>> good morning from bloomberg's european headquarters in london. i am tom mackenzie. this is bloomberg daybreak: europe and these are the stories that set your agenda. protests in europe, some of them violent. those happened over the weekend. we have seen new measures being put in to place as well across the euro zone. jay powell and lael brainard

find out who becomes the next fed chair. we know of course who is the fed chair. it is jay powell. he has been renominated along with lael brainard who has been renominated as the vice chair. we will see how your nominations pass through the senate by lawmakers in washington. jay powell is expected to be cleared relatively easily. we are also talking about oil of course. we have this class being set up between opec-plus and the biden administration as the u.s. and its allies in south korea but also the likes of china and india as well look to release their reserves as opec-plus is pushing back on that. i want to point to what is happening with the single currency. the euro-dollar on the back of the news that fed chair jay powell is likely to get this second term. and you saw strength in the u.s. dollar on the back of

a national holiday so we do not have trading in u.s. treasuries at this point but you did see yields inching above 1.6 on the u.s.. 10 year yields were higher as well. this chart shows what is happening in terms of the single currency. the weakness -- the euro is at its lowest level since june or july of last year. there is this divergence happening between the central banks of the euro zone, the ecb, and of course, the fed, and it is the lockdown. the weaker data out of europe suggests you will get a more dovish response from the ecb and christine lagarde compared to what is now increasing conversation around potentially a faster taper from the fed and potentially rate increases that markets are pricing in as soon as june. the euro is at its weakest in terms of the 14 week rsi, relative strength index, dipping below 30 for the fourth time since 2008.

let's check in on the markets in terms of class assets. you are seeing a little bit of weakness across the asian session. the ms guy index is now .5%. there is renewed concern about chinese technology. stocks listed in hong kong. the euro-dollar currently at 112. there is no single currency versus what is happening within the u.s. dollar where you saw strength overnight. i flagged that story for you. pressure down .9% on brent, below the $80 a barrel despite this commentary coming out of opec-plus, trying to push back on these plans to reserve releases by the u.s. and others. iron ore rallying more than 9%. close to 9%, building on the gains we saw yesterday. optimism around potential easing of curbs in china's property market. the demand for steel and pulling in iron ore prices up on the back of that. let's get back to the top story of the day. jerome powell keeping his job. joe biden nominating the fed

chair for another four-year term. he also elevates lael brainard to vice chair, maintaining consistency, as the central bank grapples with rising inflation and the lingering economic impacts of the pandemic. >> today, the economy is expanding at its fastest pace in many years, carrying the promise of a return to maximum employment. >> i am committed to putting working americans at the center of my work at the federal reserve. this means getting inflation down at a time when people are focused on their jobs and how far their paychecks will go. it means supporting a growing economy that includes everyone. >> we know that high inflation takes a toll on families, especially those less able to meet the higher costs of essentials like food, housing, and transportation. we use our tools both to support the economy and strong labor market and to prevent higher inflation from becoming entrenched. >> i look forward to working with him in the months and the years ahead to build a durable

recovery. >> i am committed to making those decisions with objectivity and integrity based on the best available evidence in the long-standing tradition of monetary policy independence. yousef: let's get to -- tom: let's get to bloomberg's enda curran. the market reaction was higher rates, stronger dollar, and a selloff in tech shares. it seems to come as an understanding that this is going to be a more hawkish fed on the back of this announcement that jay powell was very likely to get another four years. enda: tom, the first point, most economists today were saying there is some continuity to begin with. a change of horses midstream. it was not quite clear which direction monetary policy would take if there was to be a new governor. there is a sentence with jerome powell that the trajectories chaired to date are well-known.

the chairman of the fed that he is and what his priorities have been. also, by the way, it is welcome because it does read yours some political independence for the fed. remember, this is a fed chief who was appointed by the last administration. there was no guarantee that would happen given the divisions in u.s. politics. that is being welcomed, that the fed governor most likely will not have to go through any protracted hearings in the senate given his broad-based support. to your point, the inflation shock is a potential game changer for next year but right here and right now, a lot of economists are focusing on with jerome powell, what you see is what you get here he offers some continuity at least in the near term. tom: stability and continuity. thank you very much indeed. stay with daybreak europe. we will get analysis on joe biden's fed picks throughout the hour. let's switch focus and take a look at the covid situation in the u.k.

the government is extending its booster program. the risk of tighter controls will weigh on the boe as it considers whether to raise rates next month. let's bring in as a burden. -- liz burden. what is the state of play here in the u.k.? >> even though there has been a high daily caseload since rules were relaxed over the summer, there is no evidence to suggest a winter christmas lockdown will be needed. they are banking on the success of the vaccine booster program and they say pressure on the national health service is sustainable but the idea of a christmas lockdown will weigh on the bank of england because there is a u-turn on christmas rules last year and even though inflation has been above the bank of england's target for the past three months and it is set to keep rising, the other side of the coin is that the recovery is calling and it would only lockdown the temperature. tom: lizzy burden, thank you

very much. that is the covid situation in the u.k. and the implications. germany's health minister has issued what was a stark warning to those who remain unvaccinated. it comes as a country reports a record number of covid cases in the fourth wave of the pandemic. >> probably by the end of winter, almost everyone in germany -- it might be cynical to say -- will be either vaccinated, cured, or dead. tom: bloomberg's maria tadeo joins me from berlin. maria, a stark warning from the top health official in germany and the german government really upping the rhetoric, concerned about the severity of this wave. is any of this prompting more people to get vaccinated? maria: yes, tom.

i have to say when i heard that message from the german health minister yesterday, i was shocked. it is a very brutal choice. either you get the vaccine or be prepared that there is a very real but also very serious danger here that you may end up dead. i was very shocked by that type of language had what is clear here, the government is trying to come up with a very severe message, saying the situation is as bad as it has ever been. when you look at the infections but also the pressure on german hospitals so it is up to you to get this vaccination. again, the idea is that by being brutal on language, you will entice people to get the vaccine. the problem however, with the early indications we have with the data, the vast majority of new vaccines are not first-time vaccinations. they are booster shots. the problem here is that you are dealing with a group of people in society that for months have said they don't believe in the

vaccine, they don't believe in the science, and they do not believe in government so the question now is whether or not you have to just enforce it, make people have it. this is not a choice. you need to do it. it is now a government obligation. this is where the debate here is that in berlin. tom: maria tadeo on the ground in berlin on the situation around covid and the policy response from government officials which continues to evolve. let's get the bloomberg first word news with today's other top stories. more younger women are in work than ever in the u.k. with the pandemic driving structural changes in the labor market. according to analysis by the resolution foundation, about 586,000 people have become economically inactive and no longer want to work since covid hit in march of last year. they say the increase in inactivity has been most marked among older workers and younger men with women benefiting most from hybrid and remote working patterns. police in wisconsin say a

suspect has been charged with five counts of first degree intentional homicide after he allegedly plowed an suv through a christmas parade. they say the incident in the city was not an act of terrorism. samsung electronics is reportedly planning to build a $17 billion chipmaking plant in the city of taylor about 30 miles from its existing factory in austin. the new facility could create around 1800 jobs with chip output expected to start by the end of 2024. that is your bloomberg first word news. biden nominates powell for a second term as fed chair the u.s. fed president seeks continuity at the central bank. up next, we hear from state street. if you have any questions for our guests, ib+tv . do not miss our exclusive conversation with the dutch central bank governor and ecb governing council member.

that is at 9:00 a.m. u.k. time. this is bloomberg. ♪

>> this is a good team at the fed. >> this is sort of the dream team. >> this is a don't rock the boat move. correction there will not be any conflict on monetary policy. >> this is the central case that the markets expected. >> to not reappoint powell would have been quite negative for the markets. >> the announcement that it is giving the market more confidence with the pricing of rate hikes for next year. >> we will get a taper. >> we still have the fed on wait and see. >> they stick with the current base and then hike once you get to the end of that. >> we are at a point where stability is really important. >> continuity. >> total continuity.

>> continuity is a good thing to have at the central bank and that is what we are going to have. tom: some of our guests on bloomberg tv reacting to biden re-nominating your own powell for a second term as fed chair and lael brainard as vice chair. maria is senior multi-asset strategist at date street, arguably an uber bull on the markets. maria, in terms of the street's view, in terms of wall street's view and the investment banking community view that you are going to see a rate hike in june and possibly a faster pace of taper, does that align with your thinking? >> good morning, everyone. i think what is really important for us is not when the hiking cycle starts. the key indicator is the slope of the yield curve. the slope of the yield curve

over the last six months has been drifting lower which kind of suggests we are having a shallow hiking cycle, one of the shallowest in recent memory, starting from a very low level so to me, that is really the key in terms of the reader class from equity markets hid equity markets like go interest rates and flat yield curve so we do like it. a long-duration. for us, is how high rates will go and the suggestion is not very high. tom: what level of rates would change the calculus for you? marija: right now, what we are looking at is negative real fed funds for a decade. i think we have a long way to go in terms of starting worrying about the higher interest rates. it is emergency settings during

when the pandemic first hit. central bank is probably deliberately behind the curve, trying to get the economy running hot, trying to get better outcomes in the labor market and that is kind of been a sitting -- benefiting asset prices. tom: do you see the renomination of jay powell as a stability choice, continuity? is it underscore your views? marija: partly stability but the point we have been emphasizing in our research really is that the central bank response to the economy. it's not personalities. jay powell, actually, jay powell has not been more hawkish consistently than vice chair brainard. one of them was more hawkish than another, more dovish than the other, and both of them respond to economy. the fed wants to allow it to run hot. both candidates have been seen as dovish at times, hawkish at

times, so it's not about personality. it is about response to the economy. tom: not about personality, but the response function. with the lockdowns in austria and more restrictive measures being considered in places like the netherlands, belgium, and germany, does any of that challenge your view, your procyclical bias when it comes to european equities? how concerned are you about what is happening on the ground in europe? marija: obviously, very concerned about what is happening. we do live in europe. it affects our daily life. in thinking about markets, as discussed, probably one of the most important drivers for equity markets or financial markets in general is policy setting and the threat of covid is not going to make sense to banks around the world.

if anything, it will delay hiking cycles. again, that is a tragic situation with people suffering in terms of market reaction. probably some were muted. each covid wave had a less economic impact than the previous one. it is probably not going to get central banks more aggressive in terms of the hiking cycle. it is something we need to monitor very carefully. i don't think that is a major restriction. tom: a reminder from state street. we will get some of your calls on these equity markets. there is something across the terminal. they will offer and have offered to buy ariel bank at 29 euros per share. that would be in cash. it will bring you more on this. it supports the takeover offer

and this is the offer of advent and center bridge. 29 euros per share. aero bank offers conditional upon a 70% acceptance rate. we will get more details on this throughout the next few minutes and this hour. opec-plus is considering adjusting output plans if the u.s. and other nations proceed to tap their oil reserves. we will discuss that next. this is bloomberg. ♪

tom: good tuesday morning. this is "bloomberg daybreak: europe." i am tom mackenzie in london. lines crossing from the german health minister updating us on

the situation in terms of the evolving covid-19 infection rate . hospitalizations in germany. german health minister saying that some german regions are in a very, very dramatic situation. health minister effectively said that you are either going to get vaccinated, get infected, or end up dead as a result of the covid-19 virus that is spreading very violently across parts of germany. this is the german health minister saying some regions are in a very, very dramatic situation. everything that is playing out in terms of covid and the lockdown has an impact on the oil space and within the oil space, you have what is turning out to be a fairly dramatic standoff between the biden administration and some others in opec-plus. opec-plus officials are warning they could output -- alter output plans at next week's meeting if the u.s. and other nations proceed to tap their oil stockpiles. the move sets up a fight for control of the global energy market as countries look to ease

this year's surge in fuel prices. marija veitmane from state street is still with us. what is your take on this intriguing standoff between opec-plus, the biden administration, but also china, india, south korea, japan, and others, and is there a broader market risk if things lose control? marija: yes, i mean, for me, the most interesting way to think about oil price -- oil price is obviously a very important input costs into production of everything so the way we kind of our thinking about oil price is what higher i'll prices do for corporate margins. -- oil prices do for corporate margins. lots of companies surprised earnings expectations, analyst expectations. what is the key thing to think about is how strong the margins have been. and how companies have been able to have higher costs stemming

from high oil prices but also other kind of increased inflation as we are seeing, how companies have been able to -- the consumer. our underlying demand conditions strong enough to be able to absorb those higher costs? and the answer so far has been yes. the majority of companies maintain the margins. we have seen an increase in margin expectations from the analysts in the beginning of earnings season. that is a proxy for guidance. management saying we see strong demand conditions. we are able to pass prices higher. that is really the way for me to think about if the oil crisis gets out of control, oil prices get higher, what will happen to corporate margins? so far, demand conditions are strong enough to be able to withstand that. that is important. it depends on how much the oil price gets out of control. but so far, we are in a reasonably good place.

tom: so far, it is still manageable. you have favorite for a number of months now the cyclicals, the value play, but also in terms of long-term as well, exposure to the u.s. anything changing in terms of how you are looking at the portfolio? marija: the u.s. has been our favorite play out. for months and probably for years. the reason we love u.s. stocks is they are so much more profitable than any other market. u.s. companies have done a lot more investment than other sectors. they benefit from having large text components, long-duration, which we said is current for the current environment. u.s. stocks really stand out for us. we have seen a pickup in buybacks. yes, there are other concerns but they really will come to the or only when interest rates start rising higher but for now, it's about earnings. the u.s. is the best earnings story we can find. tom: very briefly, we saw a tech selloff yesterday on wall street, particularly the profitless companies.

do you expect that to be sustained? marija: now. -- no. the reason we talk about we like tech is because of earnings. the companies make a lot of money. those companies that were in favor. for that, we are fairly confident we can maintain stable growing streams. tom: still all about the earnings for marija veitmane and positive on the outlook. give for joining us this tuesday morning. another line from the german health minister and this is an important one, cannot rule any measures out including a lockdown. germany's health officials are not ruling out a lockdown at this point. they talk about the severity of the infection rates across that country. coming up, unvaccinated, cured, or dead. that was the line from the german health minister yesterday. germany issuing that stark warning for those who remain

unvaccinated as the company grapples -- country grapples with the surge in covid cases. we will get all the details on that, next. this is bloomberg. ♪ moving is a handful. no kidding! fortunately, xfinity makes moving easy. easy? -easy? switch your xfinity services to your new address online in about a minute. that was easy. i know, right? and even save with special offers just for movers. really? yep! so while you handle that, you can keep your internet and all those shows you love, and save money while you're at it with special offers just for movers at xfinity.com/moving.

tom: good morning from bloomberg's headquarters in europe. that the "bloomberg day break europe" and these are the stories that set your agenda. president biden sticks with fed chair powell and raises number two. opec warns it may reconsider planned output increases if the

u.s. and other nations tap their oil reserves, setting up a fight for control of the global energy market. and vaccinated, cured, or dead. germany's health minister issues a stark warning for winter. as angela merkel calls the latest covid surge the worst ever. the economic impacts of these lockdowns and greater restrictions across europe as the continent grapples with these raising and increasing rates of infection. some at record levels. it's of course still being digested and it is playing into how the markets are thinking about the policy response at the government level but also at the central bank level. that is impacting the single currency. we're talking about the euro dollar of course and the euro has been under pressure the last few days. here we're showing you in themples -- in terms of the concept of what is happening with a single currency. the 14-week r.s.i., relative

strength indexing, just for the fourth time in the last 15 years or so, since 2008, two of those times in the european debt cries aand -- crisis and the other in the financial crisis, pressure on a single currency trading at 112, means its divergence at least in views of how the europe u.s. are going to respond. that will be rounded out with more economic data later today to give us the picture in terms of growth output. the futures of the u.s. down .1%. the futures in europe looking down by .6%. across asia you saw a bit of weakness. now .5%. china tech was a laggard on the back of -- with new concerns about regulations that 112 euro dollar, 79 for bread.

a tug of war between opec, the biden administration and other nations. there's optimism around china and the sector. we'll see how that play into basic resources and the ftse100 when markets reopen. let's focus on what's happening on the ground when it comes to covid-19. germany's health issue issue -- health minister issued a stark warning to those who remain unvaccinated. >> by the time -- probably by the end of winter almost everyone germany, it might be cynical to say, will be either veterans administration thaited, cured or dead. tom: to assess the covid situation i'm joined by professor marion cookman, head of the department of bioscience in the netherlands.

give us and update in terms of rate of impression, pressure on health care services in europe at a time when you have a vaccination rate of around 70%. why are we veterans administration -- why are there records in so many countries. >> what we are seeing is a varied pictures across europe. we see several countries particularly in northern europe with steep rising number of cases and increasing pressure through the health care system, as the situation in southern europe is much more stable. and the question why that is, well, there are different situations. portugal, for instance, has managed to get an extremely high vaccination coverage compared to other parts of europe. so that explains part of that. and southern europe has had a

more stable, continued situation with containment measures which also were accepted, seem to be accepted more. than in other parts of europe. and you're showing images of vaccination rates of fully vaccinated people, you see the gradient here. and of course that explains part of it. tom: that explains part of it. how are the health care systems holding up in these countries? >> again, that's quite different, in part because the organization of healthcare is quite different. so for instance in my country, it has been quite tight, we don't have much spare capacity and that is a problem in a crisis like. this when you just need more capacity. so that's one factor. plus the duration of the

pandemic is bearing down on health care workers. we see quite a few people leaving their jobs, the amount of capacity, the flexibility of the system is further reduced by that. tom: the burn utah of medical professionals, facing and fighting this pandemic is evident. in terms of efficacy of of lockdowns at this stage, do lockdowns -- can they still work and can they prove a catalyst to boost vaccination rates? are we seeing evidence of that? >> that's, i think, a divided picture. thing mace work differently in different couldn'tries. we see in northern european countries that the control measures similar to what has been recommended for instance in my country accepted without much ado whereas a lot of debate over

here. those things, those differences between countries, really the virus doesn't take them into account and just escapes. i think that's part of the problem. in our country as well. the emphasis now is on trying to get people convince odd of the importance of physical distancing, staying home, when having symptom, getting tested, wearing mouth mask, facemasks, but the basic compliance really is going down and that may, therefore lockdown mace become unavoidable. >> part of that arguably down to fatigue about having to comply with these measures. given your background and expertise in virology what are the risks of another variant coming out of these groups, particularly as a result of the

still relatively significant numbers of people who are unvaccinated? how concerned are you about that? >> so that is a risk, as long as this virus continues to run rampant which is of course, it will mutate and particularly when it happens in a partially immune population as we see, we see lots of breakthrough infor examples because the vaccines work exceptionally well but not so well against infection, they protect mostly from severe disease currently. so the risk is there. we see that in the u.k. now there's an increased -- an increase in variance of delta that seems to have yet more -- higher transmissibility and that of course will challenge further. >> before we let you go and maybe this is an impossible question to answer but as you look ahead to 2022, do you have a sense of how this plays out

for europe? >> there are several scenarios now that have been developed so the -- it's obvious that this virus will stay with us. and gradually we expect that it will become part of the winter virus package. and just how severe that will be remains to be seen. my expectation is it would be somewhere between serious flu wave and maybe slightly more. so we will have to learn that as time goes by. tom: ok, professor marion krugman, head of the department of bio science in the netherlands, her view of how things are developing related to covid across europe. here are today's other top stories. president joe biden decided to maintain continuity at the fed choosing to nominate jerome

powell for another four-year term as the central bank's chair. powell is expected to win smooth confirmation. biden also wants governor brainerd moved to vice chair. her nomination could face opposition from senate republicans given her tough line on bank regulation. the u.k. government is to temporarily take over the running of a gas and energy supplier. it will ensure uninterrupted supply to their 1.7 million customers by appointing a special administrator with costs supported by the government. soaring energy prices have caused 21 suppliers to collapse since august. zoom's quarterly forecast beat expectations, its video remains in demand. they expect fourth quarter revenue of $1 billion after saled jumped in the previous quarter more than 45%.

nevadaors are watching if zoom can maintain popularity as many in-person activities resume and competition rises. coming up in today's big take we'll focus on the choke points keeping the global supply chain stuck. that is next. this is bloomberg.

tom: welcome back. this is bloomberg day break europe i'm tom mackenzie. turkish currency has fallen almost 60% year to date. the string of rate cuts from the central bank over in turkey, this unconventional policy at a

time when inflation is at about 20% within that country. so further pressure on the turkish lira. currently 11.70 a drop of almost 3%. we'll bring you more information on that. let's focus on supply chain hours, it's affecting economies worldwide. the ports of los angeles and san francisco are the biggest hubs of goods. today's big take takes readers through the bottleneck at america's west coast ports. joining us from frankfurt is bjorn van roy, senior economist for bloomberg, how do you assess, what is your take on the current situation of global

supply constraint and how things will evolve as we head into 2022? >> yeah, first of all, thanks for having me. we have looked at the supply chain crisis from a global perspective. we have looked at different indicators and constructed competence supply stress indicators and we find that from a global perspective that we have -- we are now seeing levels of supply constraint that we haven't seen in 20 years. so from europe to china to -- over to the u.s. and u.k., all of these countries face very large supply constraints. a good thing we see now, in the last two month is that apparently for the u.s. the supply constraints are easing a little bit. for example, when we look at prices for manufacturing firms

they have edged down from the summer. these are a first sign we may see a turn around in the supply chain crisis in particular in the u.s. we still see rising supply constraints, so this will not play in the hands of monetary policy while in the u.s. we see signs that these supply constraints are more and more being relieved toward the winter and next year. tom: so some easing of the supply constraints in the u.s. in major poforts. what's the linkages between supply chain constraints and the consumer price inflation that of course is multidecade high? >> exactly. this supply constraint is optimal for the global economy. think about when we have the large drop in prices and activity in the course of 2020

now coming out of the covid try crisis in 2021 with strong demand while supply is now being constrained. this is one major, major factor why we see inflation rates rising so much across the globe. still there's a difference between the united states and the europe area, as we see a large block of price increases in the u.s. being demand driven, not supply driven. but the combination makes it very, very strong in the u.s. in europe it's mainly a supply constraint driven factor why we keep prices so high. going to 2022, we believe that inflation will come down in both the europe area and the u.s. particularly in the europe area.

we see first signs of wage price spiral in the u.s. we believe that in the u.s. inflation is more sustained than in other parts of the world. >> so maybe a more transer to inflationary picture here in europe versus the u.s. when it comes to 2022 as we factor in supply constraints. you can read more and it is worth doing so in today's big take. that's on your terminal or bloomberg.com. coming up, it is appropriate to discuss the pace of taper. the atlanta fed president said he'd be open to a faster one. more from our exclusive interview next. this is bloomberg. ♪

>> i think there are good argumenting to be made that we should be considering how fast we execute the taper. there's a lot of uncertainty in the market, inflation, as you noted, is at a very high level. i think it's important that if we need to be moving interest rates that we get the taper out of the way first. so a faster taper would certainly give us more optionality as we move into 2022 and see where the data takes us. so i definitely think it's appropriate for us to be talking about the pace of tapering and being open to a faster one. we're going to see more data between now and when we have to make that decision or have those conversations. that will really guide us i think in having perspective on what the appropriate pace is and whether we need to move faster.

>> the next meeting, what, december 14, 15, so you'll have that data in hand. are you inclined to say, gee, you want to be talking about and maybe in favor of finishing the taper say by the end of the first quarter instead of waiting until the end of the summer? >> that timing, i would be comfortable with given the way the data has come in recently but as you noted we'll have more data that comes in that gives us a sense of what's happening both in terms of job creation and in terms of inflation that will give me a sense of whether the volatility we have seen in labor reports over the last couple of months are really real and also whether the heightened inflation that we've seen is likely to persist. my sense is that on the inflation side, the numbers are still going to come in strong and if the employment numbers come in equally strong i think that the case would be much stronger for a faster taper. but again we'll have to ceci

sort of where that plays out. >> in 202, you have your dot in that part of the chart already. at the december meet, all of you will be revising your forecast you do it every three months. that's where you have a chance to change your dot spots. are you thinking about possibly adding another 2022 rate hike dot to the dot you've already got there? >> you know, going into every commission where we do the dot spot i try to be open to moving in both directions. certainly i'm hoping for pulling forward another rate increase if that is appropriate but i'm also open to the notion that we may have to push these things back depending on thousand howe this plays out. tom: that was atlanta's fed

chair. jerome powell will retain his position as fed chair and brainerd is promoted to second in chand. let's get back to bloomberg -- you talked about consistency and that's the strewview from the markets and in economists in terms of renomination of powell and elevation of brainerd and there's a growing chorus around the need or consideration of a faster pace of a taper. >> yeah, you are absolutely right, tom. clearly it offers some stability. a big political dimension to what's going to happen to u.s. monetary policy. whether it's who gets the job. powell should be -- should have support. even though he's a known,

he's -- the trajectory for policies he's well understood by everybody, next year will be a different story. inflation is accelerating. the fed narrative on price pressures being somewhat transtear and the changes have not yet come through there are significant question marks over the fed narrative and it's expected that heading into next year there'll be pressure on the fed to do something especially if the pressure remains sticky and it heads into election later next year. the takeaway today from the investor analysis community is that obviously stability but there's no guarantee that powell can keep control over the narrative heading into next year. tom: that tension doesn't go away. that tension between inflation and jobs in the labor market that they want to see more broad-based alongside and within that new framework that tension still exists. >> very much so, tom. that is a dilemma for the fed.

on one hand they have a mandate to max out employment. that's clearly what jerome powell has been using to point to lack in the u.s. economy and our colleagues talk about lag in the labor market even as the jobs mark rebounds. on the other hand he has to manage inflation outbreak. i think a lot will depend on where the supply chain story goes. there are obviously tentative signs that perhaps the worst of that may be behind the world economy now, shipping container costs coming up a little bit, though they remain volatile. anecdotally factories are talking about goods getting to destination now and getting their hands on raw materials in a way they weren't. that's possibly -- possibly offer some relief for the inflation story. you have to say right here, right now the pressure will be on powell to prove he has inflation under control. tom: stay with us, by the way, the emerging market currency to watch is very much the lira,

turkish lira, 11.7 is what it's trading at. comments on lower rate. plenty more coming up. "bloomberg markets: europe" is next. this is bloomberg. ♪

♪ >> good morning. welcome to bloomberg markets. i'm ana. our managing editor takes us through owl of the action this hour. here are your top headlines. president biden sits with the chair. and treasury yields and the dollar jumps