default, a creeping default. >> it is time for the fed to adjust. >> the bond market is telling the fed they are making a mistake. >> if and when they start to hike, they will not get very far. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: cpi friday. from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside lisa abramowicz, i am jonathan ferro, together with kailey leinz. could we get the hottest print since the early 1980's? lisa: i was looking at the 1980's, not only ronald reagan's term but where the 10 year yield was. it was 13.7%. jonathan: 10's at 1.51. lisa: not only were they not at

zero, they were above where the 10 year was. he was a deeply inverted yield curve, highlighting some of the precarious neighbor -- nature of the fed's conversation as a deal with the cpi price. jonathan: the number 6.8%, your meeting estimate. kailey: it will come in hot québec to be fair, we are likely knew it would come in hot pit i was talking to michael mccabe -- it will come in hot. to be fair, we likely knew it would come in hot. i was talking to michael mckee -- jonathan: how do we respond to downside surprise? if we get one? lisa: great question. do people pushback or say that the fed will stay the course, because right now, even if you get a downside surprise, you are getting higher prices at the grocery store, at the gas

station, wherever you go, affecting consumer confidence. i do not think anything will really push them off course unless it is a dramatic downside surprise, which would be bad news all around. jonathan: we went from cpi wednesday to cpi friday. does that work? lisa: i think it is fabulous. you have to do something a little bit more, like a cpi consortium or something. jonathan: i will work on it. futures up 14. big print not -- big print, big number, coming in a couple hours. crude rallying 0.6% to 71.34. the euro-dollar negative again, down 0.2%. the euro-dollar 1.1267. lisa: the notes for why we have seen such a persistent dollar strength in fascinating. we will talk about that

throughout the show. 8:30 am, we will get a big number. we have been talking about it all week. the u.s. cpi print. consumer prices expected to rise 6.8%, rising at the fastest pace since 1982. the key question is how much is this basically a lagging indicator at a time when we did see oil prices come down? we have seen some of the froth around the edges get baked out of the market, frankly out of the economy as well. if you take a look at some of the underlying gauges, for example how quickly the price of used cars are going up, there was a that, then they re-accelerated. they are the most expensive or rising at the fastest pace in data going backward -- going back decades. at 9:45 a.m., the southwest airlines chair and ceo as well as incoming ceo plan to join our own jonathan ferro. very interesting to see that their main challenge is hiring. this is an ongoing issue for a

lot of different orbit executives -- corporate executives. they are not only having trouble hiring but keeping employees. how much is a higher inflation read having to do with curating consumer sentiment? we get a preliminary read on the university of michigan consumer sentiment gauge. jonathan: thank you pa looking forward to that conversation with southwest later on this morning. kailey, you brought up the hiring environment is the worst we have ever seen. kailey: and it goes to the complexities of his labor market, where jobs are ready and available, 11 million in the u.s. that we got earlier this week, and at the same time, it is really difficult to get workers in the dorp that is affecting airlines but also industries across the board. we have heard of so many higher

labor costs, coming down to wage inflation. jonathan: what is bad for the employer good for the employee? lisa: this is wonderful news for the u.s. economy. this is what people want to see. they want to see, particularly people on the lower end of the wage spectrum, the problem is if it impedes growth, some of the hiring plans of companies, it makes them turn more to robots than humans. jonathan: you think when corporate america is complain, it is good for the economy? lisa: you are really going to go broad on that? five minutes into the show, i am already depressed. [laughter] it is not the case. it is a nuanced issue, because they cannot deliver the services , goods, with a slowdown in the economy. if they have to pay more, if they can afford it, great. jonathan: george gong this joins

us. 8:30 eastern time, cpi print. running through it. george: calling it cpi friday, i know you're all enjoying it. i do not think traders can. two fridays in a row feels like an attorney d. the trick is this is december. it has been a hard year all around. i am expecting and thinking we will get higher inflation. the real risk is if we get the seven handle. if you get something that really shocks and the newspaper starts running with it in the media focuses on it until the end of the year, there is a risk all markets go down. really no place to run or hide. lisa: basically if it becomes a

seven handle and become something on the nightly news, it will send markets down. how much and how high can your yields go? george: in general, the bond market is discounting a lot of us already. we have three hikes already or more priced into the front end. obviously we can go to a four scenario easily. we have the fed next week. digesting this news friday and then over the weekend, if we get a big, hot number like that, i think the focus will be on the headlines. but the market participants will really focus on the various components of what is driving that number. it feels like a one time kind of affect and the headline just kind of loo out, that is one thing. but if there is this continued broadening of inflationary pressure, which, to mean, although the headline will be focus for the general population, in the markets, we will focus on the core, close to 5%, and if that work -- if that

were to happen, reports state sticky through the first half of next year, and that will really get markets nervous. kailey: a report said that most companies will hit stagflation. they said the u.s. is not included because the demand recovery has already been so robust that there is more christian. do you think we could face the risk of stagnation if inflation is persistently higher? george: it will be a tale of two halves. kind of typically the case anyway. we have stronger first halves than second half. but next year will be the atypical worst case scenario. growth will still continue in the first half, service sector will pick up, but then you have a sharp drop-off in durable goods consumption in the second half. i think the u.s. will whether it better than the rest of the world, but the deceleration we

have been facing on and off throughout the year will persist into 2022. jonathan: whatever the number is, we skipped straight to 8:30 eastern time and think about what the fed will do. something fresh in this conversation is not anyone's baseline from what i've heard, but i wonder how you see that panning out? george: i have been entertaining the idea as well, gary locke, concerned about that. i am behind that view in the sense that i would love for them to do that instead of hiking rates. i am not sure that will be their first port of call, but you look at the fact that the fed has basically sterilize qe throughout the year, basically all of the fed's balance sheet expansion was mopped up by the money markets. they overdid qe throughout 2021, and it would be a smart move to do quantitative tightening, and let the portfolios run off

naturally and that the curve steepen. this idea that there is a policy error in the market, it is not necessarily policy error, the markets are saying there is still demand for a duration, but rates will be too low, and now you will start hiking rates at such a low level that it could be bad for the financial system. jonathan: george kong called is there of mufg. this is something bank of america had to say yesterday. when he said the fed has tools, plural, do we have to start about balance sheet reduction and rethink how this may play out? lisa: this has really been a hot topic among a lot of individuals, especially because they say next week's surprise will not come in the acceleration of taper, it will be any guidance in the balance sheet. what would the affect be, how significantly would it allow longer-term bond yields to arise? those views highly divergent.

jonathan: do you think it would make a difference if they signaled a bunch of hikes versus balance she reductions? lisa: one fx a different part of the other. if you allowed balance sheet roloff, the theory would be we see more of an effect with long end yields rising a bit more than short end yields, especially if you do that first or allow that tandem with rate hikes. jonathan: looking for a steeper curve. right now, flatter. kailey: in going ever flatter. a lot of people say flattening will consist. but as george pointed out, we are already flattening off a very flat levels. what does that mean? jonathan: the conversation will continue. darrell cronk joining us in the next hour. from new york city this morning, cpi later this morning. this is bloomberg. ♪ ritika: with the first word news. a legal blow to a man who spent

almost a decade fighting attempts to remove him from britain. judges in the u.k. granted a u.s. request to extradite julian assange. assange has been prison in the ecuadorian embassy since 2012. the u.s. government charged him with espionage for his role in releasing classified documents. he can appeal the ruling. president biden assured ukrainian president volodymyr zelensky of u.s. support in is a standoff against russia. he pledged not to hold meetings without a ukrainian representative. he also said he had not made any concessions during a call with vladimir putin. the arrival of the omicron variant triggered a global rest for booster shots. the u.s. expanded booster access to teenagers. meanwhile, countries like the u.s. and south korea are slashing wait times for a third

dose in half. and it is more important for those who have not been vaccinated at all to get their first dose. china is trying to manage the global message on the collapse of evergrande. the property developer's statement says that will not be a ballot of evergrande, but the risks are recent. evergrande itself is staying silent about its default status. and elon musk growing closer to selling 10% of his investment. he unloaded millions of dollars worth to pay for taxes on the exercise of 2.2 million auction. global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ this is bloomberg. ♪

>> we deserve access to that market.

china has committed to a certain amount of purchases of, you know, farming goods, food goods, airplanes, etc. they ought to live up to that commitment, which creates jobs in america. we will keep pushing on behalf of u.s. industries and u.s. workers. jonathan: the new administration, just slightly old administration, gina raimondo u.s. secretary of, there. good morning. alongside lisa abramowicz and kailey leinz, i am jonathan ferro. tom keene is back with us next week. advancing one third of 1%. yields higher by just a couple basis points. the highs of the year going into cpi, two hours and 12 minutes away. this came from jonathan golub on inflation. we highlighted -- he said historic lee this is offset by rising bond yields. in the current environment,

however, inflation is not translating to higher rates, a huge benefit for stocks. lisa: part of the reason why he upgraded his expectation for the final 2022 target at 5100, saying that the discount rate would remain low, even as he saw stocks benefit. stocks being the best inflation had, how many times have we heard that? jonathan: a lot, and it has worked out for sure. the spread between the top and the bottom incredibly wide. kailey: almost 20% from what morgan stanley sees. interesting to see the divergence even though a lot of the calls are the same. morgan stanley has now pushed forward when the inflation call comes. but we will still be looking good for the most part. the fed will normalize. where that leaves equity market is a mixed bag. jonathan: right now it is

positive. joining us now, andy blocker, head of u.s. government affairs at invesco. he said it would be the nightmare before christmas. are we avoiding that? andy: i think we are on the path to doing that. a month ago, i would have said it was the nightmare before christmas, he has increased the debt limit, get the bipartisan infrastructure bill, and at the same time, get the bill back at her bill. we have gone that bipartisan infrastructure bill. we have agreed to fund the government, at least until next february, and now we have a deal on the debt limit, one of the most important things with respect to the market. we are in a path, now we will see how we get bill back better done. lisa: if we do not get a by the end of the year, will we ever get it done? andy: absolutely. i think there is a big chance for there is a 25% chance we get it done this year, but we are probably a 75 perchance -- 75%

chance to get it done. it is a good sense that democrats want to come together and get it done, it is just a matter of what it looks like right now you the question is when will progressives understand that senator manchin will only go so far and cut a deal? that is what it is about. right now, we are going through the technical things to see which of the provisions can survive that, whether it be immigration, prescription drug pricing, and from there, we have to go to chesterton -- substantive things that senator manchin has problems with. lisa: the reason i ask is it seems the more we talk about inflation and the more we get pushback to further stimulus to being inflationary at a time we do not need that, how does that color their conversation in terms of policy going forward at a time when we hear increasingly passionist -- protectionist rhetoric from the likes of janet yellen and gina raimondo? andy: i think you're onto

something there. with respect to inflation, you can expect jennifer -- you can expect senator manchin to capitalize on the number we hear today to say slow down. but also with the respecter what you're talking about, the protect angle with trade, this is an issue that is out there. kailey: let's talk more about inflation. we have seen the president at least try to be seen attempting to do something about it, tapping the strategic petroleum reserve, trying to do something about supply chains and fixing chip shortage issues. none of that has up to this point -- at least the american populace does not feel that yet. is biden's approval rating going to continue to be tied to price pressures? andy: i think you are onto something really important here. when we look at inflation, we look at it from a political standpoint and a market standpoint. from the market standpoint, we are looking at fundamentals,

those things sticky going long-term, but politically, and you have talked about this already, it is gas and groceries, what people feel in their pocketbooks. the good thing for biden's recently some of the gas prices will start to dip down. he will try to take credit for it with the strategic petroleum reserve. but it is really about omicron and fears about that as well as some of the production. a lot of these things, when we talk about inflation, are unfortunately out of the president's control, but he has to make it look like he is working on it. he is doing everything he can come up that we understand that the economy is so large and macro move so big that the federal government really cannot drive that. jonathan: what do you make of the current strategy? we have people saying feel this, and it does not feel good to me, but then you have the administration saying but it is good, and here is why.

saying that it is a media not covering the data properly? andy: that is ultimate disconnect we have found in politics. you have the numbers, you have economists saying that, on the macro level, gdp is up, but it is really about what people feel every day. but people will not member what you said or even did, but they remember how you made them feel. whether that is how you speak to people or what people are actually feeling each day, that will drive the decision-making and drive the polls. jonathan: biggest challenge for this administration, at least domestically. andy blocker of invesco. you think andrea orcel is feeling good this morning? it will join in the inflation data later this morning. santon dare must compensate andrea orcel 68 million euros -- santander must compensate andrea orcel 68 million euros for

withdrawing an offer to become their ceo. he is now the ceo of unicredit, but santander also has to pay him 68 million euros. lisa: this is pretty close to what he was asking the courts for. he wanted something more north of 100 something million euros. but that is a pretty good payout, if you ask me. jonathan:. things are good for the employeelisa was talking about that -- lisa: hold on, no. come on. so good that if you are an employee and you leave a job and get 68 million euros. or they withdraw the offer. jonathan: perfect example of the labor market we are in right now. andrea orcel capturing the objective of the workingmen. lisa: popular sentiment, without a doubt. jonathan: marching toward see the by friday. inflation data coming in about

two hours time. yields up a basis point on tens to 1.51. euro-dollar -0.2%. crude positive 0.5%.from new york, this is bloomberg. ♪

>> all of these are things that as we see clinical cases coming out in the numbers are getting bigger.

kailey: we are heading -- jonathan: we are heading for the biggest week of gains on the s&p 500. the nasdaq 100 up 68 advancing .4%. looking forward to catching up with credit suisse at about 9:10 eastern. let's get to the bond market. inflation, the big number just around the corner at 6.8%. up three basis points to 72. the curb flatter again. schumacher from wells fargo expects it to get even flatter from here. he expects 2's to get to 160 on

2's. he is looking for that on the middle of next year. can the equity market handle more than a doubling? lisa: i guess that what happens in the economy. so many questions. also, what does that mean in terms of fed strategy? jonathan: are we going to get the balance sheet reduction? let's switch the board and get the cable. big conversation next week about the bank of england. 142, the highest of the year. right now, 132. we have been trending lower ever since. after the recent data in the united kingdom, the concern of the omicron variant, i think socgen's a toxic mix. that has increasingly been the consensus. you have also seen ongoing dollar strength which has not helped things.

along with an ecb increasingly accommodative. jonathan: are you more excited about wednesday next week or the thursday next week? bit of ecb, bank of england. lisa: thursday because i know that you don't care. you think the year is over after wednesday. i think it is going to get really exciting. jonathan: i will take your word for it and phone in if it gets exciting. lisa: so sweet. this is the key question heading into next year. what can the market handle in terms of yields rising to a certain degree? do you see it feasible we could see the 10 year at 2.5% and markets could still drive higher? >> we don't expect the tenure to get to that level. if you take a look at every single recovery, it has been about a total of 150 basis

points between the bottom and the top. if that turns out to be the case, we could see the tenure between two and 2.1% next year. we definitely think the economy could handle that and we definitely think you will see the year -- yield curve flattening. we could see 125 to 150 and the economy could handle that. the key is the transition and maintenance of the consistent policy and for us not to see inflation that really becomes core. right now, all of the nature of the inflation is associated with very unusual parts of the market where we believe it is transitory. that, to me, is the difference. lisa: do you think the reason 10 year yields are so low is because people think inflation is going to decline to a more normal pace by the end of next year? and if it doesn't, do you start to see yields pickup? david: that is exactly right. the bond market is really telling everyone a strong

message but people don't want to believe it. you are going to see a message that inflation will not be persistent, that it ultimately will normalize. i think that is the thing we have to worry about. we are telling our clients right now that they are worried about the fact they could get negative rates of return for a very long time. beware of the cash the because we do expect the highest rate you are going to go on the tenure, inflation may run at 2.5% for the next decade. in which case, american bondholders are going to get a real yield. lisa: you say we are entering this new environment where not all asset prices are going to continue to have gains supported. which ones are going to get left out of that? david: certainly the short end of the corporate bond market could do poorly. i think you are going to see they're going to be a bunch of areas where you're not going to

get the u put in. i certainly think they're going to be parts of the equity market where you are not going to get paid as well. those who can deliver/flow are going to -- they're going to be be beneficiaries people don't know. they are not paying very much attention to dividends. if you put together a great dividend portfolio, you may do very well over the next five years. i think people are now well position for the environment. lisa: so you are saying there is going to be a differentiation between quality growth and quality high-growth? david: and i also think there is going to be a differentiation between higher-quality shares and lower quality shares. we took a look at the market at citi global wealth and identify

the fact that this has been a john bradley. if you look at all of the companies with junk bond ratings in the performance of all of the stocks, you will find out it has been a junk rally for the last year, year-and-a-half coming out of the pandemic. and now, we think there is going to be a quality catch up rally of better quality shares, those that can pay dividends, sustainable growth industries. a lot of places have money that is very attractive, but i think the others will be attract. kailey: it is sort of embedded in your ideas and reflected in the intelligence outlook for next year, a second year of negative returns on treasuries. that is nearly unprecedented. for the larger term consequences with that kind of trend with respect apart olio positioning -- portfolio positioning. david: if you think about the last 32 years, that would be a really unusual circumstance for the last decade. people have made good money on

their bonds and that appreciation is now being -- it means a lot for portfolios. it means clients should be moving and that in and of itself is difficult. i think that is a pretty profound change for most retail and high net worth consumers and adult think there are positioned for it. there are ways to benefit from this which is lower rates for longer are going to be extremely good for alternative investments. you want to be a borrower in the environment we just described. the ways of doing that are getting exposed to certain types of real estate that are benefiting from the digital change. these are things that require a little bit of forethought. lisa: but there is a broader idea that we have become used to the risk tolerance because the fed has been flooding the market with liquidity and that as the

fed starts to stop their purchases and possibly even discuss rolling up their balance sheet as you get a more motley picture, that becomes less reliable and all of a sudden you get pockets of volatility that become very concerning and possibly upend some of these private assets and other pockets that have been overbid. what is the risk in your view of that kind of node of contagion or volatility that could potentially get really disruptive next year? david: i don't think short-term volatility is the argument to use over the value of long term unless their liquid assets. i think he is right in that you are definitely going to see more market volatility. the other factor i want to say argues against that to some degree is the extraordinary amount of cash on the sidelines. investors achieve global wealth

and have cash levels of 20% to 30% right now. i think they're going to be surprised and not benefited by holding the cash. that liquidity is also on the others. i think the right way to look at this is there is more market volatility when the fed moved away and it will move to a normal level before it comes extreme. normalcy is something we have not seen and have to get ready for. jonathan: we have no idea what normal is anymore. earlier in the program, we brought you news out of santander. they must compensate italian banker andrea orcel. this ruling came from a spanish court. the board says it plans to

appeal the verdict. they go on to say they are confident they will be successful on appeal. lisa: i'm shocked they were trying to get out of paying $76 million to him for his removal of his application from the post. it seems pretty excessive. very much indicative of the incredibly hot labor market. jonathan: corporations just won't let it go. lisa: to me, it does seem excessive and it is not surprising. jonathan: i thought this stock was going to come to a close this morning. kailey: two years and counting. julian assange getting extradited to the u.s.. the u.k. court has ruled he has to get out of the ecuadorian embassy. jonathan: is he still in there? kailey: still in there. jonathan: you always see the policemen standing outside. i had no idea that was still going.

maybe that story will come to a close. i doubt it. nasdaq 100 up. a decent week of gains for the s&p 500 and potentially the biggest week of gains going back to february of this year. this debate about the front end, the shape of the curve and steepening of the federal reserve. is as simple as saying accelerated taper? let's get going on rate hikes or does something happen in between? lisa: two-year yields have risen by more than 20 basis wins in two weeks is dramatic. jonathan: let's call it 72 basis points on a two year yield this morning. coming up, andrew from johns hopkins university bloomberg school of public health. that is next. this is bloomberg. ♪ ritika: the coronavirus crisis is threatening the holiday

season in the u.s. number of cases and hospitalizations are rising. plus, there are shortages of beds and staff to care for patients. washington, d.c., the seven day average of admissions has climbed at least 250%. major banks are turning thousands of employees to work from home following new guidance from the british government. jp morgan and deutsche bank are choosing the number of people who will come into the office. the vibe administration is seeking to downplay inflation ahead of the data. the white house says the consumer price index will reflect recent price movement in gasoline and natural gas prices. a spanish court has ordered

santander to pay banker andrea orcel $78 million for withdrawing his account to become ceo. santander says it will appeal. it could be a potential watershed for the american labor movement. employees at starbucks have voted to utilize -- unionize at one of the restaurants. disputes left a third store in the wind. global news 24 hours a day on air and on the number quick take . i'm ritika gupta, this is bloomberg. ♪

>> what we want to start is to see how will the omicron virus

be impacted by the current vaccine. and again, we are encouraged by some of the data. we need to gather more to determine exactly what the efficacy profile will look like. right now, we are already working on the next generation should that be necessary. jonathan: the chairman and ceo of johnson & johnson sitting on -- down with david westin yesterday. from new york city this morning, good morning. equity market up 19 on the s&p. cpi one hour 42 minutes away. cpi. kailey leinz, i understand you have a bit of a correction on julian assange. kailey: it is my turn for a surveillance correction. we do know he has been extradited. i had said he had still been holed up in the ecuadorian embassy. he was there for seven years, but two years ago, british authorities transferred him to a

prison and took him into custody on the extradition warrant. jonathan: the details you needed. i did not know because i have not been following this story. andy has. i'm not going to ask your question on this. [laughter] i want to talk about this omicron variant and i think this is a really important conversation. if it turns out to be much milder but far more contagious, how do we treat that from a policy perspective? from your standpoint? how do we make that change? andy: it all comes down hospitalization rates and severe disease rates. a boost will probably give you a really good are immune response and therefore, if that holds true, the current strategy of getting people boosted should be able to limit our severe disease cases and allow us to keep going without any major changes in our

public health intervention policies. we are far away from that because we are certainly dealing right now with the delta search that is really approaching peak levels that we have seen here in the u.s. we are really in a bit of a pickle in terms of trying to deal with the current delta as well as prepare for potential omicron. lisa: i want to tease out one idea of quarantining if you are exposed because that has been highly disruptive especially for kids going back to school or the workplace. this is one big reason people are worried about bringing people back to the offices. how transmissible is somebody who has been inoculated three times once they get a breakthrough infection? are they as infectious as an unvaccinated individual? andy: data suggests you will still be more likely not to transmit the virus. there are certainly some cases in literature right now where if someone who has been vaccinated

gets a strong infection and has a lot of virus, they can transmit. for most people, vaccination will reduce the transmission of both delta and omicron. vaccination still is the route to turn the curve here. i think the thing we really have to think about right now, particularly when it comes to omicron, we have seen data mostly focused on vaccinated people and individuals who are relatively healthy. we have not seen cases of omicron in vulnerable populations, the elderly, immunocompromised, people on cancer therapies. what omicron does in those populations that don't have that protection induced by the vaccine that is going to be really important to judge because if those vulnerable parts of the population are even more sensitive to severe disease with omicron, we really have to rethink some of our public health approaches. lisa: just going back to

vaccinated individuals, if they are not that contagious and don't spread the virus, why are they being tested 5, 6, 7 times to travel? why is there still this surveillance and possibility of quarantining of them if they get a breakthrough infection? andy: it goes down to the layered approach of limit spread of the virus. we never want to rely on one thing and often times, the testing combined with vaccination status is used as at least two ways to make sure we are catching 90 plus percent of people who are potentially infectious. that is the point. i will say there are better strategies to do the testing rather than our nasal swab pcr's. antigen testing, at home testing. these are things that we in the u.s. have not taken advantage of that could make this whole process of testing and being

certain that you can go back to work, back to traveling much more easier. kailey: obviously, in the u.s., we do have access to vaccinations and booster shots whereas a lot of the world is not even have a large portion of their population given their initial doses yet. the who is saying we need to focus on getting more of the world vaccinated before we have the booster conversation. do you think we are miss aligning our priorities? andy: it is important to note that a global pandemic requires a global response. certainly, getting more vaccine to other countries has to be a higher priority. i realize there are all of these interests in terms of protecting our own population to the greatest degree possible, but at the end of the day, omicron is showing us yet again what we can expect from sars-cov-2 if we don't get better at vaccinating

the world. the doses that have been given so far to africa are a great first step, but if you think about the population of africa and doses promised, we are still nowhere close to being able to move on that one continent to a level of protection in the population that would help us really reduce the amount of variants approaching. jonathan: thank you so much. this is the news coming out of london. hsbc telling employees on thursday afternoon they should return to home working when possible. deutsche bank significantly reducing the number of staff working on monday. an internal memo saying it is reassessing he needs to be coming into the office and who should revert to working from home on a more regular basis. three banks in london making moves. lisa: you really were talking about the businesses in the heart of the city, the idea that

all of them are going to suffer economically as a result of fewer people coming to the offices. at what point do you weigh the risk of economic damage from the threat of a virus in a population that is overly protected? that is why i was asking about the question in quarantining. at what point are we having certain restrictions that are overly protective for people who are already protected from getting severely ill? jonathan: and if you are a company, you have known joyce. the city of london could become a ghost town. where are we now? going into 2022. unreal. lisa: and you are still seeing that. midtown definitely not back up and running, if you look in new york city. definitely getting more back up to speed than it was. jonathan: it feels like it is back to what -- where it was. lisa: because nobody is taking the subway. people have not gotten back to

navigating the city the way they used to. jonathan: why is that? lisa: we can have that discussion later. jonathan: we could do it now. i think we need more than 10 seconds to discuss the subway in new york city. from new york city, this is bloomberg. ♪

♪ >> what you are going to see is higher inflation through 2022. >> inflation is effectively a creeping default. >> it is time for the fed to adjust. >> the bond market is telling the fed they are making a mistake. >> we think if i when they start to hike, they won't get very far. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: cpi 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 up 20 on the s&p, advancing 0.4%. the data just around the corner. lisa: evidently it is all priced in. yet, they do think it is priced and even