>> i think the economy is on track to expand. >> we are seeing a labor market adjusting. >> showing diversions and that is going to get bigger. >> macro shifts in place before the pandemic haven't changed. >> this is not the typical recovery. announcer: this is "bloomberg surveillance." tom: good morning. we say good morning on a monday.

much going on. we are learning in real time, optimism and the kennedy offsprings from bitcoin sehgal on roadblocks. jonathan: talking about higher interest rates. i am not sure how it is connected to your optimism. the flatness, north of 100 basis points. right now, 84, the curve is flatter and the rate hike debate is further and further. tom: attentional -- a tangible moment of flattening. i will call it stasis on that level.

it is a changed landscape and nuanced from where we were 10 days ago. jonathan: it is global, this conversation. central banks responding to economic data. starting to see it in developed markets. the u.k., now pricing to rate hikes into year end in money markets. that has happened really quickly. will the chairman follow? i doubt it. tom: lisa abramowicz, i notice earlier, china making 34% of zinc consumption worldwide. look at the numbers from overnight. lisa: they were disappointing. the optimism is interesting. despite the china decline in

momentum, still growing at a rapid pace and despite rate heights people are rising in, does that say it is ok for tightening or does that say that there is so much liquidity that people are closing their eyes to the risk and moving forward. jonathan: chairman powell does not want to go there. what is fascinating is the yield , the front end of the yield curve is going there. tom: you are channeling stan fischer. absurdly low bottom. i do not look at the level at the rate of change. i wonder how united this federal reserve is. no one expects action on rates. hardly anyone expects action in

the first half of 2022. there is a lot of division going into november 3 and how divided are they? do you think the federal reserve is still with harmony right now? tom: this is a big difference from the bank of england. this is a less visible argument, but this is the fed open to debate right now waiting for data. jonathan: waiting for confirmation of a second term of its chairman as well. i have spoken to a lot of people in this market and a lot of people say some things outside of the conversation on air that they are happy to share privately and they think the chairman as on a political mission for a second term. if that is the conversation in the market, don't you think that is with the fed policymakers as well? i don't know, but surely they

are talking about it. tom: the observation is he speaks to the guests. what do you see in the data? jonathan: i see a lift for yields and commodities, it is a lift in a big way. tom: right now let's get to matthew brill, very important that we speak to him on the markets as well. what a conundrum. what do you do with full facing credit and corporate's giving all of these narratives? matt: i think right now we feel comfortable investing in corporate credit. balance sheets getting prepared. earnings strong. we have not seen a huge impact from the supply chain

disruptions. it will squeeze margins. we feel like we will have a slower 2022, but corporations are in good shape. we like reddit over full facing credit. jonathan: news from cnn and confirmed on the facebook page of colin powell. it is important to get this accurate. colin powell, leadership in several administrations has shaped foreign policy in the 20th century and early years of the 21st has died from convocations of covid-19, this according to his family on facebook. he was 84. the team in the control room has visited the facebook page and confirmed that. colin powell him of the first black u.s. secretary of state has died. he was 84. tom: i would suggest this was

only in america. he came out of harlem in the bronx. this was a guy who started out in rotc at ccny. there was no west point. this is a guy who grounded up and then executed as an officer to the many steps to the colin powell we know today. jonathan: the statement is, general colin powell, former u.s. secretary of state and chairman of the joint chiefs of staff passed away due to convocations from covid-19. he was fully vaccinated. we want to thank the medical staff for their care and treatment. we have lost a remarkable and loving husband, father, grandfather, and a great american and they signed it off the powell family. lisa: he was one of the most beloved politicians and respected as being as honest as he could be throughout his

tenure. i think there will be a further discussion that he was fully vaccinated and he still passed away from complications. this will raise questions among the public about efficacy as well as who still needs to be careful and take precautions. jonathan: the control room wanting to get a voice from washington. we will have our correspondent in the line. i think it would be best to catch up with matthew brill in the next segment. the following from colin powell's family, he passed away this morning due to complications with covid-19. the family going on to say he was fully vaccinated and they want to thank the medical staff at walter reed national medical center for their care and treatment. we have lost a remarkable and loving husband, father, and

grandfather. tom: where are we going right now? are we going to map brill -- matt brill? probably best to cover this story. lisa: especially someone who was respected for bipartisanship. he straddled both lines of the political spectrum throughout his time in tried to be a powerful voice for what he thought was right. really important person and really important of straddling both sides in washington dc with need for strategic importance in a military basis. tom: gregory valliere joins us. we were to speak but now we will speak about colin powell. this is a general who absolutely defined how we picked up the

military after vietnam. gregory: absolutely fearless. he said what he thought sometimes he upset people but was totally fearless, a great patriot paired this is a major loss. -- a great patriot. this is a major loss. tom: it has been an extremely long year and colin powell touched by the iraq war and all of the debates and then on to afghanistan. what did he think of our long and some would say never ending wars? gregory: i think he wanted to extract the u.s. from them. most of the great generals saw casualties and saw the battlefield. others never got close to the battlefield. he was in the middle of wars. he hated wars and wanted to get us out. lisa: is the representative of

the old guard in washington, really speaking his mind? is there a person like that today or is that character obsolete in today's washington? gregory: there are still some very articulate and forceful generals, still some great people at the pentagon. it is probably not appreciated by the public that most of the generals in the pentagon have ivy league grease. general petraeus -- ivy league degrees. general petraeus had a doctorate from princeton. they are fearless in saying what you have to say. i think there will be an inevitable focus in the next 48 hours on the friction between powell and donald trump. it a pit and iced how trump viewed generals. -- it the pit of my -- e

pitomized how trump viewed generals. tom: who has the message for the military right now? gregory: hard to say. lindsey graham in some respects, but in other respects he is lacking. mccain was the great supporter of the military, but jack reed, a moderate democrat, retired army captain, there are some people who served who will have to speak up. anyone who served has to view powell with the utmost respect. jonathan: thank you. gregory valliere, of atf -- agf investments. it is always important to take a beat and take a deep breath and

reset and really go over the history of a great man. tom: you have to you have to say across the span of this, my first recognition was coming out of the generals and frankly the kernels of vietnam, how there had to be a new military. colin powell -- and frankly the colonels of vietnam, other has to be a new military. colin powell started this. i don't think it is likely to be out of ccny and rotc and what he did was unimaginable. jonathan: colin powell, according to his family, has died at age 84.

>> the extreme polarization that we are seeing, the greatest threat is found within the two

square miles that encompass the white house and capitol building. our society seems to be coming unhinged here and i have never seen so much hatred. jonathan: former u.s. secretary of defense, robert gates speaking. good morning. your equity market shaping up, down. yields higher by a couple of basis points. commodities rally income accrued up to 83.50 -- income. crude up to 83.50. yields higher and around the world on the bigger conversation of higher interest rates. tom: we will continue our coverage on the death of colin powell. matthew does, senior portfolio

manager at invesco. we think of large cycles here we have certainly lived that in interest rates. i remember when 7% was a low yield. i remember there is a change, a turn, suddenly we see a higher rate regime. matt: we really don't. we think that we are in a lower for longer. you are probably off the lowest levels in the pandemic took us to extreme situations. i don't think we are going back to 7%. maybe it was because the forces in place before the pandemic are still there. you have a lot of technological innovation that is ongoing. you cannot keep pace with the last several months. lisa:, julie fed's hand be called for potentially to rate hikes by the end of next year? -- potentially two rate hikes by

the end of next year? matt: you are pricing in rate hikes and that is reasonably construction -- constructive to the market but telling you they want the fed to be aware what is going on with inflation and want them to know your is potential this is not just a near-term transitory issue. the market doesn't want the fed to do a lot. they just say they want an ion and keeping it under control and if things get worse -- keep an eye on it and keeping it under control and if things get worse, we will make a move. i don't see us getting above 1% in the next cycle. lisa: people are in the market to make money, not just to spend -- send a message and send a carrier pigeon to them. how much is it people thinking the fed will change the views or

something next year or is it simply on the margin saying this could potentially have been given where inflation is? matt: it is on the margin. on the relative basis you moved up but on an absolute basis you have not. it is that people are hedging their bets and it is cheap insurance. for corporate and equity investors, if you are afraid the fed is going to make a misstep and that will drive equity markets and corporate credit lower, you should be short and be expecting them and hoping for them to go higher. it is a cheap hedge right now and i think a lot of times that is why it has been going up. jonathan: talking about the tone of the november 3 meeting, it will not be on the decision on tapering but the what to do next. can you give us some insight on what you think the meeting looks like in a couple of weeks? matt: to be a fly on that wall

would be interesting. i think they are going to flat out say we are tapering in december. i think they will take 15 billion off a month. then the next question, once they get that checked out, there will be discussion around is this real? can we do anything to slow this inflation. if the federal reserve think they will hike that will help supply, it won't do anything for us and we don't have a demand issue. we have a supply issue and that will not be helped by the federal reserve hiking rates. they will have a lot of back and forth. the old-school economists will say the data tells me we have inflation, but other people will say that won't matter for three months or six months, but it matters what will happen in a year when we go back to normal. normal i think is 1% to 1.5 percent without the fed doing much. i don't see is overheating in 2022, and i think it will be a good conversation.

i think some of the fed disagree with me. jonathan: i think a few do and i wonder if that division can be hidden over at the fomc. he is flirting with higher interest rates. the same story applies to the u.k. in many ways, yet you have a central bank thinking he has to roll. why do you think that is? matt: i am not as much of an expert on the bank of england versus the fed. with the fed, you get somebody like powell, whether or not he is going to be a chairman going forward brings some of that into play. you have other major issues going on in terms of the energy crisis and that is on people's mind and people paying more for natural gas. they are saying good central bank needs to help us out. there is some regard when it comes to energy because that is a huge component. in the u.s., it does not matter

as much. gas prices are going up not the same as england. jonathan: what does apple know that we don't? matt: apple knows that they can borrow for cheap and they can continue to turn out maturities. but apple is under leveraged. when you have a lot of cash on the balance sheet and you have to figure out what to do with it, you can use it to buy back stock. i think you will see the large caps grow into their capital structure. it is not normal to think about a company of $2 trillion to think about that being a normal company. the traditional company is paying down debt right now, because they have been fearful about access to capital they didn't have in 2020. 70 like apple will say --

somebody apple will say, it won't hurt her credit as much. -- hurt us as -- hurt our credit as much. jonathan: matthew r.o.e., thank you. -- matthew brill, thank you. lisa: they don't have to, why not load it up? jonathan: and they have been doing that. leverage trends back to pre-pandemic conditions. encourage that encouraging, isn't it? lisa: because rates are so low so basically it looks better on the balance sheet. it has been turned out due to maturities. jonathan: good news from lisette right there. lisa: it was marginally good -- good news from lisa right there. lisa: it was marginally good.

tom: every ceo is turning to the other ceo, bring it in now even if we don't know what for. jonathan: features just a little bit softer to kick off a brand-new trading week. from new york city, this is bloomberg. ♪

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tom: some guy on twitter said he -- said he things i look 101. do i need a lift? jonathan: the other one has an ego bigger than mars. who is that? tom: should i do just the eyes or the whole thing?

jonathan: really interesting start to the week in financial markets. live from new york city, good morning. equity markets down on the s&p, -.4%. bond markets higher. it is the front that gets your attention as we pull forward on higher interest rates. the fed and the bank of england, euro-dollar at 1.1 six going into the meeting next week. eight weeks of gains on crude, 83.60 four, up one point 65%. -- up 1.65%.

tom: michael joins us. delete with a copper to gold ratio. full your -- fold what we heard about zinc and how does that equal a view and tone on the stock market? >> thank you for having me. we are focused on the shocks to disrupt the global economy or hurt the u.s. recovery, one of which is the china situation. another is the fiscal battle taking place in the u.s.. watching industrial metals prices, especially relative to a commodity that is not industrial

and used light gold can be a pretty important barometer on industrial demand. we have some shocks lifting prices but if the global economy were at the cusp of going into a tailspin or if the u.s. were sent to slow dramatically, you probably expect metals to have a rough go of it and breaking out to new highs. tom: this is the ambiguity in the economics, the views the central bank has two face. can we state that one idea of higher inflation is better growth and a fed that could look at that is good news? michael: it depends on where the inflation is coming from and how much slack is in the system. if you are talking about positive demand shock, then prices and outlook google in the same direction.

just the opposite for an adverse supply. what is so confusing is you have both shocks hitting the u.s. and global economy. i hear people saying it is not the right remedy. . there is a very robust underlying effort and demand situation unfolding where there is nominal gdp running 17% annualized. that is total spending aggregate demand. even if it slows, it will be well above the 4% trend is probably something more appropriate for the long haul. we had the catch-up growth but we are already back on the pre-covid trend for the nominal magnitude, nominal gdp. rapid uptrend growth i am afraid

it will be insistent -- persistent inflationary pressures. lisa: this is probably why you say metals are a more accurate read on where rates should and eventually will be. what is the path from where we are now to where they are fundamental where they are accurately reflected either metals market? uncle: the ratio of copper or metals to gold, almost perfect for the level and direction of the 10 year yield going back over the course of the last economic cycles. they are moving in the same action but there is a gap, probably because the weight that the fed has had on the long end of the curve. to answer your question, it is two courses that bring that

relationship into closer alignment. one will just be the resilience of the upswing. there are a lot of fears whether it is china or the fiscal situation that it will slow dramatically, but reopening and nearly $4 trillion stream of broad money, the quit assets, offsets the other shocks, which we think it will, then that will force the fed's hand on the timing of future tightening. those two forces, the dynamics in the u.s. and the federal reserve having to address and access liquidity, depressed rate environment, will kick that 10 year yield up into a higher range, at least 100 basis points above where it is now and will have important implications for asset allocation. when it was up, it is obvious

which areas are underperforming. lisa: there is a lot to unpack, the idea of the 2.6% yield is something a lot of people have not baked into their assumptions. how much can the u.s. economy tolerate given how much leverage and excesses that might be revealed to the 10 year go up to 2.6%? michael: i think it will be a more of a matter of the 10 year yield following the u.s. economy up. we have a v-shaped pattern, a much more robust recovery but rates are lower than they were on average during the last cycle. ultimately, if the fed is forced to play catch-up in the central banks aren't very good at being nimble when they are trying to catch up behind the curve, that is where we could end up with recessionary risks. it will not be a risk next year in my estimation, but could

prove to be a shorter cycle than we saw in the 1990's. typically it is slow, steady cycles with low inflation, not superstrong v rebounds with high inflationary measures. tom: do we underestimate earnings season because of technology? granted with the natural disaster in the pandemic, do we have an understanding of technology but used by other sectors? michael: i think in aggregate you look at the earnings story for the s&p 500 and it blew everybody's expectations out of the water coming into this year and the earnings have been strong. it is not the level going down

that typically happens, the growth rate will come up. that is fairly well understood. this high level of earnings has been an important story for the equity arc in and the forward on the s&p 500 has weakened a bit from 23 times down to 21 and change as of the close last week , but the market is up strongly because the earnings story has overpowered that. it will be more difficult to see that kind of thing unfolding going forward, but the growth rate of earnings and additional upward pressure likely could be an environment where the market treads water if not experiences a correction. in the last cycle, the risk off situations where we had stockmarket pullbacks and corrections were due to growth scares. but inflation scares can also impress the ratios and that is a

different situation and not one where the central bank should be responding in a dovish manner. that is unrecognized and critical at a time like this. jonathan: thanks for catching up with us. michael darda from mk m holdings. new zealand, australia building with the comments pushing to the bond market. we build on the move. tributes are pouring in for the former general colin powell, the late general powell, this from president bush, it reads as following, "laura and i are saddened by the death of general powell. he started during vietnam and many presidents relied on president -- on general powell. he was chairman of the joint chiefs of staff under my father

and president clinton and secretary of state to my administration. he earned a residential metal of freedom twice. he was highly respected at home and abroad and most important, he was a family man and a friend. laura and i send our and our children the condolences as they remember the life of a great man." tom: we will bring you the time exiting reporter in baghdad who will give us journalistic perspective on colin powell. jonathan: a difficult moment for those parts of the world. tom: it is and what is so interesting with general powell through the controversy, you heard from robert gates, this is a guy who sat on the couches and told him what he thought. he had a bs factor of zero. jonathan: he died at age 84 due

to complications of covid. lisa: we know that the vaccination can protect people from the most part but there will be people who be -- to get hospitalized. he did because mine and the later aspect of his years, when he straddled the political spectrum at a time when there was increasing bipartisanship in washington, d.c. jonathan: the show will go on for us at 9:00 a.m. eastern. i will catch up with kathy jones, and your equity market is down and up on the s&p 500 as the sad news comes in that general powell has died at age 84. leigh-ann: i'm leigh-ann gerrans with bloomberg's "first word news."

colin powell, the first african-american to be u.s. secretary of state and chairman of the joint chiefs of staff has died. his family said he died due to complications from covid-19. his family said he was fully vaccinated and being treated at walter need -- walter reed. he served in public office for four decades. he was 84 years old. china seeing a new cluster of covid cases in the northwestern provinces, new infections since sunday officials say more than 1500 people have been identified as close contacts and it is traced to two people from shanghai. key legislation to fight climate change may not the final vote it needs to survive. west virginia democratic senator, joe manchin, has told

leaders he will not support including the spending package. the program would charge utilities -- pay those freezing clean energies and penalize those who do not. assurances from vladimir putin that the country was ready to take steps necessary to stabilize the market. the biggest supplier does not plan on more gas through the u.k.. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. ♪

tom: good morning. colin powell dead at 84.

there are any number of wonderful guests and a scramble to talk about the general. not general of the army including his hero george marshall, but colin powell. this is a wonderful thing, because in journalism, he is the one who did it. others talked and he lived in baghdad in the red zone for time magazine. it wasn't the red sewn -- red zone for the magazine but danger as well. when did you come in contact with this unit general? >> i so the consequences of his decisions but didn't encounter him after a -- him until after i left the country. i was at time magazine and he had come to an event and we spoke briefly about iraq and

everything that unfolded. it was not the best place for a deep conversation, and we were surrounded by a lot of other people so i felt like he couldn't be as candid as he might have been. tom: you are candid with nate rollins the changing of iraq, but the distinction of general powell's courage and lack of naivete versus like mr. brammer as well. policy listened to as we went into iraq? bobby: he was given the impossible task of trying to defend the decision to go in there. once we were there and it was clear that the weapons of mass destruction were not there, he was in the impossible position of trying to explain why we were still there. he was an insider politician like brammer was. he was a soldier first and

foremost and the sense i got from him was that he was deeply pained by the military losses and the lust of -- loss of prestige the military had to endure because of that situation. later on as he would explain in his autobiography, to the end he remained, although he joined politics and was a powerful person in politics but he remained a soldier. lisa: just to discuss the one moment where he did help president bush cell operation desert storm and the invasion after the 2000 one attacks, what is his legacy in terms of generals acting on -- after the 2001 attacks, what was his legacy in terms of generals acting on this?

bobby: a cautionary tale for those who come after him. beware of politicians, i suppose is the way to think of it, and it undermines his legacy and it is a shame that it did undermine his legacy as a soldier and commander. the doctrine that he altered during the first gulf war was then undone during the second gulf war, the invasion of iraq. i think any military commander who after it comes in politics will become deeply aware of the risks of being associated with a particular brand of politics. when you give up the uniform, you give up the neutrality and have to live with the consequences. lisa: general powell is dead at a crucial moment for the u.s.'s intervention are lack of intervention and places in the world. there has been a shift of foreign policy to a more

domestic policy. how did he figure into this transition that we seem to be in an ongoing way, even under president biden? bobby: it felt like he was a man out of time. he was an old school republican and believed in small government and no taxes. he was out of place in this hyper partisan, social republicanism that you see now. he didn't want really to get involved in the dirty, sort of messy ideological battles that we are seeing take place now, which is why he eventually left the party. it was clear by the insurrection on the sixth of january and he decided that was it he didn't want to be part of the party anymore and became an independent. i am sure that brought him a lot of pain right at the end of his

life. tom: the classic book on fdr talks about the generals and there was ike after the war, drafted aggressively to be a presidential candidate. in the middle is powell, who was really never drafted to be president. why not? bobby: i often wondered about that and there was a moment when it seemed like it might be possible, but he was reluctant himself to go that far. obama came and went to the white house and became the sort of figure that represents the possibility of minorities in this country, but until that time, we forget now that colin powell when he became secretary of the state was the first african-american to reach that role and was an inspiration for everyone. tom: including lloyd austin. the secretary of defense austin

and so many others and so many different ethnicities and race, it began with him -- is it safe to say? bobby: that is very safe to say. his legacy in the military is enormous, but for that one blip with the war in iraq, unfortunately a big blip will always be in asterisk going forward, but i hope we don't forget that there was a time when he represented the best of this country. tom: bobby ghosh has been living in london. you are into new york? bobby: this is day one. glad to be home. tom: we are hugely advantaged to have this on this -- to have you on this important day. we are thrilled he is at

bloomberg opinion. something i looked back as bobby mentioned, it was there but it wasn't. it was clumsy. there was hillary clinton and others. this is ancient history. but it was clumsy. lisa: this person exemplifies the american dream. this idea that he really got in and worked incredibly hard and went to community college and ended at the top echelons of generalhood as someone cautious and who spoke his mind, particularly at the later stages of his life. tom: we will touch on this in the coming days. any guests will want to speak on the general. we leave you, features are negative, and watching oil, don't kid yourself, colin powell always watched oil and that

speaks of the present tensions. we will continue on radio and television on the death of colin powell.

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jonathan: kicking off a brand-new trading. equity futures down .5%.

the countdown to the open starts now. >> everything you need to get ready for the start of u.s. trading, this is bloomberg "the open." jonathan: we begin with the big issue, rate hike bets. >> market is anticipating a quicker pace of tightening. >> talking about rate height sooner -- rate hikes sooner. >> pressure on the feds. >> we cannot hike. >> we were once talking about the end of 2022, early 2023. >> we saw the first rate hike