♪ >> 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 -- then we've

got a serious problem. tom: we welcome all of you on radio, on television. how about this set of numbers for your inflation in america? is it 4.3%? is it 2.2%? or is it 2.0%? jonathan:jonathan: it depends on what you cut out, doesn't it, tom? you take out the stuff you don't like to suit your argument. that's the problem with where we are right now. the big western goes back to chairman powell and his commentary. ultimately it starts to matter when we thing about what it means for the federal reserve. in their mind, they think this story starts to fade into year end. if it starts to shake the inflation process, they've got egg on their faces as they wait. tom: i'm going to go there, the price of eggs. this is about wandering into the grocery store, and the traditional what was a gallon or a court of milk. but the price of those fancy

eggs, this is not about some economist bible. this is about what people are spending, and it is higher prices. jonathan: that's why it is so interesting this morning you have the administration on both these dirty front and the -- the security front and the economic front pushing opec-plus to do more, pushing the ftc to do more to look into so-called illegal activity to get crude rice is lower. we are all looking ahead to the politics of next year. this is a statement from the senator a little earlier this morning. given the state of the animate recovery, it is difficult to continue to spending at levels that respond to a great depression, not on an economy that is on the verge of overheating. tom: let's do some granular official "surveillance" work. organic free range eggs are going to top out ready soon. pete injuries eggs are the best. -- pete and jerry's eggs are the best. lisa: actually, the ferro report

on eggs is going to come out next month. he's probably beyond my experience. when you look at the components of increases in inflation that we have been getting, it is important to put this in perspective, they have all been in the reopening trade. they have been in the energy prices. that is one main contributor. also, used and rental cars, lodging, airfares, eating out, eating outcome auto insurance. people are going to be looking below the headline number to see , are we getting big rent increases? are we getting other increases from other areas that have lagged behind? that will perhaps be a determination of how we respond to this print. tom: and now, jon ferro, is there inflation in the united kingdom? jonathan: there is, not as much is here today. let's think about the playbook from a "central perspective area governor king made that when he talked about coming through higher inflation prints.

governor carney today did a similar thing. how long can you look through the higher inflation print? let's get away from the t word for a moment. that's what this ultimately comes down to. this comes down to patients and how durable the fed's position is to look through these higher inflation prints. tom: i agree totally, but the distinction is not the x axis. only the british folks do medium-term. i don't know what that is about. this is about massive fiscal stimulus with a $3.5 trillion gift this morning. jonathan: this is the hope of the administration, 533.5 trillion is not a demand program. what it does is boost supply and helps ultimately bring prices lower. i don't know if you can do that quickly enough. tom: i'm depressed. i had to watch minnesota twins

baseball last night. i see red and green on the equity screen. spx, negative four. dow futures up six jonathan: that is some value add on the docks -- dow futures up six. jonathan: that is some value add for the dow. for a sixth straight session, yields higher by a basis point or two. your tenure going into inflation 25 minutes away is 1.3658%. tom: that is a big number. jonathan: certainly bigger than where we were a week ago. and tom: we are grinding higher as well -- tom: and we are grinding higher as well. this is an important 25 minutes, and we want you briefed for what we will see at 8:30. it is wonderful to have him here from minnesota today. is there inflation in minneapolis, jim paulsen? jim: absolutely. it is cranking up come all the things you guys are talking

about. if you go to the grocery store, my tea i drink every day -- tom: oh no, there is two tea drinkers on the show now? [laughter] jim: there's definitely inflation. gas, when i fill up, as back to close to $50 here again. i think bond markets probably started to pick up that up as well. jonathan: they have provided to the upside. do you think they remain insulated into the next year? jim: i still lean towards the transitory side of this, think transitory is going to prove longer than we expected, and even what the fed expected, and the result of that could be we are going to get pretty worried about inflation i think, and that could bring what finally gives him stock market reaction.

the underlying cause of this is the roller coaster ride that covid but the economy into. when you push corporate america into a depression area bust and tell them they have to survive a pandemic, and they cut back operations to the bone to do that, and then you give them a wartime boom within a year, there's just no way they can catch up. so inventory to gdp ratios is one of the largest in postwar history right now, and i think it is just going to take time for the supply side to catch up. however, if we keep making it worse with another three point $5 trillion of demand-side spending, i don't know what that will mean. but i do think ultimately, supply catches up, and this proves to be a really big inflation scare. lisa: let's say that in about 20 minutes, we get a much bigger than expected inflation print. let's say it is broad-based. let's say it shows prices have

been increasing pretty rapidly. as an investor, what do you do with that information? jim: well, the bond market is going to get killed again. lisa: what does killed mean? jim: i think we will look at something north of 1.50% in a hurry if what you say, the way you put that out there, does come to pass. the real question will be in the stock market handle that. right now, as yields are going up, i think it is sort of increasing confidence, that the economy is hanging in there. the message of the bond market, which had been maybe it we getting economy on the back of the delta covid variant, maybe now the market is telling if that is going to peek and economic activity is going to be picked up. but if this is due only due to inflation and not gross, i am not sure how the stock will react to that. certainly more materials oriented stocks hold up that are

. but i don't know if the home market can hold up as well. tom: lisa and i say thank you to the st. louis fed, who actually have an inflation series for tea and consumer packages. garbage water inflation is up 49% since the beginning of the pendant. jonathan: -- the pandemic. jonathan: garbage water inflation. tom: yes, that's what "ted lasso" as. jonathan: yesterday, here are those comments. "if you continue to purchase assets, the pricing is primarily in pricing, not so much as employment. i don't think they are really promoting employment. do you agree?

jim: i think the fiscal juice has been much more important in boosting the economy than has been quantitative easing. i really do. there's just so much excess liquidity. a lot of it is sitting on the sidelines. there's not near the punch to be as monetary at the used to be. i think low rates have also helped growth and employment a lot. just look at what is done. mortgage rates to the housing industry, construction and general, auto sales and the like, i think that is a lot. one not necessarily qe, i think has been a big contributor, but fiscal has been the biggest. it is somewhat comforting. the m2 money supply has fallen dramatically from 26% growth down to 8% or 9% growth, always active -- almost back to normal

growth rate expectedly. if you buy the same amount every month but the base goes up, the growth rate declines. so i would argue we are already a long ways into tapering, and it is not really appreciated. we have been tapering since march, both qe and the m2 money supply. that is why i come home to dave dividends perhaps and starting to lessen inflationary pressures we get into next year. the fact that you are, even if it own -- if it is only the fed. jonathan: thank you. we are 19 minutes away from a cpi report in america. your equity market is down 0.9%. yields are higher by a couple a basis points to 1.3675 percent. this is bloomberg. ♪ ritika: with the first word

news, i'm ritika gupta. senate democrats have opened the way for president biden's economic agenda. they have passed a 3.5 billion dollar -- a $3.5 trillion measure to improve d.c. streets. it also proves the biggest tasks cuts in history for the middle class. it marks the stock of monster debates -- the stock debates between faster. jake sullivan says current plans to boost output aren't efficient. the u.s. has seen growth biases -- has seen gas prices significantly up over the last month. -- stole about six hundred million dollars in cryptocurrency from a protocol. the network lets users swap cryptocurrencies.

a recent surge in coronavirus cases is hurting u.s. bookings and may make it hard for the airline to generate a profit in the third quarter. this month, southwest has seen a slowdown in clothes and booking and an increase in cap collation. shares of aerial taxi began trading today since it founded back in 2009. he filled the likes to build a new kind of passenger drone. the company --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 good. this is bloomberg -- i'm ritika gupta. this is bloomberg. ♪

♪ >> was the reopening of parts of the economy, we are all experiencing supply disruptions that are raising prices, and

they are raising inflation concerns, really understanding where there is now a change in dynamics again in the aftermath of the pandemic is a vital interest. jonathan: the red a master of the federal reserve bank of cleveland asked loretta mester, the federal bank -- loretta mester, the federal reserve bank of thing that -- of cleveland president. on the s&p, we are down a little more than 1%. yields are higher on twos. this is the moves by 2% on wti to $66.91. jake sullivan, the national security advisor, saying opec+ should look into higher production. tom: we like to take real pride in our booking. we have a team of 30 people that

help us every morning particularly those in london that were able to welcome aaron will -- to welcome ellen wald. if you think about the prize from decades ago, ellen wald holds the high ground on saudi arabia. her book on saudi arabia was definitive with the atlantic council. you say in your classic look, "masters of our own commodity." is america masters of oil now? ellen: i don't think we can necessarily say that we are at this point, particularly because we are kind of shooting ourselves in the foot in terms of oil production, and basically doing everything that we can ensure that oil supplies are really at the mercy of opec and

russia. jonathan: tom asked the question earlier this morning, what is the energy policy of the soonest ration? we have heard --this administration >> we have heard so much -- this administration? we have heard so much about greening the economy, no we are hearing about boosting production. what is that? ellen: it has to do with the fact that inflation is having an effect on gasoline prices, and to distract from the fact that some health policies have actually contributed to keeping u.s. production down. i am talking about the moratorium on drilling leases on federal land, ending the keystone xl pipeline, and other issues. the other reasons we are seeing gasoline prices rise is because the price of oil is higher now, but we are also seeing supply chain issues in various parts of the country that make it very

difficult to get gasoline to certain locations. so all of these issues are creating problems in terms of gasoline, but another is demand. u.s. oil and gasoline demand was up during the summer, but it is quite possible that we could already have seen the height of gasoline demand. so it is really a curious statement at this point in time. jonathan: many people think it is bizarre. the timing is curious because in about nine minutes, we get an inflation report, erica. let's talk about -- an inflation report in america. let's talk about how easy it is to call up and say, let's go, let's pump. ellen: the question is, is riyadh going to be accepting of this? there isn't a whole lot of receptiveness towards tinkering with what was a very difficult opec+ agreement to get into place in the first place, where

they are all going to raising oil production by another 400,000 barrels a day next month and for every month after that throughout the winter, which is a time when oil demand is seasonally a little bit lower. oil demand in china looks shaky, so that could send prices lower quite weekly. if i were riyadh, i would say we are accessing the market -- we are assessing the market and we don't think this is warranted right now. lisa: what is the message for shale producers if the u.s. is not even going to mention them? does this mean we are getting a reaffirmation of peak shale and that production will likely decline from here? ellen: i am not sure we will see production declining really as much is just holding steady. it seems like shale producers are basically happy to do what they need to do to keep production steady. they are not adjusted in

increasing all that much. only a few producers are looking to drill. i don't think he want to see their levels go down because they are definitely making money at this price point, but given the white house attitude towards shale production in general, there's very little interest among shale producers to increase production at all. lisa: what is the idea price -- the ideal price for opec+ members? ellen: i think it varies from member to member, but saudi arabia would like to see it in the high 60's, mid 70's. by the time you get to 80, i think they start to worry about too high prices impacting demand, and below that it can start to cause some financial issues. jonathan: ellen wald of the economic council -- the atlantic cancel, the senior fellow. let's bring in bloomberg's -- the atlantic council, the senior

fellow. let's bring in bloomberg's mike mckee. michael: if the economy sees some slowdown from the delta variant, we are going to see perhaps inflation write a little bit slowly, and that is what people want to find out. that is the forecast, 0.5 percent for july compared with 0.9% in june. tom: do you see the partitions so you can calculate of these other fancy te -- fancy statistics like cleveland and dallas? michael: we will have those a little bit later today if you want to. jonathan: tom knows the dallas numbers, they are not going to make the front page. how important is it to set expectations here? tom: they will be looked at in fed up -- michael: they will be looked at in fed offices. they look at pe, but cpi gives us the biggest breakdown in terms of the prices of

individual items, so everybody focuses on that you get a gives us idea that we have seen in these narrow categori. jonathan: it is like red sox tickets over the last three weeks. jonathan: not a good streak. tom: they are on a price decline. jonathan: the expectations component i think is important. what goes on the front page, does that matter to some degree? tom: front and center for politicians, particularly in swing districts. jonathan: tom keene, lisa abramowicz, jonathan ferro, on radio, on tv. this is "bloomberg surveillance ." feels like payrolls friday, doesn't it? tom: it is so exciting. jonathan: basis points at 1.3658%. that might have something to do a supply.

-- to do with supply. on the s&p, we are negative a little more than 0.1%. it matters for main, for wall street. it matters for washington, d.c. your employment report -- your inflation report as of next -- report is up next. this is bloomberg. ♪

comcast nbcuniversal is investing in entrepreneurs to bring what's next for sports technology to athletes, teams, and fans. that's why we created the sportstech accelerator, to invest in and develop the next generation of technology that will change the way we experience sports. we've already invested in entrepreneurs like ane swim,

who develops products that provide hair protection so that everyone can enjoy the freedom of swimming. like the athletes competing in tokyo, these entrepreneurs have a fierce work ethic and drive to achieve - to change the game and inspire the team of tomorrow. (announcer) the core is key to losing weight, getting back in shape, and feeling good. introducing the aero trainer, designed to strengthen your core, flatten your stomach, and relieve stress and back pain. it conforms to your body and increases muscle activity. abs, back, obliques, hips, and glutes. get incredible results in just five to ten minutes a day. the aero trainer supports over 500 pounds, and inflates and deflates in seconds. check it out at aerotrainer.com. that's a-e-r-o trainer.com.

jon: we are seconds away from an inflation report in america. from new york city this morning, good morning. i'm jonathan ferro. equity markets are down, treasury yields higher by a basis point or two. here are the numbers, mike mckee. mike: bang on estimations for the overall cpi, taking the year-over-year rate headline to 5.4%. actually leaving it. there was a thought that it might drop to 5.3%. on the core it's lower than forecast. .4% was the forecast and last month it was a .9% rise. as i mentioned, the rate of change is what's going to matter

here and we get a core rate of 4.3% down from 4.5% in june. taking a quick look at the components here, food is up .7%. food away from home is something people have been keeping an ion. one of the categories going up rapidly -- an eye on. one of the categories going up rapidly, food at home. energy, year-over-year basis, gasoline on the month up to .4%. we have seen a rollover in prices in terms of oil. in august we should see gasoline prices go down. used cars and trucks, a big change, up 2/10 of 1%. so, we were expecting a rollover there and we got it. apparel, up 2/10 of 1%.

-- .2%. unchanged from the month before. looks like at this point we are seeing the temporary effect fade from the cpi that the fed to had been expecting to change. i know that david kelly is looking at equivalent rent up 3/10. we had been waiting to see how quickly rent, the idea of home prices were after they went up. one last one, john, 2.7% for airfares, they had been up 7% in june. a lot of the things that had been pushing up prices, no longer doing so. jon: deceleration is what we trade on now. the equity mark on the s&p 500, up positive seven on the s&p. the nasdaq, catching a bit up, futures there positive to tenths of 1%.

the yield was higher, moving that sticks. on the front-end, tom, the yield comes in half a basis point. not a big move, but it is important in terms of the direction that the yield didn't go higher on the back of the cpi trend and i would say in some way, early take, for the federal reserve they will be more comfortable with this one this morning. tom: people don't have the luxury of michael mckee to dive into the data and i wonder what we will see in a 30 year bond that hasn't backed up yet. michael mckee, what do you see in travel, transportation, that's the other two manned gloom thing people are talking about. mike: we do see a big decline in airline fares, down 1/10 of 1%. tom: so going the right

direction through. mike: and if you look at airfares, they had dropped precipitously when the pandemic started and they are now basically back to where they were in february of 2020. while they went up a lot, the overall price level did not rise. tom: michael mckee, thank you so much, head of economics and questioning the fed here at bloomberg. david kelly, working as a global economist for the shop. david kelly, i have never heard so much microanalysis in our life. are the pros right, is it transitory? david: part of it is, part of it has to be, but we are in the midst of a wave here, printing numbers 5% year-over-year and it will of course backed down from that. all of this talk and acceptance over inflation in the news

headlines are fading -- feeding into expectations which are at some point a self-fulfilling prophecy. they feel they can raise prices and are willing to raise higher wages. the broad picture is one where inflation runs hot and is likely to stay hot through the end of the year with an economic slowdown that doesn't seem to be on the horizon and i think it is a hot work here. lisa: do you think that the market knee-jerk response is wrong, lower on its face than transitory? david: we are looking at declines with a handle on inflation, so for me it's not so much the hour to hour inflation of the bond market, it's the notion of the 5% inflation rate with 1.4% treasury yields. that's extraordinary and i don't think it will persist.

later this month it looks like the fed is going to lay out plans for tapering at the end of the year. gradually that will push interest rates higher. and the fact that i don't think inflation is all transitory, some of it will stick around. jon: let's put some numbers on that. four handle, what is it? david: at the end of the year we are expected to see the consumption deflation rate of 3.5% to 4%, so the fed has jumped up and i think it is still low on the number. into next year we have persistent cpi inflation of 2.5% to 3% running at 2.4 percent year-over-year. well above the long-term target with hybrid inflation into the economy eventually slowing down

enough to avoid that. we are back in two a new old normal. jon: is the fed comfortable with that dynamic? david: that are not only setting the stage, but enabling reckless fiscal policy. all those things are land lines for the economy going forward. what they should be doing is getting ready to raise interest rates. cutting back on bond purchases. jon: red and green is on the screen, others are not, with how futures after record highs. -- down futures after record highs -- dow after record

highs. david kelly, -- tom: david kelly, fold this into the jp morgan conviction and equity market. david: the key thing is, you know, we are still speeding, speeding a little bit more slowly, but exceeding by a longshot capacity employment, pushing up interest rates. everything pushes off interest rates. i think you will see a return to this growth to value rotation and a return to, you know, compression evaluation across markets. particularly when i look overseas at cheap equity valuations overseas, that is going to become more important with interest rates forcing you to think about valuation and strong growth means stronger

interest rates. jon: an article from friday asks the question, the dynamics that we are discussing, would they overwhelm administrative goals? do you think they will? david: i think it could will, people are misunderstanding what's going on in the economy. it's adapting to covid. we had one economic rate cut, four pandemic rates, heading towards full employment. the danger is the economy will overheat before the administration can achieve its long-term goals in dealing with that macro issue and that will prevent them from dealing with the goals they want to achieve. jon: you have a friend in west virginia. david kelly, thank you, sir. sounding a bit like senator manchin at the end there. we are up on the s&p, advancing

on the nasdaq. snapping back on the nasdaq 100 futures. yields have settled down, tom. yields on basis points with a key theme for the market being deceleration, deceleration. tom: we will have to go through the nuance and i'm going to go to cleveland fed. taking out the top and bottom things, whatever they are, food or energy, take them out and see what the median inflation is and my guess is it's going to be somewhat quiet and. jon: lisa -- quiescent. lisa: this will cause wages to increase at a commensurate pace and if that is the case you could see what david says coming to fruition. jon: you are counting down to that, decelerated growth?

lisa: these things are not done in a vacuum. if gas prices are higher, it's more palatable if you are earning more money. if not, you will buy less gas, fewer items, on the margin you will pay her back spending. this is a -- pare back spending. jon: coming up, open-minded strategy. [laughter] jon: that's not what i was implying. tom: garbage water. jon: my standpoint, for anyone that cares. tom: pour some tea. what kind of tea do you like? jon: i like a chamomile, tom. tom: so sensitive. i can't believe it. jon: collected, relax. it's why i'm so collected every morning. from new york city this morning, good morning. this is bloomberg. ♪

>> it's the biggest expansion in decades, protecting the environment with care for the elderly, democrats passing a budget framework that opens the way for the biden economic agenda and the blueprint includes what democrats called the biggest middle-class tax cut ever. now there will be months of wrangling about the details of the plan. senate democrats setting a september showdown with republicans over voting rights. this on the election overhaul bill from june. calling it necessary to restrict voting access. mitch mcconnell says democrats want to rewrite the ground rules of democracy. angela merkel increasing pressure on government workers to get vaccinated.

she is trying to avoid another lockdown that would put more strain on the economy. norton lifelock is set to purchase in a deal that could be an increase in demand to guard against it. this is bloomberg. ♪ -- global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪ his is bloomberg. ♪

>> i'm not sure how much we come back to the physical stuff, even

after all of this. people have gotten used to shopping online and more than before. some of them have some convenience there and they like it. tom: i can tell you that his store, i'm sure he's looking for inventory. this is a joy after that laois and or the equity market with a reaffirmation of the american economy. steve is the former ceo who describes his contribution to fashion and retail and when you hear the word exclusive, he invented that. he's the mastercard senior advisor on a boom economy. steve, i want to go to mortar and brick. 760 madison avenue, taking that landmark building and building it out and it speaks to the durability of on-site retail

against amazon. tell us about the presumed death of mortar and brick. >> the death of brick and mortar was so short-lived. it's back. look at the mastercard spending data and it would tell you that for the month of july, brick and mortar was up from a year ago and represented 82% of all commerce. while the digital has transformed shopping, people want on the channel product wherever they can -- omni channel product whenever and wherever they can get it, it's back end of the example you gave is a good one relative to more stores reopening. more physical stores than we have seen in years. talking about opening new stores. luxury is back. what you find is that across all levels, low-end, high-end,

people are back in stores and want to experience shopping. they miss shopping in the physical store. yes, brick and mortar, digital has gone to 18% of commerce, but luxury physical retail is back. tom: how will amazon respond to this? all of this? a relatively small part of your world, how will they expand it? >> amazon is the gold standard in terms of the experience consumers get. they want the physical store, but also the convenience of online. i would never underestimate amazon and its power and the impact it has on the rest of commerce, but i will tell you that the brick and mortar physical store, when they open a physical store, they get triple

the digital business. it's the interaction that is so important and in the post-pandemic world we have seen how important the digital piece of it is, but it isn't digital alone. that's what you are seeing in the data. lisa: talking about the changing nature of rick and mortar, what about the location of where they are coming back fastest? looking on manhattan streets, for example, there are still a lot of empty storefronts for rent. >> you have got to take new york as a bit of an anomaly to what's going on around the country. so much of what's happening in new york, 25% to 30% is tied to international tourism. which isn't there right now. shorter term, long term, it will come back. what you are seeing is a shift back to the mall.

mall performance has been positive in the last couple of months. i think that it's going to be going back into some of the malls. diverging markets are performing well and these secondary cities are performing well. it's a time where this is a bit of a goldilocks retail environment. i have never seen, in years, almost every sector of the mastercard categories performing well. look at the numbers, 50% from before pandemic. luxury, jewelry. department stores are up 7%. you are looking at apparel growing. pre-pandemic it leads you back to stores opening up to the

urban areas, some of them suburban. the consumers are there and retailers are opening stores again. lisa: what would you say to people who are calling this idiosyncratic. people going back to work, having to restock their wardrobes after pandemic 15. it's a seasonal factor that could be pushing the numbers beyond the average of the end of the year. what would you say to the people who argue that? >> there is some element of that, the child tax credit is helping with the bump in the numbers. there is near term phenomena of a shortage of inventory. you are having high priced selling with gross margins that are favorable. it will start to even out into next year, when more inventory

is going to be available. over the next six months the power is in the hands of the retailer relative to the promotional environment. it's hard to find the kind of product that you want. long to near term, this is the retail of many cycles when product becomes available and they will order more product and you see more availability into next year. there is always that desire to catch the last sale. i wouldn't be surprised that if any -- if a year from now you are back to a much more spending -- normal spending environment. tom: steve, thanks so much. master advisor from mastercard. lisa, clearly s&p, dow, touching

record future highs. lisa: the idea that this report was higher than expected as prices increased, the reaction to the bond market, the yield moving is slightly lower. it's within expectation and the pace of increase is slowing. people are looking at the derivative effects more. 5.4%. tom: michael mckee, who parses the data, it went out of our hermetically sealed studio. he made it clear that it wasn't a garbage data and that costs inflation, it wasn't as big a deal. lisa: i will say that going forward, the fed seemed to be getting its way for now in the bond market. how long can that continue? tom: i did have to wait for my

espresso order. too much. we will continue, the market affect, the political effect of the inflation report, for the day. dow futures, up 61. good morning. ♪

jonathan: it is inflation day in america. live from new york city for audience worldwide, good morning. 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: from new york we begin with the big issue. the great inflation debate. >> it is important to see what happens with inflation. >> there is a big transitory story. >> there is still fundamental story. we had -- >> we had the supply side, we had commodities bid up. >> adding fuel into the inflationary concern. >> we know there are base effects. >> a transitory move, it would seem like everybody on the fomc is interpreting that differently. >> that debate should be qui