bloomberg's first word news. the supreme court has added five new cases to its calendar for the term that begins next week. among them, a challenge to federal election law brought by ted cruz. senator cruz's challenge involves rules about repaying a candidate for federal office who loans his or her campaign money. a three-judge panel sided with the senator, and the bided administration asked the court to take the case. texas says it is helping the economies of other states with its new law banning most abortions. in a court filing texas attorney general ken paxton says the measure is "stimulating interstate commerce" because it is forcing women to travel to other states. the bided administration has called its impact on interstate commerce as grounds for federal intervention. paxton's argument was slammed by opponents of the law. in germany the embattled head of angela merkel's christian democratic party will meet with

potential coalition partners. he is fighting for a chance to form a new government, despite a crushing election defeat. the conservative bloc crashed into its worst result in postwar germany. the social democratic party beat them. the g-7 economy are looking for ways to restart international travel. bloomberg has learned that transport and health ministers met virtually today. the meeting was aimed at moving closer to consensus on how to ease border restrictions. some countries, including members of the european union, have used vaccine passports. others have held back for reasons ranging from politics to privacy. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg.

>> it is 1:00 p.m. in new york. i'm alix steel. buckham to bloomberg markets. your other top stories we are following for you. jay powell and janet yellen just wrapped up their testimony before the house financial services committee, both blaming supply disruptions for the recent surge in inflation. all eyes stay on washington as the boats on the infrastructure and government funding bills are expected today. we are going to bring you the latest. shares of bath and beyond are plunging after the retailer trends its outlook for the year. more on the ominous sign for the retail industry and head of the holiday shopping season. let's get a check on the markets. first of all, made it to the end of september.

quarter is not over yet. it looks to be the worst quarter for the s&p since the start of the pandemic. today we are biding time until the start of the fourth quarter. the s&p down by .7%. for the quarter financials did well, but after that you are looking at health care and tech. the cyclical guys just keep getting hammered, particularly as you have rising commodity prices. let's take a look at taca. tech outperforming on the day, now flat versus the s&p. as you see real -- yields reraise, it is going to be a tough environment. in the nasdaq one -- 100, down 20% in a bear market. 10 year yields, 151 here, pretty much flat, at the top end of that range. i do want to take a look at the dollar index. the dollar is the best

performing g10 currency in that space. it rallied despite the fact that certain central banks in certain countries are getting more hawkish, yet the dollar rallied anyway. it is actually leading at? what part are we on when it comes to the dollar? we want to look for clues. is it rate chair -- rate differentials? jay powell and secretary yellen testifying today. they discuss everything from the debt ceiling to the path of the economic recovery. want to bring in policy correspondent michael mckee. a lot of political posturing. what were some of the standouts for you? michael: politics on capitol hill. how shocking. jay powell and janet yellen said nothing new on the economy or their plans going forward. both said what they had told congress on tuesday and what powell told the rest of the g-7 people at the ecb meeting yesterday, that they think it is

supply chain problems that are causing inflation to go up. those should go away, inflation should come down. at least eventually. powell was asked directly, what does eventually mean? he said we have been surprised, but we still think it is going to happen. i think the biggest thing -- the two big issues were the debt ceiling. republicans pounding on yellen in particular about the debt ceiling and saying it is because democrats want to spend a lot or money. yellen accurately saying that is not true, it is about paying for the money already spent by congress. then democrats, pounding on using yellen as a ping-pong ball to pound on republicans for that. the only real news that came out of it, bad news for joe weisenthal, the treasury secretary said they will not as the trillion dollar quarter.

the other thing that was a big deal was the proposal by the administration to have the irs report flows of money into and out of bank accounts with a minimum $600 in them both sides do not like that. regrets and republicans don't like that. yellen defended it as a means for figuring out whether they can get more tax revenue from the wealthy. we reported a couple of days ago with that the $600 limit may go up to $10,000, which would put it closer to that, but it does not look like congress is in favor of this. it is in the reconciliation bill, so he could come back, i'm not sure it won't survive -- that it will survive for a long time. alix: she also mentioned she would support a permanent repeal of the debt ceiling, that the debt to gdp ratio is still fiscally responsible. does any of this move the needle

forward? it is still that crunch time. michael: it did not move the needle, but what happened over the last couple of days is interesting. on tuesday, you look at the t-bill that matures on the 19th, which is right after that dropdead date. on tuesday at spike. the yi eight basis points. it has come down and is now trading just above where it was before she spoke. it does seem the markets are looking at all of this and saying, it is a lot of political theater and we will get through it. alix: of course, politics. just look at the infrastructure bills. bloomberg's michael mckee. coming up, we are going to continue those conversations. we are going to bring you the latest on everything from the debt ceiling to infrastructure,. this is bloomberg. ♪

alix: this is bloomberg markets. congress cutting it pretty close in an effort to avert a government shutdown. house and senate are expected to extend x -- to extend spending. bloomberg correspondent annmarie hordern is on capitol hill with the latest. where are we in that procedure to fund the government? >> they are on one of the final amendments, and that is likely to go through. this is a stopgap funding measure. really it is a band-aid. then it will go over to the house and president's desk. that is no longer an issue right now, in terms of the number of

agenda items they are trying to get done. a voiding a government shutdown, the real fireworks is what is going on in the democratic party when it comes to infrastructure. speaker pelosi says that vote is going to go ahead, we just had pramila jayapal saying the votes are not there. alix: walk me through that. nancy pelosi rarely calls a vote to the floor if she doesn't have the votes. there is rhetoric -- i should point out this is for the $1.2 trillion infrastructure plan. that is not the $3.5 trillion. will progressives torpedo this or will pelosi bring it to the floor to put heat on the progressives? annmarie: we have to see what she ends up doing. she could still pull the vote. as a speaker of the house she has that jurisdiction. we heard from steny hoyer when he was asked if he was confident in is going to get the votes. he replied simply with a nope. if it gets voted down it does

not mean the bill is dead in the water. but it would ignite some of the pressure on the moderates in the party, especially in the senate, which they are waiting to negotiate this deal. senator joe manchin, senator kyrsten sinema that the progressives think -- progressives mean is this. we do have a leak memo from senator manchin outlining what he wants. some of that was the federal reserve starting to wind down quantitative easing, but also a topline figure, which is $1.5 trillion. alix: which would be quite different. what are the chances that we don't get any human infrastructure bill? what if that number is zero? are you hearing that conversation yet? annmarie: not yet, but we don't know what kyrsten sinema is looking at and what she wants. now we have better of an idea of where senator joe manchin is coming from, and unsure yet what

kyrsten sinema wants. if they were to not have a reconciliation package, though, and the progressives maintain they will take the bipartisan, the roads, the bridges come up the broadband for that package, the democrats as a whole would recognize there would be going into the midterm elections in november with a very, very weak hand. that they were not able to deliver on anything, especially hard infrastructure. alix: it is going to be really interesting to see how that plays out. bloomberg's annmarie hordern joining us. let's dig deeper into that third prong, the debt ceiling, with former chief economist of u.s. economic development, joe minarik. in terms of budget, it is a band-aid, assuming it gets done. how does that conversation evolve? joseph: you know, we have been

doing this year after year for a long, long time. the last time we ever actually passed all of our appropriations bills on time goes back to the 1990's. it is unfortunate in that if you cannot come to an agreement on real appropriations bills, put together these omnibus bills following a series of continuing resolutions. that means you did not have full oversight, you do not have the opportunity for programmer form. it is not a way to run a railroad, but it is the way this railroad has been run for a while now. alix: that is a good analogy. it has stayed somewhat on track for a bit. let's move to the debt ceiling. you could argue it is the same thing except for 2011. we wait until the last second, the ceiling always gets raised. is this time different? joseph: boy, i hope not.

i come down where secretary yellen has been and where chair powell has been. this is something you do not want to touch. it is not playing with fire, it is playing with plutonium. you do not want to be in a situation where u.s. treasury securities are doubted, even how many of them we have to sell. so, what we need is an appreciation of that risk. what we have been seeing so far is more of an apparent willingness to use this as a hostage. this is a hostage that cannot be harmed. it is scary, frankly, to people who have been working on this issue. alix: this may seem like a simple question, let's say we do get to that date and move past it. it is no doubt for the market going to be crazy. for banks it is going to be crazy. for the average american what

does it mind up meaning for them? the money in their pocket? for what they can borrow? what is the real economic effect? joseph: at the very least we are seeing that some federal obligations will not be met. so the treasury will be writing checks as cash comes in. you know, for one thing the treasury systems are not designed for that. the treasury's checking account was designed for an entity that was always going to have enough cash. they do not have a running balance as you go through today. it will be extremely awkward. some people who are owed money by the treasury will not get it. it is highly unpredictable. we have never been there. the consequences really cannot be good. it raises uncertainty where we expect that with respect to the federal government we have an

absolutely reliable payer. alix: powell and yellen both did not endorse the mental the coin, but the thought is, why don't you just meant a platinum coin and buy back the bonds from the fed, reducing that debt? people can laugh at it, but, seriously, it is going to be hard to work down at that. what is wrong with doing that? joseph: the lawyers at treasury, in my experience, are extremely conservative. they do not like doing things that have not been confirmed in the real world and in court. part of the reason why the platinum coin, the trillion dollar coin, raises an issue is precisely your opening remark. people will laugh. and you don't want people

laughing at the full faith and credit of the united states of america. now, what do you do if your back is up against the wall and you may become the only treasury secretary in history to default on the debt? i don't know, and that is going to be an awful place for secretary yellen to be, as it would have been for any treasury secretary. alix: i was talking to michael mckee earlier about market reaction. we have seen some movement, like the t-bills due october 19 are moving. you have seen the reverse repo is sort of increasing and it comes to banks putting money aside for risk. in the next few weeks, what are the distortions we can begin to see? joseph: that is one of the most important ones, as you are going to see particular issues of treasuries beginning to move. at that point you have changed the character of the treasury market. have always said it is unitary

finance. every treasury security is substitutable for every other adjusting for surety. you know, over longer periods of time. now we are going to be talking about people having to comb through treasury set -- treasury securities to see which ones are going to be effected by a shortage of cash at any moment. it is not the way we want the world's reserve currency to behave. alix: the federal reserve repo usage raised to a record, to that point. joe minarik of the economic development. thank you. here is an interesting one. senator elizabeth warren introduces a rank modernization act. the bill to restrict harmful consolidation of thanks. the king for more detail onto one at -- onto what that means, but senator warren pounding on

banks, continuous warning of consolidation and that harmful consolidation of angst. still ahead, let's drill down into one of the stocks moving. bed, bath & beyond down 20%. is it an ominous sign or an idiosyncratic issue? we will break that down for you. this is bloomberg. ♪

alix: this is bloomberg markets. time now for the stock of the hour. bed, bath & beyond, sales falling short today as the ceo cites cost problems as the reason. dave wilson is looking at those issues. dave: like a whole lot of other companies they are having difficulty getting the goods where they need to be, whether we are talking about getting them across the ocean or getting them into the stores. the costs are going up. mark trenton talked about how

costs rapidly accelerated during their second quarter. they are facing delivery delays of 30 to 40. he expects that to go beyond next year's first fiscal half. on top of that they are seeing fewer shoppers in the stores because the delta variant is keeping people away, especially in texas, florida, and california. when you put that together you are talking about a revenue decline of 26%. analysts are looking for a drop of 23% this quarter. bed, bath & beyond is looking for an even bigger drop. they expect revenue to be just under $2 billion. they brought down their full-year forecast. they gave third quarter projections that were short of what analysts were expecting. it is kind of ugly. alix: supply chain issues, like, you could draw a dark and hit a million of them.

what specifically did bed, bath & beyond highlight? dave: you are right. you could hit a lot of them. we are talking specifically about, you know, just the ability to get product into the stores, in essence. it is not just them either. you heard and out of sweden's h&m today. they are talking about slower revenue growth. there was a u.k. retailer that cut their sales and margin forecast. that all ties in. look at what is going on in the u.s., bank of america cut its rating on kohl's, and sites supply chain issues. you look at gap, you look at hanes brands, also tumbling. a lot of that is tied into the supply chain issues one way or another. you were talking about profitability coming down at bed, bath & beyond as well. we are seeing that and other chains. it kind of sets up for a holiday shopping season where retailers

are going to have a lot of issues. alix: they are? we are. you're not going to be able to get anything. we are going to have presence under the tree but nothing in them. bloomberg's dave wilson joining us there. now to something the caught my eye. the od european fund is set to have surged more than 100% so far this year. the fund extended this year's winning streak with one of the best months of performance on record. that has been a much-needed rebound for the fund that has been recovering from years of decline. in the past six years it has posted five annual losses. european stocks were able to hang on and do pretty well also in this quarter, which helped. let's get a market check. you have s&p down around the lows of the session. on the upside you have electronic arts and paycheck. on the downside you have some

retailer guys. you have gap, haynes, so a lot of those consumer names getting hit hard. i also want to highlight what is happening with the dollar. it is mixed on the day, but on the quarter, superpowerful move, particularly against the aussie dollar and a sterling, which dropped, despite the fact their central banks might be a touch more hawkish than the fed. that is a really interesting development. in the bond market you are seeing yields going nowhere. the selloff continues in europe. at the end of september, guys. -- happy end of september, guys. this is bloomberg. ♪

[ sigh ] not gonna happen. that's it. i'm calling kohler about their walk-in bath. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. ♪ ♪ the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing,

so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. call... for fifteen hundred dollars off your kohler walk-in bath. visit kohlerwalkinbath.com for more info.

mark: senate majority leader chuck schumer is turning up pressure on the republicans over

their feud of increasing the national debt limit. he says he will seek a vote next week to suspend the debt ceiling. this brings the vote nearer to the october 18 deadline. about nine months after the arrival of covid-19 shots, there are still dozens of countries where less than 10% of the population is vaccinated. earlier this year, the who called for an urgent push to hit that target by the end of september, but more than 55 countries remain short of the goal. according to the bloomberg vaccine tracker, there are large -- parts of sub-saharan africa where less than 1% has been vaccinated. among countries of populations with more than one million, portugal has the highest vaccination rate. in france, the former president

has been convicted of overspending in his failed reelection campaign. a court found he spent roughly $50 million, twice the mutt was legally allowed. earlier this year, he was convicted of corruption and sentenced to one year of house arrest. the judge gave him a one-year sentence. he says he will appeal. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ >> welcome to bloomberg markets.

here are the top stories we are following. the u.s. equities, -- closing its next -- worst quarter. then, we will speak to a guest who believes the overall credit market will escape the fallout. wall street warns of the next big risk. >> an interesting day on these markets. we have a negative territory across north america. the last few sessions, the best improving group -- the best-performing group are the big cap names. they are less negative than industrials or energy. we are seeing steep declines there. the 10 year, we are not seeing

it shooting higher. a delayed reaction to the path laid out by the fed. we are watching the u.s. dollar with analysts noting it is making a move. over the past week, it has seen out 1.5% moved to the upside. it is interesting to see the currency market catching up not just to the fed, but what you were alluding to is the sentiment around what could lie ahead. i want to bring in our guest for more. it feels as though there is sentiment data points here. they still remain muted. the 10 year is hardly a flight to safety that you might see. >> the dollar is a moving target as far as what the catalyst is that could cause the dollar to strengthen or weaken. we are -- with a risk off

environment, the dollar tends to strengthen. my colleague crunched some numbers to try to figure out what is the main driver of this dollar strength recently? what he found is one of the classic drivers is interest-rate depression. the yield in the u.s. treasury market are higher and rising causing the spread to widen against major government bonds. germany, if you're going to look at the euro, that would be the first place to look. that seems to be tightly correlated with the move in the llar. the spread between u.s. and german yields is increasing. look at the two-year, that is getting closer to 1%. historically, that is a tight spread. compared to what we have seen since the pandemic, that is widening quite a bit.

as a result, you are seeing the dollar strengthen to the highest we have seen all year. alix: what i find interesting about that is that the dollar is stronger against some currencies that could move stronger than the fed. because of things like inflation and the power issues and the energy crisis, what the eu has looks more tangible. i want to show breaking news. the senate has a vote to pass the government funding bill and ever the shutdown. you are looking at a live shot of the senate floor. it looks like they have the votes to pass the funding bill.

it now has to go to the house for about than to president biden's desk. it seems that we have averted any kind of shut down for now. now to infrastructure it the debt ceiling. this is a good thing, we get to move on and everybody gets paid. back to the idea about the differential. >> that correlation is very high for several major currencies. the euro, the swiss franc. it is not high for the british pound. it is one of many dynamics in the currency market that would cause the dollar to strengthen. if the euro is weakening versus the dollar, that would be a headwind to the pound as well. to your point about everything going on in congress and around the world, the energy crisis moving higher, in tandem with the higher dollar that is not a

normal situation, there is still some of the risk off sentiment built into the currency market when it comes to the dollar. in addition to the rate differentials, it is causing widespread weakness and other currencies versus the dollar. it all comes back to what economy is going to strengthen the most to draw the most capital. as yields get higher and the aggressive move we have seen lately, that seems to be one of the main catalysts causing the dollar strengthen against the major peers. the british pound, the australian dollar and others, that correlation with the yield spread -- they are likely brought along for the ride even the other factors for the currency market. amanda: there will be great relief at the senate signing the votes to at least allay the next

leg of this process. what would you expect to see as overall investor sentiment reaction? >> my first instinct is to look at the s&p 500 to see how it is reacting. it doesn't seem to have a strong reaction yet to this news. there's obviously a lot going on in washington that the market is nervous about. the debt ceiling being front and center. this infrastructure news is good news for risk appetite, but there are other things the need to get resolved first before it can be an all clear risk on signal from washington. alix: i want to go back to the dollar for a moment. if the path of least resistance is higher for now, when do we feel the pain elsewhere?

certain equities have gotten hit. do we know what the tipping point is now in the world of covid? >> it's a great question. i don't have a certain level to tell you, but i think this continued strength, what we are saying now is the threat of the dollar to break out of this range that it has been seeing all year. when that happens, it will draw more scrutiny to the aftereffects of that. the impact on the earnings of u.s. exporters and that sort of thing. keep in mind, the dollar is weaker than it was before the pandemic kicked in. those spreads are very much lower. there is some room to go higher, but it is interesting to see this commodity strength, the oil strength in the face of the higher dollar. that is a somewhat unique set of circumstances. because of a couple of headwinds to the economy.

the china situation, while everyone agrees it is not leave in moment, there is a lot of attention turning to what is the outlook for china's economy as far as what kind of landing are going to see for that economy? all of that reflects back into the currency market and could cause continued dollar strength is the risk off instinct. it does continue to kick in if some of these problems aren't resolved in washington. alix: let's get back to the breaking news. the senate votes on a bill to hold the government through december 3. they have the votes to pass it. once it is passed, it will go to the house than the president. one hurdle almost down. >> yes and it is almost down until december 3. they will have to deal with this yet again.

they did avoid government shutdown right at the moment. the senate has the votes to pass it. it's going to go to the house then the president will sign that into law. what's going to be interesting later is what happens in the house regarding the bipartisan come at the heart infrastructure agreement. speaker pelosi said she has a lot of optimism that this will go through. steny hoyer, the majority leader for the house, when he was asked about if he had confidence for the vote, he said no. one left her office at said the votes aren't there. this is where things are going to get interesting and congress. >> to that point, it is buying time for more negotiations. staving off the worst. on those negotiations, what is the likely outcome for the spending bills? >> bipartisan infrastructure,

that has broad appeal. progressives want a vote for that but they will not vote until they see reconciliation. this is where the negotiations are getting interesting. we are from -- we heard from senator manchin who said his topline figure is $1.5 trillion. in a memo that senator schumer signed in july, he noted where his thinking was that the $1.5 trillion was a topline figure. also the fact that he wanted to see the federal reserve start to unwind quantitative easing. this is where the negotiations are going to be had. there is also kyrsten sinema who has an meeting with the president. where do she stand on the topline figure? we are waiting to find that out. the bill is not going to be dead

in the water if it fails today. it is going to go on for days, weeks, potentially month for joe biden's economic agenda to get his party on board with it. >> on that point, i am seeing headlines that sinema continues good faith talks and they are aware of her priorities. what does that mean? >> two things. number one, that it's not $3.5 trillion. she certainly was not comfortable with a number that high. she is more comfortable with a number closer to where senator manchin is. the other priority for her, she at one point was a green party politician. she has focused on climate change for arizona. in arizona a few weeks ago, you saw the burning of the wildfires california.

hazing is in the sky in arizona. potentially, she wants more money put toward climate initiatives. those are the things that i'm sure leadership is aware of where she stands. >> let's turn to one of the top stories of the quarter out of china which is evergrande. i asked our guest if the firm is -- >> >> we are buying evergreen debt and we will continue to buy it. -- we are buying evergrande debt. we don't know what the value is, but you're getting close to the point where we think it makes sense. we have never bought the credit until just this week. alix: evergrande has been a star of the credit world over the past few weeks. joining us to talk about the various parts of credit is a

managing partner of a private credit firm which has $12 billion in assets under management. the question i asked was did the evergrande issue create opportunity or risk for a firm like marathon? what do you think? >> evergrande is quite a significant effect -- event in the credit market for china and asia. if you look at the global credit markets today particularly private credit markets inside europe, it is a nonevent. we spend our time financing private equity firms who are buying highly attractive businesses in the european marketplace. that trend is growing dramatically. saw globally in q2, $1.5

trillion private equity capital coming to the markets because the market see the opportunity after covid to buy into businesses which are going to have strong recovery. in the middle market in europe, that has seen the largest growth we have ever seen in m&a activity in q1 and q2. >> walk through how those deals look. there is a hunger for the credit and we know that this space is growing and there is a lot of m&a activity to fund. what kind of terms are you seeing? what kind of loosening of covenants? >> if anything, covid did us a favor if i look at the terms and conditions because the market was seeing a lot of activity of money coming in from institutional investors, coming into 2020. covid meant everyone took a breather for a second.

assessed the type of businesses they wanted to own and focused on the quality of the management teams, how much equity was backing the business and the earnings going forward. if i look at us in the last 18 months, we put 1.6 billion euros into food. about $900 million into outsourced business services. 700 million into technology. these are massive growth sectors of the economy. in europe, europe has only had a single currency for 20 years. you have been going through a gradual sector consolidation in the midmarket and them the best markets. now, you are seeing a faster pace of pan-european consolidation going on to grow some of the midsized companies or larger companies that you have in the u.s.. that is where private equity is

exciting and i think these are defensive sectors. i think it's went to be a lot of money leaving ask income because even if yields increase, fixed income still yields low percentages compared to five years ago. alix: what are you selling right now? >> we don't really sell, we buy and hold and back management teams. what i would say to that is, what we are avoiding right now. you have seen massive changes in what i would say, if you go back 15 years ago and leveraged finance, industrial groups were at the forefront of activity. today, those groups are seeing huge change caused by technology and caused by changes in consumer preference. the transition over today is looking much more at the service sector and growth areas where

technology, health care, outsourced services etc. are going to be massive growth. the change to all of that is cloud computing and development and health care. alix: great to have you with us for this important insight. thank you for your time. coming up, we are hearing from wall street titans warning for big risks for investors. specifically, cathie wood and others on what could disrupt the recovery. that's coming up next. ♪

>> the number one risk we are vulnerable to is the sustainability of the global payment system. we are extremely vulnerable to

having an attack against payment system of the financial markets. >> think of people whose jobs have now been misplaced by this big step toward official as they shouldn't who have no assets to begin with. >> there are a lot of value traps populating traditional benchmarks today. the value traps, there will be significant downside surprises because of the disruption. alix: our guest all speaking on what they consider the next big risk for the market. sonali basak is here with us. obviously, he you hear people again to describe why they see the path through these markets. where is the concern about

valuation and what you are hearing? >> there are day-to-day concerns and many of them. what we did but these investors is to look at longer-term. it may be five years, resin or more because the reality is, these risks are brewing now and they could happen sooner than you think. take deflation for example. it is an interesting time to raise the cost of deflation because what we are seeing largely is inflation. cathie wood brings up a lot of indicators, things like lumber prices that have come down quite a bit and shown signs that may be the reasons we think inflation are happening are multidimensional. cathie wood raises the prospect of businesses ordering above -- then having to lower prices later on because they have done too much on the front and. the other concern she has is companies that have borrowed too much money and have to struggle with those obligations and their burdens to investors while they

are not earning enough money to pay those obligations back. risk that might be further along, but risk that we are grappling with now and terms of the prospect of the damage they could bring. >> i know the whole idea was the next big risk. what about the opportunity and the surprises they are dealing with? >> one guest, the idea of inequality and what he called the potential of a lost generation. those are strong words, and it is a theme that came up this project and the last time we did it with two other analysts. everyone is worried about the impact of technology and widening inequality on society and the prescription they have is retraining the workforce, which requires companies, governments, and local cities to be involved with tengion the trajectory. to your point, risk ahead.

these people are also in their professional lives and social lives thinking about ways that they can start to fix these problems. >> we continue to watch for those voices. always good to have your input on it as well. just to recap, we do have breaking news that the senate has passed the bill to fund government through december 3. a little relief for markets and we will watch if that shows up today on the s&p 500. we saw it turn for the negative after having been in positive territory. ♪

♪

>> global mark. stay connected. perspective on the day ahead. bloomberg surveillance, early addition, weekday mornings on bloo. >> i am crumpton with bloomberg first word news. the senate passed a spending

bill aimed at averting a federal government shut down this friday on a bipartisan 65/35 vote. the house is expected to pass a measure and send it to president biden before midnight. the federal government will be kept open until december 3 under this measure. the bill contains $28.6 billion for states recovering from hurricanes and wildfires as well as a $6.3 billion to resettle refugees from afghanistan. house speaker nancy pelosi is pushing ahead with a vote on a bipartisan infrastructure bill despite threat from democrats to think the magistrate -- think the legislation without assurances the senate will pass a tax and spending package as well. >> we are proceeding in a positive way to do so in a way