>> this is a much more rapid recovery and we are very far along towards full employment. >> the risks on the better to the hawkish side. >> they are going to start that journey to normal and we are going to help them on that path. >> the market has positioned itself for more normalization. >> there's an extremely wide band of probabilities of where things could go from here on. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: payrolls 90 minutes away. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance, " live on tv and radio. your equity market totally unchanged going into that print. tom: we are waiting for 8:30 this morning, and the richness we see from the two major employment reports. as you mentioned, onto an inflation study next week.

what i would note is the omicron effect on this market. you see it with a solid one of three on euro-swiss -- solid 103 on euro-swiss. you saw news from germany yesterday. i wonder if that is an overlay on this american jobs report. jonathan: we go into next week looking for cpi in america the week after the federal reserve. you mentioned omicron. how omicron dependent is that federal reserve meeting? tom: i think that is what is different about this jobs report. i thought andrew pekosz was brilliant on this. it is a different pastor 8:30 -- a different path to 8:30. lisa: especially because it seems as though the jobs market has been i don't want to say deemphasized, but has lost some of its luster on tightening

conditions. we have seen them emphasize inflation. you say omicron dependent, and yet inflation is not going to necessarily subside. if anything, it could potential he get worse and disrupt supply chains even more. how does the fed parts this out if they see a real problem with inflation? jonathan: these statements this week from federal reserve officials didn't sound too conditional about that meeting on the 15th, did they? they were pretty straightforward. tom: there were a lot of people saying let's go. i know we've got priya misra in this hour, and she is saying they are not going to go. jonathan: let's sum up the price action for you this moaning. equity futures pretty much dead flat, down to on the s&p, negative zero point 03%. yields have been at the front end, down at the long end. your yield on the 10 year or by about a basis point now intends to 1.43%. crude bouncing back a little bit

, 2.7 7% higher to $68.34. lisa: i am watching the 8:30 am u.s. jobs report for the month of november. we are watching how much wages are going up, watching the participation rate. how many people are coming back into the labor force? number that we have gone way down from the peaks we saw pre-pandemic. we have not recovered. we have flatlined when it comes to the participation, just north of 60%. if there is not an increase, what does the fed do with that? do they take that into consideration or focus completely on the inflation outlook and inflation adjusted according to that? jon ferro will be speaking with labor secretary marty walsh are you very much looking forward to that conversation, especially as we talk about the shift of power to labor. ? ? how much has that gone? ? how far can that continue? president biden will continue the conversation with a jobs report i tingled and 50 a.m.,

and we get u.s. ism services data for the month of november. how much of an ongoing recovery can we see, even as we have the delta issues that are still in place, even though we have people still remaining out of the workforce because they are worried about getting sick? how much can we see that shift from goods to services in this economy? jonathan: this talk about that estimate, 65. anything above 50 is expansion. if you are running in the mid to high 50's, that is a pretty decent clip. mid 60's is fantastic. we thought that would fade, and that is still the number people expect a little bit later. jonathan: but how much -- lisa: but how much do we have to recover, and what is the threat of the omicron variant? we are already hearing about people canceling holiday plans, canceling holiday parties. how much does that into perfecting some of the recovery? tom: cancel culture with lisa. lisa: oh my goodness.

i am just saying, how much does that affect what we are seeing? jonathan: we got to disclose, tom and i have both got trips prepared that we need to make sure we go on. [laughter] lisa, thank you. looking at the fed calls, barclays for may, goldman for june, bank of america for june, bnp for june, citi for june, jp morgan for september. td was looking for september 2023. they are now looking for march 2023 lift off. i am pleased to say that priya misra of td joins us now. what that -- what brought that call from september to march of the year after? priya: it is about economic data and the fed reaction function. we got a clear sign from chair powell, and i would argue from that november fed minutes that came out last wednesday. the market did not react maybe when we were cooking and eating right before thanksgiving. the fed was talking about

salvation of taper when they announced tapering, so it really seals like -- really feels like there is inflation. the market once >> ability which is why omicron -- once flexibility, which is why they want to be done with taper. why we are much later than the market is because we are not extrapolating from the current data. a lot of post-delta surge in the economy. as the fiscal drag kicks in next year. we have growth slowing, inflation slowing. that will allow the fed to be patient on lift off. they will still end taper we think by march. is the economy able to handle rates? a rate hike stocks at the middle of next year but then tapers off. we think that is actually mispriced. the fed will have the ability to start late and then go on to 2%, 2.5%. tom: i have said this, that you

have the most interesting call out there right now. how do you link taper talk to rate rise talk? are they a continuum, or are they discrete, taper talk and then rate rise talk? priya: great question. how the fed sees it, which is discrete, one should not impact the other, but i think they want to accelerate taper because they want to have the ability to hike , so they can't say they are entirely discrete. the fed has been very clear they are not hiking before the end of taper, so they have to get tapering done. in our view, hiking has a higher threshold, so maybe it will come down to the data. we think if that starts to slow, the fed can then afford to wait a little bit. but i do think that the market feels they are absolutely linked. we are expecting a very high cpi as well. defendant -- the fed ends kiwi

in march. they could pricing the first fed rate hike in march or april, so the front end could still have room for rates to rise. lisa: this is the irony, that people see hot data and then you see the yield curve contracting, which indicates possibly a deceleration in the economy or something heading towards a downturn. you actually see the economic data coming in weaker than most people are expecting, and then a steepening in the yield curve. is that the better outcome for growth, and does it lead to a higher terminal rate for the federal reserve? priya: it should come absolutely. but i think the two are linked. given our view that the fed will be patient on hikes, the curve should likely steepen. it will also allow the fed to hike to a more normal terminal rate of 2% to 2.5%. think the market is saying the inflation -- is forcing the fed's hand to taper. but when they force the fed's

hand to start hiking, i think that is what the market is pricing in. i would just say the financial conditions are easy. if the fed is able to be patient, this idea of a policy mistake starts to get priced out, and i think the flatter yield curve is essentially telling you it is a policy mistake which is very odd for the hikes. we are pressing a policy mistake six month before the market is pricing in the first hike. jonathan: you're making quite an original argument here. you think the later they wait, the less chance there is of a policy mistake. the earlier they go, the more chance there is. that confidence a lot of what we will hear. how do you convince those people what you are saying is the right way to think about things? priya: i would say for those who say the fed is already behind the curve on inflation, why is the endpoint of the hiking cycle just 1.5%? if the fed was behind the curve on inflation or the market believed that, i would say long-term inflation petitions

should have been higher, term premiums should be higher, or the curve should have been much steeper. the fact that as we move the timing of the first hike sooner, we have lowered the endpoint, shows that the market is really not confident the market can handle higher rates or that inflation will need the fed's help, or that the fed can control inflation. all the fed can do is slow growth while inflation can still stay high, so it is the stagflation idea, which i think the fed is actually going to soon rather than too late. jonathan: thank you. now looking for that first move in march 2023, not december 2023. just a fascinating conversation. this debate is wide open, isn't it? lisa: i loved her argument. you can disagree with it, but it holds some sense about why will we see a legal curve flattening at people thought it was the right thing for the federal reserve to start hiking rates sooner, and why do we have that terminal rate at such a low

pace? she is busy making the argument the fed is indulging that it will hold off longer. tom: to both of you, is the basic i hear -- the basic idea here that ms. misra is still transitory? jonathan: i think she thinks they do not need to go anytime soon, which would imply that. i wish you had asked her that when she was here so she can answer for herself. lisa: but why use the t word? jonathan: it is unhelpful. lisa: at this point, it clouds the issue. if you see some of the inflationary pressures subsiding, does that change the outlook for fed policy? that is probably a more accurate way of putting it. jonathan: this news, this is why i was distracted, an italian man who wanted a coronavirus vaccine certificate without actually having the jab tried to play the system by presenting health workers with a fake arm. that news coming from rte. with a fake arm.

tried to get the jab in a fake arm. that is the reason i brought that up at the news out of tampa. futures unchanged on the s&p. from new york city, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. congress has averted a government shutdown. the bill will pay for government operations through february 18. without the measure, the government would have been forced into partial shut down after midnight friday. it is a stunning reversal for didi. the company now has begun prep ration to delist shares in the u.s. and will start on a hong kong share sale. bloomberg reported last week that china is concerned a u.s. listing would lead to the leakage of sensitive data. european central bank president christine lagarde says an increase in interest rates next year is unlikely, but told

reuters she won't hesitate to act on inflation if needed. the ecb plans to decide on the future of its stimulus measures on december 16. the omicron variant of the coronavirus is now the dominant strain in south africa. that is where it was first detected. south africa reported or than 11,000 covid cases thursday. omicron has been detected in more than two dozen places stretching from the u.s. to south korea. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

> if we get to next spring and inflation is still over 4%

and we have ended our taper and that is where we are, i think the fed will not be on the committee at that time, but the fed will have to say seriously that this has run too high for too long. jonathan: randal quarles, the federal reserve governor for now, saying what he really think. this is what i love about people when they leave central banks. as they are leaving, they start to say what they really think. your expedition going into payrolls, 550,000. yields in about a basis point, and just to complete some of the thoughts of governor quarles in "the wall street journal," "the army is upon us, so now we will begin to fire." tom: one at the great interests of powell and brainard is they really have a very different pedigree.

randy quarles is columbia economics. let's renumber that the vice-chairman richard clarida was chair of the columbia economics department. he went on i believe to yale law, off the top of my head. but everybody has a different template to talk about fed policy, monetary theory, and you've got to know who is saying what. jonathan: there is a mystery here. let's talk about it for a moment. priya misra mentioned it. the minutes were inconsistent with the news conference chairman powell conducted at the last meeting. did that chairman deliberately not reflect the consensus on the film see in the news conference -- on the fomc in that news conference for delivered reasons that forget dilbert reasons -- for deliberate reasons? i'm asking a question.

tom: check fitzpatrick briefs this morning was bloomberg government. no shut down. so what? what does it mean? jack: so what is a good question. yes, we are going to avoid a shut down once they stopped at measure is signed into law -- the stopgap measure is signed into law by the president. that check would -- that checks one big thing off the to do list. there is still no action, no movement, some talks on the debt limit. that has a hazy deadline, but it could be a soon as mid-december. there have been talks between senators schumer,, on how to handle that, but every senator i have talked to said there is no plan, and they may need a couple of weeks to get moving on that, so there are a lot of other hard deadlines for them now. tom: my amateur analysis of this is that the democrats have never been more separate from the republicans on this. what is the incentive for any republican to cooperate with the democrats on the debt limit? jack: there is no incentive, and

the way it looks like this is probably going to play out, the republican demand is democrats need to act through the budget reconciliation process, which is how they are trying to pass this tax and spending bill, which allows them to do it without republican votes. that allows republicans to not vote to raise the debt limit, which has political benefit for them. through that process, you can only raise the dem -- the debt limit rather than suspend it, which means democrats have to come up with a number well north of $30 trillion, decide on that come about without republik and help, and then go defend themselves on the campaign trail , so that looks like the way it is going to play out, but democrats have not started the process of getting that moving, and it could take a while before the deadline to prep that. they are hesitant to do it probably because of the political uncomfortable aspect of voting alone on a high debt limit number. lisa: we can dovetail the jobs

report we are going to get into this conversation. take us into the spin cycle, which we will get right after that, with marty walsh, even though that will probably not be a spin cycle with jonathan ferro, and then president biden giving a speech. how much are we expecting them to try to use it as a way to push forward some of their legislative agenda? jack: the president is supposed to talk about the jobs report at about 10:15. on the legislative agenda, it ties into the concerns that the president has sought to acknowledge at least on inflation, when you hear him talk about rising prices and inflation, you hear about the flipside of that and the fast recovery in terms of the unemployment numbers. it doesn't necessarily fundamentally change anything on how they are going to try to push this upcoming tax and spending bill through in

congress. it may be easier for them to do that if the economy weren't ramping up so quickly and it needed legislative action. a lot of the high jobs numbers and the high price increase numbers have led to some skepticism by moderates such as joe manchin on how much do we want to frontload the spending in this, how much inflationary pressure do we want to create. i don't think it would necessarily make it much different, and it does help the president to have good jobs numbers, but it is not necessarily convenient for the legislative outlook because it kind of undermines the push for some major change and action from congress. lisa: which brings us to talking about the federal reserve and the confirmation battle for chair powell. tom cotton yesterday in "the wall street journal," republican senator from the state of arkansas, said he would not support the renomination, the reconfirmation of chair powell

because of the inflationary pressures, because of the dovish stance he has taken. how much is tom cotton an outlier, and how much does he represent an increasing mainstream in the republican party? jack: i would not describe his view as far outside the mainstream, but one factor that plays into that is there's not a lot of pressure on the minority party to help the majority party , even if it is reconfirming somebody who was originally put up by a republican. there are some republicans who have said they like powell. they obviously saw him as a better option than the alternative in brainard, so it appears there would be at least a few republican votes and not a lot of democratic defectors, so the with count -- so the whip count probably looks good, but if this comes down to will you vote to reconfirm someone working with the biden

administration, there are going to be a number of somewhat mainstream republicans who don't feel the pressure to give their votes, and the inflation concerns support that. that is something that is going to come up on the campaign trail. it may not be something that tanks powell's reconfirmation, but it is a major talking point. you will hear it from a lot of republicans. jonathan: thank you for catching up with us. you just wonder if certain people are trying to position themselves for a certain race at some point down the road in the future by not backing chairman powell. lisa: theoretically. jonathan: that quote from senator cotten, "the core mission is to maintain price stability and inflation. he has failed to do that. i cannot support his nomination." pre-blend. -- pretty blunt. not as blunt has senator warren, but for the first time, i think we can say senator warren and senator cotten agree on something. is that fair? tom: ok, maybe.

yes, i think that would be true. i still say chairman powell was handed a pandemic. jonathan: agreed. futures on the s&p -- lisa: hard not to. jonathan: yes. from new york city, this is bloomberg. ♪

♪ jonathan: this is how you expect to set up going into payrolls, unchanged on the s&p. we are positive just a point on the s&p, up by 0.03%. your data 60 minutes away. we will catch up with ellen's and their debts with ellen zentner -- with ellen zentner in a moment. 10 year yield lower come of curve flatter this morning. your 10 year yield down by almost two. that is a theme, how this market response to this data, as we approach that fed being on september 15, the day after a

bank of england decision. finish on cable. sterling wicker on the day. the hawks losing just a little but of conviction, wavering just a little bit on the omicron variant. are we omicron dependent on threadneedle street? tom: we certainly heard that from andrew pekosz. the omicron overlay which was not there three or four weeks ago is there this morning. jonathan: when you go into that blackout period, you want some guidance, not conditional this, conditional that. that is what michael saunders gave you today. cable right now, 1.3264. that is the process it -- the cross asset price action. let's say good morning to omaine. romaine: keep an eye on nvidia.

it met pushback from regulators and the u.k. and the european union, the u.s. government suing to block that deal. nvidia was pretty much just a niche player in the semiconductor space about a decade ago. it now has pre-brought breadth across the industry. -- has pretty brought breadth across the industry. a lot of people saying allowing nvidia to buy arm is too much. docusign down 32 you -- down 32%. zillow shares slightly higher. the company finally started to unwind its bond buying business, also instituting a share buyback. that has given a pop to the shares. we did see a pretty big pop early today in didi.

it has now reversed that and is down 9%. they will start the process of delisting from the u.s. less than six months after coming to the u.s., and list over in hong kong. keep an eye on that space. keep an eye on grabbed holdings, which had its -- on grab holdings which had its they view in the u.s. yesterday. uber, along with ride-hailing and food delivery companies, and focus as europe considers stricter rules to how these company's classify their employees. tom: thank you so much. right now on this jobs day, it is very good to focus on a given statistic, and with ellen zentner of morgan stanley, we can do that. it all folds down to the on the limit rate. what interests me is the 4.4 percent of this december. what is it like compared to the 4.4% one month after the pandemic, the march report, or

for that matter, back to the prosperity of 2017? what kind of 4.4% is this america? ellen: i think the mix of the labor market of those that are employed and unemployed is quite different. of course, we've had a record wave of retirements. it is really about retirements that are running well ahead of what age alone would suggest. that is quite different. downturns, we always see an increase in retirements, but you would imagine this would be much more severe, especially with health concerns around covid and especially with the amount of wealth creation we have had as well, allowing people to retire. government assistance allowing people to make those decisions to retire. so i think that is the main difference between the pre-pandemic labor market and today. tom: are we a fully employed

america, or are we two americas where one america is fully employed? ellen: i think it is not fair to separate the two because we should care about all, so we can't reach full employment until it reaches everyone. this is part of the fed's inclusive maximum employment mandate, that the recovery should be inclusiveor a we a seeing wavering retirements that we are seeing waves of retirements across all sectors, and companies are having to pay up to get workers. it is occurring most pronounced in the lower income groups or lower wage paid sectors. that is where nominal wages are outpacing inflation. they are not outpacing inflation from middle and upper income households, but they are outpacing inflation for lower income households.

so the tight labor market is offsetting a lot of the painful inflation or pressures households are experiencing as well. jonathan: you and the team have put together quite an outlier call for next year, which is no hike from the fed. you are looking for q1 2023. you put out the balance of risks around that call. you said if supply remains constrained for longer and inflation remain elevated, we see hawkish risk to the policy path putting liftoff at risk of earlier delivery. that dynamic of waiting for supply constraint to heal was a key feature of the patients behind the federal reserve. why is that now seen as potentially hawkish with this fed? what has changed? ellen: i think it does smack a bit of 2018, when the message was the balance sheet runoff is going fine, and the know my god, it is not going fine. this is why markets have been quite volatile when the fed makes a sudden change in message.

it was that this is temporary, this is temporary, and then wow, it may not be temporary. so at the very least, you have to speed up the taper because when you're tapering to balance sheet purchases, you're still providing accommodation. why are we still providing further accommodation to a strong economy? first and foremost, you pull back on that. the policymakers also see it as giving them optionality in case we turned the corner into the new year and the easing in supply chains we were already seeing, if that does not feed through into slower growth in inflation. so you want to buy that optionality. where the risks come from, and i thing this is interesting because i think that some folks think it might be counterintuitive, the risk around omicron is that the fed has to hike earlier, not later, and that is because you have another supply shock compounding on top of the current supply shock, which creates even higher

inflationary pressures that lasts longer. that would be your worst case scenario with omicron, and that is a fed that actually has to hike earlier. lisa: let's go there. this is fascinating, the idea of the omicron threat, even if it slows the economic trajectory, causing sooner fed hikes, are we saying that the federal reserve will now respond to what ultimately are supply chain chocks they have no effect on, and that they are going to deemphasize a labor market that probably would be affected by that kind of omicron wave? ellen: the fed is in a very tough spot. politically they are going backlash from both sides of the aisle to control inflation. inflation does harm lower income households more. as i pointed out, nominal wage gains for lower income households is outpacing inflation. but you want to recognize that inflation is disproportionately impacting households in the u.s., so at the margin, you make

a very good point. what can the market do about pandemic related prices? they really can't. but they can dampen inflation expectations, dampen household demand for domestic services, domestically produced prices, and in that way, they can kind of control inflation. i think they are looking out longer-term inflation expectations, and they are still in the realm of being anchored, but as we saw from the minutes from the november meeting, and this is very fed speak, they looked less well anchored. inflation expectations can go parabolic. they can really change on you quickly, and these are folks that have lived through the 1970's and remember how scary that can be. so i think putting the focus on inflation is right at this time, and then let the data come in and show that inflation is slowing. we think that it will show that february and march of next year, as we are getting data that

shows that these pipeline inflation or pressures are easing because we are getting more supply. so we are saying omicron is a risk right now, but it may not be worse than delta. of course, delta has hit on the economy was really a quote -- delta's hit on the economy was really a third quarter issue, and now the economy is tracking at 8% plus. jonathan: great to catch up with you, particularly on payrolls friday. that line, the risks around omicron is that they have to hike earlier, not later. lisa: fascinating. it highlights the shift we saw in the federal reserve. remember when they were talking about how supply chain disruptions were not something that fed hikes could really address? that seems to be a shift. suddenly, this is something they have to address. it is more persistent. it is crimping the economic growth in the country. jonathan: it is something we picked up on in the pre-statement from chair powell going into his testimony. he used the phrase inflation

uncertainty. it is clear what it means now. it is inflation risk to the upside off the back of this variant. tom: it may be inflation uncertainty, but as david rosenberg says, you've got to partition all of the different slices and dices of inflation, and i think we just need to see more data, and i will be blunt, priya misra, david rosenberg, some select others, they really push against the zeitgeist of a permanence to this new inflation. jonathan: they are saying wait. 49 minutes away. that's how long you've got to wait until we get the payrolls report. payrolls friday. your labor market report comes at 8:30 eastern time for the month of november, just around the corner. from new york city this morning, good morning. futures basically unchanged. from new york city, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. economists are expecting another strong u.s. jobs report today.

employers added 550,000 workers in november and the un-meant rate fell 0.1% -- the un-meant rate fell 0.1%. -- the unemployment rate fell 0.1%. the bank of england's leading hawk sees some benefit waiting for data on how the omicron variant is affecting the economy. michael saunders says omicron will be a key issue at the next meeting december 16, adding to spec police and the central bank may delay a move on interest rates until next year while it waits for more news. the price of oil rose after the opec+ alliance took on a flux of both stance on increasing production -- a flexible stance on increasing production. it said it could revisit the decision at any moment due to high levels of uncertainty in the market. in new york, dozens of hospitals are nearing capacity as the state reported the most new coronavirus cases since january. more than 11,000 cases were recorded. at least five cases of the omicron variant have been found.

56 hospitals in new york had capacity of 10% or less. today, state officials will be allowed to limit nonessential hospital procedures. berkshire hathaway says the current environment is even crazier than the dotcom boom of the late 1990's that led to a bust. he also said he wished that cryptocurrencies did not exist. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> what we have here is this

spare capacity that comes out at half what the market deems it to be, around 5 million barrels. it is the market saying we've gotten a cushion here anymore. jonathan: what you just heard there from christyan malek of jp morgan out of europe was the path towards 1.25 on brent -- towards $125 on brent next year. we appreciate the incoming views on all of this. what underpins that view is spare capacity at opec+. the market consensus something close to five. it is actually about 4.8. his view is it is something closer to 2.8 million barrels. that is the spread. tom: he made very clear that there are some real complexities , as well as what led to that

moving oil. the real surprise her that, but i would set up into the weekend is the idea of jp morgan, francisco blanch another's looking for high prices, and looking for a marked down $60 a barrel. jonathan: their view seems to be that we priced out too much demand out of the forecast off the back of the omicron variant, and we did really quickly. using about that last friday, a 13% move on crude, just like that. lisa: when you look a lot of these prognostications, each wave of the covid variants have led to less of a disruption, and i think that might be something that edifies jeff currie's view. jonathan: one to build up the price action for you going into the economic data 41 minutes away.

550,000 is the estimate. futures advancing 0.1%. yields in a basis point on tens. the theme this week, the curve is flatter. two-year yield is higher, 10 year yield is lower. tom: this is a really nuanced bloomberg terminal right now, and particularly with strong swissie, that is big news for sm b. the curve flattening off of the vanilla curve, twos-tens. some of the other curves showing that angst as well. what i would go to is the two-year yield, 0.650%. jonathan: we have brought back for that conversation about rate hikes. i'm looking at twos-tens back at 80 basis points, basically where we started the year. it is a full round trip, january out to december. tom: green on the screen. a good time to drag kriti gupta in here with a chart. you link the equity market into this jobs report. kriti: we are looking at the

dynamics between the two. how much of the stock market is really driven by what you are seeing in the economic data? there was a time when poor economic that it was a good thing for the markets because it meant that fed support would not stop holding your hand. our chart of the day really shows that correlation, that dynamic. for our radio audience, it really is that build up you have seen in the last couple of months. essentially, that good news in the economy is actually good news in the markets, and that has been a dynamic for the last couple of months in this pandemic era. tom: all you have got to know on radio is there's a whole bunch of red away from this correlation, and all of a sudden , the correlation flips. why? kriti: because you start to price in those rate hike bets. those really start after the summer, and today is going to be the first real test since that pivot about whether the trend stays or whether we go back to that bad news is good news dynamic. lisa: this really goes to the tech stock area. basically, how interest-rate sensitive are they? ?

the view on that has shifted. people saying they can be a bit immune to rate increases because their businesses are so strong, they generate so much cash, people will still stick with them. what is your sense of how much there is this knee-jerk response to the potential for higher rates in the tech sector? kriti: on the one hand, it is extremely interest-rate sensitive, but on the other hand, it also functions as an inflation hedge in the fact that it is just so big. we were talking about apple with their supply chain and demand issues. at the end of the day they still have $190 billion on their balance sheet, extremely low corporate credit rate lines they could draw on, and credit buybacks. it is that kind of demand that makes some of these big tech companies and their own league separate from large-cap companies that can eat those inflation. tom: do you get nonfarm payrolls up to three digits, 502,000? for are you going to go more specific than that? lisa: i heard 500s of the 5000

is the number to go for. -- heard 575,000 is the number to go for. tom: does she know this is live? we never guess these reports. kriti: noted for next time. [laughter] tom: 575,000 from dr. gupta. we will see how that does today. i am looking at the twos-tens spread. jonathan: 550,000 is the median, 375,000 the low. everyone throwing darts with a blindfold on. lisa: but here's the weirder part of that. each aspect of the labor mike it report will even matter? are we looking at wages? are we looking at the per dissipation rate? is the headline number going to be the one that matters? i am not sure. if we see the participation rate move meaningfully, that could be more important than the headline. jonathan: that is what the federal reserve has waited for all year. it has just not developed.

you have that kick higher as we reopened, and it has flattened out over the last three months. tom: i agree, it is a social statistic, but i believe we heard from ellen zentner of morgan stanley, she is not that focused on it given the gyrations of this economy. jonathan: the fed was focused on it. they seem to be less focused on it now. almost exclusively, it was a mission to get back to where we were. i am not sure that it is now. tom: there's different stories here away from x million people still unemployed. jonathan: you have captured the political divide, and that has been what is playing out all year down in washington. in fact, for the last two years. lisa: i wonder how much people to go divide is coloring the conversation on inflation, considering the fact that it is a hot button political issue. i also keep going back to ellen zentner's call that if there is significant pickup in omicron virus cases that actually does impede the economy, that could actually lead to a sooner rate

hike. this is a total shift with respect to have important the labor market is versus inflationary pressure. tom: what is secretary walsh's call? jonathan: i will ask him at 9:30. tom: his call is let's pass this legislation, and it is totally removed from a lot of the wall street analysis. jonathan: it is fair to say this administers and wanted to run this economy hot. this federal reserve is starting to go in a different direction. they will pretty well aligned for the last year. i don't think that is true any more. that will be the core of the issue when we have this conversation a little later this morning. going to try to tease that out for secretary walsh. not blunt at all. tom: i am already into my nap by the time you are talking to secure walsh. jonathan: thanks, tom. i think you are live on air at bloomberg radio at the same time. but you are half-asleep. [laughter] coming up on the program, bank

of america, they've got a call year-end on the s&p of 4600 for next year. the high on the street, 5300. the low, 4400. we will talk about the guesses for next year and just a moment. this is bloomberg. ♪ this is bloomberg. ♪

>> the messaging from the curve is very pessimistic. >> a lot of what is going on in the market now is pure risk management. >> i hope that someday in my career we focus on valuations. >> for now, corporate profitability looks pretty good. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. jobs day on radio and television , across america, around the world. it is an omicron jobs