when it comes to inflation. >> it is all about the fundamentals. >> earnings expectations are still rising. >> the handouts to earning driven markets. announcer: this is bloomberg surveillance. jonathan: for our audience worldwide, good morning, good morning. this is bloomberg surveillance. i am jonathan arrow. -- jonathan ferro. teachers up. -- futures up. tom: four days of a losses. we have cratered 1.2% on the s&p 500. it is been a bloodbath. futures this morning we watched an interesting three hours. i am just not going to get wound

up. jonathan: the president pushing van seen mandates. tom: maybe that is why futures are up. it is the american solution. we don't do it like singapore. we do it like america, which is the president is turning to business. jonathan: are we correcting course? lisa: i know that a note was put out saying the policy of cracking down a little harder on the vaccines is a market positive. i don't know if we can draw any conclusions from this. i know tom is buying this dip. this to me just shows that perhaps the fed policy is flawed in and of itself and they have to understand the influence they have over the markets. they read the room wrong.

it was vetted by lawyers so it does go directly to policy and how it needs to crafted. francine: does congress -- jonathan: does congress have to do the same thing? tom: i have very strong things about this. what bothers me is i believe it is religious and they should be able to buy securities. the issue is trading. i don't trade your you are in and out of all of these facts and ipo's. we are on break and john is daytrading. jonathan: john is not. equity features up on the s&p. in the bond market, yields higher by three basis points. a big rally worldwide yesterday, not just in the treasury market. tom: did lagarde move the euro? jonathan: think she did move the

bond market some. tom: i learned how to look that up. a dollar weakness out there. lisa: we did see the bond rally despite the fact that we got a record 72 hours of corporate bond issuance. even though he has, people don't care. what i am looking at, the u.s. ppi data, producer price increases at the fastest pace going back to the financial crisis and beyond. the question is, how much does it continue and how much is it feeding into consumer expectation for inflation, which can have a self determining effect. we have seen those climes to the highest level going back a decade and how much does this lead directly into that. at 9:20 a.m., the nasdaq will hold a one minute silence for the 20 anniversary of 9/11.

what people on that day, it feels like yesterday. this comes as the united states and world tries to climb out of a pandemic. at 12:00 p.m., this has flown under the radar, but it feeds into and fleischman x -- into inflation expectations. supplies have been plummeting. canada and russia saw supplies of crops disrupted because of drought and climate change issues that they have highlighted. meanwhile the question comes to the road ahead could we see global prices of food nearing a decade high. how are consumers feeling this inflationary push versus what the federal reserve? jonathan: let's go to the fed president robert kaplan.

this labor supply demand imbalance is going to be with us for some extended period of time. that makes me think you will see broadening prices. does that resonate with you, a broadening in price pressure. a key debate. the focus on the supply truck at the moment. the question is, how persistent. for now, we shared the view that we are seeing a transitory supply restraint. very lackluster. we do expect that to pick up. part of that is the natural indigestion. we haven't seen a more reckless recovery. there is a natural indigestion

and that should fade as we move into the fourth quarter. if it doesn't made, you are seeing a more restricted background and earnings continue at the pace we see at the moment. that is something the fed has to take account for. what you are suggesting or concluding his we are seeing a supply shock from the pandemic. that may be because the workers we are looking for post-pandemic , there is a mismatch. there could be all sorts of issues we don't think that is what is going to happen, but that is what we will see over the next couple of months. it changes the transitory outlook. tom: you have 5.7% now and into next year at 4.3%. is that a lineal -- linear extrapolation of gdp? david: no, because i think the potential gdp adjustment will

come in a long-term figure. it is a linear extrapolation in the quarter, but we think that has an impact. i don't think it is something we could therefore extrapolate going therefore forward forever. i don't think that is too much concern. in terms of the supply-demand imbalance which is critical for inflation, then i think it is that supply has reduced. lisa: investment manager after investment manager has come on the show and said the dichotomy of the economy is tied in and time to turn to europe and potentially asia for equity exposure. do you agree? david: i think the u.s. rebound has been remarkable. it is to the point where we are looking at very strong growth and that will continue with excess demand.

this will strengthen the u.s. orchid. we can talk about whether we seek corrections coming up, but in general it will remain. should we switch from a growth model which is something the u.s. exemplifies or tomorrow value driven performance, which is perhaps of the warrior will do better, -- is perhaps where europe will do better, that is something to be picked up from europe. jonathan: we pushed against the clock appeared what are we looking for into the september 22 meeting and beyond. david: as you look at september, they cleared the deck and suggested at any point they could announce pay cuts. they won't do it in october.

then the debate about whether it comes quicker. with december and the ecb clearly lining up a big step of policy moves. it will be interesting. jonathan: thank you. good to hear from you. david page , head of microstrategy at axa investment. tom: this answer to me is all data dependency. we don't have a clue what is going to happen to december until we get the november 5 and then into november and that is where you will be able to make a determination on december. jonathan: lagarde indicated that. tom: they will wait for the data. jonathan: do you think it will make a matter for the ecb hawks? tom: help me here.

you hang on to every word of that conference and i'm looking at red sox baseball and i thought the whole thing yesterday was bizarre. it is a new level of splitting of hairs because of the political cards lagarde has been dealt. jonathan: they have reduce the pace of purchases but forecasting inflation way below target in 2023. so you either have advocacy problem, or you've got a credibility problem or both. that question wasn't asked to aggressively in the news conference. i think the ecb president got a little bit of a pass. tom: how far off is that that we will see on september 22 question -- 22nd? massive fiscal stimulus. david page has gdp coming down.

i think it is data dependent. jonathan: what did the governor say? the market is pricing narrow outcomes. tom: when you get as old as me, you don't read anymore. kailey leinz reads everything and she brought me an essay and dominic wilson is dead on as the uncertainty goes up, everybody gets narrow on their calls. jonathan: the range of outcomes is wide. lisa: and the idea, is the cure for inflation more inflation and will become a self-limiting cycle and taking it away from the fed's and ecb's hands? jonathan: afford a losing streak on the s&p 400 -- a four-day losing streak on the s&p 400. from new york city, this is bloomberg. ♪ ritika: in japan, and a party

election later this month, he wants to create a country where no one is left behind. the leader in parliament is sure to become prime minister. more frustration over cabinet level talks with china. president dina asked president -- president biden asked xi jinping to cooperate. it was their first conversation since february. president biden ordering coronavirus vaccines for millions of people. the president offered millions of health care workers and federal -- ordered minds of health care workers and federal employees to get vaccinated. the u.s. justice department wants to put a stop to restrictive antiabortion ban in texas.

an emergency injunction to block it. it bars all abortions after six weeks of pregnant see. -- six weeks of pregnancy. deficiencies in the home lending business. the bank was also said to violet orders. there was a revelation that employees opened millions of accounts at wells fargo. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am riddick a group data -- a group ritika gupta.

pres. biden: i am announcing

that the department of labor is developed emergency rules to require all employers with 100 or more employees that together employ over 80 million workers to ensure their workforces are fully vaccinated or show a negative test at least once a week. jonathan: the latest push from the president of the united states. price action this morning a full four days of losses on the s&p 400's, futures up 18 points. yields with a lift, pushing higher up three basis points. tom keene is the president -- is the president of the united states making a 180 from the leader of this country? tom: really interesting. ok at kentucky, 14% infection rate, i see 80%.

the heart of the matter, emily, the morning after, is the word mandate. who does the mandating for the president? emily: in this case he is handing it out to a couple different departments who are looking into it, doing things was medicare, medicaid, and those who accept that those nurses and doctors need to be vaccinated and need to have individuals vaccinated. this is a top-down directive and comes as biden is hardening his language around these vaccines before, it was encouragement, we can get through it. this tone you sought last night, he almost attacked in a certain sense those who are on vaccinated. tom: the governor of georgia said no, it is a state right issues we all know the story.

georgia response, what power does georgia or any other state have to respond to this federal mandate? emily: to a certain extent you have to look at where the federal mandate is. it is clear president biden was talking with lawyers and trying to figure out where the federal government can have control over. they have control over their contractors and those who receive medicare and medicaid, but there are a bunch of individuals who are going to be subject to any sort of mask mandate and they have a number of governors and republican legislatures who are saying, no, we are not going to do a ban on mask mandates. we are going to ban the van. -- ban the ban. there is a lot of pushback to the vaccine mandates and the idea people have to be vaccinated. it is prevalent in a number of areas in the country and that doesn't seem to be going away

anytime soon. jonathan: this administration talked up its relationship with the unions. are the unions on board? emily: we have heard positive remarks from the former head of the afl-cio, richard trumka, who is in the process of being replaced. he said he was supportive of this page you have widely seen unions try to back what president biden is doing, at least at the leadership level. if you get to the more local level, the story becomes more complicated with who is on board and who isn't good we have the debt ceiling negotiations underway. how has this hardened some of the politics? in some ways he was almost attacking unvaccinated individuals and calling them dangerous for society. emily: the democrats are basically looking at the republicans and saying, we expect you to support this no matter how much rhetoric is being put out. you had a number of senators,

including mitch mcconnell, saying there was no way they would support any sort of debt ceiling raise. we are now hearing janet yellen saying the extraordinary measures the treasury department is using our set, and october and that was sooner than people were thinking. there is a big battle brewing over democrats and republicans. it is a very person issue. the democrats did vote to raise the debt ceiling under trump and they are painting it as a double standard. lisa: janet yellen was speaking to the oversight board and highlighted the debt ceiling negotiation as one of the key risks to financial stability and it could be concerns that they failed to do this what is the sense of the timeline? what is the likelihood there could be some fissure.

emily: we have not seen a lot of details. nancy pelosi and chuck schumer say they have a plan for how to do this and how to get this done, but at this point it seems to rely on getting republican support, which is something they don't seem to have at this point in time. usually when the debt ceiling debate's come up in d.c. it is a whole thing and there is partisanship and everyone gets it done because no one wants the u.s. to have to default. every time this happens, there is more about question of the faith that should be put in congress to raise the debt ceiling, why we have the debt ceiling in the first place and why it always has to be this big partisan fight. jonathan: the federal reserve, the regional fed presidents getting caught in i won't call it a scandal because they are biting -- because they are

biting -- they are abiding by the rules, but going into the broader index come walk me through what is happening at the congress level, whether individuals in congress are looking to do the same thing? emily: it is interesting that you mention that. a number of lawmakers got in trouble for stock trades they have done seemingly off of insider information, although it is hard to prosecute so none have been formally charged. this is definitely a debate that is going on. maybe it is not under the dome of the capitol about what, if any, measures need to be taken when it comes to officials and trading stocks. this is a story we will try to continue to see play out but maybe not in the spotlight because there's so much else that needs to be done but something d.c. people are congress in of.

jonathan: we will want to know if the dallas fed president and the boston fed president went to --. tom: i talked to him personally about this. katerina and craig torres nailed this in the bloomberg article this morning. anybody involved in the government and particularly in the fed, buy, sell a floating-rate bond etf? if 70 tells me like you, you load up on amazon and you don't trade it, that is great and you are participating in the economy. jonathan: --your equity market looks like this. output 4% on the s&p. tom: i am on the fed show three

hours into this of powell's conference and they are trading etf? jonathan: i am not sure that is what is going on. from new york, this is bloomberg. ♪

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jonathan: live from new york city, for our audience worldwide, this is "bloomberg surveillance." futures positive 18 points on the s&p, put 4% on the nasdaq. 57 points into positive territory. three quarters of 1%. this is a bounce back after a four-day slide on the s&p. we can touch on that later. to the bond market, tends, up three basis points. lisa mentioned the strong 30 year option, let's talk about the options and supply, performance of the primary

markets so far this week. u.s. investment grade, 60 billion in total through wednesday. the team at bloomberg is counting. in treasuries this week, 132.58 right now. this is a resilient market with a ton of supply. tom: the market has turned upside down. we could talk to lisa about this , but as you mentioned, it is nuts. jonathan: we can talk to lisa about it right now. lisa: a lot of people thought issuers hauled off in august and they are all coming to market now. more than $75 billion over three days sold by u.s. investment

grade companies is shocking and broke records for a number of issues. you wonder why not and at what point will some of the proceeds be used for something like leverage our mergers and acquisitions are that things perhaps we will don't like as much. jonathan: the more bearish. lisa: you have to look around corners. jonathan: why look for the downside, what about the upside? lisa: you could look for the upside. jonathan: a favorite security at the moment. today, a little selloff in line with what is happening. up three basis points. tk was south 17 basis points. tom: let's get to the basic spirit we always explain --. lisa: thanks, tom. [laughter] tom: price is up, yield is down.

jonathan: we had the basics with my dad when i was a kid. it did not cooperate well. i can imagine. up three basis points on tends good in italy, down eight basis points yesterday. ecb will be in that market for a long time. tom: we have george goncalves with us, head of macro strategy. the screams like 2006. the ig market as well, is it a mirror of 2006? george: it is always hard to find perfect analogues for the past. can we abbreviate? i love hearing your italian. it might get quicker to the punch. it is another acronym for is a

ton of liquidity. for the reasons why the fed has to taper it. you cannot blame the corporate's who were hanging and waiting for the supply season to open up. the spreads are super tight. we are stretching this idea of supply against demand to a whole another level. even what the markets would have a hard time digesting, rates lower. jonathan: fundamentals have been decent. we have to talk about -- i've no idea how you put a price on the story right now. corporate credit in america and in europe and beyond. how do you do that? george: you look at the whole community forecasting after the summer we have had and it has moved more tactical in nature. from economists, strategists forecasting the growth to stock analysts, everybody is taking it

day by day. the bond rocket is a good reflection of that. we selloff in higher rates and that is just reflective of the bond market taking it one at a time. now we focus on supplies down this week and then we are focusing on inflation. jonathan: what is next? can you make a call on the shape of the cycle? are you willing to their that -- to do that or is the range to much? george: i am nervous about what the bond margaret is signaling. -- with the bond market is singling. we are narrowing down the scenarios out there. we collectively as an overall market have been dismissive and of course we can decelerate and we can't grow like we did in the first half. as the deceleration becomes entrenched, there will be second

thoughts around our be double dipping into the fourth quarter? that is coinciding with the potential fed tapering or the narrative gets very fuzzy, but the markets try to look forward. if you have a debt ceiling debacle out there lingering and a lot of uncertainty. lisa: it is not in the price yet, but i asked of what? john said you look to the downside but what about the upside? is there an upside with 87 basis points with investment grade bonds? the idea that we are looking at such low yields, can there still be upside if we get a double-dip there is nowhere else to go? george: in double dipping, meeting deceleration, we are getting into a period where the business cycle matters and we are notoriously extrapolating into prior trends and now we are going to overshoot.

credit will hang in through their, but -- credit will hang in there. if we get that coinciding with a backup in rates. i think we are probably at the peak of corporate activity and corporate took advantage of that and rightly so. tom: we are going to have a taping of the real yield and an entourage of 40 people helping john get there. there is only one question for that, when do we get a real yield? what is your perception of when we actually get back to a return after inflation? i don't see it out there? george: i think you are going to have a hard time looking for it. the central bank community, even though they want taper and we heard they are looking to moderate, they are still doing a ton of easing and qe.

it is not like they are going to go cold turkey and go down to zero. we will have a lot of questions for the next six to 18 months. we do not know the outcomes of if there is a dip in the horizon , we will have a two-stage tapering. there are so many unknowns could what we know for a fact is every time something goes wrong, they come back with more policy stimulus and that is embedded for a long time period is why we have hard time getting up there. we haven't even gotten there all summer long. i don't see rates living massively unless one of the more negative reasons which is the basis was so high for this year than next year hurdles lower and then you will have some sectors experiencing deflation. if that happens, it is a bad outcome. jonathan: would you like to come on the show friday at 1:00 p.m.? are you available? george: we are good.

jonathan: thank you, george. lisa: 40% entourage. tom: may you could get annmarie hordern on their. jonathan: where issue this week? she went to crete. you can catch boom glued -- bloomberg real yield later. let me pull this up quickly. she things you might have seen the height in the 10 year yield. -- seen the high in a 10 year yield. tom: what is your graphic better than mine? jonathan: i am a more visual guide. tom: it looks like it was done with 72 crayolas.

you don't know what the 70 did crayolas are. jonathan: that is a band. tom: that was the ultimate christmas gift. i only had 16 crayolas. jonathan: the 50's, that you used to enjoy. tom: they were good. they opened for strawberry. jonathan: do you know what this is, ratings death. lisa: that is another and -- another band. tom: the open for rush. it was great. jonathan: yields of three basis points. lisa: can i make a serious

comment? i was thinking about this idea if we get a double-dip what does the treasury yields mean for equities? they are buying shares back. this is really -- tom: this is really important because how many banks are going to a negative narrative? jonathan: i was hit hottest thing for the macro over the last couple of years is to get the economy call right and get the market call right off the back of it. lisa: so everything. jonathan: even if i guarantee, state what this is what it will be, can you get it right? lisa: as you notice, no. jonathan: for our audience worldwide, it is a beautiful one in new york city.

this is bloomberg. ♪ ritika: president biden urged xi jinping to agree on issues while they fight on others. they spoke in their first discussion since february. the president initiated the call after becoming frustrated about meetings with beijing. two regional fed president moving to stop ethical concerns over trading. they say they are selling holdings by september 30. on capitol hill, a house committee including legislation mining of offshore drilling pair that was been billions of dollars on conservation paired the measure will be folded into a multitrillion dollar spending bill. harvard university has agreed to

stop investing in fossil fuels and will use to $42 billion endowment for a green economy. blackrock rethinking the return to office plans for u.s. employees. the largest asset manager said the spread of the delta variant calls for a different approach. blackrock telling employees haven't decided when they want to see them at their desks, at least a few days a week. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪

>> they are rightly wanting to get back to business. they want to do so safely.

they realize employees and customers want to come back and the best way to make sure happen safely and without further interruption is to require that their employees get vaccinated. now that the vaccine is approved, one formally approved, it makes it easier for businesses to make that decision. jonathan: the senior scholar from new york city. good morning. your equity market looks like this. affording losing streak into friday -- a four-day losing streak into friday here yields high by three basis points. -- into friday. yields high by three basis points. the push to get back to normal. september is not turning out to be the september that wall street and corporate america it would be. tom: i am losing track of time. you could say the same thing about september last year. every month of this pandemic is

new and original. andy pekosz and -- of johns hopkins bloomberg school of public health. let me cut to the chase these are beginning to be mandates. in your reading of the history of pandemics, can governments mandate business? dr. pekosz: absolutely, and when the safety and ethics the -- an epic city -- and efficacy are proven, we have to reduce human suffering and we have all of the data. it is now using the tools in the most effective way to get us back to something akin to what life was like before the pandemic. tom: expand to me how we are

having these escutcheon speed we have a president with the intensity we all observed yesterday and we have 40,000 people and a football stadium. it is just bizarre. dr. pekosz: absolutely. i think part of some of the feelings we have had the summer and with the covid-19 vaccine rollout and the high efficacy we saw with the initial results, people had a sense that irrespective of what they did, the pandemic was over, because the vaccines were rolling out and doing well. we've lost the ability to communicate to people that it still is about everybody getting in and involved in that process of getting acts needed. we are seeing that push and we are seeing people try to open up and go back to things that are normal yet some of the things we are doing, we are not ready to do those kind of things without something like vaccine mandates

and masking vaccine -- mandates. lisa: with president biden talking about more rapid tests being available in retail shores. is this the reality where we wake up, spit in a jar and go on with our day? dr. pekosz: it is the effective use of testing. many studies are out there that can dictate how many times a week you can test and pick up cases relatively early and before significant spread is done. testing can be a part of this. with vaccines, it has to be incremented effectively and there has to be safeguards to be sure people are following the testing procedures clearly and effectively and the test results have to come back quickly because testing on an every other day basis if the results don't come back for three days is pointless. lisa: i say this as a lot of

people had back to school and children under the age of 12 not able to get vaccinated and there are different variety of tests. what is the answer? why has it taken so long and why is there so little clarity around vaccinating the under 12? dr. pekosz: the under 12 population is more complex in terms of dealing with the safety and efficacy there. new formulations of the vaccine are being tested in that population. we know that some of the relatively rare adverse effects with the vaccine do tend towards younger populations. i think the fda was very conscious about making sure enough people were there in those studies to be able to judge not only efficacy but the safety. tom: i mentioned 40,000 in tampa

bay last night, it was 65,566. i want you to review right now what covid does to a 35-year-old male in tampa bay. some of the had to get sick last night, right? dr. pekosz: absolutely, and the data with the delta variant is suggesting that severe disease is skewing towards younger populations and those individuals between the ages of 20 and 49 or so that were initially spared the high rate of severe disease and the initial waves of the pandemic are coming down with severe disease. let's not forget long cold, which can affect people with mild disease and people can suffer symptoms for weeks and months after infection. severe disease, long covid and everything is skewing towards a younger population of people who think they are healthy and don't need the vaccine strategist need to be aware of the potential risk and how it is

increasing with the delta variant being the primary virus circulating. jonathan: what data do we have on outdoor transmission if you gather in a stadium? dr. pekosz: other transmission is still much less likely. when you look at a stadium you have to realize it is not 100%. people sitting right next to each other and one person immediately behind you does pose a threat. when he moved to indoor areas, lines for concession stands. you are moving into a situation with they are greater risks. and you cannot just at one issue, they are multifaceted issues and having amassed mandate allows you to protect against week link in all of those events. jonathan: thank you very much, dr. andy pekosz, johns hopkins

bloomberg school of public health. you did not have to wear a mask but if you put the roof up, you had to put one on. tom: don't get me going. i have seen some vented literature. they are of dubious efficacy as i would put it as an amateur. i don't want to play dr.. if the roof is closed you have to the mask on, are you serious? jonathan: apparently. tom: how did you do with the tennis? lisa: i am shocked that this came up. tom: did you wear white? lisa: it is after labor day. tom: you understand the society of the merck surveillance is competitive. -- of bloomberg surveillance is competitive.

amy in the control room yesterday broke the bank and got crayola 120. let's go to the board and look at this acquisition. crayola 120, let your kiddos' imagination run wild with midnight blue, pink flamingo. jonathan: every friday with 30 minutes dedicated to fixed income. this is bloomberg real yield. ♪

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>> in the medium-term, i would expect the u.s. growth out form. >> we have peaked in the u.s. when it comes to inflation. >> it is all about the fundamentals. expectation still rising. >> we are in the early stages from -- to early -- jonathan: can we bet back on track? good morning, good morning. this is bloomberg surveillance, live on television and radio. a four-day losing streak on the s&p, advancing .4%. the president looking to correct course. tom: he really reached a tone last night that was excel