follow the definition of transitory. the fed owns the definition of transitory. >> they know the impact on the equity markets. >> the wage picture, the labor market picture right now does not scream hiking now. the fed is not trying to kill the extension, they are trying to extend it. announcer: this is "bloomberg surveillance." >> is fed decision day from new york city for our audience worldwide. good morning, good morning. this is bloomberg surveillance live. your equity markets unchanged after four days of gains and another all-time high. dark of the fed just around the corner is going to be the vocus today. a great equity ghettos, abby will join us later. john, we have got to get abby joseph cohen at 5100 or 5200. got to get past david costin. what we have got to get past,

the fed meeting on the jobs state. and then we have got to do a little bit of politics. john: that's talk about the politics. the narrative this morning, a simple term, massive overreach. ■]■] ■emem surveillance beauty rest. as mentioned moments ago, the shocker is new jersey. yes, in virginia, the democrats are transitory, the republican will win. but in new jersey, 80% in, and republican exactly 1200 votes ahead of the democrat. that is a shocker. john: too close to call. >> that is what i'm wondering, how much this actually pushed the moderates and getting more clout and frankly, getting the headline numbers down when it comes to the human infrastructure plan.

does this make a plan more likely? jon: there is a calm in this equity market. since the fed last met, the s&p fell 5%. we've had a big move not just in rates, but in the equity market. tom: yesterday afternoon we had a nice pop. the vics gave ou a bullish tone. jonathan: lisa, let's talk about. opec-plus, the u.s. 1082.34. >> a lot of the tea leaves same to say that opec-plus does not increase production, but the u.s. and other nations could release some of their strategic reserves of oil. tom: that is in lisa's living room.

lisa: with talk about what we have to expect coming up today. there is a big question about how predictive this is for the payroll reports of a get on friday but i will be watching for any clues as to whether the participation rate is continuing to fall. we have seen it roll over remain really subdued versus the pre-pandemic levels. also very curious to see whether we get any inclination as to how much wages are increasing. of course, some people do contest that. this might be the most underplayed aspect of the day. the treasury is going to release the quarterly refunding, a potential first decline in total debt sales for the united states going back to the direct aftermath of the 2008 reddick crisis. how much does this offset any tapering that the fed announces today? the trade balances at a record deficit.

how much does that actually come back at the u.s. get that fed decision followed by fed chair jake house press conference. -- fed chair jay powell's press conference. i'm looking at how much they pushed back into the 2.5 rate hikes being priced to market by early 2023. jonathan: that is the number one question. like now we are getting some pushback from christine lagarde saying we do not see the conditions for a rate hike to be met next year. tom keene, the italian 10 year yield, highs 1.20. we've got another move on the italian 10 year yield to lower, and a bit of pushback from president lagarde after some people asked questions about last week, perhaps not pushing back enough. >> you got the german 10 year yield.

rated, it has gone to -0.10. almost a positive. germany sitting right on support right now. jonathan: the german 10 year, -19 basis point as you've indicated. let's bring in the chief international strategist at deutsche bank. let's start with the federal reserve. >> looks like a boring one. i think the federal reserve has done an outstanding job in pre-signaling to market that, one, we will get a taper and two, that the taper should end by the middle of the year. that means probably that able to $10 billion per month of tapering on treasuries. then we will talk a little about about the rate story. there will be pushback in terms of getting first the taper.

too early to talk about rates. we will mention inflation. i think the word transitory will get ditched probably in the statement. i think they will accept that, yes, talk of inflation will be coming down, but i think they will be pushing back on an idea that all the forces are transitory. then i think there will be general optimism still. those of four main elements we would be looking for. lisa: boring is exactly what jay powell would like to see but as you pointed out, how much are we potentially risking, or has the fed taken that off the table with their incredibly dovish stance? >> i think there is some very big risks on a multiyear view. but i think what is particularly

interesting in this cycle is that prices are highly inflated. you look at equities, you look at housing in particular, but that being said, i have never seen a cycle with a household has not participated in terms of a credit binge. this has all been a binge of the public sector level. it has all ended up -- all the risk is showing up essentially on the fed's balance sheet. i think there's much less risk to the rest of the action from the household sector and not even a household sector could actually withstand interest rate hikes. i think there is much more resilience. the household sector has roughly $2.5 trillion more in savings than they would have had without covid. they have got roughly about $5 trillion more into money balances than they would have had.

that household sector i think is pretty resilient, even in the face of what looks like very frothy asset prices. tom: i'm asking to channel the show truth or consequences. if the fed speaks truth, there will be consequences. what will be the market reaction if chairman powell gets his way to a modern in the -- modernity? what happens if the fed is successful to the markets? >> all hats off to the federal reserve. i think if this inflation issue does turn out to be transitory, i think we have dodged a bullet. i think we got more upward inflation forces here than i've seen anytime in the last 40 years. there are greater challenges ahead.

but if the fed gets this right, they will come out with even more ability and the markets will actually back that even more that means even more asset inflation. jonathan: before you run, let's get a market call. >> i think euro-dollar, i think we break that level and we can accelerate a little bit to the downside. for now i think it is pretty sideways, moderately dollar-positive. jonathan: remarkable that we did have a guest that talks about some of the strongest things in 40 years and then the call off the back of it is pretty tema. tom: i heard a real lack of dynamics and fear from alan ruskin. the key word there, and it is way overused, i'm embarrassed to use it, but resiliency due to savings. is that calculated in by market participants? jonathan: consumer balance sheets. tom: exactly.

jonathan: corporations, tom. there is liens of corporations. i've had my third beverage of choice last night watching the election results. when we start seeing a crunch of corporate paper, out? where ferro amalgamated comes out with like $7 million. jonathan: and we have to take it down, tom? lisa: i really want to underscore what alan ruskin was saying because it is a similar argument what bill dudley made in an opinion piece this morning. there is more room for the fed to raise rates than many people in the markets are aware of. this goes to the household debt levels which are low, and the corporations that have locked in straits that are low for a long time.

it's genetic, i'm sorry. jonathan: we know it is going to get announced a little bit later. will it be preset? will it be autopilot? lisa: there is no reason for jay powell to push back against rate hikes. jonathan: do they drop the t-word? tom: do you think brim which was well said? lisa: what did i do, what do you want? jonathan: equity futures down two. -0.05%. expect a decision today from new york. >> it is a blow to president

biden antidemocratic hopes of keeping control of congress. virginia republican glenn youngkin defeated democrat terry mcauliffe in a closely watched government race. one year ago, joe biden one virginia by 10 percentage points. a fiscally conservative democrat may have plans to vote on president biden's economic agenda this week. the so-called blue dogs are echoing democratic sentiment of the tax and spending bills causing economic impact. they also want the final text of the bill posted at least 72 hours in advance so they can review it. at the end of the federal reserve party meeting today, the federal bank is likely to announce reducing its asset purchases. the tapering is probably not a step for raising rates anytime soon. hong kong is in final talks with chinese officials about reopening that border.

discussions are said to be focused on whether hong kong will adopt the mainland --. the atlanta braves overcame years of frustration to win the world series. they beat houston 7-0 in game six. jorge solar was named most valuable player. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪

jonathan: glenn youngkin making it happen down in virginia. tom keene, lisa abramowicz and jonathan ferro. all-time highs into wednesday. it is fed decision day here on bloomberg surveillance. equity futures down two. the bottom market yields in, down and two basis points. in foreign exchange, euro-dollar not doing much. this government administration, will opec fold?

tom, this country calling it a wake-up call for the democrats for 22. tom: no question about it and the data is still coming. the selection is by no means summarize which means it is totally fair to trash on joe mathieu right now. joe, i want to immediately go from virginia. we can talk about that all through the week. new jersey is a stunning reversal for democrats. that is still undecided,. what kind of liberal lost last night, joe mathieu? joe: keep in mind that early voting mail-in ballots could in fact keep the incumbent in office here. shades of scott brown this morning. tom: go there, please. joe: that was right in the middle of debate about obamacare when he shocked the nation with

that when in obamacare. people said obamacare was dead. here we are in the throes of this reconciliation debate and the earth is shifting a little bit under our feet. i will also remind you christine todd whitman and chris christie both won at this .1 year into bill clinton and barack obama's terms. you can argue we have seen this movie before, but i am focused on the relative strength of democrats. he said last night, the people of the state have pushed, pulled, and prodded it right back to where it needs to be. tom: i want to go beneath the headline data. i want to summarize that what i saw nationwide was a

reaffirmation of some form of traditional police force within democratic politics as well. how big a deal is that, or is that just noise on the sideline? >> if you mean literally police reform, it is a big deal. the "defund the police" moniker has not resonated and even michelle wu is not calling to defund the police, rather move some money around. take a look at minneapolis. that ballot question to essentially get rid of the police force and replace it with a public safety agency did not go anywhere. of course, we saw crime as the number one issue in the mayoral election in new york. is this a reckoning? a could be more of a reset for democrats as they try to figure out how to take this path in the midterms. the same goes for republicans. the glenn youngkin just find the secret sauce to be democrats in the midterms as sort of a trump-lite?

tastes great, less filling, beats democrats? not too far, but not too close, goldilocks moment? tom: but this is exactly the question i was going to ask you, open up saying what kind of democrat won. what kind republican w;on? is this the trumpian party or something new? joe: it is something kind of in between. you have to remember, new jersey and virginia were pre-different races. in virginia, where i live, right across the potomac river from washington, d.c., it really came down to cultural issues. we spent time hearing about critical race theory, gender assignment in bathrooms, it wasn't the old " is the economy stupid in covid?" we were talking about different issues and donald trump was offering full throated endorsement of glenn youngkin who never appeared with him. he was very careful about the way he used that support. tom: you are a student of the

trends of this nation as well and i want to talk about mayor wu, a harvard graduate who started out basically with nothing. she is going to wander over to emerson street, and she is going to have a cold one in tom english's cottage. is that feasible? > it is not the boston that you are used to. it is not even one that i am entirely used to. this is a city that has changed. her challenger lost pretty badly in the selection. she was apparently the clone of marty wass. but imagine michelle wu, a 36-year-old making history in this race. it is the first time in 100 years white irishmen isn't in. tom: i can't state enough have this is a microcosm of what is happening to this nation region to region, city to city.

we jonathan: have got to say thank you. let's catch up soon. tom, there is so much to talk about. i think what we need to focus on , to see have a spring in his step? tom: i think he has got you. the three of us to darken the door of tom english's cottage. >> i want to start keeping track of how many we've got. jonathan: can you imagine if we can keep track on tour? let alone on the studio. good morning, francine. francine: i am delighted to be here. a little bit quieter. i know there's a lot of news -- noise behind me. it is a finance day, we also

heard from fed chair young moments ago. i am delighted to be joined by the astrazeneca cheap office -- executive officer to talk about sustainability. thank you so much for joining us today. first of all, a little bit counterintuitive. it is counterintuitive to look at the medicine industry and think what you can do. is it all about drug disposal? how much do you think they really have? >> thank you for having me. i think the pharmaceutical industry and the health care sector as a whole can make a big impact. the health care center is quite substantial. we can, as companies, work on all emissions. we are doing this as a company.

importantly, we can work to really make sure we reduce carbon emissions across the entire sector. >> how do you dispose of it? in a safe way that is not damaging to the environment. >> a lot of work has been done on this, too. a number of companies are really looking at how do we actually recycle or dispose of our packaging, other medicines, and recycle in an environmentally-friendly manner? are reinvigorating? >> it is very energizing. i can sense the momentum is

growing. not only governments are really making commitments and i know that we would always like to hear better, stronger commitments, dotted those in the right direction. >> speaking of commitments, what is the commitment to vaccines? >> argumentative vaccines is to bring this vaccine to as many people as possible around the world. we are very proud of this. this vaccine is making a huge difference in many countries around the world. >> what do you make of the new u.s. pricing that seems to penalize some of the smaller drug developments? >> it was clear that something has to be done in the united

states throughout patients get access to their medicine. we really wait on this pozo to enforce a $2000 cap every year. we also understand that something has to be done and it is a negotiation between industry and all the stakeholders. i think we have to do this without destroying innovation, which has been in the u.s. to the last couple of years. the description going on today is really getting there, actually. >> they also removed incentives to test kits. what do you make of that? to test children. >> this, i'm not aware of, i'm sorry about this. the discussion and the decision that has been communicated overnight is really balancing

quite well reducing price, negotiating the price of some drugs, but at the same time, protecting innovation. >> the pandemic has really put held at the forefront. as you are dealing with the pandemic, it will not incentivize other companies, health care companies 2d carbonized. -- to d carbonize. >> the sustainable initiatives launched, as-e, an industry, wee working together to reduce our carbon emissions in an accelerated manner. it is really quite exciting to see the pharmaceutical companies coming together to work with our suppliers and other health care assistance around the world so

collectively, we can really reduce the footprint. >> thanks so much for joining us. a little bit quieter, because the next primary has just started. this is bloomberg. ♪

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jonathan: what a moment from this economy, let's talk about it. four day winning streak, all-time highs on the equity market in america. we just had a 7% move from the month of october and when you speak to equity strategist, there are some people who believe it is not what we are getting from washington, is what we are not getting from washington. i am talking about a higher corporate tax rate. that's why this swing overnight across this country in places like virginia and new jersey, that is why for a lot of people if senator manchin gets a little more leverage, is that a little bit more fuel for this equity market?

tom: you make a good point about the corporate tax that we have got to have a moment of silence for the crew that said barbell 8, 9 months ago into thundering silence who said you have got to be inditex. jonathan:jonathan: if you sit on the nasdaq, you are doing ok. alternate close. it has been a benefit, hasn't it? get to the bond markets. since the fed last met, the s&p 500 is up 5%. we've more than double on a two year. we came back a little bit yesterday, just softening up a little bit. that is what it is about. the long game, the tapering of qe. i can hear how excited you are. at the front end, it is about the degree of pushback we get and the full forward we have had

over the last month. tom: you and i are going to be in the presser in the bottom line is the bond screen you are showing on television and radio to where it was x number of weeks ago, i'm sorry, this is a chairman that has managed the markets toward stasis. jonathan: let's see, tom. have you pivot away from the keyword without making people think you are enforcing rate hike crises right now? tom: you invent a new word. jonathan: what is the new word? and finished. get in the commodity market. opec-plus. a message just the other week. why does jonathan ferro keep coming off tom keene. oumci read it and i thought, re?

surely, it is the other way around. > what has changed seriously is the linkage of hydrocarbons into the soft commodities. i'm sorry for the politicians that really matter. >> politically speaking, isn't it interesting that the president comes back from glascow after having met with his own party on getting bills passed and at the same time he is not talking about i may change. tom: should i interrupt? you're right, john. jonathan: that is where the focus is. tom: joining us now, eric friedman joins us, always some wisdom in his research. eric, is the glass half-full and then you have a tendency in your modeling to say up and higher where you raise your estimates out a year, or even have three years? >> tom, good morning.

we do think the glass is half-full and we are very optimistic. we are going to be predominantly based on earnings. that sends a story i know you have covered so well as a team. we started the year at $160. now we are north of $200. we actually think we will get even $230 next year. our viewpoint is that it is a glass half-full environment. the first quarter of next year, everyone knows there is a big basis. the question for us is whether the market will actually sell up starting in march, april of next year. tom: intermediate microeconomics course where everybody including me goes down in flames. it is about the word ambiguity. when the rate rises off of inflation flipped the equity discussion from optimism and resiliency over to a challenge.

>> that was a tough class for me too, tom. if you look at the rate we are looking at for the 10 year, we are at 185. north of that, we have some concerns about not just equities, but also real estate in particular. we would say that the ambiguity really kicks in if we see faster acceleration of rate hikes. one of the things we will be looking port and a is that there is a walked back of those expectations. the ambiguity really kicks in if we see that terminal level of rates go up or if we see the fed moving more abruptly, which we think is aggressively priced in. lisa: in other words, if jay powell does not push back against market pricing, you think there could be a material move in markets? >> we do.

we think there is a 50%. basically, back into rate expectations. there is a 50-50 shot according to the markets that the federal rates in june, that is likely before the federal stock tapering. there has to be some signal now we are not going to see a rate change until the taper ends, or at least more clarity on what the timeframe will look like. that confusion, and we think that is accompanied by both the ecb, but we have heard out of the nbc, what we have read adam australia, that could set up the coverage to go up higher and faster. lisa: please elaborate. you are saying that perhaps this could cause a serious yield curve steepening if the market is not price for it? is that the idea? >> you have heard a lot of jawboning from australia, the

u.k., the last couple days. if central bankers don't say, wait a minute, we get in, there are challenges with demographics, there are challenges with productivity. we are really not going to raise interest rates very quickly. the total value of those rates will be fairly shallow. if there is language besides that, markets are not priced in it. the fed is going to actually move a bit more quickly. we don't think that is being totally factored in right now. lisa: these think that credit is the most vulnerable, or equities will see a similar type of selloff portion it to what we might see in credit? >> equities are probably feeling at the most. then, credit. i also think you have to be fairly specific on sectors.

we are bullish, but we are concerned about what estimated real look like. if you look at corporate footprints, people are thinking in the next year, year-and-a-half, that chapter has not been written yet. tom: what is your terminal value or justification timeline to own the highflying tax with multiples of 30, 40? i saw one that makes money at 60 multiple. how far out does a pro like you rationalize that to rationalize ownership? >> really three or four years at the current level, that is the level. the highflying, no-buyback set

of companies. unfortunately, with a negative real yield of -1.005, you are allowed to do that in this environment. i do think that if you do see that in real yields, even flat, you can't get away with for years. we do think that is sustainable low-rate environment is going to be tested over the next six months. we and others are going to really have to rationalize. certainly more attractive than those elongated tech valuations. jonathan: how has your view of fiscal policy involved in the

last couple of months? >> we are like everyone else in fiscal right now. look at what happened in virginia last night. we would expect there to be a rate on taxes. our s&p model is really harmed by higher corporate taxes to the tuna of a multiple and a half lower it was the exact site. that is the biggest we are paying attention to right now. lisa: frankly, how much does the win that we saw in virginia affect this position? how much does that actually gives some sort of booth to equities going forward? jonathan: you have to think senator manchin wakes up this morning with a spring in his step. tom: he wins everything. based on thed2ú wins, these cane

80 your syncretic and certain levels. however, there is a pretty big message being sent right now. jonathan: i wonder if it quits the wings of the extremes in both parties. >> let me give you just one thing. i don't have exact details in front of me. that is the district attorney races in manhattan, new york city, and out at long island in two counties, there can't be any final decision. but it is stunning how the gop has done in those important races. jonathan: staying on top of that story for you, and more importantly for this program, what does it mean for policy in washington? your equity market all-time highs into wednesday from new york city. this is bloomberg. ♪ >> and virginia, republican brian youngkin has sent

democrats a wake-up call. 8bhe returned some suburban independent voters to the republican side. and democrats open to keep control of congress next year. and new york democrat eric adams has been elected mayor. adams will immediately have to grapple with covid response, widespread any quality and safety issues. younger children across the u.s. are now eligible to receive the pfizer coronavirus vaccine. the head of the cdc has granted the final clearance needed for the shots to begin. that ushers in a new phase in the u.s. pandemic response. zillow is shutting down its home-flipping business.

in will also reduce its workforce by 25%. that decision comes after the pricing algorithm -- across the u.s.. this is bloomberg. jonathan: alongside tom keene and lisa abramowicz, and the bond market, 1.5296. yields lower by a couple of basis points q. week a really important political shift overnight that we need to discuss and the federal reserve decision coming up a little bit later this afternoon. another important story over and glasgow, scotland. let's head over to catch up with

francine. francine: thank you so much for that. i'm delighted to be joined by the president of costa rica, president alvarado to talk a little bit about his country and what can be done to save the planet. thanks so much for joining us right here on bloomberg surveillance. nearly a quarter of your landmasses under some sort of conservation. you're doing extremely well in terms of energy production. the big concern is transportation. about 50% of your emissions come from transportation that is still dirty. how can you make it cleaner? >> it is a pleasure being with you and bloomberg. well, it is true that our main footprint comes from transportation. our electric grid, the electricity we produce is 99.5% renewable. so our great opportunities to electrify our transportation.

so far what we have done, we have increased the number of electric vehicles in costa rica. we have a tax relief on electric vehicles and also we multiply the stations to charge vehicles so you can go all across the country. we are building an electric train throughout the main city. it is also an electric train from clean electricity's. >> what kind of timeline can we see? what is selling? what do people want to buy? >> are timeline launched by february 2019. we were the first to launch our plan, but by 2030, we have to see a strong low risk in the electrification of our transportation to dramatically reduce our carbon footprint.

we are not only targeted to private vehicles, but also public transportation. >> are you pushing for some kind of carbon market? obviously, that will happen very quickly. >> that is one of the big discussions. ;j)ó■yes, we are pushing for th, but i think one of the great discussions has to do with trusting the developing world that we are going to implement the measures and also trust from the developer that they are going to commit finance both public and private. we have seen advancements. >> have you seen enough? >> not yet. >> when will we see it, and how much pressure are you putting on some developing countries?

>> we are being very open. whenever i have addressed the floor, i have been very open and frank. because, you see, there is the discussion that developing countries are too risky. here, the only risk i see is that if we don't act, there won't be any planet anymore. i don't see any risk higher than that one. risk is a matter of time and framing. >> do you feel cheated by some of the top emitters? > i think we need to go further in a commitment. i am confident because as humanity, i am optimistic. >> through our policies like the high ambition coalition pushing to preserve 30% of oceans and 30% of land, so far, we have

gathered the support of $5 billion through philanthropy. .)yscolombia, ecuador, panama ad costa rica together announced the protection of our oceans area which is going to be one of the largest supported by philanthropy. >> a conversation with the president of costa rica. when you look at them of the thing that is been on the table, and what more can be done, costa rica is an open economy. the pandemic and covid-19 are not 100% under control. >> that is one of the great risks. in our case, we have for the objective population, we have more than 80%, 86% of the population with at least one

dose. the fact that africa has just 5% of people vaccinated is a great risk not for africa, but for the rest of the world. we need to tackle that because a new variant can take us to the beginning. we need to tackle that. we have seen an increase in air fiscal deficits because we have to increase expenditure to tackle the pandemic. also increase expenditure to tackle climate change. demand governments to invest in emergencies, for example. and yet the same time, we have seen a decrease on the taxes we collect. this fiscal deficits are a new risk that we face. we are facing a debt risk throughout the region. >> is it nice being back here, you studied here.

>> the only thing i didn't miss is how cold it is. >> in new york, i imagine it is warmer. here it is pretty cold, even in the center. jonathan: francine, i do not miss the weather. i miss you, i do not miss the weather. looking forward to catching up a little bit later this morning. i'm very sensitive today. tom: jon. for our audience worldwide and across america, one of the difference between edinboro and glasgow? lisa: is this a joke? jonathan: culturally? i have never been, so i can't tell you. i'm not walking into this trap. tom: your english. jonathan: that's very english of me. do you want to move on? tom: director of johns hopkins center for global emergency care.

we have got compressed time today. i want to be very straightforward. are we going to see further lockdowns in jon ferro's england, or in scotland, or frankly in asia as well? are we still in lockdown mode? >> the new delta plus. has not been named a varied of concern. we think it may dilute out. i don't think we are going to see peter lockdowns. tom: if we are not going to see future lockdowns, there is some optimism. obviously, the right direction. >> they told me a lot about this concept of herd immunity. you think we are close. 60%-80% of individuals need to be vaccinated for herd immunity.

over 60% have been fully immunized. however, there is a variant, and vaccines don't stop transmission of the virus. it is unclear when we are going to be in the all clear. maybe this is our new normal but it will be manageable as we move forward. >> a lot of people are saying that in china, they are toying residents to prepare for further lockdowns that are severe. they are talking about widespread breakouts of 93 people which would be basically a blip on the train when it comes to many other nations. how much is this an aberration in the world but is moving on verses, perhaps, an indication of something worse that will flareup over the winter? >> i think there is a lot of fear and a lot of lessons learned where they did not

lockdown quickly enough. there is a caution here which is expected and necessary. our children are finally getting vaccinated. next scene rates are high, and universal masking is now broadly available, which we knows decreases transmission of the virus. again, i am not convinced we're going to get back to where we were a year ago. lisa: we just had election day in the united states in one of the big issues for mass mandates keep coming up. when do we move beyond this being a political hot button issue and something more in the scientific realm? >> i wish we had moved to that about a year ago. this is never meant to be a political issue. the challenge is in the health care setting we have to protect vulnerable individuals.

health care workers are still masking up the goddess of their coded status or vaccine status. i don't know if universal masking will actually go away. i think in a high-risk situation where there are certain situations where you do need to mask, it will likely need prevalent. we are just trying to keep everything safe. jonathan: thank you, always great to catch up with you. on the political issues, a story from the washington post right now, this paragraph reads as follows. senior democrats are expending a new minimum tax on upper income households exchange for appealing a limit on state and local tax adoptions created by the 17 republican tax law. that is according to three people familiar with the negotiations. perhaps this is not finished. the negotiations around taxes are not over.

tom: i would go to senator sanders of vermont to his outraged. you have got to believe that to get senator sanders on board with something like this. how did they do this after the results we are seeing? jonathan: no idea. the wealthy is not as language. find the continued use of that to be interesting. tom: lisa, should we celebrate and promote john's show friday afternoon, the real yield? i think we have to. george servo moments ago with a blistering note. we got it wrong about the fed parlor game, dovish, hawkish and all that. he said look at the real yield, negative 1.00%.

look at the low terminal rate being framed out. jonathan: let's build on that with david who joins us next on this program. tom, lisa, jonathan. we are -1/10 of 1%. heard on radio, seen on tv. this is "bloomberg surveillance."

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>> because they knew the impact on the equity market. >> the labor market picture right now does not scream hike now. >> the fed is not trying to kill the expansion. they are trying to expand it. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: the fed decision hours away. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market just off all-time highs. futures softer by 0.1%. it is all about chairman powell a little bit later. tom: we will have special coverage with some terrific guests lined up.