>> 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 shifting,

if tom keene were here. this is "bloomberg surveillance ." good morning. happy friday, and bloomberg radio and television. i'm very lucky to be graced by the entire "close" staff almost, taylor riggs and romaine bostick here for this friday that is really a market shift. we have seen a rotation in a number of different asset classes. the yield curve flatter. a rotation back and growth names, into the big tech names within the equity markets. it feels like a reset. romaine: and it is a reset. a lot of people were sort of looking to the fed to maybe communicate something in august, maybe at jackson hole, maybe at their meeting in september. they got that communication a little earlier than planned, and that does require a bit of a reset. it looks like it will be a down week at least for the s&p 500 area you thought rotation -- for

the s&p. you thought he would see rotation. they are gravitating to growth stocks, although some of those look a little more defensive to me. lisa: the pendulum of safety. the pendulum of tech. i could keep going. [laughter] there is a question of the pendulum shift in equities, also with respect to bonds. it is all inflation. interesting to see the tone shifting not just among the federal reserve, inflation perhaps a bigger risk disrupting the recovery in the labor market, but we are also hearing that shift within the white house itself. taylor: really interesting comments coming out of jared bernstein, speaking on another network, saying a few different things were more concerned about inflation than we were before. then saying never mind, we are equally as concerned about inflation, still very convinced that inflation is transitory.

so really trying to hone in that message about being transitory, being on the same page as the federal reserve, all as the bond markets respond that we might downgrade on the 30 year, all as investors and economists this morning have said the fed may not be as willing to tolerate higher inflation as maybe we once thought. that's what the tapering of the dot plots show us. lisa: and the gravitational force right now as we head into the open here, about an hour and a half away, has been lower with bond yields. right now we are at 1.7468% for the 10 year yield. -- 1.4768% for the 10 year yield. interesting to see how people are rejiggering their expectations for the fed perhaps not letting the economy move and get is how does people previously thought.

the dollar pretty much flat versus the year. this is a moment for potential dollar strength after five straight days of strengthening, the longest streak going back to 20 in march. help me out with what we are seeing underpinning the stock move, which doesn't seem to be getting more negative. romaine: a lot of it does have to do with this general sense that the yield support isn't necessarily going to be there longer term. there is potentially dollar strength. that could erode some of the forward gains here. just to your point about the reset, anyone at the bloomberg terminal, if you run a dollar chart on a year-to-date basis, you look at the spike up we had in q1, the drop we had basically at the start of q2, and now this little bit of a spike we had, there's your reset. that illustrates it's more than anything. lisa: the s&p at 4195, the nasdaq at 14135. here we are trying to reset as we head into a summer of discontent. james bevan is the chief

investment officer at ccla. there's a question of how much you shrug off these comments as them trying to talk markets away from getting overly frothy. >> i think the fed is taking a very responsible tax. it recognizes the economy is surprising virtually on every indicator. it is a huge year for corporate earnings growth. i'm expecting the s&p 500 will deliver $200 of earnings this year, and i'm expecting to remain bullish on equities. i'm looking for somewhere between 43 and 4600 points for the s&p for the end of this year. romaine: i raised the issue was another strategist about the idea of stagflation, and i was

told that is really not in the cards here. based on what we know now, is that a reasonable possibility? james: i do think we are going to see relatively strong growth for a series of interconnected reasons. the cash the federal reserve and u.s. governments have already paid out to individuals clearly has passed growth, and i would look at the best intentions surveys to say there's a lot of people not wanting to invest in machinery, and critically, rising productivity. the productivity i think will come as wages go up, so it will be something to incentivize. what happens on the demand side? all of the evidence i think is that u.s. citizens have more cash, higher asset values, and i think we will see u.s. citizens

spending more money. i am unambiguously a bullish, so i concede there must be at least one chance -- from the investment in productivity. taylor: talk to us about general wage inflation. we are getting some commons from the st. louis fed, james bullard saying there is some upside risks to inflation at this moment. our equity markets then the correct inflationary hedge? james: i think people are not really concentrating on the right wages data. a number of clients tell me that the average hourly earnings are where i should look, and the shift of people, what we are seeing is lots of relatively less well-paid people coming in. the average hourly earnings,

people in the more highly paid jobs are now seeing significant wage inflation, and i think that when one things about equities as an inflation hedge, one has to think about the quality spectrum in markets, about companies that convey sector prices, but also control costs. so it is time to look again at technology, but also, some of these national brands. lisa: this is "bloomberg surveillance," so we do not discuss unch and standard deviations, although tom keene does. we do discuss a pendulum of orion different -- of a variety of different natures. i am wondering from your perspective whether the pendulum of doom coming from the bond market, this feeling of perhaps stagflation is relevant to equities, whether that is the accurate interpretation of this disinflationary trend. james: i haven't seen the pendulum move in the bond market

at all. if you said to me where should the 10 year yield be at the moment, i would say it should be at around 2.5% as opposed to 1.5%, so i fully expect the 10 year yield to finish this year at 2%, be back at 2.5% next year, none of which i think is disastrous for equity markets by a large margin. these sorts of yields are simply consistent with the normalization of economic growth . the capacity for companies to deliver sustainable growth that they absolutely require. i think the far bigger risk to the market, the markets has to itself we have an awful lot in the bag. if q3 numbers disappoint, i think there will be a lot of profit-taking in the autumn. it's been a critical period into the fourth quarter this year, not because of the bond market and a pronounced melt up.

romaine: we can have a real conversation here about the normalization of monetary policy, or at least the potential for it here area fiscal policy is to a big question here. you still have obviously folks in the u.s., including biden, looking to throw more logs on the fire to stimulate i, growth. you've got commentary out of europe, including from mario draghi, about the need for additional economic stimulus. how does that framework factor in right now? james: first, that the fiscal expansion occurs in the context of modern monetary theory, were central banks are supporting low bond yields. if you were to get back to the periods when tom keene was learning his trade, it necessarily lead to much higher bond yields and everybody was miserable. we are not seeing that because the federal reserve has bought more bonds than the treasury has issued over the last 12 months.

i believe this control of the yield curve is a conscious decision and will continue to be in favor. mr. powell and mr. biden both recognize that if they're going to spend a lot of money, it needs to be cheap for the federal reserve. i think that if inflation rises, it doesn't help people at all. lisa: james bevan of ccla, thank you so much for being with us. as we have been talking, james bullard has been speaking, and one of the most notable headlines, you mentioned that powell officially opened paper discussions this week, according to st. louis fed president jim bullard. the question here is how markets are taking this. if you take a look, it is a pretty significant move. futures move substantially lower here on the morning, including the nasdaq. romaine: a significant drop

lower here on futures, obviously being synced up with those headlines. taylor: and leaning that they might not need to be in mbs. that might now be off the table. lisa: you're seeing 10 year treasury yields inch up from where they were earlier. coming up, tongass men sean kasten -- congressman sean casten from illinois. this is bloomberg. leigh-ann: let's start with more options for u.s. tourists. the european union has lifted it travel restrictions for american residents, adding the u.s. to its so-called white list of countries from which non-essential travel is now allowed. the new eu rules mean that eu countries are free to allow quarantine free travel from the u.s. independently of vaccination status. also added were hong kong,

lebanon, serbia, and taiwan. the dup leader is stepping down from the largest political party, just three weeks after a revolt that throws into question the future of the power-sharing executive in belfast. his exit adds to the growing pressure on the dup, which has seen its support decline in recent opinion polls. california did avoid blackouts yesterday evening, but great officials are warning the power supplies may be tight again today as a triple digit heat wave continues to grip the western u.s. california is asking residents to turn off unneeded lights and appliances to prevent power cuts. temperatures climbed above 100 degrees fahrenheit across the region. sacramento hit a record 110 degrees yesterday. 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. ♪

>> once again today, the united states supreme court upheld the

affordable care act in the face of another legal challenge. so let me say definitively, the affordable care act has won. the supreme court has just ruled the aca is here to stay. lisa: majority leader chuck schumer speaking after that supreme court ruling having to do with the obamacare act. we are looking at washington, d.c. we had a fantastic conversation coming up with congressman sean casten. i'd love to get a sense of how significant the move has been as we hear jim bullard of the st. louis federal reserve speak on cs and bc -- on cnbc. they talk about officially opening the paper discussion, putting a coda on this week of said speak, to say yes, we are talking about tapering, and how it is going to begin is really a big question now. romaine: these are pretty

aggressive comment here. we did see s&p futures dip about 10 or so points. it was already down about 10 or 15 points. it will be interesting to hear, we are obviously hearing from bullard on another network. he's scheduled to speak at an event around 9:30. we will hear from all of the fed presidents, so it will be interesting to see what they are willing to reveal about what went on behind closed doors this past tuesday and wednesday, and whether they share bullard's vision for maybe a more aggressive phase of tightening. lisa: you talk about the mortgage securities and potentially unwinding that first. we are seeing markets respond to that. the details are really important for where market pricing will go. taylor: bullard saying they are looking at perhaps maybe looking at mortgage backed securities first. we got back to december 2013, when ben bernanke first announced that taper.

he wanted to look at an equal weight of treasuries and mortgages that appeared at that time to him to be the simpler way in which to start this area so very curious that we are getting comments this time around the $40 billion. nothing about the $80 billion in treasuries. lisa: we are lucky to have congressman sean casten, democrat from illinois, joining us on the drumbeat to infrastructure. there seems to be more of a consensus forming on some sort of bipartisan infrastructure bill. what is your sense of the shift that has allowed a greater consensus, and perhaps more optimism around something getting done? rep. casten: i hope you are right. we desperately need to upgrade our infrastructure. i don't think it is surprising, every member of congress would like to see infra structure projects for their district. i think the challenge we have at

this moment is that we do not forget about the critical importance of climate infrastructure in this piece because as long as the red state, blue state, red district, blue district vied tracks so closely to where people live, that means it is a huge win-win. we just have to make sure not to let the quest for bipartisanship get in the way of what we have to do for the environment and for our wallets. romaine: the partisan tinge has been a huge roadblock for a lot of efforts out there to address some of these issues. you have at least three proposals out there to address some of those climate change issues. i am wondering whether you can talk specifically about the ones that are supposed to address some of the financial risk you have out there. rep. casten: i'm delighted we just passed on the floor this week my climate change financial risk disclosure act, which essentially says that the sec is obligated to require all

companies on a mandatory and consistent basis to report both their contributions to global warming and their exposure. as an sure you know, in 2010 the sec developed voluntary disclosure, and last year the trump led cftc said those disclosures were insufficient. so the idea is to get this out there and level the playing field. that when we passed this week and will send to the senate. the other proposals we have are essentially followed from that, saying we need to understand the systemic risk that climate change poses to our financial system. on the course we are on, we are looking at an 18% reduction in global gdp from climate change. even if we meet the paris goals, that's a 4% reduction in gdp. cftc has more or less match to those predictions. what happens to low-lying coastal areas and properties

that are there from hurricanes, from wildfires, etc.? a big part of it is transitional because every clean energy technology we have built lowers the cost of energy. it leaves more money in peoples pockets. but that is really disruptive to certain regions of the country, and as i tell my colleagues, rising tides sometimes lift all boats. so we are creating a tremendous amount of wealth, but where is it going to be isolated in our economy. these other bills are designed to say let's have our regulators understand where those systemic risks sit and protect investors when those move ins inevitably start to come, as indeed they already are. lisa: congressman sean casten of illinois, thanks for being with us. we will have more next time to dig in -- more time next time to

dig into the infrastructure proposals. there's a sense of a hawkish tilt that is getting more hawkish as we hear rhetoric out of fed members. james bullard of the st. louis federal reserve, not a voting member come about coming out on cnbc and basically saying he expects the first rate hike in late 2022. taylor: that is at least what his dots are showing, as you talk more about dot dispersion coming into this meeting compared to previous meetings. again, the key headline within the bond market, yields are no longer lower. we now have a sort of -- as we look forward to higher yields on the horizon. some of the key statements to me, i was just engrossed in the december 2013 release when ben bernanke was at the fed running the federal reserve there, really talking about that initial paper of the 85 and 45 reducing treasuries and mortgages by $5 billion each to

create a $10 billion taper. it short of -- it sort of reminds us of where we were in the cycle, announcing the taper, following it up with the taper later. this feels like we thought we would get a big runway, and this feels may sooner than we thought. romaine: it is definitely an acceleration here, and that is what is being reflected. you talk about s&p futures which have just dropped about 20 points or so in less than 15 minutes or so. when you guys started this show at the 6:00 a.m. our, we were positive on the day. lisa: a.m. romaine: it all sort of blends together. remember, the dollar was coming in relatively flat. i can come of this reassessment we have been talking about all morning, as we hear from more of these fed speakers, that is going to be reforming.

lisa: how much are we seeing dissidents within the federal reserve? more fed members -- seeing dissonance within the federal reserve? more fed numbers pushing back. coming up, matt hornbach will weigh in from morgan stanley on the latest from the fed. this is bloomberg. ♪

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lisa: this is "bloomberg surveillance." lisa abramowicz, romaine bostick, taylor riggs. there is a question about fed policy, how much its framework did shift. if jim bullard is representative , then it shifted quite a bit. speaking earlier this morning he said jay powell officially kicked off taper discussion this week and he basically does see the fed raising rates at the end of 2022. that is his dot as reflected in the projections. he is not a voting member but among the 13 members who do see an earlier lift off the last of the ash than the rest of the market had expected -- and the rest of the market had expected. peggy collins joining us now. can you give us a sense of how

influential jim bullard is as a member of the federal reserve? peggy: it is important because it starts to give us an idea of who is on the scale with the dots and how they are thinking in terms of their new framework and the tapering discussion. we saw on wednesday chair powell say this was the meeting where we started talking about talking about tapering at the markets came into focus after digesting that and the surprise in the dot plot. will it be jackson hole or the september meeting when they signal to the market when they are going to start tapering, it will that be november or december which seems to be the consensus in terms of where they pulled the trigger? taylor: i am trying to understand messaging. i just finished reading a book on greenspan, talking about being a manipulator of the media , putting people out in the media to get a feel on how the

markets might respond. am i reading too much into this? what is the messaging behind putting bullard out on a friday morning? peggy: bullard also comes out -- often -- bullard often comes out it is more aggressive in his calls than other regional fed presidents. in that sense it is not a surprise he is putting his opinion out there, but it is helping to clarify where some of the board members and the regional fed presidents are. romaine: i think we'll hear from williams later today. next week you have loretta mester, daily, pretty much everyone of importance on the fed fomc scheduled to speak publicly. do you think we will hear a similar town out of those names we are hearing from bullard today? peggy: i think we may start to see a different town from some of the board -- a different tone from some of the board members.

powell had a more reserved town despite the surprise. the surprise was in the dots, not the tapering announcement. it was that we got two dots for interest rate hikes in 2023. jay powell is more reserved. we will see if the other board members have that tone as well. what we are starting to pull into focus is how to this increase rise in consumer prices , disinflation debate we are seeing, how's it influencing the fed faster in pulling forward some of these decisions faster than they might've expected earlier this year? it puts the jobs data in focus over the next couple of months. lisa: peggy collins, thank you so much for that. as we were speaking and asked the market does digest what these comments say, you are seeing yields go up, particularly in the long end. 30 year yield 2.1% and 10 year

up to 1.52%. matt hornbach, morgan stanley head of global strategy, you are the right person to be speaking to to understand how much this is indicative of a broader fed policy. what is your take on these comments from jim bullard? matt: thanks for having me on. i'm not surprised president bullard is making headlines. he has done that often in the past. i think what is more surprising is the degree to which the fed is linking themselves to realize inflation data they themselves think will be transitory. their new monetary policy strategy is suggesting realized data usurps forecasted data. that is the type of strategy that can lead them down the wrong path easily, especially when even the inflation expectation gauge they are so focused on have shown a high

degree of correlation with year on year rates of inflation. at the end of the day they are looking at the same thing and it might be leading them down the wrong path. some of the aspects of the new policy strategy are what the markets are keying off on. that is the part -- romaine: that is the part that kind of confused me. this idea that for months they have been telling us do not pay too much attention to inflationary pressures. focus on the employment picture and we will sort it out down the road in 2023. there does seem to be a message which should have been paying attention to this. is this a shift in policy or is this just misdirection? matt: you are not alone in confusion. at the last press conference jay powell paid lip service to inflation and focused a lot on the labor market. i think he did the exact opposite earlier this week.

he paid lip service to the labor market and spent a lot of time focusing on inflation. to me this is not a change in their monetary policy strategy or reaction function. this is an execution of that strategy to focus on realized data at the expense of forecasted data. this is the pendulum swinging from one end of the spectrum, where janet yellen policy based on forecasts, to the other end, where now they are making policy based on realized data that may end up proving transitory overtime. taylor: i am curious about asset price bubbles, perhaps linked to massive money supply, the liquidity in the system, the forced risk-taking going on. jim bullard say they are watching how they market. that has been a key area of concern. crypto markets that have nothing to do with inflation. do you see pockets of some of these asset priced bubbles

tones? matt: certainly you can look at certain markets and come up with a variety of conclusions. my sense is there is a lot of liquidity in the commercial banking system. we can see this clearly in the fed's overnight reverse repo program. the liquidity is abundant. the question is where does it go and when does it go there? how high do the prices go when the liquidity pays a visit to some of these markets crypto -- to some of these markets? cryptocurrencies is the poster child for this type of behavior. who knows how high the prices can go? they could always go to zero. this remains to be seen. there are of excess liquidity, but then there are other markets that look reasonably value to us. lisa: what is the message for

the bond market this week? matt: the message is the fed has to be very careful about its communications, not just verbal communications, but all types of communications, including the communication from the dot plot. the dot plot does not represent today what it did in 2012, even though chair powell has tried to get that message across, not everybody is hearing it. they need to take a second look at the dot plot and figure out what to do with it. romaine: it is a bumpy ride ahead. let's talk about positioning. what do people do right now? if they look at the messaging we are getting from the fed and the current state of affairs regards to pricing in the bond market, do you abandon some of those short bets you have, do you abandon some of the steepener traits, do you bet on the dollar? matt: i think you certainly have to give up on the curve steepening trade.

from our perspective it was mostly a carry and roll down opportunity that the fed put to bed earlier this week. we can no longer advocate for curve steepening positions. we think there are two opportunities in the marketplace. one, if you own u.s. dollar. that seems to be the clearest expression of what we are getting out of fed policy today in concert with the economic data we expect. the dollar should continue to move higher. that is massively out of consensus at this point. number two, real interest rates are also going to continue to move higher. that means the product is going to underperform. we like selling tiff's, which might sound odd to people. coupled with fed policy, we think tiffs are going to underperform. taylor: talk to me about the dollar. the shift to dollar strength is

a stark contrast to coming into 2021, when everyone was short dollar. it was dollar weakness that was the call. when did that shift happened for you? matt: we turned neutral on the dollar in the first week of january. our perspective there was there are differences in how the interplay between real interest rates and breakeven inflation rates evolved. in 2020 real interest rates are going down, breakeven rates were going up. that is the perfect environment for dollar weakness. coming into this year, you stop seeing real interest rates going down. they started going up alongside breakevens. that is an environment where the dollar move sideways. now we are moving into an environment where we think real rates go up, breakevens go down. that is dollar positive. that is one of the reasons why we are long the dollar. lisa: matt hornbach, perfect

guest at a perfect time. morgan stanley head of global macro strategy. really interesting calls. i was struck by his answer to your question saying we can no longer bent on curve steepening and the dollar should continue to strengthen. a deeply ahead of consensus call. the idea of the dollar continuing to strengthen could offset some of these europe and emerging-market debt that have become -- emerging-market bets that have become increasingly dominant. romaine: the job for a lot of fund managers just got harder if you're looking for a rewind on the reflation trade. it is anyone's guess. in addition to the drop we saw in equities and the rise in yields, we saw a massive drop in gold prices and further weakening in the commodity space. lisa: to be clear, taylor, you've been noticing this, we have seen a retracement from the knee-jerk moves. people still responding to jim bullard.

taylor: we are back to being -- on the day. lisa: coming up, nisha patel joining us on bloomberg "the open." and going into the end of the day, "close" with romaine bostick and taylor riggs. >> with the first word news, i am leigh-ann gerrans. italy has introduced a five day quarantine and mandatory. -- and mandatory testing for travelers coming into the u.k. current measures banning arrivals from india, bangladesh, and sri lanka have been extended, while travelers posing with so-called green cards from germany, the u.s., and japan will be allowed to enter the country.

iranians are voting in a presidential election that is expected to see a hard-line conservative -- the hard-line nuclear court that has major implications for mideast security and oil markets. the narrow field is expected to depress turnout and all but ensure the election of the 60-year-old. elon musk is working on a much wider channels than publicly announced. bloomberg has learned the boring company is pitching to potential clients 21 feet in diameter, much wider than the 12 feet tunnels the company has built to date. the largest tunnels would be for expansion for boring, which has been working on systems for passenger transportation. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans.

this is bloomberg. ♪

>> we have 70 plus thousand people and we are getting them

back to work and that allows people to move about under the cdc guidelines without mask. as more people get vaccinated we keep bringing more back. the view is after labor day all of the vaccinated team bates -- all of the vaccinated teammates will be back and will start to make provisions for the others as we head into the fall. romaine: brian moynihan, bank of america ceo talking about the return to office. we have to talk about what is the return to the general belief that the fed may move faster than expected. we are below 4200 on s&p futures, above 1.50 on the 10 year yield. gold basically unchanged on the day. a lot of softness in the commodity space. the vix elevated. romaine bostick here alongside taylor riggs. tom keene is out. lisa: you did better than -- taylor: you did better than lisa. she called me riley in the last

hour. romaine: taylor riggs is here. tom keene had one too many martinis. lisa promises -- lease or bomblets is off to another ship -- lisa abramowicz is off to another show which means the full "the close" takeover is underway. taylor: markets unchanged on yields after we had been higher after some of those initial jim bullard comments. the -- we talked about where we were in economics with the full vaccination rates and what does that mean for economic growth and travel opportunities. no better person to discuss travel than brian kelly. we know him as the points guy. i am a huge fan on instagram following you. some of the big headlines this morning, the eu trying to reopen to u.s. visitors. the big question is can i still afford a flight or are my flights now priced out of the

price range to europe? brian: the best deals this summer are to europe. we are seeing thousand dollar one-way business class bears to europe and is a great time to use those frequent flyer miles. we have not travel that much. use them now, especially because you can cancel your frequent flyer miles tickets and get them all back, which is much better than getting a voucher. taylor: you mentioned business class. where are we in terms of the return of the business customer? we have heard those are the big ticket items but that is no were coming back from the corporate side. is this all leisure at this moment? brian: it is mostly leisure travel, although every major ceo i have talked to says business travelers coming back much quicker than they anticipated. the banks will be calling people back to the office after labor day. is this travel will come back in a different form. at my company we will not be doing senseless meetings we can

do a resume, but we will have -- over zoom, but we will have longer more impactful meetings. it will come back, but it will look different. romaine: it is interesting you bring that up. i was speaking with the ceo of marriott international as well as the ceo of trip.com and they talked about the idea of hybrid travel where you will see much more of a blend between leisure and business customers. how does that change the way some of the airlines and the hotels price their offerings and adjust their offerings to deal with those types of customers? brian: planes are full. they are still upgrading people into first-class. the business class bears are down. we will see a return to profitability, extending the losses this quarter for most of the airlines. they are not the big ticket bears -- the big ticket fa

res to shanghai. airlines are looking for ways to raise revenue. the way they did that during the pandemic was selling frequent flyer miles to the credit card companies. we are seeing huge offers for consumers and the credit card market. 100,000 mile offers for a single credit card. we are seeing a shift in the way they are for the revenue. making it up through program partnerships is a key way to do that. romaine: do you think we will get back to a stage where we see some of those offers dangled more? i hear a lot about cost issues with a lot of these companies having to pay a little bit more for workers. there is an idea that in order to protect their margins that means they cannot offer the same type of discounts they did in the past. brian: we will see more ancillary fees, even though the airlines did get rid of change fees over the pandemic we have seen them start to roll that back. in may most airlines were not

give you the free change if you take basic economy. we've also seen bogus fees from hotels, service fees, cleaning fees. in the car-rental space we are seeing exorbitant rates and fees . travel prices are creeping up. this summer is not the summer of $40 fares across the country. i think the airlines are very smart at coming up with ways to bring in the ancillary revenue. taylor: quickly, where's the hotspot to go this summer? brian: we are still looking domestic. key west, miami, hawaii is through the roof. so many people want to travel. even though europe is opening, it has been confusing to figure out the eu rules versus individual country rules. certain countries will release information on facebook. as a points guy we break this down for our leaders. the average consumer is still too afraid to go abroad and we

are seeing huge capacity added to the caribbean for q3, more than q3 2019. people are headed to the beach. taylor: you and me both. the points guy, brian kelly, thank you for joining us. what we have to do to convince us to take the -- surveillance jetstream daca key west? -- the surveillance jetstream down to key west. we need a beach trip. romaine: we need something. we will talk to mike and see if he can set that up. you and i have to work for the rest of the day together. we will have a lot to talk about. s&p futures, 4184. we should talk about some of those comments we got out of jim bullard today and the idea we will get more fit commentary later today and through next week. you wonder what the reassessment will be when you look at the 10 year yield, 1.50. a little bit higher than what we work an hour ago.

taylor: big moves downward. the yield on the 30 year, down 16 basis points. starting to get a lift back up after those comments from jim bullard. he was the 2022 dot. he is looking at a hotter housing market, saying the tapered discussion is officially open. then we get calmness on the 30 year. romaine: this has been fun for all of our bloomberg radio and tv listeners and watches her wondering who we are, romaine bostick and taylor riggs. tom keene will be back. as will jonathan ferro and lisa abramowicz. taylor: we have two shows coming up. balance of power, and then bloomberg markets -- the close. romaine: i hear that joe is really good. i love that show.

taylor: the best two to three anchors on television. this is bloomberg. ♪

lisa: futures moving lower on hawkish fed comments. i am lisa abramowicz in for jonathan ferro.

"the count into the open" starts now -- "the countdown to the open" starts now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ lisa: the fed fueling a reflation re-think. >> starting to see some stalling. >> you will have to reprice this outcome. >> we could see unwinding. >> may be some of the reflationary traits got ahead of themselves. >> we see dollar strength across the board. >> there is a flattening yield curve. >> dramatic flattening. >> supporting areas like disruptive tech at the expense of financials. >> the long end of the market is saying it wave