see faster prices open. >> we move into the spirit of elevated inflation because of the margin spike. >> we think it is transitory and we have to admit there's a fair chance inflation will turn out to be sticky. >> there's no question we will have a pullback at some point but i don't think it's in the near future. >> this is "bloomberg surveillance." with tom keene, jonathan ferro and lisa abramowicz. jonathan: good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures up a third of 1% on the s&p 500. adp data in focus. can we start with secretary yellen? tom: i thought abramowitz would start yelling. this is a bunch of baloney.

the secretary of treasury came out, i said something wrong, jerome got her on the phone and said clarify. she clarified. tom: there's no wrote -- jonathan: there's no reporting he got her on the phone. i saw nothing in rates. nothing whatsoever. it was all equities, it was all the nasdaq and we were already down quite a bit. tom: i am upset now. we've got to get serious. we have three days of jobs data here. lisa is fired up because -- because of the recovery. it is cinco de mayo. lisa: brilliant. jonathan: that was wonderful. should i save this? we go into this payrolls report and everybody is talking about how big the number will be paid

how big does it need to be to recalibrate expectations? we 2 million plus april jobs to see the fed changes. going into this one are we talking about asymmetric risk? yields lower on a disappointing trend because we need to see a bigger number to get yields to go the other way? lisa: i think the moves we saw edify that. janet yellen saying what she said, of the move was not that significant but if the fed were to act, that would suppress longer-term rates. it would suppress longer-term inflation expectations. the bias is to down siding yields and equities. frankly the bar is getting higher and higher. jonathan: nasdaq 100 futures positive by about a half of 1%. in search of a 61 .1% employment population ratio. we will talk about that going

into friday. >> all that means is getting the amount of employees compared to the population back to where it was in february of last year. that's a jump. getting up to 2 million. -- getting up to 2 million is easy. i'd be stunned if we saw that. jonathan: here's the hard work we have to do this morning. price action quickly, i've been trying for years paid 15 points on the s&p. we are about four tense of 1%. yields were lower yesterday at the long end. i saw nothing at the front end. higher interest rates, why did we not get a move? for many people right now there is an argument the bond market already moved. it was an equity market story. that's where the pain was and it was already there into those

comments. lisa: we need to tease that out, the idea that equities are more sensitive to rate decisions by the federal reserve than the bond market. that is an interesting development. i'm watching the adp report figures, the expectation is for a surge to 850,000. i struggle to understand the correlation between the adp numbers in the jobs numbers we get and that we will get on friday. how predictive is this? we get the quarterly treasury refunding agreement. this is expected not to change. this is important because people are talking about peak net issuance of trading. demand could potentially help pick up the slack and keep yields where they are. 10:00 a.m. we get the april

services sector data. this is the question mark. services inflation. how much are we getting activity picking up here after the incredible boom we've seen in manufacturing? jonathan: reopen and get back to work seems to be the message. did you see this from jamie dimon? we want people back at work in my view is sometime in september or october it will look like it did before. here's the final line. i'm about to cancel all my zoom meetings, i'm done with it. tom: i think i've been on like one zoom meeting since this started. i've got a staff to help me not be on zoo meetings. the managers are exhausted, the executives are exhausted, of the employees are exhausted by zoo meetings. everybody has an opinion. mine doesn't matter.

what we are hearing is they want the troops in the office. jonathan: we hear that from goldman and jp morgan. let's bring in jeff henriksen. if we can just start and you can help us frame how much work there is to do in this labor market? >> i think there is quite a bit. we are making strides, but i think you've got a ways to go to get a pre-pandemic employment. i think it somewhere just south of 10 million jobs we have to recapture. i think you will see monetary and fiscal policy is going pedal to the metal until we get there. i would factor in that this policy will stay where it is at and think really hard about what that means of how you should be allocating among assets.

tom: define your barbell? what is your strategy? jeff: on the one hand. i don't think any investor wants to be on the wrong side of some big factor rotation out of value versus growth. i think there opportunities in traditional value trades. businesses that are of a decent quality, trading price significant below in terms of value. on the others we can find interesting opportunities that are more growth compounding type of companies that where the upside is not being properly appreciated by the market. you might say that's crazy because it's been on such a tear. you can still find opportunities in higher quality businesses. what we are advocating for is a barbell strategy we're looking at pricing both in traditional value and what you would call growth or higher-quality

business. >> it seems like everyone is doing this, trying to find idiosyncratic opportunities, the mispricing in a largely overpriced market. how are you looking for this? how difficult is this to find? jeff: very difficult. as bad as it was for our country, if you were a stock picker it was an amazing time because there were so many locations of obvious value. you might get 100 ideas in march or april and we were finding 20 or 30 that were interesting. now you look at 100 and you might find two or four. you have to look at stuff. the quantitative investors have carved away the obvious mispricing. the value you are discovering, you can just obviously stay on the balance sheet, it to be something a little bit harder to find.

but it is there. you can find opportunities. i'm happy with what we found. tom: this is important what you've just observed. you have to increase your study to find the few in there when you get to a richly priced market. what are the ratio studies you are using to find value if they are not within? jeff: what i try to find is what is this business going to look like. tom: this is critical. this is really important, is your way to find value to increase your terminal value out from three years to five years or from five to seven years? >> i think that is dangerous. a better way to put it is you want to look at the unit

economics of the business in question and ask questions on what are these unit economics going to look like in five years and what does that imply about the earning flow. i think when you start tweaking a dcf model. i can make it say whatever i want. what you need to understand is talking but a growth company, you need to do deep research on the unit economics of the business you are analyzing so you can say with confidence in five years this will be generating x amount of revenue and we think that will translate to even odd cash flow. and we think -- it can be something staring you in the face. you have to do more research to pull out those unit economics. you need to talk to people in the industry. you can just open it up and it will slap you in the face. jonathan: remember the good old

days. thank you, appreciate it. the nasdaq 100 bouncing back by a half of 1%. news out of europe, the eu proposals to rein in subsidized foreign firms seeking the power to find companies adding unfair foreign aid. every time i said the word for in their, it is china -- the word foreign there, it was china. tom: a lot of the reading i've been doing on china right now really wraps back to this delusion that the s oes had gone away. they haven't. lisa: the signal versus the noise. the idea is people try to crack down on china and yet still trade remains dominant with china.

jonathan: live on bloomberg television, this is "bloomberg surveillance" as we count you down to a payrolls report this friday. 8:15 eastern time. 41 .72 on the s&p 500. this is bloomberg. ♪ >> with the first word news. treasury secretary janet yellen wants to make it clear she was not forecasting interest rate hikes to rein in any inflation spurred by president biden's proposed spending. that came after remarks earlier in the day that ruffled. she said the fed has the tools to deal with it. the group of seven nations is considering a u.s. proposal to counter with the white house sees as china economic coercion. a paper was circulated before a

meeting of g-7 foreign ministers in london. the u.s. wants to ensure a response to chinese moves such as its economic threat or the belt and road initiative. the coronavirus wave that plunged india into a health crisis has the potential to get worse. some researchers project the death toll could more than double from where it is now. one problem is a shortage of test could prolong the outbreak for over a month. spacex has received more than 500,000 preorders for its startling satellite internet service. elon musk says he anticipates no technical problems meeting the demand space has not said a data for the launch. the company has to deploy 12,000 satellites. bill and melinda gates have begun dividing up their $145 billion fortune. cascade investment has transferred securities to his wife.

most of that was in shares of canadian national railway. 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. this is bloomberg. ♪ ♪

>> interest rates will have to

rise somewhat to make sure our economy does not overheat even though the additional spending is relatively small relative to the size of the economy. it could cause some very modest increases in interest rates to get that reallocation. jonathan: those comments shaking things up yesterday. janet yellen followed on those comments by clarifying it's not something i particularly am recommending. i think that person is me. from new york city, good morning. futures up a third of 1% on the s&p. up 64. up about a basis point. euro-dollar just about getting its head above water. 1.2008 and pretty much flat on the session.

anything extra to say on secretary yellen? tom: amazon top to bottom was down 8% paid you would've thought the world was coming to an end. jonathan: did not think much of it. tom: it's a little bit better. lisa: i know we will get to emily but what you make of the fact that janet yellen came out and clarified. seeming to edify concerns people have gotten away making assumptions. tom: we have an esteemed central banker is moved over to the executive branch prayed for some delicacies that have to be walked prayed that's all. -- walk through. that's all. tom: it's a rare comment from capital official -- jonathan: it's a rare comment from a capital official. i think that's what made it more

powerful. we haven't had those words from the administration on the federal reserve at all. i think it's prudent to say we try to roll out a massive stimulus plan, huge infrastructure plan, this may or may not happen. tom: here is what matters particularly to the politicians. it's going on right now. emily wilkins, jonathan ferro knows it well. i'm looking really, a boon jobs report and politicians will have to deal with what john has mentioned. is washington ready for full employment? lisa: you saw janet yellen say they have a plan if that does happen. president biden and the biden administration, they are

monitoring inflation very closely now. they understand if it starts going up that they will see repeated attacks from congressional republicans saying we don't need this, it's way too big and it will only further hurt the economy. the idea behind president biden's plan with infrastructure and social infrastructure component is to live up to the campaign promise and deliver something for the american people that's fresh in their mind when the 22 midterms roll around. jonathan: we have seen anecdotal evidence and from the pmi the company is struggling to hire. given how much is lost in this labor market has been lost over the past 12 months, here's a line out of the governor of montana. the vast expansion is now doing more harm than good. need to incentivize the people of montana to reenter the workforce offering financial incentives for doing that and

basically scrapping the additional federal help being offered as well paid there's a real break across the country and i wonder what the message will be from the white house? emily: he said he is scrapping the additional un-implement benefits that's going to offer incentives to go back to work. i think what you will hear from the white house is a line we've heard from them before, we are still many millions of people who are unemployed who were not employed in february of 2020. montana's governor might think now is the time to lessen incentives for the unemployed, there are others struggling to find jobs and work. at this point lawmakers are aware there is a graphic change coming. we have more than 50% of all

u.s. adults are vaccinated and have a shot. positioning for the biden administration moving those from domestic to international. that's going to have a ripple effect on how the administration and democrats in congress as a whole looks at what other incentives might be or not be needed in the coming months. lisa: a lot of economists who come on the show have talked about that theory. that some of the benefits people got as a result of covid led them to remove himself from the workforce and not come back sooner. people basically debunking that and saying that hasn't been the truth. biden will talk about implementation of the stimulus path. i'm curious how he will message this to try and say it was effective. jonathan: you know what the magic solution is, i think they'll be the solution.

maybe that's the objective to provide sufficient federal relief that forces companies who want to hire to put up wages. there could be an issue further down the road. >> whether or not it's the objective hasn't been clear. many objectives on their plate right now. president biden has said he is supportive of that $15 minimum wage. we already know that cannot pass in congress and get through the reconciliation process. so we are not getting that $15 minimum wage right now unless something drastic and on predictive happens with that filibuster we don't have any indication at that point that that's going to happen. so this could be pressure on companies. i think president biden about the minimum wage trying to find a way to get the economy back up and running so that it is strong when democrats are running in the midterms. jonathan: good to catch up.

just a flavor of the boom in this country and the market. tom: you see this state to take -- state to state. david westin's conversation, there is a lot in common. montana is different. they move from 11.9% down to 3.8%. maybe they start counting the grizzly bears. do you know where montana is? jonathan: it's up into the left isn't it? lisa: that's brilliant. jonathan: north of london. isn't that the cheat guide for anyone looking at the english map -- england map? from new york city this morning, good morning. euro-dollar 1.2011.

we advanced 4/10 of 1% heard a single basis point on the 10 year. more data still to come, the adp report later this morning. this is bloomberg. ♪

>> from new york city and our audience worldwide, this is "bloomberg surveillance." a bounce back up 16 on the s&p. we advanced 4/10 of 1% after the biggest one-day loss on the nasdaq we bounce back there. wasn't it curious yesterday a couple of comments from secretary yellen on rates did more to equities than rates. this is something dani burger looked at. i think it's important. the nasdaq takes it on the chin yesterday. down 1.9%. the kbw banks index, all-time higher 1.4%. what would you think was happening with rates?

higher interest rates, not what we got. yields basically where they were yesterday. up about a basis point today. that for me is what was curious about yesterday. obsession over rates but no real movement in rates. tom: the four digits right now. it's been like a rock with the greater negative lower real -- lower yield rates. that has been important as well. we drive forward this conversation. her work at the dallas fed was noted. thank you so much for joining this morning. we get one point x million, 900,000 last month and rounded up, it's a service sector

recovery. what does a service sector recovery due to wage inflation? julia: for average hourly earnings we may see a decline on a monthly basis and on an annual basis because there was such a huge shift in the workers that job losses last year were so towards the lower wage workers but it rose strongly. now as lower paid service workers come back that will depress the aggregate wage bill. just like with the inflation base effect we will have to look through some of this volatility and look at other gauges like employment cost index to get a better sense of what's happening , adjusting for the composition of the workforce. tom: does the fed react to goods inflation dynamics or service sector dynamics or are they blind to it? julia: all inflation matters and

we have a very unusual shift in relative prices. the fed has already flagged they are looking for bottleneck on temporary inflation that we will get the resetting of crisis -- prices and pass through these commodity prices. it's not an ongoing process of price increases year after year. that tends to come from wages. that will take some time for that dynamic to develop. employers are complaining right now but that's because they have been enjoying really nice profit margins and they have to pay out some of that to get workers back. we hear that every cycle. that's particularly compressed. we have millions of people to get back to work. another month of around one million would certainly be impressive and unprecedented and yet so as a whole that we are digging out of. >> do you have confidence the

participation rate does recover? julia: i do have confidence that the purchase patient rate among prime age women will recover. the women who lost their jobs, chair powell pointed this out yesterday, these women need to work, they are in their prime years and they have been sidelined largely because of school closings and juggling family responsibility, they will come back and my guess is pretty quickly. what's a bigger question is some of the older workers that left the workforce, the six he four-year-olds, we saw a lot of them move to the sidelines. that's a more open question. do they come back later? we will have to wait and see. jonathan: how quickly this labor market, is that what you would be focusing on in the months to come? julia: the participation rate?

it will be a really important gauge for the fed. we care about monetary policy, they will be looking for that rebound in participation and i think it will be different than prior cycles. before we would have to see several years of labor market recovery to see that participation recover. i think there's unique factors here that can make that happen more quickly. more important than the unemployment rate it self is just jobs in participation and getting that population ratio back up to where it was or close to where it was before this all happened. lisa: steve came out this morning saying it would take 2 million job for the month of april or more to make the markets nervous that the fed changed its stance. you agree that's how high the bar is? >> is a high bar and it will

have to be several months of this. i think if we get million plus for several months, the fed might be ready to say that substantial progress and start laying the groundwork for tapering. with the exception of maybe dallas fed president kaplan, but chair powell and some of the other leadership we heard this week all found very patient, really committed to the new reaction function where you wait for that recovery happens. lisa: we are talking about the incredible progress of the labor market and inflationary pressures when it comes to supply chain disruption. there was a story showing the birth rate in the united states fell to the lowest level since the 1970's particularly talking about the fertility rate, the average number of babies a woman will have in her life fell to

1.6. this is an all-time low. how does this lead into the inflation discussion as a disinflationary force? julia: if we look through this reopening rush we are in the middle of, what lies beyond this and, -- demographics are a key driver of this. it's well below replacement rates so like europe and japan we are looking down the road at a declining population, saving rates have been immigration but that has also slowed for policy reasons first and then for covid second. we decided to shut the doors and that's been the secret sauce for the united states but kept up with more healthy growing demographics. we are looking at a much more subdued backdrop for population that had been a disinflationary force. people can argue it both ways.

maybe you get wage pressure. but we've seen in japan and europe that an aging workforce tends to bring downward pressure on inflation. that's certainly one of the insured in factors to the fed hesitancy or belief that a lot of this reopening dynamic will be transitory in terms of inflationary -- inflation and we might have that headwind from demographics beyond 2021. jonathan: let's -- tom: let's melted this together with some monetary policy. should the fed to be looking at inflation-adjusted real dynamics now or should they be looking more nominal and thinking more nominal dynamics. >> they are focused more on the real dynamics. the nominal dynamics are all over the place. we shut it down and turned it back on. it's coming with a lot of messy friction. we are at the height of the

fiscal impulse. tom: she just said what yet said yesterday -- what yellen should have said yesterday. jonathan: you did cut julia coronado off. tom: she nailed what yellen was saying. jonathan: thank you, julia. julia: always happy to echo janet yellen. jonathan: julia coronado there. thank you very much. it echoed the word of john williams of the new york fed and what it -- what was amazing about that is he was talking about next year, basically teeing up the prospect of the supply side of the economy responding in these transitory forces in the inflation data. they will start to work themselves out through the year into next year. that will be where the bar is heard they will make the decision by the end of this

year. as to whether this is a truly transitory. get used to it. it's good to be going on for months. tom: frankly as part of the transitory international travel and trade. the unique u.s. domestic recovery. all i can say is we are headed for a fully employed america. the when of it, we do not know. jonathan: in search of a 61.1% employment population ratio. lisa: people looking at that participation rate as a key metric. tom is the only one still playing the drinking game. making a point moving on about the federal reserve talking about next year. jay powell, the vice chairs are all coming up for reelection. they could be removed from the fed in the upcoming year by joe biden and there is some speculation frankly fueled by

jared bernstein that they could be replaced which raises questions about the constancy of fed policy. their policies are really supported the backdrop. jonathan: let's be clear on who could replace chairman powell. we've been think, governor brainard becoming chairman brainard. with that in mind i don't think this market has too much to be concerned about. is there really going to be a change in the federal reserve? tom: i'm good to go back towards the parlor game and what we heard from a lot of equity strategist, it's about the recovery of america, the earning strength that is underestimated. pick your 15 walls of worry. jonathan: what was his response, i won't say yes or no. lisa: he could have just said that's on the table, we are happy where fed policy is. could have said so many things but i'm not in a say anything

one way or another. jonathan: what would you like him to say? tom: we have a new president, he wants his person in there. jonathan: it is neither yes nor no. tom: somebody say transitory open -- transitorial. 40 174 on the s&p 500, up 15 points. from new york city, good morning. this is bloomberg. ♪ >> with the first word news, president biden wants 70% of u.s. adults to receive a least one dose of coronavirus vaccine by july 4. 56% of adults have received at least one shot. the president says to make it easier, the government has been

encouraging vaccination sites to offer walk in appointments. london is emerging from lockdown . london accounts for a quarter of the uk's output and suffered almost 30% of a drop in payrolls nationwide. residents are moving to the suburbs as britain's exit from the eu is draining away high-paying work in finance. the price of -- jumped to their highest point in a most a decade. -- almost a decade. its clients and sitting you for your low in march last year. they've stoped demand for metals, food and energy. the drought in the u.s. fell to its lowest level in 1979. it was the sixth annual drop in a row.

the decline will likely continue this year. 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. ♪

>> we know many adults have not in vaccinated because they have found it too confusing or too

difficult or too inconvenient to get a shot. for those having trouble finding a location or making an appointment, we will make it easier than ever. jonathan: new targets from the president of the united states. good morning. here is the price action in your equity market. up about 6/10 of 1% on the nasdaq. the treasury responding announcement comes out at 8:30 eastern. in about one hour and 40 minutes. the fx euro market dollar unchanged. the new target from the president of the united states, 70% vaccinated by july 4. currently 56% of adults have had at least one dose. 41% are fully vaccinated. tom: there is some work to do.

we are under 2 million. day after day, the young kids hopefully coming on as well. lauren sauer joins us now. she is clear eyed on this whole mess and reading in on it worldwide. i'm going to go back to shakespeare. what is in a name? i want to talk about the brand nameism of all this. what is in the name of getting confidence of getting a vaccine? lauren: it's a great question and it's an important one as we move forward. i think people are more comfortable with names they recognize. pfizer has been around, johnson & johnson is a family name.

as we think about how we market towards people who are not getting vaccinated, places where we don't have that uptake, we think of the brands they trust and linking those brands with people they trust. if you can show the safety data, showing how effective and safe these vaccines are, it could potentially a huge push forward. tom: how do we sell it? what is your means to sell people who are truly ambivalent on what they should do? >> i think we will start to see people -- these celebrities and famous people, a trusted community leaders being a voice of you should get this which i think will be really valuable to engage communities. i also think as more and more people get vaccinated, seeing

friends and loved ones get the vaccine and who are safe and who are still healthy and who have been protected from coronavirus is huge. the impact of that cannot be underestimated. i think having public campaigns of real people who have gone out every day who have gone out and gotten their vaccine and are back to work or back to being safe, are able to take advantage of those revised guidelines is going to be a big step forward. we have to make sure we are not letting communities be insular and showing them the people are getting vaccinated and building up that trust again. lisa: new yesterday is offering free beer. you have maryland saying he will hand out $100 to get vaccinated. of detroit saying they will pay $50 to people who drive other people to get vaccinated. there is a use it or lose it kind of mentality that is

increasing among the biden administration. how much does that play into the vaccine diplomacy you see engaging -- you see them engaging in, sending into hard-hit nations who don't have enough? lauren: that is critical independent of our vaccination rates. reporting an increase in global vaccination coverage ease good practice for the u.s. and the world. it keeps everyone more safe. the more people we get vaccinated globally, any vaccine that gets into an arm is better for everyone. there is a huge piece around making sure we are not protecting those stores and letting them expire. the logistics are incredible. all the work going into that cannot be discounted. it is a strategy game but it is also a movement and operations game that takes a ton of

resources. when we think about scale up of production, that should be one of the top priorities, making sure all that vaccine we are producing goes directly to sites like covax who can distribute it . jonathan: help me get out of the new york bubble. the president saying we know many adults haven't been vaccinated because they found it too confusing or too difficult or too inconvenient to get a shot. it's hard to say that's true in new york city. is that true of the rest of the country and if so, where? lauren: it is true in areas with there is less public transportation, less access to technology for rural communities for example. finding sites that are distributing vaccine that are keeping acts -- keeping their hours regular is the place where he is thinking about when he

says the sorts of things. the key piece didn't touch on as much is making sure people come back for that second dose. making sure they get that full coverage. that has been a little bit of a gap we are seeing come into play. maybe identifying people can only get one dose and making sure they have access to johnson & johnson and then identifying those communities that either don't have transportation or don't have technology and getting the resources they need. i saw you could donate a vaccine ride on uber which is amazing. jonathan: we have to do way more about telling people whether a test what they can and cannot do once they are vaccinated. great to catch up. johns hopkins associate professor of emergency medicine. here's how it finishes at the very bottom. time to book your holidays to italy, we look forward to welcoming you again.

europe wants to reopen for business and reopen for tourism and do it quickly prayed tom: -- quickly. tom: you know the cities better than i do but you wonder about the morality parts -- the more rural parts. they've got to get this airline process straightened out fast. jonathan: allowing people who live in italy to move between regions freely. the big challenges opening up the airport and building out capacity in a bigger way. allowing foreigners to come through. trying to get that reciprocation with the united states of america. lisa: trying to get consistent standards of what's excepted with vaccines, what type of vaccine is accepted and what you have to present. these are some of the issues they need to work out. jonathan: we promised we would

give them some time. luke from ups asset management strategies. -- ubs asset management strategies. this is bloomberg. ♪

♪ >> right now the markets are being fed an incredible mix of positive news. >> we are going to see faster prices within consumer prices and wages. >> we do think it is transitory, but we also have to accept that there's a very fair chance that inflation will turn out to be sticky. >> there's no question in my mind we will have a pullback at some point, but i don't think it is in the near future. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: it is the yellen tantrum. i did that just to wind up tom. [laughter] for our audience worldwide, this is "bloomberg surveillance," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. we snap back from the losses of yesterday on the s&p, up about 0.3%, the nasdaq up 0.6%.