♪ >> moment, the market -- at the moment, the market is still digesting negative news around covid. >> the bond market is wrong that rates are going to be headed higher when the fed starts to taper. >> labor is going to be an issue not just for the economy, but for the fed. >> it is really hard to take those away. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: the inflation report 90 minutes 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. your equity market down two, -0.05%. tom: a lot of houses doing a lot of good work. i mentioned jp morgan in the last hour on rent dynamics.

that is the way this report is going to be. we are going to look at the different parts of inflation and see what those immediate dynamics are. jonathan: are the temporary factors, or do they start to bleed? tom: exactly. i do take your point, but i look much more at the boom economy, massive fiscal stimulus, and maybe almost tertiary to the discussion is what we saw in washington overnight. jonathan: let's talk about what we saw in washington through the night. lisa: democrats passed an outline for the $3.5 trillion plan. what does this mean? do you have a sense of what it can mean to have a framework for what could be passed? jonathan: it means there's going to be a fight down in washington for quite a while. i think we will have to check in with annmarie hordern every morning on what is going on.

we are -0.06% on the s&p. not much going on there, but in the bond market, what a turnaround. 1.12% this time last week. back to 1.37%. yields are higher by a couple of basis points. lisa: really important to see a much moment and there is behind this move. at 8:30 a.m., we get that july cpi report. the expectation and a broad survey of economists is for 5.3 percent year-over-year consumer price increases. bloomberg economics expects an increase to 5.5%. the issue i think you are right to point out is the specific component. it is not just rent. it is more broadly, how broad are the price increases? that will factor into the decision also, perhaps with president biden weighing in on the oil prices this morning.

we get raphael bostic and esther george perhaps talking about when taper talks start to heat up, to pay back some of the $120 billion of monthly bond purchases by the federal reserve. at 1:15, president biden planning to speak about that human infrastructure plan. the outline was passed yesterday by democrats. how much will he emphasize inflation and try to put a damper on it? this does seem to be an increasing concern of theirs, and the idea that the administration is potentially talking to opec+ about ramping up production speaks to that. jonathan: the equity market bulls don't care. credit suisse looks for 5000 next year on the s&p 500. going us now is patrick p --

joining us now is patrick palf rey of credit suisse. i found this really interesting. you are not looking for multiple expansion. quite the opposite. can you walk me through the call? patrick: you are absolutely right. i think what a lot of people are under preceding -- under appreciating is how strong corporate profits are growing. in reality, we are seeing the growth in the e outstripping the p. what that means is the pe is flat to slightly down from here. when you have profits going 40% this year, followed by high single digits next year, it allows for multiples to stay constant and flat. i think that is critical as we look at what the driver of returns are for the next 18 months. tom: the credit suisse heritage in new york is extraordinary. from the 1990's to what you end

john golub are doing today, it is hyper detailed. in your factor analysis, which is the factor on the scattered out chart that gets you to 5000 spx? patrick: right now, that factor is value. it is procyclical of the. it is looking at the infrastructure package that just passed and the one getting framed out currently, looking at interest rates and saying, where can i get exposure to the dollars being spent. that is economic sensitivity. it is financials, industrials, materials to energy. anything that looks traditionally value-oriented. lisa: i want to understand your call for earnings going forward, for the p/e ratios to start going down despite the fact that price will continue to rise. mike wilson of morgan stanley yesterday said he thinks people are underestimating

margin pressures. why are companies going to be able to continue to pass along price increases for their inputs to consumers for the foreseeable future? patrick: i think it is actually simpler than that. they pass them along. it takes time. that doesn't mean month-to-month there may not be incremental input costs, and i specify input costs because oftentimes people talk about margin. there's variable which is the input cost pressure, and then depicts market. you are driving higher sales over the fixed cost part of your business. that is your machinery, your buildings, all of those long life assets. that causes significant margin depletion. margin pressure arises when sales begin to falter. as long as sales remain healthy, and demand looks great, the

inventory backlog looks phenomenal, we do not see margin pressure coming from any of these issues. jonathan:jonathan: got to jump in with some headlines coming from the national security advisor, saying that opec+ must do more to support the recovery, that opec+ production boosts have not been enough. this the first real sign of the administration starting to lean on open bus because of higher crude prices and ultimately because of higher gas prices in this country. tom: what is different here is not the process we remember from years ago. with american supply, elasticity , we can fix the problem to a great extent if we get higher oil prices. clearly the administration thinks $70 a barrel is high. jonathan: lower right now, $67.50 on wti, down by about 1.2%. this is jake sullivan, the national security advisor,

saying opec+ needs to do more. lisa: why now? jonathan: why this morning? [laughter] lisa: why this morning, i head of the cpi print? this is a difficult sort of needle to thread because right now we are looking -- thank you, i really try hard -- but that to me i think we have to repeatedly ask for the morning. jonathan: the clue is at 8:30 eastern when we get an inflation report in america. just to wrap up here, the energy market is down you to date. where do you stand on energy? patrick: right now i think it is really just dependent on where the policy goes. i think it is a little bit more difficult for energy to continue to work, but over the longer-term, we still think demand remains strong. if we look out 12 to 18 months, gdp is expected to run well above trend. that is really going to continue to uphold the energy sector. longer-term, we think is

supportive. jonathan: patrick, get to catch up. alongside him, jonathan golub leading that pain, looking for 5000 on the s&p year end next year. the s&p right now off by 0.1%. crude lower by of the -- by a little more than 1%. jake sullivan, the national security advisor, saying opec+ production boosts have not been enough. they go on to say that opec+ must do more to support the recovery. lisa: do you think they are just going to say, ok, i guess we will? and by the way, you guys are doing nothing to support your shale producers or perhaps even pushing back a little bit right now because you want to get to some sort of greener future. i am just trying to square the message from the democrats as they tried to both email you rate the price pressures while also cater to the messaging -- both in miller rate -- both emel

iorate the price pressures while also cater to the messaging. jonathan: i think lisa explained it pretty well politically. that is just not a good story. tom: i am baffled by this, and the person that emailed, we have 42 listeners and viewers. frankly, i agree. this is sort of a bizarre sequence. jonathan: and the timing of it, to lisa's point, we are 90 minutes away from an inflation report in america. you know what the discussion sounds like. it is the morning after this big talk about the bipartisan deal, and do we know what the conversation looks like if we have a 4% or 5% handle on inflation? tom: years ago i stood with the secretary of energy, and he was in tears on a failed legislative effort. i said, why are you so upset? he said because this nation does not have an energy policy. nothing has changed. jonathan: you don't think we

have an energy policy? tom: nope. don't think we do. jonathan: i just inc. it is hard to reconcile with the messaging this morning. tom: right now, as you mention with the domestic dynamics on energy versus the international dynamics on energy, it is a joke. lisa: i think right now is a very nuanced idea because we've got a shale patch where it is a lot more expensive to pump each barrel of oil, and the u.s. doesn't want to invest in longer infrastructure, whereas open bus, it is cheaper for them to produce each barrel of oil, and it is more of a temporary fix to prices that are getting concerning lehigh -- getting concerning high -- getting concerningly high. jonathan: crude is lower by about one point 2%. on the s&p which we are down 0.1%. your inflation report just an

hour and about 20 minutes away. from new york city this morning, good morning. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. senate democrats have opened the way for the president biden's economic agenda. they have passed a $3.5 trillion framework that would expand federal efforts on property, the environment, and care for the elderly. it also includes what democrats called the biggest tax cuts in history for the middle class. the partyline vote was 50-49, and it marks the start of debate amongst democratic moderates and progressives over the details. the first woman to be new york's governor will have to clean up after her predecessor. lieutenant governor kathy hochul will be sworn in at about two weeks. she will face the pandemic and budget crises and sluggish economic recovery. new york governor angel omo is stepping down because of sexual harassment allegation that prevent him from governing. what is likely the biggest bet

ever in decentralized finance. the network lets users swap tokens across multiple block chains. tens of thousands of people are affected by that act. in south korea, the number of new coronavirus cases went over 2000 in one day for the first time. the total was up by more than 42% from monday. a spike in the delta variant and a low vaccination rate are to be blamed. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

pres. biden: america, this is how we truly build back better.

this bill is going to put people to work, modernizing our roads and our highways and our bridges. jonathan: the president of the united states. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's your price action in the equity market on this inflation day in america. your equity market is lower, negative three on the s&p, down by about 0.1%. yields higher around 1.37%, well off the lows of a week ago with a 1.12% handle. turnaround for crude through the last week. it was down almost 8% on the week, the biggest weekly loss on the year. this morning, down by 1%, back down to $57.61 -- $67.51. national security advisor saying opec+ must do more to support the recovery, and this from brian deese, asking the ftc to monitor gasoline prices for

illegal conduct. this coming out of just the past 20 minutes. tom: this goes back to when you were driving that jupiter you had in england. the price of a gallon of gas was four dollars a barrel. we are nowhere near that. we are in new york, really jaded on this, but clearly, this is a big deal. jonathan: the timing of this is not lost on anyone. lisa mentioned it. we are an hour and 10 minutes away from an inflation report in america, and you've got the administration sending out the national security advisor and the national economic concert director to blame others about what is happening with crude prices. it is kind of bizarre. tom: it is kind of bizarre, but a gallon of gas is going to go to 2022 election. nowhere near that $3.80 level, but the aaa gallon, $3.18, i guess it is a breakout.

emily wilkins knows the calculus, and she knows this matters in southwest wisconsin. she joins us now. the third congressional district in wisconsin, it is a textbook swing district. it went for trump. kind is a democrat. he retired yesterday from the house. how does a gallon of gas the election and the third congressional district of wisconsin? maria: a gallon --emily: a gallon of gas is something americans pay very close attention to when trying to figure out the impact of how policies are, how well the government is doing just a month ago when the colonial pipeline got hacked, president biden was blamed for it. republicans jumped on it, jumped on the higher gasoline prices. the method you are seeing from the white house in requests opec as well as requests to make sure there's not illegal conduct going on within the u.s., really speaks to how much the white house knows that those gas

prices are important for their political future. tom: translate this for me because a lot of other networks were try -- networks will try to translate this with their own political angle. real simple, we want saudi arabia to supply a marginal barrel, but if we are democrats with president biden, we don't want texas to supply the marginal barrel or the alaska wild regions to supply the marginal barrel because we don't want the marginal barrel manufactured in the united states. i'm confused. what is our domestic oil policy? emily: i think there's a lot of factors going on when you talk about the energy policy in the u.s. one of the main drivers for the biden administration is to try and make sure they are getting out there and addressing climate change, that they are addressing renewables. obviously that comes into conflict with a lot of the things you are seeing in the u.s. oil and natural gas production. that is a big tension here in

washington. you saw that from day one. president biden with the keystone xl pipeline, canceling that permit. republicans jumped on that and said that is jobs, that is the economy. that is a big problem for us. so you see this debate playing out where you see biden trying to walk this line between being conscious of climate, open to renewables, but also making sure that he isn't losing a ton of jobs or a ton of economic gains from the oil and gas sector. lisa: it almost doesn't matter whether this goes through or whether opec less responds. it is a great destruction on the day when inflationary pressures are much broader than just oil. oil probably isn't the main input. we are looking at rents, looking at certain areas of the food compex. how is the democratic party messaging, the increase we are seeing in prices, affecting the $3.5 trillion plan? emily: at this point, the white

house has continued to stick their message that inflation is going up, but it is only going to see temporary -- it is only going to be temporary. if that is not the case, if inflation does continue, it is going to get to the point where the white house and democrats are going to have to to get a lot more seriously and start saying to the american people, this is what we are doing to try to combat that. republicans are absolutely linking that 3.5 trillion dollar budget resolution the senate adopted last night with inflation. i am sure you will be hearing more of that messaging today. but for democrats, they only think of it partly in terms of inflation. they also think of it partly as delivering on campaign promises. so it remains to be seen what the give-and-take is going to be between those two things, whether get to that point were democrats back down. lisa: it is interesting they're focused on oil prices this morning at a time when we expect to see pretty quick rent

inflation. how quickly do we expect officials to have policy responses to some of these other areas, whether it is semiconductor chips, it is in the agricultural complex, or whether it is rents to try to, you're right -- to try to ameliorate some of the pressures there? emily: i think today's inflation report is something the white house is watching closely, something democrats are watching closely, and based on what you are seeing in that report, i imagine there will be a response to that going forward. there is still a question right now of what is going to happen with the eviction moratorium. do democrats decide to extend it again? i think there are a lot of areas of the economy right now that are really feeling the pain with higher prices and inflation, and the question is really how many of them can the government address, and in what order do they need to be addressed? jonathan: thank you, emily

wilkins down in washington, d.c. this is the issue on wall street, the issue on main, and seemingly the issue in the white house as well. this came from the national security advisor, jake sullivan, who said that opec-plus must do more to support the recovery. then the national economic council director said the ftc is to monitor gasoline prices for illegal conduct. a load of people writing in the last few minutes. one person on twitter asks the question you have essentially asked as well, wouldn't be administration welcome higher oil prices to drive the energy transition they have been pushing? tom: it is a jumble. that's the only thing i can say, it is a jumble. let's remember, let's redefine opec+ as the opec we know, now plus russia. so there is an international stew where you go nothing is going to get done, but what about domestic? jonathan: we are down about 1% on the day. lisa: will they actually call opec+?

i don't know how serious to take this. jonathan: i've got no idea. one hour away from and inflation report in america. not sure if you should think about the issues together or not. yields higher by a basis point or 2, 1 .36% on tens. on radio and tv, this is ♪loomberg. ♪

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♪ jonathan: the inflation report 60 minutes away. live from new york city on tv and radio, this is "bloomberg surveillance." down about 0.1% on the s&p. on the nasdaq, down 0.2%. a similar move on the russell as well. just a little bit softer going into that inflation report a little bit later this morning. switch up the board and get to the bond market. we talk so much about a turnaround on the 10 year yield. 1.12% last wednesday morning. this wednesday morning, we've had a look at 1.37%. the part of the curve i am interested in, the very front end of the curve, the two-year. just look at the pocket of the yield curve. looking for 2% on tens come up with the reason for that is they think it needs to steepen.

if inflation is going to be the trigger for that, expect to see this move. tom: i take your point there. i agree, we are now rounded up to 0.24. that is some real philosophy. what stan fischer would say at blackrock is the percentage move on the two-year. that adjusts the financial system. jonathan: the ballet will take place there and into the belly of the curve forget the story of the moment, crude. wti with a bit of a cap lower. we are down about 1% on wti to $57.55. jake sullivan, national security advisor, saying he wants opec us to do more. brian deese of the national economic council leading on the ftc to look into gasoline prices for "illegal conduct." this is the administration making some noise on oil that is too high, presumably because

gasoline prices are too high. tom: it is not my interest, but frankly, i want to know who is driving the bus on this policy for the biden administration. this doesn't sound like the brian deese we know. i'm not going to mince words. jonathan: this one is hard to get your head around. crude right now, $67.50 on wti. let's get some movers. here's remain -- here's romaine. romaine: those comments definitely going to be talked about throughout the day. seeing some reaction already in shares of occidental and marathon petroleum. palermo is one of the biggest refineries as well. both of those stocks a little bit lower in the premarket. it is going to take a little bit of time to sort this out and figure out whether there's any sort of real-world impact and any sort of market impact here. for right now, a little bit of softness. you are also seeing some softness in the airlines today. interesting commentary out of southwest airline this morning, saying it is already feeling the

effect of what it says are negative effects of the covid crisis. the company shaving about 3% to 4% off of its three q revenue outlook, saying it is already seeing increase trip cancellations and a decrease in trip things heading into the fall season, something to keep an eye on. a lot of people also talking today about that infrastructure bill. we saw a lot of stocks rally on the back of that. yesterday you had newport steel dynamics closing at a record high. cleveland natural resources up about 0.7% in the premarket. boeing and the news as well. bloomberg reporting right now they are actually in advanced talks with a new indian budget carrier for about an $8.5 billion deal for about such deep -- for about 70 jets. no confirmation from the companies. the boeing 737 max in a test

flight in some china, some good news for that company. and a bit of m&a to expand its consumer facing cybersecurity offerings. tom: those kind of stocks getting us to 5000 spx out 18 months. romaine bostick on "the close" this afternoon. right now, into a one-hour countdown to an important measurement of the price change we are living, jim o'sullivan joins us, td securities' chief u.s. inflation strategist. i guess i've got to go there. let's go to process 101, or specifics one or one -- specifics 101. core, 4%-ish, but what pros look at are a lot lower. what do you look at? topline, core, cleveland, dallas, or the o'sullivan metric? jim: of course, we look at everything to some extent. tom: nice answer.

[laughter] jim: for sure within the cpi report, core is more important than the headline for setting the trend. but of course, a lot of details recently raise the debate over how much this is transitory or not. disproportionately, a lot of strength has been in the travel and transportation related art. we have seen a rebound in airfares and lodging, hotel rates. new vehicles have been strong. used vehicle prices have been soaring. so the concentration has been reflected in numbers like the median dallas fed number which has been showing much less of it increase than even the core numbers because the increase has been so concentrated. but we would expect to see the travel related parts still strong in terms of hotels and airfares which charges catching up after the plunge when covid began, but the new zealand prices i think is going to be the big story today in terms of what is changing. that looks like it is starting

to slow. over the next year, i think we will start seeing some reversal in prices. tom: does the fed have the will to be patient? jim: clearly they have told us they do. the key there in terms of the arbiter is what happens to inflation at dictations broadly. consumers in general are reasonably patient about this, and jenna really believe this to be largely transitory, and the a foot -- and generally believe this to be largely transitory, the word used in the fomc statement. survey numbers have picked up a lot, but they really care about the long-term measures. they have stayed pretty low. so most people generally agree with the fed when they say this is largely transitory. so i think as long as that is the case and as long as they look at the details and see reasons not to simply extrapolate because it is so concentrated in the travel related arts, which should start

to slow before too long, i think they can stay patient here. jonathan: this is a moving target and a bit of a guesstimate. i just went to get a better understanding of your view on things. what is your data liftoff on the fed? what year? what are you looking for? jim: as powell would say, we are not even looking at liftoff right now. we've got the end of 2023. obviously that is a long way away, two plus years away. of course, it will depend on what happens to the inflation numbers ar. certainly if you were to tell me that core inflation is 2.5 percent at the end of 2022, that is a different story. we've got the core number at 1.8%. that is allowing for some reversal in prices, so if anything there could be a bit of transitory would this in the inflation numbers in 2022, and ultimately it is going to depend on the inflation numbers, but we are not tightening or raising

rates until the end of 2023. lisa: what do you do with that in terms of investing? jim: certainly to the extent that you are looking at long-term rates and short-term rates, that certainly keeps an anchor on the short end of the curve. we were talking earlier about the two-year rate. the two-year is within the horizon of the fed staying on hold if that forecast is correct . ultimately, if the economy is improving, there's more fiscal initiatives being passed and there's another step on that this morning. the economy is recovering over time. that can push up the longer end to some extent. but overall, i think if the fed is on hold for a long time, it very much keeps interest rates broadly pretty low. jonathan: let's recap just before we get this print at 8:30 eastern. the numbers you are looking for, what are they? jim: we are pretty much in line with consensus. we have 0.5%, 0.4% on the core.

jonathan: jim o'sullivan, td securities chief u.s. macro strategist. year on year, these are the numbers that go into the headlines. 5.3% year on year core, the estimate 4.3%. tom: our listeners and viewers, they are feeling this. i would suggest selected service sector inflation is going to have to adjust to a higher price just because of the cost of labor, the shortage of labor in that. so i don't want to go to certitude on dallas or cleveland cpi. the inflation angst we are feeling is tangible. jonathan: do you think the administration is feeling things? tom: absolutely, because of the retirement in the third district of wisconsin. you get four or five more of those, and the math changes for the president of the united states. jonathan: maybe they think the math is already changing. . lisa: inflation hasn't been an

issue for voters in the united states for a long time. we haven't had significant increases in inflation. suddenly that has changed, and that is changing people's opinion that potentially may or may not be accomplished. let's say you get the inflation call right. what do you do as an investor? we got patrick palfrey of credit suisse saying margins aren't an issue because revenues will be increasing so widely, whereas mike wilson of morgan stanley is saying actually, it is going to be a problem for companies, and people are not pricing that it. the uncertainty bleeds beyond inflation into what you do with that. tom: i am totally with you. -- jonathan: i am totally with you. people in this market knew what to do with 2%. we know what that environment looks like. we lived in it for the last year . christian money is actively looking for it. he think's that is what we return to. the more toxic environment for market participants, were you have to scratch your head before as -- scratch your head because

you don't know what to do, consistently higher inflation. i wouldn't characterize that as stagflation per se, but that is the kind of environment i am not sure many people know how to operate in. lisa: then you flip this over to the political regime, we don't know how that operates either because we have not been dealing with voters who have inflation as a top concern for decades. jonathan: the administration concerned about crude races. brian deese of the -- crude prices. randy's of the -- brian deese of the national economic council asking the ftc to look at illegal conduct in gasoline prices, while the national security advisor jake sullivan urges opec+ to raise production. your inflation report is 50 minutes away. heard on radio, seen on tv, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. it would be the biggest

expansion in decades of federal efforts to reduce poverty, care for the elderly, and care for the environment. senate democrats passed a $3.5 trillion budget framework that opens the way for president biden's economic agenda. it also includes what democrats called the biggest middle-class tax cut ever. now they will be months of wrangling about those details in the plan. germany's chancellor angela merkel is increasing the pressure on residents to get vaccinated. the government will expand coronavirus testing requirements for nonvaccinated people, and by october, those desks no longer be free. merkel is trying to avoid another lot on that would more strain on the economy. in canada, lawyers for huawei's chief financial officer made a final push for a court to reject a u.s. extradition request. law use argued that allowing them to face charges in new york would encourage improper demands by authorities. meanwhile, beijing has sentenced

a man to 11 years in prison for spying. a big takeover in the cybersecurity industry. a deal could be worth up to $3.6 billion in cash and stock. high-profile ransomware attack have increased demand for software to guard against hackers. the electric vehicle start a peruvian automotive is in talks to it -- vehicle start up really and automotive is in talks to expand in texas. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> this was a setback. there's no doubt about it. but we are playing the long game

here, and we think the more education, coinbase and others do for the understanding for crypto, the more we can shape regulation. jonathan: that is the coinbase president and coo. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your inflation report is 32 minutes away in america. your yields are higher by about a basis point or two to 1.3638% on 10 year treasury yields. crude rolling over to $67 $.51 on wti, down a little more than 1% -- $67.51 on wti, down a little more than 1%. the national security advisor saying opec+ needs to raise production. national economic council director brian deese saying the ftc needs to look into potential

illegal activity in gasoline prices. tom: i just want to know where the number is going. 3.5 trillion dollars down to $1 trillion, that is a huge move. if they go to $1.3 trillion, that is going to set up a lot of argument. jonathan: clearly, right now, 3.5 trillion dollars is a number that makes the senator from west virginia a little bit uncomfortable. lisa: in less than 90 minutes, we will get that cpi prints. i wonder how much that will color the debate. the idea that we are moving towards a bigger plan at a time when people are increasingly concerned about an overheating economy. jonathan: 41 minutes away, that is the main event, the cpi in america. it sets the stage for debate not just here on wall street, but on washington, dc, too. tom: i am just not going to look at the headline data today, although it could move the market. david wilson looking at not the

30 year bond, but the 30 year moonshot known as moderna. dave: not even a 30 year moonshot, tom. this company hasn't even been around for 11 years yet, and here we are as a result of the success of their covid nine vaccine, their market value has just taken off. in fact, last week it surpassed strohmeyer squibb, which -- surpassed first omaira squibb, which -- surpassed bristol-myers squibb, which traces its origins back to the late 1800s. it didn't stay above mark because moderna -- above merck because moderna fell yesterday, but it shows you how much things are changing because of the success moderna has had with its messenger rna vaccine for covid-19. it is the best performing stock in the s&p 500 since going in there last month, and how many

times have we seen companies go into the s&p 500 and falter, like tesla? tom: thanks for mentioning them in the triple leveraged all-cash fund. is it transitory? dave: that is the question given the magnitude of the gains we have seen. that said, moderna is looking to develop other shots with their technology. they are looking at cancer and other areas. we are talking about potentially booster shots for covid-19, so when you put it all together, there's at least the potential for modernity justify the surge we have seen in its shares and also in its market value, now surpassing some far more established drugmakers. lisa: i want to get your sense of analyst calls on an equity reaction to the cpi print that we are getting in about 40 minutes. this question of if we get a hotter than expected print, do equities go down, or do they go

up based on this potential for increase in growth? tom: that really big --dave: that really becomes the question. it is all about how companies manage through the inflation you see in the report. we got a good sense with the second-quarter figures that in many cases, they have been able to raise prices to offset higher costs for things like raw materials and labor and shipping. so that becomes the question as we look at the cpi for the latest month. tom: don't move. we are going to dazzle you. jon, i'm doing this for you. here's a chart from the day that i did and then david wilson made philly miss -- made famous locally. this is the no bs chart of a gallon of gas. this is the triple regular gallons gas said in today's slashdot -- set into

days/dollars. we have barely broken out on an inflation-adjusted gallon of gas. it updates -- it upsets dave wilson because he's buying a hummer, but we don't care i think they have an incredibly jumbled message. that tells me an inflation-adjusted gallon of gas is not merely the big you we are seeing. jonathan: the people in this country, though, are experiencing higher prices. the people are looking at cleveland when they look at inflation everything the month. they are looking at the b ills. tom: they are looking at the bills, including the vet bill, but what is important is swing congressional districts and even swing senatorial states. jonathan: what it means for the politics of the moment. senator manchin has put out a statement. let me just get you an idea of what this statement looks like. big and bold at the stop of the

-- of the top of the statement. manchin races concerned about a $3.5 trillion budget. "given the current state of the economic recovery, it is simply a response of a to continue spending at levels more suited to respond to a great recession, not an economy that is on the verge of overheating. more importantly, i firmly believe that continuing to spend at a responsible levels at that risk our nation's ability to respond to the unfolding crises our country. could face. i urge our colleagues to seriously consider this reality as the conversation evolves in the next months." this conversation is taking place 30 minutes away from a new inflation report. tom: you wonder how he communicates this to the guy running for senator in pennsylvania from that swing district outside of its berg, conor lamb. -- outside of pittsburgh, conor lamb.

what does conor lamb think about $3.5 trillion? jonathan: this is how skinny the margins are in the house. there really slim. to get something big like this done, you can't lose people. someone is going to be upset, either the moderates or progressives. if you upsets one, can you still get it done? tom: they got it done with the first trench, but that is a lot more test the first-round, but that is a lot more -- the first tranche, but that is a lot more accessible to me. lisa: we hear economists come out on both sides of this, we are close to overheating or perhaps stagnating and going back to a very slow growth environment. there is a bifurcation, a duality and some of these projections that is hard to reconcile, and frankly, congress members can't do that, economists can't do that, and that highlights the peril of this decision. jonathan: someone looks really silly year end, don't they? that's why i am staying so clear

of this debate. i am not going to take a view on it. i'm just going to lay out the argument on either side and sit on the fence like a polite journalist and try to stay impartial. [laughter] jonathan: yields higher by a couple of basis points. equities softer by 0.1%. your equity report is 30 minutes away.

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♪ >> we really have to keep our eye on who is in the labor force , who is coming back. 90% of companies in recent reporting say they have an inflation problem to deal with. we expect that to persist. >> we don't think the fed is still bothered by this degree of inflation. >> will star -- wall street is maybe still tricking the fed's kool-aid -- still drinking the fed's kool-aid that this inflation is not going to be the problem. >> if they are not