♪ >> looking more and more like sustainable real growth. that says a lot for the stock market. >> behind the scenes we will probably see a little more disruption. >> could we end up with much higher inflation? yes. >> i think the fed did the minimum. >> the fed doesn't know either when transitory nation is going to go away. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: good morning -- romaine: good morning for all of our viewers and listeners. i'm romaine bostick, in for

jonathan ferro. lisa abramowicz is here. and taylor riggs, in for tom keene this morning. it is going to be a wonderful few hours, as we have to talk about standard to be agents. -- standard deviations. lisa: is that what we are doing? in the stock market, you have seen that rotation back into growth. kind of fascinating. romaine: this reflation trade will be interesting to see whether this is just that knee-jerk reaction to the surprise that we got on wednesday. maybe we do gravitate back to that reflation trade. whether this is a real reset of where evaluations are. taylor: could it be an un-unch kind of day? lisa: we don't do unch on "surveillance." taylor: it is stunning, the migration lower beginning

yields. unbelievable as we have talked about the unwinding of some of that reflationary trade, not only within the world of the equity market, but within the world of the bond market. lisa: is this what you guys do on "the close," un-unch? romaine: that's what i deal with every afternoon, so prepare yourself. [laughter] we talk a lot about how the s&p has been in the relatively tight range. it remains in a tight range, despite the fact that it did come in a little bit earlier. a lot of these big cap neck stocks get bid. we have the nasdaq -- big cap tech stocks get bid. we have the nasdaq, a lot of talk about these particular drop in the commodities space. lisa: the soft commodities, just shocking how big the selloff yesterday was. i believe one sub index of

grains had the biggest declined since 2009. today there isn't a lot going on with respect to news, but it is triple which income of the third friday of every third month. you have expiration contracts on equity indexes and the equities themselves. this leads to more volume, more action. is it going to be to the downside, to the upside? does it matter? one a clock p.m. we get baker hughes u.s. rig count. interesting to see whether more will come online as prices have climbed, despite the slight cooling off in prices we have seen recently. discipline has been the word of the year when it comes to the shale patch. a lot of people expect that to continue. today, as romaine was mentioning, tom keene off, celebrating juneteenth. that is the word from romaine.

this week, president biden signing into law this official holiday. a lot of federal government employees who have the day off. you have a number of banks saying to employees you can take today off. however, even the fed staff not in the office, but that operations still going because there weren't enough provisions made to allow markets to close. that is a more complicated process. it kind of raises this question, can people take the day off and the private sector? what should banks do from a public image standpoint? it's going to be interesting to see what policies they put into place. romaine: obviously this came on short notice, so a lot of folks at work today. a lot of folks really have to assess what happened on wednesday and what could happen going forward. the head honcho's over at blackrock, when they want a sense of what is happening in the market, they turned to

wei li, the global chief investment strategist at blackrock. i am wondering if this requires a meaningful shift in tone out of the markets. wei: well, we see what the fed announced this week in line with its new policy framework. it is adjusting inflation expectations for this year. we see it is adding to the credibility of the framework because everything that has happened so far, what they have put out is still in line with what we call the new nominal theme. the rates path will be a lot slower in this cycle in comparison with previous cycles. you think about back in 2015,

when it was just about 1.2 percent. now we are a little bit higher levels, and at the same time, not until 2023 by fed estimates. so we still see the new policy framework very much impacts, and that underpins our risk. lisa: have you not changed anything about your investment thesis post the fed meeting that a lot of people thought was a pivotal shift? wei: i would say there are specific views around where the dollar could go from here on in the near-term, which we are reviewing very closely. more broadly, the view around curve steepening after this week's reversal of that. so there are things we are

working through, but the overall sentiment in market of pro-risk, we still see, even though it came as a bit of a hawkish surprise, the changes and the announcements in line with the new policy framework. taylor: how are you thinking about the rotation back into growth out of value? how much of that was maybe just some recent underperformance that we have seen? how much of that is more fundamental, that long-term growth expectations might be lower than some of our early lofty projections? wei: it is very interesting indeed we are seeing a bit of a rotation in the growthy names that came a bit more under pressure in the year. in our view, there's always a place for technology in portfolios, specially when you look from a longer-term perspective. if you think about some of the

structural challenges that we've got to tackle, aging demographics, technology will play a big role. they have continued to deliver, and we have been talking about the earlier year underperformance, so the longer it takes for growthy names -- but in the near term we still see there being more to go in this restart narrative. you think about the restart started earlier this year in the u.s., now broadening out to europe and also japan. i do think there's more to go for the cyclical trade to go this much longer. romaine: let's talk about some of the growth prospects in europe. we are getting headlines from the italian prime minister mario draghi, saying the economic forecast there will be revised up significantly. he's also talking about the need and his desire for additional economic stimulus.

kind of on the same note we have heard from draghi for quite some time, but we have seen better data starting to come out of italy and some of the other european nations here that i think would be encouraging. wei: indeed, but we have seen so far is the momentum of restart at the bottom is getting passed on from the u.s. to the previous laggards, including europe and japan. that very much underpins our premise and our previously strong conviction in equities. one thing i would say is the restart is very different from a typical recovery. so as we see this very strong income growth numbers, we have to take it with a bit of salt as well. we caution against extrapolating

, but we do see the restart opening up to other assets such as europe and japan. lisa: before we let you go, do you think that the dollar will continue to strengthen after five straight days, the greatest strengthening streak going back to may 26, 2020? wei: as you see, dollar is kind of range bound. the reason is it came off the back of a period of weakening. we see dollar strengthening, we see it coming back, and now it is rebounding a little bit. we see it range bound, not breaking out of the current range and not particularly hurting risk sentiment. we definitely keep a close eye on this market. lisa: thank you so much for that. i really am curious, this has been the ultimate pain trade, weak dollar heading into the year, then it strengthened, then it weakened.

people can't get this right. romaine: in the seesaw we have been seeing to it, a lot of that is tied into people's theories on the second of cover here -- economic recovery here. if it does persist above current levels, it will be interesting to see how that feeds into some of the equity repricing. lisa: i keep going back to this fed balance sheet of h trillion dollars, the fact that they say they are going to taper. they are doing anything but. taylor: yeah, they are. anything but that. i think that is an important distinction, that a slowing down of the easing is not a tightening. there's a key distinction there, the same way that wei li really nailed it, that it, that a restart is not a recovery, so you are getting all of these upward revisions and economic growth forecasts, though that does not mean anything about the long-term growth expectations.

romaine: i was that chair is really big or you are really small. [laughter] lisa: she's in the punishment chair. romaine: that's the tom keene chair. is tom awake yet? lisa: i think so. we are seeing markets pretty much range bound, trying to reassess the reflation you get is that on? is it off -- the reflation. is it on? is it off? coming up at :00 -- at 8:00, james bevan of ccla joining us for his investment outlook. this is bloomberg. leigh-ann: with the first word news, i'm leigh-ann gerrans. more options for u.s. tourists. the european union has lifted a travel restriction for american residents, adding the u.s. to its so-called white list of countries from which non-essential travel is allowed. the new rules mean that eu countries are able to allowed quarantine free travel from the u.s. independent of vaccination status.

also added were hong kong, lebanon, serbia, and taiwan. iranians are voting today in a presidential election expected to see a hard-line conservative replace the more moderate hassan rouhani. that could complicate efforts to restore a landmark nuclear accord that has major implications for middle east security and oil markets. the election turnout is expected to be at a record low and will all but ensure the victory of abraham raisi. emergency repairs forced the shutdown of a pipeline. repairs on june 4 released 2.7 million cubic meters of methane. the environmental defense fund has said that has about the same short term planet warming impact of 40,000 internal combustion cars in the u.s. for a year.

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 leigh-ann gerrans. this is bloomberg. ♪

pres. biden: in making juneteenth a federal holiday, all americans can feel the power

of the stay and learn from our history, and celebrate progress and grapple with the distance we've come, with the distance we have to travel. lisa: president biden announcing a new federal holiday of juneteenth. today would be the official day federal employees would have off , if they do. thanks trying to understand how to handle this with their employees, allowing them to take off, though the markets still are open. it is amazing to see how president biden immediately gets thrust back into the beltway politics of infrastructure as soon as he gets off the plane from his sojourn in the european union. emily wilkins, bloomberg government reporter, there does seem to be some progress on a bipartisan bill. we hear more and more that there is optimism around getting something done sooner than later. what has changed? emily: what's changed is tencent republicans -- 10 senate republicans.

when this bipartisan group came out earlier in the week and said we have something, it was only about five republicans. they said you need 10. they've got 10. that is making people look at this proposition very seriously. at the same point, we haven't seen the exact details of exactly what senators have laid out. the devil is in the details. there will be a serious discussion on what is and isn't included, and there's going to be a larger debate if they go forward with this bill, how much are democrats going to need to put into a separate reconciliation package with their own priorities? will that be possible? lots of unanswered questions. still no surprise that president biden got right back into this very soon after his plane landed. lisa: joe manchin has been in the forefront of the power struggle of being the swing voter, as he does skew on both sides. where are the other power centers we should be watching? emily: you do have to keep an

eye on arizona senator kyrsten sinema. but to an extent, you need to keep an eye on every senator because even if you get 10 republican senators and then you have one democrat who says i'm not happy with this, i am not going to vote for it, that is going to be a problem. you need those 60 votes. we both talk a lot about the senate, with good reason because that's where the crux of negotiations are occurring, but in the house, democrats only have a five seat majority, and you have already seen various coalitions of lawmakers come out with concerns about what they have seen in president biden's plan. so you are at this point where even as a potential bipartisan compromise is emerging, you still have a lot of details left to negotiate and to figure out to make sure this deed has enough votes to actually pass both chambers. romaine:romaine: it will be interesting what transpires as

biden deals with some of these domestic issues. of course, at some point he has to circle back to those international issues. we heard from i believe jake sullivan yesterday, and the idea that i and -- that biden and chinese president xi have to sit down and start to address their differences here, what do we know about the timing of that? emily: we don't know a ton about timing or exactly what format potential talks will take, but we did hear sullivan say yesterday, as you mentioned, that they want to do something similar with biden and xi jinping as they did with biden and vladimir putin. have this who leaders sit down, assess where their countries are, talk a bit about the relationship. i think the difference here is that for president biden, china really is the center of his international diplomacy. it is the one country he is focused most on. we saw that g7, we saw that it nato, we have seen that with his executive orders.

even more so than the summit with vladimir putin, whatever the white house decides to go forward on in their discussions with the chinese president is going to be very central to the next three years of biden's presidency. taylor: and hinting that my chrissy is under attack, and so much of the infrastructure bill is not only to take on china, some of the technology, the broadband, the 5g investments, but perhaps may be to also prove that democracy is still the way to get things done, how do the relationships with china fold into actually getting the bill done to show that, yes, democracy work, we can get something done, we can invest in our infrastructure? emily: president biden has already invoked china numerous times in trying to pitch this infrastructure package, and with good reason. you look at congress, so many things are stalled in gridlock right now. one of the few bills actually moving is a bill that would help

bolster u.s. research and development, with the idea that it would help make the u.s. more competitive against china. that bill is now being dealt with in the house. you have the infrastructure bill as well, which has already been pitched as something that would help the u.s. against china. bills that bolster the u.s. versus china, help u.s. competitiveness, they have strong bipartisan support in a very partisan capitol hill, so i think these proposals have got momentum. they've got the will to happen. they think you are going to be seeing more of them as time goes on. romaine: yesterday we heard some critical decisions out of the u.s. supreme court, including on the affordable care act. but they weren't necessarily a surprise. some people seem to suggest right now that the messaging coming out of the court is that maybe it is not going to be as divisive as some people thought this court might be with regard

to some of these hot button issues. emily: absolutely. when justice amy coney barrett was going through the process, one of the big messages democrats had against her is we are going to have troubles with the affordable care act. we did not see that yesterday. we saw coney barrett joined the justices in upholding the law. this is always the thing with the supreme court. you do have those conservative justices versus the more liberal justices, but they don't split exactly down party lines for decisions. it is the supreme court. they come out with their opinions. they tell you how they got to there. it is a reminder that to a certain extent, the court is still an independent body, despite the hyper partisanship that we have seen develop around the nominations of these supreme court justices. lisa: emily wilkins of bloomberg government, thank you so much. let's reset with a market that is trying to find direction after the federal reserve gave a

hawkish surprise to markets. we are seeing a deterioration here, with the nasdaq lower on the day heading into the open. the s&p increasing its decline. definitely a move here. there is a softer feel as people reassess the outlook. i am wondering, is it fair to say this is concerned that perhaps the bond markets are the smart money, that they see something that isn't so great in the economy and perhaps stocks are waking up to that reality? romaine: i think you saw that even before we got to the fed meeting. again, you are not really seeing a huge rotation out. the latest data we got on inflows for the week, which are a few days behind here, still shows a lot of cash coming back into the equity market. but where it goes remains to be seen. lisa: it is not going into junk bonds, i will say that. it had one of the biggest outflows of the past year in the last week. the market still trading at very

elevated valuations here. i'm lisa abramowicz, alongside romaine bostick, taylor riggs. tom keene and jonathan ferro off today on this juneteenth. this is "bloomberg surveillance ." ♪

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♪ lisa: good morning. we made it to friday. this is "bloomberg surveillance ." jon ferro and tom keene off today. markets are reassessing perhaps the concept of reflation. that has been faded, and now the question is how far does it have to go. we see futures deteriorating a bit on the s&p. the nasdaq pretty much flat on the day. the dollar a little weaker today after five straight days of strengthening come of the longest stretch going back to march 2020. crude a little off the highest level since 2018. the idea that longer-term yields are coming in on this that idea that perhaps they could be more hawkish in the near term. basically, they hike rates in the near term. that slows growth and potentially gives more of a

sense in the bond sector that there could be value there. i wonder how far this has to go, and how much, if you talk about the second derivatives, you could talk about whether people are going to start saying the bond move in and of itself may convince the fed not to move too early. taylor: can we do derivatives at 7:30 a.m.? i guess so come -- i guess so, considering it is 2:00 p.m. in london. you hit it spot on. we get a note from ian lyngen of bmo capital markets in the last few minutes, saying some of the yield dropped we have seen shows that employment is improving -- employment is improving, but not at that break neck speed. while there is some relative attractiveness in u.s. treasuries versus the negative rates we have seen overseas, the transitory narrative has sufficient buy-in at this point. i think it was wei li at black

rock who nailed it. the faster you restart now, the slower the recovery is later on because you can't have that really high gdp growth forever. lisa: that is very much the case. however, meme stocks can go up forever. romaine bostick here with what is going on. romaine: this is heading up to be one of those hodgepodge days were a lot of things are going to go in a lot of different directions. we start off with the airlines. alta and united getting a bit of a bid here. the european union lifting travel restrictions for a host of countries, including the u.s. , as well as a few other locales like hong kong and tom's favorite, north macedonia. keep an eye on the commodities space because we talk about this massive move we saw in bonds following the fed. we also saw a massive move in the commodity space. that took a lot of the companies tied to metals lower here. copper companies also a little bit lower this morning, including freeport-mcmoran. gold companies like newmont mining getting a slight bid as

we are seeing a bit of a rebound in spot gold, up about 1% this morning. we have to talk about what is going on with tech. tech got a really nice bid over the last couple of days. nvidia hit another record high on thursday, now off 0.9% in the premarket. when you look at some of the other tech stocks, it is a mixed bag. intel going lower here. a slight downgrade in price targets over at jefferies. that stock is down 0.4%. some concern about competition and its lack of ability to keep up with some of the other competitors out there. a lot of software stocks did get it higher as well over the last couple of days. adobe higher by 3% after it gave a peek at its results. those seem to encourage a lot of investors that some of those bookings continue to be on pace. lisa: romaine, thank you so much.

while, it is very much away from stocks and into bonds. i am not biased, although i kind of am. this is driving a lot of the sentiment about whether we are replacing, dis-inflating, or just in this goldilocks period for the long-term. padhraic garvey is covering it all, ing head of global debt and rates strategy. the fed is perhaps addressing a real inflation fear percolating in markets and is going to start tapering sooner, or is this just evidence of a split fed recognizing all risks, and they are going to keep the status quo? pahraic: i think it is evidence that the bond market has its own brain. it is a very shrewd operator. if you look at what bonds have been doing over the past couple of months, right back to march, they have been questioning where we are heading into the medium-term. there's no debate about 2021.

this is a real reopening. it probably persists into 2022. but the big question is where are we going to be in 2023. the fed has told us they will be hiking rates. the bond market is saying hold your horses, we are not so sure about that. that has not been a recent view. it has been there literally for months. lisa: did you change your investments for thesis -- your investment thesis post fed today? pahraic: no, despite the fact that i am looking very carefully at the dynamics and the discounts, we are relatively upbeat. 2023 went well. to us it feels pretty good. it does look highly likely that the fed will hike there, but it is beyond that that worries us. that is what the bond market is telling us. when you look at things like the negative real yields going out

the curve. romaine: we talk a lot about the moves we saw and sovereign debt itself here. the move we saw in corporate debt was a little bit different. i am curious as to what the general thinking is right now with regard them of those issues . pahraic: the general thinking is that they offer a bit of a pickup versus treasuries. they are a classic carry trade which has been the winning strategy since march. fixed rate receivers on swaps, where you pay to reduce funding costs. i just looked at the data today. there was a big inflow into long dated corporate's last week, for the first time in a number of weeks. it looks overvalued. it feels overvalued. but it is a steady kerry play, and that -- steady carry

play, and that feeds through into the rest of the year. romaine: we were up 3% or so in terms of the strengthening versus the major currencies here. obviously we are nowhere near that now, but you are starting to see this week a lot of people start to bid up versus the euro. pahraic: i think the dollar has had a good pop this week. i think what is happening here is if you look at dollars from a global context, what you see is a 1.5% 10-year treasury yield. that pushes up the dollar, and what you have is a negative real yield which is negative for the dollar, and you have high standalone inflation expectations, which is also

negative for the dollar. that is why we feel the dollar does we can going forward certainly over the next few quarters. lisa: are these all -- taylor: are these all absolute or relative place? i am thinking about the 1.49 percent on the 10 year. is absolute look fairly valued, or relatively? pahraic: it is a good question. it depends on where we sit. if you are sitting in tokyo, it is happy days. the problem for that player is that they can't synthetically create a better vehicle because the rate differential has collapsed. but now the best name out there

is 1.5% dollar. it looks good. taylor: just a final question here. i am curious, should we be seeing the negative real rates that we continue to see, -81 basis points on the 10 year? should we be seeing real yields weaving more? that's real yields moving more? -- real yields moving more? pahraic: the big move this week was in real yields popping higher. i like positive outcomes, and what i want to think if we are going to believe in a positive structural outcome from this awful pandemic is for that real yield to become far less negative. this is not sending a very positive discount. we do believe that those trend higher. medium-term it should be closer to zero. even there it is too low. it is sending a very negative signal about the future, unfortunately. lisa: padhraic garvey of ing,

thanks so much. head of global debt and rates strategy with their issei be smart money. romaine: congratulations, lisa. we've made it 40 minutes into the show and taylor and i still haven't actually upset you. [laughter] lisa: she's in the timeout chair. that's why she's in the other room. romaine: she's in the big tom keene chair. he hits on a lot of good points here, particularly the way a lot of foreign investors look at what is happening now. there is still a lot of money to be made here. we can talk about the drop in yields, the pullback in equities, but the way that folks have sort of positioned themselves in this market heading into this year i think has set them up for the idea that the fed was going to move early and telegraph that they were going to move. the fact that maybe we got that communication a couple months early i don't think changes the overall thesis. lisa: i do think there was a market shift, a significant increase to the number of members of the federal reserve that brought forward their expectations for rate hikes 22022, 22023 -- rate hikes to

2022, to 2023. members now say you should raise rates versus seven at the last meeting. what is the difference, other than an increasing number of naysayers in market spec elation? taylor: most economists i've read say they knew the fed needed to say something because we are no longer in an emergency, but there's also this tone that the fed is always dovish, so we don't actually think they are do it. i think it was rick rieder who said, wow, they actually did what most market participants thought they should do, and we are a little bit caught off guard. lisa: i daresay i am going to editorialize here, but i think they did the right thing because basically, they created a little unease in markets that perhaps were being accused of frothiness, so the idea of trying to engage some sort of perhaps discomfort isn't bad.

he's just going to let me hang. [laughter] romaine: i am going to let you editorialize, lisa. i stick to the facts. lisa: anyway, coming up, matt hornbeck is going to weigh in as well. he can perhaps push against me. this is bloomberg. ♪ leigh-ann: with the first word news, i'm leigh-ann gerrans. north korean leader kim jong-un says he's ready for both dialogue and confrontation with the united states. this is president biden's dish this -- this as bidens new nuclear envoy heads to suggest a new nuclear agreement with pyongyang.

dow jones reports policymakers are discussing the possibility of fully doing away with restrictions by 2025, talking beijing's increased urgency as china's population does grow older. the pandemic is showing no signs of slowing down in moscow. the russian capital reported more than 9000 new cases today. officials are extending some restrictions on public activities until the end of june to contain the outbreak. new infections in the city have tripled in the last two weeks, as the highly contagious delta variant. one million vaccines will be sent to the palestinian authority. israel said it will send pfizer jabs and get a symbol or -- a

similar number of doses for the next shipment. the move comes after israel was criticized for not helping to quell the virus in the occupied west bank and gaza. global news 24 hours a day. i'm leigh-ann gerrans. this is bloomberg. ♪

>> i think we need to approve in

exchange weighted product based on bitcoin, and then we need to provide some clarity around custody for regulated entities, so for broker-dealers and investment advisors. those are some of the areas i would like is to take action in. lisa: hester pierce, fcc commissioner, on allowing bitcoin to take hold in setting the parameters for it to do so anymore substantial way. this is "bloomberg surveillance ." good morning. jonathan ferro off, tom keene off. trading bitcoin with his afterthought. i believe she's deep into bitcoin. romaine bostick and taylor riggs with us. "the close" taking over the open today, as we look at s&p futures getting deeper in the red. we are looking at a 0.3% decline that does seem to be going south, and we've got the 10 year

yield also going lower today, one point 483% -- 1.483%. crude, $70.58 on the nymex. we've been talking all morning about the reason for the deflation of the reflationary trade. how this works is very unclear. romaine: you talk about the collapse that we had in mid-may, we really haven't bounced back from that. we have basically been where we've been for the last five or six weeks, and there was a great story on the terminal here of some of these hedge funds, and the idea that a lot of them are staying on the sidelines primarily because they can't model this. not because they don't think there's a future for it, but

unless you can create some bun a mental model for it -- fundamentals, remember those? we don't do that on "the close." we just do unch and bitcoin. lisa: it could be in a lawn must tweet. let's go -- and elon musk tweet. venezuelan president nicolas maduro talking about caracas and the nation that has been mired in economic crisis. part of this has been u.s. sanctions. erik schatzker asked what changes he would be willing to make an policy to get some relief. take a listen to what he had to say. >> i believe that the sanctions are immoral. that is the first thing. they are cruel, very cruel for a country. even if it is private, the united states of america, the biden administration should accept it as such, should see it

as such, and the sanctions are transformed. as the human rights organization says, the special reporter that came to venezuela for the matter of sanctions, the sanctions are transformed into a great violation of the human rights of the venezuelan men and women. furthermore, not only is there a cruel mechanism, there's also a field mechanism because all of the sanctions in an extremist and irrational manner were applied by the trump government against venezuela for a change of regime, and they didn't achieve it, nor are they going to achieve it. so the sanctions should be recognized as a legal, irrational, extremist, cruel, and they should be lifted. >> in your opinion mr. president , but it is still u.s. policy,

and it seems the u.s. won't change its policy without a change in positions. >> then it is a closed game because we have our principles, our constitution. we have the right to life, to economic freedom. venezuela and the whole world has the right to economic freedom. what should happen in their country at a political level, it would be the end of the international system, the end of established law. the united states must recognize that an international law exists, that a multipolar world exist, and furthermore, it must recognize sooner than later that what they are doing with venezuela is a brutality only comparable to the vietnam war

and the brutality they committed against the people of vietnam. venezuela has the right to produce oil, to sell it, to obtain profits, to fulfill its international obligations, to maintain the life of the people. venezuela has the right to produce gold and sell it. why aren't we going to have the right to do that? why is the right to economic freedom going to be taken away from us? why? someday that will, i have faith. i am a man who believes in god very much. i am a man of prayer and of action, and i have the faith that someday that message is going to arrive, and it is going to produce the changes that we need for a better world, a more human world, a world of respect. >> that is a problem because you obviously don't want to live under these sanctions anymore.

you are not going to change anything? >> the changes in venezuela are produced every day, but there can't be a relationship in the world where i put a gun to your head and tell you to act the way i want you to or i will shoot you. you can't put a gun to the head of the people of venezuela so that from the united states, tell us what we need to do. we would turn into a colony. we would turn into a protectorate. we would kneel down. we would betray the magnificent historical legacy of these giants, like simon bolivar. no country in the world is willing to betray its legacy. lisa: the conversation with nicolas maduro of venezuela with our own erik schatzker, an exclusive as he traveled to caracas to discuss sanctions and

the path forward for an economy that has been absolutely decimated not only by sanctions, but by some of the policies front and center in terms of oil revenues, where they go, and the distribution of funds throughout the country. yes, that was a prior drinking game. there's a question of the msci emerging markets foreign-currency index. the idea that a lot of these areas, as we look to the fed to possibly tighten rates, it sort of a question of how much that could forestall the develop at we have seen in the emerging-market complex. romaine: this is a fantastic interview, but to address some of the things maduro was talking about, we are talking about basically what has now been u.s. policy under a fourth president here, and there's concerns, certainly valid, you have to ask what the u.s. would get in return for easing though sanctions. lisa: we just talked about the

exit us of people from venezuela to other places as they struggle to get enough to eat. coming up, james bevan, ccla investment management chief investment officer. this is bloomberg. ♪

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>> it is looking more and more like sustainable real growth, and that says a lot for the stock market. >> behind the scenes we are probably going to see more destruction in the reflation in the equity story. >> danger is upon us in a sense, and that behooves action, and i think the fed did minimum. >> the fed doesn't know when the transitory notion is going to go away. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. lisa: the deflation of the great reflation. the pendulum of doom