>> i think the narrative on inflation is a little bit confused. >> you're on your comparisons are difficult to do because we are emerging from this extraordinary period. >> the second derivative is telling you perhaps the peak in inflation is over. >> our viewpoint is that it is a glass half-full environment. >> this is an economy that is still primed for growth. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. the federal reserve yesterday, there was no dissent. at the bank of england, not a

surprise, there is dissent. jonathan: no change on monetary policy, if we can get my microphone activated. 7-2, the vote on interest rates. two dissents. they leave interest rates unchanged. on asset purchases, also some dissent on that. some voting to and asset purchases, but things unchanged. tom: i know you are going to bring in our expert on this from london to -- from london, guy johnson, but guy, bond -- [laughter] jonathan: can we start this again? tom: good morning on radio and television. what is so important here is beneath the surface, we would get more visibility today from governor bailey? jonathan: the guidance is coming from the bank of england that the rate will have to rise over the coming months to meet the target, so what you've got is some dissent in the early part

of this conversation, but ultimately they are setting us up for a rate hike at the bank of england. it is just not happen -- it has just not happened today. tom: we will do the data check real quick. i see sterling cable, 1.7539. jonathan: cable down 0.8%, 0.1580. -- cable down 0.8%, 1.5680. this was their guidance. cable, $1.3587. tom: there's a new word for me, dissipate. it is so british. it will dissipate over time. jonathan: better than transitory? tom: bringing mr. johnson, please. he's better at this than i am.

jonathan: good morning, mr. johnson. what are you noticing from this decision? guy: this feels like they are trying to get the message sorted outcome of the sequencing sorted out. i find it interesting that people like catherine mann, who just joined the monetary policy committee, think we should cut the qe program and then think about where the rates are going. i think it is a sequencing conversation. i think there's also a little bit of pushback in terms of market pricing. it would have been interesting to see how the message would have been received if they had hiked rates, and then basically said what we need to do here is manage the message going forward. we think inflation is going to come back down. within get is going to get back down to target. the message still feels very confused, but they are trying to sorted out. jonathan: catherine mann voting to end qe.

this is expect to end in a month. what do you make of that? that we would have a vote 7-2 on rates, and an extra vote to end qe early by a month. guy: i think this is about getting the ducks in order because you could find yourself in a situation where you are hiking rates, but continuing with qe. do you want to do that, or do with the other way around? the fed messaging is very clear, we will do the taper and then we are going to raise rates. at the moment you start papering, rates go higher. so maybe there needs to be a more clearly defined message on the sequencing of how the qe ends, the tapering happens, and then we get onto the right narrative. tom: this is what it is about. i thought this would be a snooze, a sleeper. it is not. it is almost the idea of catherine mann as fed chair.

think about that. this is an m.i.t. professor who is absolutely definitive with an international economics. she has done the rarest of rare. not once on trade deficits i and their sustainability within our system, but also on the dysfunction between america and china. she is hugely acclaimed and academic. jonathan: i just want to line up december. on december 15, you will have a federal reserve decision. it might not be too consequential. on the 16th you will have the ecb with a big decision to make about asset purchases, and the bank of england then as well. i think you have laid it out perfectly, and i say that is a good friend of yours as well. this is the backend of the sequencing are you do you think september 16 is looking pretty good? guy: that is certainly the message i am getting from this. the implication from what they are saying is that rates are still going higher. where does not doing it this month. i think there is communication

as a subtext to the lack of a rate hike today. it is about trying to manage the message for the markets. it is about trying to get everything lined up. i think that is what they are trying to communicate here. there's clearly a design from the bank of england. others have been at the forefront of it. i think they are just to get every thing lined up, and it feels like a rate hike is coming. we will go from 0.1 to 25 basis points. i think it becomes more of a clear-cut decision when we get to december. rumor also, we get more labor market data by then as well. the end of the furlough scheme, we are starting to understand the implications of that. they will have a little more information to be able to manage that labor market story. tom: guy johnson, thank you. i thought this would be boring. i was totally wrong. two standard deviations on sterling come on cable, is right

where we are, 1.3549. jonathan: sterling has been confusing over the last couple of months. i would look to the front end of the guild curve right now, where two-year yields are coming in seven basis points to about 60 basis points. because they have ducked one, there will be people asking will they duck december as well. you are conditioned by your experience as an individual central bank. they flirt with things like this and never quite follow through. did we really set ourselves up for a move in december? that will be the conversation through this morning and the next month. tom: steve chiavarone, thrilled he could join us this morning. have you guys changed your asset allocation or wisdom across the capitalization view, from large-cap, of federated heritage, to small-cap and the juggernaut we are on right now? has there been a federated shift? steve: we have been pretty

consistent, being overweight cyclicals amongst the large caps, being neutral to overweight small caps, having some preference for international, and quite frankly, there's nothing i heard yesterday from the federal reserve that would change our thinking. we think you still have an environment where his is risk on for the time being. lisa: is there a risk as we talk about sequencing that all of the central banks in the developed world pushback rate hiking and tightening policy until next year, until the data becomes indisputable, that we get a sort of collective tightening that really puts the brakes on a rally? steve: yes, i think that is absolutely a risk. you were talking about the boe and sequencing. a very rare move, the americans were more subtle than the british, but i think we are doing exactly the same thing. the two takeaways from the fed work humility. they recognized they had a misread on inflation.

and then optionality. by saying they would take the opportunity to vary the speed of tapering come january, i think they are saying that inflation continues to come in hot, and we think they are misreading the labor market here, that they would speed up that pace. why would they do that? so that they can start rate hikes earlier. i thought it was very telling when chair powell had an opportunity to push back harder against where the market was pricing and rate hikes for next year and he didn't. admitting that we could get to full employment by the middle of next year suggests the market is not crazy thinking about rate hike number one in june or july. lisa: i am looking at the fact that two-year yields for the u.s. are moving lower in sympathy with two-year gilt yields, and i am wondering how much of the central bank world is interconnected. in other words, the rate market will move collectively or it won't move at all. how much is that the dynamic we are in right now for the developed world? steve: i think it makes sense

because the inflation impulses are similar. they certainly are connected to what is going on with the pandemic, the supply chain shortages that are a part of that. i think in the united states, the labor market is tighter than it is in other parts of the world and will remain so, but the drivers are very similar. so that is not i'm expected. tom: in the perfection of federated hermes, there's going to be no windowdressing. but to the end of the year, there is a buy side swept. how big is the sweat this year? steve: i think folks have been on the wrong side of a lot of trades, and i think you are going to have momentum into the end of the year. my take from the fed is equities are going to really like the patient's message. i think in terms of washington, we defanged potentially some of the most disruptive policy options, so you could have a scenario kind of like 2013 come over you get a real strong finish at the end of the year, and it is hard to stay

constructive as we have been because it is hard not to see the risks. there are folks in our camp that say fundamentals are positive. respond to bad news if it happens. don't anticipate it and get caught offsides. you are fine. if you have been a little bit too reactive to early, you're going to be on the wrong side of something i think is going to be quite positive and you are going to try to catch up. lisa: what is the bad news you would respond to? steve: i think you've got to look at what policy comes out of washington. i think what it really comes down to is we are in a heightened risk of dual policy error, either on the monetary policy side or the fiscal policy side. we have never spent money like this after an economy is at full capacity. we have never been this reactionary to inflation rather than participate tory -- rather than anticipatory.

so we are in uncharted waters in both monetary and fiscal policy. jonathan: steve, thank you for your humble opinion on this market. steve chiavarone of federated hermes. that is the area we are in comedy wide range of outcomes through next year. we had some great interviews so far this week. with frances donald, they called it the anti-forecast for next year. i will be interested to see what her research looks like into next year. lisa: what of risks, to use federal reserve language? -- what is the balance of risks, to use federal reserve language? i do wonder whether differing rate hikes means fewer of them or just simply concentrating the more with the data is more clear. jonathan: the growth outlook has weakened since august on supply issues. adam posen talked about the lack of flexibility around some of those issues, particularly in the u.k. but more broadly, if these

central banks make a move, are they making a move into a wickard economy -- into a weaker economy? weaker is relative because we are expecting a 4% economy in the u.s. next year and 5% to 6% in the u.k. tom: that is out the window. we don't know where the x axis is. i really have trouble right now with the fed parlor game. i am focused on what corporations are doing. it is by vaccination. jonathan: the earning -- it is buyback nation. jonathan: the earnings are looking good, too. all-time highs in america this thursday morning. good morning. this is bloomberg. ♪

>> the federal reserve is making a choice to try to find the maximum level of employment,

consistent with inflation. by doing that, there is a risk they are going to be late. the key is not whether the inflation pressures are transitory or not, but does it get into wages and into inclusion expectations. jonathan: bill dudley, bloomberg opinion columnist, senior advisor to bloomberg economics. are you in charge of that, tom? keep it down. just turn it off for the rest of the morning. [laughter] yields lower by a basis points on tends to 1.5 -- on tens to 1.57%. they teed us up for a move today. it was the chief economist who called this a live meeting. and then only to voted for a rate hike -- only two voted for

a rate hike, 7-2. so on to december. tom: the larger ferro clan remembers the 1920's and 1930's, and it was horrific. this folds into wage, and really forward into next year, that is going to be the number one thing, wage growth and inflation-adjusted wage growth. jonathan: and is the price pressure getting broader, not narrower? you can speak to people like mama delorean who would say yes, it has got -- like mohamed el-erian who would say yes, it has gotten broader, and it has gotten persistent. tom: i come up with big things like chart of the year and all this other stuff. i am just going to say the theme next year is going to be real wage growth. ira jersey with us, on the

shortlist to take over the tots. they didn't go with jersey, but it was considered at one point. on the bond market, what caught your attention yesterday that changed your short-term paper -- your short-term taper view? ira: not much because the taper happened as we thought, and jay powell was more dovish maybe then we expect it if they were worried about inflation. chair powell tried to stay really balanced, but i think what you saw this morning with the bank of england basically saying this was a live meeting and then not hiking yet, although kudos to bloomberg economics' ed hansen, who called it that they were going to hike in december and not now, basically you still have this push and pull where economies aren't good, and you are talking about real wages. real growth is slowing in large

part because of the higher inflationary pressures, so the question is will the fed and other central banks start hiking to slow the economy because supply chain pressures are forcing certain things higher? president dudley is right that if it is going to feed into wages, if it is going to force companies and individuals to demand higher prices from their consumers, that is still an open question and will be into the second quarter of next year. tom: second-quarter of next year. jon, pick it up here. i think this is so important, these nuances, given the liquidity in the declining savings rate, are absolutely critical. jonathan: he gave us the timeline, and that is what is fresh about yesterday. the second quarter or third quarter next year. what a fine marker, that we have moved the goal post so much.

vice chair rich clarida was on this program and talked about the turning point of the year and was asked, how will we know if you are wrong? he said we will find out around the turn of the year. governor waller was talking about the next couple of months as a threshold, a benchmark to really rethink the transitory story. here we are, and is up to the fed to do what the fed does, but here we are with the fed saying we'll see you in the middle of next year. lisa: i am curious what the message is that the market is sending. i wonder if you can comment on this, particularly with respect to real yields. the idea that it is because of the savings rate, because so much liquidity has been pumped into the market, because of an accommodative fed, or because the market believes there will be slowing growth, a disinflationary environment that is going to be the near term.

ira: one of the big ones is that the federal reserve, when it was doing quantitative easing, and will be for the next six months, they are buying more than 100% of supply. meanwhile, you have a lot of people who are worried that inflation is going to keep on rising. when you look at flows into tips , mutual funds, and etf's, that is completely overblown on the tips market. that is one of the reason why you have real yields as low as they are, -1% for 10 year real yields. it is not completely unprecedented. that happened a few years ago. but the fact that they have stayed there for such a long period of time i think is endemic of the idea that people want inflation protection, and they will almost pay anything in order to get it, even if it is at unreasonable prices. so you have to have a lot of conviction that you think that inflation is going to be high

for a long period of time in order to buy a lot of these treasury inflation products. lisa: this is a fascinating and super important point, especially if the federal reserve potentially gets deeper into its tapering program. if there comes a point when they are buying less than the treasury is selling, do we get a reckoning? what does that reckoning look like? ira: are models suggest fair value for tenure tips yields is more like -50 basis points -- for 10 year tips yields is more like -50 basis points. during that time, if real yields rise 50-ish basis points, then the question is, do you see nominal yields rise and inflation expectations stay the same? or do inflation expectations come down? one would expect if the fed gets more hawkish, and as we get closer to an actual interest rate increase, whether it is september next year, or even if it is december, but as you get closer to the fed left off, i

suspect you wind up getting inflation expectations, particularly long-term inflation expectations, start to come down. you are still in an environment where real yield is up, inflation expectations down. maybe nominal treasuries don't move a lot in that environment. jonathan: ira, great to catch up. fantastic. fascinating stuff on this bond market. in about five minutes, you will hear from governor bailey in a news conference over at the bank of england. our reporter in the u.k. asking whether the unreliable boyfriend is back on threadneedle street. if they want to hold your hand and guide you towards doing that, to get the sequencing right, and guy explained this really well, qe ends at the end of the year. if you want to hike interest rates, it makes sense to bind that down first, then hike interest rates, make sure the credibility is intact. the problem is we have been conditioned by the bank of england perhaps bluffing in the past and not following through.

that might explain the front end of the curve this morning. tom: i thought this was a snooze fest, and i was totally wrong. jonathan: it is a little more interesting. ed yardeni is going to join us soon, yardeni research. good morning to you all. this is bloomberg. ♪

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jonathan: live from new york city for our audience worldwide on tv, on radio, alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures up about seven points, advancing little more than a 10th of 1%. five-day winning streak into thursday on the s&p, a day on the nasdaq. we have some data. let's bring in michael mckee. michael: let's look at initial jobless claims. 269,000, the trend continues. we are looking at where we were pre-pandemic. we were hoping we would see productivity increases as companies invest to get around the fact we do not have enough workers. productivity down 5%. we will get some revisions.

a 5% decline. we had seen a 2.1% increase in the prior quarter. the unit labor cost issue is obviously going to be higher. it is 8.3% up, that is more than the 7% forecast and certainly more than the 1.3%. we did see it cost employers a lot more to bring people back. the trade balance comes in at $80.9 billion. that is more than the $72 billion revised number for the prior month. this is for september. we knew this would happen because the advanced report on trade had come in higher. it suggests third-quarter growth was even weaker than it came out to be. it looks like in this case a balanced picture in the third quarter with good news on the labor market and bad news for

employers and we knew the economy had slumped. jonathan: the right kind of downside surprise on claims. 200 69,000 on jobless claims in america. we are down two basis points on two's. on tens to 1.57. cable lower off the back of the bank of england rate decision. sterling a lot weaker. we going to the bank of england news conference in the next couple of seconds. tom: we will have to see what the headlines are. michael mckee, we have to talk about unit labor cost. i did a quick moving average study. maybe we saw it in 2013, maple we saw it in early 2000 or even the 1990's. if nominal unit labor costs are there, what does it mean for policy in washington? michael: this is an answer i've

given lots of times. we knew there would be an immediate jump because people were coming back to work and we have seen the anecdotal reports of how everybody has to offer more money to try to find them or ease. the unit labor costs continue to rise once people get back on the payrolls. that will mean the big issue in the real question for the fed. i want to point out one thing on trade. 21% increase in imports. we have been talking about supply chain problems. the white house put out a report that suggested we are processing more supplies than ever before. demand is so strong that they cannot keep up. it is not that we have fallen off. you can see that in the import numbers. tom: this is very important. michael mckee, thank you so much. congratulations on bringing the chairman to silence. ed yardeni joins us right now.

i want to get to the inflation story. let's go back to the 1970's or 1960's playbook. there is the cost, there is the push, there is demand. what kind of inflation are we enjoying? ed: it does have some similarities with the 1970's. in the 1970's everything that could go wrong seem to to go wrong. we crossed the bold window at the dollar took a dive which cost commodity prices to store, food went up. there was an issue with anchovies on the puzder of peru which had an impact on soybean prices. do not ask me how that worked, but it did. then we had two oil shocks and cost-of-living adjustments and all of those shocks went through into wages. we do not have cost-of-living adjustments anymore but we have the labor movement in control

more than ever before. it is not a movement. it is a shortage of workers. wages are going up and the supply disruption explains why productivity dived in the third quarter. i think companies are responding anecdotally to the labor shortage. we are going to see a terminus amount of automation. tom: to the mortals at the fed risk a policy error? ed: they are mortals, so we have to start with that insight which you correctly point out. there is a view which i share that they are behind the curve, contrary to what the fed chair has been saying. the economy has done awfully well, certainly in the first half of the year in the second half, the supply disruptions we do not want to see, the pressure of inflation cycle into wages, i think they are rate but my job

is not to tell us what to do come it is to anticipate what they are going to do and what they are going to do is taper and they will probably stick with it through the middle of next year. i will not be surprised if they raise the inflation target to 3% because there'll be an even more progressive fit year the way i see it. lisa: can you elaborate on that. that is a point adam posen has made. they will not fight higher inflation on a base level but embrace it. what will trigger that shift in mentality? ed: they will have to concede inflation is not transitory but it is persistent. right now they are saying the supply chain disruptions are persistent. what does that mean? it means inflationary pressures will stay persistent. i think much will depend on the fed chair. i do not think it will be jay powell.

i think it is likely to be lael brainard. openings would get filled by more progressive people. the fed will become more politicized and more progressive and more inclined to say to percent is too low, 3% is fine. if it is above 3% we can live with it. they did not want to raise interest rates more than they have to. lisa: you mentioned the 1970's, which is a trigger for a lot of people watching the bond market. i wonder where the analogy start and where they drop off, especially if you do have a more dovish fed that is more willing to allow inflation to hover around 3%. are we heading into a period where inflation could get away from the fed or do you think the fed could keep control, albee it -- albeit at a higher rate. ed: i am actually an optimist. i do not think this would be the 1970's all over again.

productivity collapsed during the 1970's. i do not think that is where we are heading. i think productivity is going to make a comeback and that is it important offset to wages going up faster than prices. you mentioned will be putting a lot of weight on real wages, but we want to look at real wages relative to productivity. the only way real wages can go up is of productivity makes a comeback. if it does not then we'll have a weight roi spiral which is what the 1970's was all about. tom: how do we calculate that and how do we guess that? is that a first half 22 exercise or are we that data dependent on rising wages? ed: at this point the productivity story is anecdotal. we can see companies are scrambling to increase their productivity with automation,

with artificial intelligence. the good news is technology is there and it is relatively cheap to make that happen. i do not think we will have to wait all that long. i think for the second half of next year we will see inflationary pressures abate, partly because of productivity and partly because supply chain disruptions get ameliorated and that is a big issue. that is a big issue, the supply chain disruptions. i think we will have more cars by the second half of next year and more supply. jonathan: the bond vigilantes stay in hibernation? ed: it is hard to have much of an impact when the fed has been rigging the bond market. they've been so aggressive in that market it is hard to call it a market. it is not a free market, certainly. by sometime next year we will see 2% on the 10 year.

we also have to factor in demographic factors. in the 1970's we had a tremendous influx of baby-boom workers. now they were tiring and we are seeing the growth rate in the labor force is those to zero. the only way the economy will grow on a trend basis is if productivity makes a comeback and i am optimistic. jonathan: ed yardeni, the author of the phrase bond vigilantes. governor bailey saying recent data reinforces the view that rates need to rise. will be interesting to see what governor bailey has to say once the q&a starts. tom: jordan rochester publishes a blistering note on the delay, the move to december how many moves out his step towards -- you mentioned 6% growth. i believe mr. rochester is

suggesting lesser growth. jonathan: growth expectations provides down. credit card spending is sideways, and real rates in his mind pointed to 1.3450. i miss being in the room for the bank of england. good times. tom: i thought you did a great time in front of the ecb in frankfurt. jonathan: that was colder. tom: and the difference is in london the lunches an hour and a half in frankfurt the lunches three howard. jonathan: in london they make you stand outside. you hit report on the bank of england and people would throw stuff at you. good times. it is not that rough. emily rowland joins me in about 20 units from john hancock. why she thinks you're by should be towards america. from new york, this is

bloomberg. ritika: speaker nancy pelosi is pushing the house towards a vote on president biden's economic agenda but a few key issues are still unresolved such as family leave, immigration, and rolling back limits to state and local tax deductions. the measure does not have the full support of senate democrats. the u.k. has rounded up about 20 nations to stop funding foreign fossil fuel products. the deal has a couple of key holdouts. the statement will be unveiled today at the u.n. climate toxin glasco -- climate talks in glasgow. macy's shareholders say the company's accelerate its digital transformation. new orian also says macy's should form partnerships and use its partnership -- nintendo has

cut its sales target for the switch gaming console. the japanese company lames semiconductor shortages and logistics bottlenecks. nintendo adjusted its profit outlook, citing currency exchange rates. a hard-line -- john deere is taking a hard-line after workers rejected a second offer. they say the contract they offered is its best and final offer. john deere valves it will not return to the bargaining table. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> if you take a look at gas prices and you take a look at oil prices, that is the

consequence of the refusal of russia or the opec nations to pump more oil. we will see what happens on that score sooner than later. tom: if it is tuesday it must be belgium. i'm sure the president saw the movie years ago. now back to washington and the challenges postelection. the president of the united states. lisa abramowicz, moments ago the president speaks, he gets his act back together after the elections come and this involves 80 million plus employees where i guess we will get some very strict vaccine mandates over 100 employees. lisa: the idea of federal employees happy to get vaccinated. this is an administration tightening the screws. they have been outsourcing some

of the requirements to private corporations. there is no option for just testing. this is a vaccine mandate. you wonder how much this stems from frustration more people are not getting vaccinated. tom: you wonder how that spreads out over private enterprise, the uproar over aaron rodgers and the green bay packers. 100 employee limit any of the green bay packers with 900 employees. lisa: there are options for tests on a weekly basis, but there will be certain vaccines required otherwise among many of the oil use. tom: there it is from the president -- among many of the employees. tom: there is from the president. lisa, what have you seen among the parents where we have this pediatric vaccine? lisa: some parents say we want to wait and see what the data shows. the other parents say let's go. when can we go?

tom: an unfair question to ellen wald, senior fellow at atlantic council joining us. the spread has narrowed between west texas intermediate and brent crude. do you apply that brent will widen out higher or will west texas intermediate comeback lower? ellen: one of the interesting things is wti has been doing better recently with foreign buyers because it was priced a bit lower, so we saw an increase in exports from the u.s. to china and other countries. if that spread collapses, the u.s. benchmark may become less interesting to foreign buyers and that may help gasoline prices at home. tom: it may help at home but are

we at attention point on gasoline? i see it at aaa unleaded. the moving average back at $100 a barrel is $3.58 a barrel -- a gallon, or is this time different? ellen: it seems prices are starting to calm down. we're not seeing as many increases as we were previously. i think we are coming to an equilibrium in terms of gasoline prices. we fought many of gasoline and storms. the lid is numbers are showing crude and stores are increasing. that is help push the numbers down. if we have a big demand over the thanksgiving holiday, that could certainly cause prices to rise. lisa: honestly, the idea that biden is planning to release some of the stores in the strategic reserve, how dramatic of a response with that be?

ellen: i do not think it would produce quite as dramatic as a response as he is his administration are hoping for. we have opec looking to increase production by 400,000 barrels a day starting in december, plus you have global consumption at about 100 million barrels a day, which is basically where it was pre-pandemic. the u.s. could do a release, but refineries are running much at capacity. we had some declines in the total amount of capacity of our refining in the pre-pandemic days. there is a bigger spr release. that is not necessarily going to translate into more gasoline and lower prices for the long-term. we could see a brief push down. in general unless it is repeated we do not think it will help that much in the long term. lisa: there is also a question

about what president biden's stance has been towards the shale industry? is there anything identifiable that the biden administration could do to try to prompt more pumping in the shale patch or whether that is appropriate in this type of situation? ellen: it is definitely a factor in higher oil prices. biden wants to blame russia and opec for failing to produce more , but they are increasing production at a pretty good clip compared to the u.s. oil industry, which is not increasing production at nearly that clip. we heard there was 11.5 million barrels a day produced last week in the u.s.. not enough of an increase to bring oil prices down. the biden administration has made a lot of people very wary about increasing production. it is not just about investment at the desire for capital discipline.

it is a concern of regulations and the methane rules announced earlier this week are not helping things. i think we will continue to see a slight increase upward but in the biden administration says we want to encourage investment in this and we will help the situation, we will do what we can to assist in more production , i do not see a major increase in production happening anytime soon. tom: thank you so much. with the atlantic council on oil. there are moments where you just stop and i did that with the announcement off of dow jones that google will take a $1 billion position in chicago's cma group. -- cme group. they have been sponsors of bloomberg's many times in recent years. this is where you get plowed position by taking an equity ownership. you wonder how does amazon, how

is microsoft, even ibm, how they react to this. lisa: as we move markets to the cloud, what does that mean in terms of the tech giants power? who is in charge. a food fight between microsoft and amazon. how much does this move google into a position other people have discounted them. trading on cme, shares up 5.5%. the more interesting activity is google, you are seeing shares up on the news because people are looking at the potential for the cloud to gain more dominance. tom: it is a start free thursday, but if google could invest -- lisa: i will not start that rumor. tom: is never a dull moment. never forget humility as the chairman mentioned.

i was wrong on bank of england. it was fascinating. stay with us through the day. small caps up. we have a countdown clock to the open on tv. ♪

jonathan: from new york city for our audience worldwide, record high after record high. your equity market up six points , advancing .1%.

the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ jonathan: from new york, we begin with the big issue. chair powell threading the needle. >> power-one company threaded the needle. -- powell and company threaded the needle. >> the fed is exiting. >> this is been so well telegraphed. >> the fed doing a good job at keeping markets calm. >> the fed along with the ecb have tried to hold the ground. >> the chair showed a good about of humility. >> chairman powell walk the fine line pretty well.