meet for earnings, but there's some potential for pockets of outperformance. >> 2021, i think it is 2022 inflation that is more import for markets. >> the market overly priced for that inflation risk. we are still going to have higher inflation to come. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: retail sales 90 minutes away. for new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures up nicely on the s&p. the s&p 500 advancing 0.5%. a big number expect a little bit later this morning. tom: it is the way there is

green on the screen with the equity markets, truly across the board, and frankly, i very traditional format. maybe that is the banks leading the way off of what we saw with america. the vix isn't giving me that market. the vix at 16.85 is feeling like under 16, maybe we will see that as we move to citigroup and beyond. jonathan: before we get there, we need to discuss the federal reserve and how that recalibrate over the next couple of meetings. tom: really glad you brought this up. it is like we are zoned in together. we will talk to mark howard about this. pros don't look to the next fed meeting. they came out the meetings afterwards. mr. howard and others are focused not on april, but on june 16. jonathan: for good reason, lisa. in june we get the forecasts. lisa: perhaps they will give us more insight, although jay powell is saying guys pay way

too much attention to forecasts. we look at the data, and this is where the group will be. there is a question, and you are talking about how there is a lift to markets today. i wonder how much of it is because of all this cash sloshing around checking accounts, savings accounts. where else is it going to go given some of the frictions in the labor market, given some of the supply chain delays? i wonder how much that is going to be a theme. valuations can keep going up, even if growth doesn't necessarily outperform. jonathan: you are giving after fill too much credit for what can be sorted out in one session -- giving dr. phil too much credit for what can be sorted out in one session. [laughter] on the s&p 500, we advanced 21, up 0.5%. the small caps up now by almost 1% on the session. tom: 1.06%. jonathan: up 0.7% on the nasdaq 100. yields in a couple of basis

points. the market interesting more broadly going into this. lisa: citigroup set to report earnings. we are expecting them at any minute, because why not. that seems to be how things are going. interesting to see how they are seeing loan demand, as well as what they have to do with all of that cash in reserves. this question of what they will buy. really, it is retail sales. the expectation i am focusing on is from bank of america because they got it right. they are looking for how much is fueled by retail payments from the stimulus from washington, d.c., and how much can be ongoing given the $1.8 trillion in excess savings that americans

currently have in their accounts. at 10:00 a.m., another slew of data. the question is, how much can the bill those backup so that they can actually get the goods to people that want to buy? also, housing sentiment data from some of the builders. the question is, can to get the lumber, which is also soaring in terms of prices? can they get people to pay some of the prices they need to demand both because of their supplies, as well as the shortage of houses available? jonathan: lisa, thank you. looking ahead to retail sales data shortly after that. lisa mentioning the bank of america numbers from michelle meyer and the team over the last couple of months. decaying where they have done their work, it is the card spending. card spending has been absolutely tremendous over the last several weeks in america, not just relative to 2020, but also relative to 2019. tom: we heard earlier from a

guest on pent-up demand. maybe we are buying forward what we would buy in july, we are buying now. it was a natural disaster. we are still in the natural disaster. i noticed last night, the number of people watching babu with the detroit tigers in houston was huge because texas has people in the stands, and everyone else doesn't. it is these nuances of consumption which are absolutely original. jonathan: people want to get back to normal. i am shocked you still haven't mentioned the red sox, and shocked you still haven't taken it to get the yankees. [laughter] tom: if you are dealing with a team as esteemed as the new york yankees, you understand that anyone from boston never talks when things are good. we go radio silent. jonathan: i am going to talk for you. we are at nine in a row, is that right, for the red sox? tom: do you understand the difference between american league and national league ball? jonathan: do you thing i have a

clue, really? i go to the games sometimes. tom: in the national league, the pitcher bats. much more importantly, they advanced the runabout bunting. on radio, folks, i am doing the bunting with the bat. they played national league ball last night. jonathan: thank you for that. i just need the yankees need to knock you back quickly. tom: very impressive. jonathan: mark howard with bnp paribas joins us now. let's talk expectations. have we seen peak expectations for this economy? mark: domestically, i think you are right. i think there is a concern at least in the near term. as tom rightly highlights, we are in uncharted territory. there are a lot of unknowns, and we are getting that since from the company's as they report -- from the companies as they report.

a lot of the results we have seen already have been around markets. as lisa has pointed out, net interest margin loan growth has been uninspiring. with a decline recently in yields, it may not become inspiring soon. what i am hearing from big institutional clients is some concern, and they are moving towards small ball. the big, fat pitches of q1 are not as likely in q2. of course, people talk about selling in may and going away. so i think it is about small ball. there's a lot of unknown in this. coinbase yesterday, we've had a lot of bitcoin based, bit dog, whatever you want to call it, there's a lot of frothiness, and there are episodes of stress. that has got people a little bit anxious. tom: i want to go to what jon

ferro said yesterday, away from loan growth, the demand for loans. is there a demand for capex? i don't observe it yet in the earnings season. mark: there's traditional capex and there's nouveau capex. you see it from b of a. the big banks are investing in technology. some of that is facilities, some of that is r&d, and some of that is people. but there is definitely investment across virtually every industry we cover and look at. but there's also some brick-and-mortars. there semiconductors. you heard about intel dropping billions of dollars. i think it is a little bit of both, and i think that is going to ramp over the course of this year. lisa: you talked about possible nodes of credit stress. walls of worry are familiar to me, so let's go there. you're talking about the potential for another canary in the credit markets over in china

following the archegos situation and the greensill situation. can you talk about why this is a concern, the trifecta of problematic credit notes? mark: i have been around a long time, and i am a student of looking at canaries and things that might actually cause disruption down the road. we have learned going back in prior cycles, when you have an extended period of significant central bank stimulus, ex cesses happen in pockets and corners that you are not necessarily paying close attention to. in 1996 and 1997, it was in south asia, where people didn't necessarily expect it. in 2007, it was in pockets of subprime and securitization. we are now seeing some of these more esoteric fields or areas where people maybe haven't been paying as much attention, and

that is something to pay attention to because what we see with investors and potentially with regulators, whether in china, europe or the u.s., they are going to pay close scrutiny to these areas that have blown up. jonathan: good to see you, mark howard, bnp paribas multi-asset specialist. the medical term for an illness caused by therapy, and in the context of markets, i think that is some thing a lot of people are talking about. lisa has been banging on about it for the better part of a decade. [laughter] but it is worth discussing, i think. tom: it is worth discussing. i look again at the wall of money, and to me it is absolutely original economics, and more importantly, it is about the traditional asset

thinking. lisa: i am going to say this and you are going to roll your eyes, but the whole peeking around corners thing is important here. what are the low probability events that are mispriced in markets? what are we missing? are things to perfect? nobody is talking about another credit collapse, another crisis like we saw in 2008. but could there be something brewing we are not accurately pricing and? that is a sick -- accurately pricing in? that is a significant concern. i am not saying there's going to be a collapse. i am not saying this is going to be do men bloom. jonathan: what if you are always seeing the wrong thing when you have been looking around corners for a long time? eventually, do you start to capitulate? lisa: i am not taking a stand in terms of that. jonathan: i know. i am just saying, hypothetically. lisa: the question is, how do you calibrate portfolio? it is not necessarily about

making one unilateral bet. how do you accurately price out risk? jonathan: do you enjoy that? with that cathartic? -- was that cathartic? coming up, congressman andy barr of kentucky. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equities of 19 on the s&p 500. this is bloomberg -- equities up 19 on the s&p 500. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. the biden adminstration is poised to impose sanctions on russia. russian individuals and entities will be punished for alleged misconduct, including efforts to disrupt the u.s. presidential election. the move could be announced today. in a phone call with vladimir putin, president biden warned that the u.s. would defend its interest. chair powell says the fed will probably scale back bond

purchases before considering whether to raise interest rates. in a virtual event in washington, powell sketched out the fed's exit strategy and said rates are unlikely to be raised before 2022. president biden's critics say pulling troops out of afghanistan will obliterate american leverage over. . the taliban the president plans -- over the taliban. the president plans to pull out the final forces before the 20th anniversary of the 9/11 attack. secretary blinken made an unannounced visit to afghanistan to try to sell the decision. a final stage trial has begun with a highly anticipated antiviral pill, but now it will only be used for people with milder disease after there were mixed results about the medicine's benefit. 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. ♪

sec. yellen: the --chair powell: the economy does seem to be at a

bit of it inflection point, and that makes more sense with widespread vaccinations, strong fiscal's policy -- strong fiscal policy, support for monetary policy. you see ridership on airplanes going up and people going back to restaurants. i think the march jobs report shows what that can look like. jonathan: it is a struggle to get a reservation in new york city, that is for sure. chair powell speaking in the last 24 hours. from new york city, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. we are one hour and about 12 minutes away from retail sales in america. citigroup set to release earnings, scheduled to release earnings in about 42 minutes, but who knows? bank of america came out a solid hour early. futures up on the s&p 500 0.5 percent. yields coming in a couple of basis points on the 10 year, 1.6148%. euro-dollar -0.1%, at $1.1967. tom: going is now is andy barr,

congressman from lexington, the 16th congressional district of kentucky. you are going to do the kentucky derby on may 1. tell us about the crowd they are, given the pressures of this pandemic. rep. barr: churchill downs is excited to return the dirty to the first saturday -- the derby to the first saturday in may. it has always been run with two exceptions, in 1945 during world war ii, and the other was last year during the pandemic. so we are excited, even if the crowd will be a little limited because of social distancing requirements. maybe a little less than half capacity, but still, the most exciting two minutes of sports will be returning to churchill downs on the first saturday of may. tom: some of my ancient ancestors were named after agent ohman named -- named after a gentleman named henry clay. you went to the henry clay high

school in kentucky, a symbol of the tensions of race in this nation act well over 100 years and forever. please discuss reparations and the tensions you see between the two parties as we engage in this debate again. rep. barr: no doubt there is so much partisanship in washington, and president joe biden, who is a member of the other party from me, gave i think an uplifting inaugural address, calling for unity and bipartisan solutions. unfortunately, ever since that speech, we have seen a president govern from the hard left, as karl rove observed recently in "the wall street journal." this so-called infrastructure plan, which is really more of the green new deal and tax increases, with no real effort to reach out to republicans, it is really solidifying president biden's reputation as the most partisan president in history.

that is a strong statement, but unfortunately, there's really not been any genuine outreach to the other side of the aisle. both parties deserve blame for this, but i would like to see this president and congressional democrats in the majority reach out and at least entertain some of our ideas. lisa: you said both parties deserve some blame for this. this does seem to be the playbook, that every time there is a new president, the other side says this is not bipartisan at all, and the president said we couldn't get anything done if we try to do it in a bipartisan level. what could republicans do better to actually move closer to a bipartisan solution? rep. barr: look, this is not an adverse structure bill that the president -- an infrastructure bill that the president is proposing. it is a $3 trillion left-wing lift wish -- left-wing wishlist. only 5% is helping roads and bridges. things like high-speed internet,

broadband, ports, airports, electrical grid reliability upgrades, those kind of infrastructure investments i think would earn bipartisan support, but in this bill, only account for about 3% of total spending. we have a new definition of infrastructure, including care infrastructure which is just a massive expansion of medicaid, and then you have some of these other unrelated items, green new deal items that were included. but on top of that, there's no consideration of republican ideas on financing, public/private partnerships and streamlining permanent regulatory reform. none of those ideas are being entertained. it is just more big government tax and spending, and unfortunately, a massive tax increase that will bring us back to the bad old days of corporate inversions, moving jobs overseas, stagnant wages, and much lower wages. the national association of manufacturing says we are going to lose on jobs in the first year if these corporate tax

increases going to affect. lisa: if there was some sort of agreement that was smaller, say an $800 billion, $650 billion by targeting -- billion i partisan infrastructure bill, would you be willing to raise taxes to pay for it? rep. barr: we ought to consider user fees as a way to finance infrastructure. that is the way we have always done it in this country. but to make america less competitive by not just increasing the corporate rate from 21% to 28%, but taking our corporate tax rate to a level that is higher than the tax rate in communist china, raising it to a level that is the highest among all developed nations, because remember, it is not just raising the rate from 21% to 28% that the president is proposing. he is proposing to do so without the base reforms that we put into place in the tax cuts and jobs act. when you add on top of the

federal income tax rates the state and local corporate tax rates, that is where you push american corporations into a very noncompetitive position. tom: one final question, and i do this after president trump gave support to the senator from florida a few days ago, and of course, with your lifelong work with senator mcconnell. i want you to frame for us how you perceive your republican party right now. so much is it is the party of trump. is it? rep. barr: look, i think our party is broad and diverse dislike the democratic party is. but we are still the party of limited government and free enterprise, and what we have seen, a troubling trend, is that big business, wall street ceos have kind of aligned themselves with the woke left. maybe that is a reaction to the trump phenomenon where the republican party more gravitating towards main street

small businesses, farmers, rural america. we represent the grassroots american people, and large institutions are letting us down. look, i believe in free enterprise, but if we are in this battle between capitalism and socialism and the ceos of the big banks, through their esg agenda, are aligning themselves with the socialists, where are the capitalists in this country? i think we need people who really believe in free enterprise, and that is main street small businesses and entrepreneurs across this country who really believe in limited government. jonathan: congressman, you are a skilled media operator because you must know i only have 45 seconds left and can't ask any follow-up questions. [laughter] can you come back so we can pick up where we left off? there are some really important points to talk about. congressman andy barr, republican from kentucky, thank you, sir. some fiery points at the end that warrant a little bit of a comeback. tom: i think we need to make a

trip may 1 down to the derby, the three of us. jonathan: there you go. to pick up on that conversation. tom: get the hat going. jonathan: coming up, george bory, wells fargo fixed income specialist. yields lower, retail sales one hour away. this is bloomberg. tom: maybe i will bet five dollars. ♪ ♪

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♪ jonathan: 60 minutes away from retail sales in the united states, and we are looking for a boom number at bloomberg economics. equities ahead of that, futures higher by 18 points on the s&p 500, up 0.4%. the nasdaq up 0.6%. looking at the small caps come a great year to date so far. on the session, up by 1%. in the bond market, this is how i am going to look at things through the next couple of months. twos, tens, and 30's. we will get pummeled by better data in america and be on the move through a lot of it, with yields pinned to the floor on the 10 year. but at some point, we will start to get a move and a reaction to positive data because people

will start to have a real conversation about the fed also making a move. that is not necessarily the story for today, but it could be the story in a couple of months. tom: the real conversation is going to be an original conversation, and more than anything, but i know george bory will talk about in a bit, the original conversation is going to be the diffuse meant of all of that fiscal the diffusem -- the diffusement of all of that fiscal. jonathan: so not just the data, but also how the market response to that economic data. get to this, it is about expectations. i think that is what we are really getting to. tom: i thought you were going to do coinbase. jonathan: romaine will do that for you in a moment. this is the expectation story. we came out of lockdown, we reopened, andy barr was set to low -- and the bar was set too low.

the story right now -- thank you, tom -- is the bar is set here. i wonder where the we can get the same kind of lift we saw a relative to expectations that we saw last year, or whether we have been conditioned to understand how quickly this economy can snap back. once again, something we need to look at through the next couple of months as we have expectations that we do get a lift this year. he does have coinbase, so you are lucky. good morning, romaine. francine: i always --romaine: i always try to deliver here. the executives basically saying they do see the economic recovery intact, credit cost going in the right direction, and of course, that trading revenue doing quite well. classes this climb up about 4% on word from -- glaxosmithkline

up about 4% on word from "the financial times" on elliott taking a big stake. it was down about 33% from its all-time highs, so you can see why an activist investor might want to kick the tires here and see if they can extract a little bit more value. it was quite a day yesterday for coinbase. we should first say, by every fundamental measure, this was a successful listing. it debuted at $381. it came down to close at around $320. but still, you have a stock that was totally valued in the private market at about $90 billion. as of yesterday in the public market, it was valued at just below $90 billion. it is getting a little bit of a bid today. you've got word here that cathie wood jumped in yesterday and picked up about 750,000 shares. how many did you buy?

tom: i didn't buy. ferro loaded the boat. very quickly, what i would note is -- jonathan: he couldn't help it, romaine. [laughter] tom: over at moffitt nathanson, they have a $600 price target on coinbase. romaine: well, if you care. look, there's two big deals. ppd apparently being bought by thermo fisher. tom: what do you think this is, "the close? " romaine: this is a big deal. they are finally splitting ways, dell going to fully spin off -- tom: i love michael. he's been milking this for years. romaine: do you still have a dell? tom: we got rid of it a month ago, two months ago.

romaine: what do you use now? tom: i don't know, acer? jonathan: he uses an apple mac. it is a big apple mac, too. tom: are you done? [laughter] lisa: romaine is like, get me out of here. tom: this afternoon, coinbase will be $550 or something like that. look for "the close" this afternoon. right now, george bory joining us of wells fargo. he will give us some wisdom on fixed income. jon ferro is focused on the short end of the market. how will jerome powell move the short end of the market? george: good morning, everyone. thanks for having me on. seems like a pretty punchy show this morning. good to liven it up some bond talk. [laughter] powell has already made it very clear what they intend to do. they are not doing anything. they are going to sit tight for as long as they possibly can. jon mentioned it before.

market dominance is about expectation. expectations are high for very strong economic outcome. that is pretty much consensus for the most part. expectations are that inflation is going to pop as well. we are going to see pretty strong numbers over the next couple of months for a whole host of reasons. but the question is, when we get to august, september, october, when we are three months out, if the data is still strong, and particular inflation data, what does the fed do? can the fed really hold on? this fed, it started to lead, but it often follows the market. the market tries to push forward . the fed has held its line so far , but the question is, can they continue to do that if the data not only surprises to the upside, but persists to surprise to the upside? unfortunately, we are not going to know that for a couple of

months. i look a lot at near-term indicators. the expectations are already very high. we are going to see strong data. the question is, three months out, if that data is still strong, can they continue to keep rates low? or will they need to signal that they need to shift policy at some point in the future? jonathan: i think we agree this is deeper into summer. we are going to have to take the conversation at some point, haven't we? do you think we need to define what substantial further progress is? so far, it is working well for the fed. but as you say, deeper into the summer, we need some real conversation about the data, don't we? george: we do, and i think the fed has learned a lot of lessons from the last taper tantrum. they want to give as much forward guidance as possible. i think that is one thing the fed will try to do with very subtle nudges, very subtle shifts in expectations. they want to lead the market to

the point of actual change. they don't want to shock the market. that is something that i think we will look forward to. tapering, that will be a bigger challenge because once they decide to shift their purchases and allow the market to more freely trade, that will be a notable shift that will affect liquidity's, rates, but perhaps more importantly, at that point in time, the market is likely to have adjusted already. that is one thing that the fed is doing. they are anchoring the front end, letting the long end move higher, letting the curve steepen. that allows the market to adjust , to be paired for that eventuality of a taper. but as you point out, it will be volatile. we don't think it will be as volatile as last time because they learned their lesson from the last taper tantrum. lisa: george, thank you for

bringing bond talk to an otherwise punchy show, which has definitely gone off the rails. speaking of tapering and how they taper, whether the market has already priced that in my hbc's stephen major has said that yields on the 10 year have already priced in some sort of end to the acceleration in bond purchases. yesterday, fed chair jay powell said they are not actually going to sell anything in their portfolio, just let it start to run off. is that priced in? george: that is an excellent point. they have been very clear they are not going to do anymore. i think this kind of relative sense of expectations is they went from kind of an accelerating program to support the market to sitting now at a neutral position to allow the market to adjust, and then eventually, they will talk about their sort of wind down of the program. what the market expects right now, the market does not expect any additional liquidity or additional change in program, so we are sort of teeing it up for

that next what i would call deceleration of the program. that is still a few months away. they still have plenty of time and a lot of runway to adjust the market expectations. but as you point out, i some of the pundits have already said, the market is starting to expect that. so the shape of the curve is probably one of the best indicators of market expectations. the twos-tens curve of roughly 150 basis points, that sort of level would tell you that the market is pretty primed for strong economic growth, he bit of a modest uptick in inflation, and less support from the central banks over time. but as we point out, that point in time is still very far off in the future. jonathan: george, always good to see you, sir. george: thanks very much. . have a great day, everyone. jonathan: george bory, wells

fargo fixed income specialist, on the debate ahead. as the year progresses and we get deeper into summer, that conversation around the fed's next move and the singlet sing -- and the sequencing of the next move gets louder. tom: not only here, but internationally as well. you see turkey at the 19% rate today. i know that is idiosyncratic, but it all folds in together. it is not just about a simple a stick focus on the 10 year yield. jonathan: we were expecting some sanctions perhaps as early as today on russia from the u.s. administration. this coming from "the washington post," the united states has sanctioned russian debt issued after june 14. that headline just crossing, that the united states has sanctioned russian debt issued after june 14. tom: will u.s. banks be allowed to participate in russian debt transactions at the initial

offering of them, or down the road? jonathan: there will be suspicion at this point. the answer to that could be no, but we need to find out from the administration officially, a little bit later perhaps today. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equities are up nicely, up 0.4%. retail sales in america 15 minutes away -- in america 15 minutes away -- in america 50 minutes away. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. in a phone call with vladimir putin, president biden warned he would defend u.s. interests. the next move could come as early as today. the biden adminstration is expected to impose sanctions on russia for alleged misconduct, including efforts to disrupt. . the u.s. presence will election a number of russian -- to disrupt the u.s. presidential election. a number of russian entities and

individuals will be sanctioned. last week, the biden adminstration added seven chinese supercomputing firms to a blacklist. chinese automaker geely will use its electric car unit to take on tech giants like apple. both of them also want to enter the booming electric vehicle market. >> we were exactly created by this -- created for this, spun off by geely. it's culture is no different from any other tech company. ritika: geely wants to start delivering electric cars in september. 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.

♪

>> expect tremendous volatility in this. it is going to be unstable in

terms of investors and analysts understanding what coinbase actually is. it makes most of its money on the trading of bitcoin and ether. those are the two biggest. it is going into a lot of other cryptocurrencies and crypto assets. jonathan: that was cathie wood, ark investment founder, ceo, and cio. equity futures look like this on the s&p 500, up 0.5%. we advance in the equity market in america. retail sales at 8:30 eastern. going into that, yields down two basis points. 1.6130% on the u.s. 10 year. sonali basak standing by on earnings coming out of citi. our team here at bloomberg were leading with the news this morning that the biden adminstration is poised to impose a new raft of sanctions on russia, including some sanctions potentially around buying new sovereign debt.

here's a quote from reuters this morning. officials who spoke on condition of anonymity said biden would bar u.s. institutions from taking part in the primary market for ruble denominated russian sovereign bonds from june 14. i stress the issue here, ruble denominated russian sovereign bonds, because they have been barred for taking part in non-ruble denominated russian sovereign bonds since 2014. i have already caught up with dan tannenbaum, sanctions expert, who said this would make a difference, in the same way that some of the restrictions in the capital market did around 2014. tom: we will defer to mr. tennenbaum, truly one of the nation's experts on sanctions. but i do agree, it does really show a push on foreign policy, including the border

with ukraine. who i want to talk to about all of this coinbase stuff, that is michael wolff. he has a wonderful cross-section of experience and technology. his acclaimed book is on entertainment and technology. we are thrilled that the woman from activate could join us this morning -- that the gentleman from activate could join us this morning. it is set up based on an invented scarcity. bitcoin has a structured scarce asset feature. how does coinbase deal with the fragility of an invented scarcity? how are they going to deal with that strategically forward? michael: the way to think about coinbase is as an exchange. it takes 0.5% on every transaction. so the real comparison is the new york stock exchange, nasdaq,

and by the way, coinbase's valuation is about the same as the other two added up. so it is not a question. when we look at coinbase, we should not be worried about the volatility of the underlying cryptocurrency. what we really should be looking at is the number of transactions which are likely to increase. lisa: how much should we be worried about regulation? michael: there's a lot to be ironed out. one of the issues is tax treatment. the irs says bitcoin is not currency, but rather property. the regulation has always taken a while to catch up with technology. in this case, it looks like it is keeping pace. the bigger issue is that this offering is really more about the sort of coming out party or the first public listing of a currency which is going to be an

inflection point for the rest of all digital currencies. lisa: i hope i have $100 billion party coming out, too. i wonder generally whether the valuations are inflated, based on everyone trying to get ahead of growth in the next big thing. how do you parse that out at a time when you have banks flush with cash, looking to buy fintech? when you have individuals looking for the next way of making efficient payments? george: what is fascinate -- michael: what is fascinating about coinbase is this is the first way in which individuals can be a part of this new market for cryptocurrencies without being subject themselves to the volatility those currencies have. i think we are going to see that coinbase is going to be held widely, that this market cap will be held by index funds.

it will allow investors and individuals to take part in this entire move towards her to currencies. tom: is it like an ebay equivalent of years ago, where there has been a structure, there has been a launch, there has been a huge repricing on advancement in price, and now basically it is dead money forward? michael: i don't think so. once again, this is an exchange. it is likely to be one of the few exchanges that dominates this business. it is actually the second largest exchange worldwide. the largest is another company. we see so much more activity. we have only seen so far bitcoin as really an investment vehicle of speculation. it is only beginning as a vehicle of payment. jonathan: good to catch up, as always. michael j wolf of activate, so

much to do this morning. need to return to this sanctions story around russia. the team-leading with some of the reporting this morning around these sanctions we could expect this morning. reuters out with their own version of the story in the last hour or so on the officials they spoke to on the condition of anonymity, confirming lots of reporting elsewhere about what could happen around the issuance of russian debt and the participation of u.s. financial institutions. according to reuters, the president would bar institutions from taking part in the capital market on ruble denominated russian sovereign bonds. reminder that those u.s. financial institutions have been barred from taking part in the primary market for non-ruble sovereign bonds. certainly starting to tie things up with russia. this is the president's first real effort at doing so. tom: but i would suggest is the real response here, sure, we will get a response from mr.

putin, but i am fascinated by the allied response across the continent of europe. jonathan: confirming some of the reporting we lead with at bloomberg this morning, i am with you. the multilateral effort this administration has stressed over the last couple of months, will we see that on this particular stage of russia? tom: not only that, but the reason for the biden action is i am going to suggest very u.s. specific. how will the allies respond to that, versus a more general statement, say on energy transfer in europe? jonathan: there is the headline, the united states to ban banks from buying new russian sovereign debt from june 14. tom: we are going to see how ruble reacts. i want to emphasize, we see it weaker here by 1.6% right now. we also want to see what euro ruble does as well. jonathan: conversation continues on foreign policy, on economic

data. retail sales about 30 minutes away. on earnings, citigroup set to report. heard on bloomberg radio, seen on bloomberg tv. alongside tom keene and lisa abramowicz, i'm jonathan ferro. this is "bloomberg surveillance ." ♪ surveillance ." ♪

>> we are in uncharted territory. there's a lot of unknowns as we look beyond three to six months. >> the economy generates private sector demand, and then the banks will be happy again. >> what is going to power consumer spending is the services side of the economy, not the good side. >> everything we follow would suggest every bit of inflation is being passed through, and then some. >> the market is overly price for that inflation risk in the near-term. we are still going to have higher inflation to come. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.