the next couple of months, we will cease to forget lee's stronger inflation. >> the consumer is still spending in excess. >> this summer will be huge. the bounce back in oil demand will be significantly more than people have in expecting. >> currently some demand prices are out of control. it is almost hyperbolic. >> inventory is low and demand is roaring so prices are extraordinarily volatile. >> this is bloomberg surveillance. jonathan: it is cpi wednesday. good morning. it is bloomberg surveillance. i'm jonathan fara. -- on jonathan ferro. lisa abramovitz is out of the building. tom: jobs day friday?

maybe not. there is a mystery around better data on european gdp jonathan: you -- european gdp. jonathan: you used to the s word earlier -- you used the s word earlier, stagflation. why / -- why / --why? tom: it is that lingering fear that gdp may not be there. jonathan: i hear you --upside risk to inflation relative to expectation. tom: maybe. jonathan: yesterday we were blaming everything called inflation. tom: it was an odd day.

what i noticed it was nasdaq 500 coming out at the end of the day. write down i have the nasdaq 100 down -- right now i have the nasdaq 100 down. maybe it is jumble wednesday. jonathan: everywhere you look speaks to strong demand and a problem on the supply side. you see this survey that came out yesterday -- tom: john and i go blather, blather, blather. mckee really cares about job openings and that they were a boom. jonathan: we do not have real jobs! tom: we came in with ties today. jonathan: maybe we should come off at 8:35. futures, 41: 32.

a little bit of supply later, 40 odd billion coming to market. a euro dollar -- just to add fuel to the commodity debate, 71 up 7/10 of 1%. we have got a gasoline shortage. a lot of people on wall street will wait for this number to come out at 8:30 eastern, but for a lot of people they are experiencing inflation every day when they go to the fuel pump, when they go to the grocery store, when they pay the rent, when they try to buy a house. tom: gas is a part of it. there is a lot of rationalization by fancy people in suits, but it does matter.

the real yield continues to break down. the inflation-adjusted yields are just not happening. jonathan: a new bloomberg piece this morning suggested yield can go higher. tom: nominal yield can go higher. jonathan: for that matter yields can and should go higher. tom: as we go to retail sales on friday -- but on friday -- wednesday, it is like 14 flavors of inflation. jonathan: from a previous 1.6%, it is becoming year on year the headline number. tom: the number one thing we learned yesterday was pricing power among selected corporations and a lot of people i heard alluding to microsoft and the rest -- jonathan: let's bring in harm

bandholz of kiel university of applied sciences. how are you interpreting the coming data? harm: good morning. i have no tie --i hi apologize -- i apologize! it is as you talked about earlier. at the market is obsessed with inflation. we have a report coming out today that will show higher in nation. last year -- exactly a year ago, april, 2020 -- covid caused a big drop in the cpi. that base effect is now getting out of the system. it is why we get what jon talked earlier about. that year-over-year spike is the most in i think 10 years, so

this will make headlines. it will corroborate the market notion that inflation is spiking and all the inflation dangers are materializing. jonathan: just to jump in and look at the labor market, we had job openings surge yesterday to records, then you look at small business surveys. a record number said they were unable to fill positions. that job openings issue, the problem on the supply side, is it an issue solved by time or higher prices? harm: it does not go away with time. have been looking at these numbers. i have been using this as a reason that wages will go up and did has not really materialized

in the past. i am not quite sure it will materialize in the future. taking a step back, you mentioned stagflation. there may be a little of the latter part, inflation, but there will be no stag. the u.s. economy will grow strongly, the numbers are strong and the economy will grow at a very strong pace. this is all corroborated. i do not think it will lead to sustained, higher inflation. tom: in the last hour, and the borrow confirmed the resilience of the u.k. economy. goldman sachs readjusted the 2021 u.k. gdp. you gained worldwide fame with an essay on riyadh, saudi arabia and the price of oil.

we now have gasoline bringing crude back up to $70. harm: the market wants higher inflation right now. that is what it focuses on. you have for april these stronger numbers. we have gasoline shortages and as we all know, that boosts headline inflation and it trickles through to some of the core cpi numbers, so usually the core cpi is also positively affected when gasoline prices go up. this debate will stay with us. tom: part of your job, i know you do not have do you it in the ivory tower of kiel university, but part of it was linking inflation worries into what the stock market is going to do. what is your correlation there, if there is one? harm: if the stock market thanks

high inflation leads to high interest rates, the stock market does not like it. gradually rising prices, means higher pricing power, and that increases the cost tower. when we see the sale off -- selloff, we should not take it out of context. i know you like statistical numbers. the economist pe ratio has been three standard deviations above the average. during the.com -- stuck markets are expensive relative to the economy and if we see a couple days or so i've selloff, may be we must not take it out of -- tom: it is fabulous to have our

first guest of the morning talk and standard deviations! jonathan: the academic loosening up a little bit. tom: do you realize all his students on bitcoin -- own bitcoin? i hope they do not. [laughter] jonathan: we have got to leave you there. harm burnout -- harm bandholz. iowa, montana,, missouri tennessee, are joining a republican club of governors to get rid of the additional $300 of unemployment benefits. it is a political decision that will have economic consequences. jonathan: the university --

tom: the university of chicago has done brilliant work on this. there are selective states where clearly that unemployment aid really stops job formation, but there are just as many states where that is not true. how do you partition them? jonathan: the president raised to the fact that may be using one blunted to a love that fiscal policy in rural areas -- blunt tool of fiscal policy in rural areas -- tom: thank you! listeners and viewers in urban areas where there is higher unemployment, we are talking about gary, indiana. they need that unemployment aid. jonathan: does it have adverse effects? tom: i want to be more optimistic -- you will have

growth come in. imagine inflation wednesday in november! jonathan: cpi wednesday, inflation wednesday -- how are we going to brand this? the big four meeting the president of the united states in washington dc later today. we will catch up with the team down in washington later. from new york city, this is bloomberg. ♪ >> i'm ritika gupta. colonial pipeline knows -- colonial pipeline says i will know later today whether it can restart gasoline flows. shortages spread quickly across the eastern u.s.. even if colonial can restart today, it will take days to ramp

up operations. s rail stepped up its attacks on the gaza strip overnight -- israel stepped up its attacks on the gaza strip overnight. israel warplanes pounded gaza with airstrikes. five have died in israel. it seems to be the most serious escalation sends a 2014 war in gaza. there was a reason -- christopher miller well tell a house committee today he thought the deployment would heighten speculation of a government to. he will testify -- a government coup. it is then another tax receipt -- they have won a court fight over the 3.3 million tax fight.

apple successfully challenged a record $15.8 billion eu tax order. powered by more than 127 journalists, i'm ritika gupta, this is bloomberg. ♪ ♪

♪ >> if we tighten the stock

market front. they agree that markets are frothy but they are determined to keep rates low until they get more people back. jonathan: from new york city this morning, alongside i am tom keene, i am -- alongside tom keene, i am jonathan ferro. i was expecting that. in the bottom market, yields come in almost to the basis point. $41 alien of 10 year notes -- $41 billion of 10 year notes coming to market. crude up eight to of a percent just after 8.66. tom: the 20 year swiss full

facing credit to a positive .091 -- that is huge. right now in washington, jon wants to talk about things that are serious now. emily, ms. cheney is out today from wyoming. this has been widely reported. we have got the republican party, where we have got 100 republicans planning to threaten -- what in god's name is " plan to threaten"? what can the republican -- what can liz cheney do against the group of trump? >> if you look at where republican voters are, and voters are the ones who ultimately have the power, the voters are still with trump.

we saw a reuters poll showing that republican voters still approve of trump. they believe that the 2020 election was stolen. you still have the voters going with trump and leaders like kevin mccarthy know where the boats are. -- know where the votes are. tom: where a i -- where is the power of the traditional republican party? >> things change within the party after the rise of power of trump within the party. you still have groups at their backing into supporting mainstream republicans and drip republican- values, but at-the national level, the -- and

republican values. tom: you see a little inter-nicene warfare where stephanie murphy avenue florida is going against marco rubio's seat -- stephanie murphy of florida is going against marco rubio's seat. emily: we will be seeing the top four leaders in congress, into plessis, -- nancy pelosi, kevin mccarthy, chuck schumer, and mitch mcconnell sit down with the president. it is seen as this big move for potential bipartisanship. the question is can something get done on that infrastructure passage? he will need to leadership if you wants -- if he wants to

pass a bill through congress in a bipartisan manner. are democrats just going to say after this meeting " we tried. it does not look like we will have republicans going ahead with us, and we need to move through reconciliation," which will significantly change what can or cannot be in a package. jonathan: on the domestic issue, i can't seven republican governors now , south carolina , tennessee, missouri, stepping up to declare the end of the additional $300 of unemployment insurance. i keep asking government if you have talked do these governors. it is not clear. has the governor spoken -- has the president spoke into these

governors about the decision they are making? emily: senator merger -- roger marshall introduced a bill to end it. what you hear from democrats and president biden is that they do not believe the week jobs numbers are a result of these unemployment benefits being so high. what they say is because it is a lack of childcare for families who cannot return to the workforce because their kids are not back in school as well as general concerns about people worried about their health. tom: for all of us, whatever our age, there is an architecture of his. -- architecture of our history in the labonte. -- in the lavant.

emily: there has always been a lot of tension around the palestinian issue. we have always been divided between republicans and democrats. we have continued to see that pattern develop in congress is as to who is pushing for what. we will continue to see more of the same as violence in the area continues to ramp up. jonathan: emily wilkins in washington dc. 1000 rockets have been fired from the palestinian enclave. this has been described widely as the bloodiest battle we have seen since 2014. tom: to me the greatest mystery

is the relationship of the president of the united states with the is really government. i -- the israeli government. jonathan: would you be comfortable characterizing this as the biggest foreign policy challenge of the current administration? tom: his card is full nation -- worldwide. jonathan: president biden is weighing sending an envoy. tom: we have all seen the ballet before. the number one ballet is to stop the carnage. it is not a question of one child here, one shot there -- one shot here, one shot there. jonathan: from new york city alongside tom keene, i met

jonathan ferro. we count you down to a -- i am jonathan ferro. we count you down to a cpi report in the u.s.. from new york, this is bloomberg surveillance. ♪

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>> shrinking margins are increasing demand on the buy side. do you have the technology to stay ahead? data, analytics, trading, risk,

operations. the buy side from every side. ♪ jonathan: it has been a messy couple of days, some price action looking for a narrative. equity futures are down. we are two hours away from a cpi report in america. it is a cpi wednesday. a year underperformance on the russell. let's get to the bond market. from 42 to 45. we will -- we will talk about energy later. about a basis point there as well. some stability after we capped aggressively lower in friday's session. the debate in the united states

and worldwide -- we do not have a demand problem, we have a supply problem. job openings in america, 8.12 million from 7.5. it is a record! the big debate now is what will solve that gap between demand and supply. tom: i did some research yesterday on this. they were -- i were at mcdonald's and they made it clear that they could not serve more people. they were starving for labor. jonathan: were you eating at mcdonald's? really? i'm not going to go with that. i don't believe you were there. tom: leave me alone! jonathan: what did you get?

did you just walk into do market research? tom: are you done? inflation research -- you do not know what to do in the equity market, i don't know what to do. erg friedman has a -- eric friedman -- eric freedman has a very nuanced view. you are at 4600, up 11%. are you lonely? do you think a lot of people have that view? eric: we are a little lonely here. the markets will test of that 4600 number for us. what is positive is the momentum that came out of this last quarter's earnings. we think there are some personal

revisions but that transition is important. tom: what is important here is it is so cold at colgate university that everyone studies statistics to stay warm. do you talk about in sample volatility -- that is a fancy phrase for the internal -- what does in sample volatility tell you about being a bull. eric: the composition of the market is changing. it the composition in terms of the reopening trade versus the steady-state technology and health care, those are things we are really gauging. if you look at the u.k., the compelling reopening is a recurring. -- is occurring. can they pay for a reopening on

a gradual basis? we think this shift back and forth across sectors is normal even though the past couple months have been abnormal. we think this is a dip that is worth buying. jonathan: we caught up with a lot of people who have talked to us about staples pricing power. do you share that view? eric: we think the really good conversation you had yesterday was on technology. they are voting to maintain that pricing power. if you look at technology, what cfos will spend on repeatedly is unlikely to have substitution. that leads us to think that technology is worth looking at here given that ongoing pricing power. tom: what -- jonathan: what has surprised me

is the obsessive talking points around inflation. they almost disregard what happened with margins. margins were fantastic despite the fact that there was price power. tom: my number one point is corporations i just. that is my number -- corporations adjust. jonathan: the question is if there is some urgent risk. eric: i think so. if you look at capex trends, that will flow into the income state. if people anticipate spending not only in the u.s., but globally, and as we see a gradual reopening in the u.s., u.k., india, latin america,, that could create an appetite

for capex to continue. tom: i want to talk about user cash. they are going to buy back shares. give me your view of the rest of this year in terms of this titanic profit corporations are seeing. we are going to see share buybacks like we have never seen before. eric: we have a large capital market. talking to that team, cfos are thinking about being more aggressive and also continuing with that share buybacks. funding is not an issue. people do not have issues raising capital. that is likely going to be something couldn't -- something we see continuing. tom: did you get your 40 gear amazon piece? did that -- year amazon piece?

did that trade happen? jonathan: no. we have had almost an eight minute conversation on the market, and we have not talked about the fed! does the fed play into how you think about the equity market going into summer? eric: it does. your point that people like leo brainard, these are stories we will keep paying attention to because there seems to be modest cracks in the foundation that we are not even thinking about talking about rates. as we see conversations increase about inflationary pressure, we cannot bypass the fact that the fed may lose patience. tom: i want to go right to fear 101. this is the reality -- people feel they have not participated in this bull market.

they do not own big tech. where do you place fresh capital now if you have missed out and you know you want to get on board but you're scared stiff? eric: two places -- one would be domestic mid-caps, that sit in that middle place between momentum small as well as large cap, which has done very well. for those who want to scale into pieces within the fixed income market, we think these are things you can actually own. things like mortgages, these are spots where you can take on not much portfolio risk. , over time, the bid from cfos will persist so as that continues to struggle, that is a spot investors can pick away at. jonathan: eric freedman.

later we will hear from bostick and parker later -- harker later. tom: what will they say about inflation? help me with football right now -- it is the end of the season. jonathan: which league? tom: i cannot keep track of the leagues! jonathan: neither cannot. --neither can i. tom: how late in the season our way? jonathan: -- tom: how late in the season are we? jonathan: there are two or three games left. rinaldo lost out on a place in the to be in sleek. there is a tight race in spain

-- place in the league. there is a tight race in spain. jonathan: abramowicz went out and hired an arsenal supporter! jonathan: i thought -- tom: abra,owicz -- abramowicz went out and hired an arsenal supporter! jonathan: i thought abramowicz was an arsenal supporter. tom: on radio, this is the chart

of the moment. moonshot covers it. out of the pandemic, it is a true moonshot. email lesson, vote -- email us in time, folks. jonathan: is this a labor market price issue? tom: it is a natural disaster issue. we are coming out of a natural disaster. what is fascinating is what is the power of labor to demand higher wages? anyone who says they have a theory, i am not interested. we need to observe what wages and benefits do in the three or four lowest deciles there. jonathan: it has really struggled to understand whether supply can make it. tom: with commodities -- look at copper today! jonathan: i have heard that once

in 30 minutes. going into an inflation number. you will hear that word repeatedly -- transitory. we declined 2/10 of a 1% with john kane -- tom keene, jonathan ferro, and hello to lisa abramowocz. >> the white house is stating right -- hi did pressure on guess aligned prices. that the epa has waived requirements across 12 states and washington dc to help bring more fuel to areas normally supplied by the colonial pipeline. virginia has declared states of emergency as gas lines ran dry.

republicans are threatening to form a third party. the statement is supposed to ease donald trump's chokehold on the gop. taylor said that those who will sign a statement include lawmakers and cabinet secretaries. writers say that christine todd whitman will sign it. in the u.k., boris johnson indicates that an investigation into his government's handling of the pandemic will be formed within a year. the government has been criticized for a number of things. johnson is now riding high after a successful vaccine rollout. global news 24 hours a day on air and on bloombergquint take. -- bloomberg quicktake.

i'm ritika gupta. this is bloomberg. ♪

♪ >> every country in the world is now looking to us to provide for

their lack of capacity to produce and or have vaccines. i am not going to shortcut the united states of america. we will have enough vaccine for every single american, but we will be engaged in working with other countries. jonathan: america first about we will help the rest of the world, the message from the president of the free world. going into an important inflation print later, 8:30 eastern time -- it is cpi wednesday. the euro-dollar, 1.2129, a little commodity strength. about five cents. the s&p 500 index is down. tom: this is dollar canada,

1.2088. to see a breakdown to 1.18 would be a big deal. we are not there yet. lauren sauer joins us from johns hopkins. we noticed to the wonderful pot race and will myers -- pod race and will myers. four of the 5 players are out of commission. how do you have an athletic team out and the song and dance that we are going to fill pepto field? lauren: it shows that covid is still among us and we need to be very careful. we are seeing drops in cases across the country but there are pockets where people have

lower vaccination rates and people are still vulnerable. tom: if i am walking down the street, should i have a mask on as a courtesy to others and also because i need it because of covid, or are we where we can go mask free? lauren: the cdc is it saying that outside you can be mask free. it is up to your personal level of comfort, but it is safe to be mask free outside. where you want to see people wearing masks is when you are indoors, particularly in places where the ventilation is not great or if you are outdoors, in places where you are in close quarters with people, so if you are sitting close to people or in a place that is partially

sheltered. if you are in one of those tents set up in places without good airflow. outside, mask free is all about the airflow. jonathan: is it social or science? which one is it? the science is you do not have to wear when outdoors. we keep blending the lines between social etiquette and science. what is your view? lauren: i totally understand that. it is a mix of all three like you said. we are learning more about masking. we have not been a culture that masks. there are a lot of great scientists looking for that line, but it is blurry. it is an area where you want to see, if you are in close quarters you wear masks because we believe it makes you safer

and it make -- may keep someone else safer. outside, it is a safe. we have all agreed it is safe if you are spaced out to not wear masks. jonathan: we talked about this recently and i would love your view on it -- the goalposts seem to have moved from protecting the most vulnerable to achieving herd immunity and getting 70% of the country with at least one dose of the vaccine. why have the goalposts moved? lauren: because we have a vaccine available. have targeted our most vulnerable people in the community to get the vaccine first as we were ramping up production. production is higher now and we continue to improve production so we cannot only target more broadly across the country but also support global efforts.

to increase vaccination it is less that the goalposts have moved -- global efforts to increase vaccination. it is less that the goalposts have moved. we are still targeting our most vulnerable communities, and especially those who have not been able to access the vaccine yet. the goal has gotten bigger -- more vaccines in more arms. tom: let's circle around to the padres again. 5000 people in the stands -- would you wear a mask? lauren: it would depend on how crowded the concessions are. [laughter] lauren: i would probably wear a mask in the concession area, any place where i felt i was not comfortable, and the restrooms. if you are outside and feeling

safe as long as you are socially distanced, your fine. tom: have you ever had coors 3-2 beer? this was from my childhood. it was the worst year ever. it-- it was the worst beer ever. jonathan: it is like bud light? tom: it is like watered down bud light! jonathan: we call bud light something else. i can't talk about that on air. tom: coors 3-2 beer went away. jonathan: don't even listen to a word of that!

does not mean -- tom: lager beer. jonathan: or peroni. tom: i like peroni. it is sam carlos's restaurant. it is real food. jonathan: you are going to have a peroni after work today. tom: are you looking at the real yield? i'm sorry, how the real yield moves at 8:30 is a big deal. jonathan: the countdown continues alongside tom keene. i'm jonathan ferro. one of us may have had a pero ni already. jonathan: good morning --

tom: good morning to all of those watching this morning in boulder, colorado where they still serve coors. jonathan: it was like -- what is that beer? tom: it was like when nixon was president. ♪

♪ >> over the next couple of months, we will see significantly stronger inflation. >> the consumer is still seeing spending in excess of what would be normal. >> people are going to be spending, and the bounce back in oil demand is probably going to be greater than people are expecting. >> we are now at a point where supply is extremely low, inventories are extremely low, and demand is roaring, so prices are extraordinarily bought. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: cpi 90 minutes away. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance,