strong as it is, fueled by the stimulus that was put hind it, you get inflation. >> the fed is likely to start to shift their policy stands in the coming months. >> we have never had the situation, historically, where the fed has not begun to normalize rates and there's an inflation concern in the market. >> no one knows of these inflation pressures are going to prove more transitory or less transitory. >> this is bloomberg surveillance with tom keene, lisa abramowicz. jon: for our audience worldwide, this is "bloomberg surveillance," live on bloomberg television alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures up a quarter -- .25%. tom, another week of inflation obsessions. this week, 10 year breakevens, having the biggest weekly decline back to september of 2020. you don't hear much about it. tom: you don't hear much about

it i think is dead on. economic research, into monday, are going to be extraordinary. the operative economic word, and this is jargon, this is a pro word, it has been a nudgy week. i love what you said about real yields as you go to the real yield, look for that. the expanded edition this afternoon, 90 minutes. i'm going to look at the cash out there and the action of the nasdaq in the alaska -- in alaska. we are promoting the real yield at 1 p.m.. -- 1:00 p.m. jon: inflation expectations come in little bit, take a rebounding a little bit. we spend a lot of time talking about peak growth expectation. we started the conversation this week discussing maybe we have seen peak inflation expectation, how would we guide our way through that space in the coming weeks and months? tom: to me, it is open.

we can go on with that and i'm sure we will, but i think you had the number 280 gazillion dollars. i'm not suggesting that will go into speculative -- speculative -- i think the theme in june is this chart norma's gas -- try norma's -- this ginormous cash. lisa: part of the uncertainty lies on who has that cash. is it the people taking the checks from the government and putting it in their savings likely to spend or the wealthy individuals that have knock on vacation and are likely to spend it because it is going into their wealth bucket. this is one of the biggest disparities with the highest and lowest gdp's. jon: they are going on vacations. have you tried to book a vacation in this country? they are going on vacation. lisa: but how many vacations can

you take to make up for last year? tom: or going to test it. [laughter] tom: i have hardly been off this year myself. jon: sure. [laughter] i'll be off on monday again. i've got another day off. tom: i was scheduled but i had to take that back, going to camp , she is going to cam gulfstream in labrador below the arctic circle. lisa: why were you [indiscernible] tom: this is the prosperity out there. you talk about it, and i'm sorry, seriously, lisa, this is the linkage of the goods producing sector like the airplanes to get you to the lodge into the success of the service sector like what we do. john, that recovery is evident. jon: i'm gonna turn to the price action. i'm not going to get into your shopping a private jets. good morning to you all. we advance .2%. in the bond market, yields a little higher on the day. 163.52 is where we are. euro-dollar totally unchanged.

1.2 227. i called that to be honest with you, tom. the bti out about 1% -- wti up about 1%. lisa: i do not shop for private jets. i will argue i can drive a car. i'm not qualified to drive an airplane or would anybody want me to do so. what i'm watching today is the manufacturing on things like airplanes and other goods. tom: there you go. lisa: thank you, i try the segway. did it work? tom: it works. lisa: we will getting the u.s.-made pmi's for the united states after the european data on the manufacturing sector. this really goes into the higher cost of material, this idea it is rising to the highest levels or fastest levels we have ever seen. how much does this crimp output or put a damper on factory production. this, to me, is one of the conundrums with longer-term

inflation. you get higher costs of these base materials. how much does that slow growth in the longer-term? 12:15 p.m., besides kaplan and bostic, they are all speaking at a technology conference, interesting to hear the future of work. how much does the technological advancement over the last 12 months affect growth in the job market or a stagnation with respect to who gets jobs, how many people can be employed, and jobs that may be replaced by computers. also today, joe biden will be meeting with south korea's president. i'm interested, first of all, to note this is the second meeting joe biden has taken at the white house following japan. talk about the emphasis on asia. second of all, strategic importance of south korea with respect to china negotiations and north korea. jon: looking forward to that. are we going to cover this corporate tax rate all? lisa: i think so. jon: 15%, is that the new minimum? tom: what is your new theory on

that? jon: they're trying to get ilan to come up from 12.5%. i have no idea if they come up. tom: why would they do that? jon: i had some sympathy for matt miller's argument this morning, making the argument that shouldn't island be able to make its own decisions on where it's corporate tax should be? why should they agree to that? tom: i find the whole thing odd. is the right word quixotic? jon: i can see why the administration wants this to happen, but i don't know why they would want to come along for the ride. lisa: did you see maria tadeo's interview with the foreign minister? it basically came out but said he could see something maybe coming out midyear. jon: sure. 12.5%, maybe. lisa: fair. ok. jon: 15 is clearly closer, but if i had to come all the weight down the 15% from 21%, because

island is not coming along for the ride. lisa: no. jon: you can have these -- try to have these high-level conversations on what should happen and put yourself in the epicenter. there is that thing called sovereignty, is that lost on everyone? tom: i think it varies. i think we need an explanation, because you have been leading all financial media and the idea of getting a london quarter. what is the separation of boris johnson in london from the fractious, very dominant conservative party? i am baffled by london's vaccination politics. jon: there's a lot i am baffled by. on the travel front, i am absolutely baffled by -- i have no idea why the europeans are doing this without talking to allies. i want to see that happen in a bigger way. i think it is great the europeans are doing this to get trouble going again, but you need to be able to go to the united states, too. need to be able to reciprocate. i haven't heard much about that

at all. where's the u.s. administration on the travel issue? tom: i don't know. there should be some clarity. internationally, there is a difference in new york. why don't you bring in mr. dayco? jon: economics chief u.s. economist. greg, your read on the date at the moment? we have pmi's out of data. -- out of europe. we have seen the same dynamics play out over europe that we have seen in america in the last couple months. greg: i would say the u.s. is a couple months ahead of europe when it comes to the health situation, reflected in the economic situation. what we see in the u.s.'s rapid rebound in demand and supply is taking time to adjust, hence the price pressures. the inflationary environment we are seeing now is a feature of the strong demand and fragile readjustment of supply. it is not about -- it will be with us for some time. tom: oxford is acclaimed for

acute gdp analysis. are you gonna recalibrate your view on gdp for the next 12 months? greg: we will certainly do that at some point because we know it will be provided over time, but i think we are on the right trajectory. we have an outlook quite optimistic. we have growth approaching seven -- 7.5% a percent to 8% this year and moderating 4% next year. overall, a good take on the economy led by consumer spending, driven by use of excess savings that consumers have been saving over the past 12 to 15 months. lisa: so a general missed pile of savings. what is the more likely outcome, and upside surprise on how much consumers spend of the savings are downside surprise when consumers use that to pay down delayed debts as well as perhaps get a cushion against whatever is to come? greg: i would say in the near

term, we are up for upside surprises. we have an environment in which consumers have a lot of excess savings, and a lot of these are held by higher income families which are likely to spend it over the summer, but we are also seeing these lower income families have put aside or used some moneys, checks to pay down debts. so there is some savings buffer there, and there could be upsides, especially if savings are considered income. if they are considered income, they are more likely to be spent. if they are considered wealth, they are less likely to be spent over time. the wealth aspect is low. the more they are considered income, the more their upside risks. we are expecting consumer spending growth to be 10% this year, which would be a record. that is going to push us well above the pre-covid environment. there are going to be these inflationary pressures as a result of this environment of strong demand supply takes more time to adjust and the economy

takes a little more time to get back to a pre-covid state. jon: always good to hear from you, gregory daco. the data out of europe today, fantastic, upside surprise. in the u.k., here's data, retail sales surging as the stores reopen. the private sector in the u.k. expanding at the fastest rate since at least 1998. we get a back to business in europe and the u.k.. tom: the zeitgeist, there was an image looking down a street in paris, and it was jammed. you think about all of the gloom about lockdowns in paris and italy. i saw american airlines is trumpeting nonstops to milan again. this is happening, and what i would and for size, and i could be wrong on this, i went far south yesterday. i got to 56th street. jon: congratulations. tom: thank you, but i would really emphasize the recovery we

see in new york city. jon: two streets south of our you are right now. tom: i was the. jon: tom raising the guide, the outlook, 5.3 to five point seven, previously 4.6 to five. so it's another big american company looking forward in seeing the brighter future. good morning, alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures up 2%. this is bloomberg. ♪ ritika: palestinians poured into the streets of the gaza strip early today to celebrate a cease-fire with israel. the hamas militant group and israeli forces are now observing a truce that ended 11 days of conflict. at least 232 people were killed by israeli airstrikes and artillery fire on gaza, and it doesn't died during the hamas rocket attack on israel. the u.s. is now calling for a global minimum corporate tax of

at least 15%. that is less than 21% rate it has proposed to the overseas earnings of u.s. businesses. some nations have called the rate excessive. national negotiators are trying to come up with an agreement this summer. the biden administration is looking to ways to alleviate the global shortage of semiconductors. gina raimondo convened meetings of -- meeting of companies executives affected by chipmakers, automakers, and tech giants. they could share supply chain information. [indiscernible] a chance to salvage. you negotiators have agreed on quarantine free travel within the block. the coronavirus document will prove their holder has been vaccinated or had a recent negative test. 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 am ritika gupta.

this is bloomberg. ♪

pres. biden: my conversation with president netanyahu, i commended him with the decision

to bring the current hostilities to a close in less than 11 days. i also emphasized what i have said throughout this conflict, the united states fully supports israel -- israel's right to defend itself and other gaza based terrorist groups that have taken the lives of innocent civilians in israel. jon: the president of the united states. from new york city, good morning. i'm jonathan ferro. the price action this friday morning, equity futures up 11 on the s&p, we advanced to 5%. your 10 year you nominal yield is 163.69. the fx market, euro-dollar is 1.2225. the commodity market is up about 1.5%. we look at the premarket, up .8%. coming into today, up by about 32% on the year so far. that is quite a run through 2021, so far, and they left the outlook this morning -- lift the

outlook this morning. tom: i will fold in what we heard from gregory daco, too short a visit with mr. daco, but his optimism of 10% gdp folding to 7% gdp and then into a good 4% number, those are the kind of numbers that fold over to a worldwide john deere doing better. jon: goldman put out their vip list, which is basically the list of the companies the hedge funds hold and where they're most concentrated. the big five holdings are still the big tech players but the 15 new vi please -- vips, citigroup, general motors, that is where the money is starting to shift away from the big tech players. you know what the number one holding is? lisa: facebook. jon: facebook. tom: facebook? i would not have guessed. jon: 27% of hedge funds on facebook shares. 57% of those polled it as a top 10 position. . lisa:lisa: kind of amazing. tom: one of the reasons as emily wilkins will spend 12 hours tomorrow on facebook. she joins us now, bloomberg

governor reporter in washington. i lost facebook like three years ago. i said enough with this full issue. -- foolish. to me, it is a weekend in may for washington to recalibrate. it was mentioned moments ago that the tax forward view is in shambles. there has been lots of distractions, including israel. how do you presume washington will recalibrate into the summer? emily: you are making a great point here. we heard, yesterday, from congressman peter defazio, the head of the house transportation committee, that the step we were expecting to be critical to president biden's infrastructure bill was supposed to be held next week. now to a not be held until late june. you're starting to see these delays in the process as lawmakers realize just how complex this plan is. they are still trying to figure out whether it can be bipartisan, whether they need to go it alone, and the clock is

ticking, because certain deadlines have to be met before this upcoming fall. and then of course, 2020 two, when the election stuff gets underway, it is -- 2022, when the election stuff gets underway, it will be hard to legislate. tom: who in the democratic party, obviously the president, will be able to get them into some sort of census as democrats recalibrate. speaker pelosi, are you watching? senator schumer? is it someone i don't know? emily: i think you hit on the exact two, speaker pelosi and senator chuck schumer. i think they are, right now, pushing the white house to make a decision. chuck schumer said he is worried about, if congress waits too long to moving on something, if democrats way too long to have republicans give aa or nay -- yay or nay on whether they will go at it with democrats, this is more time the democrats don't spend. speaking with someone on the

hill that was saying this plan, we needed to pass and then we need productive results before november of 2020 two, so when lawmakers go up for reelection, they are able to into shovels in ground saying we have passed to this bill and things are getting done. the longer they wait, the longer the proposal and voters in america do not see changes. lisa: which raises the question how much ground the democrats are willing to give up. i wonder as we look at the 15% minimum tax globally the u.s. currently proposing on corporations, whether that is giving a lot of ground, how that is being received by fellow democrats effort initially per -- after initially proposing a 21% global tax rate. emily: janet yellen has called that 50% proposal the floor. she is hoping to negotiate higher, though i know you guys were just talking about that the fact 15% to still higher than what you are seeing other countries propose. we are seeing the rubber hit the

road on this tax plan. yesterday, bloomberg reported richard neal, the chair of the ways and means committee, very powerful, as a tax committee that is starting to question whether they need to tweak the president proposal on the taxes, the ones that deal with how much tax airs need to pay on the assets they pay. they were suggesting maybe instead of paying the taxes when they get the assets, they could delay it. you're seeing democrats try to figure out what the contours a president biden's planning to be. even if democrats -- of president biden's plan is going to be. they need to get moderates on the same page and that is not the case. lisa: we just got deare earnings, and the -- deere earnings, and they indicated they will see supply chain pressure this year. this is a common theme we hear

from all the big industrial companies. we saw the pmi's that the industrial pressures of being placed in europe are also rising. yesterday, gina raimondo held a summit on how to ease some of these concerns. what is the timeline for anything to get on on that? how soon could that actually ease the supply chain issues we are seeing now? emily: i know that both the white house and lawmakers in congress are working on this is to as quickly as pot -- this issue as quickly as possible. it will be something that president biden ends up meeting with today with the south korean president moon, it will be a discussion on the supply line, on the semi conductor shortages. that will be a big focus with moon. he is going to a plant in atlanta on saturday to look at this issue further. this is something washington has its eye on, but tying it back, there is a lot going on and you are right, there is a rush to get everything done at once, at this point, before the 2022 elections.

jon: emily wilkins ndc, our bloomberg government reporter. the pmi's, this is the commager coming from germany. supply shortages curbing production levels and new orders due to forced downtime. sounds familiar, doesn't it? as any country right now in europe or in america. lisa: this is really the prevailing theme and unknowns include how long this will last, how much this will crimp growth and supply. also to give you a sense of how much this is jacking up prices, the price to the pmi in the eurozone for manufacturing sector shows 90% of companies had to pay more for their intermediate inputs in may. jon: that's the scene right now worldwide. from new york city this morning, good morning, alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures are advancing. up about 3%. in the bond market, yields higher by single basis points. foreign-exchange, comfortable with a 122 handle.

and crude is higher, up by 1.6 percent, $62 at about $.93. more to come from new york. this is "bloomberg surveillance." ♪

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jon: stocks are positive but a dollar is weaker for a second straight day. 89 handle on the dollar index, comfortable around those levels and euro-dollar in and around 1.22. here's the story of the equity market, up .3% on the s&p. friday, down a nudge. that is tom's word of the morning, down a nudge. the nasdaq up by about .3% and the russell up about .5%. data at europe is tidy, i will talk about that in the moment. if you switch to the bond market, twos, tens, 30's, your 10 year vietnam nominal yield has done nothing -- 10 year nominal yield has done nothing. your nominal yield has been stable on the week. at breakevens have come in because real yield has started to push back out.

that is a calculation for breakevens, the nominal minus the real and a gap in between. that's right has been getting lighter over the last year. -- wider over the last year. people are always talking about breaking inflation expectations. this week has been about real yields, starting to come back a little bit. i know you have been on top of that. tom: the real yield story to me is definitely there. i think it comes to the combination of economic data. i will go back to greg daco as an uber optimist. what does real yields do if you get the uber optimist? jon: you get a reprice or a paper? is that what we got a hint of? tom: that is the consensus. the certitude of taper tantrum i have trouble with. jon: switch on the board and finish in this, in europe, have we gotten to the place where the story is really well known? in europe, the data was terrific this morning, fantastic.

in italy, down about a basis point in germany. we've seen a lot of repricing even though we have not seen the data in europe this a we have -- the way we have in the u.s.. looking at the bloomberg indexing europe, it is going this way, up. in the united states, it's going down. this story in europe has been getting priced through the year. in bonds more recently, and equities over the last six months. it is in the back stocks. tom: i would really folded into a cultural issue or social issue , the grimness of the vaccine in europe, and that has been sharply reversed. we see the enthusiasm, particularly in germany. with the festivities in bitcoin, i want to do this board with jon ferro right now, because it really goes to what we have tried to do with bitcoin, which is bitcoin pro. bring up that board. i'm sorry, gold, there is the movement, 2% on the week.

there is one of the european great pairs. this is incredibly important for eastern europe. some kind of stasis, and there is the volatility of bitcoin. jon ferro, is bitcoin a gold or currency equivalent? jon: before we get to bitcoin, can we look at the swiss franc you just put up? tom: yeah. jon: out of the last crisis, people would remember there were a lot of mortgages taken out in eastern europe, in swiss francs, and when we got the adverse move away from what you are denominated and what you are your money in, some of the mortgages got absolutely hammered. i have not looked at that cross for along time. tom: i know you will tear up, but i wanted to bring a tear. rebecca patterson joins us. we are thrilled to have her with us. she is the bridgewater director of investment research but far more is her time on the street bringing holistically together the foreign-exchange market with everything else out there. rebecca, wonderful to have you with us today. on bitcoin, what did we learn

this week? i put up there some of the dynamics, the silliness of it being a gold equivalent or coin equivalent. what did we learn? rebecca: i think we got reaffirmation that it is a speculative asset and still has a long ways to go to become a gold equivalent, to become a problem -- proper store hold of wealth, something you can count on to have purchasing power over time that will have stable and relatively low volatility. this was not a low volatility week for bitcoin, quite the contrary. jon: do you see a generational divide between certain age groups at believe this is the new gold and other age groups? ? that do not rebecca: anecdotally, yes. -- roots that do not? rebecca: anecdotally -- groups that do not? rebecca: anecdotally, yes. people looking for alternative sources of cash, you have a bias toward the cryptocurrencies versus gold, but to me, it is not the generation as much as the retail versus the

institutional. the money going into bitcoin and other cryptocurrencies today is still margin or -- marginally retail. you are getting family offices, some hedge funds, but the large institutional money, the thinking about do i want this as part of the diversifying assets in my portfolio to protect me from bad periods of market stress, we are not there yet. it might get there over time, but it is not there yet. this is still an asset that i think is primarily one for used for return and speculation. jon: over time though, do you think that investing condition kicks in? many people ask if there not from is clear -- not familiar with the markets, why does the yen do so well when things get bad? it just as well. it has worked historically. do we need to be conditioned by this to start believing it a little more? rebecca: over time, you could see that environment come together. there are couple things i would

be watching, the big one is the regulatory ecosystem. it is very immature for cryptocurrencies. after the colonial pipeline half pay for with crypto, the ransom was paid for with crypto, i think you would see regulators in the u.s. focusing on this, trying to make sure there is activity and increasing transparency. that might want holders not to own it anymore, they are therefore the anonymity. but it could create an echo system that gives more -- ecosystem that gives more encouragement for larger players to come in. if you have another source of liquidity and they come in, that could break down volatility over time. that is the positive slide wheel that i think bitcoin and other cryptocurrencies are perceived. there is the environmental issues which are clearly a problem for some investors. i think those things need to get addressed, and the volatility needs to come down. if those things can happen, i think that could involve into some type of digital gold, if

you will. lisa: i want you to elaborate on the environmental concerns. elon musk highlighted this and you highlighted this in your research report, showing bitcoin uses up more energy than say even switzerland when you take a look at the energy consumption. it is basically a niche onto itself when it comes to this area. can this be solved? how big of a concern is this for certain investors? rebecca: increasingly investors are focusing on environmental and other esg issues. so it is an increasing concern for a lot of large institutions. there are ways it can be addressed. you can see changes in the technology use in bitcoin, for example. that could reduce energy use is -- energy usage. you can see more of a focus on renewable energy, that could be a positive trend. there's another option, that another cryptocurrency that has lower energy usage but also some of the positive characteristics like limited supply, you could see that supplant bitcoin. just because bitcoin is the

dominant currency today does not mean it will always be. i think there are different paths, but over time, it will get addressed one way or another. lisa: i want to pick up on something jon was talking about because i know this dovetails into the inflation call bridgewater has had. moving forward, the inflation could be more of a threat. what do you make of the move recently, lower in longer-term breakeven rates? longer-term inflation expectations have come down even as we get this robust data. rebecca: our -- this is such an unusual time. we are seeing the biggest u.s. boom that we have had in decades and we have so many different crosscurrents, given the reopening's, coming out of the pandemic. demand rising faster than some supply can meet it. he mentioned that a few minutes ago as the european pmi data, that it is hard to have a high degree of confidence how this will play out. as we look at the year or so

ahead, we see a decent amount of risk that inflation could keep rising, it is already rising, but stay higher for longer. art of that is the supply taking a wild to catch up with increasing demand. part of it is more structural forces. globalization, which has helped reduce inflation for years, that has been plateauing and could possibly reverse a little bit. the trend toward capital over labor, that is starting to reverse a little bit as you see higher minimum wages, higher wages, etc. if you see some of the secular forces slowing or reversing somewhat and the cyclical forces, we think you could be in a slightly higher inflation environment. the day-to-day moves aside, i think you want to be looking, as an investor, does my portfolio have enough protection if that risk becomes reality? and this is not as the fed likes to say, transitory inflation. tom: i'm going to ask a rude question and you are such a pro that you will give me an honest answer.

stock bond correlations are quite odd. that goes into rate parity strategy in size. what is the duration, the timeline of this odd correlation where it begins to affect portfolios? when you are in short-term, no big deal. when does no big deal become a big deal? rebecca: i don't think that is a rude question at all. i think you're highlighting a couple things that are worth unpacking a little bit. first, when we think about risk parity strategies, which is our strategy, it is a strategic, long-term asset allocation. what we are trying to do is get rid of some of the volatility that can come with changes in economic environments, growth, inflation, and what that allows us to do is get steady returns over time, then we can compound that, which as einstein said, it is the eighth wonder of the world. that is the different strategy rather than where were focused

on over shorter time periods, more tactical. for folks who are thinking about risk parity strategy, it is never -- has never been determined on one asset or one country is going to be a balanced fix of assets. even if bond yields rise, there are going to be other bonds that are attractive. china, for example, the 10 year yield there is 3%, more normal policy makes going on. then you will have other assets that will give you diversification and balance, no matter the environment. the other thing i think is really important is about correlation. i think 60/40 portfolios for the last decades have been able to sit back and let it roll in. you have had rising stocks and falling bond yields. today, there is a chance you will see that relationship break apart. you need to understand why that is happening and what to do about it. if we take that relationship -- think that relationship is breaking apart because of inflation, you want to make sure you do not have too many bonds

and you want to make sure you have other assets to protect you against that risk, whether it is gold, which has been recovering nicely recently, inflation linked bonds, even equities that give you more of a steady cash flow over time that are not going to be as vulnerable to that duration issue. jon: rebecca, always smart and enjoy your contribution, rebecca patterson, bridgewater director of investment research. from new york city come good morning -- city, good morning. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. president biden said the u.s. will help -- a cease-fire brokered by egypt took effect earlier today. israeli warplanes and artillery pounding as a while hamas militants fired rockets at israel. at least 232 palestinians were killed and 12 people were killed

in israel. the fed is now looking into a digital dollar. your own house as the central bank will seek public comments on digital currencies. the focus will be on how a digital dollar could improve any already -- system. china is already moving ahead with the digital yuan. in a virtual conference, elon musk said this is a country where they could potentially build a factory. he also said there should be more dialogue between the u.s. and russia. and the antitrust trial with epic games. tim cook is to be the last person to testify in the courtroom in california. he is expected to argue that apple's rules for its app store ensure a seamless user experience and developers can make good money. 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. ♪

>> you don't want to declare victory prematurely, but if we can get the 70% of adults

vaccinated with at least one does by the fourth of july the way the president has set the goal, i think the chances of there being a surge or rebound is extremely low. that is the reason why we want to continue to get people vaccinated. jon: the message from dr. fauci there. good morning, alongside tom keene, i'm jonathan ferro counting you down to the opening bell with features looking like this. up 11 points, we advance .25% on the s&p 500. just a little softer on the s&p 500 in the week. bond market yields, a basis point higher with 163.35. euro-dollar, 1.22.2 -- 12227 -- 1.2227. tom: this gives a bullish feel this morning. what we have tried to do for what is it, 14, 15, 16 months in recovering america is bring you the smartest people we can find,

the adults of medicine in this terrible pandemic. one of those would be stuart ray, with johns hopkins out of vanderbilt. what is so important about his work is he went from hiv, hepatitis c, and now onto covid. i love this, dr. ray, a stable reservoir for hiv resting cd4 plus t lymphocytes in infected children, a jewel from 20 years ago. dr. ray, you have decades of experience in the path of what we learn in pandemic. where are we in that sequence with covid? are we still newbies or are we really getting a handle on this unique virus? dr. ray: i think there's a huge range of statuses. we have come so far on vaccines, and we have come so far on getting the rates of infection and disparity down, but we still have headwinds.

we are learning a lot about how this virus is spread and what makes someone susceptible, so we have a lot to learn, but i think it is amazing we have, as far as we have in a year-and-a-half. tom: how do you respond to a baseball field of 40,000 seats that will have 15,000 people in them randomly this weekend? say this friday evening. are you comfortable with that? dr. ray: i am. we don't completely understand this, but open-air is an amazingly protective thing. people still need to be careful about how they get to those seats and how they go from those seats and what they do in the corridor's between the time there in those seats, but i think the time and the seats is probably not the riskiest thing those people will do that day. lisa: let's talk about what is potentially riskier at a time where we are being advised if we have gotten vaccinated, we do not have to wear our masks in most places. this is the advisement from the cdc.

is that advisable, given this data and signs that you are studying? dr. ray: i think it is important what you hear when those words are said, because what has been set as you do not have to. it doesn't mean you shouldn't. we have to think about the most vulnerable among us and what will help get rates low. right now, we have pretty high rates of transmission still. similar to where we were a year ago, but we have more people who are immune. and when people are immune, they are protected from severe disease, but there are people around them that may still be susceptible, and we still need to learn about how we protect those people. lisa: dr. ray, can you clear misconceptions? i'm not clear on how infectious somebody who has been vaccinated is. should they contract the virus, even if perhaps they do not get sick. what is the data? what is the epidemiological work showing on that front? dr. ray: we know that people who have been vaccinated have a lower rate, much lower rate, of

getting sick. and when they get sick, we see they do not get severe disease or death. the problem is we do still get positives. we have a substantial number of people fully vaccinated getting hospitalized, and those people still have positive tests. so we know they can harbor the virus, and we have some evidence they can spread it, but it is a much lower rate than it was before they got vaccinated. tom: yesterday, dr. ray, in new york city that is clearly becoming more buoyant, more visibly back to normal, i heard so much talk of era variants. and this is from people -- fear of variants. this is from people qualified into many people unqualified. you have a fear of variants? dr. ray: my fear is more for the population then individual. if you are fully vaccinated, your immune system is not impaired by medicines we give or other conditions you might have, then the variants don't pose a

greater risk. the vaccines are effective in preventing severe disease against these variants. the problem is, these variant raise the infectivity of the virus so much that the threshold, the herd immunity threshold we need, the number of people or portion of people vaccinated we need to protect the population from spreading of this virus is now higher. so the more infectious the virus, the more people we need to vaccinate to get to the point where we don't get kindling of an epidemic. now, instead of initially 60% or 70% threshold, we need more like 80% or 90% of people to be vaccinated, and that makes it harder to get there, especially with hesitancy about it. jon: how do we know what the dominant strain is if we have sequencing compared to the u.k.? dr. ray: it's true the u.k. got ahead of us we have made advances and we are sequencing more than 10% of positives in maryland and i think your

restrictions have done the same thing. we have ramped up that capacity and have a good idea of what is going on. right now, the b.1.1.7 variant first identified in the u.k. is now the dominant strain with like 80% of infections being caused by that one. we now see the rise of other variants as well, so we have to keep an eye on that and have to make sure the epidemiologists are happy. jon: always good to get you on the show, thank you. stuart ray, johns hopkins professor on infectious diseases. the variant first identified in india, that seems to be a concern in the u.k.. i wanted to what degree that will hold back travel arrangements late to the summer. tom: what i find sobering as the pros don't know. we are all looking around for certitude whether it is the kids to camp or airlines, as we talked about earlier, but the answer is the pros do not have a clue. they are learning as we go, and we ought to have respect for that. jon: always something to learn about. lisa: without a doubt.

i'm a prime candidate for that. one thing that caught my eye, taiwan saying to the united states, you want some of the cap shortages stalled, give us more vaccine -- solved, give us more vaccine. this ability -- attempt to dovetail the vaccine. jon: vaccine diplomacy. lisa: yes. tom: seriously, the helicopter is out this morning so i took a car in. my biggest mystery is japan. jon: and how slow it has been. tom: i literally do not understand it. i have to read about it this weekend. jon: how close are we to the olympics? tom: we are close, and it is a raging battle in japan. what i know is i would've thought japan would have been out front on vaccine efficacy, and i think the opposite. jon: not so much. lisa: the japanese prime minister wants to hold the state secure olympics with virus precautions. so he is still planning jon: jon: on the olympics. i think most people are planning

on the olympics happening slightly third-period lisa: coming up. -- 23rd-period lisa: coming up. -- july 23. lisa: coming up. jon: we're looking forward to that. this is bloomberg. ♪

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>> all this money sloshing around with incredibly low interest rates, i think we risk and inflation surge. >> if the economy stays as strong as it is with all of the fuel we put behind it, you get inflation. >> the fed is likely to shift their policy stance in the coming months. >> we've never had a situation historically where the fed has not begun to normalize rates and there is an inflation concern in the market. >> no one knows if these inflation pressures are going to prove more transitory or less transitory. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity markets this morning positive 10 points on the s&p, up by about 0.2%. we had some pmi's out