♪ >> we are in that peak moment. peak growth, peak fiscal. i think we still have a ways to go on the cyclical recovery. >> our view is that the economy is likely to continue to be strong, but we are transitioning. >> we have questions about what the world looks like once we get through this. >> starting to see some cooling global mobility trends, which means reopening is pausing a bit. >> some of this will ultimately differ growth into 2022, which is exactly what the economy needs right now. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa

abramowicz. tom: good morning, everyone. a simulcast for bloomberg radio, bloomberg television. taylor riggs pulling the short straw, in for lisa abramowicz today. i've got to say, everything said and done, what you and i have always said, follow the market and follow the debate. we've got a guy coming up right now who is really pretty cautious versus what we saw and some of our opening guests. jonathan: let's follow the debate around bond market. it is divided. i haven't seen it this divided for quite a while. there was this consensus about the smooth path towards 2% on the 10 year. we were moving fast in q1, then we unwound all of it in the past few months, back down to 1.2 3%. we saw 1.12% yesterday. a lot of people scratching their heads about exact what we are doing down here. tom: and it is going to be information. what will we glean from the ecb? it has been underplayed

certainly off of our new york platform. but it will be a learning experience tomorrow. jonathan: two things to look for. one is the guidance. ok, you have changed the interpretation of your mandate. price stability no longer close to 2%, just 2%. how do your guidance change around that? for a lot of people in this market, there's a highly flexible asset purchase program called pepp, the pandemic emergency purchase program. i think i got that right. the emergency part of it is key. define emergency for us because that will give us an idea of when this thing has to be shut down, and then we have to have a conversation about what replaces it. tom: taylor, you're the only when i know who has read all 1840 pages of the posey, and it comes down to real yield versus inflation dynamics. taylor: i don't how you get higher inflation expectations and negative real yield that takes you further on the 10 year to a -1.1%, which is what we got

earlier this week you'd you think about how that impacts financial conditions, and then you take a look at 1.23% on the 10 year, and what foreign buyers , what technicals, what pension funds are buying that? every time you think you are going to get higher, you get buyers into this market enticed by a higher yield. tom: this is a real deal with the real yield at -1.12%. there are separations, there are nuances in the bond market we are all trying to glean. jonathan: we saw this at the end of august last year, deep into summer, when we started to see that massive nasdaq outperformance and big tech names flying. use all real yields plunge ever lower. i think this one of the little bit different compared to what we have seen. we have this massive repricing of growth in q1 of this year, and i keep going back to this growth shock. it was a positive growth shock for this economy. every morning, you and i would

sit here, another economist upgrading their outlook. that is not the story anymore. i think frances donald of manulife nailed it little earlier. it is a not about cumulative gains. this market is focused on deceleration from this year to next and the year after that, and right now that seems to be, if you want to pick out event a mental, that seems to be part of the fundamental story. tom: bob males in, has taylor really read all of -- bob emails in, has taylor really read all of the posey? let's do a data check right now. i'm going to start with $1.93 on dxy. some strengths there. jonathan: south of $1.18 going into the ecb my euro-dollar down a little more than 0.1%.

futures advancing almost 0.1%. we are still down there, aren't we? 1.2334% is not were many expect us to be. tom: strongly agree, with the 30 year bond under that 2% level as well. my eyes are killing me. it is important to speak with daniel morris of bnp paribas. they have done a wonderful job of dovetailing a cautious gdp call with a measured outlook on the markets. he delivers that this morning with some real caution. identify the why of your caution in terms of investment right now. daniel: to be honest, it is probably driven as much by the technicals, definitely a fundamental change in the outlook. in terms of the medium-term, we are still quite optimistic. we see the reopening, however delayed it might be. we appreciate what you say with treasury yields over the last

several months. it is probably not the optimum time to be very overweight on risk. so we see the technicals for the summer. we see the demand for treasuries. we see the low liquidity. we just feel that this could go a bit further before it reverses , so right now we are taking a bit more of a cautious position. jonathan: talk to us about how you're taking that cautious position. what are you trimming? daniel: we have reduced position on emerging market local currencies, and have already reduced some of the positions we had an emerging market equities, really looking at some of the cyclical plays that we had previously set up that haven't been working out exactly as we had hoped. jonathan: you sound like tom keene, a better entry point. has that worked out? look at e.m., look at china this year. it really hasn't worked out. a lot of people came into this year looking for that cyclical story. they had it from the banks for a little while longer. they had from the airlines through spring.

then i look at the nikkei. nothing for me. i look at the shanghai, nothing for me. why? daniel: i think you keyed in on the right thing here, it is china. if you look at the relative performance of e.m. versus equities and strip out china, a significant share of the index, and look at the performance versus developed market equities, it has actually been flat, so the under performed to have seen has been from china, and there are very specific reasons for that. but that also explains why you have seen that underperformance from japan because japan is also quite exposed to what is happening in china. so i think that is really the key in terms of the under performance of emerging markets. taylor: i love your note when you explain the technical factors behind the treasury rally because from a fundament of perspective, it is hard to justify 1.25%. what are the technicals in this rally that bring us down to 1.24%? daniel: on one hand, you tend to

have above average buying from japanese investors. often the pboc picks up its purchases. it is not entirely technicals. there are fundamental reasons to see the decline that we have had in yields. you have been talking about a marginal change in the growth. that matters. so we appreciate the marginal change. we don't agree with the absolute level we are at. we just don't see a 1.2% for 10 year treasury yields at all commensurate with the gdp growth rate we will have at 5%. but right now, the marginal change is negative, and that is what is driving the market. tom: i want to climb on what jon was saying about e.m. in china, and the idea of bnp paribas' exc ellence in the decades of experience on the pacific rim. is e.m. setting itself up for a great fall here? is the real issue the dynamism,

the fiscal stimulus of the western and developed countries and e.m. is going to collapse? daniel: i wouldn't say that is our view. if anything, we are still quite up to mystic on the outlook. we just don't think the timing is ideal at this point. we have to think about the timing of the recovery. we are hopefully having it now in the u.s. we expect that to move to europe and e.m. at some point, but we appreciate that with the delays in vaccinations. , with the new variant, that reopening trade -- in vaccinations, with the new variant, that reopening trade keeps getting delayed. we just think about the time to change that allocation as opposed to having a different view. jonathan: maybe let's finish their because something that has changed quite markedly over the last decade or so, the weightings within some of these benchmarks. the msci e.m. index is heavily tilted towards tech and in some cases, chinese tech picking up the bulk of that. when you take a look at the

performance or underperformance of the benchmark at the moment, has that been driven by cyclical stories, or just a much more aggressive regular here -- aggressive regulatory regime coming out of beijing? daniel: the dominance of china now within e.m. has turned the index into a growth index, where traditionally, we had the view of e.m. as the value play within commodities, within financials, and that is not really the case anymore with the exception of e.m. ex-asia. that actually did reasonably well when yields were rising, but in aggregate, it is much more sensitive to what is happening with growth. jonathan: important conversation. good to see you, daniel morris, bnp paribas asset management chief asset strategist. it is not the old story of yesteryear. it has changed quite a lot. tom: this is a clinic you just

heard from mr. morris on e.m. e.m. used to be a phone company and a concrete factory, and that was about it, and it was a value play with the phone company acting as a quasi-utility. you hear the growthiness from dan morris, the optimism. jonathan: now they are just monster tech firms taking up the place and some of these indexes. taylor: i think there's an interesting point there, that within e.m., how many people are looking at e.m. ex-china given some of the regulatory pressures from beijing on big tech? how do you exclude that in some of your risk analysis? jonathan: taylor riggs, alongside tom keene, i'm jon ferro. tom: she should come back more often. jonathan: she can come back whenever she likes. i don't think this alarm is to welcome, this wake up our. you will take a pass? i'm not surprised. from new york, this is bloomberg. ♪

leigh-ann: with the first word news, i'm leigh-ann gerrans. senate majority leader chuck schumer is on track to fail in his attempt to start a debate on an unfinished bipartisan infrastructure bill. today, republicans say there is no way a deal will be reached in time, and they won't vote to open debate until there is further agreement. trump allied tom barrack remains in jail in los angeles after being arrested on illegal lobbying charges. the founder of colony capital is accused of unlawful efforts to advance the interests of the united arab emirates in the u.s. he's also accused of obstruction of justice and making false statements to agents. his lawyers say he is not

guilty. those with spikes -- that was not the case in the earliest month of the national inoculation drive. verizon beat expectations for wireless subscriber growth in the second quarter. promotions for used phones helped the carrier -- for new phones helped the carrier push its new 5g service. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm leigh-ann gerrans. this is bloomberg. ♪

>> there's still a bit of choppiness to our growth. we had the big pull forward in

2020 and subscriber adds. we also had a push in production in some of our key returning titles and new releases until the latter part of the year, but overall our business is performing well. jonathan: the netflix cfo. here's the price action this wednesday, going into the opening bell one hour and 12 minutes away. equities up seven, advancing 0.15%. into the bond market, yields higher by about a basis point to 1.2384% on tens. compared to the last couple of weeks, not much going on in the bond market, relatively speaking to what we saw yesterday. netflix in the premarket, negative almost 1%. tom: international is ok, and domestic, everyone is all lathered up as well. michael nathanson with moffat

nathanson has been spectacular with all of the stuff we watch at home, and has really had an opportunity to make money at it. where is the profit? it's all about profit, all about getting out there and making money. is there an identifiable profit in the streaming business? michael: at this point there isn't. the profit is going back to the consumer with the discounting being done. the consumer is grabbing the prophet -- grabbing the profit. tom: comcast was able to make that shift in cable tv to get that real profit to real cash flow. do you model to what comcast did in cable tv, or is this time different? michael: this time is different. netflix is the only company in the next three or four years that we think will make money, and money is defined as free cash flow. we could see big black holes everywhere. that is why you had discovery

and warner merge. that's why comcast and viacom, rumored to get together. [indiscernible] jonathan: michael, this seems to be a broad sector call. that is what gets my attention here. this is neutral netflix, neutral walt disney company, neutral roku. you see this across the board here. michael: the problem is, and i think about your previous guest in the cost of money, you're going to look out 5, 10 years to see valuation be supportive. to me, it is a long way to go, and everyone is so confident about their data points that i take the other side of this trade. we know streaming is the future, but the market has overpriced these assets. i am just going to wait for that entry point at this point in time. jonathan: let's talk about what would it take for you to say i'm wrong. always a good exercise. what would it take in the coming year? michael: one is our view is that

the u.s. is a very competitive market, and it is hard to eat profits out in the u.s. business. you would need to see more consolidation. you would see apple and amazon step act, and you need -- step back, and you need netflix to start growing more quickly in the u.s., which would point to a higher upside penetration case. i think here you need competition to lessen, and you need growth to actually start accelerating again. secondly, i think internationally, you need to see some developing markets where there is low consumer pricing to really start to show signs of pricing power. those to me are the two things because the profits right now are in the u.s. potentially, and the growth is coming from low market places like india, where pricing markets just don't have great returns on capital. taylor: i've heard this a lot,

the u.s. customer is more profitable than the international customer. how do we get them to be even? how long do that take? michael: a big part of this story is developing markets. so you have latin america and asia pacific as the drivers of growth, but those price points are really low. the rest of the world price point outside of europe could be half to 1/3 of the price of american customers, so it is a long time for prices to start elevating. before pricing can elevate, you need toe consumers a 10 of content to make the product sticky. this is the biggest challenge. you need to invest billions of dollars to make the content sticky enough to hold onto customers and then to drive pricing. two it takes years of investment to get to that place where you start raising prices again. taylor: the other point you made pretty well is about

consolidation. i was reading another of your colleagues' notes talking about amazon purchasing mgm for about $8.5 billion. why isn't netflix making more purchases? should they be? what does consolidation in the industry look like to you? michael: there's not a lot they can do. the biggest reason they took a bet on mgm is for franchises. the speed at which disney built out their direct to consumer business is due to the ability to really lift marvel, pixar, star wars and streaming -- star wars in streaming. mgm is really not that much. i worry as the analysts covering the industry that you are going to see apple and amazon but even more money to work in streaming because they have other reasons to do it beside trying to make a

profit. jonathan: a bit of a tricky line this morning, so we have to cut it short. we always enjoyed catching up with you, and we enjoy your work. send our regards to the team. nathanson, mo -- michael nathanson, moffettnathanson. what you paying for some of the services? how much are you paying for hulu? don't you think we have all just been conned into cutting the cord, and here we are with about 10 different bills for the subscriptions? tom: all the rest of these guys say yes, that's what's happened. i can't say this enough comedy microeconomics works backwards. you say in your head, here's how much i have to spend each month, and you divide that up into what matters. right now what matters to me is major league baseball. the service is terrible, let me make that clear. but i want to watch major league baseball. how are you watching all of this

boring football? jonathan: i can tell you, the european championships were on abc and espn. you can see those on hulu. next year i understand it is going to be on paramount+, which means i will have to get another subscription service. tom: i just don't buy it. my personal take here is they are out of their minds. i am going to go back to claudia eller and what she has done at variety, where she is doing the content creation, all of the dealmaking, the making of the shows, all of the sexy part of it, and the answer is they are coming out of the pandemic and variety is saying, let's go. but again, where the prophet? jonathan: our director has just let me know that la liga will be on espn, and the premier league on nbc, so take your pick. tom: maria tadeo is directing the show? jonathan: maria tadeo is in my ear, tom. tom: she knows la liga. is that italy? jonathan: that is spain, tom.

seria is italy. you know this. taylor knows, too. we advanced 0.2%. bond yields higher by a basis point. 1.2350% on tens. this is bloomberg. "bloomberg surveillance -- this is bloomberg. ♪

jonathan: live from new york city, for our audience worldwide on tv and radio, looking for more gains this morning. one hour away from the opening. equities with a lift. futures are positive. advancing nine points. into the bond market, the first thing you look at every single morning on the bloomberg screen. 1.24 on 10. tom: i do not. jonathan: what is the first thing you reach for? tom: i look at the baseball scores. i want to see what the padres did. jonathan: i'm talking about the bloomberg. tom: i checked the bloomberg for the baseball scores. jonathan: this is from jim bianco. don't forget ted lasso is on

apple tv. season two drops friday. tom: eric friedman said he is watching. ted lasso, it away from the gloom. jason sudekis. jonathan: are they actually in richmond? tom: they film it at crystal palace and they give a shout out to crystal palace early on. i believe it is filmed at crystal palace. jonathan: that is south of the river. tom: i believe they do it there. jonathan: i am pleased you have your geography of london. tom: you have to get on this bandwagon. tyler's -- jonathan: i love love violent. i'm not even up to speed -- i love love island. tom: tyler is a constructive addition. we go to thomas costerg.

thomas costerg joining us right now. within his research note is a really important observation about america's savings pile. he is optimistic we will spend a little bit of that savings pile over the next year to advance the american economy. what happens in a couple years to that still massive savings pile? thomas: the savings pile right now is around $2.5 trillion. the question for the economy is how much will be spent within the next year. a small amount of that will be spent, but a small amount, around 10% to 15%. 10% to 15%, a big amount of consumer spending, which will be

flowing into the economy. that is why i'm quite cautiously optimistic about the u.s. consumer and therefore u.s. gdp in the coming months. we are going to see a deceleration in growth, but i think the u.s. consumer will stay resilient. tom: do you believe our savings pile has a permanent feature, that it is a permanent fixture of how we believe and think? thomas: i do think part of the savings went into the market, went into long-term savings. we will not go back into the economy. part of it will be bent. i also do believe in credit card lending. credit card lending has some upside potential in the coming weeks and months. we also support consumer spending. if we get 50 billion to $100 billion more in credit card lending that would be helpful for growth. we have a lot of tailwinds that

will fade in the second half of the year, including the reopening, the fiscal support, things like that. we also have some headwind from the delta variant, but i think the u.s. consumer will be resilient. jonathan: to what degree do you think q4 will shape the outlook for the whole cycle? thomas: the thing with a u.s. cycle is we are going back to potential growth. we are going back to the trajectory before the pandemic. that matters because that is a signal we are midcycle. when we are midcycle, growth is getting harder to guess. the situation becomes more fragile, more difficult, more risks. 2022 could see more risks. the u.s. consumer can prop up growth. i also think we could have more lending in the economy, accommodative conditions despite the fed tapering.

that could help sustained growth going forward, even from a pure metric perspective we are already midcycle and we have more risks. jonathan: what is potential in the u.s. economy? two? sub two? thomas: i do not think potential growth has changed that much. it is still around 2%. the problem is we have week demographics. birth rate is a concern. we do not have enough babies in the u.s. but europe as well. that is an impediment to growth. with regards to innovation come innovation is there and more prevalent in the u.s. then europe. innovation is still failing to broaden out and spread through the economy. that is a problem. productivity growth may pick up but it will not be a massive pickup. taylor: are you confident peak inflation is behind us? thomas: regarding inflation, it

is complicated. right now we have the bottleneck inflation. next year we will have the cyclical inflation, because usually inflation comes with a lag. you have the recovery in growth and one year later you have the inflation. 2022 macy inflation above 2% for cyclical reasons -- may see inflation above 2% for cyclical reasons. the real question is 2023. the jury is out. two forces i am watching our globalization and officially the u.s.-china tension which could lead to an erosion in globalization and more inflation in the u.s., and also the share of labor in the economy and whether wages go up more. that is for another day. taylor: i know i am said levine this so bear with me -- i know i

am simplifying this so bear with me. you've taken away all of the wage gains because of the inflation. how do you think about that? thomas: i do not think wages are a threat to inflation until we get around five or more on wage growth. we are not there. we are at 3.2% on the atlanta fed wage growth numbers. still well below a level that could be dangerous for inflation in the sense it will lead to a self perpetuation of inflation at about 2%. we are not in the danger zone because of wage growth. wage growth can go up without threatening inflation. tom: you get back to a positive real rate that does not infect inflation? thomas: the correlation between wages and inflation is much more fragile and tenuous and slim then widely appreciated.

i think the real danger comes about 5% on wage growth. especially the atlanta fed median wage. you have to look at median wage. someone stay in the labor force, staying in the same job, how his or her wage compares. that is the key indicator. to me, the key indicator is the atlanta fed meeting. we are at 3.2% year on year. still quite soft. i would not worry until we reach 5%. we are not there yet. tom: the run rate on the atlanta fed, i totally agree with thomas on the median aspect of wage growth. we have to get back to 3.6% to really get there. jonathan: only economist call 5% wage growth dangerous. will you call anyone else -- we find anyone else who calls 5% wage growth dangerous? for a lot of people who have

accidentally to do in this morning and stumbled across economists talking about the labor market, what is dangerous about a 5% wage hike? thomas: then it starts to affect inflation expectations and you have wage gains starting to outpace productivity. this reasoning is also based on historical relationships. we have to go back in time to see wage growth above 5%. i think the early 1990's you had inflation sustainably above 2%. it was a time when the fed was struggling to bring down inflation. the problem now is there trying to move up. those days of the early 1990's are probably gone and unlikely to go back. i might be wrong, but so far i do not see that. jonathan: thomas costerg, good to catch up, thank you all stop managers everywhere, year end review.

i cannot give you the 5% you wanted because it is "dangerous." tom: we are seeing action in our world. deutsche bank is banking some of the young turk pay packages. jonathan: $100,000 for the first year for some of these banks. tom: i think it is out of the pandemic and it is eight labor shift. is it a change in labor share? i'm not there yet. jonathan: larry fink of blackrock coming out with a percent. it is happening. taylor: it is power back to the people. you get a sense it is a negotiation. we will see how that continues. jonathan: you can see it. the workforce seems like it has leverage. i wonder how long that will last. taylor: that is a good question. i don't know. like tom said, you're coming out of the pandemic, how do you think about that going forward? i do not have the answer. jonathan: we have to see how

supply heals through q4. september is the month we keep bringing up repeatedly. tom: i totally agree with your question on q4. we barely touched on it. the end of july. q4 is a complete mystery. jonathan: something as simple as back-to-school. tom: in the last 24 hours, back to school has changed. jonathan: let's see what happens stop tom keene, jonathan ferro. tom: d-one minute until you leave, right? taylor: i will be with you friday. jonathan: who is tomorrow? taylor: kailey leinz. jonathan: taylor, c friday. thank you. -- taylor, see you friday. t minus 19. from new york, this is

bloomberg. >> the coronavirus has taken a toll on u.s. life expectancy. it dropped the most in more than seven decades last year due to hundreds of thousands of early deaths. the pandemic disproportionate toll on communities of color widened the existing gap of life expectancy between white and black americans. all of this information according to the cdc. widespread flooding in central china has forced the evacuation of 100,000 people from the city known as the world's biggest production base for iphones. the city received 18 inches of rain from monday afternoon through tuesday. that was equivalent to about eight months of average annual rainfall. coca-cola is bouncing back. the soda maker second-quarter

sales beat expectations and it raised its revenue forecast for the year. that is evidence that consumers who are locked down a year ago are now returning to reopen restaurants, amusement parks, and stadiums. jamie dimon is 65 years old but it does not look like retirement is in the picture for the j.p. morgan ceo. the billionaire was granted a special gift -- the biggest u.s. bank another significant number of years. he was awarded $1.5 million from depreciation rights which will let him capture a process if the stock does rise. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans. this is bloomberg. ♪

tom: good morning. bloomberg surveillance from new york. taylor riggs and tom keene.

lisa abramowicz is on vacation, jonathan ferro off to excellence at 9:00 a.m. a recovery off of a two day growth there. this is a joy because he has done public service for america across so many areas, including ambassador to japan and now senator from his tennessee. they cap -- bill hagerty joins us, the republican from tennessee. i have to go to the stunning washington post analysis this morning of the unvaccinated. you are a leading spokesman on this. how are you going to convince the unvaccinated of your tennessee to get it together and get vaccinated? sen. hagerty: i think we are off to a good start thanks to operation warp speed. i do not think there is enough credit given to the progress we made in america. in tennessee i've been clear, i've taken the vaccine. my mother, who is 89 years old

has taken the vaccine. we continue to encourage people to make a personal choice. i've been clear that i've looked at the data and i think the right decision for me and my family was to do just that. tom: how do you sell it. we talked to french hill of little rock the other day with the same challenges. i would suggest arkansas a grimmer story than tennessee. what is the prescription you have with your knowledge of nashville media and tennessee business, what is the plan to jumpstart this as we hear from president biden? sen. hagerty: as we look at where we are headed, the numbers continue to look much better. we just need to continue to talk about that positive outcome, that positive result and encourage people to continue to get behind it. as school reopens, we will probably see another pickup in

inoculation. tom: one final question on this. what do you need from former president trump to send a message to the unvaccinated? sen. hagerty: president trump is having a hard times any -- is having a hard time sending any messages thanks to the censorship of big tech. his message has been stifled. i think that is troubling. in terms of his message, no one worked harder to put a vaccine in place. people know that. i think he can convey that. he put a tremendous amount of work in place with operation warp speed to make the vaccination possible. it sets an incredible example and he should talk about that when he can. taylor: pivot with me to infrastructure. what is the path to the bipartisan $500 billion infrastructure deal? sen. hagerty: very hard to say. chuck schumer is planning to put a procedural vote in place to

start the process. we have not seen any test. we do not know the content. i have not seen anything. this sounds remarkably similar to something we've all seen before. remember you have to pass the bill before you see what is in it, obamacare 2.0. that did not work out well for america. we have a lot more work that needs to be done before i can comment on what is in the bill and how to proceed. taylor: is this approach still the right way to go? sen. hagerty: certainly not the path i would take. i'm a businessman my entire career. i look at this and say what is happening. you have a two path process. a lot of effort has gone into play. i respect my college but worked hard to put a bipartisan plan in place -- i respect my colleagues who worked hard to put a bipartisan plan in place. we have the biden administration , we have nancy pelosi and chuck schumer talking about pushing

everything that was negotiated out of the deal alongside. nancy pelosi said she will not look at the bipartisan bill unless the completely partisan reconciliation packages put forward. i would not call reconciliation package, it is just another reckless tax and spending program. a massive program. i think you will have devastating effects on the economy. i'm very concerned about enabling this partisan package to go through under the guise of partisan infrastructure package. tom: i am fascinated what your prescription is for your republican party. many of the interviews we have with republicans and democrats is a liberal tranche of the democratic party troubling for moderate democrats? do the republicans respond to that by being more staunchly conservative, or by moving to a lamar alexander middle? sen. hagerty: what we need to do is continue to convey what will

happen. we need more business people like me in washington. that is the point. we have a hard time conveying the essence. we have already seen a $1.9 trillion package move through in march of this year. that is roughly 10% of our gdp. we are talking about 25% more of our gdp in the so-called infrastructure package. it will be massively inflationary. we hear moderate democrats like joe manchin say he does not want to put something through that is not paid for. he does not want to increase the debt. these are things we need to push back on. if it will pay for itself, we need to look at how they are talking about paying for it. they are talking about taxes on job creators, killing capital formation by putting capital gains taxes in place, those policies will be devastating to our economy. the american public is smart enough to understand this. we need more people talking about this. tom: you mentioned private

business in washington. i need you to comment on the jailing of the private equity gentlemen from los angeles. what were your thoughts when you heard of these actions by justices? sen. hagerty: i've only seen a headline or two so i do not know anything about the specifics of the content of this case or what it has to do with private equity. tom: it does not have to do with private equity, but is certainly of note. thank you for joining us. bill hagerty of tennessee. rightly appreciate that. we've interviewed tom barrett any number of times across what we have done on surveillance, and certainly the shock of seeing him jailed this morning is tangible off of allegations from the united arab emigrants -- the united arab emirates. we will see how that plays out. taylor: erik schatzker running to the phone to try to make some sense of it. if you'll bear with me i want to

go back to a comment the senator mentioned. you have mitch mcconnell saying higher inflation has wiped out all of the wage gains, it is a tax on the consumer. i know with your focus on the economy i am simple find that, but you have the senator hitting -- hinting at inflationary pressures. that means their constituents are talking about it. i wonder what their constituents are saying. tom: i do not have the chart in front of me. the inflation-adjusted wage dynamics in our nation are simply grim. there is no other way to describe that. that will be one of our themes into our federal reserve coverage. i am told by my people that there will be a fed meeting next week. taylor: [laughter] tom: i was still in space. taylor: you have people? i need people. tom: it helps to come down from space with jeff bezos and his team.

dow futures up 144. it is a market recovery. please stay with us through the day on bloomberg radio and bloomberg television. good morning. ♪

jonathan: the s&p 500 up nine points. for our audience worldwide, good morning, good morning. 30 minutes until the opening.

"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: live from new york, we begin with the big issue. confusion in the bond market. >> this window in this anomaly -- >> the confusion and the discussion from a bond market strategy and structure of the portfolio standpoint. >> general lack of visibility by the bond market. >> a lot up in the air. >> these yields will probably not stay where they are. >> it is difficult to be positive about what stops that slide. >> we've already seen the peak in yields. >>