♪ >> public hype over inflation got to high. the fed got spooked. >> i think we will have real issues deciphering this data. >> we have an economy that is really strong. it is not normal to have rates at these low levels. >> what the fed is concerned about is that after 2023 you will see continued increase in inflation. >> given the rise in inflation, the hawks are more willing to show their hand. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. a little later that afternoon, chairman powell going down to capitol hill to testify tom:

he's got a lot to say -- testify. tom: he's got a lot to say. the message is the time continuum. what is important with powell is to see is he focused on 2021, 2 022, or even out to 2023 or 2024. while you were out, landau had the courage to go out to 2024. jonathan: i'm not sure anyone is calling it a sabbatical, but that's ok, tom. [laughter] i'll let that go, don't worry. you talk about the damage done to this market. what damage? where is it? lisa: tom: exactly -- tom: exactly. the drawdown in the s&p 500 is less than 1%. there's a raging debate on what to do, but if you're not in the game, you can't play. jonathan: and we are always focused on the dumpster fire, aren't we? what happened in credit? lisa: absolutely nothing,

basically wide open. it was completely calm. spreads tightened after a brief moment of i wonder what is going on. we talk about damage control. where was the damage? why aren't fed officials hearing the response? a little bit of froth taken off the skepticism of how long the fed will keep the pedal to the metal. the fact that longer-term inflation expectations came down is not good. if they are going to do damage control, that is where there -- where they are. tom: spx went up 95% yesterday. that was a jump condition seachange. jonathan: we were concerned at the fed about how quickly some people believe that the federal reserve had some people shifted the reaction function on a very nuanced, subtle move in last week's news conference and the summary of economic projections. that's not what happened. if they spent more than a year

on this, talking about the shift in this reaction function, to have people question at of the back of one news conference, one decision, that is probably not good news for them. tom: i know we've got to get to anna han, but one of her great themes is the economy will deliver for chair powell. jonathan: let's turn to this market now, 4213 on the s&p 500. futures largely unchanged. in the bond market, there is a rally in the treasury market last week. yields coming in about a basis point on the 10 year. the euro-dollar, $1.1893, down 0.2%. lisa: really dramatic march i -- really dramatic market here. not a lot going on. trying to find some level after that drama tom was talking about last week are you today, new york city is holding their democratic mayoral primary election. he questions in addition to

crime, safety, and ranked voting, how do the big cities recover from the pandemic? how do we get back to an office culture? what does that look like in a more remote working environment? the u.s. is selling notes after yields on those securities rose to the highest levels since march. if people are forecasting in early 2023 rate hike, what does tha the two-year? how messy is this auction? fed chair jay powell is testifying to the house. interesting to see what damage he sees. what he emphasizes, how much he plans to emphasize transitory and the dispersion of use on the federal reserve. -- of views on the federal reserve. should this give the market some confidence that the fed is recognizing the inflationary risks and they are not necessarily going to let things get over their skis and coming with raising rates and committing to a pause here? jonathan: is the balance of risk around the outlook changed, or has the outlook changed? is it the same?

lisa: suddenly, the fed seems more concerned about inflation, and the dual mandate seems to be much more weighed towards employment, with the fed shrugging off inflation, saying it did not think about the longer-term. we are hearing more true concern about inflation now, and if the dual mandate more heavily ways inflation, all of a sudden, people think the fed is going to have a swifter reaction function and will come in and hike earlier. tom: i just think they are making it up as they go. lisa: we all are. tom: all this navelgazing about what the fed is going to do, they are making it up as they go. jonathan: anyone with any conviction about the outlook as a charlatan, let's be clear about that. tom: i interviewed richard timberlake and our washington, d.c. office, the giant of the georgia school, and he was just magisterial. they put their pants on one leg at a time, just like everybody else, and they are making it up as they go. jonathan: anna han joins us now,

wells fargo equity strategist. tom: anna puts her pants on one leg at a time. jonathan: anna, let's get to the equity market. has anything about your outlook shifted in the last week? anna: there has been some shift, especially in the last week. what you did see is that more people on the fed are expecting a little bit of a sooner rate hike. but that move, as much as it was a bit surprising, wasn't all that mind blowing. these hyatt go from 2023 to maybe a hike in 2022. that probability distribution has been pulled forward and the timeframe, but that is not the biggest move to us. i think more surprising was hearing paper talks start. -- hearing taper talk start. we don't think that is going to happen until the end of the year.

tom: your note on gdp is great. i put my pants on one leg at a time. i want you to tell me right now what jerome powell putting his pants on one leg at a time, what we do with 11.3% nominal gdp, your new statistic up 7.3%, plus 4% inflation. i think that math is 11.3%. that is a boom economy. stocks go up. anna: yeah, when you look historically, equities can go higher even as rates are moving higher. that is because of the level at which they are coming off of, where we are lifting off of. look at where the 10-year is. with these kind of changes to our projections, the big driver is going to be consumer expenditure. what may be a risk to our outlook, especially with have coming earnings, is how the supply chain and into earnings -- the supply chain and earnings look like. lisa: should the fed start to

taper their bond purchases sooner? anna: you know they are buying $120 billion a day a mind rather than being a crutch at this point, we have gotten so used to it. we have been dependent on having that liquidity. as a taper that back, i think risk appetites will be pulled back a bit, and that is natural. when you have accommodation coming off the table, people have to adjust their risk outlook and see what kind of cyclical exposure they want. but that doesn't mean it is time to head for defensive's. the macro theme in place to remains. reflation, recovery. it is just a bit of a shift, and it is different than we saw from yuriko -- from a year ago. jonathan: if you had to stay in one segment, would you stay in financials or big tech? anna: we believe tech still has more room to go, but the outperformer in the next six months, i would put my money on financials. lisa: how much is this a bet on

the steepening yield curve? anna: that steepening yield curve has been a headwind for banks and financials in the last quarter. you saw what happens -- what happened when the yield curve has been flattening. it can be a challenge. but i think that is something the market is going to get through. i think that a sum that is going to see that trend return to a steepening yield curve, especially as you see more data come out. one of the things we've got to watch out for as well is how long is that inflation going to be marred, or wink could it continue. can the supply chain really keep it suppressed for the next several months? that is going to be a part of the market we look at a signal for that. jonathan: thank you, anna han of wells fargo. your market bouncing back a little bit, up 5, 6 points on the s&p 500, advancing a little more than 0.1%. a big bounce back in the

financials and energy yesterday. the banks up by more than 2% in yesterday's session. the question of the year, what do you want to own within this equity market, away from the benchmark index? do you want to pivot back to big growth? tom: i don't have a strong belief here, but i do agree sector selection right now is really critical. i would also point out just in the last for five days, moving from plus 20 down to 17.52 on the vix, a vix of 16 completely refutes the angst of the last three or four days. jonathan: that is where the tension has been within this equity market. will the fed move to choke off growth? lisa: and would lay taper actually cut off growth?

that is a big question at this point, based on your point earlier that if they are not reducing their balance sheet, how big of an impact will this actually have? jonathan: tk mentioned mike wilson of morgan stanley a little bit earlier. what is the bigger force at play here, greater change in the economy or the move towards taper? lisa: probably the move behind growth because it has to be the earnings that justify the growth. probably the liquidity and markets is already there. that is what analysts say. tom: i strongly agree with this. i can't say enough about the linkage here into gdp. a research note that underscores that optimism this morning, is a wonderful note over at j.p. morgan, and you and i love when somebody says, you know, i was wrong. he went weak dollar and said, we were wrong. we lost patience with a patient fed. the yen weaker, and he looks

again at the real yield. the real yield i believe friday afternoon. jonathan: i am just sitting here in stock that you did something serious for a moment. i was expecting something else. [laughter] thank you. up four on the s&p, we advanced 0.1%. live on tv and radio, this is bloomberg. tom: i've got to brush up on "love island." ♪ ritika: with the first word news, i'm really could. 150 miller kings -- 150 million americans have been vaccinated against covid-19, but cases are rising in several poorly vaccinated states, with more young people being admitted to hospitals. the highly contagious delta variant first identified in india has been spreading of the south. with pandemic restrictions being lifted across the country, companies are taking different approaches to retain staff and boost productivity. some expect a full return to the office, while others are being a bit more flexible.

companies like goldman sachs and jp morgan are hiring all vaccinated employees to be back at their desks this fall, whereas apple and others plan a hybrid work from home strategy. dating app bumble closed its offices this week to allow staff to recover from covid fatigue. -- justice secretary has counter to dutere's remarks, saying that vaccinations are voluntary. several banks are said to be restricting credit to china on the mounting interns about financial health. three banks with billions of dollars in combined credit exposure have reportedly decided not to extend loans this year in

response to questions from bloomberg. 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 ritika gupta -- i'm ritika gupta. this is bloomberg. ♪

♪ >> this upside risk to inflation could go higher than what i want

here. we have to be ready on both sides to be able to react to that, to be nimble, just as nimble coming out of the pandemic as we had to be going into the pandemic. jonathan: the loudest voice in the room getting all the attention. that was jim bullard, the st. louis fed bank president. we will catch up with the new york fed bank president this morning. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equities, 40 27 he the s&p. we advanced 0.1 -- 4217 on the s&p. we advanced 0.1 percent. when you are buying a home in america, you might be competing with someone next town over, someone out of state. you might be competing with the likes of blackstone. blackstone group agreeing to buy a company that buys and rents single-family homes in a $6 billion deal. the china investment firm reaching a deal to acquire home partners of america, according

-- the giant investment firm reaching a deal to acquire home partners of america, according to reports. your new competition, let's just say the competitor, is over on wall street. lisa: the idea that it is mass purchases sight unseen, and they will come in with a bid bond -- a bit beyond what you as an individual can make, raising questions about rents going forward, raising questions about affordability at a time when the average home price in major metropolitan areas rose 13.2% in the year through march, just to give you a sense of how much there's been this powerhouse behind prices of homes. jonathan: raising questions about the social war your status of the federal reserve. are these the kind of things they want to see happen? i doubt it. tom: i think they will become overcome by events on this. it is hugely regional.

in the new york city landscape, there's the real theory of rent versus buy. the crowding out is tangible. there's a lot of research going on about what egg institutional money means for crowding out and moving up prices. jonathan: when it comes to the federal reserve and the asset purchase program, i notice just one example, but were broadly this is the story. do you think it puts pressure on the fed to remove the accommodation they are providing for the market? it should come up but i don't think it is going to. lisa: one of the main things that stemmed from last week's meeting would be to reduce the mortgage packages, they would -- mortgage purchases. the mortgage market has underperformed significantly, so perhaps exact lead to your point, the fed is taking stock. jonathan: an example of why they might have to move. blackstone betting $6 billion on buying and renting homes. let's be clear, this is not

blackstone's fault. this is the fact that you can to a yield anywhere else. tom: right now joining us, someone who has been extremely busy within the tri-state area, particularly the five boroughs of new york city, and that is our new york city euro chief shelly banjo -- new york city bureau chief. provide a word of distinction on this election. what is it? to me it has been the assent of crime, of what are we going to do about safety in the city. what is the shelly banjo distinction of the spoke today? shelley: thanks, tom. it is a real vote on how you want the city to recover. early in the election cycle, you saw a rise of the candidate like andrew yang, saying i want to bring hope and cheerfulness back to a city still in lockdown. everyone has sort of come out of their homes and realized maybe some of the more quality-of-life

issues like crime, maybe those are a little more important right now to me than some of the more ideological battles that were fought over the last eight years in new york. lisa: tom has been talking about turnout. typically with primaries, there isn't that big of a number of individuals that actually go out and vote. do we have a sense of what turnout will be like this year? shelly: i think that is the most import question on everybody's minds because there are some any different variables this time around. already about 200,000 people voted early in the election. it is hard to compare it because last time around, there wasn't early voting. during the presidential, 1.1 million people came out. that is always the case, that there's more people for a presidential election, especially one like 20/20. also, ranked choice voting, the primary in june when it is usually in september, just a whole much of changes this time around that make it harder to figure out what is going to

happen. lisa: traditionally, new york city has been pretty progressive . they are not in the lead, and in the lead is the issue of crime. can you give us a sense of how the increase in crime in new york city has readjusted, completely reshaped the landscape for politics in new york? shelly: politicians like to say it is also the perception of crime that matters to people in new york because if you perceive that things are bad, it doesn't necessarily matter the numbers. you still want to cash don't want to go out and take the subway. it is all tied together. there's no economic recovery until you get the crime rates down. there's no tourism, know any of those things until you get the crime rates down. that is why everything is focused on crime. we depend on getting tourism back.

if you have shootings in times square, you can't do any of that. that is why crime became such a hot topic during this campaign. jonathan: shelley, thank you. bloomberg's new york city bureau chief. 4218 on the s&p. we advance a little more than 0.1% in the equity market. tom: it's the way we are advancing. this goes back to strategic notes six months or a year or out six hours. this idea of a grind higher. what you see on the bloomberg terminal when you look across equities, bonds, currencies, commodities. just in oil, you have seen this grind nature back invoke, particularly in equities. jonathan: the grind is back after a big bounce in yesterday's session. lisa: george sarah vallas of deutsche bank put out a note talking about bond yields being low, equity prices being high, and how this basically is being backed to secular stagnation

2.0. how far can equities continue to turn higher in secular stagnation 2.0? jonathan: do you think that is screaming something bad in the bond market right now? anything to worry about it? lisa: the messaging has gotten a bit muddy. globally, the central bank reaction function, the fact that there is so much money and you've got investors coming in because on a relative basis, the u.s. is pretty high-yielding. jonathan: are we really questioning the fed reaction function after last week? is that what has been happening? tom: i'm not. it has been a roller coaster coming off of the fed show. things lit up, up, down, whatever series you're looking at, but the end result are officials calming the markets. are we going to see that?

this john williams interview today with you and michael mckee is without weston the interview of the day. i don't know what else to say. jonathan: i think that was a sincere promo. thank you, tk. i appreciate it. from new york, this is bloomberg. ♪

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♪ jonathan: from new york, live on tv and radio, here's the price action this tuesday morning. equity futures advancing a little more than 0.1% on the s&p after a nice snapback and yesterday session, following four straight days of declines. speaking of banks, can you get a nice bit into the banks? switch up the board. a chart the top doubt in late february north of 160 basis points, right now about 121, and just a small bounce in the last 24 hours. we had steve from federated talking about that long banks story, that he needs the yield curve to come with him for the ride.

so far, we have not threatened to take out those highs from late february, late march. wti and brent, a little later this morning we will catch up with francisco blanch of bank of america, talking up triple digit crude. right now on brent, $74.52. we are down about 0.7%. that's the call from bank of america, and it is a big one. tom: two years outcome of the come back to $65 a barrel because microeconomics works, supply comes on, and down comes price. jonathan: that gets your attention in the equity market. let's say good morning to taylor riggs. taylor: we tried to get francisco on the show yesterday. they said you stole him for the morning show. you have goldman making the call

of $100 a barrel in reach. some upgrades on individual stocks that you are not seeing the follow-through on some of the best-performing stocks we had earlier within that oil space. let's look at a place where we are seeing some action. norwegian cruise lines, they are getting improving booking momentum, but that doesn't help the stock. delta coming off of really strong we can within the travel space, trying to hire about 1000 pilots. you cannot get people back to work fast enough. finally, we shift to some of the meme stocks. we do this just for tom, as we talk about fundamentals trying to register. rbc saying they need more cash. not enough right now for nicola. finally, let's take a look at microstrategy. what happens when you sell debt to buy bitcoin at an average of $37,000, bitcoin falls to early $2000?

-- falls to $32,000? tom: novo gratz was on with some really important comments from our qatar economic forum. and there it is. it is critical support, and $29,000 print is a huge deal. jonathan: taking off early for another show. are you going to do that? tom: probably this afternoon with "the close." thank you, jon. insert "the real yield" there. . jonathan: that's the price we pay for an appearance, the promo. tom: right now, this is really important. this is the interview of the day that links chairman powell to president biden to all of the politics of this nation. if you are ever so lucky at wellesley college, you were focused on the reduction function was karl case, and that was a special thing. betsy stephenson joins us now at

michigan, holding court on labor share. labor share is a stunning trend from world war ii. it is because of technology, because of productivity. betsy: i think we will see a return to workers seeing some bargaining power, particularly at the bottom end of the income distribution. their services are in demand all over the shop. those heavy help wanted signs you are seeing. not only are your workers wanted today, they are probably going to be want to just as much or more next month, so take your time, pick your employer, start listing your demands, and they are definitely doing that.

that is why we are seeing wages getting pushed up at the bottom. we are seeing people quit jobs. we saw more people quit retail jobs in the month of april than at any other time in the series history over the last 20 years. so workers definitely have some oomph right now, and they are using it to find a better place for themselves. tom: wells fargo looking at nominal gdp over 7%, and i get that is an outlier call, but the bottom line is when the fiscal stimulus drifts away, when nominal gdp comes in as well, do you have a confidence that labor share increases can continue? betsey: well, i think we are in the midst of a pretty great reckoning with how we have treated workers. i am not at all confident that

the market is going to solve that problem on its own and that we will see all of a sudden a rebound of the labor share of income. i think we will need policy change to actually see some permanent real change done. i think we are seeing what happens when we give workers some more power. lisa: one of the reasons why you are so brilliant and i love speaking with you about economics is because you dovetail the human behavior into it. basically, the choices we make determine these broad microeconomic changes -- these broad macroeconomic changes. what fundamental shifts in behavior do you observe post-pandemic about where people choose to work, how many hours to work. what are we seeing so far? betsey: normally when we come out of a recession, everybody is worried that there's not going to be enough jobs. so when you get offered a job, you take whatever you get because you don't know if

there's a job coming down the pipeline. this pandemic is completely different because we have seen that the economy is opening up and there's going to be job growth all over. so i think you have seen a lot of people willing to take their time. that is very unusual in a recovery. but there is something that is deeper than that going on, which is that we have all had a really weird and in many ways bad year-and-a-half, and i think all sorts of people are stopping and asking themselves, should i be doing something different? i think that happens in everybody's life at some point, but i've never seen it happen to a nation all at once. so we are seeing a great rethinking underway, and we are going to see that in the macro data because we are doing it is a macro group, because we all had this correlated stock, which is the pandemic has caused us to question what we are doing with our lives. lisa: how does that readthrough through to the discretionary spending, to whether people go out to eat versus eat at home the way they have been during the pandemic?

a lot of these broad macro shifts, what other lifestyle changes are you observing in the data? betsey: i think it is too soon to see what is going to be permanent and what is not. you are seeing a lot of people ready to get back out there and party like it's 1999, but there's a bunch of people still nervous, and people who don't want to take their masks off, people who don't want to be in crowds. i do think there are a lot of people who psychologically, it is just going to take a little bit to get them comfortable again being in a crowd. that is going to change their spending preferences. for sure we are seeing people with those weddings they are going to go to this summer, so maybe they will buy something new to wear. but i don't think we are going to go back to spending in the same way. certainly i think the technology

shock, really the adoption of technology shock that happened over the last year, that is for sure going to stick with us. we are not going back to the mall, to stores to shop in the same way. i think people are trying to figure out how much are they going to continue to do remotely versus what are they going to go back and do in person, and almost everybody i know hasn't fully figured that out yet. they have a bunch of activities they are going to continue to do remotely that they used to do in person, so they are just not ready to go back to doing in person or don't think the value proposition is there for doing in person. i don't think we will see business travel zooming back anytime soon. jonathan: we got to leave it there. thank you. a bit of breaking news on catherine mann, formerly of citigroup and the oed, being named to the monetary policy committee over at the back of

england for a three-year term that will begin on the first of september, 2021. dr. catherine mann. tom: this is an inspired selection, and this goes to the prime minister at the g7 meetings as well. catherine mann not only with her recent tenure at citigroup, but also her academics, her profoundly important monograph of a number of years ago is the trade deficit sustainable, and then she did what is so rare in economic research. her definitive discussion of the co-dependencies of china and the united states will be of huge service to the bank of england. it is truly an international choice for england. you don't see this at the fed. jonathan: i think we should see a lot more of it. chancellor rishi sunak saying, "i am very happy to announce the appointive dr. mann. her breadth of experience will be immensely useful to the mpc."

whenever she came on "bloomberg surveillance," her backdrop was a global map. perhaps that is the view she brings as monetary polity becomes increasingly international. jonathan: is that the story? we have a more international outlook. tom: the prime minister didn't mince words about it. he's looking for global written, and this is something, i will be blunt, the united kingdom does this better than the united states. lisa: are you just trying to make jon feel comfortable? jonathan: i think he is. [laughter] tom: no, they had adam posen on the board and the rest of it. jonathan: the history of this i think it's what you're trying to get at, tom. this is a big announcement for the internationalization of the bank of england. jonathan: is this to make me feel comfortable that your central bank is better than ours? [laughter] i will be catching up with the new york fed president mr. john

williams a little later this morning. michael mckee helping us with that interview. that will be taking place at 9:30 eastern time thereabouts. your estimate is 4200 on the s&p. from new york city this morning, good morning. live on tv and radio, this is "bloomberg surveillance." ♪ ritika: with the first word news, i'm ritika gupta. a bipartisan group of senators working on an infrastructure deal say they are getting closer to an agreement, but they say they are still trying to figure out how to pay for the plan, considering white house opposition to indexing the gas tax to inflation. lawmakers are set to meet white house officials today and planned to drop a framework for a proposal this week. -- completed an aftermarket offering program by selling 5 million shares for a total of more than 1.1 billion dollars. shares of the videogame retailer surged as much as 11% in trading

after the announcement. they will use proceeds to maintain a strong balance sheet. blackstone group has agreed to buy a company that buys and rents single family homes in a $6 billion deal. according to dow jones, this is how wall street believes it is going to stay heart. that company owns more than 70,000 houses -- more than 17,000 houses. an nfl player has announced that he is gay, making him the first active player in the league to come out. the raiders player revealed news on instagram, saying he's pretty private, but hopes is coming out will mean other people will not have to make similar videos in the future. he added he is donating $100,000 to a nonprofit that works to prevent suicide amongst lgbtq+

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

>> the british financial system has to do business in asia as a

whole, and china in particular, and of course in hong kong. naturally we don't make the laws in those countries in asia, and certainly not in china or hong kong. we have to abide by the laws that are locally made, even if there are many aspects of them with which we disagree. jonathan: and apparently there are many. that was lord mendelson, the global council chairman, speaking to tom keene at the qatar economic forum. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market looks like this on the s&p 500. we at a little but of way to the s&p, up a little more than asherah little bit of weight to the s&p -- a little bit of weight to the s&p, up a little more than four points. euro-dollar now down to $1.1901. your 10-year back with a 1.49% handle.

your yield coming in a little bit this morning. that move fades as this session grows older. tom: look where the calendar is ending in june, and then we begin the earnings soiree. there is no one who does earnings at bloomberg better than dave wilson. they have done their recalibration outfront, $250 on s&p earnings. you fold that into price earnings ratio to try to figure out where the market is. dave: indeed. really looking at the forward price earnings ratio on the s&p 500. you are talking about earnings estimates 12 months out, using that as a basis for valuation, and comparing that for what is going on in the bond market, specifically the real yield, inflation-adjusted on the 10 year treasury. what we have seen is that they

forward pe on the s&p 500 has come down because earnings estimates have been coming up. that's how you get that 200 dollar number -- that $250 number as an example. the real yield has kind of hung in there. even if you were to see that real yield move up, bond yields rising and inflation adjustment has well, then stocks would be any position to handle it. tom: the only real view at this is to watch "the real yield" at 1:00 p.m. [laughter] jon is back, david. reporter: dave: i see that dave: dave: -- i see that -- dave: i see that. welcome back, jon. jonathan: thank you, dave. lisa: how important is it for us to not be at peak growth, for us not to be at peak earnings

acceleration in order to keep this rally going? how much does that have to continue to make the current valuations worth it? dave: there's no doubt it has to continue, if only because there's so much optimism built into estimates at this point. you look at the second quarter for the s&p 500, we put together the individual company projections, analysts are paying earnings growth of up to 60%. you could argue that is skewed because of the pandemic affecting a whole lot of businesses, but at the same time , you look at the shift that has gone on, people going back at some extent to the areas of growth in the stock market, backing away. tom: so you are observing a growth tendency, away from value? dave: when you look at technology, look at energy, certainly there is some of that. look at finance, materials. they have suffered a bit. the question is, does growth pick up from here?

tom: dave wilson, thank you so much. jon, that gets over two what is going to be growthy out there. there's different kinds of growthy as well within the social moment we are in, wrapped around amazon prime day. i've never bought anything on amazon prime day. i really don't get it. jonathan: if the federal reserve moved earlier than you anticipated, and you believe they might choke off growth prematurely, then growth equities become a little bit more expensive because growth becomes scarcer. that is what we saw last week. tom: anna han told us there's another way to go. you can have a good economic and markets rate rise. that is not in the zeitgeist. jonathan: steve authers

acknowledging that you need the stock to come with him. lisa: the stocks have moved sideways for a while now. we don't about the various rotations. it has been pretty dramatic. over the past month, real estate has gained 6.4% in the s&p 500. materials down 5.2%. an incredible selloff, i sort of retracement in commodities as they have been completely inflated over the past 12 months. there's a question of how long-lasting this can be. will the fed curtail their more -- will the fed curtail their mortgage bond purchases and give back to other areas? how do they knew wants this in order to affect markets in a way that they see prudent? jonathan: we go back to the story of the last hour from the dow jones, the blackstone has agreed to buy a company that buys and rates sigel family homes, a six billion dollar deal to acquire home partners of america.

this was controversial earlier this year, getting even more controversial as it progresses. lisa: this really started in the aftermath of the 2000 and housing crisis. -- the 2008 housing crisis. wall street firms went and bought housing in bulk and rented them out. it raises a policy question about how high rent can go, about barriers to access for individuals who own homes, especially at a times of such low interest rates. jonathan: the federal reserve has been very clear about this social warrior side of their mandate that chairman powell increasingly has taken on. this clearly is one of the downsides of the policy, that you start to get wall street getting involved in homeownership in america and a much more prominent fashion. tom: i am sure they would push back and say the financialization of it provides a benefit and a path to homeownership. what i would suggest is they are going to focus on the mathematics of john williams. r squared debate now is front

and center. this comes back to the reaffirmation of potential gdp. we had feroli at j.p. morgan tell us he stands by their low statistic, and jan hatzius said we are going back sub 3% gdp. they are way more focused on that. jonathan: i imagine you believe this is daylight, between the likes of lead, kaplan, and the likes of williams. tom: there's daylight, but there's supposed to be. the independence of the fed. they are supposed to argue. it is normal to be that way. i think we do the world-class best interviews of central bankers worldwide, but this interview with john williams is going to be intense this morning. he has to re-justify their math. jonathan: mike mckee helping to lead that interview at 9:30 eastern this morning. coming up on this program, binky chadha, deutsche bank chief global strategist.

looking forward to that conversation with your s&p 500 approaching 4220. we advance a little more than 0.1%. your yield is 1.4886%. euro-dollar back down to $1.1899. live on tv and radio, for our audience worldwide, this is "bloomberg surveillance." ♪

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♪ >> the fed is not going to kill this recovery. >> public -- public height over inflation got too high. i think the fed got spooked. >> given this rise in inflation, the hawks are more willing to show their hand. >> if you think inflation is not going to be transitory, it's because you think the labor market is tight and we have tapped out earlier than you might hope. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.