>> the market is becoming more concentrated and less contestable. >> we think markets tread water for a bit as we continue to be concerned about inflation and taper talks. >> i think we are in a pretty unique period of monetary policy. >> fed policy is going to be pricing the number one source of potential volatility over the next couple of weeks. >> we have a real recovery in process. i don't think the roaring 20's are the right analogy. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. lisa: a surprise bond rally in a summer that was supposed to be

sleepy. good morning. this is "bloomberg surveillance" on bloomberg radio and bloomberg television. jon out, romaine bostick very much in. we start the day focused on yields. the 10 year yield now at 4.1979%. -- at 1.4975%. it shows the complete evaporation of inflation in markets. tom: it's a chart of lower lows, no question about it. you see the headline come out across the bloomberg, where brazil consumer prices, i'm looking over here at the secret "surveillance" tv wall screen, where brazil inflation is actually tangible. no one cares. lisa: they all say it is transitory, and the federal reserve will remain on hold. romaine: it makes you wonder

where this leaves equity markets. you had the s&p within striking distance, and the russell 2000 only about 16 points away from its all-time high as well. the nasdaq still needs to do some catching up, but with real yields moving in this direction, you have to think that the next leg of this rally could be there. tom: the president this hour, and frankly in our world, the meme of that is maybe more important than the president. is this meme surge different from the last meme surge? romaine: i think so because the last was about heavy short interest and folks taking advantage of that. you definitely have short interest, but not the 80%, 90%, and 100% plus we saw on gamestop back in early january and february. these stocks have short interest, but this is really about people finding a place to put their money, and if they do it collectively, they can move prices. they've shown they can do that. they are doing it again this morning on a lot of the names

that a lot of people weren't paying attention to. lisa: is this what ken moelis was saying, people laying at a craps table, and it is all good fun? or is it consequential? i think there's increasing question about the composition of indexes. the russell 2000, the proportion of amc and gamestop shares, which have rallied a lot, given the fact that there have been such a huge shift to passive investing. tom: every summer there is a report, and it is the dirty little secret of wall street, and every buddy tries to out duel each other for the intellectual report of the summer. here's an early nominee. , tulare i larry and momus ago on twitter notes the report. -- mohamed el-erian notes the report on twitter come with a lengthy report on inflation, where dfl says inflation is a timebomb. this is hugely influential, whether you agree or disagree

with it. i just want to note, as he notes, that this is a report that will get immediate global wall street attention. futures up five, dow futures -11. nasdaq up 0.3% as well. the vix come in, 16.12. the 10 year yield at 1.4992%. that is stunning. we get perspective from sam stovall, cfra. sam, what an odd and interesting time we are in right now. what research are you doing, when you fall back on stovall fundamental research? what are you studying right now in this craziness? sam: first off, the question is is this the roaring 1920's or the beginning of the 1970's? because with the focus being on inflation, with all the stimulus being very similar to the

1960's, do we end up with a decade of elevating inflation that then has to be strangled by a more aggressive fed? i look to the 1970's and realize that the year on year change in cpi started at 5.3%, ended the decade at 12.4%, averaging around 80%, and no wonder we had the lowest compound annual growth rate of 1.6% for that entire decade. tom: what is interesting is we actually listened to "deja vu" by crosby, stills, nash, and young. lisa: we will have that for you on bloomberg television and bloomberg radio. you talked about the 1970's and roaring 20's. we looked at earnings expectations, and they have surged, i believe 60% pop in earnings-per-share and the second quarter. is this potentially a cause for concern, given houck high expect

ash -- given how high expectations have gotten and this inflationary push? sam: eventually it could be because you have more and more people who are, as you said before, very willing to embrace the risk on trade. one of the indicators to look at is the relative strength between the s&p 500 high quality and low quality stocks, and right now, people are focusing on low quality stocks, whether they are meme or not. and we look to second quarter estimates, about 60% gain, the first thought is that is a pretty high bar. you can only be disappointed by that. however, the bar was set at 15% in the first quarter, and we ended up eclipsing it by having a first quarter gain of more than 40% in earnings. so i think with a 32% full-year expectation, investors are saying that this economic expansion, because of a very

tight labor market, really only has room to move rather than contracting. romaine: i don't have any songs. tom: come on, keep up. [laughter] romaine: i'm trying. i am curious, when we talk about a lot of folks that have embraced some of those cyclical names come on the idea that the economy was revving into another gear here, now that that may be at least in question in the short-term, does that take some of the bloom off the rows of some of those cyclical names? or do you stay wedded to that sector? sam: you bring up a good question because with interest rates coming down, we are seeing rotation back into small caps, back into technology, back into growth itself. but i think that could end up being as transitory as the expectation for inflation. going back to 1970, if you looked to what happens in a steepening yield curve

environment, it is energy, financials, industrials, and materials that tend to be outperformer's, which are exactly the rotation we saw from the end of the last near 10% decline in september of last year, through the recent high on may 7. so near term, yes, we will probably see that rotation into growth, but longer term i would stick with a rising yield curve environment. romaine: what do you do -- tom: what do you do with big tech? you've got five stars, four stars, three stars, and all that. what do you do with those big nicknames? -- those big tech names? do you sell them, keep them, or by more -- or buy more? sam: i think you keep them, and if we end up with a swoon, you use that as a buying opportunity because while the cpi number could come in at 4.5%, four point 7% tomorrow, it will be down to about 3.5% by september,

so our belief is that we are not going to be seeing a spike in inflation, but a more moderate upward trajectory in both inflation and the 10 year yield. lisa: how much do you trade on the idea that taxes are probably going to be higher for corporations going forward? sam: i think it is a possibility, but when you look to history, you look at changes to capital gains rates, we have had 10 periods going back over the past five years, and we had positive total returns for the entire calendar year with the average being about 11% gains. usually there's a lot more moving parts to the market itself than simply a change in the tax rate. tom: sam stovall, thanks so much. greatly appreciate it this morning. there is a grind to it. dow futures may be going green for a second. but is just a stunning market grinding higher that we are

seeing for those like me in trouble leveraged all-cash as well. we did some songs there, lisa. you were born to sing katy perry's "pendulum." it is just there. [laughter] lisa: if you wait, at 12:30 on sunday night, you will catch me singing "pendulum" by katy perry. tom: why help -- while having your potato vodka seltzer. lisa: i don't think i'm that gloomy today. obviously, think there's a lot -- tom: you heard it. ferro is so optimistic ash romaine -- remaine -- romaine is so optimistic, he brings the gloom out of you. lisa: the s&p is certainly among the indexes, and yet the bond rally really is showing caution in markets perhaps, or the belief that things perhaps

aren't as good as they look for now. to me, that means that frankly, the shock really has to come from the fed. romaine: we will see what happens. i think the fed shock may not be as much of a shock. i think a lot of this is being priced into the market right now, and a lot of people believe what they hear out of powell and the other fomc members. tom: to me, it is the ecb meeting in a few days. we will miss jon ferro's coverage on that. the fed meeting on june 16, i'm sorry. i thought it was a nonevent. i think i'm wrong. lisa: i think one of the most interesting aspects is former fed officials one after another coming out and really writing scathing op-ed about the fed's policy, saying they are risking a huge policy era. this dissent, how much will we see it represented at the fed meeting? tom: ♪ it's a pendulum

it all comes back around ♪ [laughter] on radio and television, stay with us. the president on the white house lawn and moments. -- lawn in moments. ♪ ritika: with the first word news, i'm ritika gupta. joe biden heads off on his first overseas trip as president. he's heading to the u.k. for the group of seven meeting, where he's going to focus on increasing the availability of coronavirus shots to lower income countries. after the g7, the president will attend nato and european union summits. then he will meet russia's president vladimir putin in geneva. a group of democratic and republican house members have come up with its own infrastructure spending plan that calls for a total of $1.2 trillion in spending over eight

years. president biden supports a 1.7 trillion dollar proposal, but the president ended talks with republican senator shelley moore capito yesterday after they failed to agree on a spending plan and how to pay for it. the senate has overwhelmingly passed a bill to help the u.s. compete with china, to bolster manufacturing and technology. it was a rare spot of bipartisanship in an otherwise polarized senate. still, the bill's fate in the house is uncertain. in the u.k., the chancellor of the exchequer rishi sunak wants london's financial district to be exempt from that global tax deal. sunak is expected to make the case that financial services should not be in a plan to make global corporations pay a 15% minimal tax. that would affect financial firms with head offices in london.

global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> i think transparency of debt contracts would be a big step forward for china.

we welcome their memory chip and shareholding in the world bank. there they third-biggest shareholder in the world bank, and we are engaged in china with our programs. tom: david malpass of the world bank with a terse economic report yesterday. they minced no words about it in their wheelhouse of a struggling world economy, particularly africa, and they made clear the disparity between the haves and the have-nots in this pandemic is exceptional. it was really quite a heated interview. in this 8:00 our, wall street and washington time, we are waiting for the president of the united states. he has left the white house. we should have images of marine one in a moment. it is andrews air force base. air force one awaits this president for his first trip abroad. more than just a visit to cornwall and the g7 nations. he will make the grantor, as presidents do, including -- will make the grand tour, as

presidents do, including a meeting with the queen. with the yield front and center here, the yield indicating the oddest of american economies, one point 50%. terry haines, every president goes abroad, and then they come back. i love what politico says today on the ghosts of the legislative graveyard. what does the president come back to in washington? terry: what the president comes back to is i think approbation, positives on handling of the coronavirus, including how he will continue to talk about united states leadership in the g7. i think he comes back to gathering momentum in a positive way on infrastructure. i think on g7 and the taxes, i think people need to understand in markets that there's far less

here than meets the eye, and congress is unlikely to take that up. and on semiconductors, but washington has done largely as throw money at a problem instead of trying to fix immediate issues in the supply chain. tom: you are expert on conservative gridlock. are we in gridlock now, or is it a new gridlock? terry: i think there's gridlock anytime that the progress is on the left and the conservatives on the right ball things up, but when the center of both parties comes together, as they have on covid spending, and as i think they are still likely to do, about 60% likely to do on infrastructure spending, then you don't have gridlock. but those are short-term agreements that continue to exacerbate longer-term problems like the debt and the deficit,

and may feed into the inflation problem we were talking about a few minutes ago. romaine: we are looking at live pictures of marine one landing at what a sanders -- landing at joint base andrews. what is the claps that president biden and the americans overall have on the international stage right now? terry: i think it is somewhat of a well-meaning trope to say that president biden is reestablishing leadership. what he is trying to do is use a different form of leadership that is a lot more collegial than the previous administration , which was set off i a lot of frustrations with european countries not paying their defense bills, not doing this and not doing that, and trying to reset the relationship. president biden is resetting the reset, but he's got one big plus, which is that the nature

of concerns with china and russia are both focusing minds in a way that hadn't been done over the past few years, and that is really the nature of american leadership here, to try to fight common solutions to those fundamental problems. lisa: it is not just internationally, but also nationally. we saw that plan passed by the senate yesterday on a bipartisan basis to help support certain industries in the united states to become more competitive against china. how material is that in your view? terry: you said in the last hour that it might be rearranging the deck chairs, and i think that is true to some extent. markets need to understand that this is what the endless frontier act is all about, about long-term issues. that is perfectly fine. but at the same time, there are

no answers, and unexpected, really, to the immediate supply chain problems, the immediate rare earth problems, all of the other issues with semis, much less the other issues with china. so what we are going to be doing, and there's no view in washington as to why we need to be throwing money at the semiconductor industry, which last i saw, didn't really need money to be thrown at it. so the long-term problems are being addressed, but not the short-term problems, and that is what markets need to understand. lisa: markets are also trying to understand policy and head-to-head -- and headlines that sometimes seem confusing. we saw talks per down between president biden and senator capito. you wrote a report probably thereafter saying don't believe tonight's erroneous press headlines that infrastructure talks are ending.

they are not. they will continue with an expanded bipartisan cast of characters. what is the distinction of this new bipartisan discussion from the one that had been being had between capito and biden? terry: no sooner did i write that report that a bipartisan group including the so-called problem solver caucus, and in the senate including senators cassidy of louisiana, as well as apparently democratic senators manchin and sinema, came out with a proposal of $1.2 trillion which is now getting into my bogey of a deal at $1.25 trillion to 1.5 trillion dollars. but what is a port to understand is this group and president biden are now $500 billion apart overall, and $250 billion apart in new spending. so we are on the way to a deal getting done, i think.

tom: terry haines of pangaea is with us, and he will stay with us right now. we witness the president of the united states as he begins his first trip abroad. this is the g7 meeting and course wall -- meeting in cornwall, southwest of london. the president leaving from the white house with mrs. biden, and they will leave on air force one. for those of you worldwide, the east coast and out to ohio of the united states invaded by cicadas this summer, and the press plane had a mere seven hour delay, according to the associated press come out of dulles, west of washington. the president is moving east towards the atlantic ocean at enders air force base -- at andrews air force base. the president going to a g7 meeting, and as we heard earlier , this is someone very familiar with g7 politics.

lisa abramowicz, ian bremmer making clear we could not have a vice president more understanding of this approach. lisa: the question is how much weight that will carry based on the actions of the united states , based on president trump administration, and frankly, that began several presidents before that, that the u.s. started to depart from the rest of the allies and the rest of the european continent. there's a question of what president biden can do to restore those alliances at this point without some sort of material legislative action. tom: image is everything, as they come off of air force one wearing marine blues. he looks like romaine bostick, casual on the weekend. [laughter] with the aviator glasses going. lisa: but it is important, this is his sort of common man look in the common man appeal.

how much that is going to read in europe at a time when the u.s. is trying to restore its relationship is going to be important to see. tom: he seems fired up. we will try to listen in here and maybe hear something from president biden. pres. biden: strengthening the alliance. making it clear to putin and china that europe and the united states are tight. thank you. [indiscernible] pres. biden: i have one and i will be announcing it. thank you. [indiscernible] pres. biden: who knows? tom: terry haines with us of pangaea. romaine bostick in for jon ferro, and lisa abramowicz.

i can't help but note every step of this trip, including how he walks with the queen of england, will be as compared to president trump. there will be a comparison made every step of the way. terry: i think that's true. what is likely to come out is resident biden is a lot of things -- is president biden is a lot of things, but one of the things he is his very comfortable in his own skin after a lifetime in the public. you were talking earlier about the style being important. that is kind of relaxed, but focused at the same time. it will generally go over well. as depressive or terry said yesterday and i thought it was entirely appropriate, the idea that he gets to look people in the eye for the first time as president, and any group of leaders gets to look at each

other in the eye and person for the first time in over year. . it is hugely important. i don't want to over dramatize this, but it is not too much to say that there's is a potential inflection point here geopolitically. that is probably a good thing. lisa: president biden is trying to restore alliances at a time of a very different dynamic on the european continent and beyond. the idea of brexit, and the united kingdom is a very different relationship right now with brussels than it has had in the past and pre-trump. what is your view on how he plans to bridge this tension between the u.k. on the continent? terry: i think there's an understanding in the american government that the u.k. and the european union are working their issues out. you see a lot of tensions, most recently on the import and

export of sausages which has given way to lots of funny headlines in the press, but there is still back-and-forth tension on the commercial tension on the commercial relationship, but there is an understanding there is much more there that unites them then divides them, and secondly that the u.k. and europe together will be united on big issues. bidens task is to try to cement that. number two, he has to try to smooth over the divide between big nations in the european firmament and small nations. that gets to the heart of his g-7 trouble. the finance minister deal is what it is. it is wishing and hoping in my view. as long as you have the ireland problem, an agreement will be tough to come up with. tom: we heard that from the

leadership of hungry who made it clear, "absurd." thank you. we have a historic moment in the market. we have romaine bostick looking at the meme stops. -- at the meme stocks. romaine: you are looking at these up 20% to 30% on the day. the meme stocks dominate, but we cannot ignore the larger legitimate type of stocks. just yesterday target closing a record high, google closing at a record high, and you have a lot of other of those big cap names camped out near record highs. that cannot be ignored. tom: capitalism marching forward and green on the screen across the board. the vix under 17.16. lisa and i watching a yield lower.

stunning consensus, 1.505. on the 10 year yield we had a 1.49 handle. we welcome all of you on bloomberg radio across the nation and on bloomberg television. a worldwide view to the g7 meetings. joining us is someone who has the courage to take a longer perspective. claudia psalm is one of the most -- claudia somme is one of the most interesting practicing economy. we are thrilled she can join us this morning. i love your morning report where you say would everybody grow up and stop looking at weekly claims, stop looking monthly, thinking monthly. you want us to have the courage to look out a decade. what you mean by that? claudia: i follow every shred of data just like everyone else doing macro economics.

i am so frustrated by the fact we cannot even set the latest numbers in the context of the pandemic, let alone the decades of trent we have seen. inflation is just one example, has trended down decade after decade. crop -- trends do not reverse in a month or two. we have seen for decades fewer people working. the employment to population ratio has been going down if you smooth across the recession. tom: claudia sahm with us again as air force one begins of flight. 3:00 this afternoon the president and first lady will be in the united kingdom and then onto cornwall in the g7 meetings. very impressive they will go to a castle, i think that was and pull dark as well. the g7 -- in poledark as well.

the g7, where does the u.s. fit in after the trump years? the president wants to reassert a biden tone internationally. how do you suggest his best practice would be? claudia: it is time to lead and time to work with other countries. we are not going to be on track until the least privileged among us in the world community are on track. the united states has a moral responsibility to help people get out of the pandemic. there is a leadership of the global economy that starts at home, and investing in the united states and its people. that is an example we need to set for the rest of the world. lisa: let's tie the idea of the global stage with the domestic one, the idea of inflation being an international story. one reason people have said for decades inflation is coming down is because inflation -- the

disinflation imported from china . cheap goods the u.s. is importing. we are seeing a shift. how much does that change in the underlying premise inflation does not pick up if china is a wealthier nation seeing inflation pickup. claudia: it is important to know we have different crosscurrents. inflationary pressures now that we are still in a pandemic, they are with us. their supply chain issues that have come from the pandemic that are pushing against it. it is kind of a race between the two, but i am betting on the longer run trends. like china it may shift around the world. it will do so slowly. we are not turning on a dime. lisa: there is a question as we emerge from the pandemic and president biden saying the world vaccination strategy he will

detail in his trip to europe as he heads overseas. going forward, what is your conviction that all of the former fed officials coming up warning against being too sanguine on inflation are wrong? claudia: i am a good forecaster and i've trained with the best in the world. the federal reserve takes inflation very seriously. the staff did better forecasting than the federal open market committee for years, so i think there is a thoughtfulness, a grounding in data, and an understanding that supply chain issues do tend to be temporary. we live in a very different economy than in the 1970's. while i think inflation will run year-over-year around 3% the rest of this year, that is a good sign. that is an economy getting back on track, getting people back to work.

i want people to write down their numbers so we can have a conversation. romaine: do you think if we got a 3% or anything around there, do you think there would be any conflict with an inflation rate at that level, and i guess the other side of the mandate, which is getting the full employment level at this point. they are -- claudia: they are both pointing in the same direction. last year inflation was running around 1%. the fed says it wants around 2%. the last time i checked 1% and 3% average to 2%. the fed is on track and we have millions of people not on the job. their mandate is pushing in the same direction. i struggle to see the conflict. romaine: as part of the mandate do you think there'll be more focus on the quality of jobs rather than the average number? claudia: there should be. that is what for employment is. if you go back decades it was not about having a job, it was

about having a job at a livable wage and i'm surprised some of the movement we have seen, not just in wages but getting people more regular hours, there are 70 things we can do in the labor market to make jobs better -- there are so many things we can do with the labor market to make jobs better that are no-brainers and should have been there before the pandemic and we were not. tom: thank you so much. we have to keep it shorter today because of the president's trip. claudia sahm. i cannot say enough about following her on twitter to get her thoughts about the present economic data. lisa, the president taking off to cornwall. the history he drops in on his extraordinary. i was not aware of this. poledark was shot there and i think johnny depp in pirates of the caribbean. if you go to the inn in say knives come is only back to

1312. lisa: is this wikipedia? you actually know all of this information about cornwall? tom: i am really a fan of poledark. lisa: preparing for this show is always an interesting moment. romaine: you prepare for this? [laughter] tom: this goes to claudia's comments, because cornwall is very distant from the boom of the greater london area. there was a bit of an uproar for this g7, the meetings where the hotels, some homeless people were reportedly pushed out to get other staffing and security in. he parachutes into a microcosm of the qualities we see in the united states. tom: in all seriousness there's a lot of symbolism -- romaine: in all seriousness there is a lot of symbolism to the site where this will be held. we talk about it the perspective

of bided and his allies, but we also have to look at it from the context of what is going on in the u.s. in europe. the tensions we have seen the last four years between them. that continues. i'm keeping more of an eye on that rather than what biden himself is doing. tom: away from the g7, it is the g20. lisa: that is what i was going to say. it is telling you about the inequality at a time joe biden is saying he will announce a world vaccination strategy. the idea we are in this together. if you start to have a widening disparity between wealthy countries and poor ones, that will hamper growth for everybody. we have seen it is a global economy and we cannot get it off the ground without the full potential. that will be an ongoing theme with competitive undertones throughout the meeting. tom: let's do a group data check. futures up seven, green on the screen.

what you see in the foreign exchange market? romaine: you have dollar weakness once again, down .2% on the spot index. you look about the yen. we have been talking a lot about latin america, i know that is not big, but keep an eye what is going on the peso. a lot of activity. lisa: i will look at the 10 year. 1.4874. the momentum is to the downside. definitely plumbing close to the 1.7 percent -- definitely coming close to the 1.7% resistant. we will talk to greg peters on the open. curious to see how much more downside momentum people think yields have as people shrug off the threat of inflation. tom: credit suisse doing what everyone else is doing. greg peters will be with us on radio and television. credit suisse out with headlines

moments ago. to reward some managing directors, and other staff. a sign of the times, to say the least. departures but also retention bonuses offered. this is bloomberg. good morning. ritika: with the first word news, i'm ritika gupta. the u.s. is appealing to iran to accept a mutual return to the landmark 2015 nuclear deal. world powers are battling in vienna for a sixth and final round of talks. they're are trying to persuade iran to accept a cap on its nuclear programs in exchange for lifting of sanctions. president biden and european leaders -- the two science will promise to remove tariffs related to steel and aluminum before the end of the year. they will also agree to resolve that dispute with airbus and

boeing that has lasted for almost two decades. four months ago, a failure of the electrical grid sparking backlash. now the state is on pace to have as much green power development in the coming years as the next three states combined. $20 billion worth. that is according to a trade group. there was speculation amongst conservatives that frozen wind turbines were to blame. an electrical vehicle maker may not have as much cash to get its pickup truck to the market, and the start that recently went public warns it may not survive the next 12 months if it cannot raise more capital. it operates out of a shut down general motors plant in ohio. strategists worn another bad week for bitcoin could be a precursor for more pain. the world's largest cryptocurrency is down 10% this month. bitcoin is worth a little more

than half of what it was worth in april when it hit the record high. several analysts say the $30,000 threshold could lead to a dive to $20,000. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> the market is becoming more concentrated and less contestable.

more importantly, these companies can quickly also have some power and determine what we see, what we read, what we do. the concern is they might do it for economic reasons but also political reasons. tom: a great student of american capitalism with comments on these moments we live in. lisa is not with me. romaine, we have to go to the equity reality of a 10 year yield 1.4 8857. romaine: that is a wow statistic. if you thought this would happen, kudos to you. this will provide an upward lift on equities. not as broad as you would think on the s&p futures, 4227. a strong bid over the last two days because of this drop in yields on some of the smaller cap names.

the russell 2000 within striking distance of the all-time highs. that is your outperform or. tom: the president on a trip to cornwall to begin the g7 meetings and an extensive european trip after that. i do not think there will be a quarantine, maybe there will be a test. george ferguson is bloomberg intelligence. when will we be able to fly to heathrow expert. he joins us. it has been an immense frustration. we put someone on the moon. we develop two phenomenal vaccines, but we cannot figure out how to open up jfk to lhr and back. how have we failed at something that simple? george: the challenge is working with governments and working with countries that have different concerns, fears, expectations.

each government has to manage their citizens's desire for protection for the virus as well as their comfort with the vaccines and proof of the vaccines. it is proving to be hard. tom: will we travel internationally like we remember? will we get back to what it was or will it be something new? george: i think we will because there are so many areas of the globe that are so dependent on travel. as u.s. citizens, definitely. we traveled many places around the globe, and i hate to be so blunt, but our money is desired in those places. the travel industry is important. that is where you are starting to see open, the southern tier european countries open up to

consumers. greece was open early. we have close relationships with -- we will find a way to get around it. in asia we have close connections. as u.s. travelers we will travel like we did again. romaine: the headline this morning is the headline state department loosening travel warnings for france, canada, and other nations. there has also been an uptick in domestic travel. when you look at some of these trends, how does that fall into the idea the playmakers will give -- the plane makers will get back to the normal growth with regard to orders and deliveries? george: if we are talking normal growth as the end of 2019, 2018, i think we have a while to go. 60 airplanes a month of the 737, a320. i think we have a while to go. we have a lot of park fleets.

there is a lot of fast growing carriers around the world. the fast-growing low-cost carriers are trying to take market share and they do not have a lot of park planes. they are offering cheap fares and grabbing at leisure travel that wants to travel now. boeing and airbus are feeding those airlines. when you go back to the full-service carriers, you have airplanes sitting on the ground. getting to 60 is a ways away. 30 or 40, we will see that late 2022 or 23. romaine: when do we see some of the capacity come back? anyone who is tried to book a plane knows it is difficult to get a flight you want at a time you want at a price you want to pay. when you look at some of the planes that are not being used, you have to wonder what are the airlines doing? george: they are starting to bring those airplanes back. maybe they are hoping that will

help the bears out a bit. there are processes for taking the airplanes out of the desert. the calculations the airlines have to make is it worth it to do the process to keep the airplane out of the desert and makeup maintenance needed. is it worth that and are they going to keep flying the airplane into the winter season? the big question we have is if business does not come back as strongly, it is still not back has strongly. we saw southwest report 70% of business travel still down. if it does not come back strongly, we will not have a great q4, one q. maybe you want to maintain it here -- next year. tom: thank you so much. something all of our audiences care about. it is never boring.

i thought it would be -- not that i thought it would be a snooze fest, but i thought it would be predictable. 1.4857 is stunning. ira jersey publishes for bloomberg intelligence. he is focused on 1.47, and after that 1.38%. romaine: i think you are going to see more movement once you get past tomorrow. a lot of people want to get a peek at the cpi numbers before we start to see any significant move in either direction. you can see the spring being coiled and the potential with yields dropping, and economic data that seems to fall into the idea the fed will stay on the sidelines for longer. that could be the next catalyst for the equity market. tom: the underlying thing i've heard in the last two days has been beginning to look to next earnings season. no one has considered the machinery of what we do after jp morgan announces and we go

through all of those companies moving forward. romaine: next earnings season i think will be a little bit of a different appointment -- a little bit of a disappointment. a lot of people are focused on fed policy, getting clarity out of the august meeting and potentially at the next fed meeting, if we start to get a little bit more guidance as to what the roadmap looks like for tapering and for normalization. tom: a roadmap is to do a data check on an eventful day on wall street. the inflation story, a lot more color on that in the next 24 hours. futures up seven, dow futures up four. spx doing better than the dow. the nice nasdaq left. 17.03% on the fixed -- 17.03 on the vix. the president will go to cornwall, as will guy johnson. guy johnson giving coverage on the g7 meetings beginning

tomorrow. we will advance the domestic dialogue and the senate from pennsylvania with david westin. stay with us on radio, on television. this is bloomberg. ♪

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lisa: it is all about the yields . yields lower. stocks poised to open higher.

i am lisa abramowicz in for jonathan ferro. the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ we begin with the bit -- lisa: we begin with the big issue. investors gearing up for another big data point. >> cpi print. >> the consensus is for a .4 pickup. >> any outside surprise will dominate any of the other news. >> what are the drivers comment is that start to dislodge things? >> we do not see this as a destructive influence. >> the question will be how transitory that is. >> the components of that