♪ >> the fed wants to give inflation a chance to pick up, give the economy a chance to run hot. >> there's a risk that we are going to get an inflation problem. >> in some ways, we should rejoice. >> when we open up, there's going to be bottlenecks. >> the supply-demand imbalance should be somewhat temporary. >> it is really about an overwhelming amount of monetary stimulus. >> i think we've got to be aggressive. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.

jonathan ferro, lisa abramowicz, and tom keene. it is a simulcast on bloomberg radio, on bloomberg television. the snow filled fields of central park. good morning in boston, 106.1, 99.1 in washington. it is like winter out there, and with it is a raging battle of swings of inflation. . it is the theme right now. jonathan: i was really wondering where you were going with this. [laughter] i agree with you, that is the debate right now. we see that playing out in the bond market. steve mager of hsbc has pushed back, saying people are starting to price the risk of inflation. don't confuse people pricing and the risk for inflation versus that risk materializing. tom: i was just trying to get poetic here, and what is so important when we look at the inflation battle and the worry out there, futures up 11, dow

futures up 63, i'm sorry, lisa. it is the lisa of our discontent. there's a lot of worries out there. jonathan: yes, a ton of things to worry about, but the equity market is still doing well, near all-time highs. anyone who wants to come to market, they are able to do so at very nice prices. tom: lisa, are you surprised we are seeing this normalization within equities, as jon mentioned? you mentioned carnival in the last hour, versus what we see in planes at 8:30. -- in claims at 8:30. lisa: we were just hearing from mark cabana, and it really highlights the technical underpinnings of this market forget the amount of cash that is pushing asset prices up. i think what fed chair powell was saying yesterday was really interesting, the idea that he doesn't want to do harm. he wants to hold steady even though asset prices are so high to allow the federal government

to come in with fiscal stimulus. the question is, in my opinion, is the fix perhaps overly harmful and benefiting the biggest companies, the wealthiest individuals, not necessarily allowing things to grow into the prices we have already created? tom: i really need to talk to you about this, the real yield on "the real yield." the real yield is moving. it is a surprising statistic. jonathan: they like where it is, i think. if it is inflation expectations driving yields higher, i think they are comfortable with that. on chairman powell, what changed? who is this guy? because this does not sound like the chairman powell from a couple of years ago. i understand we've been through a massive pandemic, but they are on the same page now, aren't they? you've got to run the labor market hot. chair yellen talked about it. chair powell suddenly realized, the light switch has gone on.

i think we have to talk about this. i've been talking to people who agree with what i have to say, that chairman powell is a political animal looking for a second term. that speech yesterday spoke to that. that's the chairman looking for a second term. the issue here, there are many market participants that do not think that this fed will follow through on what is said when inflation picks up. why? because the leader of this federal reserve did something different last time around. not many people buy it. lisa: in other words, people are saying the federal reserve is going to be forced to hike rates faster than they say because they are not going to let inflation run as hot as people expected. jonathan: the chairman is telling you what is going to happen. he's telling you what he won't do. they will step out. the problem is, people still come on this program and say i don't believe you. why? because they didn't in the last cycle. they stepped in. tom: i would take it back to

1951. they are all political animals. jonathan: couldn't agree with you more. tom: it is part of the institution. to me i really downplay it because it is a given assumption. greg boutle with us now, bnp paribas. this is an important conversation. i want to begin with the normalization of vix. jonathan: jon has beat -- of vic's. -- of vix. jon has beat me up about this. why is the vix un-normalized right now? greg: we will start with the most obvious response, that we had a massively volatile year last year. not only was the drawdown in march extremely volatile, but the subsequent rally has been as well. jonathan: just to weigh in on the situation with the vix right now, some 20.

we have -- now, sub 20. we haven't seen it post pandemic. what do you make of that? greg: it's been a real support level for the market. but the s&p is about 15% higher than where was pre-pandemic. the vix is about two points higher than where it was pre-january and february of last year. there's much more premium still in the volatility market. if we break through that, i think it could drive an accelerated move on the downside. jonathan: it helps us understand the relationship between the vix and risk assets, and how you expect that to reconcile in the months and quarters to come. greg: clearly, we normally have an inverse relationship between equities and the vix. when equities selloff, the vix tends to go higher. when equities rally, the vix tends to come off. but when you see equities moving higher at a very aggressive pace, as we saw in q4 of last

year, that can help keep the vix somewhat supported. the environment where the vix is really going to normalize is when the equity market continues to go higher, but at a much slower pace. lisa: perhaps the story of the week is bitcoin, but the theme of the year is the shortage of assets, the shortage of both debt and equity instruments because of the cash that has been created. in some ways, what we are talking about is related to that, that people want to hedge against declines because they can do so more cheaply through derivatives then parting with assets, parting with their equities that they still want to hang onto for this ride because they believe in it. how much is that driving the action? how much will that keep propelling equities higher, regardless of anything fundamental? greg: i think it is the biggest single driver. we are expecting a large upswing in the second half of the year. it creates a great environment for equity markets. but we have had some very rapid

moves in equities. last week in the etf space, there was on was $35 billion put to work. a three standard deviation inflow for equity markets, that does keep volatility bid. it does give investors the incentive. if we see a slow rate of gain in the s&p, the risk-reward becomes much less appealing. lisa: we have been talking a lot about the stop phenomenon and the -- the gamestop phenomenon and the meme stock. how much are we getting capitulation of retail investors that have been on the sideline for a decade that are finally saying we are all in? greg: there are certainly a lot of signs of it. see it in the etf flows, but also in the options market. i think this is rational in some degree. we go back to 1999. if you took your money out of

the equity market at the peak, you could put it in short-term rates, 5%, 6%, 7%. you guys have been talking about where short-term rates are now. if you don't have money invested in the equity market, where do you put it? tom: i want to go a little tech. we can do this at a little technical. we can -- a little technical. we can do this with the gentleman from bnp paribas. in your world, has the theta changed? does it change the way global wall street does business? greg: i think it is another word for yield in some ways. if you sell an option, it is similar to the yield you might take in a bond. what we saw over the last decade with qe and very low rates is that there has been more demand for short optionality strategies. but unfortunately, what we saw last year with the flipside to that trade. in a risk off environment, it

acts very different to a classic yielding safe asset. so what we have seen so far over the last nine months is equity markets have recovered. they have been -- there has been less harvard at -- there has been lest harvesting of theta to take in that yield you can get from what is a very steep vic's curve. -- steep vix curve. tom: what do they want to do? greg: at the moment, it has been using optionality, whether to get asymmetry to protect your portfolio or to do the opposite and inject leverage into your portfolio. that is a buying optionality flow. we have seen more prevalence of that since the pandemic versus the volatility harvesting and the hunt for yield that could start to creep back into the markets in the coming months. jonathan: greg, great stuff. always great to see you. coming up on this program, looking forward to this.

william dudley, former federal reserve bank of new york resident. coming up in about five minutes. tom: of course, we will dive into the inflation dynamics. we are just killing it. jonathan: nice lineup, right? tom: if i am on bloomberg radio and sitting in the tube in london, you can't leave the parking lot. jonathan: this is what you need, a perfect mix for a great show. great guests and lisa and a little bit of a mood. [laughter] tom: it is the lisa of our discontent. jonathan: when you break your finger, you are in a bigger mood. you just need to break a finger each morning. lisa: i take that back, drink. [laughter] jonathan: alongside tom keene and lisa abramowicz, i'm jonathan ferro. coming up, former president of the new york fed. we are looking forward to catching up with mr. dudley on this program. with equities climbing about 13 points on the s&p 500, up about 0.3%, even tom says it is cold

outside. in fact, i think he said it was freezing. lisa: he said it was winter. tom: it is february. jonathan:jonathan: cold in winter? for goodness sake. from new york, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. joe biden raising a number of concerns in his first phone call as president with chinese leader xi jinping. according to the white house account, the president spoke about china's coercive and unfair economic practices. he also brought up human rights abuses and restrictions on political freedom in hong kong. house democrats are building a case against donald trump using his own words, and chilling new video of the storming of the u.s. capitol as lawmakers escaped. they laid out their case during opening arguments as the impeachment trail in the senate. one of those arguments, that the

former president tried to stoke down about the election months in advance. in japan, former prime minister yashiro mori will reportedly resign as the head of the olympic committee in japan after comments that adding women to the board of the committee would lead to more talking. disney faces a high bar when it reports quarterly earnings after markets closed today. the company is writing a wave of enthusiasm from a investors day in+ focuse -- in december focused on disney+, hulu, and espn. 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. ♪

>> given the number of people who have lost their jobs and the likelihood that some will struggle to find work in a post

pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy. it will require a societywide commitment with contributions from across government and the private sector. jonathan: chairman powell's got a message. we are not stepping in any time to stop this recovery. alongside tom keene and lisa abramowicz, i'm jonathan ferro. the number that popped out in that speech yesterday, just rereading it yesterday evening, $10 million. -- yesterday evening, 10 million. that is how many fewer people we have employed. 10%. the chairman thinks that is a more accurate read of where the labor market is right now. tom: there's been good work on that. i would note the economic policy institute and the fed for really doing some important work there. futures in advance 15, dow futures up 84. we are going to get a claims

report here any bet, and it is the urgency of monetary and fiscal authorities to employee america. william dudley, writing for bloomberg opinion, former president the new york federal reserve, has been quite clear in his essays on the path forward. one of them is that the fed will have to change on inflation. though deadly, asheville dudley, any room -- bill dudley, and your important essay, you make clear that this needs to be a fed that is malleable in their thinking. what do we make of that? william: right now it is all hands on deck. you've got monetary policy, interest rates at zero, a large fiscal package coming, so that is great for now. if the vaccine dissemination works, we are going to see a very strong recovery in the second half of the year, and i think we will see pressure on resources faster.

i understand why the fed is doing what they are doing. they don't want to prematurely change expectations about future monetary policy and thereby tighten financial market conditions. but we have to recognize that if they are successful, they are going to have to change and financial conditions are going to have to tighten. tom: i think the heart of it is a broad public that looks at the fact of inflation as seen in their monthly payments. i would note that rent is lower it here in the last inflation report. pros like you are looking at the expectation, the expectations of inflation. what are we expecting right now? william: what's been interesting over the last three months or so is that inflation expectations, if you look at the spread between 10 year treasury yields and tenure tip yields, the has gone up by 0.5%. that is not really very far away from the fed's long-term target. the argument that we have to

keep monetary policy easy to support inflation expectations, that seems to have mostly already been accomplished. jonathan: would you look at that come of the market pricing in a risk of more inflation as the outlook for inflation, or just the market pricing the risk of it? william: i think it is the outlook. this is about what is going to happen over the next 10 years. i think people recognize the fed is all in. they are going to be very accommodative. the new monetary policy regime, they will push inflation above 2%. bull find that credible -- people find that credible. so essentially the fed has been accomplishing its mission. jonathan: what i need to understand is what they would respond to. as you remember, governor king at the bank of england, we headed north of 3%. they look through it. what is the kind of situation you think the fed response to end the kind of situation they look through?

william: i think they will look through it if there's a bit of a bubble of inflation because you have the surge of activity, and prices go up in some areas. i think what they are watching is the labor market. at the end of the day, i think they will watch the labor market. i think the thing that is different about this compared to the one following the great financial crisis is how swords -- is households have a lot more ability to spend. it is not the overhang you had from the mortgage crisis. chair powell is absolutely right. there are about 10 million out of a job. but at the same time, if we do conquer the pandemic and allow the opening up and getting people back to work, this could be a bounce much faster than people anticipate. tom: jared bernstein -- lisa: jared bernstein of the white house economic council did say

that people are saving that cash in order to make all of the debt payments that have been deferred, so there could be a little bit of that hangover as well, but it goes to a key point you are talking about, which is the difference between reflation , which is a lot of what people are seeing right now, versus inflation, which is what you are saying we should expect later. when do we shift from reflation to inflation? what do we have to see for this to be more sustainable? william: i think it is going to be how long does it take it right. i think that could happen a little bit -- does it take to get back to a 4% unemployment rate. i think that could happen a little bit faster than people think. the fed's current forecast that we don't get back to full employment until 2023, i think the risk to the market is it just happens in a more

compressed timeframe then people are expecting. jonathan: just quickly so we can wrap things up, just how the reputation of the federal reserve is involved in the last several years and there is now increasingly willingness to focus on society and perceived injustices as well. i was familiar with the kind of response where a central bank would turn around and say we can't address inequality with the brunt to live interest rates. now the approach feels very different. that speech yesterday felt different. do you sense a change? what is behind it? william: number one, current fed policy is benefiting rich people more than poor people, so the fed is very aware of that and wants to make it clear that is not really the goal of the policy. the goal is not to make more wealthy those that are already wealthy. the second is the last cycle, the fed pushed the unemployment rate very low, so we can go further on the labor market than we thought. so they don't want to make the risk of being too cautious

pushing the labor market because they think they can go further than they thought. jonathan: it makes you wonder what it will look like if they have to come in and hike sooner than people thought, too. that is bill dudley, former new york fed president. they are trying to address societal injustices, and equality. what happens if they have to step back in once again? tom: i think it is a theory well taken. i give the chicago fed a lot of leadership points on this. jon, you're absolutely right that it is all easy and comfortable given stability in policy, and the moment they have to get to the surgical nature, with jon, a real yield that is real, and it is not. it will be interesting to see how they get back. jonathan: but you nailed

the problem that the policy helps rich people, and now the pr machine is in full swing. tom: that's always been the way it's been. jonathan: from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. with your equity market with a lift, it is winter in new york city. this is when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store.

jonathan: economic data 10 seconds away for the audience worldwide. good morning morning from new york city. i'm jonathan ferro. equity futures with a list on up 40 points in the s&p with your economic data out any second now, there it is. mike mckee. mike: bad news this morning on the initial jobless claims front . 793,000, that's an increase over the seven a week before. we had expected it to drop to 760 and again, we have said this many times, it's not data that you can specifically trust the numbers, but you can trust the direction that it isn't helpful at this point. the hope is that the pandemic started to proceed in there is good news on that front over the

last week or so, people going back to work, but that doesn't appear to be the case. last week, which was initially reported at 779, revised up to 812,000. the news is not particularly good on a week to week asus and looking back we are still way above the high from the great financial crisis that was 675,000 and that was a one-week high compared to where we are now. it just tells you that the labor market is still not healing and it underscores what jay powell said yesterday about letting the economy run hot because we have got to get these numbers down. jonathan: great to catch up, sir, thank you. looking at the market action on the s&p 500, in the bond market, tom, yield is up by about a basis point or so? tom: really distressing numbers there. you heard it from chairman powell yesterday as well.

with the enthusiasm of the markets where they are, there's the reality of the labor economy. conservative or liberal, there's one reason in washington to get the report. this is two or three hours after the jobs report comes out. the economic publishing institute published a paper by heidi. read it. i want to dive into the history of the moment. mike mckee just alluded to the worst of 2008, 2009. how bad are we in the historical framework? heidi: it's bad. the unemployment insurance claims,, the number of people who needed to get through right now, we are at historically high levels. we are at the 47th week in a row where we have had unemployment

insurance claims higher than the highest week of the great recession. jonathan: i don't mean to into -- tom: i don't mean to interrupt, but this is important, there are all sorts of certitudes in the media and we are guilty of that like anybody else. if you could say one thing about the character of the unemployed right now, what would it be? heidi: people who are out of work through no fault of their own during a global pandemic. people desperately need the relief of unemployment insurance, but until we have a vaccine that is widely distributed and the economy can fully get going again, where we can get things back on track. lisa: we have been looking at a broader issue where the reserve wants to run the economy hot to allow the labor market to heal with fiscal support, possibly, from washington, d.c., but if inflation ticks up and the fed

is forced to stop the rally in the markets, it can cause a big setback in the labor markets that could hit the lowest income the hardest. talk a bit about the disproportionate effect of the market disruption is something the fed could potentially incite if forced to hike to soon? heidi: that's a good point and i think the key message here is that the risk of doing too little are far worse for the most vulnerable people, people at the lower end, middle end of the wage distribution then of the fed doing too much. that's really important. right now we see the huge hit that lower middle income people have been taking, a massive disruption to the labor market, people seeking massive unemployment. that is a really dire thing right now in the longer it goes on, the more the lasting consequences play out. so, if we can get on top of this quickly, it will make those folks a lot better off in the

question is, if they go too far, what are the risks? that's easy to pull back. they have levers they can easily pull to keep the economy from over stinking. i think that's the upshot here. the risk of doing too little is far, far greater to the people of this economy who, who depend on the labor market the most to get through week two week. the risk of doing too little is far greater than the risk of doing too much. lisa: it's clear the labor market has hit a complete roadblock. bigger than expected jobless claims now, going in the wrong direction. jerome powell yesterday, as john was saying, it's the 10 million number, fewer jobs in the market than last february. a 10% unemployment rate, if you were to pick out some of the other elements. what are we doing in terms of bridging the gap? what can be done in terms of how

much change has happened in the fundamental labor market? the reduction in manufacturing jobs that we see as ongoing and somewhat independent of the pandemic? heidi: those are really good questions. one thing we are seeing is unlike any recession before, this idea of deification of recovery is going on. there's that idea from the labor market from a few weeks ago that the unemployment rate of workers, the lowest income workers, the highest wage workers -- burners are under five. just 5%. it's an enormous imbalance where we are really seeing this recession, this downturn exacerbated. the recovery that people need to, we are still in this dark

days of widespread pandemic. until we can get out of that and see widespread vaccine distribution to keep the economy going again. jonathan: heidi, there seems to be something about cycles, downturn and recovery, if we can get hit first and then recover last. i'm trying to understand if that is the natural order of events or if policy amplifies that in the federal reserve, which boosts asset prices within banks or if there is something else going on that we can address. what do you think it is? heidi: you are right, recessions always exacerbate in equality and this is worse than we have ever seen before because of the nature of this thing. it has really hit face to face services that have just shut down and even if they reopen, they reopen at much lower rates and workers in those industries tend to be lower wage workers. so, you have a ton of people

that didn't have a lot before and don't have, didn't have a big buildup to build on getting slammed in this recession. and so, we always see those workers get hit harder, but it is just more than ever before because of the nature of this thing. so it really does underscore the importance of doing a lot to get the recovery back on track. jonathan: that's what i want to build on, is that this natural order of events, nature, or typically that first response addresses the downturn exclusively with financial conditions adjusting really quickly. but if you hold assets, you will recover quickly as well and i'm trying to work out if we can do, for the next time we have a downturn and the time after that and the time after that, we will experience the first thing again and again. what's heidi: heidi: the policy prescription here? the fed needs to do everything

it can to get the economy on track and it will help people at the highest end and also at the low end. we know that that is the fed getting the economy going and that's a key part of a recovery that adds jobs. since low income people are more likely to lose jobs, they are also more likely to gain them as the recovery continues. that's an important issue. we need congress to step in with fiscal policy. tom: heidi, i want you to know that jonathan ferro has provided industry leadership on this because he is from england and he looks at america and goes you guys are nuts. go back to that michigan economics, what they are doing their with betsey stevenson and all that you studied. you are required at gunpoint at michigan to take a course like the cart -- descartes de'can't. are you sensing that america is going to change to a more

european labor aid construct? or are we still going to maintain arch individualism of every person for themselves? heidi: that is a big question. i do think that there is a big shift happening, particularly in the economic field. it used to be a consensus in economics that intervention in the labor market and in the market was a real drag on the market. hurting the very people it was designed to help. that used to be conventional wisdom. we are seeing that conventional wisdom change. with things like minimum wage increases, they don't actually cause job losses. it's essential to making sure that middle-class people get their fair share of overall growth in the economy. tom: heidi, we are going to run out of time here. this is too important. in honor of the late alan krueger, why can't we ramp in a

time distance minimum wage increase to get up to $16 and $.23, for i believe it should be? heidi: yes, right. you are on it. the $15 minimum wage bill that has been introduced in the house , it's in the reconciliation. it's it definitely has a chance and would ramp up $10 to $15 by 2025 in five steps. you've got it. the most effective thing there is right where policymakers are. jonathan: great to catch up, heidi. thank you. the economist and director of policy. how did you throw immanuel kant in there? tom: diane can speak better on it. everyone in school -- every school, including warwick, has there own culture and character.

you know, what do i know? the issue, john, michigan has a strange calculus. it was 20 years ago and it's really interesting. jonathan: we really miss the late, great alan krueger. the last 12 months, we would have been better to have him with us still. what a great man. equity futures are up 14, advancing four tents of 1%. this is bloomberg. ritika: with the first word news, i'm ritika gupta. donald trump's first word impeachment team is counting on a couple of words from january 6 to lean heavily on his use of the words "peacefully and patriotically," well -- while they make their case in the senate and that's part of their case. how's impeachment managers focused on trump, urging supporters to fight like hell. president biden said the u.s.

will sanction military leaders in myanmar linked to the coup this month and their leadership will not be able to access $1 billion in government funds held in the u.s. and the president says that humanitarian support to the country will remain in place. president biden is promising to act fast in delivering more pandemic relief, including the $1400 check for millions of americans. but not all are in a rush to spend the money. according to a survey conducted for bloomberg news, more than one third of likely recipients plan to stash the money for later oh. that complaint -- that compares to the 22% who said they would do is that -- that they did so with the last stimulus check. and of the material needed to make the core of a nuclear weapon, "the wall street journal" cites a confidential report saying that iran started

producing uranium last week as band under the 2015 nuclear accord. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta, this is bloomberg. ♪

>> we are not going to immediately turn our back on legacy businesses. we are going to use it very much

as a high quality financial foundation of the company that is going to pay a very significant part of shareholder distributions into the next decade. it's a balanced narrative based on a disciplined approach that we are laying out today. discipline in catch -- cash and carbon management. jonathan: there's -- tom: the executive officer of royal dutch shell there, doing a bit better in france. it was just in the last number of days. bloomberg radio, bloomberg television worldwide, this will be a superb conversation now. lisa abramowicz on energy and oil and our chief energy correspondent. javier, you go way back to your days as a young kid at the financial times. it's been asked before, but we have to ask again based on what we have heard from these big oil

companies. do they have the will, i should say, to adapt to the modern energy age? javier: i think they have the will and they want to adapt. do they have the ability? that's a big question mark. they have struggled to make money in the last few years in their choral oil and gas business. are they going to be able to make money in a business where there's renewable energy and electrification for those electric cars when that hasn't been their core business? many shareholders have a big demand on that. lisa: this idea, as oil companies try to become cleaner, can you push it into the supply demand dynamic pushing for the commodities super cycle now? how much will he pull back in the drilling and exploration and expansion of some of these oil and fuel companies lead to a

shortage that leads to higher prices down the line? javier: talking about that return, based on the lack of extending by these producers, it looks for example like at royal dutch shell, who announced that their oil production peak in 2019, every year they attempt to reduce by 1% to 2%. if you look at what they are looking at their, the oil demand continues to increase as the pandemic ends. the gap could be relatively large. talking about the beginning, it kind of had a bit of return to my early days covering commodities in the early days of 1997, 1998, 1999. it's been a prize based on the super cycle where everyone in the industry starts attending.

you have to worry along the future supply. /lisa: -- lisa: it's so important, it goes against capitalism and what companies want to do when the price of something you can supply goes up, you want to pump more of it. how disciplined will these companies be? how much pressure will they have from shareholders to restrain themselves from pumping more to meet demand? javier: it very much depends on the price. to date, they are putting pressure on a green movement to reduce production. if it goes to $100, will investors be happy with companies announcing that they are reducing production? they have very short memories. it should hold as they are asking today to reduce that spending and ask in a few years to increase spending. jonathan: -- tom: i get it, but

as one example, the property plant and equipment pushed towards a little under half $1 trillion. the numbers are mind blowing. 400 billion dollars, whatever it is now depreciated. how does big oil depreciate or write off an old business? javier: well again it's very much a question of the price of oil in a years time. do you believe that we will reduce consumption significantly ? then you have to assume those projects are going to have to ride a lot of those assets. one number when we talk about reducing oil demand significantly over the next 20 years to 30 years, in the pandemic in april, when businesses were collapsing, the people were unemployed. consuming $75 million per day of

oil. it's difficult to reduce the oil demand. they still demand 75 million bars per day of -- barrels per day of oil and i get the sense that we will be consuming a lot of oil before it's over. lisa: it's definitely something people are talking about, can you solve the issue of fossil fuels from the corporate standpoint, from them reducing supply when demand continues? let's broaden this out to j.p. morgan analysts coming out and predicting a super cycle for commodities. they are not alone. hedge funds haven't been this bullish since early 2000s, moving beyond the dynamic we are talking about. how much credence do you give this as we move into a new regime with greater demand for manufacturing and some of these precious metals that are involved?

javier: the oil in new york is at 20% in january and that's the best start of the year for wpi oil. the oil futures market opening in new york 30 years ago. certainly the price has that flavor. going in the super cycle, i see it. getting less supply, but on the demand side are we going to have china, when the super cycle started? the big questions here are always india. tom: and we heard that last -- yesterday as well. thank you so much, heavy air, -- javier, our chief energy correspondent. looking out 10 to 20 years, i'm not even doing that with red sox.

lisa: look at where they came from, the price of oil has doubled in the last year. remember when we have negative prices? it raises an interesting question is the biggest oil companies try to make themselves more appealing to these green energy types of shareholders. thinking of cutting production, but demand is still there. driving more than ever right now. tom: and i think it's well said, there are some real dynamics here. we will be focusing more on demand dynamics rather than supply dynamics. assets are going down, we failed. our goal was to drive the puppy to 0.1. lisa: how much did you leverage it up? tom: i'm going out to triple leverage cash. it [laughter] lisa: that was the technical story of the warning. tom: no question about it.

we are going to drive forward the conversation and coming up an important conversation with the gentleman from uber. lots of questions to be asked. tom: yeah, over on bitcoin. this is bloomberg. good morning. ♪

jonathan: from new york city,

for our audience worldwide, good morning. the countdown to "the open" start right now. on the s&p, advancing 1/3 of 1%. and a report from the fed, the chairman is not returning. >> all he has to do is reinforce that. >> it is expected to go slightly higher. >> he is saying, we are not worried about it. >> they came in weaker than expected. >> he has identified that he will have access inflation. >> until the realized numbers hit. >> the fed does not need to move. >> we will keep our foot on the gas pedal. >> it may be is a risk of some upside inflation pressures. >> is only then we will consider doing something. jonathan: let's bring in the