-- lag. >> we do not have a playbook for this. >> bond investors should love it generally. >> we will get higher inflation but mostly because the u.s. economy is going to be roaring back. jonathan: from new york city, good morning. this is "bloomberg surveillance." tom keene is out of the building today. we start with the big issue this morning. lisa, it is in the bond market for the last 24 hours, for that matter, the last week. your high yesterday, 1.61. jonathan: is this reflation expectation? no. i'm sorry. they're the lowest in the five to 10 years going back to the end of last year. what is driving this move?

jonathan: real yields. we brought forward some rate hikes. we started to challenge the fed to the front end but we did not have the inflation expectation. it seems every time we see higher yields, people jump to the conclusion it is inflation. lisa: the question is how the fed is going to respond. it is convenient that tom keene is out today. losing all his money. here we are. jonathan: i thought we might actually get some work today and that is why he stepped out of the building. let's get some work done. good morning. your equity market ounces back with the smallest move and then we tried lower. we are down on the s&p. for the week, down about 2%. from the bond market, 161 for the high yesterday. all the way back to 146.33. this move has been absolutely

huge. this felt so technical yesterday. not about a fundamental at all. the fx market come euro-dollar. some dollar strength. lisa: after a lot of dollar weakness yesterday. there is a question about the fundamentals come how much they match, what is currently being priced into bond yields. we will be getting the key piece you court if later at 8:30 a.m. that is what the fed looks at to determine their inflation expectations versus the inflation surge they are saying on the ground. income and spending will be interesting as we get the bleed through from the stimulus past late last year. at 10:00 a.m., university of michigan february sentiment data. interesting to see it was the and it upsurge as people get vaccinated. inflation expectations rating.

i want to look at that. how much are people expecting higher prices going forward as they see their prices on the shelves of the grocery store pickup yeah oh -- pickup? and then the 1.9 trillion dollar stimulus. we learned the minimum wage aspect was makes from the bill. it does seem like they do have this up to get it through. the russian is, how much pushback they get within the democratic already -- the question is, how much pushback they will get within the democratic party. jonathan: we will talk about that with kevin cirilli. this from hsbc, c major putting up the following research the last hour. "humble pie." the leftovers because volunteer. goes on to say, you have the near term reopening risk, longer-term secular story remains intact.

looking at what we have seen the last 24 hours. lisa: if you look at the inflation expectation, very important, the ideas the inflation expectations over the near term are substantially higher than longer-term inflation expectations. this has not happened since the last financial rises. basically, people are expecting it to overshoot in the near term and fall back to that low growth, low inflation trend. how do position for that? jonathan: this is consistent with fed guidance. what is that is moving the fat hikes and lifting the trajectory as well. that was the inconsistency in the last 24 hours. lisa: the seven year bond option yesterday, we talked about the expectation. it was a terrible auction. he basically was looking at it was a record low bid to cover ratio that basically saw a surge in yield relative to where it was expected to be priced. who will be buying this?

this goes down to the fundamental supply and demand. jonathan: marvin loh joining us now. let's start with the bond curve. as you look at things yesterday, what was the challenge to the fed? marvin: it was definitely the belly. the option, like what you and lisa mentioned, was absolutely awful. it showed the expectation that buyers might come out because yields backed up so much wind up being incorrect. i do think there is a supply and demand issue. i think after all of the debt sales we have seen over the course of the last year and expectations for continued sales going into this year would potentially get bigger something the fed is going to eventually need to address as part of its credibility in keeping the yields within this low framework while the economy reopens. jonathan: build on this, how

inconsistent the price action of the last because been with the fed's new framework? expectations have been brought in but inflation expectations -- basically, very little the past week. marvin: it is absolutely a change in commentary, i believe. no doubt for the most part we have given in to the fed and gable to get close to its inflation target. that was the first part of the move that took us from january to the beginning of february and always good. risk assets felt good, we were reflate in the economy, everything was within the fed framework. after that, the markets started to push against the fed's ability to hold the line. we moved in from i think it was probably late 2023 two weeks ago to at one point based on eurodollar futures, pricing in a late 2022 number. within a week, we can have, that is an aggressive move. at this moaning -- morning we

are still at 2023. it pushing the fed whether they will be on the hold the line. in the vein of the seamless coming along. jonathan: -- lisa: how much are we try to create a narrative for technical move? marvin: there were these massive price gaps yesterday. i think there's a lot going on behind the scenes, whether it is convexity hedging, whether it is these potential changes and bank holdings of treasuries. i think all of that came into play yesterday. ironically, a lot of those type of technical factors come in at the worst time. to certain degree, fuel a fire that was already burning. lisa: is are larger pointed take away from the technical move? this was technically driven, this market, the deepest most bond market setting key interest rates that affect foreign exchange rates, borrowing costs

for companies and individuals -- it is fragile and getting increasingly fragile. marvin: yeah, the most important number in the entire world is what that 10 year yield is. absolutely. we learned how important was last year when we are in the midst of the volatility in a similar disconnect on the liquidity side and how much firepower the fed needs to use just to pull that part of the market in. it is scary to think, particularly given the liquidity pumped into it that we still find ourselves in the situation. yes, expect that choppiness. there are structural issues at a time when we have more and more treasury securities being put into the world that needs to be absorbed. jonathan: too early to say the fed's credibility is being tested, but lisa, i think we can say that in europe and australia, the story the last 24 hours. australia pushing back the front end trying to cap the story

because they have yield curve control there in are struggling to control. the ecb, an executive board member pushing back against this move. lisa: erasers the question, good one, -- it raises the question, good one come at what point is volatility around the world they're experiencing the fact they have to pump more stimulus because of what he says going to affect his message? so far people are saying he is very much banker to the united states. jonathan: statement of confidence. we heard from them all through the week, chairman powell, others saying, rates are still very low from mr. perspective. not expecting we will need to respond at this point. that was in the middle of this mess. what are you expecting to change on the communications i? marvin: they put themselves in a difficult position no doubt. a lot of ways, their commentary is a glide path for traders to

continue to try to push those higher. i think that will happen. certainly, while we saw volatility come up for the first time this year because of yields, it did not necessarily bleed into all different parts of the market. high yields are still getting done. i think that gives the fed cover . near the loosest we have seen since last spring. once we start seeing that creep up and more volatile -- so we don't have volatile days like yesterday. in the volatility we have seen the last couple of weeks, if that continues, those financial conditions will start to tighten. one part of the real economy that has been affected by this is mortgage rates. for me at this point, margaret rates and credit -- mortgage rates are more important than where the equity market is for the fed because it affects companies and the real economy.

lisa: marvin -- jonathan: marvin loh, thank you. we know how this ends, one of two ways. central banks stepped in or is stars to infect risk assets and this becomes self-limiting. we have seen it the past 24 hours. but you percent move on the s&p 500. go back to december 2018 when we had 100 basis points in the united states and the primary market totally shut down. we have not seen that stress yet. i'm not playing down the move we saw the last 24 hours because it was huge, but we have not seen that stress relative to what was so before. lisa: and we have not seen any widening on credit spreads at all. but certain investment-grade companies saying we are not going to sell bonds right now, raise money right now because things are too volatile. there is a question and a certain point the volatility

creates an ideal -- not ideal, excuse me, i will get my words out, nonideal for raising money. jonathan: you will not be interrupted. lisa: i can just stutter myself. jonathan: later, sebastien galy. good morning to you all. what a couple of days it has been. equity futures coming down. bond yields coming down almost five basis points. this is "bloomberg." ♪ emme: the house is expected to present abides $1.9 trillion coronavirus relief today, bringing most americans one step closer to receiving 1400 dollar payments. it is unlikely he will increase the minimum wage to $15 an hour. the senate parliamentarian moved

it cannot be considered under the fast-track procedure. it needs to be pushed through congress. president biden has undertaken his first use of military force since taking office. air sacs in eastern syria. targets were connected to iran-backed groups. the pentagon says multiple facilities were destroyed. bloomberg has learned u.s. intelligence report applicants saudi arabia's crown prince mohammed bin salman in approving the murder of jamal khashoggi. the report could be declassified as early as today. it reflects abides a administration to decision to recalibrate with saudi arabia. european union morning is should support vaccine passports to help countries to reopen to travel. basically president says apple

and google will step in to fill the vacuum. she says the tech trends are in talks with the world health organization about some sort of vaccine certificate. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this i

>> despite the popularity of the legislation with the american people, a republican calix are

organizing to oppose the next round of covid relief. >> house democrats do not get to take the razor their majority, which voters just shrunk, and use it to steamroll states and localities to try and prevent themselves from losing even more seats the next time. jonathan: senate leadership sparring. battling over the minimum wage hike, intensive i ended the last 24 hours. more on that in a moment. i'm jonathan ferro alongside lisa abramowicz. tom keene taking a long weekend. we looked a little something like this in the equity market. we settled down on the s&p 500. let sit on the bond market for a moment. the moves we have seen, the statement of confidence in the mind of chairman jay powell at the federal reserve. i wonder when that statement of confidence gets little addition at the end but we remain vigilant to what is happening in

the bond market if it leads to an undue timing the financial conditions. i wonder how close we are to that? lisa: people expecting them to be sort of the reaction function that was step in, possibly buying a long duration bonds. we will be speaking with sebastien galy in a bit. he was saying he expects the fed to come out in the near term, the next few days and say they might start buying longer-term bonds. i don't know. do think they will do that? jonathan: it has not happened yet. you have seen the ecb do it. that is been pushed by. you have seen the rba in australia do it. that has been actual policy. we have not heard it from the fed. lisa: how much is technical and will it be a self-correcting cycle of people try to get value out of bonds that have been perhaps oversold? kid dukes put out a note where he was staying there may or -- the cheapening of the believe the was curve predictor is

unsustainable. that seems to be the view. jonathan: p jump at the longing? lisa: i have not gotten back messages. jonathan: i've not heard anything. joining us on politics and adc, emily wilkins. -- in d.c., emily wilkins. things changed the last 24 hours around minimum wage. emily: democrats are trying to get this package through as part of the larger seamless package. they're not using the normal process, they're using the special process a budget reconciliation -- but not everything can go through budget reconciliation. last at this in a promontory and ruled the dollar minimum wage hike cannot be in the bill. -- the $15 minimum wage hike cannot be under the bill. it does make it easier to pass the stingless at this point but progressive democrats are saying this $15 minimum wage hike needs to happen and they're starting to look at other alternatives to do it. jonathan: what are the

alternatives? emily: we're hearing from a couple of settlement -- senate democrats that are looking at potentially penalizing companies through taxes work major corporations i don't have at least a $15 minimum wage this could mean a reduction in companies, tax penalty. these ideas are still early in the process here. they're thinking something like that could potentially be passed to the 1.9 trillion dollars seamless package. the benefit is democrats don't need republicans to sign on, they just pass it on their own. lisa: and they form a circle and shoot at each other. there's a question how much they will delay this to him this bill from getting present they try to renegotiate key and controversial aspects -- in the: douses had to put on the bill today. we have not seen any pages on that. we are processing this morning. we have heard speaker nancy pelosi say she does plan to

bring it to the floor with the $15 minimum wage. the house is not have the same rules as the senate so they can going to do that. that provision might need to be removed in the senate. the overall target deadline is mid march. this is about two weeks away when some of the supplemental unemployment insurance benefits run out and that is what congressional lawmakers have said is the deadline to pass something. lisa: so we still have the deadline amid march. let's shift gears. president biden what i had with his first u.s. airstrikes in syria to address some issues that he saw happening in iraq. could you talk about what prompted those airstrikes and how they're being perceived on capitol hill? emily: they were rotella torrey. at this point on the capitol hill, i think we will see this shape up a lot as lawmakers begin to weigh in on this. this is a big first step for the

biden administration. i think we're probably going to see a number of democratic lawmakers who are supportive of the president on this point but it definitely is interesting to see how the discussion on this shapes up throughout the rest of the day. jonathan: trying to understand the approach to the middle east and the relationship with saudi arabia and the relationship with the crown prince as well. what are you expecting to happen today on that front? emily: we're waiting for report to be declassified around the killing of jamal khashoggi, saudi arabia citizen. was murdered the other year. there will be additional report details coming out. did not against addressed and strong, aggressive terms. looking for the by the administration to bring a different perspective on that today as far as the killing is concerned, the information the government puts out about it. lisa: as we assess the first 100

days of the biden administration, what is your sense on how quickly he is moving on a number of these friends? is this par on course or does it feel like he is a firehose dealing with a lot of issues at the same time? emily: biden has signed more executive orders in his first couple of days that we have seen from past presidencies. i think this is a thing that a lot of them have been revoking a policy -- a popular policies under president trump. content is, we will undo it. but you have also seen some substantial policy things. clearly, the biden he was ready to move on their regression policy. you have a short time in which you can use -- do legislative before campaign season picks a begin and it becomes much harder to pass things on capitol hill. jonathan: emily wilkins, bloomberg government and a washington, d.c. look at your market this morning.

i have to say, can you imagine having a chief economist -- risk of complacency on inflation. probably not the message -- i'm just guessing here -- no inside information on this. i'm just guessing. i'm assuming this is not the message that governor bailey would like to have out there at the moment. lisa: now, it will just add fuel to this rise in yields we seen around the world. here is the question, is it inflationary? is it someone saying we expect inflation up and get more than inspected or on the contrary do we expect central banks around the world to maintain tighter policies as we get steady growth ? these are some of the questions that people are asking themselves as they try to

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♪ jonathan: from new york city for our audience worldwide, this is "bloomberg surveillance." 2/10 of 1% on the s&p 500, down to tenths of 1%. the nasdaq down on the week by five you are familiar with the story. the nominal story in the bond market, two's, tends, and fives, because that is where the pain was. how much of a challenge is it for the fed. yields come in five basis points in the belly of the curve a similar amount, 14736. every time we see high yields, how many people start talking about inflation scares? this was about real yields which

moved over the last week and that whacked around the nasdaq. we will talk about this later. let's get to australia. the federal reserve said in a statement of confidence and we have repeatedly's said that one central bank's statement of confidence is another's undue timing. in australia, trying to pin the front end of the yield curve target around 10, 11 basis points, trying to keep it there. they tried. 10 year another 18 basis points. pushback from central banks and a test of credibility. for australia he does australia and the ecb, they do not like what they are seeing -- australia and the ecb, i do not like what they are seeing. when does the fed join the chorus? lisa: that's what i'm waiting for. this note out this morning, stress is likely to remain elevated in equity markets until such a time as the fed announces

an extension of the maturity of its bond purchases, the expectation in a couple of days. sebastien galy, this was really interesting because it raised the question of, does the fed deal they need to respond right now given that there has been a seemingly uncontrolled move in bond yields but not necessarily in risk assets that followed through today. can you give us a sense of why you think the fed will come in and react? sebastien: they will come in because you have a strong tightening of overall monetary conditions linked to the back end of the curve. you have the options, five and seven year, which happened yesterday, was very poor, so yields have to adjust for all these issuances from a nonpoint -- $1.9 trillion packages. the long end is readjusting to what the fed wants but not at

the right time. if we focus on what will happen now and the next few months, we will be much closer to a 2023 course of tightening and the pressure will be strong because not only in the united states but globally, the tape that temper tantrum could become stronger in june, july, august. lisa: what is the risk that the fed would come in and react to a move? we are not seeing a consistent message across markets and expectations of inflation are not speaking -- not picking up. you are seeing the lowest expectation for long-term inflation going back to last year, so how do we know this is a move the fed needs to respond to, versus the technical disruption that will right itself? sebastien: if it is a technical move and not that important, they need to react over the weekend or in the next few days. the move nonetheless is

considerable in nature and is happening at the wrong time because the economy is not doing well. they need to do something, and it will be a coordinated response. you will probably see the ecb and other central banks over the weekend try to calm the market with their inter-linkage of the market in basal. jonathan: i am wondering when the buying starts to come in, because this is the year-end price target, q1 2021 -- q4 2021. when does the buy start coming? when do people think about having duration? sebastien: you probably are looking for the fed. the fed buys and guarantees the top side so if it extends the duration of its maturity, then you have a massive amount of insurance to flatten the curve by 20 basis points. it is a huge opportunity for fixed income investors. if they don't do anything today,

you are eight basis points higher. the curve is five basis points richer now, but it probably will be another eight basis points higher if they do nothing so over the weekend they do it and monday, you see flattening. is it risky to try to extend duration on a friday without much liquidity? it is not a great time. jonathan: good to catch up, sebastien galy. looking at the bond market, five basis points to 1.47. we didn't just take down big tech yesterday, it took down everything, the cyclicals, energy plays, goldman out saying high rates -- gold went out saying high rates are a challenge -- re-engaging or adding the pro cyclicals to the equity market. lisa: that is what i'm struggling with. this is moral hazard. if the fed comes in because of a

dip people want to buy, does that mean the fed is the backstop to any drawdown? if this is a technical issue, you would think they need to identify what that issue is and address that we are looking at a fed balance sheet that increased to a record high of about $7.6 trillion. it is not like they are not in the market. jonathan: every thursday, 4:30 eastern. somebody follows me and tells me that is what they do. lisa: every thursday. jonathan: that person is lisa abramowicz. to lisa's point, what is the kind of move the fed needs to respond to and what move can the fed let go? rubeela: what we've seen so far has been pretty quick and disruption of disruptive and unexpected. what we are hearing from fed officials as we are seeing an adjustment up. how far further this goes, that is the question.

i don't think they want to come out now because the markets have pushed them to see at what level they get a response, and i think that is a tricky situation for the fed to manage right now. the message now seems to be that this is an adjustment up, a welcome move, rates going up, but it has been click. i think the markets might be looking for a way to elicit a response from the fed. i don't think it will come now. jonathan: more often then now we the real price action was happening in the belly of the curve. on the front end, we've had a mass discussion about the possibility the two-year rate to go into negative territory, and they started to push higher. what do you make of that? rubeela: again, it is about expectations, it is about what the fed will do and how quickly, and it is about how the economy will perform.

on that front, we are looking at growth expectations that are moving higher, our own forecast has moved hires inflate last year, so there's a lot of that involved in how the front end of the market is reacting. lisa: what's the correct outlook with respect to inflation? the biggest debate in wall street, the message is we are still in a slow, low inflation perspective for the foreseeable future. rubeela: our view on inflation has been and continues to be that we are going to see inflation move higher this year, first on base effects and second as the economy runs -- opens. the service sector makes up for core inflation and we will see prices move higher. how sustained that will be beyond 2021, that is an open question. we don't think the inflation dynamics have changed that much and we don't think the labor market will be at a point where wage pressures build.

we are going to see some moves higher, one-time moves, one-time adjustments, but i don't think that will be sustained. for markets, it is the perception that matters. you have to see where base expectations are moving and that can be a self-fulfilling prophecy. if houses -- households expect prices to move higher come of that as whole different dynamic. lisa: here is what i'm struggling with. deal about this texted me and said that part of the issue in longer-term inflation expectations is a liquidity in the tips market. a growing number of people are citing market dysfunction for the cues we are getting to predict what will happen how much has this rendered an unreliable gauge on the economy?

rubeela: it certainly may affect the tips market and expectations, but the fundamentals will drive the inflation picture, and that still remains one where the label market -- labor market is at a hold, no wage pressures, and we have a long way to go. i think the signal might be mixed or distorted, but we have a pretty good picture of what will happen with inflation, over the course of the year. jonathan: thank you for being with us. on the first of march, the fed will speak. williams of new york, 9:00 in the morning. bostitch of atlanta, metzger of cleveland, kashkari of minneapolis, brainerd twice the next day followed by governor daley of san francisco.

then you will have evidence and guess what, right before payrolls, on the fourth of march? jay powell discussing the u.s. economy. there is a ton the fed speak. if they want to correct course there is enough in the diary. lisa: the question is whether they want to. moral hazard point is the question. the more they are throwing liquidity, the more they sustain status quo. at what point does this spiral become unsustainable, and if they want to end it and allow the markets to freak out, this is not the biggest deal. stuck between the market -- jonathan: stuck between a rock and a hard place. people were talking about too much frost and now we are talking about the long end move too much, the fed needs to step in. all in the span of a single month. lisa: do you feel bad for jay

powell? jonathan: central bankers. it is not feeling. it is not therapy for central bankers. from new york, here is your market, equities on the s&p 500. just a little lower by 16 points, down 4/10 of 1%. this is bloomberg. ♪ emma: congressional democrats will have to find another way to get a $15 million -- $15 minimum wage approved. a parliamentarian ruled they cannot use a fast-track budget to get that approved. they are already using that to push $1.9 trillion package. president biden indicated the white house will not ignore the ruling. in the white house, age -- in the united states, a dramatic

plunge in the number of coronavirus numbers. the biggest drop was among americans 85 and older. donald trump will declare himself still to be the leader of the republican party this weekend. he will speak to a conservative group on sunday. he is unlikely to say whether he will run again for president in 2024, but he will boast a crushing opposition would be in the republican party. the bitcoin rally has hit a speed bump, heading for its worst weekly decline in almost a year. it has been down as much as 20% this year, falling below $46,000. bitcoin surges are destined to repeat the boom and bust. japan finding process in -- progress in the fight against coronavirus. restrictions will stay in place in the tokyo region. the lockdown has battered --

global news 24 hours a day, on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am emma chandra. that was your first word news and this is bloomberg.

♪ >> [indiscernible]

these days -- impacting what we were hoping for, for the e.u.. jonathan: the astrazeneca ceo speaking to the european parliament. alongside lisa abramowicz, i am jonathan ferro. the s&p 500, we come in 19 points, down one half of 1%. on the bond yields, 1.4788. the commodity market, back to 62.31 on crude. the copper market down almost 3.5%, and the ftse is getting hammered, down 1.5% in trading gold. the commodity trade starting to run will -- rollover a little bit. lisa: i wonder how much is tied to global growth and how much is technical. there was a huge buying spree by chinese buyers in the copper

space and you wonder the mechanics beneath these moves and how much they are trying to give narratives to other things. jonathan: energy and metals not doing well in the last 24 hours. the story of the last 12 months and the story -- the better story in the last few months. joining us is dr. andrew pay costs. -- dr. andrew pekosz. dr. pecosz: the hospitalizations and the severe -- the deaths will be driven by the vaccination program that is going on in the u.s. as well as globally. that is targeting the most vulnerable populations, so we should expect to see the hospitalization and death rates drop faster than the case numbers. the regular case numbers, there is a normal cycling with respiratory viruses that infect during the winter, and as the temperatures start to warm up a little bit, conditions for

transmission are little bit less ideal, so you see reduced case numbers. let's be clear, we are still at a number of cases in the u.s. that is much too high to be able to be controlled by our standard methods like contact tracing. we need to keep our efforts up to drop the case number down even lower than now. you mentioned -- jonathan: you mentioned the national cycle -- natural cycle of the disease and the vaccinations. dr. pecosz: it is a question of who is getting vaccinated. in the u.s., we are not immunizing enough of the regular population to see that effect on case numbers. that should change. the j&j vaccine in the u.s. will probably be approved today by the fda, and we are hearing manufacturing of the other vaccines is going up. in the next month or so, we should see a major change in

terms of a switch to vaccinating the general population, which stood just should lead to a faster drop in general cases. lisa: when can we drop our masks, go to the theater? when can this be over? dr. pecosz: that is the $10,000 question. lisa: $10 billion. dr. pecosz: the models tell us the population immunization rate close to 70% will get us to a manageable rate. that is incremental. as we move to higher percentages, we will move -- have less and less numbers of cases. in the u.s., we are talking about late spring, early summer before we get to a level of immunity where we can safely consider to let up on many of the restrictions we have. lisa: late spring, early summer, that is a lot earlier than people are saying.

i wonder if the naysayers who are saying stay on with your mask, keep social distancing even as we get immunity building up in the community, whether they are worrywart's, and people who are like, we need to live again are right, that the level of immunity is building and we are safe. what do you think? dr. pecosz: the public health measures are a multilayered approach and they are trying to remove the ones having the greatest impact on our economic and social lives. to be honest, masks should be something that we should just get used to wearing for a while, because those are the simplest ones that can be in place that can maintain a level of reduced transmission. what we really want to focus on are things like schools, on getting people back into their workplaces, and finding ways to use the vaccination as well as contact tracing and mask wearing to allow us to open up those aspects of the economy so that

we can get to some level of normalcy. think about this as layered. jonathan: let's talk about how we should handle those that have been vaccinated but not from a political standpoint, from a scientific standpoint. there might be a worry about creating a two-tier society. is there any reason why those that have been vaccinated and waited several weeks after the second dose cannot just go about life as normal? dr. pecosz: so far, the signs suggest that these vaccines, particularly moderna and pfizer to have been the most studied in the u.s., .2 having a strong immunity and points to having reduced case numbers as well as the drop in case numbers. we want to maintain a group effort here. masking is something that is going to be needed, and if you are vaccinated or not, masking will help us in terms of limiting cases. we also want to stick together

on these issues, and masking is an easy way to make sure we maintain the feeling that all of us are still in this together and fighting this pandemic the best way we can. i would imagine that masking is something that whether or not you are vaccinated, you want to make sure to keep that up for the next few months. jonathan: from your standpoint, what it encourage vaccine take up when we need the encouragement to allow those who are vaccinated to go about life as normal? dr. pecosz: it is a difficult question because you don't want to generate a two-tier society. someone has to think about as at of the population has been vaccinated, they should do more things whether that is going back to school or work. there should be benefits of getting a vaccination because you are going to help reduce the level of transmission of the virus in our community if you get yourself vaccinated. that will have a general population benefit. jonathan: andrew pekosz of johns

hopkins. a simple question -- can those who have been vaccinated go about life as normal? if you are answering that question from the point of view of science, or is it the societal point of view? lisa: you cannot with absolute certainty say there is not a transmission risk from someone who is vaccinated so until the have that certainty, they don't want to recommend the all clear. if you don't get the all clear sign, what is the point? why get it? jonathan: that is what some people are asking. that is why the message needs to change and why people think they are underselling the vaccine. lisa: what is your biggest pandemic fatigue? jonathan: i cannot wait to go to the movie theater. i am going to do it this weekend. i haven't done it for ages.

lisa: your sarcasm. jonathan: equities down 13, 14 points on the s&p, off one third of 1%. yields are lower in the bond market, 1.4788. coming up next, chris harvey of wells fargo. on radio and tv come on bloomberg. ♪

♪ lisa: we are seeing the employment numbers already lag. jobless claims should be doing substantially better. >> this recovery is not normal to the upside. we do not have a playbook. >> that is where the central banks will allow the curve to steepen. >> managers love the steel -- stephen curve. >> the u.s. economy will come roaring back. >> this is "bloomberg surveillance," with tom keene, and lisa abramowicz. jonathan: good morning, this is "bloomberg surveillance," on tv and radio. alongside lisa abramowicz, i'm jonathan ferro. the s&p 500 down 11. yields higher by 41 basis points. lisa, the big returns, yields