♪ >> the public is still engaged. volumes are still heavy. flows are still strong. >> we have enough going on this year to push the economy well above potential. >> it would be a mistake to assume the u.s. is now china and can sustain growth at these astronomic levels. >> i just don't think the fed is ever going to take runaway inflation. >> this seems to me to be a year in which main street beats wall street. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: 2.4 9 million.

for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside lisa abramowicz, i'm jonathan ferro. tom keene back with us on monday. let's start there, 2.49 million. that is your average vaccination rate in the united states. you throw a monster relief out of washington and a chairman willing to sit this out and not hike interest rates, and that is the scene for you down in bc today -- in d.c. today. . a big effort, a unique moment. lisa: you have to wonder why we are not seeing more of a rally in equities. that goes to the fatigue. yes, we know we are almost there. yes, we know we are going to get more spending, although there is some doubt on the $3 trillion plan and how realistic it is on the near term. yep, that is being baked in, and now what? we need to reopen, and people

are just exhausted. jonathan: deceleration, what does it look like? it may increasing the be on the radar as this year grows older. this is what the likes of pgim, blackrock, and others, everyone we speak to on a weekly basis are thinking about beyond 2021. what does the deceleration look like? it is the boom, but years after that, is it familiar? is it like the previous cycle? do we return to that again? lisa: and how do you even gamed that out at a time of fiscal policy uncertainty? i talk about that $3 trillion plan that was being proposed and talked about. that is a big number, much bigger than some people expected. i was surprised to see no market response, or very little. it is a wish list. it is not going to get done, certainly not on a bipartisan basis.

the question is, let's say we do get infrastructure passed. how does that filter into markets? or are people already hoping for something that is not likely to get past, and that fiscal policy uncertainty, to me i can't room number the last time it was this big? jonathan: yields are in five or six basis points on 10's. equity futures come in on the s&p 500. do i sound a little bit sensitive? maybe. 14 points on the s&p. in the bond market, yields at 1.64% on tens. crude is down by about four .5% on wti. 58 handle on wti. that'll's, crude lower. in the fx market, the aussie weaker as well. the euro down 0.4%. lisa: defensive in both stocks

and bonds, which is interesting. are we seeing some sort of shift where bad news is bad news once again? jonathan: let's bring in ann mileti, wells fargo asset management head of active equity. is this something we can indoor beyond 2021? ann: i think it is a great question. certainly we will see a lot of strength in the economy, like you mentioned earlier. that surge is going to because earnings growth, but it is not across the board. this is where active management can really play a role, where fundamentals are going to matter. the dream is the dream, but now it becomes the reality. so who can really capitalize on building cash flow and earnings? those will be the companies that i rewarded more in the next cycle. jonathan: give me a better understanding of your approach to bottom-up analysis and

stockpicking. what are you looking for? ann: certainly we have portfolio managers and investment teams that have value focus and growth focus. emerging markets, etc. across the board. that would say that instead of focusing on value or growth, what they are focusing on more is cyclic how to and secular trends -- is cyclic how it and secular trends -- is cyclicality and secular trends. certainly, the recovery of gdp is pushing that secular trend we are seeing in value and small-cap stocks -- sorry, the cyclical trend. but the secular trends are really driving what we are seeing across almost every industry. innovation really has led the way, especially over the last year, and it is going to continue to be an important driver for earnings and cash flow for all industries. lisa: you talked about basing

some of the purchases on fundamentals. i am going to dub this as philosophy tuesday's. what are fundamentals at a time when so much is being driven by policy, whether it be fiscal or monetary? ann: fundamentals really are how companies are investing for the future. certainly, capital has been very cheap. that liquidity has made it possible for almost every company to survive this past year, but also, for them to do relatively well in the marketplace. but now there's a recent separation of winners and losers. who has taken that liquidity and invested it for the future, and who is going to continue to do that? if you don't invest for your future, you're going to die. that is what we are going to see more and more, innovation trends continue, digitize asian continue, and all of the

companies almost across the board are going to have to invest. lisa: do you think the market is accurately picking up on companies that are investing well in their future? i am saying this at a time when we expect gamestop to come out with earnings, and they are expected to not lose money for the first time a long time, and yet that might not be enough to justify determined this rally we have seen. is the market acting efficiently? ann: i think it is fair to say we are seeing some very strange things. certainly in my career, i have not seen some of the things i have seen over the last six months, over the last year. there are inefficiencies in the market, and whenever you have this much stimulus thrown into the market, you are going to see things happen like we are seeing today. but what has really driven the market over the last decade is all of this stimulus. it is almost like everyone can survive because capital is so

cheap. that trend has to stop at some point, and that is one fundamentals really will matter. and quite honestly, they still have mattered for the most part. investors are focused on cash flow, focused on earnings growth , and that is going to become more important, especially when we get to a rising rate environment. those are the companies that need to produce earnings. if you have a high multiple now, it might be ok as long as you can rapidly grow your earnings. jonathan: we want to finish where we started. i think you did a brilliant job taking us away from growth versus value to focus on the cyclical aspects of this market and the more secular aspects of this market as well. some people might go another step further. the sick you look -- the secular story is to buy only short-term horizon. i am trying to understand whether there is a cyclical story that you would like to hold beyond just the next 12 months.

ann: yes, there are several industrial companies in the manufacturing space and in other places that are benefiting both from the cyclical trend, but also the secular story. we have manufacturing coming back to the u.s. that started over the past four years and is going to continue into this term as well. so the secular and the cyclical can emerge and a lot of companies together, and that can last. that could create a cyclical story that lasts much longer than we have seen the past. jonathan: that could get really interesting in the year ahead. great to catch up. come back soon. ann mileti, wells fargo asset management head of active equity. this is when policy is critical down in washington. how do you take some of that cyclical exposure and start

thinking about it? how is it supported by policy beyond 2021, into 2022 and 2023? when you hear about infrastructure and industrial policy, those are the themes i think you get in that conversation. lisa: that is why i keep reiterated that, because it is unclear where the money will get directed and how much of the supply chain will get brought back to the united states for a variety of reasons. these are where there could be a sudden boom or an unexpected explosion of certain industries that people perhaps aren't seeing now. i wonder how much people are gaming that out from some of the plans being outlined by the biden camp, especially given the fact that there is not bipartisan support for them. jonathan: are you starting to since a few more doubts coming into the cyclical trade from various houses on the south side? lisa: very much so. people are basically saying perhaps we bid too much, too

quickly, especially given the fact that we are going back to that low growth trend. i think people are also just uncomfortable with valuations. i think that is fair. we've brought forward so much growth over the past 12, 14 months, based on hope, not necessarily the reality of the data. as we get the reality of the data, a lot of people are saying that is when we will get confirmation or that is when you start to sell. jonathan: mr. kaplan from dallas , more aggressive on the rate hike. this won't be a surprise. he said he's among the fed members advocating for a 2022 rate increase. there is division at the fed. i think it is worth talking about that. the median dot tells you one story. i wonder what that division looks like as the year grows older. seeing it is very different than forecasting it. lisa: financial stability.

that to me i think will be the big divide. who's worried about it, and who is not? the dallas fed president has signaled some worry about it. from new york city this morning, good morning. alongside lisa abramowicz, i'm jonathan ferro. tom keene back in the building next monday. loads are in five basis points to 1.64%. from new york, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. for the second time in less than a week, there's been a mass murder in the u.s.. amen with a rifle open fire in a supermarket in boulder -- a man with a rifle open fire in a supermarket in boulder, colorado, killing 10 people. one suspect has been arrested. last week, eight were killed in a mass murder in georgia. president biden is beginning the push for his next multitrillion dollar spending bill. this one is centered on infrastructure. he is saying it will do more than just boost the economy.

he told members of congress it could ensure u.s. competitiveness against china for decades to come. another setback for astrazeneca's coronavirus vaccine. health officials indicate that promising results in the u.s. trial may give an incomplete view of the shot's effectiveness. the company says the shot was 79% effective in the trial, but the panel expressed concerns that the results included outdated information. astrazeneca says it is completing verification of its analysis and will engage with the safety panel. after last week's contentious meeting with the u.s., china is looking to improve relations with russia and north korea. according to the state run news agency, beijing said that is willing to work hand-in-hand with north korea to develop its relationship. meanwhile, russian foreign minister sergei lavrov visits beijing this week. citigroup will begin having zoom-free fridays, according to a memo to employees. zoom calls will be banned on

friday, at least for internal meetings. they will also in-state a companywide holiday to be known as reset day. 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. ♪ i'm ritika gupta. this is bloomberg. ♪

♪ >> if real yields start to go higher into positive territory,

then you better have strong growth and you better have the inflationary pressure. otherwise it is going to have an impact across all asset classes. jonathan: it has had an impact over the past couple of months. bob michele there. we've been talking about headlines from dallas fed president mr. kaplan, seeing treasuries rise further to do percent. in the bond market -- to 2%. in the bond market now, yields about 1.64%. 3917 on s&p 500 futures. crude down almost 4% to $59.11. what do you make of that headline from the dallas fed president, seeing the 10 year treasury rising further to 2%? lisa: there's a question here of where his concern lies. is it inflation?

is it in tightening financial conditions? or is it in financial stability? he's raised issues about financial stability and what it means for them to hold their low rate policies for a long time. if he sees sooner rate hikes, perhaps that long and does what he will be looking for to justify that view. that is what i make of that 2% call of his. jonathan: i know a lot of people will be screaming "nonvoting member," but i do to get muddies the waters ahead of jay powell later. just some of the headlines from the dallas fed president, expecting to raise rates in 2022. that is his view, not the view of the committee right now, if the median dot is anything to go by. we talked about looking back 12 months and the lessons learned in the equity market. i think we need to do the same in credit, and we have the perfect guess to do that, with don mullen, pretium ceo.

what was the big lesson for you? don: i think the big lesson we learned is that when the fed stood -- when the fed decides to do credit qe, when it made its decision to invest in investment grade bonds, it would have a dramatic affect all across credit. don't fight the fed, a common phrase in the past, what was more true this time than before, particularly when you combine fiscal support, which was extraordinary this time around. strong expectations of high gdp growth for the latter half of this year going into next year our consensus, but people aren't sure how that is going to be spent. so valuations in credit and valuations in the equity market, as well as the fact that so many companies have different balance sheets today than they did in

2019, no one knows which companies will be the ones that don't benefit. so there is a challenge right now in credit markets. what is the right narrative structure? how will movies recover? how will jim's recover -- how will gyms recover? nobody knows. lisa: that is true in both stocks and bonds. i am wondering if you are seeing a similar move in credit, this idea that it has been so good, and it has been backed by a really easy fed that is now second-guessing some of its policies and how applicable they are to a future that looks brighter. basically, are you starting to get more cautious on credit from here? don: i think we are going to see a trader's market rather than an investor's market. so less beta, more volatility in credit. we would hope to see some dispersion in the lower quality,

smaller cap names, where capital has a harder time accessing, with the money managers raising human amounts -- raising huge amounts of distressed capital. so more of the inefficiencies are on the bottom parts of the market and the smaller sizes. so we are going to see a lot more volatility in credit spreads as the narrative develops. we don't really know where the consumer dollars are going to be spent. we know clearly they are going to be different than they were in 2019, so as a result, we see opportunity coming, but i think we are priced closer to perfection. i see opportunity on the horizon. lisa: where is their distress at a time of 4% high-yield bond yields? don: we still have businesses that had a very high default rate in 2020, and we continue to

see an above average default rate. don't forget the last year, we had default rates at almost 7% in bonds and in excess of 4% in loans and lower recoveries. we obviously had some gyms have survived, as an example. restaurants have suffered. so as a result, areas that have 95% declines in revenue, which was the leisure, travel and entertainment categories, certainly experienced the faults. companies with access to capital be the ones, similar to your earlier comments on the show, talking about americans who gained the covid-19 pounds, we have many companies that have a much larger balance sheet with the amount of debt and equity and cash flow that plays out in

2021 be adequate to service that level of debt. i think there will be many defaults as a result. i saw the announcement today that the streaming window for theaters has been drinking. that is only -- has been shrinking. that is only going to enhance the ability of theaters to create cash flow. but equities are probably too highly valued. jonathan: great to catch up, sir. thank you. just want to turn back to something important. michael mckee really helping to frame the conversation. i do think framing the conversation appropriately is important here. remember in reading the breakdown of the bite and build back better planned that the administration is talking about spending $3 trillion over 10 years. a lot of money, but not the same as shoveling one point $9 trillion out the door in 2021

and 2022. i think that is a really important point. lisa: i agree. i also think it is important to know that not all of the act that was passed, the $1.9 trillion plan, most of it has not been spent yet. that is one key question to janet yellen today and congress, a question of how much has actually been deployed. how much more has to get back into the economy? that will also give a sense of how much more of a boom there will be as this filters into state and local governments, as this filters into plans for health care and beyond. to me, that affects growth so much, and the uncertainty in the pause you are feeling in today's markets. jonathan: the house financial services committee holding that hearing with jay powell and secretary yellen at midday washington, d.c. time. coming up on this program, megan greene, harvard kennedy school senior fellow, on policy down in washington, and policy in d.c., not just on the physical side.

president kaplan and the dallas fed really making some waves going into this hearing. he sees a hike in 2022. that is his view. he sees the 10-year treasury yield rising to 2%. that's what we want from the fed, isn't it? a price target on treasuries. this is bloomberg. ♪

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jonathan: from new york city, this is bloomberg surveillance live on tv and radio. alongside lisa abramowicz, i'm jonathan ferro. here's the price action. outperformance on the nasdaq, underperformance on the russell. the s&p 500 down .3%. it is one year on from this mess. over the last year, the s&p 500. what a move it's been over the year. 76% on the s&p 500. just amazing to see that, isn't it. the leaderships changed. it's not just about growth in big tech or the nasdaq. it's about financials, the energy story. the financial story has been held up by what's happened in the bond market.

yields are down five basis points on the 10 year. the 10 year -- forecast from the fed president. michael mckee thinks this 10 year can get out to 175. i have to say, chairman jay powell probably if you read these comments this morning, i assume, i imagine, if i was to guess what he's thinking, he's probably not happy with the waters being muddied going into his testimony later. lisa: if i were a member of the house committee that will be grilling jay powell and janet yellen, i would be reading these comments and asking him about this. michael mckee has been reading them and parsing them. what is the response from jay powell to these comments. robert kaplan is not a voting member but nonetheless an influential voice. >> probably rob kaplan forgot

the old song about you make a forecast about a number or a time period but you don't combine them. i don't think jay powell is going to be worried about it. powell and janet yellen will be on capitol hill today talking about how the year has progressed. you look at their opening statements and there's not much there. powell has said if the economy is getting better we would expect rates to rise. you look at 175, it's about where we were a year ago coming into 2020. it isn't going to bother the fed too much that rates are rising toward the level, especially given the speed with which they are rising and slowly. go ahead. lisa: i would argue it's not the long and that people are really thinking about. his projection to 2% treasury yield sounds like a lot but it's

not that much relative to history. the idea of raising rates in 2022 flies in the face of all of the messaging in the federal reserve and it edifies some percolating concerns in the market that the fed will not be able to avoid hiking rates. how much will jay powell have to address the concern that if inflation does overshoot even if it's in the near term, they are going to have to respond? >> he's going to say that. if inflation does rise significantly and quickly and gets to their 2.5% upper bound, the fed might act. although they do want to see it stay there for a while. it's really going to be about the speed and the orderliness of any rise. they are predicting 2.4% this year. the fed is not going to be worried. obviously it will be a political topic on capitol hill. yellen and powell are going to

talk about how things have really improved, the forecast has really improved. yellen says we will get back to full employment by next year. they are going to be relatively happy with the outlook for now and if rob kaplan were to be right, i don't think either one would complain. jonathan: you asked the most important question on the news conference that didn't get answered. mike collins is thinking about the same dynamic that you are. that the fed isn't going to hike with the numbers they are forecasting right now. when will they and did they miss the window? mike collins answered that question for you. he thinks there's a better chance of that happening than not right now. what's your take on that and the conversation you are with other people about it? >> that's the problem with forecasting devices and the dot plot.

you really don't know that far down the line how the economy is going to develop. the fed based on the forecasts it's making right now would not raise rates until 2024 and beyond because they don't see inflation getting to their target and staying there. but that's not realistic. so there will be questions as we go along about whether the fed will miss a window or not. member how important it was for the fed to raise rates in 2016, 2018 when they were saying you need to have room to cut rates if you have a recession? we will see those questions come back. jonathan: always the best questions. progressively getting pushed further to the back of the line in the press conference. we will bring you that hearing live today.

chair powell, secretary yellen. secretary yellen, chair powell. 12:00 p.m. eastern. let's bring in megan green, harvard kennedy school senior fellow. do you think it's premature to have the cycle conversation? maybe the fed never raising interest rates. >> i think it is a little premature. there is a huge debate about what kind of inflation we are going to get. we know we will get some temporarily. the fed has acknowledged as much. will it be sustained, that's a big question. i think if we have unemployment as for -- at 4.5% as the fed expects, and yellen says we get to full employment next year. and we have inflation at two point 5%, it is going to be increasingly untenable for the fed to argue that the appropriate rate -- i think the fed will be pushed into hiking

sooner rather than later so i think the scenario where the fed never hikes is pretty unlikely. jonathan: are you a kaplan 22 type of call if you are on the fomc right now? >> the said -- the fed has said they will provide a long runway for investors. if we ended up having the fed hiking in 2022 it would probably happen in the latter part of that year. i think it is certainly possible and likely before the fed's own forecast according to the. which is until 2024 at the earliest. lisa: that implies they will start to taper the bond purchases they have been making monthly. how soon could we see tapering? >> you could see them start to discuss it at the end of this year. tapering is going to be really tricky. even if the fed guideposts this

well in advance, it represents a binary shift. i don't see the fed being able to taper without roiling the markets. it happened last time we had a taper, there was a tantrum through emerging markets. i think this is something investors need to watch. lisa: how does financial stability way in on this? the idea that the markets are supported by the fed's instabilities when we have a new boom supposedly underway? >> one of the reaction functions of the fed is indirectly that. even if you get rates starting to go up very gradually over the next couple of years, it's from zero. so while a bunch of the markets could look frothy, there might be room for the fed to normalize rates. i don't think we will ever fully normalize rates, but at least start to hike them. it's a consideration, but that's

a balance the fed will have to get. they had to get right in the last cycle as well. jonathan: do you think that's what shaping the views of the likes of president kaplan? do you think he's tying the two things together? >> kaplan is a markets guy so he's absolutely tying the two things together. it's not just financial stability, also the robust growth forecast that we have. the bond market moves we've seen so far this year. it's all of it together. he is certainly looking at the markets on thinking some of them are frothy. he has said that before. i'm sure that's part of his reaction. jonathan: he has said that repeatedly on his program. i wonder how lonely he is on the fomc right now. megan green, thank you. some lines from dr. fauci on astrazeneca. this is an unforced error, this is likely a very good vaccine. not quite the full endorsement

you would want at this point from a company that has suffered some pr issues the last couple of months. not going anywhere anytime soon. lisa: unforced error. how much is he a participant in it? he read this data. where their flags on it? why are they continually making unforced errors at a time of such crucial health importance? jonathan: luckily it is not as big an issue in america. it's on pfizer and moderna and increasingly j&j as well. we are looking at 120 7 million doses giving in america. luckily in america the emphasis for this rollout has been with other companies away from astrazeneca. lisa: these numbers about the vaccinations and how they are ramping up in the united states, i want to pair it with the idea of froth in markets.

there's more of a rational behavior underpinning some of the market moves. there's a shift from the growth stocks, the big tech to the cyclicals and that continued. that's where the outperformance is coming. perhaps giving some faith that they are going to hold rates low forever. we are seeing that improvement could we are also seeing a very rational investing behavior in markets. jonathan: a bit defensive this morning. talking about the themes. a bit defensive this tuesday. positive about .1% on the nasdaq. outside of that there is a bit into the bond market that we are off the lows into the session. in foreign-exchange, euro-dollar. 118.90. spread arguably wider over the last few months. we had a move from 123 to 118.

what's left? it's the what's left i'm intrigued by with the incremental bad news out of europe. not doing much for this currency pair. we will touch base with the blackrock investment institute head and lisa will drive you forward into the 9:00 hour. i will be on bloomberg tv counting it down to the open. from new york city, this is bloomberg. ♪ >> in boulder colorado, police aren't saying much about the mass killing inside a supermarket. a gunman killed 10 people including the first officer to arrive. they haven't released his name or discussed a possible motive. janet yellen and jerome powell will get a sense of how concerned congress is about inflation and the deficit. they will begin to days of and

congressional -- congressional hearings today. president biden is on the verge of proposing a bill to fix infrastructure. growing numbers of mexicans are heading north across the border spurred on by an economic crash at home. promise of a stimulus resurgence in the u.s.. the apprehensions of working age mexicans traveling without children has more than doubled. that would be the most in a decade. the u.k. and the european union are trying to break the deadlock over astrazeneca's coronavirus vaccine. exports to the u.k. could be blocked from the drugmakers plants in the netherlands. >> accusations of vaccine nationalism are so wrong in terms of europe because we are very intranational in terms of exporting.

we should have good conversations with other stakeholders about what they might do to reciprocate. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪

>> we are going to have a very booming economy for a while and then it's going to settle back

into normal and that trajectory does not look on a inflation is peaking in the next 12 months. why should interest rates go a whole lot higher? lisa: that was chief investment officer of morgan stanley, global fixed income really raising the question about how you price in inflation when it's expected to boom and increase way past the trend as we have not exited secular stagnation. i'm so glad to have barry on this morning. i want to get an understanding of whether we have too much optimism or pessimism and frankly that pendulum has been swinging around at record speed. barry is the bloomberg podcast hope -- host of masters in business. always wonderful to speak with you. i want to start with that. have you felt this huge shift from pessimism to optimism?

>> i think we have to be careful about painting with too broad a brush when we talk about sentiment. i can't ever recall in history where market bubbles were called so fervently and frequently by participants. we have been hearing people say this is a bubble since -- five years. certainly off the lows last year. bubble drumbeat started. it's kind of hard to deem markets being overly optimistic when there so much fear on valuation and bubbles. i know it's very counterintuitive, but it's just not what you typically see when everybody just throws caution to the wind and they are all in. lisa: we are not necessarily going to be talking about a bubble as much as the hope in

the recovery. the cyclical trade. the move away from growth. the idea that you can pile into airlines and cruise liners that have tons of debt that haven't yet started to float their boats around the world and i wonder whether you are starting to get the sense that the optimism has been priced in and there isn't that much upside in the cyclical trade or whether you get the feeling that people are just taking a pause here and they assess the landscape going forward but that will regain steam. >> try not to put it in binary terms of two optimistic or pessimistic about the recovery. markets make probabilistic bets. how strong is the recovery going to be. we have seen people float numbers 6%, 7%. if the upper range of the economic recovery is right, there's a ton more revenue and profits for corporate america and stocks aren't overvalued. on the other hand if we are

overemphasizing, if we think we are going to get back to normal, if the estimates are way too early way too fast, then markets are clearly pricey here. we don't know what the next 12 to 24 months of the economy are going to look like and what you are seeing in this bull bear debate is really an argument as to how fast are we going to get back to normal, how quickly will that fall to the bottom line of companies. lisa: what are you doing with your money right now? >> the same thing i always do. i look out 10 to 20 years. i don't care about tuesday or what happens this week or this month. humans are terrible at conceptualizing long periods of time. we are really bad at it because we exist in the here and now. most of evolutionary history, life was short and brutish.

no one thought much about retiring 20 or 30 years hence. we try and look out a decade or two. we have clients that have perpetual time horizons because they are investing for philanthropy or foundation or their grandkids. any given day or week, it's irrelevant. the fact that markets fell 22% in october 87, look at it on a chart it's a little squiggle. if you were retiring 20 years hence, what did it matter? it's almost irrelevant. i know we are in the news business and we want to keep up with the day-to-day goings-on, it's hard to be long-term bearish on where the united states is. i'm thrilled with how fast the economy is recovering. i wish people were a little more circumspect and continued to wear masks and not go crazy on spring break. that can slow the recovery down.

what the market has correctly sussed out how quickly the vaccines would be available. how fast we would get over the valley of zero profits. in the market is telling us this economy is going to ramp up pretty quickly. lisa: barry ritholtz, thank you for being with us. bloomberg opinion columnist, founder of rit holds wealth management and the host of masters in business, bloomberg podcast that i highly recommend. talk about being in the news business and following the day today. the big question is going to be the fiscal deficit and how we are going to pay for it as the united states borrows more and more money in order to get the economy back on track. michael mckee is still with us. i'm wondering from your perspective what the message will be from janet yellen as to when the debt becomes too much for the economy to sustain. michael: i'm sure she won't put a date on it.

she will say in theory there is a time period when that could be an issue. it's imperative that the u.s. do something to bring down its debt. but the time is not now. she's not going to get caught out in a game of putting dates on it. but it's going to be important because they are introducing sometime soon the new build back better plan, which the various news organizations are reporting at $3 trillion over 10 years. that's going to raise questions about additional spending that she will certainly get asked about. lisa: what about jay powell? how will he weigh in in terms of capping yields at a certain place, buying more debt if yields rise to much to support the national fiscal deficit? michael: i think he will also dodge. his statement has been something along the lines of we will use whatever tools we need to to keep the economy expanding. that's what you will hear him

say today. lisa: anything else you are expecting to hear from the conference? what would you ask? michael: the inflation question is going to be paramount. he may also get asked about the supplementary leverage ratio. that may be more of an issue with the senate. the whole idea of are you giving outbreak to the banks is something that's going to be a political issue on capitol hill. the sicko michael mckee, thank you for being with us. we will be watching that house hearing today at noon. janet and jerome powell taking the hot seat before a house committee. we started the day saying we saw treasury yields going lower and the nasdaq also going lower. that has reversed. meanwhile you've got the s&p down 10 points. really range bound as people try to gauge the lockdown expected in germany with the ongoing

economic enthusiasm in the united states as well as $3 trillion infrastructure plan from the united states. i'm lisa abramowicz. jonathan ferro and tom keene back next week. this is bloomberg surveillance. ♪

jonathan: testimony on capitol hill. from new york city, good morning. the countdown to the open starts right now. 30 minutes away from the opening bell with equity futures down nine. -.25%. the push and support for an unprecedented spending spree. >> these numbers are big. >> $3 trillion. >> coming off a huge influx of fiscal support. >> the nearly one point $9 trillion package. >> 2020 to 2024. >> trillions of dollars worth of debt. >> this is simply a u.s. government that has lost their fear of debt. >> driving the u.s. economy by a boom in gdp. >> and the focus of monetary policy. >> they want to grow their way out of this problem. >> we care about what the fed is going to do, we care about