no expensive machines, no expensive memberships. get off the floor with aerotrainer. go to aerotrainer.com to get yours now. >> we are in the unusual situation where the central bank is trying to push out inflation expectations. we will continue to get good data. at some point we hit the peak. >> i expect the savings rate to stabilize at a much higher rate. >> the point is to get the economy growing faster. >> we are not late, we just came out and we are still officially in a recession. >> this is bloomberg in -- this is bloomberg: surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: it's an extraordinary

morning, the bank of england is out. we are missing this. nothing boring about the markets and the geopolitics. the u.s. and china will meet in alaska and anchorage, and moments ago, harsh comments from mr. putin to mr. biden. i don't think we could link in the geopolitics into the markets. but nevertheless, a change the dialogue between russia and the united states. jonathan: we go to that high level meeting over in alaska, but for now, that story is on the bond market. 175 on tens, 173 on equities. tom: we did see equities heading south with a new let down. putin says the u.s. will take us into account that sounds like peter the great, 17th-century material. your observation on the

character of the yield move. jonathan: it's been fast. i think lisa is correct to focus on the pace, speed is what a lot of people are watching. the speed has not disrupted the market too much. it's been tougher tech and the nasdaq. the financials continue to rally. when does the fed get uncomfortable? 180? 185? right now, financial conditions are not tightened. tom: chairman powell made clear that he's not going to be uncomfortable. lisa, the backdrop is economic growth and we see that anecdotally in manhattan. how far off would you say the fed is from where economic growth will land? they are at 6.5%. lisa: that's one of the aspects, the pace of yields rising. the economic projections we have seen on wall street have been increasing at a dramatic pace.

the question is, how much is baked into markets. we talk about the relations between higher yields and lower nasdaq. how much have we brought forward this growth. do we see people fade that as we look at midcycle growth. i think that's part of the conversation. tom: you mentioned the bank of england earlier jonathan, how linked is the fed. jonathan: they are waiting for the outcome of this. they are waiting to see the data and the monetary policy is not forecasted today. in some ways, it is similar to what we saw coming out of the last crisis. the federal reserve and the bank of england were in line. but there is a key difference. the amount of money being pushed

through in washington, d.c. to supercharge the recovery. another key difference as well. across the channel, europe is struggling. tom: we do have that with the state department action. i do want to point out an important statistic. the one-month the yield going to negative. it was negative off the pandemic. it was an interesting chart. we will tell you that the one-month yield and 0% is just below that. this is in the united states. the screaming you heard moments ago as we take the one-month deals to four digits, 0.0025. is that a negative interest rate strategy? jonathan: that's not, it's a supply demand story. the money market has surged in america. this is not what we have seen in terms of savings. we have seen those conditions persist for the rest of the year. tom: i get emotional, we take one-month yields and people scream.

we are speaking now to our guest, greg, i want to talk about the economic growth to,. the response of corporations to come, the revenue to come. how do you adapt now? greg: i think we have seen the market adapting. that we will have this cyclical reopening and a massive fiscal push with strong earnings growth is given. i think the market is trying to digest what's priced in. and how the rising yields fit into the equation. we had a bit of a free lunch. the market was responding unchecked too much stronger reflationary conditions. now the bond market has held more into account. jonathan: the equity market did in early november. we talk about the correlation, if not causation. when the rate comes up, it's worth discussion.

credit suisse came up and it was compelling. it not rotation caused by high yields but better outlook for global growth. and also a sense for growth equities that are lower. is that important, weathers correlation or causation if the outcome is the same? >> i think correlation against causation is a brilliant point when talking about bond yields and equity markets. the traditional mindset is that high yields should be a headwind . academically, we agree. if you look at it empirically and the distribution of equity returns, the best yields for equities, 20, those were yields -- years in which bond yields were rising aggressively. there a much stronger reflationary expectation rather than correlation. jonathan: doesn't matter where you are in the equity market? greg: absolutely.

rotation is a big thing. what we saw after the u.s. election was this bullets rotation -- bullish rotation. we had this net inflow. what we have seen since the middle of february, when the yield have started to accelerate, that has morphed. value is outperforming, but we are seeing actual growth. i think at the moment, the rotation is a more powerful story than a directional story. we have more conviction in rotation from growth into value and fiscal rotation then we have directionally. lisa: does big tech continue to lose value or underperform the more cyclical aspects of the equity market. greg: i think they are very finely balanced. if we see the rates continue, we run the risk that we see outflows from tech and negative returns.

that makes a difficult environment. we talk about value on growth and for the index weight, they are not. the s&p is dominated by growth, not value. tom: greg jensen over at bridgewater writes a prescient note, talking about something we all studied in school. when you have a huge expansion, you get debt monetization which leads to classic inflation cycle . how does the stock market do, given the debt monetization over years? greg: we have been fighting deflation, globally, for a while. part of the reason we are getting this very patient -- from the fed is that it's hard for us to move from an environment about deflation and now worrying about the other risks in terms of inflation. not to say that there is not going to be an issue down the line. but we are at the point where reflation is wish -- bullish.

lisa: does a question about earnings and fundamentals improving. at what point do the treasury yields raise questions about valuation regardless of the earnings growth, simply because you have brought forward a lot of those growth expectations. >> they are already pressing valuations. i do have convinced -- conviction in the view that we are going to be lower than 12 months time. but that does not necessarily mean a lower market. we are seeing strong earnings growth. when we look at 2022 there is an upside risk. we see economic forecasts aggressively upgraded. that moves to earnings. jonathan: that's the next leg of

the story. greg, it's good to catch up. let's talk about the forecast from the federal reserve. this year, huge. a six handle, seven handle maybe pay let's talk about next year, 2022. you could see where this is headed. tom: you know that i think this, this is my huge question to the experts we speak to, what does this look like. and there are many different opinions. i don't think anybody has asserted as greg jensen has said, this is debt monetization. and this is the a radical territory. jonathan: and it's a moment to be humble because we have not seen some of this. who could put out a forecast for the next two to three years? but lisa, at some point you have that 12 month rolling forecast that kicks in. in the middle of the year you start thinking about the middle

of 22. what does that look like? any carry-on of the same level? no. does it come down? and there are numbers we are not looking at right now. lisa: if we don't get those kinds of numbers, the debt load starts to matter a lot more. not only for the national debt but also for companies. this is the conundrum. we are not seeing the debt monetization that people have expected. the fed will not necessarily ramp-up their purchases to suppress bond yields further. at what point does this matter as we look at that and paying it back. tom: -- jonathan: it is amazing. $120 million a month. and when the chairman was asked about the absent purchase program -- the asset purchase program he says we have not seen progress and we won't even talk about it until we do. tom: we are trying to keep up

with the news, we have people on radio and tv going what? here's the watch. we are in original territory, including chairman powell. jonathan: good morning, yields are higher at nine basis points. equities are lower down by 25 went on the s&p 500 which is up by 6/10 of 1%. from new york. this is bloomberg. ♪ >> in talks between the u.s. and china, beijing wants a meeting between president biden and president xi jinping. the chinese would like a summit around earth day, april 22, to show both leaders wants to fight climate change. president biden is close to his goal of delivering 100 million coronavirus vaccine shots in his first 100 days in office. it could happen today. more than a month ahead of time per the u.s. is reaching the pace of 2.5 million vaccinations

. the house is set to vote on two immigration bills which would provide a path to citizenship for millions of people living in the u.s. without legal status. the bill is for farmworkers and young undocumented immigrants known as dreamers. democrats hope to offer more ambitious legislation but that disappeared with the surge of migrants who arrived on the southern border. google is planning major investments, the company says it will spend more than $7 billion to create 10,000 full-time jobs. more than a billion dollars will be spent in california. there will be data centric -- in several other states. deutsche bank says investment banking revenue is up 20% this year. the favorable market conditions during the height of the pandemic have continued into early 2021. deutsche bank expects revenues from buying and selling securities to take off.

it's predicting lower revenue overall. 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 am ritika gupta. this is bloomberg. ♪

>> anybody making more than $400,000 will see a small to significant tax increase.

if you made less than $400,000 he won't see one single penny in additional federal tax. jonathan: the next leg of this conversation, tax hikes. president biden over the last couple of days, in new york city, alongside tom keene and lisa abramowicz. here's the story. your equity markets. the s&p 500 is down by 7/10 of 1%, the nasdaq is down by 1.7%. crude is down by 1.4 percentage. $63 and about $.90. tom: michael is with us. for those of you on radio, you need to know that joining us this morning as clouse on the left, on the left, on that count, sleeping. and mr. darden on the right.

mike, i want to work off of bridgewater today. you will monetize the debt as we have since roman times, and that will lead to a per minute -- a pernicious inflation. is that good for equity markets? mike: i think we have the answer to that, no. if you are in an easy money environment, higher nominal growth in the extent that you are getting higher inflation. discount rates will go up. we see that with higher than expected inflation. and market ratios and all other things equal, will go down. you are seeing that visibly in tech and the nasdaq 100. which is falling on his face for lack of a better term with high market interest rates. tom: will the corporations adjust to the reality of collapsing ratios? mike: i think so.

a previous guest pointed out that in a v-shaped boom, reflation and then inflationary profits are going to go up. that's one way for the ratio to adjust down. but the other way is through lower equity prices. we are seeing a combination of both. the profits will be strong. i think the equity markets are going to struggle. they have already priced in the rebound. with not fully appreciated at this juncture is the potential for long-term interest rates to continue moving up, for inflation rates to go up, we are looking at the prospect of higher tax rates on corporations and capital gains. they will be forced to start tightening monetary policy next year, not in 2023 or 2024. lisa: this leads to a big question, the weakness we are seeing in the nasdaq, will it persist? can it bleed over to other areas

of the equity markets which are resilient in the face of high-yield? mike: it's a great question. i think it will persist. the forward evaluations on the nasdaq, this incorporates the big rise already expected, this is almost 60% above what the average was for the last six years. some of our -- some are arguing that that could be justified based upon where the rate structure and liquidity is. we are priced to perfection based on liquidity. liquidity is 22 percent above the pre-covid trajectory. even adjusting for rates which are merging with what we saw before the pandemic. this is particularly in the tech stocks and the nasdaq 100, which continues to be over the evaluation basis.

the outlook is favorable. earnings are strong. but these valuations are likely to continue coming in. lisa: that's the nasdaq story. how about the rest of the universe? the idea that there's more room to run based on the gains that we saw lagging behind big tech. is that being hampered? mike: it could be. even some of the so-called value sectors have had a appreciative a run since last summer. the valuations have come up as well. the risks are lower. the valuations are lower. the idea of a rotation makes sense. but with higher valuations, the expected future returns should be lower. that's the way things typically work. i think where there's danger is where there are some of these markets which have been swept up into a speculative frenzy. not just the 40% at the nasdaq

100 trading at a double-digit price to sales ratio, but the so-called reddit trades, crypto, these are areas of interest rates that jump higher that we can expect to see a lot of volatility. tom: what do you expect to see from larger companies and more traditional corporate officers. not people doing stocks or reddit or the rest. but a -- whatever, whatever the sector is. how do you think those corporate officers will bond -- will respond to this historic moment? mike: i think the good news is that we are going to get a very strong rebound in gdp and jobs. the other side is with the strong rebound and some potential overheating as we will have some higher inflation and market interest rates.

it's a push and pull. and the pole, from higher market interest rates and lower valuations. i think what the -- that's with the prototypical corporate officers will have to deal with. tom: you always look so smooth -- jonathan: you always look so smooth. what a beautiful dog. good morning. we are resetting and counting down to the opening bell. we need to talk about why we are in this moment and the federal reserve wants to run the economy hot because they have been conditioned by the previous cycle to believe it takes a long time for it to heal. that's the story we will witness in six minutes when we get the jobless claims that are still expected to come in and around 700,000. still way too high. tom: i'm glad to bring it up. we left by the wayside with the market activity. the labor numbers are driving.

and chairman powell mentioned that. there's a boom in florida. what we make of the headline, the land of solomon drafts volunteers for a move to west palm beach. jonathan: sounds horrible doesn't it. lisa: horrible. my question is, as some of the companies look to move their employees out of high cost cities, how much will they ask them to take a pay cut versus going there? and did you read the story about how people are moving back to new york from florida as the summer starts to set in? it's a migration and a heated point of debate. tom: -- jonathan: it's about where the clients will be. of the clients are down there, they will be there to serve them. this idea that business travel will come back. if i could get an edge on you by seeing a client in person, we

are both vaccinated and can shake hands. get on the plane. lisa: people want to break bread. really. jonathan: in the same room at some point. maybe. tom: north palm beach. $79 million. ♪

jonathan: from new york city, live on tv and radio, waiting for jobless claims in america. alongside tom keene and lisa abramowicz, i'm jonathan ferro. down 25 on the s&p. with your economic data, here is michael mckee. michael: good morning. it is jobless claims day so we are keeping an eye out for the latest figures. they have had some disruptions in the market. we have seen jobless claims hold higher than they were expected to come and that is what we have again today. 770,000 initial jobless claims while last week, up from an unrevised 712. the forecast was for a drop to 700,000. we are not seeing any significant improvement in the claims picture. i give you my warning there is

always a question about whether the jobless claims number itself is accurate. the thing we have to keep in mind is the level and direction. right now the level and direction remain bad. philadelphia fed business outlook comes in better-than-expected, double what was expected. 51.8 compared to 23.3. here is a number we want to keep a lookout for. i'm waiting for all of these numbers to breakthrough. the philadelphia fed prices received index is 31.8. last month it was 16.7. on any kind of inflation measure we will get over the next couple of months is going to have residents in the market as the fixed income people start to worry about how much they will or will not lose over the coming years. michael: your thoughts -- jonathan: your thoughts -- tom:

your thoughts on the press conference as you brought it to a halt by trying to get the president to talk about japan. i thought that was rude on your part. what did he say about 700,000 claims, what did he say about the labor economy? michael: we have an enormous amount of slack in the labor economy. not just people reportedly unemployed, but people who have left the labor force. until we can get the kind of levels we saw before the pandemic, the fed is going to keep going. we had 3.5% unemployment and no one nation. tom: john from coventry emails and says what does it mean about the philadelphia fed? is this the beginning of the boom data that gets us over 6.5% wrote? -- 6.5% growth? michael: it suggests there is more optimism among the philadelphia fed people.

employment, 30.1. there is a lot of optimism in those numbers. it is the price figures people will pay attention to. tom: thanks so much and congratulations on a great fed day. jon ferro, it makes the yield move higher. jonathan: the outlook improves and when it does the nasdaq is allergic. yields are up 10 basis points. equity futures down, off 1.65%. we are familiar with the story playing out again this morning. tom: absolutely. what we are seeing is our team at bloomberg surveillance trying to get is the best guess on the moment. on inflation, it is david rosenberg, who claimed the partition of inflation, the subsectors of inflation. david rosenberg has been heated in his disagreement on the certitude of higher inflation. he joins us this morning.

david, in our comments before this interview you went right to the heart of the matter, which is it is assumed supply will come on in a boom economy. you disagree. david: i actually think the supply with a lag will come back. obviously demand. we had a demand implosion last year. as the demand cratered much faster than supply did. now demand will come back at a faster rate than the supply side will. it is all very temporary. i do not think supply chains have been in disrepair for a permanent time period. of course we have the base effect we will work off of in the next several months, and inflation will probably get to 3.5%, maybe even higher. poor will test -- core will test 2.5%. it is temporary.

my comment would be we have seen this before from the treasury market. it often will shoot first and ask questions later. we had 10 of these huge pickups in yields from 2009 to 2019. we had several inflation stairs, whether commodities or oil or barack obama's infrastructure package. tax cuts. the big story of the last cycle was core inflation pete at its lowest level in recorded history. the question is are you going to focus on the trees or are you going to focus on the forest. right now the market is focused on the trees. i think the surprise will be by the end of the year how low inflation cats once we get through the temporary spasm. jonathan: let's focus on the math. we appreciate having you on the program the composition of the inflation basket and the dominant sectors and how you

expect those forces to evolve in the coming year. david: as you mentioned on the philly fed, we will be getting goods inflation, we have seen that already. the prior weakness in the dollar, the run-up in commodities, although there not a big share of the cpi, they will still spillover. the services side is going to be what is most important. we talk more about the dominance of shelter and the rental components. that is looking at the being count on a bottom up basis. when you're looking at what ultimately drives in nation -- drives inflation. the huge spike in the philly price index is manufacturing. that does not tell you where inflation will be in 12 months or five years. the key is the labor market.

people forget -- everybody is focused on inflation, they do not realize the fed has a dual mandate. people look at this forecast of 3.5% unemployment rate three years from now and they think we are going back to full employment. that is not what it is saying. you could look at a 6.2% unemployment rate right now and say that is not so bad, but you have to remember over 4 million people have left the labor force in the past year. when you adjust for those people that left, who could be unemployed if they came back into labor market, the real unemployment rate is close to 9%. show me a cycle, not two months, not three months, so me a cycle of inflation that involve -- that did not involve real wages accelerating beyond productivity growth. when that happens i will change my mall, but i will not change

my call because of the philly fed index. jonathan: your thinking is very much in line with the federal reserve. when it comes to the labor market, what are the data points you think we should be focusing on because the federal reserve is looking in the same place? david: unfortunately they only tell you the u3 three unemployment rate. look, 4.5% year end. it is not that simple. i would say let's look at the u6, let's look at the broadest measure of unemployment. it is 11.1%. you will not squeeze inflation on any durable basis. if i see evidence we will pull down towards her blow 11%, that will be a sign we are fully employed economy. this is looking at inflation top-down. we have to see real wage growth

exceed productivity. that will put more durable pressure on inflation, not commodities. those are the data points i'm looking at. lisa: what is the concern among economists that they failed to get the depth of the downturn in the wake of the pandemic and the incredible search we saw and were in the recovery, the idea we could see employment pick up much more quickly than we have ever before? how much does that change your outlook based on inflation? david: there are a lot of assumptions, that employment will come back a lot more than was previously thought. of course employment is going to come back, but the one thing that went up seemed late last year at a time when we had the worst ddp number -- the worst gdp number since 1946 is business spending on automation and software and ai.

a lot of businesses realize productivity boomed last year in a horrible year for the economy. how many of these jobs are going to come back? does anybody believe everything is going to come back in one month or does joe months or three months? the pandemic is not over. we are winning the battle. there a lot of assumptions. look at what has happened in europe. i do not think everything will come back. it is not going to be like the snap of a finger. we have tremendous fiscal stimulus. if we have that $900 billion package that was signed on december 27, look at the pattern of retail sales. we are getting into first quarter gdp contraction. what is the vitality of the economy? is vaccines and fiscal stimulus. the fiscal stimulus is all very transitory. it gives you this initial jump

in the data, but there is no multiplier. what i found interesting is when you look beyond this year's big boom in the economy, what does the fed due to 2022 and 2023 minus gdp growth? jonathan: not much. david: the fed will start telling you this is all temporary. i know the market is pushing the fed and testing the fed and assuming the fed will be forced into moving rates a year earlier. everything in their forecast is predicated on policy being where it is for the next several years. they told you this is our forecast based on policy today, and on rates and policies staying accommodative for an extended period. they are telling you that post this year -- we have had these economic rooms before -- go back to 1984. we had the same growth rate in

1984. this is a very rare event to get a 6% to 7% growth in a year. jonathan: incredibly unique. we have to leave it there. david rosenberg of rosenberg research. that is the story out to 202023 tom: all of these different voices. this is going to be fun. jonathan: the next couple of months will be fascinating. coming up, jp morgan head of macro and fixed income strategy. looking forward to catching up with tom kennedy. if you are watching on bloomberg tv, that is not what tom looks like. i am not sure who that was. tom: it was palm beach. jonathan: i hope tom kennedy is just listing on the radio. he joins me in 20 minutes. this is bloomberg. ritika: a russian legislature is demanding president biden apologized to vladimir putin for calling him a killer. the deputy speaker of russia's upper house all the president's

remarks a watershed in relations and unacceptable in any circumstances meanwhile moscow has recalled its ambassador to the u.s.. oil is on its longest run of declines in over a year. west texas intermediate elf for a fifth day in a row over concerns -- after several european countries halted the rollout of astrazeneca's vaccine. more fallout of credit suisse on the retail capital scandal. it is suspending bonuses for senior executives. credit suisse is forced to suspend funds when it became apparent it can no longer value them. the u.s. economy is set for an epic hiring spree as the pandemic proceeds. there are signs that may already be underway. bars and restaurants added 300,000 jobs in february. that was the first increase in four months. goldman sachs sees the

unemployment rate falling from 6.2% in february to 4.1% by the end of the year global news 24 hours a day -- global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> we are thrilled with the response we are seeing from our guest in terms of future reservations and intent to come

back to our parks. it is a function of two things. confidence we are seeing the light at the end of the tunnel for the pandemic, but also tremendous trust in our brand. tom: the gentleman from disney, chief executive officer bob chapek, thrilled he could join us in the recent hours. your interview of the day on the consumption of america and retail america, there is no when i know more wired than dana telsey of telsey advisory. i've been in your neck of the woods last couple of days. luxuries trying to come back. i will go back to audrey hepburn in a modest movie about 57th street and fifth avenue from a few years ago where audrey hepburn talked about the quietness of tiffany's, the quietness of fifth avenue. when do we get from the quietness of fifth avenue right now? dana: thank you so much for

having me. today, compared to what was six months ago is better than it was. it will take a resume from fifth avenue to come back. it will take the locals returning. it will take people coming back to offices. we need more traffic than we have today. while traffic may continue to be weak, sales are improving. some of the sales are getting back to prior year levels, even with less traffic. tom: i look at the powerhouses. lvmh and tiffany's entrance action. i think they own all the corners of fifth avenue. what is the dominance of those powers coming out of this pandemic? they get stronger and stronger, don't they? dana: they do. the power they have is scale. they can create products faster.

their digital presence has only been enhanced. they have the dollars to invest. they have the dollars to invest to make it an experience. when lvmh acquired tiffany, i think you will see more creativity out of the brand for the next two years and we have seen in the past five years. lisa: what will we see in terms of the shift in brick-and-mortar and what its role will be going for given everyone has gotten used to shopping online, whether it be amazon going directly to the producers of the goods. dana: e-commerce definitely accelerated during the pandemic, but one of the takeaways was stores were essential to the online channel. the most profitable sale for retailer is when a consumer comes in, picks it up and buys something on the way out. it eliminates the shipping expense. i think people want to get back to in-store shopping.

they may not go as frequently, but they may buy more when they get there. they experience going to the store, there is an aha moment and i think we'll be returning. maybe not as frequently, but the amount of transactions and the amount you've purchased will be just as great. lisa: perhaps people will go to the stores but they are not necessarily going to increase purchases that much more unless they are prepared to go out to eat, which brings me to spending and restaurants and spending on experiences. how quickly can that come back on line, given the elasticity and concerns of hiring all the people you need, staffing the kitchens, doing the things you need to do to get business prepared for people to come in the door. dana: i am friends with the restaurant tour in manhattan's restaurant opened in the depths of the pandemic and is doing well. the obstacle is the occupancy rate and hiring. with the stimulus that is available to workers of certain

means, they may not want to come back to work. you may not see the full extent until september. the biggest obstacle today is getting restaurants up and running fully, particularly in the new york area, finding people to work in those restaurants. i think we will continue to see outdoor dining be a mainstay, even during winter weather. getting the help is the biggest obstacle today to making a restaurant run right. tom: more than anyone we know, this is in the fabric of dana telsey. it goes back to a storied childhood in the hallways of goodman and your grandfather. you have seen this 14 times. it is in mad men. the collapse of retail we saw in madmen. what is the thing we underestimate about retail resiliency? dana: that new product drives demand. you will see the consumer, who

has the ability to spend, savings rate is high, there is pent-up demand, people have not been engaging with each other in nearly a year. they want to celebrate birthdays, graduations, weddings, anniversaries. i think the innovative products and the collaboration that are out there in going viral that show up in the store, that is the aha moment. there is an excitement people miss. tom: i noticed yesterday bg's on the seventh floor is open and doing business. that is a good thing for new york city. dana telsey with telsey advisory group. lisa, what is your observation on the last 18 hours? starting at about 2:34, when mr. powell said we are outcome

based, on we have gone. lisa: i am surprised to see yields seek out the expectations and targets. the idea we have a 10 year yield near the highs of the session at 1.74% and beyond. a question of why is the nasdaq not selling off more? that is an indication of resilience. you are seeing stocks tip on this, you are seeing s&p futures down .6%, but it is not that much if you are having a dramatic reset of yields. how much can that tension persist with financial conditions remaining easy and accommodative? tom: strongly agree. we do not slagged jonathan ferro's products when he leaves, when he is gone we do not talk about him. but we have to go to the real yield moving in an attractive direction. lisa: it also raises the question of whether the fed will step in or this is the pricing in of the fed stepping back,

buying their $120 billion of purchases, but not looking to cap those deals and extend the maturity. they did not talk about that. they are ok with where things are at, and that is the question given how quickly this move up has been. at what point does it rock the boat? tom: ira jersey does not like it but i spent less time on the flow. lisa: you paid attention. you pretended to. tom: look at the auctions. what to they do at this price? lisa: the options we have seen this week -- the auctions we have seen this week were ok. not great, not terrible. the question is will the fed have guidance and will they keep holding on to more treasuries. tom: the key question as we got more mail on west palm beach than anything else we did. lisa: it is really nice. [laughter] tom: i've noticed from certain yankee fans in palm beach that

west palm beach should not be confused with palm beach. also that west palm beach is south of north palm beach. lisa: you want to do a field trip? tom: i think we should do a road trip. we will watch the washington nationals play. ♪

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good morning, good morning. "the countdown to the open" ends right now. equity futures down 25 on the s&p. chairman powell. >> we are committed to our framework. we are very much committed. no matter how well the economy performs, until the job is well and truly done. our policy stance on that in our asset purchases is appropriate. our holdings of treasury securities and mortgage backed securities is appropriate. monetary policy remains appropriate. very clear guidance on lift off. until substantial further progress has been made him actual progress. labor market conditions, inflation that has reached 2%, above 2% for some time. we are still a long way from our goals. jonathan: let's bring in michael mckee and kailey leinz. good morning. michael: