>> it is time for the fed to adjust. >> every time we get close to a fed tightening cycle, markets tend to adjust. >> the flattening yield curve is suggesting that it won't take much to break something. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: it is fed decision week. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. your equity market up to 12 points on the s&p. what a week to have a record high of the start of this week. lisa: i was looking at a bank of america credit survey for the month of december, and it showed that the top risk was a policy era. not covid, not a market selloff,

but the fed doing something wrong. what does it mean to do something wrong, move too quickly or wait too long? jonathan: what has driven stocks this year? earnings have been fantastic. margins have held up really well. that be the story coming into next year? the multiple, will it be impacted by this conversation we are having? lisa: people are just worried about the policy response. if earnings keep up, how can people people from stocks given that bonds are really offering nothing, offering the most negative returns going back decades when it comes to a real basis on inflation? jonathan: caroline hyde will remind me the year is over on thursday. the bank of england just around the corner. caroline: what about the boj or russia? jonathan: i think it is fair to say we can skip the boj, unless you think something dramatic is going to happen after that.

caroline: i think it is interesting, this is a week where we have not one, not two, not three, 20 central banks. the narrative, as mary daly was saying, from the federal reserve over in the united states, saying that now, what is the impact on the consumer? it is inflation actually. that now becomes front and center rather than the labor market. jonathan: now i've said that, the boj is going to move markets on friday. lisa, you are -- lisa: you're going to end up with the most eventful markets. jonathan: i will call it when the boj mixer move. a lift in this equity market, i record high at the close on friday. the biggest week of gains since february. the rally continues. yields in a basis point on tens, and euro-dollar negative, down about 0.3% on that currency pair. lisa: divergence still the theme

in terms of the ecb remaining on hold. you have been talking about possible additional accommodation with extension of their pandemic emergency bond buying program, whereas in the united states, it very much is how quickly can the federal reserve go. the bank of england replaces the -- releases the financial stability report at 12:00 eastern. 12:30, they will have a press conference. how much is the stress come to come from inflation versus a move too quickly? the bank of england tightening into a slowing economy. today we get an opec monthly oil report after the biggest weekly gain going back several months, and it comes at a time when the iraqi oil minister came out overnight and said that demand has not been dampened by the omicron variant. to me i find this fascinating, especially if it is borne out in the data.

antony blinken will give -- on the strategy. they have said they are not going to rejoin, but how much is the idea that they need to diversify the supply chain issues? how much does that really bear out with respect to forming relationships? jonathan: here's a conversation i want to have right now in the premarket. apple positive in the premarket, approaching $3 trillion market cap. up 1%. coming into this week, 2.9 $4 trillion. day knives of wedbush saying another watershed moment for apple as the company continues to prove the data is wrong. that number could be just around the corner. lisa: apple down 2%, 3%, 4%

because of their supply chain headaches, but it seems as though that supply chain issue just puts it to one side. is it the haven trade of last week? we are higher since the start of covid. jonathan: it feels like five minutes ago we were talking about a $1 trillion market cap. caroline: honestly, -- lisa: honestly, who isn't a $1 trillion market now? it just increased the air rotation of asking for it. jonathan: joining us now, the demanding director of portfolio strategy at goldman sachs. i've been talking about the

market doubting the durability of a fed put. make sense of it for us. >> i think you already mentioned it. we are all grappling with the same issue, which is that this year was a phenomenal regime where you had real yields anchored despite rising inflation and growth was strong. earnings growth in particular. robert margins surprised to the upside. we all know it is going to be a tougher climb next year. the question is how much tougher. is it going to be the monetary policy, the growth breaking away because of omicron? at the margin for most of next year, you probably will have above trend growth and real yields at the backend will remain pretty low, so you probably want to be a bit overweight equities, but definitely going into the first quarter, there's a lot of

question marks, and investors have very little appetite right now. lisa: you said the selloff we were seeing didn't look over, that it looked like there was more to go, and everyone thought there was a dip that was buyable, and here we are back at record highs. what is your view in terms of the correction a lot of people have been saying are overdue, yet never seems to come? christian: as long as real yields are low, there is a certain amount of search for yield that will define behavior. levels of growth are really strong right now. you have the ism services at all-time highs. growth in the u.s. is running incredibly strong. what we said at the time, when you had the thanksgiving selloff , there were a lot of

technicals, a lot of things exacerbating the fed pressure tactically, and it wasn't that fundamental. the type of selloff pressure we saw where it was not that significant in our indicators that we would see this is was amazing dip buying opportunity that would propel the market into next year, i think it is fair to say it was a buying opportunity, but there's fundamental issues are still there. so what you like in terms of dip buying, if you have capitalization, you are having unwinds, or you can sound clear on the macro. both of those are true, so we are still a bit worried that there is more volatility going into q1. lisa: i know you look --

caroline: i know you look a lot at options positioning. where do we stand now? christian: i think there are a few areas that have completely reversed, where going into this correction, you've had some extreme bullish positioning in some spots. you definitely see that sentiment earnings have had a significant leg down. i think you see the positioning and options turn a bit. but at the margin, we have seen the largest inflows into equities on record this year, so at the margin, most of the declines are probably a bit overweight equities, and they should be. on the strategic allocation point of view, you should probably in the back of your mind aim for a bit of an overweight in equities. the problem is in q1, these type of lower weights -- type of overweight may be tested a bit. jonathan: is there a u.s. bias within that overweight? christian: it is really

interesting. i think we had this year a bit of a shift where people were definitely getting more interested in euro performance, slightly longer term perspective, and in japan, occasionally tactical. you were mentioning apple before. i think a lot of these heavyweight companies will still dominate in portfolios, and that is just a matter of size, in terms of market cap, but also at the margin, there's really a lot of cynicism on the kind of new cycle narrative. i think we all know the covid narrative and how much that can potentially keep growth above trend here, but we don't know how green capex, income inequality shifts come all of these things are going to create a new cycle. euro could be a beneficiary there. jonathan: christian, great to catch up, as always.

lisa, north of 7% now. apple makes up north of 7% of the s&p 500. lisa: and it seems to be growing. this is the amazing thing. a lot of people wondering if it is saturation. no. $3 trillion. dan ives has been on the forefront, and he continues to be. jonathan: we mentioned the word from jonathan vol up and credit suisse -- elephant golub -- jonathan golub and credit suisse. the current environment, inflation is not translating into higher rates. that is your huge benefit to start. lisa: you're getting a bit of a lift on the front end, but not the long end, and that is what matters. caroline: good morning. -- jonathan: good morning. coming up shortly, wei lee

of black rock. this is bloomberg. leigh-ann: with the first word news, i'm leigh-ann gerrans. boris johnson warns the u.k. is facing a tidal wave of omicron infections. the prime minister set a deadline for the end of the year for the country's to vaccination program. the number of new omicron cases in the u.k. almost doubled on sunday from a day earlier. a new study says two doses -- it underscores another finding released that emphasizes the need for booster shots. in kentucky, the death toll from the tornadoes on friday may be less than originally feared. still, at least 50 people are believed to have been killed. kentucky's governor says more than 1000 homes were destroyed.

the storms code at least 14 people in four other states in the south and midwest. foreign ministers from the g7 nations have ordered russia to de-escalate its military buildup around ukraine. if not, they say moscow will face massive consequences. the u.s. and its european allies are also considering sanctions that would target russia's biggest bank. vladimir putin has denied he has any intention to invade ukraine. 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 leigh-ann gerrans. this is bloomberg. ♪

>> the cbo says it is not paid for. it is $3 trillion have deficit

spending. it is four point $9 trillion. the house should we vote. you know why i wrote a letter to cbo? because joe manchin came to me and said i think this bill is full of gimmicks. jonathan: lindsey graham of south carolina. from new york city this morning, good morning. lisa abramowicz, caroline hyde, jonathan ferro. tk back with us for fed decision day and a couple of days. up about 10 on the s&p 500 and up 0.3% on the nasdaq 100. another 2% higher on the s&p. senator lindsey graham saying this is a one-two punch to build back better. he was was bonding to inflation -- he was responding to the inflation printed america. lisa: the one-two punch might just be that democrats can't get

on the same page on anything. the fact that we are still talking about salt deductions, capital gains taxation, how much this gets applied, this tells you what you need to know for 2021 passage. jonathan: it is all in the sentence there for senator lindsay graham, a republican senator invoking the words of, cap. -- of a democrat. lisa: inflation is going to be probably one of, if not the key debate issue when we head into the 2022 midterms. jonathan: emily wilkins joins us of bloomberg government and washington, d.c. the inflation print is still shaping the conversation, isn't it? emily: absolutely. right now, everything focuses on send her joe manchin and kiersten's -- on senator joe manchin and, to a lesser extent,

kyrsten sinema. everyone knows it. you saw senator lindsey graham saying he requested the report after joe manchin said there might be budget gimmicks. publicans jumping out on that report friday showing that the bill could add up to $3 trillion in inflation. you also saw president biden saying he's going to be meeting with mansion -- with joe manchin this week, and a number of groups launch ads targeting manchin over this bill. he has set explicitly he does not want the bill to pass this year. he wants to wait until 2022. he wants to see what happens with inflation. but there's a lot of pressure to move now because the general wisdom in washington is that once you get to an election year, it is much harder to get legislation through and to the president's desk. lisa: they've tried to drive

down inflation with strategic oil reserve release. how effective has that been? emily: the white house will say they still need more time to see how that pans out, but i think we saw what the inflation numbers released on friday that inflation is still a major issue. president joe biden made the very bold prediction that last month's inflation numbers would be the highest that we would see, but we are already hearing economists and experts saying that is not going to be the case , that this inflation is going to last well into 2022. i think there is simply a big question at this point about what it looks like, as well as what, if anything, washington needs to do here. you have seen lawmakers start to focus on things like bills to address backups in the supply chain, doing what they can from their section of the u.s. to address some of these backlogs and bottlenecks. it is one potential thing they can do, but this really is a global issue. jonathan: i was struck -- lisa:

i was struck by janet yellen's comments last week, when she sounded more like donald trump with respect to protectionist policies and trying to get supply chains back home. how much support is there among democrats, and how much does this move the needle with trying to do something on a policy level to bring supply chain's home? emily: she definitely has bipartisan support. the u.s. senate passed legislation several months ago that would give $52 billion to semiconductors to be made in the u.s., to make sure that very critical piece that the u.s. does not necessarily have to rely on foreign countries to produce that. that bill has not yet crossed the finish line. there are still debates between the senate and the house because of a much larger package, but it does show there's bipartisan support for the idea of made in america and for having the u.s. take some control over various supply chains. at the same point, it takes

years and years for the u.s. to build up the capacity to produce some of these things currently made overseas, and there's also an acknowledgment that the u.s. can't just say we are going to build it here in the short term. we are going to have to figure out ways to deal with the global situation. caroline: all of that speaking to the inflationary push within the commodities space, the inflationary push that president biden was trying to push against, saying with build back better, you will get a cost-of-living cut. is that really what he is going to be putting his eggs in the basket up to try to push against the narrative that this will be inflationary in terms of spending? because even mary daly of the federal reserve saying inflation is such a regressive tax. emily: the white house has consistently said, and we have heard this message from other democrats, that because the bill contains so many provisions for workers, that ultimately in the long-term it will help the economy. the question is what happens in the short-term.

we only have elections in november of next year. lawmakers are keenly aware of that and keenly aware of what kind of timeline they are on for this legislation have an impact. at the same point, the inflation debate is valid. it is happening in washington. lawmakers, particularly democrats, are confident that they have promised their constituents a number of the policies in this bill. they don't want to go empty-handed. should inflation wind up subsiding midway through 2022, they feel like they need to have something to run on beyond that bipartisan infrastructure bill that they feel has a big impact on people, thinking of the childcare tax credit, thing of health care expansion, thinking of climate policies. democrats see it is their one chance to get it done. they've got the keys to the car. they want to make sure they are getting it across the finish line. jonathan: emily, thank you. one good piece of news, we are not talking about the debt ceiling going into christmas.

that would have kept cool down -- kept people down in d.c., working well into the holiday. lisa: the idea of a default, we have gotten that off the table. jonathan: i think it is some good news, some relief. lisa: then the question is whether they will get anything done, and that is unclear. so interesting come on the oil reserve release. no other country has really come out and shown that they also have released oil as agreed upon. so the u.s. right now is kind of a loan. jonathan: this came from opec in the last couple of minutes. they boost their first quarter demand view as the omicron risk is seen as mild. whenever you analyze the message, you have to think about the messenger, granted. still, that is the headline this morning. lisa: i do wonder what they agreed upon ahead of that opec meeting.

jonathan: have they agreed on anything? lisa: they have been changing their message, have they not? are they going to stay the course, even though there are these risks? jonathan: mike collins is going to join shortly, of pgim. from new york city, this is bloomberg. ♪

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jonathan: lisa complaining in the commercial break that she's not as gloomy as we suggest she has. [laughter] lisa: no, there is nuance. jonathan: from new york city this morning, good morning. your equity market up 0.2%. the nasdaq up 0.4%. the russell basically unchanged, kind and coming into this week -- unchanged, coming into this week on all-time highs. that's the equity market picture. here's the bond market story. it is something we can digest -- we can discussed in just a moment. right now, the difference between twos and tens is about 80 basis points. the spread in and around 120 to

130. i think you know where i am going with this. will they be willing to hike interest rates at 100 basis points with a curve that is flattening like it is at the moment? lisa: they will hold off. they are not going to raise rates as much, and they're going to get the long and creep up a little bit? they're going to get a steepening even though everone has a high conviction that the curve is going to continue. jonathan: pgim thinks maybe we have seen the front end already. i colleague at pgim coming up very up -- mike collins of pgim coming up shortly. sterling at 1.3260. in the u.k. right now, struggling to find the good news. that is a difficult for anyone who is long sterling going into the bank of england this coming thursday. most people are pushing out that call at the bank of england. last time around, people expected a hike.

this time around, people aren't suspecting a hike. it has changed in the last month. lisa: inflation is still a real problem. u.k. natural gas futures rose on concerns about russia and ukraine. how do they counter some of the inflationary reads given the fact that it is a slowing economy and given the fact that there is the omicron variant? jonathan: new restrictions could become an, or maybe not. we talked about prime minister boris johnson refusing to deny that may be more wrister actions are coming before christmas. what else -- more restrictions are coming before christmas? what else can he say? what can a leader say to that? lisa: right. i do wonder how much noise is being generated by his office to try to distract. jonathan: maybe get him talking about this, and not the christmas quiz this year? lisa: i am just saying.

jonathan: of course. 1.3263 on cable. let's get you some single names this morning with romaine. romaine: we are looking at record highs on the major indices in the premarket. getting them pump -- getting a bump from pfizer. an executive at pfizer saying they're more interested in a treatment they have been developing. it is paying about $100 a share, $6.17 billion. coca-cola higher on an upgrade by jp morgan. analysts say the company has recouped about 70% of what lost in on premise sales. keep an eye on apple come on the $3 trillion market cap watch. you need about a one from 5% close -- a 1.5% close to get

that $3 trillion level. we should point out a lot of analysts saw this coming. dan ives at wedbush, another at citigroup which raised their price targets and implied a $3 trillion market cap. that was a 12 month price target. here we are nine months later, staring down the barrel of $3 trillion. some interesting changes coming at the end of the week in the nasdaq composition. they are reconstituting the index, six new stocks going into that. that includes airbnb and lucid. trip.com, the big chinese travel agency, this has really gone nowhere. this will be reflected monday morning when you come in. jonathan: thank you. from new york, futures up around

10 on the s&p come up 0.2%. apple and the $3 trillion market cap very much insight. from jp morgan, they are the new big bull on the street, looking for 2.10%. lisa: we've got to get dan ives back on, ask him if he has a change. jonathan: he's been bullish basically the whole way up on this run. mike collins going just -- mike collins joins us now. using maybe we have seen the peak of yields at the front end and the long end on tens as well. walk us through the framework right now. would you all get around a table together, how do you ask plane this? -- how do you explain this? mike: it is looking at the long term view. everyone is so caught up on this oath surge and inflation surge, and we have done a lot of work on this. when you really peel it back, it has been more demand driven than supply driven. if you look at the supply of stuff being made around the world and being shipped, it is

higher in many cases then pre-covid. but the demand has jumped 20%, especially for goods, durable goods, imports. that demand is going to come down. the big jump in the savings rate we saw last year with all the fiscal stimulus, all the helicopter money, that has already been spent. it is gone. so what is going to happen going forward, as the fiscal stimulus really retrench is, notwithstanding the infrastructure and bbb packages, which are really nonevents in terms of economic impact, the balances are going to come back in the next 12 months. that is really the big picture. the fed is pinning themselves in the corner. they're going to hike rates because they see these headline numbers. so the front end is selling off.

the backend is flattening, which happens every time you get a fed rate hiking cycle. so i think the curve is going to continue to the point where it is flat, but that is already priced in. if you look at the one year note two years from now, which is reflected in the three year yield, that is at 1.62%. the 10-year note, 10 years forward, is at one point 60%. so the market is already priced in a totally flat curve, which is what ultimately will happen when the fed is done hiking. lisa: you are talking about an idea that a lot of people disagree about, that you're going to see inflation come down enough that can justify the fed's patients. how can you see their rhetoric this wednesday confirming that if they do accelerate the paper, as they are -- the taper and continue to talk about uncertainty? michael: they are not being patient. that is why the front end is getting killed here. i always look at 30's because we

manage a lot of long-term money for insurance companies, pension plans. they live in that thirty-year space, not like retail investors. it has been cut in half, and it will get to zero, but that is already priced in. the fed has turned really hawkish. they are getting really aggressive. they are going to accelerate their taper. they are probably going to pull forward and accelerate rate hikes. ultimately, what is priced into that 10-year note and the 20 year note is where the funds rate is going to average over the next 10 years. on average, it is probably going to be 1% or less. maybe they overshoot and get to 2% or 2.2 5%, but sometime in the next 10 years, it is going to be back to zero. so on average, it is going to bounce around and average 1% or probably even less, which puts 10 year notes reasonable value here. caroline: are you pricing in at

all the risk that they might have to be more patient? the bank of england was really hawkish, and now they are not. michael: good morning. that is the risk. there's so many priced end in the front end right now. that is a fed that is really moving for two straight years. that is a long time to try to figure out what the economy is going to look like, what inflation is going to look like, and what covid is going to look like. one of the risks right now, i think the hawkish scenario has been kind of priced in. but the risk is you get a big drop in activity over the next six to 12 months, and that inflation comes down a little more quickly than people think, and the fed and other central banks say we are not going to be able to hike three times a year. let's pull that back. then the curve steepen's, and we

are not ideally positioned for that. we are in the flattening which has been working like crazy, but we are trying to recover some of that because we are concerned that fed isn't able to hike six times, which is a high prep ability. jonathan: you always get me thinking. great to catch up, for sure. you're the best. thank you, sir. i have been lucky over the years to learn from some of the best in the fixed income market. something mike collins said stuck with me. i asked them -- i asked him about 3, 5 years ago, what would we think about this bond market about all of this crazy yielding stuff. he said you will wish that you had bought the 30 year with a 3% coupon. and here we are done at 1.85%. lisa: in the break, he was talking about how we are going to go down to zero at some point. i said, what about balance sheet reduction? he said, who cares?

it is going to go up to $20 trillion anyway. these are the discussions being had by bond strategists. jonathan: i'm not sure that is his actual call, but it gets you thinking. maybe, given what we have seen in the last two. lisa: this is what a lot of people think because they think the fed balance sheet has to keep up with the monetary supply , with the pace of issuance with treasuries, and honestly, that has seemed to be the trajectory. jonathan: on this economy, joining us shortly, stephen stanley, chief economist at pierpont. tom keene back with us on wednesday for that fed decision. going into that fed decision, your equity market up another zero point 2%. the s&p 500 at all-time highs. from new york city, heard on radio, seen on tv, this is "bloomberg surveillance." ♪ leigh-ann: with the first word

news, i'm leigh-ann gerrans. the u.k. health minister says once again, the country is in a race between the vaccine and the virus. he has detailed plans to offer all adults in england a booster vaccination by the end of december. there is no certainty the government will be able to keep schools open. in kentucky, they are still searching for victims of the tornado that left a 200 mile path of destruction. governor andy beshear has lowered the death toll. still, he says 50 people have died. in illinois, six people were killed when a tornado slammed into an amazon delivery depot. 45 people made it out alive. flight attendants in the u.s. say alcohol is fueling an increase in in-flight violence by passengers. they are calling on airports to limit travelerss access -- limit travelers' access to drinks

before flights. pfizer has agreed to buy arena pharmaceuticals in a cash deal valued at 6.7 billion dollars. arenas portfolio includes development stage treatments in dermatology and cardiology. the company shares almost doubled in premarket trading. apple is inching closer to a $3 trillion stock market value for the first time. shares are higher in premarket trading. apple is up more than 200% since the coronavirus first sent the world into lockdown last year. 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 leigh-ann gerrans. this is bloomberg. ♪

>> you are looking for the stock market to be the leading indicator of where the inflation

is going to be. these rising short rates. it is suggesting the fed is going to make a policy mistake. jonathan: jim b uncle -- jim bianco of bianco research going into the weekend. tom keene back with us for the fed decision. futures up nine, advancing 0.2%. it is not just the fed. it is the ecb. it is the bank of england. there are others, too. kriti gupta joins us. kriti: i want to look at the boe , the bank of england, right now. it is really those rate hikes i am interested in. the pound has been dropping. it has been weakening. it has been having a really rough time of it lately. a lot of that has to do with the rate hike bets being pushed to

february and the omicron variant impact. my chart of shows the pound on a trade-weighted basis. this chart goes back to this brexit times, which virtually traded in a range for the last five years, and notably traded at the top of the range. here is something a lot of people aren't talking about when you look at the pound, and that is trade flows. "the ft" reporting u.k. is seeing their worst year since 1983. the first being oil volume. a lot of the port volume comes from 1/3 of oil volume that goes through london and into the rest of the world. but of course, with the coronavirus really impacting the demand picture, those u.k. ports aren't seeing that. the other piece of the equation is cargo volume as a result of brexit instead going through ireland, and then through the eu. the question is, as you start to see the congestion really

relieve in ports around the world, do those trade-weighted flows start to impact the pound in particular? jonathan: great question. fantastic going into the bank of england this coming thursday. right now i am incredibly distracted by a series of ryanair tweets in europe. once you start writing -- rising through this. the u.k. alert level was increased over the weekend. ryanair has this graphic which has the stage of the outbreak on the one side and the downing street party level on the others. when you are at level one of covid-19 no longer present, it is a small gathering with wine and cheese, all the way up to level five, when the risk of health being overwhelmed is matched by a downing street full on rave. [laughter] i won't read out the rest. lisa: honestly, not fit for air, some of this stuff. the idea is that this is a highly political tweet from ryanair, one of the biggest airlines. clearly not happy.

jonathan: the person who sent this to us as markets have where's -- is marcus ashworth, bloomberg opinion columnist, and he joins now. they're pushing it against the rules from the prime minister and his party and the rules for the rest of the country. marcus: i think it has been overblown. if you look at the price of the pound, it is holding up really well despite the fact that they will probably not get a rate hike from the bank of england. you look at some of the dates -- amongst it all, i think the growth in the u.k. is actually doing pretty well. however, with omicron and a number of other things, we've got cpi wednesday, we are worried about 10% in the u.s.,

but u.k. probably gets up to 4.9%, maybe worse. that could do something to the bank of england, but they will wait to february for quarterly review. we are seeing things getting priced out on the interest rate market for sure. caroline: there has been some shakiness within the real estate market. may be a healthy dose of shakiness because prices have been going ever upwards. but is that going to be some thing of concerned, do you think? marcus: there's only one way for housing prices to go in this country, and that is up. people with small deposits can access a mortgage which has been a problem in this country for the last five, certainly seven years. there's a problem with interest rates staring very low, and banks wanting to lend mortgages.

you might think the bank of england might do something today about it, but they did that over the worst part of the pandemic. they've now had to relax that. it probably means prices keep going up. lisa: you've talked with a lot of traders in the bond market. how much credibility has the bank of england lost over the past couple of weeks? marcus: all of it. you just have to look at some of the shocking numbers out of hedge funds. they are not supposed to lose quite so much money in a spectacular way. the fact that the bank of england caused such dislocation across the world, u.s. money market rates, let alone u.k., i think it is a really bad handling. they keep on making it worse. what would be perfect to confirm

how tone deaf they are is if they do raise rates on thursday. jonathan: i remember back in 2014, that talk from governor carney seemingly teeing us up for a rate hike. they didn't quite deliver everything. was this that much worse? marcus: it was because it was totally unnecessary. they changed for no reason and shocked everyone with a series of statements, then never backed away from it and failed to deliver. they said, it wasn't us, when they so plainly did. in my mind, it was a very bad handling of a split committee. i do think those external members who do not want to hydrate are still a pet -- still upset. there's a split counsel there, and i think they are not handling it very well. jonathan: i know you are a rugby

fan, so you don't follow football at all. thank you, sir. champions league, uefa having a tough morning. the champions league draw needs to be redone. a technical software problem with the software that tells officials which teams are eligible to play each other. manchester united withdrawn in a really tough draw. i imagine man united fans will be happy because the draw will be completely redone at 3:00 p.m. european time. not a good weekend for people who have to organize sport. i am thinking that just for the champions league. i am thinking of formula one as well, for a certain lewis hamilton. caroline: if you broken hearts. there was a lot of shouting going on in my family at that particular moment. what a dramatic race. you like shoemaker.

jonathan: i'm a hamilton fan. i'm a bigger schumacher fanned. so i was -- bigger schumacher fanned. so i was conflicted. but i did lose my voice, too. can you imagine my neighbor at about 9:00 a.m. in the morning, thinking, what sport is on at this time? it was formula one.

mom, hurry! our show's gonna start soon! i promised i wouldn't miss the show and mommy always keeps her promises. oh, no! seriously? hmm! it's not the same if she's not here. oh. -what the. oh my goodness! i don't suppose you can sing, can you? ♪ the snow's comin' down ♪ -mommy? ♪ i'm watching it fall ♪ watch the full story at www.xfinity.com/sing2

>> we are seeing more and more of these fed members becoming a bit more worried about inflation. >> the game is to stop a wage spiral from starting. >> there's a risk that all markets go down. there's really no place to run and hide. >> what people forget is negative real yields are a very positive thing for risk assets. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: a massive week ahead. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance

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