible right now. between taiwan and hong kong, it has been overcome by other events. jonathan: i would agree. coming up on this program, we

will catch up with northwestern mutual. good morning to you all. this is bloomberg. ♪

>> i've never heard fed officials a sickly bag for fiscal policy the way they are beg-- officials basically for fiscal policy the way they are now. >> to question is, are we headed towards a cliff? >> i think we are in the midst of a slow-moving policy mistake. >> hong kong is for all intents and purposes now part of mainland china. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. welcome to "bloomberg surveillance." we welcome all of you across this nation on bloombergio