on a switch and have the economy come back. >> we are seeing the face of the new shape of inflation in a post-pandemic world. >> everyone is pricing in this perfect transitory soft ending. >> low rates, positive growth, and strong earning. that is a good backdrop for risk-taking. >> the fed has loaned everyone to sleep with the kool-aid that they won't ever focus on inflation. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: we welcome all of you to a simulcast on bloomberg radio, bloomberg television, if it's monday it must be brussels. matthew, the g7 meeting, what was the score from germany and what do we look for in brussels? >> i am pumped for today because we had the wrap up of the g7 and

now we had the kick of nato. plus we have so much market action around the fed and the ecb. carl weinberg has an excellent note out and we will talk to him. we will get through a lot on this monday morning. tom: somebody stopped me on the street and said they love obligatory car talk. we don't do that with lisa abramowicz, we do that with matthew miller. a lot of international relations at this hour, we have a photo shoot in the next hour. the moment of this market in this week with the fed meeting, retail sales tomorrow, a big week for economic markets. everyone -- lisa: everyone looking to see if the federal reserve will raise rates. people are looking at the dots and their projections and the sense of whether 2023 is the year in which they start lifting rates, in which they have to start tapering in the near term. it's amazing how much fear there

is of complacency at a time of record highs for the s&p. bond yields near record lows and the question of where the fed goes next. tom: brent crude at $73.34. lisa: you can see that grind higher and lumber prices saw a big drop last week, one of the biggest in the recent years. there's a question of whether the fed is correct. is this transitory? what's the risk if they are incorrect? the and rational time saying the fed is allowing the risk to build so much with complacency about the fed risks are large -- hard landing if they have to raise rates. tom: is there an effect on transitory inflation in germany? matt: there really is not unbelievably. we have seen the numbers tick up and are expecting them to keep going in the near term. watching the bun this cog --

watching the financial local news here in berlin, there is not a lot of talk or concern. tom: we see it in the u.s., certainly in used-car prices. the grind higher and prices continue. the vix 15.9 zero, what do you see in the data? matt: interesting i thing is -- the interesting thing i see is the yields. we see yields coming up here, but the levels are so low it shows you the risk around central banks is asymmetric. tom: the 10 year real yield, negative 0.89% earlier, a little less negative than it was on friday or thursday.

on the commodity complex i looked carefully this morning, but with weaker commodity prices the dollar paces the euro, and the yen 109.68. here is lisa abramowicz. lisa: we will watch the nato summit in brussels today. how much of the countdown to president biden's meeting with vladimir putin on wednesday, how much is he going to try to come to some sort of consensus with the allies ahead of that. i'm interested to hear any details and how nato nations will create some sort of rival to the belt and road initiative of china, that was a key issue that did not have a lot of clarity out of the g7. the ceo of morgan stanley will speak at a conference held by the bank. i want to understand how quickly people are spending their cash piles. this is a key? underpinning this economic recovery.

we will get a feel on that tomorrow with retail sales coming out in the u.s.. the big? is do people have cash in the bank with intention to spend it? goldman sachs is also having its staff, most of them come back, and they are requiring people to report their vaccination status. this to me is going to be one of the first companies globally to say, come back, we are done with the work from home experiment. what will the roadblocks be and how much are people going to want to come back? will this be an employee retention issue? will they be more productive? will banks see when there is camaraderie they want to come back, and are we better and more profitable? tom: sonali is on site at goldman sachs. to me, this is a huge cultural statement by goldman sachs.

the partnership is known from the weinberg family as saying, we are different, we are working, let's go. we have breakfast and dinner for you today. >> and music at some headquarters. tom: do i get the surveillance dinner tonight? lisa: if you stick around. as a survey that shows that younger employees actually want to come back to the office, because they feel like they are being left behind. there was a survey that showed about two thirds. tom: matt miller, where are you on this? i can't say anything, because i'll get in trouble. matt: i have never worked from home before. for me the office is the only thing i know. i can't believe that others who have been working from home for a year will be back to five days a week. tom: we have the nato disbursement and russell's -- in brussels.

this is not as scripted and planned on television as it was in cornwall where we could sit on a scene. this is a bit helter skelter, the gentleman from canada arriving. act in 1949. -- back in 1949. matt: that hair. lisa: lovely hair. tom: you like my hair? matt: i was talking about trudeau. tom: let's go to someone well groomed, carl weinberg joins us from high-frequency economics. george sarah bellows -- george from deutsche bank says it's a v-shaped pandemic recovery, but we are heading now to a steady state. does high-frequency economics see a v-shaped boom or do you see a steady state? carl: good morning.

we have already seen a lot of the v-shaped that i think we are going to see. that low hanging fruit has been picked, the firms that are easy to reopen are reopening and people are coming back to the work place. households are putting their spending back towards services, away from the goods they have not been able to -- services they have not been able to buy. we are going to move to a steady state, but the question for the markets is if it is a steady state of inflation, or transition. do we go back to where we were before? >> everyone wants to know, but i have to ask you about the pacific rim boom i see priced to and so many places. does high-frequency economics believed in an enduring pacific

boom? >> we have to look at the pacific as a medium-term proposition, that's the part of the world that is growing fast and has further to go before it starts to run into obstacles. in this recovery we will see a lot of increased demand for imports. this demand rises faster than supply. these countries make stuff that we want to buy. i think the pacific rim is a place to look for to outperform what we are seeing in europe and in north america. lisa: one thing you've been vociferous about is that perhaps there is not that much to worry about about the inflationary impulse we are seeing. you have matt miller talking about the asymmetry of risk coming out of this fed meeting. why is the fed right? why is it the best way to go, allowing inflation to run hot at a time where near-term data shows a significant surge in inflation. carl: matt has the right idea

talking about asymmetry of risk. the question is, what risks are most important to the fed and what are most important to the world economy? is it overshoot on employee shush inflation, or an undershooting on where we go with jobs. what scares the fed more? a persistently high unemployment rate or a touch of inflation that it tells us many times over and over again it has tools to manage should it occur. i think the fed's number one problem is inflation right now in terms of -- is unemployment right now in terms of the things they are looking at. i think the fed and every other central bank in the world has stated the objective of getting the unemployment rate to the point where there are persistent price increase near the inflation target. we have some transitory price increases.

prices are going to be rising as fast three or four months from now as they did last month? the answer is no. we are seeing a surge in demand and a shortage of supply there's a persistent rise in prices that will go on for multiple years. matt: who do i pay to get your research, to get on your mailing list? your note framed up my day so well. tom: weinberg has been doing that since lehman brothers and the founding of the nation. matt: a little jaded when it comes to the g7, do we get no surprises out of this meeting? is it all predetermined? carl: for the first time in -- tom: you froze him.

♪ let it go, let it go. ♪ what is so important is the guests have different characteristics of their notes. the weinberg high-frequency economic note is important. what's important is the concept of international economics from mr. weinberg. that's the shock you were talking about. lisa: if you look at what is going on now, you can see the dollar weakening has brought in a lot of international investors to the treasury market. you are getting a greater foreign bid to talking about pairing the international picture with full faith and credit. the idea that low bond yields make sense based on where we see the rest of the world in terms of growth and demand and income. this to me is the key question. can one nation get inflation without all of them --

tom: it goes back to currency as the global litmus. one of the important things of this month has been the states and -- stasis of euro. it is frozen at 122. matt: we have the same issues you do. the issue i keep coming back to is the savings rate. there was a lot about how pent-up savings will drive the growth and inflation, here in europe and in the u.s.. i don't know, how broad-based is that savings? are my gamestop shares savings? tom: no. [laughter] i want to show the image in brussels. our surveillance research has shown that the blue carpet in brussels, it starts in luxembourg. the leaders get out of the car in luxembourg and they walk all the way to brussels. look at that.

it looks like the oscars. lisa: it's the olympics. tom: the president is in brussels. after seeing the queen yesterday. stay with us today in brussels. this is bloomberg. ♪

pres. biden: i think you are

going to see straightforward dealing with china. we are not looking -- as i told xi jinping myself -- i am not looking for flicks. when we disagree i will stated frankly. there is plenty of action on china, and there is something, i'm sure my colleagues think they could improve if they wanted, but i'm satisfied. tom: the president of the united states in cornwall, most of the report cards say he had a successful g7 meeting. now onto brussels. it's a different brussels than the stereotype from our youth. nato is 30 countries including northern macedonia, the only one in bloomberg that knows the name of every eu nation is maria. my first question is back to cornwall and then to brussels. how does the european community, the eu, the ec and brussels, how

does it fit into the g7 continuity? how does it fit in around the table at cornwall? maria: she does represent the commission, which is becoming incredibly powerful in brussels and in europe so essentially to get everything done in the european union you need the french, the germans, and then you will need brussels. she is that person who represents the brussels voice. you need to remember that she was -- she does know a lot about this topic. it is relevant to some extent. tom: you absolutely nailed it with your defense. what do the nations want from the president of the united states on his unilateral exit from afghanistan?

maria: we have not heard anything on this and that significant. the real focus for the country, even europeans, ukrainians, lithuanians, poland, it is russia. vladimir putin has been sending so many troops to the eastern border and they worry about that. this is the number one thing they want to speak with president biden about. they want a clear commitment ahead of wednesday that he will go in and represent the nato commission and get tough on russians. >> will there be talks getting tough on russians, sitting here in berlin it's so interesting to see that the german government wants to funnel billions of dollars to this nord stream 2 pipeline, to vladimir putin in moscow. what does everyone else think

about this thing other than the u.s.? maria: we know there has been a lot of pushback on the nord stream 2 and that eastern european countries made money by transfer fees and are not going to make money because this is a direct line from russia into germany. this is a much more nuanced story. it's not about germany wanting to make dealings with the russians. the germans have to build this thing because otherwise they would get -- they want to minimize the impact of the north stream pipeline, looking at something that will reduce the quota they can import and compensate some eastern european countries. they are trying to find a way out of this, but the capability from the northern ash north stream pipeline is reduced to a minimum. lisa: there is a tension that the nord stream 2 issue highlights, the economic concern

paired with international, human rights, and trade concerns on a more global and existential a level. we saw that in cold relief during the g7 with europe pushing back against hard-line rhetoric from the u.s.. where are we in that? will we see any development building on what was discussed at the g7 at the nato summit? maria: it goes for russia and china. what the europeans say, and it's important to get their perception here. they are not soft on china and they don't say they want to be soft on china or russia. the dynamics of the european economy are different than that of the u.s.. politics need to be different to some extent china has got to be arrival. it is hard to take this all the way without thinking of the repercussions that it will have from europe. there is this idea that they want to be autonomous and that

europe does not want to follow everything the united states has to say. tom: what is the tension point for general lincroft, the supreme commander of nato? what is his tension point at these meetings? >> as always this is a recurrent theme, he will want to get a clear assurance that everybody stands by article five, that if there is aggression against one there will be aggression against everyone and that and supple -- president biden saying that is sacred for the united states to give a different town to president trump, and he is going to want to see money. tom: thank you, at the end of the long blue carpet in luxembourg this morning with all of our coverage from brussels as well. i look at nato through the prism of all we grew up with, but it

still the end result the remains of world war ii. like there's a question of how much unity remains today and the relevancy of this current world going forward. i think about china and the lack of coherence with respect to the view coming out of the g7. it's interesting the competing plan against belt and road and how you reach out to all those nations. tom: the president of the united states with the former minister of norway as they begin their nato bilateral's. the major announcement in america as we saw president biden, apple stores will let you in there without a mask on. matt: as you watch the change at least in the west, keep your eye on the u.k.. they now have to delay their reopening, should it be longer?

>> extraordinary, i don't understand it. i read a couple of the articles trying to understand it. futures up three, the vix 15.9. >> again this question about complacency, we are going towards a new record high, inching up every day. tom, do you think that was sabe was cute? tom: i think the dog delivered the goods. this was a pekingese at the westminster dog show. lisa: the breeder said, he can have a filet mignon and i will have champagne. he will carry him around as much as he needs. tom: these are the imperial dogs of chinese royalty years ago.

i think wasabi belongs on the abramowitz couch. matt: she definitely needs a dog in that one looks fitting. lisa: who is going to pay the bills and walk it? tom: we will have more from the westminster dog show. this is bloomberg. ♪

tom: good monday morning. bloomberg surveillance. jonathan ferro is off. matt miller miller is in from berlin as well. there is a nato meeting. there is a list to the equity markets, futures are up three. the yield is stasis. a little bit higher yield. oil is $73. $73 on brent crude. robert joins us. he is an advisor.

ambassador, thank you for your perspective. i want to go back to one of the chapters of your wonderful book, the price of liberty. the first great test. what is the first great test for president biden and he meets with vladimir putin? >> he has to demonstrate the united states is going to be much more resolute in resisting various cyberattacks that come from russia, or are sponsored by the russian government. where trying to sort out which is which. we have been plagued by lots of cyber problems coming from that country, directly or indirectly by people on that territory. these are not only disruptive in themselves, they portend the prospect of things getting worse or ask a living. -- escalating.

we are very cyber vulnerable. tom: can we be cyber offensive? >> i'm sure we have been. i'm sure we don't say anything. the reason is we don't want other countries, not just russia, other countries to understand how we do it or what we're doing and what our technology is. we have the technology to be more offensive. there is some sense that if they go too far, the united states can take action against them and it could be very disruptive. they have a weaker economy. we are very connected economy. a lot of things can happen here. electricity can shut water supplies down or transit systems or energy systems. the world is in a very precarious place. lisa: how much unity is there

among the g7, among the g 30 in combating cyberattacks and working together to make sure networks are up to speed and information is shared. >> i would put it this way, we've got a long way to go. there are different countries that are vulnerable in different ways. some european countries have borne the brunt of this. there is really not a collective doctrine of collaboration or what constitutes an attack that requires retaliation. the other problem is sourcing and what they call attribution. they sometimes don't know where the perpetrator is. that makes it more difficult. the vulnerabilities are becoming increasingly apparent. nato is the vehicle for doing

it. we don't know as much about how these have gone, where they are coming from. we don't have a doctrine of specific retaliation for specific attacks. we know things are getting worse. we have to improve our defenses, which have not been all that good. they have been inadequate. if they don't deal with their territory, we will have an opportunity and a will to take more action that could be very disruptive to them. lisa: there is a broader point here, leaving g7 and heading to the nato summit. there was disagreement about how hard of a line to take with china. my eyes are on china given the

predominance of the global economy. where are the biggest question marks in terms of a unified strategy to interact with china? >> it's a great question. there is not a clear answer. europeans are concerned with certain things. the european companies, the problem is companies in europe are very vulnerable. they have become very dependent on the chinese market. that has been cut back somewhat. if they take action against have -- china, europeans are not so concerned about the strategic strength of china. these china sea, many of the

geopolitical and strategic issues in the pacific we are concerned about. the europeans are more concerned about the human rights issues and trade issues. they don't want an all-out trade war or confrontation with china. the united states has a lot of geopolitical issues. we have a navy there. the europeans don't. we have a different set of issues on the strategic side. we have similar concerns on the economic side. my guess is if there is to be some measure of unity, it's in those areas, not in the geopolitical ones. they are concerned about their economic vulnerability and are more reticent to do that. matt: do we risk pushing china and russia closer together?

>> we've already done that. the russians and the chinese have had their issues over time. the first opening between the united states and china came because the chinese perceived a russian threat to china. there were numerous russian divisions on the chinese border. it hasn't been a comfortable relationship. they are beginning to realize that if they want to deal with the united states and resist some american pressures, they will have to work together. that's what they are doing. that has happened already. the risk is it will happen even further. other countries in the middle feel they don't want to be caught like -- between.

matt: i want to ask about that. the last time i sat on set with tom keene in person, there was an attempted coup d'etat on erdogan. how does turkey fit into nato right now? they have the second largest army in the alliance. they don't ci to eye with the u.s.. >> they don't on numerous issues. the turks are extremely valuable. their bases are very valuable to the united states in resisting russian pressure. the turks have made erdogan improvements to relations which they have done. they still want assurance that the united states are going to have relations with the russians

deteriorating. are we going to be resolute with putin moving troops into central europe. the troops have gone up close to the border. there are we all committed to article five? what would we be due if there were incursions in article five countries. what would we do if there were incursions into other countries that are not in nato, whose interests are important to the united states. how do you convince vladimir putin to be restrained, it's going to be critical. are there ways of improving

relations with russia. tom: we are out of time. thank you so much. we can't say enough about his books on the united states and our diplomacy. i looked at oil. we did not get to a 74 level on brent crude. you talk about inflation, you have to fill up the hummer. lisa: it might be transitory about how long you have that hummer. there is a question on how much this has to do with new israeli leadership coming on board and the hardline. there is a question on how quickly and whether that supply will come back into the market. tom: we will touch on this during the day. i know david westin will touch on israel. lisa, the other idea i see is

corporations with goldman sachs returning. the idea is a wall street that will move forward. that means the issuance of corporate debt. it has to be a record year for any issuance of debt. lisa: it will likely continue to be. there is a question about how speculative some of that is. matt: you don't see that as a sure thing? lisa: it's already happening. matt: i thought it was fascinating. there was a 6.5% return on those bonds. lisa: there is a question on why people are mine bitcoin

directly. tom: i am lost on that conversation. matt miller had a good weekend. coming up, meetings of the north exam it -- like tree organization. this is bloomberg. ♪

>> the countries launched the reopening. more than 5000 in february to an average of about 300 over the last week. benjamin netanyahu is plotting a comeback. the leader was voted out of office on sunday. he was replaced by a shaky governing alliance. netanyahu issued a pointed morning as he addressed parliament in his last moments as prime minister. the new coalition will govern with the slimmest majority with 61 of 120 seats. global news 24 hours a day, powered by 2700 journalists in more than one hunted 20 countries. this is bloomberg. ♪

>> we have pledged over $1

billion either directly or funding. that is 100 million from the u.k. that is another big step. tom: the prime minister of the united kingdom after the most successful g7, including an attendance are the royal family and onward to windsor castle as the president met with the queen. if you missed that yesterday. we welcome you to bloomberg surveillance on radio and television. dow futures are up five. retail sales tomorrow. then we go onto that important fed meeting. four fed coverage to come up. it will start a little bit earlier because there is so much to talk about. right now, we talk about this pandemic and the recovery in new york as well. novavax will join vaccines with some good statistics as well.

jonathan ferro is off. matthew miller is with us this hour. new york is in celebration. i would also suggest london is not. what is the difference? >> the differences vaccinations. vaccines are very protective. we are so fortunate that multiple ways of getting at a vaccine for covid have worked. they are working against all of the variant we have seen. you have to get both of your doses. matt: people are concerned about variants. there is more serious variant in the u kate can some of these overcome a vaccination if you've only had one shot of the two?

>> it is not as protective as two for the delta variant, the one that was detected in india and is going to become the dominant variant. it really is important to get vaccine to everyone. these global efforts are so important. it is important in the u.s. to get those shots. matt: everyone is vaccinated from 12 years old and up. in the middle and flyover country, i say affectionately because i am from ohio, it is less so. is that because people are anti-vaccine or's in the middle of the country? is it more difficult to get the

vaccine there? >> i don't think access is the problem for most people. it is still a challenge for some people who can't take off work or they are concerned if they have any effects from the vaccine they won't be able to take off from work. if they are able to take the time off, there are multiple places to get the vaccine. people shouldn't make too much of that. this will protect them from sickness and hospitalization. lisa: this is one of the central

efforts by the g7, going into the nato summit where mario draghi is walking down the blue carpet as tom was mentioning. the covid vaccinations are on the forefront of everyone's minds. as the population gets vaccinated, the question is turning to the booster vaccine. how long will they be effective? >> some of the data is showing protection from the vaccines that expand into years. there is good memory that the immune system will make sure it responds to what it last saw. it might be that we don't need a booster for some time. there are options for boosters, including this latest news from

novavax, which would be a very good booster vaccine. tom: we greatly appreciate it. moments ago, mario draghi is speaking. he had a successful tenure shifting from monetary duties over to driving lee forward out of the pandemic. that has been a challenge. establish for us the tourism in europe. lisa wants to do three weeks, italy over to portugal. lisa: the greek islands. tom: is that going to happen? lisa: yes. matt: the greek islands for sure. people are traveling inside their own countries. my wife is back and forth to spain. it's not terribly easy. you have to bring testing stuff.

tom: we adjust to obligatory dog talk. i look at this pekingese talk. you are one of the people that actually acted on this. you saw a westminster dog show and ponied up for the dog. matt: one of the executives was on the program 10 years ago. i asked him for a rottweiler breeder. he pointed me in the right direction. tom: who names their dog stephen? lisa: matt miller. tom: you name your dog after the richest grandfather and some alcoholic beverage. lisa: i love that matt miller

has creatures that are perfectly trained. his stephen as well trained? matt: no. deathly not. it is very loving with people. if he saw a car on the street, havoc would ensue. tom: her name is car car. right now, we named her after a kardashian. lisa: how about a car? we can dovetail into car talk. matt miller pointed out that mario draghi alive -- arrived in a lamborghini. matt: not that he arrived in a lamborghini, that they are almost sold out. they are almost sold out. draghi is italian. lamborghini is italian.

tom: thank you for joining us today. if you are brave, stay with us for another hour. we are in brussels. guy johnson is so off today after his wonderful work in cornwall. this is bloomberg. ♪

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>> if there's anything we've learned, you can't of turn on a switch and have the economy come back online. >> it seems like everyone is pricing in this perfect, transitory soft landing. >> low inflation, low rates, positive economic growth and strong earnings? that's a pretty good backdrop for risk-taking. >> the fed has effectively lulled everybody to sleep with the kool-aid that they are never going to focus on inflation. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. we welcome you to a monday simulcast on radio come on television. good morning across the nation and worldwide. from cornwall we moved to brussels and nato. i believe it is like a "surveillance" photo op. we have a photo op in this