set today to vote on a short-term increase to the u.s. government's borrowing limit. that whatever the immediate threat of a catastrophic default . it sets the stage for an even bigger showdown on debt and spending in less than two months. american consumer expectations for inflation kept rising last month. household expectations for inflation when year ahead rose .1% to 5.3% in september. the expected inflation rate three years from now rose to the highest ratings in the survey eight year history. the biden administration urged a federal appeals court -- the justice department argues that the strictest law and the nation flouts more than 200 years of

precedent. 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. matt: i'm matt miller. welcome to bloomberg markets. stocks slightly lower as investors way inflation risks as well as look ahead to earnings season. the 10 year yield remains steady ahead of those auction results that we are expecting just moments away. plus u.s. small business owners say they have plenty of

customers are growing frustrated by labor and supply shortages. a bloomberg report looks at thousands of decrepit oil and gas wells leaking methane across the u.s., the news is in shares of the country's biggest owner, diversified energy, plunging more than a fifth. we will have more from our pulitzer prize-winning reporters. the s&p 500 is down about .2%. brent crude also falling now. nymex falling as well today. in terms of the glc a picture, losses in gasoline and oil.

take a look at the big coin price. -- bitcoin price. we will be watching very closely. we are just about to get the auction results out. those 10 year notes drawing that one spot versus one spot 590 presale when issued. this is just one of a few actions that we've got today. we had three year builds earlier and month notes coming out as well. sorry, three year notes earlier and three month bills drawing right now 0.05%.

spring in ira jersey. let's talk about the 10 year option. what do you think about how it's gone down? >> it was another very solid auction. 70 1% of all of the 10's that were sold today went to indirect bidders. that's among the highest we've had on record over the last 25 years or so. he saw the same thing in september as well and those were domestic investment funds buying these bonds. a lot of people seem to think that may be direct bidders or foreigners. there is what's called the collateral squeeze. it's very technical but a sickly a lot of people are short 10-year note's.

people need more of them to borrow. matt: there is a pretty common misconception that indirect bidders are foreign central banks. we're looking at a decent roundup of indirect bidders. why are there so many options -- options today we have seen three year notes. why? >> normally you get most of these options spread out. and you typically do get two people auctions on thursday. that's normal operating procedure. we have the six-month t-bill, this afternoon the three-month

and tomorrow we get the 30 year bond and that one is going to be more interesting because yields are higher than they were a month ago but we've seen a little bit of a rally back. the question is will he continue to seek a demand for the market risk being added by the treasury selling more bonds tomorrow. matt: thanks very much, ira jersey talking to us about the 10 year option. let's get something that caught my eye. a new survey from the new york fed showed that consumer expectations for nation continue to rise. american households expect inflation to rise to 5.3%. that's the highest rating on record. the data comes ahead of the cpi release tomorrow in the u.s., i know ira was getting ready for that. you can find his take.

inflation is something that all investors are is not worried about at least aware of. the imf following closely the inflation picture. the imf now expects output to expand 5.9% worldwide this year. 0.1 percentage points from one of the anticipated in july. the imf chief economist spoke to alix steel and guy johnson following that report. >> next year we expect advanced economies to be back to what they work in the absence of the pandemic. many emergency -- emerging economies, 5% of their out loss and 10% relative to where they would've been.

especially with low income countries. >> in terms of what's happening in the developing markets, the fear of the moment is that we are going into either an inflationary world or stagflationary world. what gives you confidence that inflation is going to fade? >> when you look at the facts in terms of how countries have rebounded to pre-pandemic levels this is a strong recovery that we have seen. we still have the global economy . in terms of inflation, our view is that most countries by the

middle of next year coming back to typical pre-pandemic levels of inflation. some of the countries risks are bigger. as of now, many of these features for inflation has moderated. in terms of the pressures we have seen supply-side pressures. all that is expected to revert by the middle of next year. there are these transitory forces and as long as we see inflation expectations remaining anchored, we expect to see a return to normalcy by next year. >> what would have to happen to think those inflation

expectations when anchored? breakevens are over 4%. the path of least resistance feels like it's becoming a stickier environment for inflation. >> we do want it inflation expectations to be at a level consistent with inflation mandates. after inflation expectations came down, we would be glad to see it moving back up. we would like to see broad-based inflation again. the question is if that spirals out of control and you end up with very high inflation numbers , we are not seeing that yet. we're looking very closely at developments in labor markets. seeing what happens with shelter inflation.

what's happening to long-term inflation expectations. these three sets of indicators will give us some signs of where we are headed. alix: i want to get your help in the doing business scandal has erupted. do you feel like your research is going to have a problem and what do you need to do to backstop it? >> the board came out with a statement expressing full confidence in the managing director. the issue about the data had nothing to do with the imf. replace incredible amount of importance on data at the imf. we have many checks and balances. so i feel good about where we are. guy: you have been put under no

pressure to make the data for the narrative that is being delivered further up. there's no incidents of that happening at the imf? >> absolutely not. i have personally never faced that pressure. matt: that was judy cope not speaking with alix steel and guy johnson. we will talk with executive director of the national federation of independent business about labor and shipping costs. this is bloomberg.

matt, this is bloomberg markets. i'm matt miller. a new report from the national federation of independent business says small business owners are growing increasingly frustrated by shortages of things like skilled labor and supply chain challenges. the small business optimism index fell more than forecast last month. that's the lowest level since march of this year. joining us now is holly wade. it's not a great situation right now, but it could be worse. we have a real rebound that is still palpable in the u.s. economy but i'm sure a lot of small business owners were left in a challenging position after the lockdowns and now we are finding it hard to keep up with the reopening. is that how you'd paint it? >> absolutely. small business owners are facing two major headwinds which are

reflected in the klein in the optimism index which was primarily due to a decline in business conditions. the two major headwinds and labor challenges. they're having to navigate supply chain disruption and adjust business operations accordingly. matt: the labor shortages and the supply chain issues, we've been talking about this for months. i'm wondering especially how they would characterize their economic expectations. >> many of them don't see any of these headwinds easing in the near future. they're having to adjust as they go forward.

the staffing shortage is an issue because many of them are saying that there losing sales opportunities. all of these combined are huge challenges. they don't see any of these easing up anytime soon. matt: the obvious move theoretically if you are having difficulty hiring people is to wage -- raise wages. if you have just been an a situation where your revenue was lost for months, that's much easier said than done. is that one option some businesses are pursuing? >> absolutely. we have seen very high levels of small owners increasing compensation. it's incredibly competitive in attracting applicants but also maintaining their current

workforce. their main tools are increasing compensation packages which primarily are wages than on the others owners are having to work more hours within their business to make up for some of those unfilled job openings they are having a hard time finding applicants for and so adjusting the hiring party event and the business operations are incredibly challenging and they are trying to navigate both of those. increased compensation is what many of them are doing to retain their current workforce. matt: they don't see any change in these headwinds. does the nfib have any recommendations to small business owners, maybe to government to try and deal with the supply chain challenges in the labor shortage?

>> one of the issues we are dealing with right now is the threat of increased taxes. while they are having to navigate these incredibly difficult headwinds, they are also looking in the near future at maybe having to deal with increased taxes which are also going to impact their bottom line and make it even more difficult and operating their business going forward. so that's one of the biggest challenges. congress do no harm to small business owners while they are navigating these environments and increasing taxes would be devastating for many of them going forward. matt: holly wade, executive director of the nfib research shortage. talking to us about the supply chain issues that have been a problem especially for small businesses. a really challenging environment

to get this is bloomberg. -- a really challenging environment. this is bloomberg. ♪

matt: the shares of diversified energy are falling hard today after a bloomberg report focused on issues tied to gas leaks at aging production installations. zach schneider explains how these leaks can be a climate menace. >> if you think about the fossil fuels that are down in the ground, one of the main ones is actually methane. and what we refer to as national -- natural gas is essentially a combination of gases that come up from the ground that are mostly methane with a few other gases thrown in there. methane is a superpowerful

greenhouse gas. it has 80 times global warming potential of carbon dioxide. scientists think about a quarter of all the human caused morning -- warming is because of methane emissions. we do a lot of different things. grazing livestock is a big contributor. landfills, sewage. and then of course oil and gas. matt: most striking of all was the fact that i had no idea this was even an issue. we can try to get the last few drops of oil out of minds they buy on the cheap from other countries. is it under the radar to some

extent? >> absolutely. the focus has been fracking. that's horizontal drilling and hydraulic fracturing. basically all the oil and gas being produced today. these guys are buying up all the old conventional wells that they feel are being undervalued by the market. so this company diversified so now the biggest well owner the country with more oil wells than exxon or chevron. matt: these are referred to in the industry as work over rigs. it has long been a lucrative business. the amount of wells these guys have is just unbelievable. pretty much double the major integrated oil companies wells onshore in the u.s..

have investors really been rewarding them? i have the shares been soaring? >> they've been doing great in the market. the last few years have been tough for oil and gas companies in the u.s. and abroad because of low commodity prices and diversified has a different approach where they are not betting it all on new production. they are just taking assets that are already producing and trying to strip out costs and boost production along the way. they've been head and shoulders in terms of their stock performance. matt: they are seeing a little bit of punishment today. it is quite a run-up especially with those competitors. it's a great story. i just recommend that our

viewers and listeners go ahead and check it out on the bloomberg terminal. they can see it on bloomberg.com. coming up in this program, active trading platform. zero has merged with zune acquisition. i hate the word merger. usually one buys the other. unless it's a perfect partnership of equals, which is terribly unlikely. we will find out what happened with dan to pathan next. this is bloomberg. ♪

mark: the u.s. has not -- is not headed for 1970's type stagflation. when unemployment and inflation rose in tandem, the vice chairman of a federal reserve bank said the conditions required tapering. >> the substantial further progress standard has been more than met with regard to our price stability mandate and also with regard to our unemployment mandate. the committee has said progress is continued to expect -- is expected to continue. we think tapering might be warranted soon. mark: he also said the inflation surge will be largely transitory. the governor of florida has proposed a law to shield workers from being fired for not getting covid-19 vaccines, saying he

would challenge the federal government's plan to mandate vaccines for large private sector businesses. the remarks come after the governor of texas signed an executive order outlawing vaccine medics. nancy pelosi is signaling she would prefer to scale back resident bidens multitrillion dollar agenda. that may make progressive democrats unhappy. they want to enact the president's full range of programs but only for a few years. democrats have to cut down a bill worth at least three point $5 trillion to roughly $2 trillion. in germany, social democrats olaf scholz is -- olaf scholz's bid to succeed angela merkel as chancellor is hitting a speed bump. they say they have made progress in finding common ground but have more to do. 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 am mark crumpton. this is bloomberg. amanda: welcome to bloomberg markets. matt: welcome. here are the top stories we're following. citigroup bonuses in the crosshairs. a little notice changed to the firm pasta rewards for executives has set off a detractor. we will speak with the tradezero ceo, dan pipitone, to track a deal.

food inflation marches higher. we talk to chris webb, ceo of chow now, about how the industry is handling inflation. amanda: inflation one of the issues dogging these equity markets, but as we look ahead to the official start of this quarter pasta earnings season this week, that may well be the weight and see -- wait and see the markets are demonstrating. we have rate sensitives leading the broader s&p 500 higher. you see consumer discretionary broader for the s&p, but tech and communication weaker, and beyond that, more granular early -- more granularly, some of the biggest banks we follow, watching that 10-year yield at 1.5 8% come elevated relative to where it was. is it i levels where we would

see something of a rotation happening? that is something we are watching. something we are watching from bloomberg intelligence, that netflix could be raised to investment grade by moody's and s&p within the next six or nine months. they say this is not yet fully reflected in its bonds and it is interesting to keep an eye on one factor reaching this upgrade , its debt to market cap ratio, above 6%, among the lowest among its peers. netflix has been funding some of its businesses with debt. matt: very interesting especially considering how much -- let off in the reopening. i know we are at different

phases, but you still may be stuck in front of your tv more often than i am, and of course we all watch the squid game, but eventually we will go outside and do other stuff. amanda: we all watch the squid game, by the way. some of us find it terrible. to your point, there is a lot to this stay-at-home trade. speaking of trading, tradezero is one to watch, it provides free subscription-based software for active stock trading. it is merging with activision, a spac. it gives the combined company and enterprise value of $556 million. for more on the decision, the tradezero ceo dan pipitone. this is obviously a decision to do spac instead of straight up ipo. why was this the move for you? dan: from a time-to-market perspective, a valuation

perspective, the spac was the right move. we began this process a few months ago and we sent -- we selected dune as our partner from a finding perspective at $172 million in cash. it spoke to our needs and wants as a company and we feel that postmerger we will be in a position to execute on our growth plans into the future. matt: and i hate the word merger because i always feel like we are using it on behalf of pr. it makes more sense in terms of a spac acquisition, of course. but, at the end of the day, you and your cofounders are still going to own a majority of this business, right? you are rolling 100% of your equity in and you will own 70%. dan: that is correct. totally true. we will have a vast majority of the equity ownership in the

combined company postmerger and we are excited about the prospects of partnering with dune, having the influx of cash postmerger, and allowing us to execute on our growth plans into 2022. amanda: on front, how would we compare against people who position you to a retail trading platform like robin hood? where does tradezero fit into the mix, retail versus professional? dan: we looked to be the one stop shop for active traders globally. we are doing that and a three-pronged approach and focus on our product, technology and service. we offer four different front end platforms. we are currently offering equities and options trading. we are also focused on shortselling and facilitating shortselling. so the offering we provide through our technology is access

to equities and options, real-time streaming of market data, the ability to trade from 4:00 a.m. to 8:00 p.m., and having the ability to trade long and short options, so this speaks to the active trader. this is a function not available at every broker, but it is something we really focus on. we have a patent pending on our short locator product, which is an innovation that helps facilitate short selling in a faster and easier way. matt: are you worried about fallout? because although a lot of people think short-sellers really improve the efficiency of market pricing, it is not popular with your average congressman. dan: that is true, but we are not looking for the average congressman to open accounts. we are looking for traders and those people that have a bi

directional trading plan. a short trading plan is about access to, the people need to locate these stocks to short them first. so our traders would wildly disagree with some of those people in congress. this is a function of a well-functioning marketplace. shortselling plays a role in that. and for the most part, we are talking about shortselling on an intraday basis. our customers, our traders, look to capitalize on the intraday moves in stocks, and it is one thing to be able to go long and be wrong, but it is another thing to want to short a stock with every believe that this is going to go down only to find out that your broker does not have access for the shares -- access to the shares for you to short. matt: speaking of unpopular, payment for order flow is widely criticized congressionally, but

our matt levine did some back of the napkin math and shows that it actually lowers costs, especially for retail traders. how do you feel about payment for order flow? dan: we do agree. however, for us, payment for order flow makes up less than 10% of our revenue, but we see the writing on the wall. to that point, we have gone out and are in the process of becoming members of various changes. we have become member -- we have become a member of the new york stock exchange. they have a program to send order flows to the mis-c in exchange for greater rebates. the writings on the wall but it is less than 10% of our revenue, but through our exchange memberships, we believe we have a way around any payment for order flow discussions that come down the pike that would force us to move away from that model. matt: interesting stuff. hope we can do you back on

again, dan. tradezero ceo daniel pippa tone. big bonus for citi execs. why it is getting criticism from one of their biggest attractors, mike mayo, also one of the most widely watched analysts on the street. this is bloomberg. ♪

matt: this is bloomberg markets. i am matt miller with amanda lang. investors are dumping negative yielding debt at the fastest pace since february. the total market value of it worldwide dropped $1 trillion last week, the biggest since february.

it dropped another 500 billion dollars monday alone as investors positioned for a reduction in fed bond purchases. so, amanda, it is seemingly less necessary and definitely less profitable to hold it. amanda: yeah, and this is presumably why the fed committed to transparency and a path, because if we see this kind of market reaction, a carry trade blooming as well, and this is to be expected and you want to be -- you want it to be as orderly as possible. so far, we seem to be in ok shape. matt: yeah. transparency typically a good thing. so modern, this fed. rates and inflation are one of the focuses for wall street, obviously. it is also talking today a lot about a new report on bonuses, particularly at citi. joining us to discuss is sonali basak. and it is not just anybody

involved when you are talking about citibank. one of the most watched and respected analysts, mike mayo, has a problem with their structure for bonuses. >> yes. they don't like that. as was pointed out, this was disclosed a couple months ago. not a lot of people either paid attention or cared much. this is for three very renowned executives. what mike mayo has not liked about this was the lack of clarity for the targets for this transformation program. he said it is like charging up for dinner before we know if we are getting hotdogs or caviar. the question becomes, you know,

are these bonuses appropriate? are they incentivizing the executives to turn around this business? it is the only bank of its peers right now trading below its value. amanda: the numbers involved are not huge, i would say. maybe wouldn't agree, but by wall street standards, it not leap off the page as a massive payout, but does it speak to a different tone because of citi's performance and where it happens to be in its trading path? sonali: yeah, and there is no timeframe. normally, when you are sitting bonuses, you have a price target and date. $5 million, not humongous by wall street standards, but that is the difference from what you would normally see in a pay package, more finite targets. and of course, one executive at the helm of this turnaround plan for citigroup, which

involves a lot of these regulatory matters passing them by. mike mayo is over at wells fargo and they have a lot of these challenges as well. we will hear from mike mayo later in the program this afternoon, so he will drill into these concerns more and whether others share them. matt: we will hear from mike mayo and other names. you will be busy as wall street reports earnings. what can we expect? sonali: it is an exciting quarter because it is a mixed bag. we have trading moderating for the first time in 70 months -- in so many months, and so our market share gains and losses. we saw ipo's start to pick up again in october, so what you saw in the summer may not carry over into the later part of this year, loans as well. some of the things that pushed loans further, will they last?

mortgages, for example, as rates go up, will people still be willing to borrow as much money for a booming housing market? these are the conundra that face jamie dimon first, but a lot of other banks throughout the week. matt: thank you for joining us, bloomberg's sonali basak. she covers wall street. for us as she mentioned, mike mayo will join us as well. he will be bloomberg -- she will be on bloomberg tv within the next hour. that's an interview you do not want to miss. amanda? amanda: and on that, we learned today that global wheat stockpiles were below all estimates, at five year lows. that suggests more food inflation ahead. after this, we are talking to chris webb, ceo of chow now, about high food costs and how

the industry is grappling with them. stay with us. ♪

amanda: we are talking about the recovery for restaurants. chris webb is with us now, ceo of chow now. chris, one of the big transformations that's happened is restaurants that were not always ready -- not already using digital platforms have begun to. let's of boon for your platform. let's start with how things stand with regard to your growth and the pandemic and what it has meant for you. chris: no doubt, like everyone in our space, when covid hit, everyone rushed to order food online and has been doing so ever since. it was not even a chart that went sideways, just straight up since march of last year and elevated ever since. more and more people order food

online at restaurants in order take out. -- restaurants and order take out. that has made growth for our business. matt: what kind of curb do you expect -- kind of curve do you expect in inflation? are you concerned this is not transitory? chris: it does not appear to be slowing. this past number -- number, with the -- past summer, with the covid numbers dipping, you saw this. everyone who has been in this industry for 10 years always has seen this slowdown. as cold weather picks up, fall and winter, sports back on tv, kids back in school, you see this acceleration of growth in online orders and take out. we saw a little of that but not as much as we expected this past summer.

we are seeing the numbers go back up when it comes to online ordering and take out and expect that to be the case through spring before a plateau. amanda: i feel as though your business might be being hit with the perfect storm of rising prices. you see delivery costs going up because of input costs on energy. probably labor shortages as well. and it is hitting the restaurants themselves, how they price things. are you seen that show up as reluctant demand on the consumer end? chris: no. there is not seem to be much of an impact there. no doubt, it is a difficult time to own and operate a restaurant these days. costs are going up everywhere, so not just food costs but labor and everything else. and they don't show any signs of slowing down. it just continues to move up, so it is difficult for an industry that has always run on low

margins. the other thing is this consumer trend to ordering off delivery apps, when those take 20, 30, sometimes 40% of revenue, so it is not set up restaurants well to succeed, which is why we launched a product called the order better network, allowing restaurants to tap into pools of millions of consumers online without paying a commission, so that's one way we have tried to help, the launch of this order better network so the restaurants don't have to worry about rising costs. we are trying to offset those costs going up. that is the way we have decided to help the industry, but otherwise, everything is just going up. matt: will you have to order -- to raise prices, though? somehow the bills have to get paid. chris: they are. and it is why i think most consumers have noted the last six to 12 months when they opened their go to delivery app,

one of the big three or four out there, they have seen prices higher for a few reasons. one you brought up a minute ago, food and labor costs are going up, but the costs for the restaurants using those apps have also gone up, so one way these restaurants are trying to fight back and retake a little of the margin they are giving up is raising their menu prices on these delivery apps, so you see the prices on these apps go up more than in the restaurants, and that is a way of restaurants trying to recoup some of that commission. they would have to give up otherwise. matt: thank you for joining us. chris webb there, ceo of chownow . for amanda lang, i am matt miller. this is bloomberg. ♪

mark: i am mark crumpton with

bloomberg's first word news democrats -- news. democrats are grappling with how to fit their prioritize -- how to prioritize their priorities in a shrinking spending bill. >> the fact is that if there is fewer dollars to spend, there are choices to be made and members have said let's get the results we need, but we will not diminish the transformative nature of what it is. mark: democrats must slim down a bill worth at least $3.5 trillion crafted by house committees last month to roughly $2 trillion, a figure the president has floated as a potential compromise between progressives pushing for more spending and west virginia democratic senator joe manchin, a moderate who says he supports a