>> we are in a recovery, but this is going to slow down. >> long-term is not looking good right now in terms of the support for consumption. >> the right policy approach is probably to do nothing. >> bond investors are sleeping on a dynamic pillow, and that dynamite is inflation. >> this is "bloomberg surveillance," with tom keene, jonathan ferro, and lisa abramowicz. from new york and london, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. with equity futures positive 0.8% on the s&p 500, the countdown to the open starts right now. we begin with the city of new york. we have to say, 19 years on, they are very few events in life like this one, where every single person you meet knows exactly where they were when it happened. family, friends, strangers. if they are old enough, if you

ask them, they know where they were that day. 9/11 is one of those rare moments, perhaps one of the only moments like it. tom: in washington, was a plane ascending -- with a plane ascending out of reagan, a flag unfurled along the west wall of the pentagon. thee will be ceremonies at pentagon at the pentagon at 7:30 this morning. as you say, we moved to new york city. what a decidedly different 19th year of remembrance this is. with this pandemic, it will be a very different set of images this morning. jonathan: we will observe those moments of silence through the next several hours here on bloomberg tv and on bloomberg radio. lisa, give us the day ahead. consumer8:30, some price data. we are talking about a potential dynamite pillow, as we heard from albert gallo. will we see the resurgence of inflation?

at 2:00 p.m., how big is the u.s. deficit? we will get the august budget statement. today, president trump and former vice president biden will be marking the 9/11 anniversary. i have to say, i grew up in new york city in the 1980's and 1990's. i live through 9/11 and the rebuilding. today we are going to be hearing so much about resilience and unity, and it is going to resonate that much more this year. hopefully 20/20 marks a turning point towards a new era -- hopefully 2020 marks a turning point towards a new area of -- a new era of rebuilding. jonathan: i think we all hope that. up 0.8% on the s&p 500. we advanced 25 points. in the fx market, euro strength, and the ecb does not know what to do with it. we will talk about this a low bit later this morning. , didn'te lagarde tried try that hard.

not much has happened since. tom: i am thunderstruck. but to theber day, business side of things, i am absolutely thunderstruck at this discussion at the $1.18, $1.19 handle. i expected $1.22, and this discussion has come early. jonathan: $1.20 got it done. joining us now is enter sheets, morgan stanley -- is andrew sheets, morgan stanley chief man -- cross asset strategist. andrew: ask, and good morning. it is nice to be with you. while ithat we see is is very easy to ascribe some of the summer strength to easy central bank continued easing globally, i do think the major story of the summer strength has

been surprisingly strong economic data that surprised to really a historically elevated degree. i think that means the continued strength of the data is really essential going forward. we can't simply coast on the expectation that central banks will solve all problems. i think this is what makes the debate around u.s. fiscal policy so important. i think we are facing a really key decision point for how economic growth in the u.s. could look going forward. we think that would matter for markets even if the fed keeps policy easy. tom: what does the decline in oil signal? it seems to be the one statistic removed from all of the gyrations of fed, central-bank, ecb, fiscal and that. what does morgan stanley say of wti? andrew: the oil market is interesting at the moment because i think what you see cross commodities, and i think

this also goes back to the idea the supply dynamics really differ. you have very different supply dynamics in something like copper versus oil, where i think the challenge that oil has is that as soon as you move up around $40 a barrel, you have increased incentives for shale producers to hedge, and it is for members to continue cutting supply. that oilyou suggesting is not indicating global slowdown? think so.don't a lot of the other economic data we follow, the pmi data, a lot of other global retail sales data, that all still looks pretty good. we still think the global economic picture is strong, and that what is happening is loyal has a bit more to do with some of the micro fundamentals of supply in that market. jonathan: how do you price

--lisa: how do you price in a slow down in consumer spending and possibly a downturn in the accomack data if we don't -- the economic data if we don't get another round of fiscal support, which looks quite likely? andrew: i think this is the reason why investors need to hold lighter positions this month. as you mentioned, this is a binary outcome. the difference between another cares package passing and not is the difference of trillions for u.s. gdp over the coming months. that is the difference between better-than-expected growth and growth starting to decline again. i think this is one of those issues where our base case is that another aid package will pass, but it is inherently uncertain. because of that uncertainty, we need to tread a little more cautiously than we would otherwise in september, look for more clarity, and at that point it is easier to reengage more aggressively.

jonathan: lighten up where? means runningk it lower overall exposure to equity markets. we've also reduced exposure in emerging markets. emerging market foreign-exchange i think could potentially suffer from the fact that the extra carry you are getting in those markets is historically quite weak. as you look across a lot of different asset classes, it is quite hard to find hedges given how low bond yields are, how high volatility is, so potentially emerging markets could suffer some as they look more attractive as a hedge. we have also dialed back some exposure in emerging-market credit as those markets have gotten closer to our target. i think it is generally about not abandoning an early cycle thesis, but holding less of what you would otherwise and looking for a better opportunity as some of this uncertainty eases. jonathan: this is the story that

the team has been telling now since we come out of the crisis in march, that the recession playbook will play out as it always played out. is that still the case? the question i ask this week, what are you learning as this journey continues? andrew: we do still believe in that. we believe this will be a more normal cycle then maybe expected, despite all of the .bvious abnormality of it a lot of the usual strategies that work them out of recession can work again. one thing that has surprised us, certainly surprised me, is i think the bond market has remained far more skeptical of the recovery than other parts of the market. i do think you still have a fundamental tension in the fact that some things that benefit from normalization have benefited. small-cap stocks have rallied off of the lows. but a lot of the things you

would buy if you expected things to remain abnormal for a long time, some of these highflying nasdaq names, elongated bond yields, those have also performed well. i do think we are approaching a key crunch time with the fiscal package, with the u.s. election, where that can't continue. you will need to see more divergence, and ultimately we think the more procyclical strategies will ultimately work over the next six months. lisa: what is your inflationary backdrop in terms of supporting your view, given the fact there is so much dissent? some people saying we are going to get deflation, some people say runaway inflation. where are you? andrew: it is a wide market at the moment. we are definitely in the reflationary camp. that is actually very near term. morgan stanley is above consensus on cpi numbers. broadly, we think you will see more inflation over the next 12 to 24 months. it is not going to be 4% to 5%

inflation, but we do think you could get closer to a 2% to 3% number on core pce faster than the market is expecting. i think that is a function of we actually think the global recovery is happening better and faster than the market has been expecting. we do think fiscal and monetary policy will remain quite easy into next year, and you could argue there's some shocks to both the demand side and the supply-side into next year. on the demand-side, saving rates are high, so there could be pent up demand of things normalize. on the supply side, it has been very hard to invest and build up capacity this year. if anything, capacity has probably been reduced, and that could also be deflationary. jonathan: great to catch up as always. andrew sheets of morgan stanley, thank you. you would have thought that the overwhelming -- that the overall inflation was this inflation, but andrew painted the picture of disinflation there.

tom: there's very few signals. you touched on it with mr. sheets, the idea of what signals do we look for in this journey through the autumn of 2020? it is fascinating in inflation, in the market, the technical statistics of how it could go this way or that way. as a lot of that going on right now. jonathan: if you are making a short to medium-term call on investment, maybe that is where the inflationary argument comes from right now. what is -- where does the extra supply-side come from? gundlach onve jeff one side saying that the tips market is overpricing inflation. he's betting on deflation. you have others coming out and saying -- honestly, jon, this is the most confusing market for me right now. short-term, near term, a labor market that has been absolutely decimated. i don't know. jonathan: i agree with you.

i think that is the best response right now coming up on filion --m, johnny fillion, ceo-yves of bnp paribas. ritika: with the first word news, i'm ritika gupta. president trump won't extend the deadline for tiktok's u.s. operations to be sold. bytedanceent said if can't sell the unit by september 15, it will be shut down. officials have been debating whether to extend the deadline. bloomberg has learned a deal is unlikely by next week because new regulations complicated relations between bitter microsoft. that's between b -- between bidder microsoft.

officials are trying to reassure the public that they will not given to political pressure to approve a vaccine prematurely. in the u.k., prime minister ants to breachw international law and rewrite the brexit deal. and, meant to the bill would give parliament -- an amendment to the bill would give parliament a veto. both sides say they want a trade deal, but time is an issue. the transition phase ends in december. built tesla model threes intended for delivery outside the country will likely start mass production in the fourth quarter. the markets include singapore, new zealand, and europe.

biden will mark the anniversary of the 9/11 attacks in the same place, but not at the same time, in pennsylvania, were one of the hijacked planes crashed. 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.

[laughter] -- pres. trump: so we will either close up tiktok or it will be sold.

i'm not extending deadlines. there will be no extension of the tiktok deadline. jonathan: see you next week. that's the message from the president of united states on bytedance's tiktok. two hours away from the opening bell, this is the price action. we have a lift after a brutal week, up 0.9% on the s&p 500. the nasdaq heading for one of the worst weeks go another way back to march. in foreign-exchange, euro-dollar $1.1860, a stronger single currency. sterling breaking down aggressively this week. now all the talk is no deal, no deal, and slowly pricing that in. tom: saw a $1.27 and/or earlier. earlier.handle different on this were a, and it is hugely different with the pandemic. kevin cirilli joins us from

washington. jennifer epstein reporting with vice president biden, "i am not going to make any news today. i am not going to talk about anything but 9/11." why can't we get these two candidates to shake hands in pennsylvania? kevin: of course, the historic site of the september 11 memorial, with regards to the other side on 9/11 in which the took downthat flight that plane, likely headed to washington, d.c. last cycle in 2016, top u.s. policymakers, new york city mayors, as well as then nominee hillary clinton and then nominee donald trump appearing at a memorial service together in new york city. so it could have been possible. both campaigns behind the scenes

have been somewhat open to it, but it doesn't appear likely, at least today. such a crucial battleground state. shanksville, pennsylvania located in a more rural area of somewhere in the southwestern portion. but this is a crucial state that relies heavily on the energy sector come on fracking. democrats in the state early greencal of the more new deal type of democrats like freshers -- like freshman congers woman -- freshman congresswoman alexandria ocasio-cortez. are hoping to replicate turnout in 2020. me, i was looking at the news flow. so extraordinary this morning, i was distracted. that happens with the bloomberg terminal. kevin, i need to bring it back. of course, jon ferro looking at

china and tiktok. i think jon will bring that up in a moment. when we are done with our remembrances, how do we move forward to the sunday talk shows? 50 days to we breach the election next week. kevin: from a foreign policy standpoint, the conversation with regards to september 11 presents an opportunity for president trump to discuss the troop withdrawal he announced several days ago with regards to iraq. we should also note the peace talks with the taliban in afghanistan this weekend. that could also present a potential breakthrough. in terms of the politics of the sunday shows, bob woodward is going to be continuing to talk, and i think that will continue to have more conversations in the coming days. jonathan: what just happened in the senate? actionwell, nothing in happened in the senate.

a skinny deal was dead on arrival, and wasn't able to break through. steps, itf the next is increasingly unlikely that this is going to get to some type of deal by the end of the month, and they have to pass some type of funding bill to keep the government open. both sides are saying they want to keep the government open, but i've seen this show before. it will definitely be interesting to see if democrats or republicans feel that there is incentive to keep the government open when they can't even get to some type of fiscal stimulus deal. but economists are saying that each time there doesn't appear to be fiscal stimulus, the more uncertainty it provides to the timing of a recovery. jon's point,d on isn't it in republicans' best interest to pass a bill that gives a check to every american to flood the economy with money, keep consumer spending up so you don't get a slowdown in the

economic data right ahead of the election, which is what economists are predicting without another round of fiscal support? kevin: precisely. in fact, it is really remarkable because this is where the down ballot races become incredibly important. there are ultraconservatives in districts looking at the price , $1 on some of these bills trillion upwards, and saying not going to happen. but at the end of the day, the president and his reelection campaign are looking at this and saying, that v-shaped recovery they were so bullish on, at least in a particular time period, that could turn into a u . and now with the various pharmaceutical companies putting on hold, at least one of them, the vaccinations, that is really starting to look at the timing of potential movement between now and november 3. jonathan: let's talk about

timing. the real deadline was at the end of july. it was a long time ago now. it's the deadline now for policymakers before they disappear and focus on the election? kevin: i pose that question to some staffers yesterday. in checking with my sources, again, if they can get it done by the end of the month, but it doesn't appear that likely. increasingly this is looking like a lame-duck type of fiscal stimulus, at least some type of monumental bill that would go through. i also think that, depending upon the outcome of the election is really when you start to talk about what with the first initiative be for a reelected president or a first-term joe biden, and would it be something like infrastructure, which would provide another vehicle for there to be more stimulus. so it is really unknown, but i can tell you that the lawmakers and their staffers, based upon conversations i am having on both sides of the aisle, incredibly frustrated about the inaction. jonathan: i ask every day, is it

still a matter of when, not if? kevin: i still think that because the senate majority worth aut up a bill couple hundred billion, i still think that is worth something. i still think, to lisa's point, that the president feels it is worth something as well. jonathan: great to catch up with you. we roll over a little bit on equity futures, up 25 on the s&p. -- 0.7 5%.0.3% amazing how little progress has been made in washington. tom: i get the politics of it, but the statistics that you, i, and lisa are looking at of the labor overlay, the published statistics plus the pandemic statistics on top of that, leads to a lot of jobless in america. tom: the conversation continues -- jonathan: the conversation continues.

let's borrow a word that lisa used at the top of the hour, resilience, and the resilience of new york city. that conversation coming up next with jean-yves fillion, bnp paribas u.s. ceo. this is bloomberg. ♪

jonathan: this is "bloomberg surveillance," live on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. two hours away from the cash open. futures just with a little bit of a dip in the last 20 minutes or so. we are still elevated 22 on the is and p. we advance -- on the s&p. 0.7%.ance inflation mandate, policy objective, euro-dollar walking straight through it. in the bond market, slap bang in the middle of the last several months, around 70 basis points on tens. bound centse range of that is were markable. right now at a 0.69% come around to get up to two digits. it is just a massive stasis in

the bond market. jonathan: the upward of the range was 90 basis points. that was the top of all of that rotation talk. since then, everything has faded, and the bond market hasn't cut back to those levels. tom: lisa, is it the same in your world of high-yield and ig? is at the same range bound cents? lisa: yes it is. it is a push/pull. what does that mean for inflation? the backdrop comes from the fed balance sheet, which has stayed basically a flatline for more than two months. one of our themes is the utilization of the balance sheet. 11,t now on this september we now speak with bnp paribas u.s. ceo jean-yves fillion. he joins us right now. the commitment of bnp paribas to new york city has been steadfast. give us your thoughts on this

19th anniversary of this tragedy. thank you for having me today. i would like to stop this morning and really acknowledge the significance of today's date. onembering those we lost september 11, 2001. this is going to be forever in in newory, particularly york city. tom: the pandemic speaks to what every business is doing, ears to the ground, trying to see what every is mrs. doing. what will be the action of bnp paribas in north america in the ?oming weeks got aves: we have

return to the office plan, but it is gradual and phased-in. at the peak of the pandemic, we were probably 95% of the staff working from home. working are 80% to 85% from home. i am expecting this to stay probably the way it is until the end, and reassess pandemic in early 2021. jonathan: let's talk about something that is hard to do, but let's pretend from the -- pretend for the sake of this conversation that the pandemic goes away. perhaps we have a vaccine in the next 12 months and it is widely distributed. what will change permanently for you, operating in new york city? jean-yves: the remote working, i believe, is going to be part of the new normal, even in the scenario you just described. we have discovered we can be so effective serving clients, communicating during the pandemic. by the way, make no mistake, i

miss face-to-face interaction. iwish, like we always do, would be with you in the studio in person, but it is here to stay. i see another trend in terms of smaller real estate footprints in the condensed urban areas. obviously business traveling will be dramatically different as we reassess the need to really travel around the world, even though i would love to host you all in paris one of these days. for my clients, i see an interesting trend. it has been back and forth, but particularly for u.s. clients that are more international, a real winning this for supply chains. for economics, i would say independence, as well as job creation reasons. jonathan: a lot to impact their. let's just talk about things operationally briefly. we have seen with debt issuance that supplies kept coming through, even in the summer. i guess that is an example that

we can work from home and get that supply in an efficient way, even in august and perhaps in places like europe as well. from an operational standpoint, what did you find difficult working from home? what would a bank find hard to do? jean-yves: i would say at bnp to bes, we were fortunate very digital, but still, nobody was ready to have this amount of staff working from home. we were already investing in bandwidth, laptops, and making sure activities like trading and payments would continue to be fine. another dimension of working from home is it is harder somewhat because it is chop, chop. you don't have much time between meetings. some of our staff at times might have felt isolated, and we are

here to provide support, and hopefully the psychological support. however, i think a significant part of my staff likes getting closer to the communities. the main fear of staff is public transportation, coming to the office, and making sure the office is safe here. to your point, another real investment we had to make, we all had to make, is to make the workplace safer, much more adapted to this new way of working. lisa: that is a really good description of the day-to-day challenges as people try to get back to work in this current environment. on a broader sense, you talk about the rita mastication of supply chains -- the re- domestication of supply chains. tensions have been exacerbated by the pendant. do you feel it -- by the pandemic. do you feel it, being a french bank operating in the united states? jean-yves: we do feel it. our clients feel it. bnp paribas is headquartered in

france, but it is really a european bank. we obviously have to make sure that we can support clients, help clients managing this uncertainty you just described. an area of increased activity because of this uncertainty and instability has clearly been a real high demand in terms of hedging, protection strategy across rates, currencies, commodities. lisa: there's also the question of consumer strength versus the investment bank. tom was talking about the robust issuance of corporate debt in august for that. do you expect the consumer to take on more of that as we see this ongoing strength in consumer spending, or do you think those putting faith in that, perhaps the jp morgans and goldman sachs of the world have gotten ahead of themselves? jean-yves: that is a very important question here. on the capital markets, you are

right. it has been amazing. in terms of how i to they have been, you mentioned earlier, high-yield, high-grade across all asset classes. infrastructure projects. contraste still is a between the very active capital markets and what i would call the real economy. confidence andr consumer spending is going to be evolving over the next few months is really going to be depending on what jon was mentioning before, how the pandemic is being managed, and how fast we managed to get a vaccine. i would say not only making it work, but distributing it widely. i think the whole consumer dynamic will be there. paribas, our integrated, diversified business model, retail, wholesale, helps us

manage the various factors. consumer investment banking, corporate, institutional, that obviously has been fluctuating depending on day-to-day conditions. mackenziei think the have called this the great acceleration. i wonder where esg fits into that great acceleration, how much emphasis has been put on that in the next couple months moving forward. jean-yves: esg has been in the math already for many years. we this year have exceeded the $1 trillion of green bond, sustainability financing issuance around the world. the pandemic has been an excel raider. -- has been an accelerator. we all probably better understand the impact our communities have, the economy. i see this on both the investor and issuer side. bnp paribas, we have been a

pioneer in sustainable finance. today we lead the rankings in terms of loans, and terms of bonds, and we recently were one of the first banks to structure a sustainable rebuilding initiative. i think it is a trend that is going to be reinforcing itself over the weeks and months. and esg is actually taking more and more visibility on the social side. you've seen covid-19 rescue bonds becoming much more of a factor here. are on board long transactions in europe, and are ,ery committed to institutional and banks getting into this. jonathan: we are lucky to have you on the program with us this morning. thank you, jean-yves fillion,

u.s. bnp paribas ceo. the s&p still positive, up 22. we advance about 0.7%. tom: the bonds show the same thing, a risk on feel. but what happened yesterday? it was pretty good, pretty sprightly, and then it evaporates. we were going on in search of news to determine the new vector , and it is really indeterminate. jonathan: we've been told so many times over the last several months that policy was the issue. i think pimco called it policy primacy. the balance sheet of the central banks in the fed have been flatlining, and the fed has just broken down on the fiscal side. i don't see how they put it back together anytime soon, when there's some $1.5 trillion apart. , to me,gree that fiscal i am looking at the blended labor economy, and this economy on a jobs basis just is nowhere

for the optimists. it is not accurate. jonathan: agreed. in absolute terms, yes. but relative to expectations, we have continued to surprise to the upside across also quince of the of is economy. the conversation continues. equity futures positive on september 11 in new york. we remember on bloomberg surveillance. ♪ ritika: with the first word news, i'm ritika gupta. president trump is playing hardball with the chinese parent of tiktok. he is refusing to extend the september 15 bed line -- september 15 deadline for bytedance. he says if there is no sale by tuesday, the u.s. will shut down tiktok for security reasons. isomberg has learned a sale unlikely in time. another revelation from bob

woodward's upcoming book about president trump. he writes that the president threatened to withdraw the u.s. from the wto unless the country got more favorable trading terms. that took place in a call with .he wto's then leader the president said he wanted the u.s. to be labeled a developing nation. homes and2000 buildings have been destroyed, roughly 14,000 firefighters trying to put out more than two dozen bushfires raging from the oregon border to just north of mexico. the pentagon has found that its five year budget plan for the f-35 falls short by about $10 billion. that is a new indication that the comp >> fighter jet may be too costly to operate -- the complex fighter jet may be too costly to operate.

it is the most extensive weapons system since the pen to gun 2012 --ed its costs in the pentagon overhauled its costs in 2012. 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. ♪

>> >> -- >> we have seen many markets in which there's no good data to make credit decisions

for communities. so the decision to bring data from all sorts of different sources to replace the fica score, as it were, and open up the credit aperture, those are all enormous opportunities for us to use this supercharge to digital for good. jonathan: mr. corbat is stepping down. jane fraser is stepping up and stepping in. what a history citigroup has. back years, the first female ceo on wall street. tom: what is great here is the story of citibank. we forget where they were 13 13 years ago. that they are here now is

frankly extraordinary. the stock was once in the high for hundreds, even $500 per share, and has come down. the book value off the bloomberg, jp morgan, 1.30. bank of america, 0.90. the valuation and the property -- and profitability is something. jonathan: you just wonder what happens elsewhere as well. i think they have made a statement here, but it's not a surprise, let's be clear. when we spoke to mr. corbat in said he would be proud to step aside for someone like jane fraser. jp morgan has done a lot with diversity, particularly gender equality in the c-suite. i wonder if that is the next place you will see something similar happen on wall street. tom: we will see.

ken leon joining us yesterday, and we are thrilled he could come back today for further perspective on this historic moment. you stopped me yesterday when you explained how small the citigroup united states platform is, where they are only in four states. is that goal number one, to expand across america to make them more like bank of america, more like jp morgan? ken: well, thanks. i think for jane fraser, it is having a bigger presence in consumer, but maybe not brick-and-mortars. maybe not acquiring a smaller or midsized bank, but leveraging technology, leveraging digital kit abilities for cards and consumer loans. jane fraser brings laserlike focus. she must have been in the boardroom many times where she

kind of disagreed. michael corbat did a great job, but he was a classic bank relationship executive on the commercial side, so i think they are going big on digital. they might be making big and technology. then, because she had a seat as ceo for asia and latin america, whether she wants to keep those businesses and possibly leverage ahead. there's a lot they've done in asia that they want to bring to the u.s., but it is going to be digital. lisa: so an expansion in digital consumer banking. does this mean lending more? does it mean taking on more risk? does it mean opening branches around the country? i know you say it doesn't mean brick-and-mortar, but doesn't mean diversifying the presence? give us the path over the next two or three years for citi. ken: it's a great question. essentially, we are looking at at who iset, looking

my top customer. citi does have a mass-market presence with the card business. strengthly don't have in wealth because they sold that business with james gorman at morgan stanley several years ago. the question does she want to be broader as millennials age and begin to invest more, can they capture more of that share? you want to have that ability to have offerings, not just in paying your bills, but to take advantage of where they save and where they end up, and citi has a lot of work to do there. said in the next six to 12 months, you are bullish on goldman sachs and morgan stanley. not so much bank of america and citigroup. does this appointment change your view at all? ken: we still have a buy on citigroup, but it is a very

different dynamic. a morely, we need to see visible picture in terms of a return to normal u.s. economy, and then global growth, it does benefit goldman or morgan stanley, but citi has a higher percentage of net revenue outside the u.s. the stock markets are where this is interesting. 0.61, yet ang at lot of analysts on the street have a buy, probably for the same reason. this is a great ultra cyclical play once we get in a macroenvironment. tom: i don't do ratios on friday, but i just looked at operating income to employees, and the easiest path is to slash the headcount on an operating income basis. they just can't compete with bank of america or jp morgan, can they? ken: they can't, and this is where jane fraser comes in.

i think she's probably going to cut back the capital markets business, and maybe the commercial bank where they do not even have good market share certainty in local areas. that's what i knew ceo does. before yup capital, not just headcount. -- you free up capital, not just headcount. tom: how high do you go? ken: this is not wells fargo, where you've got a very different situation in terms of imploding revenue and strict regulation from the fed on wells fargo. , think citi can be proactive and doesn't have those pressures. they have shareholder pressures. that is a pretty big number. i don't know if it is that number, but if we stay at a continued builder market or if the stock -- continued doldrums market or if the stock market come down, you will see them in

the thousands for sure. jonathan: great to catch up there. tom, when you hear someone say digital transformation, usually there's some job cuts in the mix when they are thinking about that phase. tom: there's no question about it. sonali basak was exceptionally strong this morning on this, the ratio analysis of these three banks. you can add in wells fargo as well. then you look at the european banks, we just had on jean-yves fillion from bnp paribas, and it is remarkable how much cheaper the european banks are trading with a lousy profit outlook. jonathan: you know what's forced the digital transformation? the pandemic. tom: no question about it. not that i would be hitting ago,es in davos, but years i went to one bank lovefest and then to another bank lovefest, and the ceos of those two banks said exactly the same thing.

they underestimated digital. jonathan: i like how you run the clock down so i can't get in my response to how you party in davos. tom: you've got that right. jonathan: five seconds left. another time on "bloomberg surveillance."

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switch and save $400 a year on your wireless bill. plus, get $400 off when you buy the new samsung galaxy note20 ultra 5g. >> we are in a recovery, but this is about to slow down. >> a longer term is not looking good in terms of the support for consumption. >> we are pretty sure the fed is not going negative. >> the right policy approach is probably to do nothing. >> investors are sleeping on a dynamite pillow, and that dynamite is inflation. >> this is "bloomberg surveillance," with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. jonathan ferro, lisa abramowicz, and tom keene on this september 11. we welcome you all of you