out. >> the training wheels are off. liquidity will slowly be drawn away >> through the course of next year. >>this is "bloomberg surveillance" with tom, lisa abramowicz and jonathan ferro. jonathan: from new york city and her audience worldwide, good morning, this is "bloomberg surveillance" live on tv and radio. alongside tom keene and lisa abramowicz, i am jonathan ferro. the fed chair decision could be coming this weekend. tom: come on, jon. i was looking at my phone every five minutes to see what is going on in washington. i would suggest with great respect to the president, he cannot make up his mind. jonathan: the team in washington indicating that might be the case. tom: it is a big decision. maybe we need to review that,

why is this a big decision? not just about monetary policy, but posturing if things get worse. do you go with a proven horse if things get worse or the new girl on the block? lisa: i do wonder at this point how much the biden administration is regretting not doing this earlier because the conversation is not where they wanted to be. it might be four days, which everybody thought with a saw the announcement. you have a problem on your hands. a messaging problem with inflation and a problem as we head toward the debt ceiling. jonathan: i will say this with a smile on my face. some people suggesting maybe senator manchin will be the guy who decides of the next fed chair will be. lisa: can we just call him president manchin at this point? jonathan: the president would

like you to look at bottlenecks at the port and a number of containers sitting at docks in l.a. has declined 29%. the president retweeted a bloomberg story. that is a little bit of good news for the administration. tom: the good news is also home depot, citigroup raising the price group on home depot. that to me is linked to the ports in los angeles. it is all linked into recovering america. over to the united kingdom, the dollar stronger, euro weaker. look at sterling off the inflation statistics. what does it mean? jonathan: maybe a rate hike at the bank of england.

we are frontloading christmas. that is the story. tom: the big story for me is, do you go with the big turkey or two small turkeys? jonathan: are you going with a smoked one this year? tom: know, i am going to a restaurant. [laughter] jonathan: i have done that with you before. we have about two points, no drama. yields unchanged. tom: the euro is drama. jonathan: i am getting there. [laughter] jonathan: having a look at 1.12. a seven-day streak. tom: idiosyncratic. the euro weakness is an elegant chart. it is a 2.4% euro weakness, 63%,

that is an abrupt move. jonathan: i am having a look at 1.12. lisa: tom keene is not always the most predictable. his smoked turkey is terrific. today, 8:30 a.m., housing starts expected to show strength. this goes to the issue of perhaps we are seeing some of the bottlenecks start to ease in the port of los angeles but these are broad-based pressures. how much concern is there and how much does demand -- people struggle to afford things. 10:30, a house committee holding a labor perspectives. how much can a message we are moving toward something better when it comes to alleviating some of these pressures?

consumer sentiment is the lowest since 2011. can we alleviate that at a time when a lot of people say supply chain pressures are getting worse. today, who is not speaking on the federal reserve? the roster of speakers is almost borderline ridiculous. who is not speaking on a day when there is very little they can actually say? will we get any actual words or will it just be noise? jonathan: you get to run the fed? lisa: [laughter] jonathan: what a lineup coming up later. i want to check out crude quickly. keep an eye on what is happening with brent crude. the south china morning post raising the issue of china joining the united states in releasing crude oil reserves.

it was raised in a virtual meeting between president xi and joe biden. tom: the new economy forum of bloomberg, this is something that is put together over the year. i thought what dr. kissinger said is, look, let's shape it up and get diplomatic. jonathan: let's see if we get any follow-through. joining us now to kick off the equity conversation is ben laidler, etoro out of london. ben: november, december, generally the strongest months of the year. here we are in the middle of november, we are up nearly 10% from september. this has been quite frontloaded. we are up 25% for the year.

i think markets are very well supported. i would caution that maybe we will not keep rallying. i think we have already -- i would take a little bit of consolidation. tom: the modest ben laidler. let me make clear, nobody on global wall street called for three digit double return like ben laidler. he is not surprised we are up 25%. we finally get to a single digit reality? ben: i think we will come pretty close to double digits. i think we have only ever seen four straight years in the last 40 or 50 years appeared i think it is doable. expectations are far too low in

the u.s. and globally, 7% or 8% next year. i think you will get double that when all is said and done. gdp growth has doubled long-term averages. a lot of these reopening sectors still have a long way to bounce back. i think valuations will come down, but i think they will stay way higher than long-term averages. bond yields go up but they are still a fraction of previous recoveries. you have the huge tech sector which deserves to have high valuations. lisa: a little bit around the edges given that we have frontloaded the rally. where are you taking consolidation right now? ben: tech would be the obvious place. it has done well. i take a lot of comfort from the

rally. putting back a little bit on tech. the near term story is the growth acceleration we are having. you saw it in the retail sales numbers. you look at the fed, gdp for the fourth quarter. nearly 9% growth. we were at 2% last quarter. really focusing on the cyclicals, the commodities, the segments of the market that are sensitive to this very strong growth recovery we are seeing. the market passed a huge stress test. we were worried about the fed tapering, we were worried about interest rates. we had a big repricing of the fed and markets are yawning.

jonathan: are we looking at a repeat of q1? is that the playbook? ben: it is the reopening stocks, the more cyclical sides of the economy. who has the most sensitively to this growth rebound we are seeing? the numbers are far too low after the fourth quarter. jonathan: the optimism of ben laidler of etoro. thank you for looking ahead to another q1. my question would be as follows, i am with ben, we have seen the three acceleration of the economy, can we get a repeat of q1? tom: i am going to go to the top line, which i would suggest in christmas of 2018 was a top line of ben laidler when he made the call. to me, it is about the top line. we saw it with home depot.

to an extent, we saw it with walmart. target is a mystery. it is about top line boom economy. the atlanta gdp number still unimaginable. jonathan: the issue is we will have the stress test every single quarter for the next several quarters. lisa: the fed has to respond to the ongoing strain you see in the earnings with holding tight. how much to the have to get a little bit more hawkish and how does it unravel the trance? jonathan: how long can they be patient? from new york city, good morning to you all. coming up from the bloomberg new economy forum, we will hear from the prime minister of singapore. from new york city, for our audience worldwide on radio and tv, it is imminent. tom: i still cannot spell it. jonathan: this is bloomberg.

♪ ritika: president biden is still deciding whether to reappoint federal reserve chair powell or replace him. he told reporters to expect an announcement in the next four days. a chairman said there is no doubt the senate will confirm either candidate. inflation and the u.k. is at the highest level in the decade putting pressure on the bank of england to raise interest rates. higher costs for fuel, restaurants and hotels led to adjustment in prices. a secretive government-backed organization -- competing semiconductors.

some tech giants see the metaverse as the next area of growth. the ceo of google. >> the market valuation, our mission is timeless. there is more need for information than ever before. ritika: global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪

>> china needs to play by the rules. a certain amount of aircraft and agricultural products, they are not doing that. they are not living up to their commitments. jonathan: from new york city this morning, good morning. tom keene, lisa abramowicz and jonathan ferro. a stellar retail sales report in america, the conversation about -- inflation, growth is looking good. yields are at 162.84. the euro dollar, 1.13. crude, $79.66. a report from the south china morning post that the u.s. and china has had a conversation about a joint effort to release

crude reserves. no results or follow-through. tom: we will have to see about that huge point in singapore and malaysia or the oil comes around and off the pacific rim. we will hear more about that at the bloomberg economy forum. leading the way in washington, annmarie hordern. everyone is trying to find out when the appointment is. the other parlor game you can do if you are bored with the red sox hot stove lead, you can go to website where they are talking about the estimate of annmarie hordern's christmas shopping. set yourself up for huge disappointment and the ability to raise tax revenues. how tangible is that? annmarie: this comes down to

potentially how much money if you give the irs to really clamp down on making sure everyone, especially this administration, are paying their taxes. what we will expect is the cbo does not match what the white house was telling these moderates and i could make it difficult for the moderates to get on the board and voting for build back better. we heard from the moderates that they do not want to put a red line in the sand with the media. tom: is there any history that politicians pay attention to what bright people of the cbo write and say? annmarie: they do, tom, when it is convenient for them. i think the cbo scores matter a lot when you are on the fence or you know you have to go home and dissent your constituents why you voted for something. with the inflation figures so hot in october, and that is what

the electorate is worried about, the cbo scores are coming at a difficult time for some of the centrist moderate democrats. lisa: cbo estimates are one thing, a balance sheet is something else, and the u.s. balance sheet is looking shaky. they have $369 billion in cash available, the u.s. treasury department has to transfer $118 billion to the highway trust fund by december 15 as per passing this law. how close are we to defaulting? annmarie: janet yellen gave her projections to the congressional leadership. we will get very close potentially to that cliff with the debt ceiling. that is december 15. a few more weeks out from december 3.

experts say it could be anywhere between the middle of december two us far out as the middle of february. this is just another litany of issues added to the list that the democrats need to finish with less than two weeks, technically, of working days. it seems like they will have to work overtime in washington and it will come up to the end of the year with a long list of things that have to get done. with this debt ceiling, one month ago we were in the same position and we had the republicans pave a way, mitch mcconnell allowed 11 republicans to help the democrats get this over the finish line. it is unlikely he will do that again. lisa: is there more cohesion among the democrats now that they passed the bipartisan bill? annmarie: i would say there is not because they are arguing over a number of issues. build back better will be one and you have the national defense legislation. it is a must pass

legislation. you are seeing amendments thrown at that. in the democratic party, issues from the senate and house about what they think should go in the defense bill, including whether or not they should include the china competitive legislation that was passed in the senate in june. jonathan: are you doing a fed special on saturday from outside the white house? annmarie: we have gone from imminent to indecisive. the president said "about" four days, so i'm not sure imminent means four days anymore. friday is going to be the turkey pardon day. tom: you drank the kool-aid in washington. are you kidding me? annmarie: saturday is the president's birthday. i do not expect them to announce the fed on that day. i think it will get punted into

next week. jonathan: thank you. [laughter] tom: do you think we are doing a fed show saturday? jonathan: i am off next week. [laughter] jonathan: i can be on standby for you. lisa: really? tom: that would be great. jonathan: let's have a look at what is happening in turkey. over five years, as recently as 2018, we had a three handle on this currency pair. this is the seventh straight session of a positive move on dollar lire. record weakness on the turkish lira. the turkish president said the following, -- it should decide independently. a lot of people are trying to answer the question. is the central bank independent? tom: what is so important here

is this word pernicious. it is incredibly elegant and persistent. there is a technical breakpoint seven years ago, trade-weighted lira is down 77% in six years. jonathan: unreal. a huge economic experiment taking place with monetary policy. lisa: that is one way to put it. the idea that lowering interest rates will somehow curb inflation. you can defend higher interest rates if inflation creates a better backdrop for your residents. jonathan: dollar lira around 10.50. we break down the data from this weekend last week. this economy read accelerating and yields picking up.

162.84. very, very briefly, the euro dollar with a 1.12 handle, now back up to 1.13. this is "bloomberg surveillance ." ♪

jonathan: live from new york city, for our audience worldwide on tv and radio. equity markets unchain after coming close to all-time highs yesterday. the s&p not down a single point. here is the bond market story. 162.84. restart to have a bigger conversation about rate hikes. the team at td says wait until december 2023. we will keep talking about td and others who think the fed has to remain patient. who hikes first?

will it be the bank of england? the pound against the u.s. dollar. tom keene, the labor market flashing green. will the bank of england hike interest rates in the middle of next month? tom: we will have to see. our interview of the day yesterday, flat out doing -- what did you think of that? let's stop the show for a minute. i thought that was a make or break career call. jonathan: i think it is a big one. it depends on how patient you think the federal reserve will be. whether this chairman will be committed to the framework. whoever the chairperson is. be patient to sit this out. if we wait long enough, the economy will change. can they wait? tom: i go to gdp, which is a

boom economy. target is doing a home depot. there are always some nuances. target with over 400,000 employees, you talk about labor demand. home depot, what i would really go here is can anyone compete with amazon? the digital experiment at target is organized, acute. they are up 155% from the previous year, up 29% on digital. let's go right now to lindsey piegza, chief economist. this is a transformation of the american economy. when you look at the gdp estimates, do we underestimate the technology transformation as witnessed by target? dr. piegza: underestimating the

support of technology and an increase in productivity will add to the economy into 2022. remaining at these lower gdp forecasts, it does recognize the loss of extraordinary fiscal support, which caused a boom and economic growth. other factors are helping to offset that. it will not bring us to the 3%, 4%, 5%, 6% that we saw at the beginning of the year. tom: what is your number? dr. piegza: i can be more optimistic through the end of the year. taxis will average out to 3%. when we turn the corner to 2022, it is likely we revert back to the pre-pandemic level of 2%. the u.s. economy was losing momentum. we were slowing from 3% in 2018 to 2% early 2020. going forward, barring the

scenario of unlimited government spending, there is little expectation in my mind we are able to return to a more sustainable growth rate. jonathan: i am trying to understand this we acceleration in the u.s. economy. are we frontloading economic activity going into the holiday season? dr. piegza: look at retail sales yesterday. surging past expectation. consumers are of the mindset, we better go out and buy what we can because next month, prices will be higher if goods are available at all. consumers are aware of what inflation and supply-chain constraints are doing heading into the holiday season. that is not to send the consumer will fall off a cliff, but there are a number of variables toward the end of the are spending. jonathan: is that evidence of

the psyche of the consumer in america changing? what does that mean for your outlook? dr. piegza: it is supported by the decline we have seen more recently in consumer confidence. taking a big step in the wrong direction as consumers are reporting the are not only increasingly concerned about the current financial situation but they are uneasy about the future of the economy, the future of the financial situation. consumers are embracing a thought process of buy now because prices are on the rise. lisa: when do we see that translate into the data of weaker retail sales data? something the fed can .2? dr. piegza: it will be a double-edged sword. we are likely to maintain moderate strength in november. by the end of the air, if much of the spending has taken place, it is likely december is on the weaker side of expectation.

even if the fed can point to a relatively slower pace of consumer spending with inflation at in some cases 30 year highs, it will be difficult for the fed to backtrack on the taper process or postpone the first rate increase beyond the end of 2022. i know there are several calls for 2023, but i remain skeptical that the fed will be able to maintain these very low rates for another year, let alone longer. the backdrop of the cpi, ppi regardless of your metric suggesting prices are extremely elevated. lisa: there was a story this morning on bloomberg showing that chair powell's own the dashboard is flashing yellow. there are signs of more sustained inflation. if this continues, what is the

path for next year that you foresee? jim bullard was talking about ending the taper in the first quarter. is that feasible to you? dr. piegza: in terms of accelerating the process, absolutely. the fed would need to see evidence there is gained momentum. the realized pathway of the data is really going to drive the monthly reduction of the asset purchase side. as far as left off, i think the fed is chasing a delicate balance. they want to control inflation, they want to keep expectations in check. at the same time, they do not want to undermine the recovery. they do not want to pull the rug from out of the recovery. likely, a slower step up, getting us to a cycle peak, maybe 2%, 2.5%. tom: one final question.

you have a core gdp equation, differentials about that with the scope of consumer, the variability, the dependence. you mentioned government tapering down. tell me about the dynamic of x minus m. is it predictable, or is exports-imports a total mystery? dr. piegza: i think it will be a wildcard and it will continue to cause a tremendous amount of volatility in terms of forecasts. if the consumer remain solid, there is demand in the marketplace, but the question is, can we get those goods imported into the u.s. or are they sitting on ships waiting to enter the u.s. for days or weeks at a time? it is not just the demand side of the equation that raises the

question mark against the background of loss of fiscal stimulus or wage growth, which is solid, but not keeping up with inflation. it is a supply-side question mark. jonathan: always fantastic to hear from you. good to catch up this morning. thank you very much. let's revisit the numbers from target this morning. the stock up 50% coming into wednesday's session. this morning, we are down 3%. pretty decent for the fourth quarter, expecting high single digits or low double-digit growth. it is the gross margin, 28% in the third quarter, it is down 2.6% from one year earlier. this is the cost pressure. can prices keep up with cost? tom: we do not know. but down at the bottom of the

press release i saw earlier is 8% operating income predicted by their management. that number, i can't find the words for the scope and scale, the mass of an 8% number but what used to be generated 20, 30, 40 years ago. this is about profit. they are minting money at target. jonathan: things are picking up in this economy. margins have held up until recently for some of these names. we will talk about the stress test. the stock is up 50% year to date. lisa: that said, there is concern. about where we are in terms of valuations and the potential incoming margin pressures. doug mcmillon said fighting inflation is in our dna. they do not want to pass along all of the input costs to

consumers. you heard a similar message from target. how much of this is the beginning? jonathan: are we frontloading some of this economic activity in q4? lisa: the question is, how disappointing are some of the december retail sales? will people have a multiple appetite to purchase multiple trees? jonathan: is there a christmas tree index? i am sure there is. tom: we do at home. there is a 10 footer in the living room. we counted back from 12 feet. -- we cut it back from 12 feet. lisa: you want to celebrate. jonathan: do you pretend to celebrate? lisa: something equal to christmas. [laughter] jonathan: do you want to get religious at 6:40 in the

morning? lisa: you call that religious? [laughter] jonathan: in the bond market, 162.84. from new york city this morning, good morning. this is bloomberg. ♪ ritika: treasury secretary janet yellen is morning there is a risk of a government default is lawmakers do not raise the debt ceiling by december 15, the day the new infrastructure bill requires the treasury to transfer money to the highway trust fund. the european union is targeting key commodities. the company's goal is to cut greenhouse gas emissions. some of the top shareholders have raised concerns about the terms of the former ceo's

departure. investors are unhappy that he will keep getting his $3.3 million salary and other benefits through october. pro basketball star lebron james and teammates are getting a new name for their court. crypto.com will replace the name at staples center. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪

>> we know this virus spreads more efficiently when ventilation is like the indoors

versus the outdoors. if you have segments of the population who are not vaccinated and they are indoors and this virus is ever present, you will get infected. it is what is happening in u.s. states. the unvaccinated will be infected with delta. jonathan: from new york city with tom keene, issa abramowitz and jonathan ferro, this is "bloomberg surveillance." yields down one basis point to 162.67. basically unchanged on the session. crude, $79.82. one to watch over in germany, the head of germany's vaccination committee might update advice on who should get the booster shot. we have seen this in the u.k., too, and new york.

maybe we should open this up to more people. tom: the chart of europe is stunning. the differential of the united states just with a little uptick. united kingdom, and then germany and the rest in their own world. jonathan: pockets of problems appeared bhakti hansoti joins us. she has a phd from south africa. we are thrilled she can join us. disneyland is said to be the happiest place on earth. they had 1.7 million attendees two years ago and they had one case and shut the place down. is this science? dr. hansoti: it is precaution. one case can transmit. shut it down early and it returns to being the happiest

place on earth. it is surveillance at its very best. tom: is that the future to come, not only in hong kong at disneyland, but frankly across a many other parts of the world, including america? dr. hansoti: implementing surveillance systems that lead to early detection is classic surveillance techniques. thinking about how to detect early and mitigate transmission is what we should all be doing. should you shut down disney world for one case? tom: i am asking. jon, i think this is so, so, so important. you were going to go to a concert at madison square garden. if there is one case, do you have to stay in the garden until you are tested? jonathan: we have a different tolerance level compared to what happened at disneyland.

do you think we should have a different tolerance level? dr. hansoti: yes, we should have a different tolerance level. but on the flipside of that point, we are in the midst of a pandemic in the united states. there are still daily deaths. we have to take a hard look at the policies we have in place, are they effective enough to get us past the pandemic? lisa: we did speak with some advisors to china who did indicate after the beijing olympics they would loosen up a little bit on strict approaches. there is a question about drug pricing and distribution. do you have any insight into why pfizer is offering its antiviral treatments at a discount while not doing the same for the vaccine? dr. hansoti: my guess is the

drug paxil that is a prohibited r, there will be different versions available. they are being smart in a competitive market and it helps with their image. it could set precedents for what happens in the future. lisa: this raises a larger question about profitability. incentivizing companies to come up with vaccines, technology to fight future pandemics. there are plenty of people saying, you are making millions of dollars off the backs of people struggling to get the vaccine. have we entered a new regime with a new respect and a new pricing power for vaccines? dr. hansoti: i hope so.

we have seen amazing innovation early on during vaccine development. sharing of data, sharing across different manufacturers. coming together to make joint recommendations. this cohesion across the industry is pretty unheard of. i think it is the way to go. if we want to have rapid innovation and implementation and lobby as an industry to the government to change their policy in order to improve, i think the collaboration, hopefully, will transition into shared pricing. jonathan: how many vaccine mandates are in your industry? dr. hansoti: i know there is a health care worker shortage, i do not think you can blame that on the vaccine mandate. 30% of the workforce seems to

have left. in some emergency room, there is a higher turnover. people are going home to take care of their families. individuals were laid off early in the pandemic, lost their livelihood and do not want to return to the industry after the pivoted. vaccine mandates are not the reason for the labor shortage. however, they are keeping us safe. jonathan: thank you. it is good to catch up and get some clarity. dr. bhakti hansoti from johns hopkins. lisa: 30%. the idea of long covid and burnout when we saw the images of packed emergency rooms. i can imagine that over in germany, emergency rooms, the morale is dropping as they see another way of continuing. jonathan: these issues are not

going away. tom: they are not going away. mayor bill de blasio talking about having a fully attended times square. what i find fascinating is in america, private enterprise will adapt and adjust the conversation. i am not trying to protect what they will do with the airlines or whatever, but you have to watch private enterprise reaction if this goes on. we are 19 months into it. jonathan: will you be in times square? will you attend that one? tom: i was there five years straight. jonathan: did you enjoy that? tom: no. jonathan: where did you go to the bathroom? it sounds terrible to me. lisa: people wear diapers. jonathan: that is what i was alluding to. lisa: [laughter] jonathan: tom keene, lisa

abramowicz and jonathan ferro. coming up shortly from the bloomberg new economy forum, we will catch up with the prime minister of singapore. from new york city on radio and tv for our audience worldwide, this is "bloomberg surveillance ." ♪

and there you have it. woah. wireless on the most reliable network nationwide. wow. big deal. we get unlimited for just 30 bucks. sweet. but mine has 5g included. relaaax people. my wireless is crushing it! that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one-upping itself.

switch to xfinity mobile and get $200 back when you bring your own phone. or get a samsung galaxy a42 on us. call, click or visit a store today. this is elodia. she's a recording artist. 1 of 10 million people that comcast has connected to affordable internet in the last 10 years. and this is emmanuel, a future recording artist, and one of the millions of students we're connecting throughout the next 10. through projectup, comcast is committing $1 billion so millions more students, past... and present, can continue to get the tools they need to build a future of unlimited possibilities.

♪ >> one of the features of an economy that does get too hot is it slows itself out. >> p market is underestimating the extent of fiscal drag. >> liquidity is slowly going to be brought away through the course of next year. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: a sleepy wednesday morning. from 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 totally unchanged. we wait for the chairman of the federal reserve. tom: getting resiliency off of earnings reports like we saw from target earlier on.