a larger capacity to borrow. >> some of the strengthening we are seeing in the credit card data, that will shift to the business sector. >> you cannot afford higher rates, and it is very unlikely that we will reach the heights of the last cycle. >> this is going to be a very long expansion. >> this is "bloomberg surveillance," with tom keene, jonathan ferro and lisa abramowicz. jonathan: from new york city, good morning, this is "bloomberg surveillance" live on tv and radio. your equity market is pulling back a little bit, advancing on the nasdaq. day two with chairman powell, and the yield is flatter. tom: trey hollingsworth will not show up. as you mentioned earlier this morning, really with a sharp question on the heart of the

matter, what is the fed doing to the american economy. tom: let us paraphrase, we are distorting the financial economy and in the real economy. is there a benefit? jonathan: what are the long-term benefits and what is the difference between 100 been billion dollars and 60 or maybe zero, and that is a question we have to ask at the moment. when we look at every single data point, can you show me an example of insufficient demand i cannot find an example in this economy right now. tom: i cannot find it as well. olivia rodrigo moving the needle. what i would look at is on the bloomberg terminal. the u.s. 10 yield -- 10 year inflation-adjusted yield. it is nothing that trey hollingsworth studied or that chairman powell has ever seen, it is an distorted economy. tom: where did that come from --

jonathan: where did that come from? i am going for it. lisa: to me, the biggest take away and from the testimony what i am looking for is his addressing what is a bigger financial risk, allowing markets to run as hot as they are, or perhaps basically curtailing this and stymieing the economy. right now there is no need for them to support the economy more, but they want to prevent a tantrum which is the ultimate question. tom: the quest -- jonathan: the question is if you are jeopardizing the cycle, being overwhelmed by things that will prevent -- that you could prevent. tom: it will come up in the senate and we will have coverage of that. but, the answer is the fed has a plan, and it appears as mr. powell said, we will stick to the plan. i thought the congresswoman from

missouri, the former ambassador whose name escapes me right now, i am sorry. she was brilliant about painting out inflation that people are feeling but we have guests saying do not worry about the inflation. tell that to the constituents. jonathan: the fed has an extrapolation reaction function and they could be overwhelmed and that is the position that some people are taking. tom: and thank you, they can be overwhelmed by fax and when do they come? maybe not before the next meeting but they do not come conveniently, they might come in the autumn. jonathan: we could be here all day talking about this. equity futures coming in at .1%. elsewhere, advancing about one third of 1%. it is all over the apple move of the last week. over the last several weeks in

the last couple of months have rallied off of the lows on the nasdaq 100 and the big tech names as well. outside of that, it gets your attention in the bond market. we had a billet -- a bid yield to lower. going into day two of the testimony. lisa: that is a really interesting trend and we will be talking about it. earnings continue, q2 earnings on the banks. morgan stanley the last major u.s. formed -- firm to report and i am looking at the toggle between morgan stanley and goldman sachs. so far if you look at the share performance, goldman sachs is up 40% versus the 36 percent gain. morgan stanley shares a little bit lower and expect expectations to be very high when it comes to investment banking, revenues and profits and i am curious how much this will continue. 8:30 a.m., u.s. initial jobless claims and we expect the lowest rate of claims going back to the

beginning of the pandemic, we hundred 50,000. and what clues as to fed chair was saying, that the headline unemployment rate belies this slack and weakness under that. do we get any signs of that from this otherwise noisy data? nine: 30 am, chairman powell presents day two of his testimony to the senate banking committee. i want to talk about the flattening yield curve, this is a market signaling that they are concerned about the policy error that will not react quickly enough to curtail the inflation you are seeing with all of these coming in way above expectations. if that is the case the fed would have to hike faster and curtail the economic cycle earlier leading to this flatter yield curve. jonathan: that is one perspective. thank you. the bank of england speaking right now. the policymaker from thread needle steve -- threadneedle

street. he is reflecting on the neighbor market and the shrinking slack right now. the fact of the matter is that so many people in the u.k. cannot get a read on the labor market until we get through the rest of this year and i think many people in the fed share the view. tom: i do not thanks we will hear it with jim bullard or michael mckee, but john, -- jon you wonder where the voices are will say let us go. tom: the extreme -- jonathan: extreme accommodation is one thing and positioning for rate hikes is another. the reason some fed officials are not keen on the former, this is where people start to run towards the latter. the sequencing of this is important. if you start tapering then you and i will have a conversation about lift off. only some people on the fed wanted to happen. tom: it is this tantrum, everyone agrees to that. is it feasible with our lack of

knowledge that a central bank can accommodate a society and system without tantrum? that is unproven. jonathan: anthony roth joins us. why are yields lower and why is curve flatter? anthony: i wish i knew the answer to the question, and i think we do not see the forest for the trees, we need to step back from a lot of the gyrations we see recently and project where the 10 year will be, on labor day at the ee -- or at the year and we believe it will be higher through the year. inflation is going to come down. inflation is transitory, but not nine area. it is not you are in the transferee -- transitory camp, inflation will come down, but to a higher level where we stood prior to the pandemic and it is going to come down to the level where it is -- if you look at

inflation expectations, it will come down to probably the two to two point five -- 2.5%. that is with negative real yield sitting. that is coming from the current administration, and senate caucus. not consistent with the 10 year, real gdp tapering, what you guys are talking about, none has anything to do with the 10 year sitting where it is today, and most importantly the fed does not want to zero when it comes out of the cycle, the fed wants to normalize its toolkit, so the fed will look to see the tenure move higher and for all these reasons it will move higher. lisa: we have heard these arguments for a long time and this is what i am struck by, people have pointed to these reasons and again we see the 10-year yields go lower.

how do you counteract the argument that it is a high debt load and the fact that the inflation we are seeing will stymie growth and will lead to a lower growth trajectory that the fed cannot affect at this point? anthony: well, i think that the market is driven right now in terms of the 10 year by a lot of institutional trading, momentum and technical trading. there is a fundamental disconnect between real yields and the fundamental economic factors that will drive the economy as we move forward. i think that as investors, what is important is to focus on when fundamentals will potentially take hold again, and we think they will have to take hold as we move into the cycle where the fed finds it necessary to taper, whether that is accompanied by a tantrum, we will have to see. it is clear that whether it be the september meeting, jackson

hole, the fed will have to address the tapering needs. by the way, ironically, 10-year yields being so low makes it easier for the fed to go into tapering. jonathan: where do you want to sit in this market? nasdaq had a fantastic run. mark -- small caps are starting to lag, do you want to lean the other way? anthony: you want to lean into cyclicals around the notion that the tenure will be moving higher. you want to lean into stocks and specific companies that are going to be economically sensitive and will show that they can increase productivity and that they can pass on pricing to the consumer because of their brand, pricing power, etc.. it is not sector by sector, it is company by company. you will find that there are companies, even in the sectors we do not favor, like consumer staples that do really well in this environment because of

their ability to execute their franchise and this can happen across the entire economy and we do not want to underweight technology, we want to be market weight technology. when you look at metrics like price to revenue, you are at levels higher than the tech bubble 20 years ago. so, you do not want to be too ambitious with technology and underweight it. you cannot underweight technology. jonathan: good to catch up. anthony roth, cio of wilmington trust. pricing power just comes up again and again, that is where you want to be. tom: revenue build. jonathan: consumer price tolerance. coming up, set the page. from new york city, this is bloomberg. ♪ ritika: with the first word

news, fed chairman jerome powell says it is too early to scale back the aggressive support for the economy and told the house financial senses committee that debate will continue at the upcoming meetings. powell says inflation has risen faster than expressed -- then expected. he is back on capitol hill. emmett -- senate democrats have found a way to pay for their spending legislation. they want to impose tariffs on carbon intensive imports and includes expanding tax credits for renewable energy and electric vehicles. in china, economic growth is steady. 7.9% from a year earlier and down for more than 18% in the first quarter. a number that was skewed by the pandemic. industrial output beat estimates last month. boris johnson will set out his vision for improving living standards. he says that his promise to

level up the country is not simply to transfer wealth to richer -- from richard to pour parts of the britain -- of britain, he wants to improve areas that have felt left behind. fx is making its first big move beyond tv shows and movies. it will move into video games. they have hired a former electronics artists to lead the way. 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. this is bloomberg. ♪

>> this bipartisan plan, i

thanks we are in good shape, there might be slight adjustments, and that will get down to what congress wants. and we have an agreement. jonathan: the president of the united states of the united states, an agreement in washington. good morning alongside tom keene and lisa abramowicz, i am jonathan ferro. here the price action, going into jobless claims from morgan stanley. 40 -- four point 356. higher on the nasdaq up 23 points. the bond market gets your attention, it is back to lower the curve with two basis points. and briefly, if you will indulge me quickly. a pop on the pound against a u.s. dollar. tom: why is that. jonathan: because mr. saunders is talking about withdrawing stimulus and perhaps soon. tom: there it is, and some of

the back and forth has the dollar churning. right now we turn our attention to washington and always in washington in the summer there can be a distraction. the president was out with vaccination of the young and he selected olivia roderigo x disney plus and a number one hit in the country. it took america by storm. worry this was taking the true zeitgeist of america. she appeared in nation l suit. -- a chanel suit. what is the why on this? why is washington overtaken by events like this? >> there is a little bit of excitement, i would not say overtaken. >> when you have congress trying to pass through a massive multitrillion dollar infrastructure plan both here

and at home, it adds to a little bit of excitement. and i was actually educated by tom keene about who olivia roderigo is and i have gotten into her music during "balance of power." but in all seriousness it is about vaccinating the youth and that was a message. tom: it is an overlay on the american economy that we have the 12-year-olds and up and we are a worried -- we are worried about five to 12 years old and we are making slow progress. are we seeing the same slow progress and what the president was talking about in his legislation? annmarie: when it comes to legislation there has been a drip feed about what they do want to get done in terms of how they are going to pay for it. last night we heard one thing on the table is a carbon border tax which means if you have imports that are carbon intensive industries like steel and aluminum, oil and gas, i am

giving more details on what i think it would look like, it is slim on details, but today is a big day in terms of the senate to make sure that they can shore up all of the pay fors for the hard infrastructure deal. it is moving in the right direction and it will be days and weeks that we will be working through the obvious reset. jonathan: what you just described sounded like a china tax, is that how you would characterize a? annmarie: china is one of the biggest emed -- emitter. it could be a china tax and also russia and all of these countries that have massive exports. this is how i think this kind of legislation or way to pay for this legislation would get bipartisan approval. we have seen talking tough on china, wanting to do more in building united states infrastructure and etc.. it is all about how do we play the domestic game in terms of foreign policy, and that is what

this administration has been doing. tom: let -- jonathan: let us talk about germany, a government stuck in the middle of those two issues and also on the wrong side. chancellor merkel in town, how will that go? annmarie: china will be top of agenda and china is stuck in the middle. during the pandemic when china overtook the top number one trading partner for germany, they are entrenched. there are more cars being sold in china from germany than there are the united states. this is something that we saw a little bit of tension at the g7. the biden administration once the combat china, -- wants germany to combat china, merkel's one foot in and one foot out. they want to maintain economic ties and they do not want to maintain as heart of a line. that and nord stream 2.

the secretary of state says that this pipeline will be done at the end of the month and it is just about what germany can do to help secure and support ukraine from a national security perspective and also economically. how much -- lisa: how much do the discussions veer towards that the united states has not opened up towards european travelers? the president saying he will continue the travel ban. annmarie: i imagine this will be another big topic. i spoke to the u.k. secretary of trade, and she said that there transport secretary, that is their number one priority. they want to make sure that they can come over to america if you are vaccinated. where this goes will be interesting because i feel like the biden administration is taking a tougher line and you also have to think that there is going to be a little bit of a

hurdle with the fact that astrazeneca is not a vaccine given in the united states but one that is widely used across europe. so is the united states going to let -- to allow individuals and that are fda approved in the united states or anyone vaccinated with other vaccines, there are others out there. astrazeneca is a huge one for the european market. jonathan: this was really well navigated, well done. thank you. you never comment on anyone's outfit, you just nod. tom: i am loving her. she is killing it. jonathan: you do not comment. lisa: since when has tom followed at a cap. jonathan: i am trying to give him advice. keeping him out of trouble. if you want to make about business, i saw you are naming labels, the brands, chanel. what were their shoes? how do you know that?

tom: because ms. rodrigo is filipino so it is a topic of conversation. this is going back home a little bit. do you get brownie points for mentioning it? tom: i do not get bounty points -- brownie points at all. jonathan: we are negative .2. chairman powell coming up a little bit later. with a curved flatter, the 10 year 1.73. lisa: i am curious to see if chairman powell will address the flattening yield curve. they might see markets as forcing their hand and causing them to be more hawkish. that is the implication from the flattening curve at a time where inflation is running. tom: it is a boom economy. you are talking about the pendulum of ominous signals. there are ominous signals.

ominous signals, the world is coming to an end. jonathan: from new york city and our audience, tom, you are in a better mood i will give you that. equities 43.58. it is a day off tomorrow, isn't it? ♪

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jonathan: live from new york city, here is the price action this thursday morning. equity futures 30 -- 3.34 coming in at about .3%. this strength has been in the nasdaq 100, it is at .1%. look out for the individual components, a handful of names, apple up by 20%, almost 30% higher. 38% higher since the march lows, we have had a massive move on that stock in a big move on the nasdaq into this week on an eight straight weeks of gains. the secret sauce has been here, what is happening in the bond market. shaping up as follows, 132 -- 1.32 feet -- 40.

this is what the shape of the curve looks like. switch up the board and look at the chart, 2's versus tans. we were pushing 160 in march and now we are holding onto 100. we are down to just south of .1%. that is setting the tone and sentiment in the outlook for things like the financials, specifically the banks which have had a toffee time. tom: some of this is the real yield and one of the statistics is as followed, out to a new large negative low, -1.04%, unimaginable within the textbooks and theory as well. what as do this right now, let us turn to wall street and we do this in advance of morgan stanley and james gorman's efforts. devin ryan joins us, first gaining my attention, sandra -- sandler o'neill where he won

awards. devin ryan with some acuity on financial. i love with -- what you say in your research, this is a global and american wall street in search of the next catalyst. everybody says it is wealth management and i do not buy it for a minute. what is the next catalyst for the shops? devin: it is the right question. the group has done incredibly well over the last 12 months, kind of the early days of the pandemic and then markets rallied. financials have actually performed very well market to market on wealth management, and trading was well above normal and investment banking is a record. the catalysts will have to become age-specific. we talked about goldman sachs a couple of days ago with their

growth initiatives, but i think morgan stanley is reporting today that it is about some of their incremental growth areas, technically within wealth management, but i think tied to some of the newer areas of focus like the e*trade acquisition, they are really pushing hard into the workplace with employers, and that will be adding a big growth initiative. the last piece which could be a catalyst is morgan stanley, goldman sachs, and jp morgan have gained a lot of mortgage share, so you hear a lot about normalization on the earnings calls, and the trading is normalizing an investment may as well, but the question is what to? and the bar has moved higher and earnings power is stronger than people appreciate. morgan stanley's marketing --

market share was 5% pre-pandemic and it is closer to 10% today. that is what is going -- what it is going to have to be but go down the bar, and i think we all will get that next catalyst. jonathan: if you compare goldman sachs to morgan stanley, oldman is trying to do things organically and morgan stanley is trying to make big m&a. does that give you preference of one over the other? devin: yes. goldman sachs, let us not count them out on m&a. they have not done anything big yet, at their stock is pushing $400 and a much different calculus then it was not too long ago at $200. have a stronger currency and i think that gives you more flexibility to do mna, and they have a lot of capital that they have built into the system. they were not buying back stocks, and as we were talking

about a number of growth initiatives particularly in consumer and wealth that also with an active management, and i would expect goldman to be the equivalent, but that is the key thing. goldman has so many areas that are newer and starting from a smaller base, so that is why we are more optimistic over the next couple of years because these newburgh roshan -- growth initiatives are small but very significant. i think the student loan business over the next 10 years could be one third or more of their overall business. jonathan: you alluded to that stronger currency, the stock is up by more than 40%. talk to me about the way you think they would be buying specifically, where is the focus? devin: consumer and wealth is one big example. right now they have done some small acquisitions in that space , and you have seen, i think,

and interim cash incremental push to expand the product focus and capabilities on the custody side. the ra and custody side they are pushing that business in a nice way and there might be opportunities there. but first and foremost, wealth management, consumer, and then also asset management as well. those are just a couple of examples, but i think that they are open to it, and open to keep an eye on it. lisa: it seems like the trends this earnings season has been the banks that have a bigger component of their earnings from investment banking and dealmaking have done battle -- better on the interest margin set of common disappointing as well as consumer lending, how long will that can send -- continue based on the study that consumers are flush with cash but lending does not seem to be going toward making profits in a way that the bank of america and

wells fargo would like to see? devin: i think that trend continues. first of all on investment banking, we have a lot of visibility over the next nine months. we are in a record environment. it was a record first half, but what is unusable is that this will continue. there has been a record amount of m&a announcements and you get paid on completion so there of been a record numbers of completion. then there is the whole spac wave late last year into the beginning of this year, and those are all deals moving towards completion. you get paid on the back end on spac's as well, so you have this long tail on revenue that will push your very big back half of the year. that is probably better than people actually realize and give you some momentum in the next year. you are right, that has been a trend and i think that continues. your lending is very competitive

and there has not been as much demand, but those are things that do not change in the near term. lisa: will the likes of j.p. morgan be forced to turn away depositors if they see their balance sheets well? devin: i am not sure how they technically turn away depositors, but deposits are in less demand because every bank is so flush with deposits. you've already dragged deposits down to effectively zero but there are other things that banks do to deter large influxes of deposits. you have a market shock, people could bring more money, more cash into banks or in other financial institutions. that is something that everyone is looking at but you are 100% right, the value is not what it was because on the others the acid group -- the acid group is

not the same. tom: one more question, are any banks brave enough to do the catalyst of acquiring a european bank institution, for example a beleaguered bank in zurich, or any of them brave enough to do something bold? devin: bold is difficult, because you are obviously opening a pandora's box. so that is not what we have envisioned for what incremental m&a looks like. you can always talk about mna for a financial -- m&a for a financial deal, but strategically i do not think that would be something that the u.s. banks want. that is not something we are expecting, never say never. if there is consolidation in europe i expected is more european to european versus u.s.. jonathan: it is good to hear from you.

the research analyst on some of these financials. a more specific about what they are thinking of, do they have a $26 market count? tom: i really do not know, i want to stay clear. you can go to the bloomberg terminal and find many functions and we can look at a value. that would be a book value trading this morning at 0.48 versus jp morgan, 1.9ish. i think that is a factor. jonathan: can you imagine a transatlantic joining like that. tom: i do not see it, they have learned a lot of lessons 20 and 30 years ago about the train wreck. lisa: i wonder how much it affected credit suisse. let us put a name to the bank that you are randomly referring to. jonathan: we did not name a name. lisa: not only are they losing business, but also top members of their staff to other banks,

and that has been coming out. you wonder how much they will be pressured by base. jonathan: they are going to do what larry fink did in the last 24 hours, just 8% across the board. that is pretty bold to say look, i am going to put my money where my mouth is and i do not think the inflation story is temporary, extend rates. tom: the terminal functions like to crockett -- calculate credit suisse is important and it is incredibly important to understand our new functions cha and go -- chan that can get you to the chanel website. jonathan: a bloomberg terminal subscriber says can you say happy birthday to my wife. happy birthday, sue, and thank you for tolerating brian and allowing him to watch so much bloomberg tv and listen to so much bloomberg radio. ♪

ritika: with the first word news , the biden administration is extending a trump era economic dialogue with china. treasury secretary janet yellen's in touch with the chinese counsel but there are no chance to restart the higher level talks. president biden has refused to lift rules that prevent most europeans from traveling to the u.s.. european governments are growing frustration citing inconsistent rules and an outdated strategy for stopping the coronavirus. it is likely to come up when the president meets with chancellor merkel. rural areas in the u.s. have low vaccination rates and are driving the most recent covid surge. the case rate is highest in arkansas. in missouri, infections are at a level not seen since february and hospital admissions are up 24%.

they accounted for .1% of u.s. infections, both have low vaccination rates. the company is on the right side of history in antitrust battles. prosecutors and lawmakers have looked into whether big tech companies abuse user privacy and squash competition. microsoft make sure that user primus -- privacy and internet safety is among its highest priorities. 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. this is bloomberg. ♪

>> i think as we move to the fall in the united states in

particular, the biggest constraint other than the virus itself will be the question of can i get people to do the work and can i get the guts to actually sell, and that is what we hear from customers that they are worried about. jonathan: the bank of america ceo, from new york city good morning, alongside tom keene and lisa abramowicz, i am jon ferro. a slight decline on the s&p 500. negative eight points, call it negative nine. nasdaq 100 up 38 points advancing point 25%. -- .25%. this big conversation about inflation continues. larry fink, we mention him earlier, raising wages 8% across the board with the following quote "companies are focusing on their employees more and i believe you will see more wage growth, and that will be above trendline." that is a commentary from lack

rock. tom: this is something that will be a massive theme. would you agree to me that it is -- that the catalyst for that raises rent and mortgage payments. jonathan: i would agree with all of the above and more. there is big competition taking place to keep people and keep talent. tom: the key thing is is it just wall street? are we going to see it just on wall street, i do not -- i do not buy it for a minute. we will have to watch that carefully. things seem good, we cannot get product, we hear it just -- intervale after interview. jennifer is at the dovetail of the medical pandemic. greg in his morning notes as this nation and country is red-hot. jennifer, we have rising cases, maybe a little bit of rising deaths and a worry about the variance. this or that variant derail a red-hot american economy? jennifer: sure, we are seeing

case rises in nearly every state, and at least half of states have seen increases for more than two weeks meaning that this is not just a one-off, absolutely. this remains a national crisis. obviously, there is a huge disparity in terms of the states that have high vaccination coverage and those that do not and that is the biggest impediment to putting this behind us is getting people vaccinated. tom: we have heard this in every single interview, but what are the pros looking at, the turn and the trend of higher cases, the level of cases, or the rate of change? which matters? jennifer: i look at all of them, because they each tell me something differently. obviously high case numbers are not great because the more people who get sick the greater the probability are that people will wind up in the hospital and died. vaccines keep that from happening so it is good we have

not seen a huge surge. that said in the states where this case increases are the highest there are upticks in hospitalizations and that could follow. the thing that is keeping them at bay is vaccinations and we need to work more at that. anytime we see trends headed in the wrong direction, it makes me nervous because it foreshadows what could, and we need to act early, because we do not want to have setbacks or go back to where we were. i do not think we will, i think vaccines rolled out in decent quantities will prevent them from going back to what it was last winter, but we should not even be headed towards multiple week increases when we have the tools on hand. lisa: there was a story that caught my attention, cdc data showed that u.s. drug overdose deaths stored almost 30% last year -- soared almost 30% last year to a record number of people who died during the pandemic. at what point we move beyond the

pandemic and address the health problems that have gotten worth -- worse during this period of lockdown and social isolation and say that covid is with us and it will be like the flu, if you do not get a vaccine that is on you and let us move on. jennifer: first of all, we should have always been addressing these other health concerns even at the start of the pandemic. if you die of an overdose or covid it is not good either way. one of the differences between now and then is exactly that, we have tools on hand to prevent this from happening, still it is hard, if you look at states like missouri where they have had sustained kiss -- case increases or they are running out of ventilators, at that point it becomes a societal problem and not just individual choice problem. that has been the challenge, individual choices affect others. the good news is that if you do not want to be threatened by

others you can get yourself vaccinated. it is still challenging for the country to truly move forward and march towards normalcy when we still have large pockets of the country unvaccinated. lisa: just quickly, there have been mixed -- mixed messages in how well the vaccines protect against the delta variant. what is the latest? jennifer: they protect you, you need to keep our eye on the big picture. is it possible that you could get a mild infection, a cold or feel lousy for a few days? yes, it has not been happening frequently, but from time to time. the people that if you get vaccinated you will not likely right -- wind up in the hospital and in very rare instances there are totally vaccinated people who wind up in the hospital and there is some underlying health reason why they are there. that makes it harder for them to

mount immune responses, which is one reason why israel might be looking to add a third vaccine for people in particular who need extra help in protecting themselves. jonathan: always good to catch up, thank you. looking at a number of things, look for three, look for the relationship between cases and deaths, something that people are overwhelming focused on. market participants are focused on two other things, the increase in cases in the changing behavior of consumers. and policymakers starting to change as well on the margin. from catalonia the government talking about a curfew. just one data point and certainly not a broader story just yet, but something worth keeping an ion, how do consumers respond? they are looking at getting back to normal. how do governments and policymakers respond, subtle shifts. tom: the question on catalonia and australia is to the individual state's do that in

america? i cannot see that. jonathan: that is the question we have to ask for the next several months. lisa: the behavior of consumers has been different in different areas. in europe in certain areas you are seeing consumers do less and go out less when the cases start to go up, so you get a response that is not relevant to the health care professionals, and we saw an increase in inventory so it was unexpected over the past week in the united states. there are signs that perhaps it is affecting mobility. jonathan: just not a broader story yet. coming up we continue this conversation the head -- with ahead of global asset. we are down 13, -.13%. in the next hour we hear from the ceo of morgan stanley and from his bank and what the numbers are for q2 earnings. euro-dollar-dollar 1.1822. in the bond market it continues,

yields are lower. 1.3 257. hot cpi and a dove is fed share and yields lower and the curve is flatter. this is bloomberg. ♪

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♪ >> could be on because of a different economic environment where we do need to be more careful about inflation. >> some of the strength in the consumer that we are seeing andy credit card spending data, that is going to start to shift to the business sector. >> we cannot afford higher rates, and it is very unlikely that we will reach the heights of the last cycle. >> this is going to be a very long expansion. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: chairman powell a couple of hours away. 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. equity futures down 14 on the s&p to 4354. yields in