>> the market is starting to look forward to the healing and developed economies. >> a lot of things are changing right now that are leading to higher yields. >> the market is really edging towards reflation. >> if we were to have a real debt crisis and default crisis, the fed has options. >> deceleration in growth and inflation will mean even though they have hocks, it will be difficult to start aggressively tightening in 2022. tom: oil, $80 a barrel.

on radio, on television, the marginal gallon of gas is going up. you link it altogether, it goes to some form of inflation. jonathan: 10 year yield, 1.53%. this equity make -- equity market breaking down a bit. that nasdaq 100 down by 1.5 percent. underperformance yesterday, again this morning. tom: higher yields, maybe a change as the mathematics on those ratios used to measure the value of the high-tech, but high-tech under siege. small caps does better. jonathan: was the tolerance of this equity market for high yields. last time around, this was spring. we pushed 1.80%, 30 basis points north of where we are right now. clearly the scope can go even higher. when do we start to get that? is it now or later? lisa: i don't know about the biggest worry, but people are

looking to the slowdown in china and the feedthrough to the global economy. what i am wondering, is this a new type of reflation trade? if we talk about higher oil prices and higher inflationary and put prices, how much does that crimp consumer staples that it somehow can't pass along all of the costs to consumers. this is what i am going to be watching with this earnings season. tom: i was having breakfast with jon ferro yesterday. we were at popeyes. i said, we've got a bull case going on right now. malik, ben laidler, anna han. but then we heard in the opening from blackrock, they are stating the bull case. jonathan: the beauty is that we can do single names as well. i am taking about the nikes of this world. it was a miss, but a supply constrained mass. do you want buy names hit by supply constrained stories

because their demand is still robust and could persist into next year? tom: there's the optimistic tone. the vix out over 20, 21 earlier. 20.60 on the vix now. jonathan: your equity market comes in 0.75% on the s&p. crude, let's sit on that for a moment. $76 on wti, $80 on brent. bank of

tom: you interpolate it outcome a $3.94 a gallon of gas is one eyeball on where you go as you go to $100 a barrel. should we state the bull case right now? state the bull case where this swoon is an opportunity. >> earnings growth we think can be in the high single digits, but the concern today is whether yields are moving too far, too fast. the issue is that as monetary policy becomes contractionary instead of expansionary, how do we get to this growth rate? we are looking at a strong consumer, strong manufacturing data, all of that to continue. what we are seeing is that growth is being postponed. it is not evaporating in the third year of the market. we can see strong earnings growth come from the top and pricing power because margins are about decade highs. companies with pricing power could show that earnings growth going forward. tom: will be news outstripped any margin erosion? saira: that is our view. we are looking for the companies with the pricing power. it really was a supply issue on the guidance down. they have a lot of brand heat. develop and has never been healthier for nike. i'm wearing a pair right now.

[laughter] jonathan: carry on, saira. saira: the vietnam factories are opening right now, and they have scale, so nike is going to have more power in that area. we think going forward, they can beat earnings next year. jonathan: is that a temple it for you this earnings season? are they buys for you? saira: likely we will see a lot of companies talking about supply chain issues and may be missing opportunities because of it, but we are looking for companies with the power to reopen and overcome those supply issues. another name we like is a mall company. malls are not dying. a lot of people want in on the channel business, a combination

-- want an omni-channel business, with accommodation of brick and mortar. it is trading at a discount because it is a mall, so that is another strong play going forward. jonathan: banks are bouncing back as well. where do you like the financials right now, within the banks themselves? goldman very different to bank of america. what do you like? what kind of business model do you want exposure to? saira: what we like about banks are the yields. what we don't like is there valuation. we don't think they look particularly cheap. we like companies more like morgan stanley, which has more consistent, stable business in wealth management, and we like our big cap banks which have more of a strong southeast original footprint. they have a strong business model, rolling out new products. a lot of cash on the balance sheet so they can really

leverage the yield going forward. lisa: how much does oil at $80 a barrel going up potentially to $100 a barrel challenge the view of airlines, of certain cyclical stocks that may not be able to pass along the costs so easily? saira: we don't love the cyclicals that don't have pricing power. we are not looking at what our highly cyclical companies at this point. energy is going to be an issue. you have to have that pricing power and demand in place. airlines are not necessarily a favorite for us. we would say companies related to airlines like boeing, which has the leverage because they are supplying to airline companies, but less volatile, less cyclical. lisa: today we are going to hear from jerome powell. we also heard from janet yellen about the inflationary input. how much do you expect the supply chain disruptions to be? saira: we don't think we are at

the peak of inflation at this point. it will be mostly transitory, but there's going to be some permanence going forward, especially in larger pieces of inflation like wage inflation. going portion -- going forward, the question is how hot is that for the fed? we are on the side that the fed does not make an error here. our view is that the interest rate may not increase, but going forward. tom: what is use of cash going to do, given this maelstrom? saira: it is interesting because you have seen really high levels of buybacks this year. this tells you companies are not confident enough right now to spend on capex. buybacks tend to be more flex people. however, we think we likely keep going forward. we are seeing this going

forward, and then maybe they peak around the end of this year. as companies become more confident, as delta moves behind us. jonathan: good to catch up. thank you. global equities cio. ash nuveen global equities cio -- nuveen global equities cio. tom: they have been crushed. they are down 2.4% from there post-pandemic hi i know where you are going with this. jonathan: -- post-pandemic high. jonathan: i know where you are going with this. 1.1679%. president lagarde saying, "the ecb must not overreact to transitory supply shocks. the federal reserve would agree

with the ecb. i think if you want to a cup this affects market and get some clean directional trades on the likes of euro-dollar, we need to see divergence between central banks. just given the way things are starting to set up for next year, maybe we start to see that between the ecb and the federal reserve to the back end of next year. tom: i think they are both massively data dependent. i get where you're going, but i don't know how you do that if you don't have a plan, if you don't have a belief. right now they are all just staggering to the next set of economic data. jonathan: you have to say the ecb will be much more reluctant to raise interest rates than if of ever reserve -- then the federal reserve. lisa: i also want to note come of this is one of the biggest economic experiments in terms of how you deal with the labor market. clearly there is more slack in europe following what they did to keep people employed, versus the money spray they used with

checks on households. have got lots of slack here? lisa: would you agree that there is more slack in the european market? jonathan: i don't know how much slack is there is in the united states. if you look at job openings, it looks like a tight labor market, doesn't it? elsewhere, it doesn't look so tight. lisa: are there people waiting to go back to work because they have funds in their savings account? that's one of the big question marks. that is something we have not seen, even with the enhanced unemployment. jonathan: are you saving, tom? tom: no. jonathan: looks very disappointed there. tom: my bank is amalgamated tuition. jonathan: ok. i should not have brought that one up. you sound a little but upset. down 32. we are negative zero point 7%. from new york city this morning, heard on radio, seen on tv, this

is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. pressure mounting on congressional democrats to raise the debt limit and avoid crippling default. senate republicans have blocked the bill that would suspend the debt ceiling into december 2022. democrats have offered no immediate backup plan. oil has broken through the $80 a barrel barrier. the median crude benchmark rose to the highest since 2018. there are signs that demand is running ahead of supply and there have been a slurry of british price productions from traders and sellers. >> where is that hurdle rate? august, we are over $80 a barrel this morning on a branch basis, and we look at the rig count in the u.s. and other parts of the world, they are showing you $80

a barrel is simply not enough. ritika: goldman saying prices could hit $90 a barrel this year. the minimum is required to hold by law more money from the sales group -- stated by the tsunami in 2011. 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 rick agrippa. -- i'm ritika gupta. this is bloomberg. ♪

pres. biden: you know me. i'm a born optimist. i think things are going to go well. i think we are going to get it

done. i hope it is by the end of the week. but we've got three things to do. the debt ceiling, the continuing resolution, and the pieces of legislation. jonathan: the president of the united states addressing some of the issues in washington at the moment. from new york city, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. as we march towards the opening bell one hour and 12 minutes away, equities are softer. we are down 0.75% on the s&p 500. the nasdaq 100, negative one .5%. that is where the underperformance is off the back of this move in treasury yields. we are higher by four or five basis points to 1.53 49 percent. crude through $76. brent through $40, 1% -- through $80, 1% higher in the oil market. tom: $79 $.95 on brent. dan clifton always writes with a

sense of american political history. his latest note is simply a jewel. he is the strategas head of policy research. i love what you say about 12, 13 years ago, and in november a decade ago, that party collapse. how do you bring that forward to the democrats of 20 tony one? -- of 2021? dan: thank you for having it. -- for having me. we call this field of dreams week. as you know, the progressive democrats have been pushing for ironclad commitment on a 3.5 trillion dollars spending package, and if they get that, they would agree to an infrastructure package negotiated on a bipartisan basis. we are nowhere near a $3.5 trillion deal, so speaker pelosi made a very big shift last night and said i am going to de-link

the infrastructure deal from the spending package. let's take the win on infrastructure, now we are going to have a test of whether the progressive democrats are the equivalent of the tea party in 2011 and 2012. you remember, the week before the fiscal cliff of 2012, the tea party took down a bipartisan negotiated agreement on the fiscal cliff in direct opposition to what the speaker wanted to get. as a result, they ended up with a much worse deal, and eventually the collapse. so this is a very big test of the progressive here. i believe an infrastructure bill will ultimately pass this week. tom: are they so intransigent -- i can't even say it correctly, but are they whippable? dan: i think they are, if the president of the united states picks of the phone, even goes to their lunch this week and says i

need your vote. the president is in quicksand here. he's got higher inflation. he's got covid issues where he is underwater with the voters. he has the afghanistan foreign policy. he needs a to mr. policy wh -- a domestic policy win. the momentum will get us to a larger spending package down the road, and second, the highway trust fund will completely expire on october 1. we don't want those jobs to go away, so i need your vote. but it is not a one-way street. he's going to have to go to senator manchin and sinema and say i need something bigger on the $3.5 trillion spending so i can go back to the progressives with something. i believe that is going to work, but this is high-stakes when you can only lose three votes in the house of representatives. lisa: you said you do believe an infrastructure plan will pass. i assume this is the bipartisan infrastructure bill that will pass this week.

where does that leave the debt ceiling debate, the potential government shutdown? does it help move the needle in that direction? daniel: completely separate, but everything is can could -- is connected in washington. we had a vote to continue that negotiation i stand -- negotiation and extend the debt ceiling. my guess is that democrats and the senate will remove the debt ceiling, and that will ultimately pass the house of representatives. then we are going to have to figure out what we are going to do with the debt ceiling. i think the democrats are starting to come to the realization that they are going to have to do it alone through the budget reconciliation process, and it is going to take about two weeks for them to get there. for me, i am much more worried about the debt ceiling resolution. we are already seeing short-term interest rates on the market start to bid up. that is going to have a far

bigger impact on financial markets than the infrastructure. think about the question you just asked. think about the bandwidth. each one of these is very difficult, and we are trying to do four of them at one time in a very short timeframe with limited majorities in both the senate and the house. this is as high-stakes as i have ever seen it. tom: what is the hiss -- lisa: what is the historical analog for the potential to default here? is this like 2012? daniel: we have been calling this a september to remember because it reminds us a lot of september 2013. the fed was trying to taper. bernanke's replacement was on the table. we had to raise the debt ceiling. that is very similar to what we are today. if we had a government shutdown, it would be even easier to raise the debt ceiling because we had to reopen the government and attached the debt ceiling to it. in 2011, which i think is

another good analogy, that was the republican tea party challenging on the debt ceiling. today is a little bit different because you have a 1.40% -- you have a one-party government, and usually you have a one-party government, that party raises the debt ceiling. we have ways to do it. we are just going to need the pressure to get policymakers to act. that is why i think you get some short-term volatility in the credit markets until we get a solution. jonathan: one party made up of about three different parties. that is the issue, isn't it? a two-party government in name only. isn't that the mid tier down in washington? daniel: that's exact the right. our presentation into the political election was that you have your establishment republicans, establishment democrats, you're progressive, and your trump publicans. -- you're progressive's, and

your trump republicans. i think the key question, speaker pelosi is the best whip i have seen in my lifetime. she knows where to get the votes and exactly how to play the pressure. but she is a lame-duck speaker, and do the progressives see that as an opportunity to try to burn the house down until they get what they want? my guess is they are not going to let perfect be the enemy of the good. they are going to wind up moving the ball forward. but it is going to take a lot of work from pelosi and biden to get there. ultimately, i think there's a lot of work to be done behind the scenes to get some sort of reconciliation package through in the range of $2 trillion. that is going to have a meaningful increase in health care and renewable energy spending. so not everything you want, but that is washington. you are going to have to accept that compromise. just like the republicans did with obamacare in 2010. it is not easy to watch the legislation be made, but i think we are starting to see how this

program is going to develop, and the democrats are starting to get it together. jonathan: from new york this morning, good morning. equities down 0.8 percent. yields are higher, crude is rally. this is bloom -- is rallying. this is bloomberg. ♪

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jonathan: equities struggling this morning. from your city on radio and tv, this is bloomberg surveillance alongside tom keene and lisa abramowicz. your equity market shaping up as follows. -.8% on the s&p. yields higher five basis points on tens. two through 30 basis points. real change. helping this move, crude. off the highs of the session but still through 75. tom: this is important. we are seeing a real breach. we will get to this in a moment with mr. stanley. i am looking at a 30 year bond. eight basis points, that is yields up, price down.

jonathan: if you ask me to guess last week what would happen if we pretty -- if we reprice rate hikes, i would've expected the long end in a little bit or at least to stay and the curve to flatten. that is sort of what was on wednesday, that yields clicks higher on tens and 30's. it has taken me by surprise and is easy to explain now. the whole curve with a left. tom: a little bit of yield curve lived. stephen stanley joins with acute abilities at market economics. i will cut to the money quote. we are grossly too dovish. why are we grossly too dovish and what will we do about it? stephen: the market is voting with its feet at this point. certainly it feels like last wednesday's fomc meeting was a seminal moment and people realize now the fed is serious. it is not a great surprise we

will taper in november, but the reality was a splash of cold water in the face. more importantly, if you look the short end in the belly of the yield curve, market participants are thinking about rate hikes. that was inevitable the minute tapering was a reality that people would move in the next step, which is when will we get left off. the fed has move the timetable forward quite a bit over the last six months and then market participants are starting to seat we are getting serious. tom: young turks like jonathan ferro and lisa abramowicz look at the 10 year yield, the standard & poor's 500. i look at the dow jones industrial average and i always look at the 30 year bond. you suggest the 30 year bond is below any kind of appropriate measure? stephen: even if the fed is right in inflation comes back down to 2%, that leaves you with

basically no real return for 30 years. things have to play out perfectly for that to be a good investment over the long term. not making a comment about my white -- about what might happen the next day or two. yield levels have been very low and they have been consistent with this emergency policy. now that that is going the way i think market participants are thinking about what makes sense. obviously yields are drifting higher. jonathan: let's talk about what makes sense through the front of the curve. you raise the important question. we are starting to price in some kind of rate hiking cycle that begins at the back end of next year, the turn of next year into 2023. the conversation we are having is to try to work out how shallow or steep that conversation will be. what is your thoughts on that when you speak to clients, what do you tell them? stephen: first i would say a lot

of people in the financial markets are keying off of the last cycle, 2018, 2019. i think there is broad consensus the fed tried to raise rates and they got to a certain level around 2% and things got tight at the economy weakened. therefore the fed will not get above that level. one thing we saw last wednesday that did not get as much press estimate the other headlines is extending the dot projections out to 2024. the median 2024 dot is well ahead of what markets were pricing in. i think the fed believes we will get back to something close to their view of what a long run neutral funds rate is, which is 2.5%. the markets had been working under the assumption that we were never going to see anything above 2% for a long time.

jonathan: my question is a question for an economist. how high of a rate can we tolerate in the economy we have now with the debt we added a blast 12 months? we have really yields -86 basis points. can we back -- can we get back to zero without turning this economy over? what are the answers? stephen: if you look at the household sector antibusiness sector and both of them are flush with cash. households are sitting on next or $3 trillion that accumulated over the course of the pandemic with a lot of fiscal relief. the flipside of the government debt is households are sitting on a lot of cash. businesses have borrowed it rock-bottom rates in of piled up quite a bit of cash. the private sector is not going to need to borrow a lot to sustain growth. we do have a government debt issue. the private sector cannot be particularly sensitive to a rise

in rates. it will have impacts on the margins, it will have an impact on the margin of the housing market because people do not pay cash for houses. maybe on the auto market at some point. for the economy broadly, i think we can power through given how much extra liquidity households and businesses are sitting on. lisa: you think you are in the majority among your fellow economists when it comes to the view we can tolerate higher yields, or you think you are in the minority? stephen: i feel like i'm never in the majority about much of anything. i think there is still a view that rates will have to remain low. that is a broadly held view. starting to loosen up a little bit. the other thing we have not talked about is the possibility of inflation being higher on a sustained basis. that presents a lot of upside risk.

the entire conversation we've had so far assumes inflation gets back to where the fed wants it. that may happen, but even the fed a knowledge is there is considerable upside risk to that view in which case the fed might have to move beyond neutral and run a somewhat tight monetary policy for a while. lisa: the reason i ask whether you are in the consensus or not is i am wondering whether the pressure is in the economics profession for appointing new fomc members. there are six openings. is this a case of who could be the most dovish and let the economy run hot? is it an ex post facto fed reserve, or is there something else that could take hold with these new appointees? stephen: i do think appointees to the board are likely to push

it somewhat in a dovish direction. the administration is going to want, even though i expect jay powell will be renominated, the way of balancing that on bidens left flank is to put people on the board that the progressive wing of the party would like. that will push us in a dovish direction. certainly in recent history the board members have been in lockstep with the chairman. i do not know how much that will change. it has not always been that way and we might get some outspoken people on the board. it is too soon to say anything about the two bank presidents that will be replaced. we will have to see how that process goes and what two people end up being the new bank presidents. if anything the board will become more dovish than it has been. i have long argued this is the most dovish fed in the history of the institution. we are only moving in that

direction. one caveat is the -- is inflation. if inflation does get too high, it does not matter, hawkish or dovish, i think the fed has to respond. if we are still there gray area where it feels like inflation is under control, then the board and the fomc have the freedom to push the envelope a little bit and let the labor market run hot. that goes out the window if inflation is moving at a clip the fed does not want to see. jonathan: no hops at this federal reserve. stephen stanley, thank you. another question is how involved this bedboard might be in trying to shape the views of the boston fed and the dallas fed in selecting new presidents. that could be interesting. tom: i less think so. i think as we heard from michael mckee and others, diversity is front and center and theirs are two geographies where they can

easily affect diversity. jonathan: diversity abuse as well? tom: yeah conservative tilt to the texas fed. -- you have a conservative tilt to the texas fed. boston is its own interesting soup with all of the universities around. i have a great confidence the local boards will solve the issues washington cares about. jonathan: a lot of questions for chairman powell. that starts at 10:00 eastern. lisa: i wonder whether this takes pressure off him in the sense he has fewer questions to answer in terms of the ramifications for trading activity. i wondered stephen stanley will be right that the new fed, the new composition of the fomc will only be more dovish than what we have seen? jonathan: cap and you get more dovish than what we have seen? lisa: what does that mean?

jonathan: all i know is the two hawkish dots go. tom: i was confused about boston university because the closest professor to fenway park in the world. jonathan: are you trying to correct something you said? tom: i went down in flames on the river. jonathan: do like this line from kailey leinz? males ages 45 are more likely to freak out and up their portfolio during a downturn. lisa: is a great story. jonathan: do take that personally, tom? tom: we are freaking out. go to cash. jonathan: coming up, a lady who thinks you should not get a cash. anna han of wells fargo. catching up with anna in about 20 minutes.

from new york city, this is bloomberg. ritika: with the first word news, i'm ritika gupta. senate republicans have blocked a bill that was a spent the debt ceiling until september 2022 and would've kept the government operating past the end of the fiscal year. that increases the pressure on democrats to find a way to raise the debt ceiling and avert a crippling default. they may now have to use a budget procedure that could take two wakes. european nations dominate the covid resilience tracking. ireland is at the top of the survey. norway fell to 10th. ireland has been moving up since the start of 2021 when it had the worst outbreak in the world. the delta variant has left the u.s. flailing, it is down to number 28. two of canada's largest gold miners are combining. the deal valued at $10.6

million. it is the latest in a string of similar deals that has reshaped the gold mining industry. ford is making the biggest investment in its history. the automaker will spend $11.4 billion to build factories in tennessee and kentucky. the factories will produce electric pickup trucks and the batteries to power them. ford will spend $7 billion for a chair. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> we have an investment problem we cannot solve easily. at the same time we have surging

demand because we keep renting all of this money. my concern is prices for oil and commodity spike. will we say this is transition area and keep feeding more money and increasing our government debts to cure the problem? that is not going to help our transitory inflation story. i think it could make it more entrenched. tom: french cisco blanche with our perspective -- francisco blanch with a perspective on commodities. there are other sides to this besides wall street firms like bank of america. we look at the extractive process and say what does the future look like? we do that now with columbia and diego puyo joins us, their energy and mines minister and his tour of duty with the international monetary fund. we do not do this enough.

when you look at the media talking about the extractive process, mining, or even oil, what we get wrong about the challenges you face in making supply happen? minister puyo: in the extractive industry sector, we need to make sure we have more stability on the price side. that is difficult because it is determined by the market forces. it is understanding how the production levels will change once we have those swings in prices, either upside or downward. that could be one of the things that is difficult to forecast and understand the response from the real sector. tom: you bring prodigious academics to this unlike many others. do you call a commodities super cycle after years of disinflation and outright price deflation? is it time we have turned and we are moving higher?

minister puyo: it does look like we are going in that direction, not only with oil. we saw the columbia reference cross $80 per barrel. european markets and coal, which has recovered more than 75%. lisa: how do you support your home industry while also remaining on the right side of the debate over global warming on the right side of all of the development in terms of what is next for energy production going forward? minister puyo: we know we need to be more competitive because the demand for coal has shifted towards the east and we need to make sure companies are competitive in that market. we have been helping those companies enter the asian market. some companies have done it very well, for example drummond. now you know that glencore

announced buying the stakes of anglo american a couple of months ago. i think there's a good sign it will continue. columbia would like to see the coal sector continue to drive us as it has done over the last three decades. lisa: how do you get a foothold in the new industries, and i'm thinking about natural gas in particular, which is surging? minister puyo: we have been doing efforts to award new emt blocks. we are problem in columbia because when we came into power in 2018 the country had gone through five years without new emp contracts. in the three years we have signed more than 35 emp contracts and we have a new route taking place this year which will be awarding contracts by the end of the year. we are focusing on gas, offshore, but also in the medium on onshore basins in columbia

well known for its gas. tom: is the mind mechanized or does it employ so many people it is a domestic labor issue for columbia? minister puyo: even though it is not labor-intensive, it is the main employer in the two provinces we have. about 10,000 people. tom: you have 10,000 people strapped to coal. you have a global mandate to reduce coal. how do you juxtapose that? forget about the limousines outside the yuan -- outside the u.n. how do you juxtapose that out five to 10 years as we are asking china to diminish coal? minister puyo: that is a good question. our main public policy has been energy. columbia has world-class resources. it happens to be the highest potential is exactly where the coal mines are.

we have done options. we have crated a fiscal framework while tracking investment into this unconventional renewable energy sources, and we are going in 2018 for less than 22%. we have about 12% in 2022. we have a well-managed transition over time. jonathan: we are talking -- lisa: we are talking about the potential for energy crises across the world. there's a potential for one in china. how do you avoid something similar happening in a place like columbia? minister puyo: we need to make sure we exploit our national resources. columbia has an advantage because right now our power matrix depends on hydropower. we have hydra resources and we

are complementing those resources with wind and solar. we have about 20% of natural gas and coal and can complement water, wind, and sun. our matrixes are looking good and will be better once we finish this process. tom: let's get to the most important commodity at columbia. what you do about the price of a cup of coffee? help us. minister puyo: that is something that is under the agricultural ministry. lisa: [laughter] tom: you are here so we are asking you. we are happy to see strong prices for coffee. tom: are we? minister puyo: in columbia. i think the demand for coffee is more inelastic than we think. lisa: no getting. [laughter] tom: anything else you would like to add? minister puyo: the energy process we've been doing in

columbia has a couple of significant milestones that are taking place. on thursday will be launching with the president the hydrogen roadmap. columbia has seen it get potential for green and blue hydrogen. we also awarded the first option in latin america for large-scale storage. tom: see how he did this? right back on slip. my youngest daughter is having eight dollars a cup. lisa: just your daughter. tom: diego, thank you for being with us. these are some of the great challenges. we do not do this enough. lisa: when we talk about our commodity prices it goes into how do you plan for an entire nation? i love the idea of coffee being inelastic when it comes to pricing. tom: i want to point out that the ministers conversation dovetails perfectly with what we heard from jeff currie and francisco blanch. this is supply coming on.

lisa: how do you capitalize has a country that produces coal at a time there is such a distaste for that commodity. tom: futures -40. stay with us on radio and television. this is bloomberg. ♪

jonathan: yields are higher, the dollar is stronger, and equities are lower. your equity market declining 37 points on the s&p. down .8%.

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: we begin with the big issue. treasury yields breaking out. >> we have a 10 year yield at 1.5%. >> i question what took so long. >> a little overdue. >> a bit of clarity on tapering. >> a market edging towards reflation. >> that is busily true in the bond market. >> the steepening in the yield curve. >> makes a lot of sense. >> we look for the 10