♪ >> if you have confidence in the economic outlook, equities are usually the best place to be. >> pure reopening trade that some of the covid sentiment sectors have a harder summer than people were hoping for. >> that abroad acceleration is getting shifted from the u.s. >> we just all focus a bit more on fiscal policy. >> the fed will actually end up doing what it has to do but it may be a little bit late. >> this is "bloomberg surveillance." with tom keene jonathan ferro,

lisa abramowicz. tom: good morning. a simulcast of doom and gloom. the market pulls back this morning. we will dive into that. an important conversation with the secretary of treasury as well. world is coming to an end. the tenure inflation-adjusted yield under 1%. we have come about that to -0.98%, crisis over. jonathan: 1.2795 on nominals right now. you've mentioned reeals, we are still -97. we've had a big moving real yields. when you try to fit a fundamental narrative to it, do you miss what is just a technical expiration? -- explanation? bob michele of jp morgan has taken that we. tom: i have then going back

and forth. what we talked about was the short cover on bonds. price down, yield up, oops, i am wrong. jonathan: the emphasis at the fed has turned. one line jumped out to me in the fed minutes. "a substantial majority of participants adjudge the risk to their inflation protections were tilted to the upside." that's not a shift in the reaction function, not even a shift in the forecast. that shift in emphasis was enough to spark what we are seeing playing out over the screen over the past month. tom: dow futures at -5.14. the vix reached out with just a case of 21 as well. is that a correction? romaine: no. we are far from that. i think jonathan golub hit

it on the head. this is still able market. we have had these dips before and people have bought these dips. today, obviously, a little bit more severe than what we have seen. we really only had a couple of sessions where we opened lower. on both of those days, we closed higher. i think you are seeing people who see opportunity here, they see an opportunity for rotation rather than an opportunity to exit. tom: i want to go through the data. i think we have to do a complete data. i will save bonds for you. dollar churning here. i want to point out renminbi comes back a little bit weaker. maybe all the china news, 6.49 on yuan. the major news is what is not happening. euro really does not move off the ecb market. jonathan: euro is firmer. euro-dollar out by 0.4%. yields are to 1.2778.

intraday highs of the year were n6 we keep beating this drum. this move is not new. this is not new. it has been developing for the last several months. tom: we will have to see. we are going to get to this and this is a good day to speak to someone at morgan stanley actually wearing about not losing money -- worrying about not losing money. we rarely talk to people in the trenches and we do so today. what's your biggest headache right now with people who say i need to make money like it's in the market but i don't want to take risk? what do you tell them? >> thank you for having me on the show. it is such a weird environment that we are in. on one side, our economic forecast remains to be positive. on the other side, for a while now, we have been calling for a correction, a pullback of some sort, anywhere from 10%-20%.

we are saying that in the context of the bull market but we are preparing clients for the fact that this economic cycle seems to be happening a little bit too quickly and some type of a pullback here, it just seems natural and normal. this is not a reason to exit the market, but certainly a good trigger to reposition the portfolios, go to safety, to take some profits off the table. jonathan: your colleagues, particularly in investment bank, i am thinking of andrew sheets, mike wilson, they have been focused on where we are at in this cycle. the team at morgan stanley believe we are experiencing a midcycle dynamic. explained that to our audience why we are already there so quickly. >> generally, these things take time and bull markets last for a while. because of so much stimulus and

this whole economic reopening event that we are going through, everything is happening quickly. we seem to be going into [audio drop] which is known for corrections and pullbacks. because everything is happening quickly, there are developments and concerns dealing with inflation, labor shortages, higher cost of materials, you know, on one side, we have this growth of recovery. on the other side, we have the volatility. we think the pullback on the correction at this stage in the recovery is a midcycle transition that we find ourselves in. it's only natural. romaine: this is a pretty broad-based pullback, at least for today. nothing of significance higher, at least in the premarket. i want to go back to the economic data we have been getting, which has been mixed, and has been mixed for pretty

much the whole year. there were a lot of upside surprises out of that data and that seemed to fuel a big part of this bull run. those surprises have started flattened out. if you read into that, any sense that even if the economy continues to chug along higher, the idea that we will be presently -- pleasantly surprised in a meaningful way has passed us? >> one of the key factors is that there seems to be a of a disconnect -- a bit of a disconnect between the way the federal reserve sees inflation and the way consumers see inflation and everyday life. what we tell investors to do is focus on earnings, focus on quality, focus on fundamentals. i do believe that we are going to see surprises but we have to be very careful with portfolio selection, very careful with our

securities selection. we look at quality, earnings, we look at the long-term opportunity for the stocks to make sure that the valuations that we are seeing are actually supported by earnings. because we saw so much run-up in some of the sectors of this economy, and some of the individual equities that the question is, is this sustainable? if there was ever a time to go to quality to increase the overall quality of investment portfolios, this is the time. jonathan: always good to catch up. morgan stanley's private wealth management senior vice president. let's talk about some individual names. apple delivering its first new high since early january. these are names that have not done much at all. today is a little bit different and i think it's worth explaining. we've had rotation on, rotation off. this morning, you have a broad-based decline in this market. you see the underperformance on the small caps, the downdraft in

the nasdaq. romaine: this is significant. yesterday afternoon, we were talking a lot about the breadth of yesterday's rally and yesterday's closing high. when you come into a morning like today and you are seeing everything in the red, i mean, there is no large-cap stock right now in the green. levi strauss is pretty much it. you talk about the apples, the amazons, the microsofts, you talk about all those cyclical names, airlines, travel stocks, material stocks that had is at all-time highs, all of them down today. you wonder if this is that pullback, if this is a correction and it just ends up being a reset. jonathan: is that on the edge of doom there? tom: romaine bostick is a wonderfully optimistic person. it's because he is sitting in

that chair, the gloom just comes. jonathan: he alluded to something quite critical. this is not new. your 10 year yield topped at the end of march, breakevens topped in may. i want to sit on the airlines for a moment. american airlines is 20% off the highs of earlier. this summer is not the -- of early june. this summer is not this summer we imagined 12 months ago. the idea that this london-new york corridor is not fully functioning. i had a friend fly yesterday and i had a picture of the cabin. in coach, their work two people -- there were two people in the whole cabin. tom: to mentioned the secretary of transportation coming up, i mean, south bend to o'hare to

l.a., can you do that at this moment? it depends on who you are. i am not going to die on the domestic leg but die on the international leg? jonathan: we can have that conversation in a moment. where is the science here? what's the scientific rationale to have not made a move on this? the same data points in the same countries when it comes to the vaccine, you have the u.k. coming up with a new travel arrangement, but it doesn't have reciprocal arrangements for the united states. what use is it? right now, not much. tom: you have lived in this with your travels. we make jokes about it. all of us have a whole team helping people trying to get around all of these different rules. it comes down to, when do we get rid of quarantines? jonathan: it's been a nightmare. we talk about some of this with

pete buttigieg, the u.s. transportation secretary. he will be joining us shortly. your equity market down 1.6% on the s&p. off session lows and what a session is developing. in about 20 months, initial jobless claims -- 20 minutes, initial jobless claims. after that, the opening bout in new york city. this is bloomberg. >> in haiti, police have reportedly shot and killed four suspects in the assassination of the president. according to the associated press, two others were arrested. three police officers who were being held hostage were freed. still no word on who the assassins were. the european central bank has raised its inflation go to 2% in the medium-term. policymakers signaled they may treat deviations above and below that target with equal vigor. all of this was part of an ecb

strategy revamp. tokyo will stage an unprecedented olympics largely without spectators. there are multiple media reports that fans are expected to be banned from all olympic events in tokyo and surrounding areas. the eu has imposed fines totaling $1 billion on volkswagen and bmw. regulators say that two companies colluded to delay the rollout of emissions cleaning technology. daimler avoided a fine to be the first to tell the eu about the cartel. more than half of hospitality workers will not go back to their job and more than a third are considering not reentering the industry. the survey underscores the hiring challenges for restaurants, bars and hotels. 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 right ago grouped up.

-- i am ritika gupta. this is bloomberg. ♪

♪ >> i happen to believe that there will be a movement ahead

in capex. we think there will be an infrastructure bill of some sort. where not privy to the negotiations in congress. we think there is a desperate need for spending on infrastructure, but there is also a need for private engagement in capex. jonathan: nice to catch up with abby joseph cohen. from new york city this morning, good morning. alongside tom keene, i am jonathan ferro, together with romaine bostick. equity futures down 62. this bond market is firm, particularly over the last couple of weeks. yields are lower by just three or four basis points to 128 after a break of 1.25 a couple of hours ago. tom: there is some calmness in the last hour. it is not a comb time for our secretary of transportation. mr. buttigieg, of course, we all

know from south bend, indiana. sterling academics. could we write an essay on john f. kennedy's profiles and courage. we want to talk about transportation, international travel, but yes, right now on infrastructure, mr. secretary, thank you so much for joining bloomberg. i lived the last infrastructure disaster. as you drove out indiana west and there was a point where i-80 died and you had a two lane highway west. we are going back to that on the condition of our infrastructure and we are doing it because we cannot figure out how to do a gas tax. can't you do a gas tax that will repave the roads, rebuild america and be politically acceptable for democrats? sec. put a judge --secretary

buttigieg: turns out you don't have to. republican and democratic senators have come together on delivering the biggest investment in american infrastructure in more than a generation, the biggest investment in our roads and bridges since eisenhower, the biggest investment in passenger rail since amtrak without having to ask americans to pay anymore in taxes, any american who makes less than $400,000 a year. this is a promise that the president made when running for president. he plans to keep that promise. he was very firm on that. it is absolutely possible to make these kinds of investments by looking to other funding sources that don't ask that of ordinary americans. we are thrilled that this critical mass of republican and democratic senators agreed. now, we need congress to move it forward, get it to the president's desk so we can get those dollars working, whether

it's on our highways and bridges, airports and courts, or on some of the things nowhere to our infrastructure picture, like digital infrastructure. tom: you mentioned david eisenhower -- dwight david eisenhower. i remember going to his museum, all wonderful. dwight eisenhower had to fight his republicans to get his vision of the highway interstate system done. how can you fight your republicans? secretary buttigieg: people don't agree much along party lines, but they agree on the need. when i am talking to house or senate members, republican or democrat, they are all from somewhere. this week, during this july 4 recess, they are all home talking to constituents saying, when are we going to get this bridge fixed, why is our airport

looking the way it is looking? how are we this far behind on transit? or whatever it is in their district. yes, i do believe that we have finally reached this point of, if not consensus, the overlapn. that's why you had this remarkable sight of the president walking out of the west wing flanked by republican and democratic senators. we have a deal is not the same thing as we have a bill. turning it into legislative text, moving into these processes, there's a lot of machinery, especially this month of july, that is going through its motions in washington. but it is resulting, i believe, in the opportunity for something that we have needed really for the better part of my lifetime, as we have watched these investments degrade, as we have coasted off of decisions made generations ago. last time i was in new york was to look at the hudson river tunnels, the finest

infrastructure technology of 1910 and we are still depending on. tom: look at the shade the secretary gives to new york city. jonathan: there are some things that are easy to get done and haven't. one is infrastructure, another is international travel restrictions. when are we going to get an update from your administration? sec. buttigieg: unfortunately, cannot be based on an arbitrary date. it has to be based on conditions. as transportation secretary, of course, i am as impatient as anybody to see us move as quickly as we responsibly can toward more forms of reopening. right now, what's going on is a set of working group processes. we've convened working groups with international partners. there is one for the u.k., for the eu, one for canada, one for mexico to determine the right pathway forward. a lot of this is based on what's going on with progress in the vaccines.

we see good news and bad news in terms of the variants. one moment, you are reading about a variant across the world, next thing you know, it's becoming the dominant strain in the u.s. jonathan: the delta variant has become the dominant strain in the united states of america, according to the cdc. from my position personally, you did not have to watch her father's funeral down the screen of an iphone on tuesday. i did because of your policies. i expected you to bring up the science and i expected the quote that came from you to be used. here are the policies for our audience. currently, if you a citizen of the united states of america or if you have a green card, you can travel to the u.k. and you can fly directly back. if you have an h1b visa or l1, you can fly back to the u.k. but to come back to america, you need to spend two weeks in mexico city to get back to new york. i have spoken to scientists

about this and there is no scientific rationale for that policy. for me and thousands of others who have not got to be with their loved ones througb a difficult time, there will be thousands more if you keep on repeating the same line. why are you not changing the policy when we have scientists day after day say there is no scientific rationale for maintaining it? sec. buttigieg: first of all, let me say i am sorry to hear about your father. let me also say that i am among those who are impatient to see loved ones who live across the atlantic. let me also say that the u.s. is going to be conservative. jonathan: forgive me for jumping in. you keep going back to this. there is no scientific rationale to draw a distinction between someone who has a green card, a visa or l1. you know that, i know that. it is not going to justify it.

what i need to understand from you as a policymaker is why thousands of people who live in this country legally and pay taxes cannot go home to see loved ones and return directly and why you still repeat the same line again and again. it does not make it through. you do not have a scientific rationale for this. you cannot back it up with science. why are you not going away with policymakers and doing something? sec. buttigieg: our tools are imperfect. we are dealing with a country-based framework for assessing risk when, in a perfect world, we would know all the information we need to have for a traveler based framework. we can move in that direction somewhat. that is more refined and ultimately more accurate. but we don't have the toolkit to do that in a way that would be as smooth as we would want. we are going to continue to have a strategy led by public health

authorities, guided by homeland security, cdc, my department at the table, to reopen travel as quickly as we responsibly can. jonathan: forgive me for jumping in. just allow me to get this stock -- this thought in. i need you to understand that i am talking about working people in this country who are working here legally. with the stroke of a pen, you can enable thousands of people in this country who work legally and pay taxes to return home to loved ones. you can do that by making it equal treatment for people with an h1b, l1, green card. that's not difficult. that is not a large change. that's allowing people who live in this country to get back and see loved ones like they want to. you didn't have to watch your mom standby your father's casket

in a funeral two days ago because you won't do what i'm describing. it's easy. i hope you go wait and make the changes so that thousands of other people don't have to go through what i have gone through in the last month. can we make that happen, sir? sec. buttigieg: these are exactly the kinds of things that we are reviewing on a daily basis. i am the transportation secretary. my entire job is to do everything i can to safely get people to where they need to be and where they want to be, whether it's to be with loved ones, whether it's to do business, it's literally what i'm here in washington to. nothing about this, respectfully, nothing about this is easy. we are dealing with a farm and on -- phenomenon that has led to the deaths of 600,000 markets. nothing about this -- 600,000 americans. nothing about this is easy. we are doing everything we can,

as quickly as we responsibly can, to get back up and running. tom: would you support a passport equivalent? i have a passport. i happen to study microbiology a few years ago. why can't i get a passport, a federal passport, that says i have been vaccinated? sec. buttigieg: there are a lot of privacy and technology issues. it's worth noting, you may have had this experience, too, i had it when i was younger traveling internationally of carrying a yellow cdc passport that reflected the vaccinations that i needed to demonstrate that i had to travel to parts of southeast asia and africa. we have forms of this that are frankly very low-tech. how to balance that with privacy issues is a charge. we have decided it is not the federal government's job to establish these kinds of requirements but it is important to make sure that there are ways for people who want to demonstrate that they are vaccinated to prove it.

we have seen a lot of third-party and private sector ways to do this and i think that's going to continue to develop, and needs to have continued support at the policy level. tom: what is your biggest headache right now in getting this infrastructure plan throug? i know you are managing a message every day and certainly we have seen that with president biden. this is an emotional piece of american legislation. how do you get it through a fractious senate? sec. buttigieg: the biggest thing is not to let the politics get in the way. people are impatient for this to happen but it has been infrastructure week for a good decade, and we need to demonstrate it is going to get done this time. the policy framework is clear, the path forward is clear, we need roads and bridges, we need better airports. there is a listing of@]é3■ airp, not one of the top 25 is in the united states. that is unacceptable to the president and unacceptable to

most americans. one of the things we have to do is move it through congress and as this turns into a legislative text we are turned down any obstacles to getting into the president. i feel an enormous amount of momentum on both sides of the aisle. our job is to make sure the momens!z finish line. jonathan: mr. secretary, appreciate your time and thank you for hearing us out and responding. pete buttigieg, u.s. secretary of transportation. economic data in america. let's turn to michael mckee. the wrong kind of upside surprise on jobless claims. michael: not much of one. about a 2000 increase over the prior week because that was revised higher. 300 73,000 jobless claims filed in the last week. that is more than a survey of 350,000. still a much lower level than we were during the pandemic. the average of the five years

before that was 230,000. we are getting there. it is taking longer. the real question is not the initial claims being filed but - claims. ]ññ$cpñ1gv÷■that is 14 million t is the number you want to see as people move into the labor force and try to get jobs. we are keeping an ion that. some of the states where we saw the end the unemployment benefits early, alaska and iowa saw jobless claims drop during the month, mississippi sought jobless claims drop by 8000 in new hampshire saw jobless claims rise by 3000. is there evidence we are seeing people go back into jobs because they cannot get extended benefits? not conclusive yet. tom: there is a weekly data point. i want you to save us as we look

at the yield market and the equity market and the worry about the trajectory of growth. forget about the fed. when you read all of the market strategist, the market economist , we talk about a boom economy and they a sort of boom economy, how has that timeline changed in the last number of weeks with the research you have read? michael: it has not changed. the psychology changes. if you are the fed you can afford to wait. you can afford to say we will not know what will happen with inflation unemployment. we have a theory. if you are an investor you have to trade on a daily basis. you are treading the psychology of the moment. the psychology of the moment is the delta variant is getting established and that will have an impact. we don't know at this point. romaine: when you look at the continuing claims and the trendline, it does not seem it

has come down a great deal over the last -- i wonder at what point do you start to be concerned? michael: that is the question for the fed. while we see jobless claims are not related to payrolls in a direct way, they do have are of the relationship in terms of where people are in the labor market and we do not see people getting jobs at a rate we want to and we are seeing an elevated rate of claims. they should move together. claim should start coming down as more people move into the labor force. that may not happen until the fall, when schools reopen, where the extended unemployment benefits expire for everybody and people are able to get jobs. that is something we want to keep an eye on. as the extended unemployment benefits end, that should also push that number down.

does it push it down a lot? that is the question. tom: christine lagarde is beginning to explain the symmetric change in ecb policy. i believe she will answer delicate questions. we will follow that. our team in frankfurt and london. we will see how symmetric she is in answering sensitive questions , certainly from the german media as well. james o'sullivan joins us. he has been extremely good at blinking market economics and what it -- at linking market economics and what it means for the markets. we are thrilled jim o'sullivan joins us. i want to talk about the signaling process you see out there. as the market signaling the fed or is the fed signaling the markets?

james: it is a good question and we are puzzled by the rally in the bond market of last couple of months. for the most part the u.s. economy seems to be recovering fairly well. we just saw 850,000 increase in payrolls last week. it is inevitable that the boost from reopening and fiscal stimulus will fade. we do not expect to see 7% or 8% growth indefinitely. inevitably there will be fading. the economy seems to still be pretty strong. it is a puzzle that the bond market has rallied as much as it has. tom: it has rallied because of price up. i do not want you to go in full fixed income mode. does it concern you to see the oddities in the very short term

market? link that to what our listeners and viewers live every day in a more long-term bond note market. jim: are you talking about the short end of the curve? tom: i am talking about the wall of cash that is out there and has distorted all of the trust market inside six months. jim: there is certainly a flood of money in a kiwi world the fed is -- in a qe world the fed is in right now. the fit is still buying 120 million dollars a month in bonds. bank reserves are being flooded. there is short-term money. the fed just week it's short-term administered rates, the repo rates and the excess reserves right -- excess reserves rate. we are living innknkúth

that is putting long and short-term rates close to zero. that is not about to change anytime soon. what is being talked about is backing off on the qe part of the program. that will slow down the increase in all of these reserves but there's certainly no talk about taking it back anytime soon. romaine: the monetary accommodation expectation is for it to remain. let's talk about fiscal policy accommodation. there was a high expectation heading into this year about the type of fiscal stimulus and spending we would see. that has not worked its way through congress and now there are doubts about whether we will see the full proposal come to fruition. how is that factoring into your outlook? jim: that is a bit of a specter for the bond market. it has only been true the next round of fiscal policy will be more of a long-term plan over the next eight to 10 years. not so much about 2022 or 2023.

meanwhile it has been true the huge amount of stimulus put in place over the last year and a half was very much frontloaded, including $1.9 trillion stimulus , certainly an active march. that stimulus will fade into 2022 and that is a reason to expect growth to be much slower this year than next year. meanwhile, it looks like it is a challenge to get that long-term plan in place. there's a lot of negotiation still. in the end it looks like something will be done. there's a lot more negotiating. the longer-term plan is more about the next eight to 10 years , not so much about 2022. jonathan: good to catch up. jim o'sullivan, td securities chief macro strategist. here is the price action. down 59 on the s&p 500.

we declined 1.36%. treasury yields saw a break of 1.25% earlier this morning, we are now at 1.20 762%, down 4%. -- one point 2762 1 --.2762. -- 1.2762. later, jerome schneider. tom: that could be a one hour conversation. as i mentioned, the trust bond market is shattered. this overnight repo market, a bunch of mathematics. they are talking greek. jerome can translate that. jonathan: what did you make of that claims data? tom: we do not have time with mike mckee. i looked at the chart and by no means does it violate the trend

to a better set of statistics, better feeling about employment in america. the continuum of the trend is still very much intact. jonathan: i will run you through the opening on tb and tom keene will do that on the radio. into the close, romaine bostick putting in a long shift. romaine: the breadth of the selloff combined with the lack of breadth in the rally, whether you put that together and whether it spells the idea that some of the steam is coming out of this. tom: i lost my train of thought. i was thinking about italy and england. the breadth thing is a big deal. it has not been there. romaine: we will have a good conversation. that day mary during the close. -- that game heirs during the close -- that game airs during the close. jonathan: how does that work?

romaine: checking the phone during the commercial. jonathan: from new york city, heard on bloomberg radio, seen on bloomberg tv, this is "bloomberg surveillance." ritika: with the first word news, i'm ritika gupta. a two week search for survivors of that collapsed condo in south florida has come to an end. the operation has shifted to recovery after authorities concluded there was no longer any chance of life in the rubble. crews have recovered 54 victims with 86 people still unaccounted for. another sign the rapid spread of the coronavirus delta variant could wreck europe summer. france is warning not to vacation in spain and portugal. those countries have the highest 14 day case notification rate in europe after cyprus, and both rely heavily on tourism.

in china and the government signals the economy needs more support from the central bank. authorities hinted the people's bank of china could make more liquidity available to banks in order to boost lending to businesses. one way to do that is cutting the amount of money the banks have to keep in reserve. china's recovery from the pandemic has shown signs of faltering recently. in china tesla has unveiled a significantly cheaper version of its model why suv -- model y suv after a string of negative publicity that may have hurt consumer sentiment. the model y starts in a little more than $42,000, about 20% than the original model y. 36 states have sued google, accusing the company of abusing its power of app sales. a suit in san diego says google used tactics to thwart competition. the company says the lawsuit

gets it wrong. 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 ritika gupta. this is bloomberg. ♪

tom: good morning. "bloomberg surveillance." a very interesting half-hour, we

speak with the secretary of transportation on infrastructure and on international travel. the market somewhat improving. right now it's a special moment, not only for "bloomberg surveillance," for all of new york city, but it is a national story. eric adams is the democratic nominee for new york city mayor as two other candidates did not go for a recount and conceded in the last 12 or 18 hours. joining us for a conversation with the democratic nominee is romaine bostick, and we are actually thrilled to have shelly banjo with us. she has driven our coverage of bloomberg. this started out as another race and then became something different. eric adams, thank you for joining us this morning. i will let shelley talk about your piercings and all of that we've seen in the last 24 hours. i want to talk about the first

meeting as mayor with the new york police department. how do you envision that will go? mr. adams: we are starting already and not with the department. i had a conversation with ed mullins, a conversation with the president of the dea. it is about going behind closed doors and say let's turn a new page. the requisite to prosperity is public safety and reform. they are eager to sit down and say how do we move policing into the 21st century, we reestablish a relationship between police and communities. our cities will be controlled by the good guys at the back guys in right now the back guys are winning. i'm going to stop that. romaine: are you going to do that with german mcshane at the helm? mr. adams: i am not. i've made it clear my police

commissioner will be a woman. we will finally bring the largest police department in the country into the 21st century of women leadership in law enforcement. i am looking at three candidates i've communicated with. romaine: i am sure you know being a veteran of that force, that will come easy. we have seen the relationship between the rank-and-file, police unions, and the mayors of the past. you have also had a relatively complicated relationship despite being a veteran of that department. how do you bridge that? how will you do that in a way where the police, which are a mighty force in the city, some would say are mightier than the mayor himself? mr. adams: it is easy. those who say it is not going to be easy do not know me. i had difficult challenges in my life. arrested by police officers, assaulted.

moving through the ranks to captain. became a state senator and now borough president, beat diabetes by changing my diet. difficult challenges is not something i run away from. what we must do is stop talking at each other around reform and safety and start talking with each other. your dog to see in the first year a complete change -- you are going to see a first change in the first year in an atmosphere of public safety and how please respond. we will get rid of the bad cops and reestablish relationships in our community and it will be done in year one. shelly: the three women you're currently in conversation with, are they within the new york police department or are you looking outside? mr. adams: what i do not want to say is it is bigger than a bread box or smaller than a house,

because that limits the potential candidate. i do not want to jeopardize what they are doing. i will rebuild those numbers immediately after i win the general election in november, i will reveal. shelly: another big force to be reckoned with his governor andrew cuomo in albany. you have had a checkered past with him. you have run in the same political circles for almost your entire adult lives. did he call you to congratulate you and what is the first thing you will try to work with him in albany on? mr. adams: we do not have a checkered past. we are both strong in what we believe. we know how to sit down and communicate. we worked together in albany. i am looking forward to having him as a partner as we deal with public safety. i cannot emphasize this enough. we will not -- if we have

shooters in times square, nobody will get on the subway system because of the violence. we will first deal with making our city safe, and then we will use the dollars coming from the federal government to go after the theaters of crime and the theaters that prevent people from leaving institutional poverty year after year. i believe we can accomplish this together. tom: they will study your candidacy, the path of this mayoral race for you in brooklyn. they will also study it in boston and also in idaho. you will have a national ramification for all democrats. what does your victory say about the certitude of the left and the democratic party? mr. adams: if you are a dsa candidate or a republican candidate, you do not want to be put on the train or slashed. i think what you will see -- i

am the face of the democratic party. i keep saying this. i won four boroughs in the city of new york. my message resonated with everyday working people. it was not impacted by your ethnicity, your gender, your worship. i think you will see this message resonated. this is an opportunity to understand we do not have to talk at each other. i will bring closer together so we can overcome not only the pandemic, but the pandemic of unemployment. tom: we are on television and we are on radio, and a number of radio listeners have emailed in and said what does the piercing look like? where is the piercing? romaine: look at this. mr. adams: it is a gold earring.

my son and i attended a meeting with a group of young people and they said we will vote for you if you commit to get your ear pierced. a promise made is a promise cap. -- a promise made is a promise kept. tom: i can assure you the 108th mayor of new york did not go through this. looking forward to speak with you again. the democratic nominee for new york city mayor. shelly banjo, your thoughts on this conversation? shelly: i thought it was great. adams has a big challenge ahead of him. he has made huge promises on crime. he said i will reduce crime. that is not easy, and if you do not -- if he does not do it quickly people get upset. romaine: i wanted to get questions on education. that is a big part of the reason why he lost manhattan. eager to see how he addresses

that. tom: very interesting moment. markets, dow futures near -500. the open is next. i believe they will talk about the markets. good morning. ♪

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jonathan: from new york city for our audience worldwide, good morning, good morning. the bond market, your 10 year,

1.2912. "the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ jonathan: we begin with the big issue, the cyclical trade breaking down. >> cyclical part slowing. >> a correction encyclical equities. >> the bond market focusing on a slowdown. >> probably a peak rate of change in this quarter. >> the rate of change is what matters the most. >> we are transitioning out of the brought reflation regime. >> investors and traders were short into march and april. >> they are taking off th