-- lookingovement for improvement in the economy, but the pace will probably slow down now that we've had this rebound. >> this is a secular downtrend in the dollar that could be 10%, 20% over a two-year period. >> the large, industrial behemoths of our time is probably not where cap it wants to flow. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. jon ferro on sabbatical this morning. really upset over lionel messi and barcelona. he was apoplectic when i spoke to him about this whole blowup. i've got to go to something i got wrong here on radio, on tv, and thank you, i got the hurricane wrong. this has become serious rapidly.

lisa: hurricane laura is moving rapidly toward a category four hurricane, possibly inflicting billions of dollars of damage on the gulf coast. interesting to see how that evolves with respect to oil prices. what else can 2020 bring? tom: it is going to bring a lot of challenges in academic growth. futures red and green on the screen. let's get right to the business review this morning. ata: what we are looking for 8:30 a.m. is the july durable goods numbers. interesting to see what this tells us about capital expenditures at a time of such uncertainty for companies. the u.s. is selling a record 101 of -- a record $151 billion five-year yields. see viceing to president mike pence headlining day three of the republican

national convention. look out for his 2024 that form, also expected -- money 24 platform, also expected to be -- his 2024 platform, also expected to be a potential candidate in the future. tom: we need to stop and explain jackson hole. it is a beautiful place with mountains that only michael mckee has climbed, across the lake with the moose in the background and a lodge. i've had the privilege of being there for some very important meetings during the financial crisis. it is run by the kansas city fit and their wonderful -- kansas city fed and their wonderful esther george. this will be a virtual jackson hole meeting. we spoke with esther george on the framework at hand. >> i will just offer you my perspective that this has been a useful process. it has been a process that really asked of ourselves to

look at what we learned over the last decade to try to think about how the economy may have changed, and importantly, to think about how we communicate to the public. the process in and of itself has been a useful one, and i will leave it to the chairman to tom about what we've learned from that. michael: you've been considered an inflation hawk. where are you on the idea of average inflation targeting? is tofocus on inflation be true to our price stability target that our 2% really has to represent what is happening in the real economy. so as we think about ways to better communicate to the public , i've never thought of 2% as a ceiling, but to really stay focus on what anchors inflation expectations in the economy. ,rom a communication standpoint i think we will be talking about the kind of things that help us

do a better job of achieving our objective. michael: wall street is betting, or at least many people on wall street are betting that the fed will change its forward guidance in september. some of your colleagues say, don't need to do that yet. where are you? esther: i would agree when i look at what the federal reserve has done since march, and terms of interest rate policy, asset purchases, and the credit facilities we've had. i think trying to gauge what else does do they economy need is pretty premature. i think we are beginning to see signs of a recovery. we are beginning to see where the economy may have shortfalls, where it may be doing ok, but that is going to take some time. thinking about what those other things are i think has been a useful discussion. whether it is time to activate those things is something we will be debating. michael: in the run up to your conference and chairman towels

speech, -- chairman powell's speech, there's a lot of discussion about inflation going on. do you think that all of the stimulus that has been pumped ano the economy is perhaps inflation danger down the road? think we always keep our eyes on inflation and what impetus may come to that. importantly, what we see today are really generally deflationary kinds of forces. until demand comes back, until we see the economy regain its footing, it is hard to see in the near term. but as you point out, there's a lot of stimulus that may be out there at the point that the economy regains its footing, and we will have to see what impact we see through prices at that point. today is probably not that day. let's focus on your

focus on the economy there? esther: we see some encouraging signs. this region has experienced the virus in different time frames, in different levels of spread over the last five months. what we see overall is there has been some improvement in the job market. we have seen some businesses that are beginning to come back. but of course, that is coming back from a very low level. region,ar to this things like agriculture and energy are very prominent. we know the farm sector has been under some stress for some time, with low farm income, and this episode puts further stress on that, causing the farm sector to have to rely more heavily on government supports. with the rapid decline in oil prices, productivity, producers had to lay down their rigs,

those two sectors in particular under region are already some stress. it will take some time for them to come back. michael: i would ask you to expand on the labor market. what are employers telling you right now? do they need more people? can they find more people? or are they saying we have to wait and see where the economy goes? esther: we hear a variety of things, but very important as we have talked to our contacts in the region. it is often a function of the sector they are in. if they are in a part of the economy where they are dependent on air travel, dependent on theytainment or dining, are struggling and having a harder time, and bringing people back in those sectors looks to be some time away. we also hear that some are having a hard time bringing people back because they felt what they were competing with

some of the jobless benefits. whether that is true today is less clear. there are a number of dynamics affecting the labor market, and that is why it will take us some time to see where does all of this shakeout in terms of how that labor market heals and how we begin to see growth resume in the economy. tom: esther george of the kansas city fed. welcome all of you worldwide, a simulcast. thrilled you are with us this morning as we really begin this coverage of the important speech. michael mckee is our international economics and policy correspondent. i was thunderstruck by esther george of all people, the history of inflation fighting in kansas city, talking about deflationary tendencies. did that surprise you? michael: no, the fed in general sees more of a danger of deflation than they do of inflation. how toson is they know

fight inflation better than they know how to fight deflation. the good news is that we have seen a bit of price inflation, more than we anticipated. as esther george said, not enough to be concerning at the moment. tom: we are boxed in always by our events at any given conference. freedom the degrees of that jerome powell has to play with here, given the huge economic shortfall? michael: they sort of made their own room. the fed has stepped in and done some extraordinary things that 10 or 15 years ago, we wouldn't have even considered. the lending programs are very broad at this point, by bondsorate directly. the thought is where can they go from here. it gets a little bit more difficult. they've lended to just about everybody at this point, and they've cut interest rates to zero. unless they decide they want negative rates, there isn't much more for them to do to stimulate the economy.

it is about how they go about keeping rates low. lisa: this is exactly where i wanted to go. is the fed running out of tools? how much is that going to be a central narrative of this conference? michael: it depends on what you're talking about in terms of tools. if you are talking about ways to keep the economy going, to add additional stimulus, they can do more qe and put money into wall street to pump up the markets, but beyond that, they can't do a whole lot to add more stimulus to the economy. the difference now from the great financial crisis is the economy doesn't want to roll over and play dead. it is being forced to. the financial crisis, no one wanted to borrow. but really, it is about how at this point you keep rates low, whether they would have to do something like yield curve control or additional qe.

that is the question wall street is going to be asking. want tom going to -- i know, what is it you are going to miss most about jackson hole? is it the breakfast? is it the 10 mile hike you take with alan blinder? michael: it is socially distancing from you, tom. [laughter] i will miss the moves. -- the moose. tom: i will miss the grizzly bear at 3:00 in the morning. a standout occasion. i'm out in a log cabin 15 miles up the road, and it's 35 degrees. lisa: they just wanted to get you close to the lake. tom: in touch with nature. michael mckee starting our coverage here. it is going to be really interesting. always an important paper coming out of it. mike mckee, thank you for that conversation with esther george. i wanted to do a little bit more of a data check here. yields are higher this morning.

that is important, even though the tenure tips is stable. on policy amid this republican convention, libby cantrill will join us from pimco. that is a timely conversation. on radio, on television, this is bloomberg. ritika: with the first word news, i'm ritika gupta. a warning from the national hurricane center. it now says hurricane laura will rapidly strengthen to a category four storm, with winds of at least 130 miles an hour. the storm is expected to make landfall late today or early tomorrow. it has already disrupted oil and natural gas operations. on the second night of the republican national convention, speakers tried to humanize president trump. first lady melania trump spoke from the rose garden.

to usemp: i don't want this precious time attacking the other side because as we saw last week, that talk only serves to divide the country further. husband'swe need my leadership now more than ever in order to bring us back once again to the greatest economy and these druggist country ever country the strongest ever known. ritika: secretary of state mike pompeo said the country has made historic progress towards peace in the middle east. in wisconsin, the governor has declared a state of emergency. there was another night of violent protests kenosha over the police shooting of a black man. ints were fired confrontations between protesters and a group of armed men. two people were killed, and one was wounded. the data mining company backed

isbillionaire peter thiel the sting on the new york stock exchange. 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. ♪ erg. ♪

ms. trump: donald will not rest until he has done all he can to take care of everyone impacted

by this terrible pandemic. pompeo: he's ended the ridiculous agreements with china that punched a hole in our economy. >> americans are going back to work. tom: good morning, everyone. some of the voices last night at the republican national convention. right now joining us, chief national correspondent -- chief washington correspondent kevin cirilli. i want to talk about how choreographed all of this is, and yet the news moves on. the news overnight from kenosha, wisconsin is flat out not good. in the law &ed order theme given these repetitive event in a most difficult summer. kevin: i think it is a really great point. they are likely going to try to hammer home the point of law & for swing voters in

order to boost turnout in republican districts. , melania last night trump really tended to humanize the president, but also, in brief remarks from secretary this notion of trumpism optimism. i think that is what they are trying to do in the final two nights of the convention. tom: it was split clinton-trump in 2016. 46% and 46%. how does the president break that and do the magic he did again in 2016? kevin: in terms of the law & order issue, it is another case

of america looking at the news through two different prisms of social media, and here's why. while progressive lane the white blame theservatives local politicians on the ground in these districts. wash inankly, it is a terms of the effect this would have on november 3. lisa: on the other side, we also have the economy very much front and center, as we have an unemployment rate at the highest levels. remainingmp's rating so resilient in the face of such carnage in the economy? kevin: because of the company that politicians keep. that is based upon the conversations i've had with

democrats and republicans area the concern amongst independent voters, according to the republicans i talked with, is what they are trying to push, that joe biden would be beholden to some of the more progressive flank and his party, that they would have his ear. in contrast, the democrats are arguing that they are going to be much more forcefully making a case on the economy by using not senator elizabeth warren, but people like meg whitman, former governor john kasich, people who are conservative who are now going towards biden did as a it is of that, i think going to be a tense dynamic in the debates, specifically on the economy. lisa: meanwhile, in the here and now, we still don't have an additional round of stimulus in washington. are we expecting to hear anything about that this week

with the rnc following the d&c -- the dnc? kevin: i was reaching out to some folks on the hill and said, is this going to be one of the convention surprises, where the president can say dealmaker and say he got a deal? the conversations are being had over the next couple of days, but i think regardless of whether it happens in the immediate short-term or in a week or so, it still is an opportunity for the president to say he just got a deal with democrats. tom: we spoke with congressman westerman yesterday. it is another world. i understand that. he is very pro-trump, i understand that. the razorbacks are going to play football, etc. the rest of the country seems to fall flat on its back. do all of these elite, democratic, republican, do they understand how serious it is in both democratic look and democratic and-

republican jurisdictions? kevin: no, i don't think they do, or they would have passed this once ago. i think it is a fascinating demonstration to have all of the old guard establishment of both parties go to the convention and then to have this current week really be a trump solo convention. this is quintessential donald the contrast is quite striking, but the bottom line here, the ratings for both conventions are down because the american family has so much on their mind as they wrestle through this. tom: american airlines out with the first statistic, 19,000 job cuts. does that change the political dialogue in this nation? kevin: i think it does because i think it is a stark reality in terms of what is coming in the fourth of this year.

you mentioned jokingly about football, but these are all incredibly localized issues. in pennsylvania, a battleground state, the statewide high school sports association is going against the democratic governor and having the kids play sports. i bring that up because all of these hyper localized issues, we can't look at it is just biden and trump. it is playing at a microlevel. tom: kevin, thank you so much. that article on american airlines, really extraordinary to see them go from 140,000 down to 100,000 jobs through retirements and also firings. lisa: it is really not an anomaly. the airline sector has gotten hit the hardest, but we also saw bed, bath & beyond announcing cuts.onal 2800 job we hear this one after the other

as they announce earnings. at what point will this give some sort of urgency in washington? over in europe, they are getting deals done. germany announced an extension to their job support program. where is washington on this? tom: you really want to focus on what we are hearing from economist, and the reset that we may see in the third and fourth quarter. ruth kaz meant of jp morgan making very clear not the gloom, but the caution of his view forward. lisa: meanwhile, we are seeing some resilience in consumer spending that surprised a lot of economist, yet this doesn't lead to a lot of confidence that the economy is really surviving on its own. it is just that there is a lag effect. we won't know the pain until it is already here. tom: right now we see a mixed market as well, but yields higher by two basis points this morning. a 0.71% 10 year, different than

what we saw on monday. lots of good conversation to get to through the convention jackson hole, coming up. this is bloomberg. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance," a simulcast, bloomberg radio and bloomberg television. i've learned that jon ferro is not in barcelona handling the somewhere, but maybe on the edge of tuscany. somehow trying to move forward as well. lisa: does he have a 700 million euro exit clause? i'm not sure. tom: i think jon is a little south of that. not too sure. for a data check right now before we talk fixed income, i am really going to focus on math because it is math wednesday. we like that. we look at the nominal yield, which is higher. 0.7079%. that is the current yield on the 10 year note.

then you take away inflation expectations, which is a measure , and the realst yield hasn't changed over the ont couple of days at -1.01% the real yield. what that means is in the last number of days, we have seen rising inflation expectations, nominal minus inflation expectations, and that gives you that stable real yield that we have seen. that is a data check into george rusnak of wells fargo. he has had a wonderful career monitoring the fixed income markets, and we are thrilled he can join us today. are you laser focused on the nominal yield? george: we look at both, tom. the challenge with fixed income now is that traditionally you would get two things out of fixed income. you would get stable income and a conservative or folio that

offsets some risk in the equity markets. the challenge right now is that you are going to have to choose one or the other. you are either going to get the offset to risk, or you are going to get the yield. look at high-yield in emerging markets. you are balancing both of those, but to your point, you compound that challenge of low rates with the idea of real rates now taking back lower, with inflation picking back up, and also you compound that with the idea that duration has actually been picking up in assets, so the last five years has gone 228 down to 114, so the challenge is you are getting more risk and less income. rusnak all jargon this morning out of wells fargo.

he says, we are all going out 15% longer than we thought we would go out. that's because i bought that 100 year austrian, looking for the payoff somewhere. what i love in your research note is you have given up on the 60/40 mixed. , 40% bonds. if that is not the case, what is the correct mix? george: the actual mix is somewhere between the two. unfortunately, as i described the dynamics of more interest rate risk as you have described, you are going to have to start moving away some of your assets away from fixed income. there's no magic bullet. it is not like there is one solution out there that is going to give you that magic solution. the second thing is don't sweep it under the carpet. i've heard more clients talk about, well, don't worry about that. interest rates will go up. in 2008, it took seven years before they raise rates again. it is going to take a long time

before we start getting to a higher interest rate environment you have to do it head on. what we say is taken incremental and multipronged approach. but not just to fixed income. look at equities, real assets, look at alternatives, and risk adjust those returns. we are looking at more of a balanced approach, and taking on . little bit more credit risk we have taken credit risk in investment grade and recently rated to favorable our high-yield stance as we think there are some opportunities there. lisa: you upgraded to high-yield at a time of possibly record bankruptcies? please explain. george: that is a challenging message, but there are some short-term challenges within the market, be at the idea of the elections, the longer-term elections, fiscal stimulus. , businessesg haul

are a spot in the economy that you should start changing and looking out over the long term. even with increased potential defaults, we still think there are opportunities now. a lot of the money have been made with the ccc's actually compressing. we think you stay up in the higher grade of high-yield, specifically the double be -- and you have to actively look at these sectors, be very sector specific. we have seen tremendous technicals help out the high-yield market. we think that is going to continue. the last five months, you have seen positive inflows. we still think there's opportunity. we think over the long haul, that is the improvement time you want to get into high-yield, and that is why we are recommending so,or investors that can do and do so on an actively managed basis. don't just take exposure to the market. lisa: we are now calling

high-yield sub for percent. i am looking right now at the bb yield, the bond yield on the top rating of high-yield. high-yield now 3.92%. not a lot there. which is the reason why blackrock came out and said they were actually downgrading their holdings of investment grade credit to neutral, saying that probably that trade is already gotten played, that everybody rushed into the top rated reddit and probably got any gains to be had -- top rated credit and probably got any gains to be had. do you agree? george: we are evaluating that, and that is part of our thesis for the high-yield, that spread we are talking about where you see some compression on investment raids, but you haven't seen that on high-yield yet i with it there is some opportunity. i think the really important thing is you have to be really active in this market. you have to look sector specific and even security specific to

grad that yield without the incremental risk. we think it is part of the solution. that's not the only solution, but we do think that is part of the solution. you are taking away a little bit a be of your growth potential from a capital appreciation perspective, but quite frankly, the yield differentials are pretty strong right now. the income differentials are pretty strong and compelling. you want to diversify your assets within fixed income and look holistically not just within fixed income, but in equities and real assets and even in alternatives. income,ook at fixed clipping the coupon and the charm of it all. is it a total return year? with these nominal yields, i have no idea how somebody has a portfolio. is it just take the coupon and pray, or can you actually think of total return?

george: if you are looking at the full year, absolutely it is a total return year. but over the second half of the year, do we expect to see that sector appreciation? the answer is no. i think it is that bifurcation i talked about, the idea of you're going to have to get a little bit riskier if you want to get the income component. look high-yield, look emerging markets. if you want to balance that with some of the conservative portfolios, we think that balanced approach is the right way to go, and that mix will give you the commendation of income plus the protection you've known in the past from fixed income. lisa: i want to rip up the script because i am going to take a page from tom's book. there's something that's been kind of bugging me, and i've been seeing charts of increasingly tight lending standards for businesses at banks. this doesn't cohere with the incredibly loose environment i am seeing in the corporate debt markets, with investors rushing

to put their money to work in credit. how does this make sense to you? are banks seeing something that investors in creditor not -- in credit are not, or is there some thing else has played -- something of supply? tom: the banks traditionally do pull back and become more scrutinized over their lending standards. the same time, what you're seeing is a term appetite for income within the marketplace, so as corporations are issuing and trying to shore up their balance sheet, you are seeing investors come in, both individual,l and for attractive yields because the prospect of the future is that rates stay low for a long time, so got that incremental income while you can. that kind of describes that dynamic you're talking about. learned a lot here. george rusnak, thank you. these are hugely odd times for

us, this ideal of nominal rates for a two-year yield, the 10 year yield at 0.71%. it just doesn't make any sense at all. lisa, i love what you said about high-yield under 4%. i remember when high-yield was well above 8%, 9%. when you take out a fee for bond management, how does anybody make money? the client, the shareholder i've hung, the fund manager? i just don't get it -- the fund, the fund manager? lisa: that is sort of the big question. can we see this ongoing surge in bankruptcies that don't need to some sort of contagion, that just lead these ongoing potholes in specific hard hit sectors,

with other companies able to hang on? i don't know the answer to this, but underpinning a lot of these that's seem to be assumption that yes, there will be survivors that benefit from looser credit even as you see an increasing toll of losers going bankrupt. tom: i just pulled up on the bloomberg a loaded high-yield fund, and it's got a 100 beat expense ratio. how do you do a 100 eight expense ratio on a 4% coupon? lisa: that's why a lot of people go into the etf's. we have seen ongoing inflows. tom: absolutely. morning, dowt this futures -42. issei digital. i meant the nasdaq. a faux pas on my part. points.aq up 54 that is merkel. i have been remiss in mentioning this, dan ives over at wedbush with a new price target on apple

, $600 share. maybe that has a little bit to do with the lift we see in the nasdaq. curve steepening. lisa says i have to mention the tip, negative 1.01%. stay with us. this is "bloomberg surveillance ." ritika: the first word news, i'm ritika gupta. hurricane laura is taking aim at the texas/louisiana coastline. the hurricane center warns it could rapidly strengthen to become a life-threatening category four storm, with winds of 130 miles per hour. it is expect to make landfall late today or early tomorrow. the hurricane is already disrupted oil and gas production and could keep some of america's biggest refineries shut for months. the food and drug administration commissioner tells bloomberg, "made a mistake." stephen hahn spoke after overstating the benefits of a

therapy for coronavirus patients. he says he worries that his mistake will hurt the public perception of the fda. he also said the agency would not rubberstamp a vaccine. china has said it has made concessions and allowing u.s. regulators to audit its most sensitive companies, now calling for direct talks to solve a years long dispute that threatens the global market. bloomberg spoke to the vice chair of china's securities regulatory commission. he says he hopes there will not be a financial decoupling between the two countries. investors of the u.s. who have invested in these chinese companies, they have made a lot more money than they have with market return, and it is good for the chinese companies as well because they have access to international capital and listing in new york also helps raise the corporate governance standards of these companies as well, so it is

mutually beneficial, so i hope there will not be a decoupling. ritika: 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. ♪

♪ >> one of the things that was really important about the police response is the fact that it really protected household at the economy

continues to recover. tom: really interesting conversation there. mike ryan of ubs wealth management. these are some of the dynamics of the consumer. simulcast, jonr ferro off, lisa abramowicz and e onking -- and tom keen television, on radio. sterling and a mentee bank career and wandered over to moody's, where he is the definitive analyst on the street on the debt, on the balance sheets of retail america. we are thrilled that charles o'shea could join us this morning. , andk at retail right now the great hope and prayer is a real estate work out for the beleaguered. is that a hope, or can that be a reality. charles: first, thanks for that

glittering introduction area i think it is a common nation of both. i think what you're going to see is a consolidation in the retail space, which needed to happen. we were way over the square footage heading into the pandemic. from 2007 toboom 2012 hasn't really come off yet, so there needed to be something. i think what is up in the air right now is exactly what the retailers that survived this and those that thrive, what their footprints are going to look that the surge in online spending has benefited the retailers that had good online businesses, and those that had good online businesses were leveraging that to the max. you've seen that with walmart, target, best buy. i think it is similar to the thesis we had surrounding store closures ahead of the pandemic. you can't use a scene -- a

chainsaw. you have to use a scalpel. i think the retailers that are going to come out of this the strongest are the ones that are really going to dig and say what is it really giving us, and how can we get more out of it before we make that hard decision to keep it open or close it. tom: let's go there right now. you saw this in the 1980's at rochester, the decimation of downtown retail. we've moved on 30 years to a national, even global decimation of retail. what is the formula that moody's sees to avoid store closures? i don't see it. charles: we go back to what is your sales mix, and what do you think your sales mix is going to look like once we come out of this. buythe retailers, best yesterday, for instance, is a company we have been positive on for an awfully long time. this goes to 2012, 2013. best buy was one of the earliest

buy online, pick up in-store retailers. yesterday they made a comment that 60% of online sales were picked up in the store. heading into the pandemic, we thought that was approaching 50%. i think for the best retailers, they are going to be using those stores area you will see some rationalization, but as we have seen with some of the mall operators ahead of the pandemic, they are becoming very creative about who they would bring into fill that into space, and i think this is going to be evolutionary, it is going to be the classic rome wasn't built in a day, and it wasn't done for free. there's going to be a lot of upheaval in brick-and-mortar, but i think the savviest retailers will find a way to use that as a class at to the best of its ability. lisa: the difference between

2020 and 2017, people are saying perhaps having something physical may better at some point in the future, whereas in 2017, it was understood that perhaps a physical experience was not to be neglected. you said in recent research you expect mall store footprints to shrink more than 20%. is that from where we are today after all of the shrinking we have already seen so far this -- oror all we already are we already most of the way through that? charles: there has been some shrinkage heading into this, but i think it is safe to say that a 20% level for retail in the malls is a pretty safe bet right now. we do a lot of work with our read team and publish a lot of combined research, and i think our view is that the malls are going to have to evolve. they are already in that process. you see grocery stores and traditional malls now.

there is a mall i think in plymouth -- i get confused with the geography out here because we are still kind of new -- but there is a wegmans store in the traditional mall. that is going to drive traffic. i think what you will see going more of a leaning on some of the food retailers of the world to move into the mall space. that would lead to some store expanse for those retailers because they are going to put new locations there, and those drive traffic. the issue that you may have is, with the surge in by online pickup, curbside, what is that going to look like? i look at what walmart has done, curbside. they've done the best they can come up at they could certainly improve that. that takes a different layout and a different kind of parking and ingress and egress

phenomenon. this is going to be evolutionary , and i think the assumptions that it can happen quickly our little bit flawed. tom: a different view of retail coming from moody's. charles o'shea, thrilled you could be with us as well. a lot going on. i want to go back to the yield market. lisa: i think it is really important to keep talking about the dissonance between yields creeping higher in an absolute basis, but when you take a look at the real yield, the inflation-adjusted yield, it has remained really steady. this raises questions. how much is this pricing in some yield curve control going forward? how much is this due to inflation expectations being the main driver right now for yields going up, not necessarily any kind of term premium? tom: turkish lira, erdogan having a better day of it,

testing 7.4 zero yesterday. stronger turkish lira, down to 7.36. well. haven study as i do want to mention gold. we spoke with dennis gartman this morning on "bloomberg surveillance," and he framed his support on gold from $1900 to $1925. huge change for gartman, looking for gold is a pure play off of u.s. dollar. coming, lisa abramowicz and i int to talk about the vol the market. i mean the volatility. we could do that with dean curnutt of macro risk advisors. one of the great surprises for 28,130 is the vix is

not set at a lower sister stick -- a lower statistic. we will dive into this volatility and the dynamics of the equity market that none of us own enough of. stay with us on simulcast from new york, this is bloomberg. ♪

>> we are looking for continued improvement in the economy, but the pace will probably slow down now that we've had this quick rebound. >> they will keep rates at zero for a really long time, maybe forever. large industrial behemoths of our time are probably not where capital once to flow. >> there is a certain logic in the markets doing better than the economy here. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. mr. f