>> the market is starting to look forward to the healing and develop economies. >> the concern today is whether yields are moving too far, too fast. >> the fed cannot and will not respond to supply-side inflationary shocks. >> if inflation does get too high, it really doesn't matter hawkish ordovician. i think the fed -- hawkish or dovish. i think the fed has to respond. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: some calm after a bond market storm. good morning. this is "bloomberg surveillance, " live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market bouncing back 29 on the s&p, up 0.7%. it is a bounce back. the nasdaq up 0.9%. tom: all we are talking about

our winter they asked about is when are they going to raise just rates. there's a fair number of people saying you got it wrong. they are not going to raise rates in 2022. everybody calm down. jonathan: sabre malik of nuveen nailing -- saira malik of nuveen really nailing it. at the long end, i'm not sure. i think we are getting too far ahead of ourselves. we need to discuss that a little bit more. tom: the dynamics of the long end into the short end are important. the first thing i'll that when i walked in today was a yield -- first thing i looked at when i walked in today was the yield. i know michael dard is a big believera in it, the scope of the curve. it is not inflammatory yet. lisa: i don't really understand it either. i don't understand what is behind this move because we heard from fed chair jay powell,

a little more hawkish, a little more of a timeline, but completely expected, and still highly qualified. what i do understand is that there has been a material shift with oil prices and the energy crisis. there's also a material shift in the idea of supply chain disruptions lasting for longer. i think that has shifted the nature of the reflation trade and the nature of this discussion. lisa: will it prove -- jonathan: will it persist into the new year? what happened two september? it is over tomorrow. where did that go? tom: october will becomeer -- will be calmer. jonathan: september just did not produce. lisa: people aren't saying wait until that moment when we suddenly know it is over. it is sort of that understanding that it is going to be a grind. jonathan: i will see you in 2022 . tom: are you taking off the rest of the year? [laughter] you've got to get the book done.

jonathan: a series, three books together in one of those beautiful sleeves. tom: crisis over. we are done. jonathan: it's a turnaround. crude down 0.6%, $74.86. lisa: today i am looking at what we will see with respect to global banking. central bank chiefs, as well as some of the data we are getting. 10:00 a.m., u.s. august pending home sales. the expectation is for a bit of a rebound after a sluggish past couple of months because of how prices have been. just to give you a sense of the pace of the increase, three straight months of gains. the idea of 20% gains on housing prices, which is that due to home wealth? what does that due to inflation? 10:30 am, we get the eia crude inventory report. how much do we see a drawn out until the supply in the united states, and what does that -- a drawdown in some of the supply

in the united states, and what does that do to prices? on the ccb panel, what kind of consensus could become to? -- on this ecb panel, what kind of consensus could day come to -- could they come to? is she going to change her tone and say the mood is shifting, we need to adapt to policies that are not crisis era that really effect the modern moment of inflation and supply-chain disruption, not of 2020? jonathan: i thought she said she was an owl, she wasn't a dove, she wasn't a hawk. lisa: what is this, harry potter? jonathan: i find it interesting whenever talk about governor kuroda anymore. what is normal at the bank of japan? tom: they are not even trading paper over there. can i just point out that the

new leader of japan, there's a charming photo of queens, new york years ago of him attending public school 13. that is pretty cool. jonathan: that's she to -- dan alpert joins us now, with what capital managing partner. -- westwood capital managing partner. dan: when you're starting to scream about how the u.s. is going to default on its debt, there might be a subtle dislike of holding debt that people count on for liquidity. normally we ignore defection of the distinction between the debt issued by the treasury and the dollars issued by the fed. as a practical matter, they treat them the same, as fiscally -- the same, especially near the effect of lower bound.

some people in the market take notice. not many, but at the end of the day, there are enough out there to really move the market. when the market starts to feed back that and start talking about that being a sign of inflation, the fact that the market is selling off in the face of this kind of crazy political crisis, i think you are getting the wrong message. that delivers a very distorted situation, especially when it bleeds into commodities. tom: i want to go to some of your work on the age of oversupply. the money question right now is can american chief executive officers, their boards, their cfos, can they adapt to the persistent oversupply's we see? what is the scorecard right now? daniel: i think it is going to be very difficult. not only have we ramped up imports to a level that is really huge relative to pre-pandemic, and we are all

familiar with the enormous backlogs that have created price dislocations across the board when it comes to tradables. the fact is that we have now juiced up capacity in areas like china because suddenly, they were already running fairly low. chinese capacity was at about 76% pre-pandemic, and now it is juiced up a little bit higher, and you see additions to that capacity coming in. there's a connection between this -- here's an interesting point -- between this and the whole evergrande story. think about the fact that china is going to now have to reduce its dependency on investment, on real estate investment, as a result of its crackdown on evergrande and other property developers. but where is that additional employment going to come from? to the extent that there is a just demand, they are got --

there is exhaustion is -- there is exuding us -- there is exog enous demand, they are going to fill it. right now, we may have seen the bottlenecks shift from sourcing to logistics, meaning we now have a problem with all of the stuff stacked up on ships and in warehouses and getting it distributed around the country, but at that point we are going to have a very large manufacturing capacity from abroad, and we are going to be back to a bad situation that we were in pre-pandemic. lisa: this really goes to the heart of some of the confusion around inflation, the disagreement. hard to understand where you should look. on understanding this noise was a paper by jeremy read, i fed researcher, that was highly controversial over the past week.

he bemoaned a criminally oppressive social order in the economic field. daniel: a famous footnote, too, in the paper. he came out and was very critical of the fed's own, and he is one of the senior forecasters said the fed -- forecasters to the fed, fed's own policy of being heavily weighted towards inflation exhibitions. it really shows that inflation expectations are very poor determiners of actual inflation in the future. generally, they are quite incorrect. what he was criticizing with that footnote is the fact that all of the spending and the fiscal spending currently being teed up and has been talked about before, but really hasn't been effectuated, has been held back on this fear of 1970's style inflation coming again, and for 40 years we have harbored that fear.

what he is saying is in the long-term, this has proven to be a constraint on equitable growth that could have been eliminated had we not run policy in accordance with this fear of inflation being reflected in expectations. i have a paper coming out either the end of next week or the beginning of the following week, and it is 50 pages on this issue , so i hope you all will enjoy reading it. jonathan: well, come on soon. if we don't get through the 50 pages, maybe bring a summary and we can go through it with our audience. [laughter] daniel: i will bring a companion. jonathan: we appreciate that. sterling breaking down through 1.35. this one closed with a 1.37 handle on thursday. a real turnaround for sterling. everything has changed today relative to yesterday. equities are higher, yields

lower. with the exception of the dollar. the dollar stronger again this morning. tom: i go back and forth on this while we are answering questions and doing work. i did a bunch of technical studies, and sterling hasn't had the standard deviation move of other currencies here. but i tell you, from a point and figure basis, this is inside baseball. it is a textbook double high pull top, which screams weaker sterling. jonathan: explain that to us. tom: i can't do it in 20 seconds. all i can say is read your aw cohen, and you will understand. jonathan: i will do that on the break. on the cable, we are -0.4%. the dxy near a $94 handle at $93.89. from new york, this is bloomberg. ritika: with the first word

news, i'm ritika gupta. democrats have hit a wall in their attempt to avoid a government shutdown, avoid debt default, and advanced president biden's economic agenda. meanwhile, time is running out for funding the government and raising the debt ceiling. japan, the former foreign minister won the leadership of the country's ruling party and is expected to be named to succeed outgoing prime minister yoshihide suga. he has promised tens of trillions of yen and spending. he will face an immediate test of his broader appeal in a general election that must be held by november. one of spain's canary islands, lava that erupted 90 is ago is flowing into the ocean and large clouds of steam could be seen drifting into the air. the temperature of the lava is estimated at 800 degrees fahrenheit. residents are being warned to stay indoors because of the risk of toxic gas.

netflix acquired its first videogame developer. the company is best known for its debut title. netflix plans to make games part of its subscription with no ads or in app purchases. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

♪ sen. warren: your record gives me grave concern.

over and over, you have acted to make our banking system less safe, and that makes you a dangerous man to head up the fed , and it is why i will oppose your renomination. jonathan: senator warren making the headline she wanted to make. good morning. opposing the renomination of federal reserve chair jay powell. alongside tom and lisa abramowicz, i'm jonathan ferro. up 22 on the s&p 500, advancing 0.5%. yields down three basis points on the session. still north of 1.50%. euro-dollar down 0.3%. that is one part of yesterday's story that has continued. dollar strength. if we can take a quick look at the dollar index, on the cusp of a $94 handle at $93.97. tom: this is 50% some eu based. what i would look at is

bloomberg dollar index. jon, this is something equity and bond people have to monitor, even if you don't understand it. lisa abramowicz will explain fx with clarity. [laughter] lisa: when is that going to be? this is one mystery, despite the fact that people are talking the reflation trade. it is not a reflation trade like it was six months ago. is this a real rate differential story, or some kind of look for safety at a time of a lot of uncertainty? jonathan: if it was a rate to story, you would expect sterling to be anchored, given the hawkish tilt we got from the bank of england last week. for governor bailey a little bit later. i wonder if he's got his eye on this one, i break down and cable to 1.3474. tom: we don't have time now, but between the lorry drivers --

lisa: how much are they getting paid now? jonathan: a lot. tom is reconsidering, let's put it that way. [laughter] tom: jack fitzpatrick in washington is saying, i got up for this? what is the single thing you will try to observe in the white marble of capitol hill today? jack: today we will see if they can avoid a shut down, even though there's not a deal on the debt limit because that is a later date. this thursday night at line to avoid a shut down is being issued today. the senate is going to try to get a bond measure to fund the government through december 3. if anybody objects, that would trip up the whole plan, but republicans are saying in general, they are going to let that go forward. we will see if they can get a vote in the house either today or tomorrow and try to get the president's signature on that i 11:59 p.m. tomorrow to avoid a

lasting appropriation. tom: does speaker pelosi have the collegial support of the warring democratic party, or is she on the edge of a john boehner? jack: i don't think the support could be called collegial right now. they are all relatively angry with each other. but they are holding it together for now. the question is are the moderates in the senate in particular, joe manchin and kyrsten sinema, going to give them a number they can work with ? the progressives and moderates are trying to get one bill over the other. if they can make enough progress on the reconciliation bill, they could try to move forward on both. but the key is do they get a topline number from senator manchin in particular saying

what is the framework that we can work with. they really haven't gotten that yet. lisa: how doug in are the progressives -- how dug in are the progressives? jack: they are pretty dugin. i think the key issue is not whether the progressives just crumble. it is could there possibly be enough moderate republicans who side with the democrats who want the infrastructure bill to overcome the progressive objections. we don't have an exact vote count now, so i can't guarantee that the progressives are going to block this infrastructure vote that is supposed to happen on thursday, but we haven't really seen any signs of progressives wavering on that. both sides seem very confident. it is really just a question of do enough republicans jump in with the moderates to move that infrastructure measure award, if both sides of the democrats are

completely dug in. lisa: is it fair to link this debate over the debt ceiling with the debate over the fed chair, seeing that both have to do with president biden having to wrangle his party together and deal with incredible splits that seem irreconcilable right now? jack: the two issues haven't necessarily converged yet, but you can imagine them doing that, especially because on the legislative agenda, on the reconciliation bill and how it ties into the infrastructure bill, the president has worked to get progressives on his side. he really let them get out front and take the lead on a significant portion of the legislative agenda. it is not going very well right now, and they have hit a wall on that. if they don't get that, or if they don't get it now, or if they have to get a much smaller version, do they look for

some other smaller a compliment? do -- smaller a compliment? do progressive -- smaller accomplishment? do they focus on a bill that they think is viable? they could converge if progressives get particularly frustrated. jonathan: always something to worry about on in d.c. always something to worry about in this market. this is from bank of america. "moral attitude only raises the risk of a larger fragility shock for year-end." tom: there you go, the pendulum of fragility shock. jonathan: i thought you might like that one. tom: november 3 is the scheduled game seven of the world series. doug kass this morning, this is trading, and i am not recommending this, he goes long amazon and long google in this carnage. jonathan: those names have been beaten up, tom. they've had a tough time.

tom: he likes the faang's. jonathan: i complete the bank of america quote. "adding uncertainty is the general hawkish turn away from the measures prompted by the covid shock." lisa: ok, i don't necessarily know that the tapir is unknown. i do think the fiscal cliff is something people are worried about. there's always something to worry about. you know i feel that way. jonathan: it is just so easy to wind up tom sometimes. $93.98 on the dollar index, stronger there. cable breaking down, -1.3477. tom: drive down to where your manse is, wherever you are downtown. jonathan: where are we going with this? tom: you can see the people cano in the canary islands, you are up so i -- the volcano in the canary islands, you are up so

high. jonathan: ok. you are right? tom: no, i'm not all right. jonathan: from new york city this morning, good morning. this is bloomberg. ♪

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♪ jonathan: practice over. your line, tom. thought you might appreciate that. from york city, this is "bloomberg surveillance." alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market is a bounce back. the bounce fades a little bit in the last hour or so. positive 0.6% on the s&p. thereabouts on the nasdaq, likewise on the russell. it was so unsettling, the move in the bond market. two's, tens and 30's, this time last wednesday, a close at 1.30%. it is the pace of the move, 20 basis points in about a week. a 20 basis point move in a week gets your attention. it is the direction and the speed that rattled this market. what is interesting for me today is that you can turn yesterday upside down in the equity

market, turn the bond market upside down. you will deliver today, higher yesterday. equity market lower yesterday, higher today. dollar still stronger for four straight sessions. we push a 94 dollar handle on the dollar index. $93 97 cents. some dollar strength on the screen this morning. tom: this was a really different day on currency markets. there's a lot of nuances, whether it is loonie or peso. jonathan: look out for the central bank speak a little later. lisa: 11:45. tom: how does she know that? jonathan: she's a machine, tom. tom: i'm in the "surveillance" nap by then. jonathan: a dangerous man. i mean, come on. bears everywhere agree with

senator warren. he a dangerous man. let's get you some movers this morning and say good morning to a very nice man. good morning, romaine. romaine: a lot of people looking for safety or you keep an eye on shares of alphabet because there's quite a lot of -- because this caught a lot of people's attention yesterday with the drawdown we had in big cap tech stocks. alphabet caught a lot of people's attention. this had been one of the most persistent stocks out there among the big cap tech stocks. it had been on a persistent uptrend going back to early january. that broke down yesterday, without the bet closing below its 50 day moving average. it is higher in the premarket by about 0.9%, but still below that key technical marker. a lot of people saying this will be a barometer with regards to big tech, much more so than apple or amazon or even netflix. netflix shares are higher this morning. a lot of this has to do with this new slate of korean programming, particularly the

success of a big survival drama. it has become a huge hit over there. more importantly, it has become a huge template for how netflix is expanding overseas by partnering with some of these overseas studios. a lot of analysts are very bullish on this. micron, this has been on a down trend a few months. this was one of the best performers in q1, now in the red on a year-to-date basis. lower by about 3% in the premarket after some disappointing guidance. the biggest volume over on the day, this stock has rallied 30% month to date prior to yesterday's selloff. it is back to where it was before that selloff. some bullish commentary on boeing, spirit aerosystems, and airbus. basically, travel trends starting to work in their favor. keep an eye on firm holdings, -- on a firm -- on affirm holdings. tom: romaine bostick, thank you

so much. on "the close -- on "the close" today, the vix -- robert hormats is with tiedeman advisors, their managing director. we are thrilled ambassador hormats could join us this morning on the new unexpected of china. with president xi, what should we expect? richard: i think we can expect a strongly nationalistic china. xi wants to have china come back from two centuries where he considered the west had taken advantage of china. china was fragmented internally. now he is trying to pull it together under very strong party leadership and exercise enormous

international influence. he sees that the u.s. is tentative in some areas and has raised a lot of doubts among allies, although it has tried to put those doubts to the side at the moment and strengthen itself , but he sees this as a chance for china to strengthen its position in east asia and other parts of the world, and the party is having its anniversary coming up, and he wants china to be world leader. tom: with a new leader in japan today, the okinawas, the islands and the rest we remember from world war ii, they stretch down some 234 miles from taiwan. japan has a vested southern interest in taiwan. how should the u.s. address the

calculus of beijing, taipei, and tokyo? richard: certainly, china is interested in increasing its influence throughout the entire western pacific. the small islands are the starting point. i don't think taking on taiwan is, while a goal of china's, it is probably not something the chinese are going to do anytime soon. i think it would be a very disruptive factor in the region. but it certainly is going to exert its influence all around asia, and certainly it is increasing its naval presence not only in east asia, but in southeast asia and in the indian ocean and other parts of the world. so i think china will be restrained on taiwan, but certainly will be exercising its naval influence throughout the

entire region. lisa: it seems like there has been a material shift in the tightening of the screws by xi jinping and the entire party. it seems like there's been a shift in terms of how hard they are willing to crackdown on certain sectors. and yet, when we speak with corporate executives, they are so delicate about this. they say we are not going to change our strategy. we still see a lot of opportunity. as somebody who has operated on all sides of this debate, how do you think corporate executives from the united states are viewing what is going on in china with relation to their presence there? robert: it is very interesting. i have spent a lot of time over the year with president xi when he was head of hunan province and then vice president, and he does want foreign investment in china, and has been advocating that for a substantial period of time. on the other hand, he has a couple of goals, one which is to have much stronger party control over the chinese economy, and he

is exerting it primarily with big chinese companies, where in virtually every company, there is a communist party committee at very high levels in the company, and it is very influential in the decisions that the companies make. the second thing he wants is much tighter regulation because he sees what he calls the three red lines. he sees a lot of averaging going on particularly in the real estate area. he wants a much tougher regulatory environment for borrowing and real estate. third, he once a degree of equity in the system. the notion that some companies and some people do very well and others don't is important to the communist already'-- the communist party's control over the economy.

lisa: i really have to go back to what you said originally, that xi jinping still very much once foreign investment, and yet the message being sent to the bondholders of evergrande, the dollar bondholders, is very different. how do you dovetail investors with that case with this drive for more international investment? robert: in this particular case, most of the bonds, most of the exposure is chinese. 90% plus is owed to either chinese bondholders and renminbi or to suppliers in china. therefore, the impact on the rest of the world is not directly going to be that great. i think a lot of warnings have already gone out that something is going to happen.

i think they want to have an orderly restructuring. the bigger problem really is not so much the borrowers here, although it has done a lot, but it is the localities. this company has projects in 200 venues in china, in every province. in many cases, a lot of people have bought apartments or homes on the basis that they will be built next year or the year after that, but they have put their money down area if this company goes under, a lot of those people will find themselves out of a lot of money . so i think be a worried more about the social instability in china than they are about foreigners. i don't think foreigners, other than perhaps psychologically, are going to take a very big hit here. but he is also going to make the point that the longer run here will be a much better regulated

chinese financial market, particularly in real estate. real estate is about 28% of the chinese economy, and if the real estate market tanks, it will slow down the overall economy and hurt foreign investors in china, and her chinese companies. so i think he is feeling that if he can regulate the economy in a responsible way, in a curious sense, the prospect of the bubble will diminish, and the stability of the chinese economy over the medium term will increase. so i think that is the message that he is providing, but also, a lot of companies are still doing well in china. a lot of american companies still see this as the world's fastest run market, which it is, and they don't want to do anything to upset the apple cart. jonathan: so's long as the authorities let them do wealth, and i guess that is the issue. valuable insight, as always. bob hormats there.

that's been the story in china for a while they have been trying to push. tom: the pboc saying forget about the speculation. that is a tough thing to accomplish. jonathan: from new york city this morning, good morning. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. congressional democrats have hit a wall in the attempt to deal with three crucial issues at once, avoiding a government shutdown, preventing debt default, and moving forward with president biden's agenda. senate republicans are blocking an attempt to raise the debt ceiling. democrat progressives and moderates cannot agree on the tax and spending package. north korea says its latest rocket launch was a successful test of a hypersonic missile. that suggests kim jong-un's regime has come closer to put nuclear warheads and high-speed gliders that can evade u.s. missile defenses. in tuesday's tests, it was difficult for experts to verify

the claims. in the u.k., the business secretary says soldiers will be deployed in days to drive fuel tankers after the government said shortages that triggered chaos at gas stations are stabilizing. meanwhile, the government's reserve tanker fleet will be on the road today. u.s. regulators are leaning towards authorizing half dose booster shots of the pfizer coronavirus vaccine. the u.s. has already okayed the pfizer/biontech shot as a booster. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> we are excited to be part of this return back to the city.

we will be bringing 5000 people but to this office over the course of the next six months, and we are thrilled to be part of that resurgence. jonathan: the deutsche bank americas ceo sonali basak -- ceo with sonali basak. i've heard nobody call it the deutsche bank center. tom: on the southwest corner of central park, it is truly iconic as time warner, and of course, the attachment to cnn. jonathan: the deutsche bank center. get it right. up 22 on the s&p. tom: i don't go to that whole foods either. i go to the other one. jonathan: upper west side? you've got one right by you, on 87 entered. tom: i like the 1 -- 87 and third. tom: i like the one on the west side. jonathan: why? tom: it's got better turnover. i can buy all the gluten-free stuff. jonathan: value add. down three basis points on tends. the dollar stronger. tom: one of the great features

we have come dave wilson and i have never touched gluten-free. he's here with the utility analysis. come on, you by dominion and forget about it -- you buy dominion and forget about it. dave: no, not lately. it is not only the longest losing streak ever for that index come which goes back to 1989. it is the longest streak for any of s&p 500's 11 main industry groups. it goes to show you how relentless the decline in these stocks, which are pretty interest rate sensitive, has been. tom: are they a retirement vehicle, as we were taught? by you, frankly. dave: not so much, given that the industry is changing. there is so much solar power around, and when you think about what is in the utilities index, it is largely a more traditional electric, gas, and water companies. so you really don't capture that

transition. i would just point out that if you look at the 10 year treasury over the timeframe where the utilities index has been falling , the 10 year yield actually fell on five of those days, which means the bonds were rising at the time that the utility stocks were falling. it has just been a more consistent decline. may be a better gauge in some respects of what people are anticipating on the rate front. and by the way, it is the worst performing industry group over that stretch out of the 11 main groups. real estate second worst, another rate sensitive group, down the list seven or eight days -- the last seven or eight days. tom: kenny was plane the uproar here, that mr. west ham came out and missed a shot? jonathan: last minute penalty against manchester united. legend of west ham. they bring him on for the final kick of the game, and he misses. cameron crise of bloomberg joins us now. he is mr. west ham as well. forget into the markets, what

were they doing? why bring him on? why have him take the shot? cameron: he's got one of the best conversion rates in europe. he's the club captain. i think he made something like 27 out of 29 penalties in his career. you know, it was to draw the match. it's one of those things that the numbers make sense. it didn't work out, so it is easy to second-guess. but i haven't seen the other players take penalties and training, -- nop's and training, -- penalties in training, but it didn't work out. i understand why they did it. jonathan: let's talk about this bond market. 20 basis points in about a week on the 10 year yield. a lot of people coming up with some nice stories to fit the price action. what say you? cameron: i think it is a

confluence of a lot of things. i think we can't ignore what is going on in europe. the energy story has clearly driven yields up in the u.k., in germany, and i think you can argue that the primary nexus of this whole inflation story is the european story because we look at breakevens in the united states, they have kind of gone nowhere over the last few months, even with the rise in nominal yields, whereas in europe, the nine-year breakeven in france has gone up very steadily. i think you can probably argue that insofar as european investors are incentivized to buy currencies on a treasury hedge basis because they get a nice yield pickup vis-a-vis the domestic bond market, and the domestic bond market in europe has ratcheted higher in yield, that can actually put some pressure on the treasury market as well. and of course, we've got the fed

last week, which i think was undeniably fairly hawkish. tom: are we within a range, or are you sensing whatever the series is that we are at breakouts? cameron: on a narrative basis, it certainly feels like we are breaking out. if you look at some of the proxies you can use or the trend followers, that also suggests breakout where cpas will have flipped from low bond futures to short. it is sort of random -- if you lay one bet, it is sort of random whether it works. if you lay 1000 bets, it is playing the strategy. so it certainly feels like we are going to keep testing higher in yield, barring some

sort of catastrophe on the economic front, or the equity market keeps falling in disorderly fashion. that could perhaps return to the bond market. lisa: the dollar, what is the story behind its strength? cameron: i think the interest rate expectations is the primary angle here. the ecb, kind of by design, wants to like the fed and other central banks, and the fed on the dot plot has ratcheted up the timetable and the magnitude of rate rises. so i think it is fairly orthodox , if you look at interest rate differentials, the eighth euro-dollar -- the eight year dollar contract versus the eight year libor contract. the euro-dollar has tended to match that spread pretty closely over the last six months, year or so. that has clearly moved to favor the dollar. jonathan: thank you, sir.

good luck this weekend. cameron crise, thank you. important news out of the u.k. the u.k. will deploy its reserve tanker fleet this afternoon to boost delivery of fuel across the country. the trucks are driven by civilians. or maybe not. i can confirm that tom keene i may have been training for this. tom: you don't just get in the truck. the steering wheel is on the wrong side of the truck. that's the first thing. [laughter] jonathan: the general been on twitter that captured this moment, tom keene and i might be part of the reserve fleet. lisa: can i just say, i looked up what the salaries are. in dollars, i converted it, basically $75,000 a year, which i guess people are saying is much higher. tom: what is great here is we

can drive the carlsberg trucks. they emailed in. jonathan: wonderful. lisa: who of you have a driver's license? jonathan: both of us did our license. we are ready to go. lisa: what about a car license? jonathan: you don't need that. jay pelosky up next. this is bloomberg. ♪ ♪

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♪ >> effect at the market is selling often face of this -- the fact that the market is selling off in the face of this kind of political crisis, i think you're getting the wrong message. >> d concern is whether yields are moving too far, too fast. >> if inflation does get too high, i think the fed has to respond. >> the fed cannot, and in my opinion will not, respond to supply-side inflationary shocks. >> supply chain disruptions are creating some inflation pressures. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.