♪ >> you will see more workers reentering the labor market, and the labor market is very hot now. >> i think growth is going to be quite strong. >> what is the fed going to do, and how does that play into everything else? >> what worries me right now about inflation is what is in expectations. >> the reality is that all of these things do go away, and you just don't know how long they take to go away. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. "bloomberg surveillance" from new york and from geneva, switzerland. we welcome all of you on radio and television, worldwide and across this nation. jan hatzius to join us later on the fed.

many other worthy guests. particularly thrilled that romaine bostick is with us today, sitting in for jon ferro. lots going on in geneva, switzerland. the news flow is extraordinary. i don't know how to dovetail the meeting in the fed meeting together, other than to say it is a world in recovery from pandemic. lisa: the other way to dovetail them together is that there are so many meetings going on that have to do with geopolitical issues, cybersecurity, how to deal with competition around technology. it he cares in markets. everyone is watching the fed. they want to know when they will buy fewer bonds each month. that is going to move markets more than any rhetoric, and that says a lot. tom: pretty much on schedule meetings. mr. putin lending a bit ago at the geneva airport. a motorcade to the villa le grand. right now, we need to address

the markets. romaine bostick, i would suggest the stasis of the markets into this meeting. romaine: stasis is certainly the right word. we have seen a bit of a holding pattern for the last week and a half. even if we don't get any meaningful change in policy, or even a change in tone, i think the market just wants to hear it out of powell's mouth. here's what's going to happen over the next few months. once they hear that, you will start to see maybe a little movement. in which direction, who knows? tom: we be the one thing that looks like helsinki of three years ago is the motorcade going by and then the empty street with the crowds waiting for the next motorcade. because of the news flow this morning, i think we should get to the data very quickly. futures at negative two present -- futures at negative two. romaine: it has been locked around 1.50%. gives you a sense of what the

bond market is expecting. that reflect what you're seeing in s&p futures, as well as nasdaq futures as well. we will see if that changes in a few hours. tom: oil advances, $74 a barrel. lisa: today we are expecting president biden to be meeting with vladimir putin of russia. that motorcade just arriving. the meeting expected to last four hours or more. vladimir putin knowing that president biden is tired after his tour of europe. the question is, do we get anything material from this meeting? what do we get in terms of president biden's relationship with russia versus president trump's relationship with russia? 10:00 a.m., treasury secretary janet yellen testifying in front of the senate finance committee, talking about president biden's plan for the budget. taxes very much front and center. how much is this still part of the conversation? how much is the democratic party drill down -- democratic party

going to drill down on higher taxes on individuals and corporations? at 2:00 p.m., the all-important fed rates decision. what this tapering mean? do they have to get down to zero before they raise rates? what does it mean if they do bring the dot forward, or were in members there. forward to a -- or one or two members b ring their dot forward? tom: the new slow is extraordinary right now. mr. biden arriving at villa le grand right now. the red, white and blue of the russian and american flags lined up on the lawn as the motorcade comes in. the building is absolutely extraordinary. this is a family residence from the 19th century gifted to the city, and the absolute hallmark of this villa, this was an acclaimed catholic mass i pope paul vi a good 15 plus years ago

-- a good 50 plus years ago. i believe it was 1969. i cannot say enough about the symbolism. now it is most different here, with mr. putin greeted by the leadership of geneva in switzerland. again, we hope to see images soon of mr. biden and mr. putin as well. i want to squeeze in here yousef gamal el-din with us. we got eight things going here in my ear. this is so important, at the fairmont hotel, looking back at the acclaimed fountain as well. geneva has done this so many times. what is different this time? yousef: the stakes are a bit higher. in the run-up to this, you talked about how both sides have described the relationship as

being at the worst level in years. there's been quite a bit of preparation. when i flew in, the airport was stacked with russian and american planes. -- an american flags. one of the local newspapers headlining it, actually. "biden puts geneva into the global spotlight." that gives you a bit of a reflection of how the city looks at it. in terms of what we might get in terms of outcomes, it is really about a small step forward rather than any remake of the kind of grandeur of gorbachev and reagan or khrushchev and kennedy, but it does have those historical underpinnings. i can very much feel it on the ground here in geneva. lisa: we are expecting joe biden to arrive in just a few minutes. anything material that could potentially come from this?

yousef: what you could get is a restoration of diplomatic ties. that is the kind of feedback that we have been getting from officials we have been speaking to. that means resumption of consumer services, so some visas could start working again. you might get something on cybersecurity, maybe something on climate change. but what i will say, and it has actually been quite stunning, is to understand there have been no plans for a dinner, breakfast, a lunch. they are not going to sit down together. and then the sheer heat of the day, to drive me to take off my tie before i go on air, that is also a factor. tom: it is a "surveillance" exclusive. romaine: at the end of the day, whether we have the pomp and circumstance of the meeting without necessarily the pomp and circumstance of the press conferences and dinners and

such, there's a general sense that putin has solidified a certain amount of control over the middle east in a way that the u.s. maybe had a little more influence and more control. is there a possibility here that the u.s. may be able to reassert itself in the region against the whims of vladimir putin? yousef: that is going to be one of the important talking points when they sit down together over the coming hours, is russia's leverage in certain parts of the middle east and africa, and how there could be more coordination. a lot of times in these conflict zones, you find they are on opposite sides of the spectrum. that is going to be one of the driving priorities that biden zeros in on, but mr. putin will firmly believe he has the advantage, especially given where oil prices are and how that has beefed up some of the costs.

tom: i want to go to your insight would be to acknowledge of the middle east. syria a major flashpoint here. the bottom line is, syria is front and center here. with the turmoil politically in israel as well, how does the syrian discussion changed today because of the end of netanyahu? yousef: it just makes it a lot more pertinent to find common ground and a proper solution that you can execute on the ground. the united states is losing influence in certain parts of the middle east. syria is a good example of that, where the assad supported regime , of course supported by president putin, they are able to hold ground. in coordination with iran, turkey, israel, and some of the other powers, here's what is being told to me throughout the last few weeks. the u.s. needs to step up in terms of leadership in the middle east because the absence of that is just going to invite

other powers like russia and china to continue to build out. whether the u.s. has the political capital for that, that is an entirely different conversation. tom: thank you so much, from the north shore of lake geneva, looking back at the reformation old city this morning. right now, we are absolutely honored to bring you from the cannon institute -- the kennan institute, their deputy director william pomeranz. professor, thank you so much for joining us today. if you were to write a long telegram from geneva today about this summit, what would you say? or is there a not -- is there not enough to say? william: i think it would be a very short telegram because we still need to see what actually the two leaders agree upon. we don't have any preliminary agreements.

i think a lot will depend on what comes out of this meeting. the relations between the united states and russia are at a low ebb, but this is not the cold war. i don't anticipate mr. putin arriving like the gorbachev and adding a surprise. i think it will be a businesslike meeting. they will agree to disagree on a lot of things, and it will try to see where they can cooperate. tom: very importantly here, and i think of the soviet union, how much of the soviet union tone or diplomacy is represented by mr. putin? or has russia completely moved on from the legacy that you are expert in? william: i think glenn rebooted does have certain soviet tendencies -- think vladimir

putin does have certain soviet tendencies. he's not interested in joining the global order, as it were. he's interested in sovereignty and russia's ability to assert its sovereignty domestically and overseas. so this is a really important aspect of putin's foreign policy. it is not overly ideological. it is just to make her russia is respected and has a sphere of influence -- to make sure russia is respected and has its sphere of influence. this goes back hundreds of years. lisa: president biden met with the allies and asked for their input about how to handle this meeting. i am wondering how much is biden talking to vladimir putin, and how much is he talking to the allies in terms of supporting how they want their relationship with russia to develop? william: i think coming out of the eu and the nato summit, we have seen a resurgence in the

role of the united states as a global leader and it is the ability -- and its ability to talk and communicate with allies. i think going into this summit, president biden has listened to his allies. there were some important achievements coming out of the eu and nato summit, both in terms of dealing with china and russia. i think one of the real victories for joseph biden happened before the summit with putin, and that is that he reasserted global leadership and reasserted the relationships with our traditional allies. lisa: we are expecting president biden to arrive at the summit any minute. his motorcade on the way. there is a question, though. president biden is toggling between a hotter -- a harder stance that is literally very popular, and internationally

much more delicate, given some of the trade relationships between europe and russia and the geographic proximity. how much has the european view and the u.s. domestic local vision of russia -- domestic political vision of russia a factor at this point? william: president biden has given europe a tremendous victory in the sense that the united states is not going to sanction the owners of the nord stream 2 pipeline, and that is now going to most likely be completed. in terms of listening to the united states and the european allies, i think president biden has demonstrated that he wants this relationship with our european allies, and he has decided that that is acceptable,

even to the point of not fulfilling congress' wishes to sanction owners of the nord stream 2 pipeline. so i think listening to european leaders, i think they are trying to present a united front. it is always difficult to unify europe on foreign policy issues, but i think president biden went a long way to healing the rifts that occurred during the trump administration. romaine: and of course, we have been here before. we are watching on screen right now the motorcade of president biden working its way through geneva here. biden of course going into this meeting, but we have been here before with trump, with obama, with bush. as been a lot of attempts to restart the relationship between the u.s. and russia. is there any reason why outside observers should be more hopeful that this time around, the outcomes going to be different? reporter: in one word -- william: in one word, no. i think president putin has

decided to go it alone in terms of international foreign policy and geopolitical objectives. so i think there's not going to be a reset or anything like that. biden has asserted he's not looking for a reset. we are looking for ways in which to tone down the rhetoric. we are trying to identify areas where we can cooperate, which sounds like a reset, but i don't the gators as a busy -- don't think it is as ambitious as a reset. i don't think president putin is going to change his political goals. he has a go it alone strategy, and he has asserted that geopolitically and economically. he has introduced various policies such as import substitutions, counter sections on food, etc., that suggest he's not interested in becoming part

of the international global order. russia really believes that it needs to go it alone, and that is the policy of putin. tom: we will come back to you in a moment. on radio and television, we reset this morning. we welcome all of you worldwide and across this nation. william pomeranz with us with the kennan institute, their deputy director to. absolutely honored he could give us perspective this morning. the villa where mr. putin awaits the arrival of the president of the united states. my major observation is that the u.s. motorcade was maybe going at a faster speed than the russian motorcade. professor pomeranz, i think very importantly here is what we have observed over the last number of days.

many suggesting a nato overreach. did nato reset in the last number of days there overreach of adding countries over the recent in the cold war years? -- recent end of the cold war years? william: there is an issue in the communiques of dealing with china, although there is an overwhelming agreement on how that can be done, so i don't think we had overreach in nato. the second reason why i don't we have overreaches that president biden yesterday issued a very strong statement that nato is not going to have ukraine join it anytime soon. ukraine has to deal with its domestic policy, with corruption

for it becomes a part of nato. that is an important objective of vladimir putin. putin does not want ukraine to become a member of nato. it appears now that ukraine won't anytime soon become a member. so i don't see overreach. i see trying to deal with a post-cold war world. i think the best evidence of that is that it is going very slow in terms of inviting ukraine to become a member. tom: president biden pulling up and waiting here. the swiss authorities waiting to greet the president of the united states, and i believe we will get an image of the two leaders in a number of minute. william pomeranz, so importantly to any of us is this word that the president of the united states uses, autocrat. when we see that within the media, within international

relations, how do you define the autocrat that joseph biden sees? william: i think that when we talk about a not a grat, especially in the reston ash about an autocrat, asked -- about an autocrat, especially in the r -- in the russian sense, we see a politician that does not have to address the domestic. he does not have a legislature opposed to him. he does not have a judiciary that overrules him. in the aftermath of all of the constitutional amendments in 2020, putin has solidified his power. when we talk about an autocrat, it is someone who doesn't have to really deal with these issues of politics. power is always in the hands of the autocrat. in russia's case, putin's word can become law.

so this is obviously very different from the american system of checks and balances and separation of powers. this is what the advantage of vladimir putin is. he doesn't have to address congress. he doesn't have to address other constituencies. his word becomes law. tom: william pomeranz, thank you this morning for joining us, with the kennan institute. a spectacular brief this morning on the moment between russia and the united states. lisa: in light of all the news today, with markets very much focused on the federal reserve, on inflation, steve shive around of federated hermes -- steve chiavarone a federated hermes, who is joining us now, there's a sense that they could have been loads whose -- could have been lulled to sleep. yet we are talking about cybersecurity, about tensions

with china. how at risk our markets right now, given the quiescent feel beneath the surface? steve: good word to start the day. i like that. [laughter] lisa: happy wednesday. steve: i think a very simple view starts with the federal funds rate. if you are uncertain about the federal funds rate, you are going to be uncertain about what 10-year gilts is likely to be which is going to make you uncertain about what the right rate is for stocks. right now the market is convinced the federal funds rate will be zero forever. i think that will be shaken over the next couple of weeks. i think inflation is going to run hotter and longer than the fed anticipates. we will probably get into the process of tapering around jackson hole, with maybe some hints today. once there is more uncertainty around that federal funds rate, you will see uncertainty build throughout the rest of the market. i think that is really at the heart of the market. romaine: all of that ties into, with regards to people's outlook for inflation here, a lot of debate about the transitory

elements of that. i wonder if you can may define what transitory means because in some sense, some people look at this has something that can be resolved over the course of the next few months into next year. other people are looking at transitory and saying transitory can be two or three years and we will still survive. steve: i think that is where we would differentiate from where the fed is right now. we think transitory is a longer period then what they have communicated. we don't think transitory is six months. we think transitory is two years. even if you were to see cpi slowly grind down to its three-year average rate by the end of the year, you're still going to print a 5.25% year-over-year cpi reading in december. that is a really elevated level. so our view on transitory is that long-term downward pressures on inflation will assert themselves, but they are going to assert themselves slowly, and we are probably going to end up at a higher level of inflation then what we had pre-pandemic, and markets are going to have to digest that

and we will see how the fed responds. tom: right now we have the two leaders. we are going to go back to geneva here, with the two leaders, truly an historic moment here. the overlay from 2013 speaks as well. mr. putin, and the flags of russia and in between of switzerland, and the united states flag as well. let's listen in. [speaking french] tom: this is where we need francine lacqua, and we have gone down in flames. [laughter] i spent a wonderful time in geneva in my youth, and i can assure you, my french is as weak now as it was then. to the gentlemen on the porch,

mr. biden and mr. putin, our yousef gamal el-din making very clear that it is a hot, steamy day in geneva as well. and now in russian, we are hearing the various translations of this historic moment. this is stunningly different then in helsinki. lisa: it is, and that sort of return to the old normal a bit with the u.s. allying itself more closely with europe is one thing that has given some stability. steve, i am wondering what your perspective is going forward about the global recovery, the global working together-ness to try to pull everyone out of the pandemic, whether the unity we saw is feeding into your outlook for the economy, for bond yields, for the fed's view. how much are you counting on some thing more akin to a sink

and iced lowball recovery, at least -- a synchronized global work every, at least in the months ahead -- global recovery, at least in the months ahead? steve: more than we were, and that has to do with vaccinations picking up in europe, sharing vaccinations around the world, and how the allies coordinate with regards to china. russia is important geopolitical he, but china is obviously the most important relationship from an economic standpoint globally. i think that is key to things like information security, trade policy, etc. moving forward. tom: the two leaders going back to the villa le grand. you said this is four to five hours of discussion? lisa: that is what president biden said. president putin said the meeting is expected to last four to five hours, which is amazing considering how long people have been on the road with the g7 and g20. it just speaks to the ability to try to get the upper hand. tom: they will have staff.

i am sure they brought along a plane load of people. steve chiavarone with us with federated. thank you so much for joining us this morning. so much of this comes down to the pacific rim. i have been talking about a pacific rim recovery which we see in prices and appreciating currencies. at federated, what is your weighting towards china and towards a pacific rim, given the diplomacy of the biden administration? steve: frankly, we have been no better than neutral, and in china specifically. the pboc is really pushing against inflation, see you have an element of having to fight the fed. our view is that inflation pressures are going to continue to mount and you are going to have higher bond yields. china has been a traditionally

value type economy, and has become more of a tech economy. finally, vaccination rates in the pacific rim are not yet as good as they are in europe and the united states. i think that is going to take some time, given the number of people that need to be vaccinated. we are more centered on the western world in terms of our overweights. tom: steve chiavarone, thank you very much. greatly appreciate it on this fed day and a day of international group lummis he -- of international diplomacy in geneva as well. help me here, romaine. the nasdaq, spx dialectic has been really strange the last couple of days. it is just sort of like, flip-flop, flippy flop, flippy floppy. do i have that nailed? romaine: i think they call that rotation. there may be a more technical term than flip flop.

one of the reasons why we saw those big cap tech stocks start to get bid again was those yields as we head into that fed meeting. i think the bloomberg for longer narrative, if that is reaffirmed at this meeting and press conference later today, i think you can see maybe the nasdaq continue to reassert itself. we did have that record high today's ago -- record high two days ago. lisa: we are seeing oil go higher. brent crude at $73.43. outside of that, lumber has been absolutely crashing, which i find fascinating. we were talking about the highest lumber prices ever. they have declined substantially. we see copper well off. tom: oh come on, lisa. you nailed microeconomics at chicago. you've got the dynamics of price goes up, demand goes down, right? lisa: is that really what is at play here? how much is this that issue, the fact that perhaps homebuilding

is still being delayed or pushed back because of the increase in lumber prices, and how much is this having to do with china pushing back on commodity prices , releasing some of its state stockpiles in order to counter the commodity prices? the weaker debtor we got overnight out of china, i don't know. it is interesting. tom: the bloomberg commodity index, which is really good mathematics, has ebbed away from the boom we saw over the last couple of months. it is a u.s. story as well, wrapped up in canadian imports and exports and all of that. but commodities have come off the burner, and then there's brent crude, $74.43. that's four dollars a gallon, right? lisa: that's a lot. especially if you rent a car as well. the gas price is a very different story from the rest of the commodity complex. if you look at the rest of the commodity complex, it is telling you that perhaps we have reached

peak inflation or peak growth expectations, edifying that whole view given what we have seen. tom: i think the last time i filled up a tank of cash, russian have was the president of russia. what have you got on the stock market? romaine: let's look at some of the individual movers here. last night, citigroup's mark mason, the ceo over there, was speaking at a conference. he gave some guidance with regards to the company's trading revenue, looking for a drop of about 30%. that is a little bit worse than what the street was looking for. that comes on the heels of comments by jamie dimon a jp morgan about a drop in trading revenue. investors starting to reassess the trajectory for some of these banks. shares have dropped pretty significantly heading into the close, down about 1.7%. they are fractionally higher in the premarket. oracle also came out with earnings. a lot of people focus on that company's cloud revenues.

not only did that different out -- that disappoint, but there was a lot of concern about how oracle was classifying some of its sales into that category. the bucket may be a bit too large here, not necessarily as discriminating as they would like area roblox -- would like. roblox came out with some specifics in their earnings. those shares down a sent in premarket. -- down 8% in premarket. the two big copper companies in the u.s., copper prices down for a third straight day, well below $10,000 right now based on london prices. some concerns here about some of that upward pressure in commodities, that that may finally have peak here. a pet vaccine company. tom: with the news flow, the fed

and what is going on in geneva, it is good to hear a stock update area romaine bostick, thank you for that. if you are just joining us, we welcome all of you on bloomberg radio and bloomberg television. a really different morning here for us. we are focused on geneva. biden meeting with putin at this time at the villa le grand. lisa mentioning it could go on for many hours. many different topics to speak of. we spoke with our josh wingrove on the shores of lake geneva. yousef gamal el-din on the other side of the lake at the fairmont hotel. we will have much more from geneva through their afternoon and into the evening of switzerland. right now on the fixed income market, as we mentioned the stasis that it's out there, michael collins joins us from pgim. what is the symbolism of a 10 year yield locked at a 1.4849%, maybe 1.50%? michael: maybe we are the only people that aren't surprised by the level of interest rates

here. we have been talking about peak rates may be around 1.75% for this cycle, and i think the markets are finally realizing that and sniffing out the idea that this growth and this inflation is somewhat transitory. maybe not the next six months, but two or three years from now. that is the important factor. what is the world going to look like in 2023, 2024, and 2025, when the fed starts talking about hiking rates? and what does full normalization even mean? i think a lot of people assume they will hit that 2.5% pipe dream target when we think the funds rate is probably going to be in a range of 0% to 1.5% -- of 0.5% to 1.5% for the next few years. lisa: what is the fed's ultimate goal with their bond purchases? are they going to alternately by no bonds every month, or is it

tapering from $120 billion to $115 billion? michael: i think they start that way. maybe they knock off $20 billion for a quarter. i think they want to get to zero before they start hiking. that's say they start to taper early next year. let's say it takes them a full year. by early to mid 2023, now they have the room to start moving the fed funds rate up. that is not fully reflected in the dots. that is the big risk everyone is focused on today, when that median. will move up for 20 -- that median dot will move up for 2023. i would be surprised if a large majority of the fomc members keep that 2023 fed funds rate expectation at zero. it seems kind of impact a whole at this time. -- kind of impractical at this time. at how high does the funds rate

get, and how long does it stay there over the long-term? that is what drives the value in the 10 year and long-term interest rates. lisa: is it feasible for the federal reserve to stop buying any bonds at all each month and not have a significant disruption in debt markets that have absolutely ballooned under the easy money policies? michael: absolutely. i think the tantrum already happened. the middle of 2013, we saw a big jump in rates, and it was the first time the market was dealing with this tapering process. as we have seen throughout our career, the markets are surprised in the first time an event happens. by the second time it gets priced in. i think this is going to be a big nonevent in terms of the taper tantrum. so i think the fed is doing a good job messaging it really slowly. what happens typically, once the fed stops buying bonds, once the fed starts moving monetary accommodation rates --

accommodation, rates typically fall. tom: i have to interrupt. this is the library of the laissez family that was gifted over 40 or 50 years ago. this is one of the jewels of oaks and bigley attack -- of books and bibliotechs in europe. the presidents of the united states and the russian federation meet. to mr. biden's right is secretary of state mr. blinken, and to mr. biden's left in somewhat of a circle is mr. lavrov of russia. in between them, a globe, and on a table for those of you on radio, a modest level of flowers and the two flags behind. it is a photo opportunity with no audio before we get to the discussion. i can suggest the body language again. whatever your political views, the distinctions from helsinki

are absolutely remarkable. to be on common ground in geneva is no surprise. lisa: it is no surprise they are on common ground. however, it may be a surprise if they come out with anything with respect to cybersecurity in particular. this is a very important focus after the colonial pipeline and a host of other acts, russia being pinpointed as perhaps the genesis of some of these. there's a question of what kind of resolution they could get you , and what kind of existential risks this poses to markets, this poses to society. the idea that cybersecurity is of ever-growing importance. tom: the press gathered here in this historic library. what i can think of is what is the common ground they can find? maybe it is syrian refugees or other things, but i really want to identify where the common ground is. there's your telltale signal, the leader of foreign policy for

russia just looked at his watch. [laughter] romaine: that's always a bad sign, particularly when you have four or five hours ahead of you. they are going to have this meeting now, and later they will have a longer meeting with a broader staff. they talked about this, there really isn't a lot of area right now where they can find that common ground, at least not one that is going to satisfy president putin. it really comes down to what the united states is willing to concede right now, given the rhetoric we have already heard out of biden. tom: we go to our body language expert, l abramowitz with a photographer in front of the camera. don't know how we had that. biden is sitting as he had as vice president for years, comfortable, his legs crossed. mr. putin with a little different body language. tom: he's got the power -- lisa: he's got the power pose, legs

spread. [laughter] tom: which train is he on? lisa: if you really want my full interpretation, joe biden crossing his legs away from vladimir putin. this is very much perhaps going to speak to the relationship, tom. tom: some questions being bandied about. we don't have audio. help me out here. lisa: let's go back to michael collins, just to wrap things up. this idea of what to expect from the federal reserve, everyone is expecting them to make noise about tapering. as we look to the incredible growth of market froth, what is your number one base case scenario for what will happen, and what could happen that could be disruptive today? michael: we are just starting to enter this transition boko.

we have been in this -- transition boko -- transition period. we have been in this transition , and we are starting to see it might start shifting. i wouldn't be surprised over the next 6, 12, 18 months that the fed tries to remove this accommodation, which isn't going to be easy. you will see market disruptions and some of the froth lead to more volatility. tom: i think we are going to leave it there. michael collins, thank you so much. we have so much going on here. we've got to reset here at our studios in new york. the fed meeting coming up. i guess we will get from diplomacy to the beginning of our 1:30 coverage as well. it will be interesting to see where we are. where are we going to be at the close this afternoon? lisa: we will be on set. romaine: we will be unset.

tom, you can stick around for "the close." lisa: he is, actually, sticking around until the close. [laughter] romaine: we have a show after that too, tom. tom: jan hatzius of goldman sachs will join us in a bit. stay with us. from geneva and new york, this is bloomberg. ♪ ritika: with the first word news, ritika gupta. in geneva today, joe biden and vladimir putin will come together for what could be four hours of meetings. officials are keeping expectations low in what has become an adversarial relationship. the two leaders will look to reach agreement on starting a new round of arms control talks. they also may take steps towards storing diplomatic channels that were severed as the relationship plunged over the last few years. global banks looking to avoid

trouble restrictions have bad news. critics of u.s. technology giants are claiming victory. president biden has named the chairwoman of the federal trade commission, one of the most prominent advocates for aggressive antitrust enforcement against big tech companies. her appointment came hours after the senate confirmed her for a seat on the ftc. in louisiana, a federal judge has blocked the biden adminstration s -- administration's halt of oil and gas leases. in hawaii, tourism has roared back after being brought to a screaming halt after the pandemic. that has led to record prices and staff shortages. rates at luxury resorts are

pushing to $3000 a night in some cases, four times what they were before. unemployment hit 15% before the pandemic -- during the pandemic. global news 24 hours a day, on air and on quicktake. i'm ritika gupta. this is bloomberg. ♪

♪ >> investment banking revenues are likely to be down in the low

to mid single digit range. we do see strong m&a performance and we feel good about the pipeline and the dialogue we are having an investment banking. tom: mark mason, the cfo of citigroup. we will see for the quarter as well. we welcome all of you on radio and television. our fed coverage beginning at 1:30 this afternoon. we have been in geneva, switzerland, where the two leaders are meeting right now behind closed doors with their secretaries of state and foreign ministers, if you will. they are at the villa grand, and it is sort of boring in geneva as we wait to see how those meetings turn out. they will not be a joint press conference, very different than what we saw in helsinki in 2018. right now, always the same is david wilson, justifying the world of spac's. i'm is lost on this as anybody else. do these have a track record

that someone can brag about? dave: not exactly. actually, i want to focus on something i found a couple days ago, specifically de-spac's. companies that have gone public through special-purpose acquisition companies. think about lordstown motors or nikola or draftkings. what we found, there's an index that tracks them, and it didn't rise as much going into february as the ipo spac index, which focuses on those companies that have not completed deals or even made them. since then, that group has taken the bigger hit. as of yesterday it was down 27% from its high in february. at one point it was off as much as 45%. if you look at the spac's,

down 23% from its peak, and it has kinda flatlined at this point. tom: you and i are expert at this. you have what is called a red herring, and you have a perspective. you read it from back to front, folks. go to the back and see who's on the board, and then go to share dilution and the rest of it. do we know any of these for these the specs -- these de-spac 's? dave: you get the merged company trading, so it is sort of a different route clearly than the traditional public offering. lisa: i was talking about froth in the market and how these

pockets make -- these pockets might get the fed concerned. how much has the froth come off the top in certain areas. also, there's a question that we are seeing the rotation out of cyclicals with underperformance to some of the big banks. how much does this edify conviction that we are not at the top, that perhaps there is still some speculation, or at least skepticism, around the rally. dave: when you put it altogether, it is clear the skepticism is there. if you focus on the spac's and the companies taken public, they really did peak back in february, and they have been down as a group performance. then you look at the spac's being rolled out, and you just don't have the numbers you did four or five or six months ago. so at least in that piece of the market, you have had sort of a

backing away from more speculative elements. can you say it is happening more broadly? that poses a bigger question. tom: come on, spac frenzies collapsed, right? romaine: it is collapsed. remember when we used to call it reverse mergers? we can sort of change spac's to some other accurate and that will woo people, but there was a general sense here that there were bigger players this time around in this space that were actually going after more legitimate companies here. is that not the case anymore? have all of those people faded away? dave: not necessarily faded away. it is that they have done a number of deals. considering this has been going on for several months, you could argue that it gets harder to find what you might call legitimate targets. when you put that altogether, you can sort of understand what the bloom is a bit off the rose,

shall we say, when it comes to spac and the companies they combine with. tom: greatly appreciate it. let's bring it back if we can to the elephant in the room, which is inflation, and the idea of gas. i guess elites are saying that $74 a barrel really shouldn't affect monetary policy. i just don't buy it. lisa: the question isn't whether that in and of itself will affect monetary policy. there's a question of what the as as an input price. inflationary or longer-term disinflationary because people buy less of it, as you were saying. there is that supply and demand dynamic. it feels like so far, the fed has shrugged off the commodity boom as simply a transitory, non--- transitory phenomena. tom: it is a nice recovery, but on a political basis, jerome powell has been astutely

political, even defining a new route for the fed, for the chairman at least, and this is a guy that's got to confront ppi, cpi, and four dollars a gallon. romaine: i do think there is something a little different here that we need to address, which is the idea that this is very regional not only in the u.s., but regional across the globe. it is whether the fed should react to some of these price changes. you have to look much more at how those prices are feeding into things globally. i just don't think you are seeing it. lisa: perhaps not for fed chair capable of much as president item because this gas prices actually affect the political regime and the sort of impression of inflation much more than perhaps from a monetary policy stand, but how much does president biden lose support for his stimulus efforts and raise concerns about inflation as those prices go higher, and how much is that

reflected in the university of michigan study? tom: it is cruel and unusual today . this would never happen ifferro was here. -- if ferro was here. come on, twitter is making fun of my french? lisa: that may be cruel, but it is not unusual. tom: i only speak french with francine, and usually i have to have something in my hand. romaine: how is your german? lisa: can i point something else out? five-year greek yields are negative. tom: that is stunning. lisa: dear member when people worried about the sovereign debt crisis? negative yields for five years in greece, of all places. we were talking about complete solvency. talk about a complete reversal in fortunes that is purely ecb driven. romaine: ferro would be all over this. tom: five-year greek yields are negative. lisa: i try. tom: somebody just drove off the

garden state property listening to that. we welcome all of you on radio and television on the historic state. our coverage on radio and television at 1:30. brian levitt with us. jan hatzius as well. good morning. ♪

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>> you will see more workers reenter the labor market, and they are reentering a labor market that is very hot right now. >> what is the fed going to do, and how does that play into everything else? it has been a fed driven market. >> if there's anything that worries me right now about inflation, it is not even in the data. it is what is in expectations. >> we didn't see it for about 14 months area -- about 14 months. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. lisa: a historic day in