>> central bank 101 as you want to look through some of the supply driven increase in inflation. >> the risk of a 60's or 70's thousand fallacious story is overblown. >> amick spec and the fed to not make policy mistake. they will air on the side of easing. >> this is an economy that does not need additional accommodation. >> this is "bloomberg surveillance" with tom keene, jonathan ferro and lisa abramowicz. tom: jonathan ferro, lisa abramowicz and tom keene. the sum of all your fears.

in a moment, david costin of golden stacks -- goldman sachs. it's a bull market. jonathan: sometimes this year if there is one criticism it's you haven't been bullish enough. looking ahead to next year it's all about multiples and to what degree the federal reserve bring those down with a move. what are we expecting, we're expecting to see a couple of highs in the dot plot for next year and three more a year after that. tom: the surprise may be the emphasis in the press conference. how do we link what jerome powell says to the somewhat fragility of this great bull market. >> i think steve is so right to think about the emphasis the central bank. how data-dependent is that first rate hike. does a wrap up at the end of

march or just go visit a case of inflation data through q1 assessed with a degree of deceleration in inflation and then work it out there. i wonder where he will push later in that news conference. >> our bond team, two killer stories about the bond market is about the primal scream needed for the bond market to get this attention. >> going along with the fed said which is transitory saying if we see near-term inflation peak it will come way down and in the meantime we can get neutral rates up to a significant place or frankly any place they've been historically because of how much debt there is and they will go back to a more secular stagnation type paradigm than what we saw over the past two years. >> markets will need to --

scream. >> inverted yield curves will make jerome powell screen. real volatility in terms of how much things are swinging around and this feeling that people are on more orbotech -- unmoored. they have had such an influence starting this market. tom: a tinge of emotion as we face this december 15, our final show together this year all three of us with our separate lives and travels always cherish the final data check of our year. jonathan: i cherish you. i really do. equity futures unchanged on the s&p. where are we, down 25. look at that. i've got the hat ready. just publishing. jay powell has backed away from the term transitory, was little

information he thinks it's entrenched to stifle the curve. we believe we will provide continued support for economic growth and risk assets. tom: everybody recalibrating here as well. coming up in this hour, the chief u.s. strategist at goldman sachs has been a huge advantage to us in describing a bull market he needs to be invested in. the big fear is this silliness. everything else terrible. and the fear of a drawdown. tie the two together. >> the subject of a drawdown will bring happiness to lisa to hear about that. but the idea of a narrowing market is i think it important characteristic of the last six months. relatively few stocks have driven the market to these record levels.

the history would suggest that over the next three to six months you will get a larger than average, deeper than average drawdown instead of a 4% drawdown over time, you may likely get an 8% drawdown. that's what history would suggest once there such a significant narrowing of breath in the market. if you think about where we end not just the year, but that time , equity prices seem higher. all of the focus today in the conversations before have been about the announcement on the fed today and the tapering. all of those are important. the fundamental issue in equities has been this year you had a huge spike in commodity, you had supply chain dysfunction , difficulty with companies finding and keeping employees and you had the delta and omicron variants. all these issues yet profit

margins in the united states across every sector are at record high levels. management has been very nimble in dealing with these issues. we look into 2020 earnings up around 8%. largely the economy is still growing. that is the story for 2022. a flat valuation in my opinion. roughly 10%, maybe 11% total. >> i'm not rooting for a downdraft. a lot of people of been talking about how people -- how things look. your argument is they are not because they will get the ongoing margin of incremental growth in terms of how just because i want to be in brand here. what's the sense we will get some kind of rate hike or savings account and the consumer says we are not going to accept,

not only pay you enough for more inflation but then more. >> the disconnect in the discussion with most portfolio managers relates the situation that's fast-growing. and high-margin companies. based on the same valuation that's fast-growing but negative margins losing money. those two groups of stocks is anomalous that they would be trading at roughly the same valuation. sort of nine times enterprise guidance sales. we are talking about companies with a forecast of 20% revenue growth. but some are having 20% margins. the issue is as rates go higher, that's the goldman sachs and 10-year treasury yield will climb around 2% over the end of

next year. in that environment it's exceedingly unlikely that you get the same valuation for these two groups of stocks and the idea the market is unforgiving if companies which have high revenue growth and all the valuation is dependent on that revenue. as compared with companies where there is rapid revenue growth. that is the stencil tension in most conversations with fund managers. so many of the money-losing lossmaking growth stocks are very much in the glamour stocks that everyone has been so benefited from over the last couple of years. >> the obsession is to look forward out 12 months. can we reflect on the last 12 months. looking at your original forecast for the s&p 500. when that first came out the s&p was around 3500 and we looked at your forecast, look to jp morgan which is higher and everybody

said this is ridiculous. we broke through 4700 four we got to the end of the year. from your standpoint when we play this game each and every year at this time of year. when you look back 12 months what's been the best -- your biggest lesson with clients? >> are forecast at the end of 2021 was 4300 and we looked at that in august. the biggest surprise has been the resilience of corporate margins. that's been a key driver of why we have earnings -- and earnings led market. it has not been a -- an expansion story. it's been an earnings led market. that's the same outlook we are anticipating which is earnings climbing around 8%.

the other aspect that was surprising to me is all year long, most of this year we've been looking at handicapping the probability of a higher corporate tax rate. we are assuming there will be some reconciliation. and affecting a headwinds profit next year. whenever legislation may or may not be passed and i expect some legislation to be passed. the tax hike will not affect company profits. so basically that extra earnings. inures to the investor. profit margins and a lack of increase of legislation. >> your distinction is you say to own a high gross, high-margin , high profit stocks. there's a number of those as well.

are they under owned or over owned right now? >> depends if you want to talk about the hedge fund community or the mutual fund community. if you are looking at the leverage community. basically owning the leading stock in the market, that's been persistent for 20 years. we look at this every 90 days. that's been pretty much the last four or five years the leading stocks in the market. they have been dominating their performance. that's pretty much considered with the whole index. you look at the mutual fund area and there sing it in the underweight and we are looking at large cap, value managers and different benchmark.

the core mutual fund managers are underway with larger stocks in part because there is such a significant waiting in the market. >> this is incredibly important and the comparison contrast with what we saw. >> the prime minister boris johnson holding a news conference from downing street. midday eastern time to talk about omicron. the reporting of the u.k. not expecting to get new measures expecting an update on the booster program. we talked a lot about earnings. you talk about earnings being the big surprise for next year potentially. there's been some confusion around why multiples are so elevated. is it that early recovery were earning start to deliver upside surprise. that's were deutsche bank sits or is it the fact that rates are

lower. can you give me more view on your brand. >> and absolute metric if you look at enterprise sales, price earning multiple. the equity values are extremely high. the rationale for the market being reasonably attractive does depend on the extremely low interest rate environment whether that's corporate bond yields, inflation protected securities or even nominal treasury yields. interest rate related metrics seasonably attractive. an important construct think about is that in history it shows six months before he fed hike, six months after he fed hike. basically you have multiple splats. everyone of the tightening regimes has been the experience.

that happened to match up closely with 2022. it's about six months before the expected first hike. six month after put you at the end of 2022. that's not upon which we make the forecast. as a result, the way we think about it is rates are going higher. why is it a bit lower? consumer confidence remains high. the policy on certainty, the election for next november. beyond that you will head back to a roughly stable evaluation -- stable valuation. historically high but still reasonably attractive in a low interest rate environment. even with rates rising braden jonathan: i hate to result body of work, but fantastic on the

index level over the last 12 months. good to catch up. they were looking for 4300 12 months ago. we are just short of that over the last couple of months. >> what permeates is a corporate america, that's the number one thing i see. >> this constructive view on earnings has delivered through 2021. from new york city on this fed decision day with tom, lisa abramowicz and jonathan ferro. your equity market unchanged. from new york, seen on tv, this is bloomberg surveillance. ♪ >> with the first word news. president biden will get a

firsthand look at devastation caused by tornadoes in kentucky. he we will storm victims and local officials to offer federal support. more than 30 tornadoes ripped through kentucky and four other states. the biden administration is considering whether to impose tougher sanctions on china largest chipmaker. that would limit access to advanced technology. the u.s. reportedly will place eight more chinese companies on a military-industrial complex blacklist. that's according to the financial times. antony blinken is cutting short his trip to asia. one reporter traveling with him is tested positive he will skip a planned trip to thailand and hawaii. one of the most wildly -- widely used vaccines in the world does not provide enough antibodies to neutralize the omicron variant.

those findings may have sweeping consequences for millions of people relying on the sinovac shot. in the u.k., inflation assets which the highest level in more than a decade spring -- more than a decade. driven by higher costs of clothing, gasoline used cars. it may be enough to persuade the boe to raise interest rates. 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. ♪ >> this is the bernanke legacy of the federal reserve.

the irony of all of this is the market is freaking out because the fed is getting -- considering tapering at a more aggressive pace than the market has been dying for the fed to taper. jonathan: john there, oppenheimer chief investment strategist. the most bullish on the street. looking for 53.30. 30 points higher. equity market up a point this morning on the s&p. futures going nowhere. yields going nowhere. tom: we are going to pause here. a hallmark of what we do is to have respect for those who get it right and those who get it wrong. i want to emphasize in the wall street first, it's so hard to do this. participate in the markets through thick and thin. >> they have been fantastic.

let's not reduce the body of work to the index level. so much going on beyond that. let's pick a house to struggle. morgan stanley. a great call beneath the surface. some single named calls as well. >> one thing that so important as you read the people opposite the calls on the street. if you are bullish i'm reading morgan stanley. on china, enda curran joins us now. i do not know where to begin this discussion. what is a single thing mr. xi jinping is worried about domestically? >> the effectiveness of china vaccines. the report out of hong kong university saying basically their effectiveness against the omicron variant is pretty low. if that's the case that will

certainly pressure china's strategy. it will surely suggest more disruption. consumers consumption is weak because of that. i think the variant holds up against vaccine will probably the biggest concern. we have more data pointing at the property sector. the depth and leverage story. lisa: we focus on china as is the world's second-biggest economy. some of the disruptions we've seen, it's a huge generator of economic wealth over the past couple of decades. how concerned is the people's bank of china over the retail sales way below expectations with the idea people are not

going out and spending even though they have perhaps the cash but there isn't the confidence being expressed in the economic data? >> it's a very interesting case and when you look through a number, it was hit hard. automobiles was quite weak. that might afflict the shortage in the chip sure -- chip story. the consumer story is a key concern for them. it was thought the november numbers were better because the single day. that doesn't come through. when we are talking about the omicron variant and whether or not the vaccines are effective against it. it will lend itself to zero covid policy.

what exactly they're going to do remains to be seen. >> what would happen if they stuck with their deleveraging policies? >> we know the developers there, some kind of relief is expected. this story will be less about the central bank and more about people talking about levels you put into infrastructure products for example. that wouldn't necessarily turn around the virus story. we talk about spending and rev up that side of the economy. so critical in terms of how this virus will play out. thus determining all of that. tom: what is the body language

of the western banks in hong kong after 12 and even 18 months of massive historic turmoil. what's the day today language you see? >> there is obviously a lot of peak in hong kong. we are in a unique situation. we have a zero closed border strategy going on. but the flipside is this is a global finance hub and travel bans restricted airlines both in practical terms and how to travel given the quarantines required. the mood is definitely frazzled. people are jaded. people are watching and waiting to see how this plays out.

we should acknowledge the virus is out of control here. jonathan: thank you sir, you stay safe. thanks are up late for us. some of the data in china and more. some u.k. data. north of 5% on cpi. u.k. inflation to peak above 6% in april. tom: why is 6% inflation different from here? jonathan: not necessarily two different. there is an fx impact. it's the same story. reopening, supply chains. tom: he puts out a killer map. it's not funny. utility rates across the continent in england are terrible. how does that play in?

jonathan: it's the number one thing my mom will bring up on the phone with me. that the cost of gas, the cost of electricity. all the time it will come up on the phone. the cost of fuel in the house. tom: he's folding into a bond like thing. lisa: because he is a british accent and talks to his mother? bank of england going back to that, the bank of england has a really difficult needle to thread. possibly more than the federal reserve. right now you are seeing inflation surge at the fastest pace ever leased over the past four months. some of the inputs they don't have any input over. tom: we have a problem. we are starting to get the

holiday images. for those of you on radio it's a gorgeous -- coiffed with a bow tie. jonathan: can we pinch it? just for the holidays.

jonathan: here comes the economic data. your equity market up a single point on the s&p 500, yields going nowhere at 1.43. with your economic data, here is michael mckee. michael: we are seeing a couple of numbers ahead of retail sales. 31.9, one point up from the month of november. that is good news. strength in manufacturing in this area. import prices coming up .7%, that is less than last month. take out petroleum and it is up 7% as well. it is not just oil and oil prices have been going down. retail sales, we are up just .3%

-- last month it was 7%. the control group down .1%, last month up 1.2%. we do not know why this is. it is possible it has something to do with omicron, although the omicron story was not out until the end of november. it may be people pushed sales earlier in the year because they were expecting shortages. this brings down the growth path for the second quarter or the fourth quarter but it does not necessarily made terrible news. we will have to figure that out. take a quick look at some of the components. we knew motor vehicle sales were weak during the month.

electronics and appliance stores , that is always surprising at the holiday time. you would expect these things to come out. food and beverage stores, 1.3%. clothing and accessories, .5% gain on the month. department stores down 5.4% and food services and drinking up 1% on the month. tom: very good. michael: there is one bit of good news. that is the only discretionary thing in here. some good news. in terms of the retail sales, this is nominal. it is not inflation-adjusted. you have to take away -- you are looking at negative. cpi during november, you're

looking at a negative number for the retail sales. jonathan: i think it was back in october, there was a feeling that we have brought forward a lot of that. we can build on that on the front end. down about a basis point on two. a similar move down to 1.43 on tends. positive .1% on the s&p 500. i wonder on any other day whether we would see a bigger move in the market on the back of these numbers that just so happen to come out on the fed decision day. tom: we go from retail sales to the fed meeting. michael mckee, one more question . that is the spirit of retail america. remind us that 69% of our economic pie, it -- and my close? michael: roughly. tom: is amazon in the statistics? michael: it is in the statistics

but is broken out into non-store retailers, which is flat. that is an unusual statistic for that category. it could be everybody went shopping in october expecting they're not to be anything to buy. jonathan: michael mckee, thank you. that is a sizable downside surprised. tom: this is a great joy. one of the original words uneconomic, finances, investment in international relations. public service to the international monetary fund, a good tour of duty a number of years ago. i want to play for you and for our audience the comments of adam posen at the peterson institute on the need to lift inflation. let's listen. >> one of the problems we do not

foresee when we put in place inflation targets, we assumed you could be able to reset the target as economic knowledge and circumstances changes. we have never seen targets get raised for inflation targets. we should be opportunistically reflate a. we should be saying let's reactor it there. tom: off of your important book, the curse of cash, should we fear the curse of inflation? ken: -- by far the most elegant solution if cash is marginalized is to move to effective negative interest rate policy. a gradual rise of inflation, 3%,

they have lost control of the game and they need to demonstrate -- if it is still higher in four years, i think this conversation will come up. if lael brainard had been appointed fed chair she was pretty sympathetic to this idea. i have a feeling -- tom: who lost control of the game? ken: it turned out much better than we thought. the vaccines, the recovery. there is inflation. it is good news. it could have gone a lot worse. i think that story starting six months ago was getting kind of severe that was not where we were, and the stimulus and the

bided administration put in place so the fed had to push back. we would not be talking about chair powell mall, we would be talking about lael brainard. i think with that hanging over his head. tom: your graduate work. -- ken: i think we are talking about inflation. that tends to move gradually. i know it has not felt very gradual. if you look at the rate hikes inflations in latin america in the 1980's and the 1990's, the soviet republics, it took a while to take off. it did not happen overnight. you need to react.

if we are talking about a crisis, another banking crisis, that can come much more slidably. i think -- much more suddenly. i think emerging markets are just an accident waiting to happen. if we are talking about the fed being behind the curve, the international monetary fund is even more so. right now we are talking about inflation, there is time to act. this does not mean the longer you wait it does not get longer. lisa: i want to double down on this idea of an accident waiting to happen. how much does that hinge on a fed that most people think will be able to have control hikes that some people worry have gotten a little out of control? ken: it is certainly very sensitive.

there are many countries that have access right now suddenly would not. that would be catastrophic. i'm not talking about a 4% hike plus, if they have to hike by a full percent next year, that would trigger problems, but they're already problems in the frontier emerging markets. argentina, lebanon have defaulted. you can look at countries like pakistan and ghana with very high debt, not a lot of market access, double-digit inflation. very different picture. there is not a lot they can do if there is a rapid fed hike. i think the imf has been behind the curve on this, not putting any conditionality. it made a lot of sense early on, but as time has gone on they have not dialed back. very similar to the fed. lisa: there was an implication

in your comments earlier about how jay powell, had he been more honest in his assessment six months ago about how he saw the economic picture he would not get renominated. what does that say in terms of how political the federal reserve is and how much market participants can trust the messaging they are putting out? ken: there is always pressure on the fed to the reappointment of the chair. that is nothing new. donald trump was pressuring janet yellen, she resisted. it is a reflection of our society, what they live in. it is hard. biden has a lot of appointments. their indirect pressures they can put on. we have seen a period were a lot of academics have said we should have fiscal dominance.

federal reserve policy should not do that much. fiscal policy should take over. that is a central theme -- fiscal policy is very political. it should look at long-term growth. look at what happened in march? fiscal policy coming in too late, too much, wrong timing. jonathan: i want to go to something you know better than most. tom and i get hate mail sometimes, they hate mail i had a blast ready four hours was why don't you use hyperinflation? -- in the last 24 hours was why don't you use hyperinflation? i was wondering if you can distinguish between problematic inflation and the h-word and what happens when we cross that line and use faith in the underlying means of exchange? can you walk us through that dividing line?

ken: hyperinflation is something like 2000% per year inflation. united states had annual inflation of 13% in the 1970's, the u.k. went over 20%, that is not hyperinflation. venezuela had hyperinflation. zimbabwe in 2008. hyperinflation is a hyperbolic word. on the other hand, if we got to 13% inflation per year, it would feel like hyperinflation in the united states because we have very complex financial markets that are not built for this. i think we could well see inflation stay up at 3.5% or 4%. i do not know that it is the modal outcome but it is quite possible. as they try to start raising interest rates, corporate debt,

public debt, the stock market, housing prices. in the early 1980's i worked at the federal reserve under paul volcker. jonathan: this is a massive change. unite have talked about it. it might not be hyperinflation. some think double, triple what we are used to, that is a massive jump. i'll have this conversation a little later with priya misra and bob michele. tom: i want to know where priya misra is. jonathan: if in a couple of years we are still up there, how does that change things for the market? tom: we continue with ken rogoff on radio and television. as you mentioned, paul volcker, i want to go back to the courage of 1979. the doom and gloom crew wants volcker courage right now.

i do not hear that from you that that is needed right now. what is the prescription for 2022, but what kind of courage is necessary for our monetary economist, our leaders on this theory? ken: we are in this pandemic where there is such a menace uncertainty. -- there is tremendous uncertainty. in 1979 it was clear what had happened. there was broad consensus the fed needed to do something and the politicians pushed back and i'm not sure jimmy carter knew what he was doing when he appointed paul volcker. today there is a lot of lingering uncertainty. i mentioned at the beginning that everyone on the fed is terrible, they're idiots. it is monday morning quarterbacking. i did not know when the pandemic broke out we would have the vaccine at this point. there were predictions about it.

the modal predictions were much worse. where he will have to be courageous, he is going to raise rates next year. where he has to get courageous is things will start seeming shaky, there will be pushback, and yet inflation is up. what if he needs to take rates two years from now to 2%? that is easy to write on paper. tom: lisa and i would like to ship to the conversation to the mystery of 2021, the ascent of bitcoin. you are out front on this with the curse of cash, looking at cashless societies, the criminality of the system, negative interest rates as well. your thoughts on the enduring ability of bitcoin?

full bitcoin in your seminal work the curse of cash? ken: i talked about extensively in the last part of my book on central bank currency and cryptocurrency. regulation does need to -- much more dramatically than it has. i suspect eventually -- will have to get banned in the advanced economies. that was a prediction of my book. i mentioned before the program i am doing a lot of these issues. the dynamics of regulation, bitcoin etf allowing the big investment houses to set up

funds in cryptocurrencies, pension funds to invest. an analogy i like to make is what if you found a diamond etf was a good idea. what if i tell you it is a blood diamond your investing? if you look the actual uses of cryptocurrencies, i do not think it is something we can tolerate. i got it wrong five years ago at the pace with which this would happen. oil and gas have a lot of value. we think we will not be using them in years. tom: that thought you just heard was james dimon falling off his chair. this is incredibly important, how the regulation has not stepped in. lisa: gensler has been vocal about the need to do so and be more aggressive going forward. there has been a feeling to not

want to stifle innovation at a time when the technological advancements of the united states have driven a lot of the growth. professor, there is a theory that when you pull the tide back at a certain point, there is a lot of malfeasance, there a lot of very frothy spots that would get knocked out. if the fed cannot allow that to happen because that would torpedo in economy that has few tools left to accurately prop up. you agree the federal reserve will be more involved and activist just by virtue of potential consequences if they are not? ken: you're going beyond crypto. lisa: i am. ken: i do not know if it makes them more activists or last. i think in the immediate future, the difficulty for the fed is they might need to raise interest rates cyclically quite a bit.

frankly i think the 300 basis point drop in real interest rates that has happened since 2007, i think part of that is trend, maybe one third of it or 16 the bid is trend, and some of it is not and they are likely to retrace some of that. at these market levels you can go down the asset list. it is going to be very painful. that is why a suspect that despite the tough talk we will get now, when things start pushing back they will find it further scaled-back than they think. i'm glad we are coming out of this, i am glad the economy is recovering. they are in a very difficult spot. tom: ken rogoff, thank you so much for an extended conversation. with harvard university as well as other work as well. we shift to the equity market. we go to gina martin adams, are

cheap equity strategist at bloomberg intelligence. in outlook for retail on 2022, i did not hear them say go to cash. how do you do the fourth year of a bull market? how prosecutor the thinking? gina: i think it is part of continued strong growth in tighter interest rates and tighter fed policy constraining the potential of the equity market. it depends how fast we can grow earnings. interest rates are certainly important as a discount mechanism. frankly what matters most for the direction of equity prices is what is happening in the economy and earnings growth. tom: buried in the goldman sachs deck from david costin was one single comment, you have to stay

with high-growth, high-quality, high profit. he did not mince any words. do you share this wickedly barbell strategy or do you go a different way? gina: it is interesting because it has changed in our modeling over the sector size over the last six months. we have started to migrate towards lower volatility from higher volatility. that means the meme stocks that carry 2020 and 2021 returns as we move into an environment of tighter interest rate allstate. -- of tighter interest rate policy. it becomes more of a classic investment environment. you start to take away more of that liquidity and think about things like quality and less about buying on the cheap and buying all the junk to get the big rally. i sympathize with that. in our sector strategy we are also seeing something similar,

where within the u.s. economy the specter strategy is working in favor. highly cyclical groups but also in favor of some defensive groups like some of the consumer name started to bubble up, technology bubble map, real estate is towards the top of our scorecard. industrials, materials, and some of the hyper cyclical names are back at the bottom. a barbell can be appropriate in sector strategy. lisa: this explains why we are seeing muted expectations going forward for the headline number into the index. you talk about the fed and i do not want to let the fit go. everyone is counting on a gradual rise in interest rates. the fed will not hike rates quickly. can you give us a sense of how much that is baked into the assumption at the s&p headline level will rise 8% to 10%? gina: it is a huge part of the assumption because it is foundational to your modeling. at the base of our valuation

model is the two year treasury rate. adding on to that to adjust to an equity risk premium, we use the real cash we use the yield curve. -- we use the yield curve. the situation is some yields flatten over the course of 2022 as a result of the bed movement. -- as a result of the fed movement. if we get something where the bond market rallies and we see long-term rates rally substantially at the short end moves higher as the fed starts to guide towards tighter interest rates, that is a significantly different scenario and has historically been much more difficult for stocks than that idyllic flattening environment the consensus is expecting. we could see multiples contract in that environment all the way down to 17 or 18 times from 20 times comment unless you are getting very rapid earnings growth, that means a flat to down equity market.

we are sensitive to what is happening in the fed. tom: gina martin adams with us with bloomberg intelligence, a whole team of people working sector by sector on what makes this market. with all of this, the great conversation with gina martin adams and ken rogoff, we did not say enough about retail sales. i believe i saw a negative statistic. lisa: on the control group. this is significant. it raises the question on how much inflation is weighing on consumer willingness to buy more stuff. the fact we saw such a big disappointment means it is starting to weigh. i wonder how much this is in the estimate -- this is the smallest advance on the overall retail sales number in four months. to keep the trajectory going. tom: i will go nominal. michael mckee said those are nominal statistics. when you take out inflation you wonder how it adjust.

with the inequalities in america, we make jokes about good morning to all at lvmh, at the bottom of the line there are partitions to america, partitions to retail come into huge partitions to the future of equities. lisa: when you start looking at 6.8% increase in prices year-over-year, this is a new paradigm. when you go to the grocery store people feel let. when you decide whether you will buy a dishwasher or stove, this is been ongoing for a host of reasons. to me the idea margins will continue to increase and expand as companies are able to pass along more and more of their price cost is something that needs to be proven. tom: breaking news right now. it speaks to what lisa has been out front on. jp morgan announces their health care conference will be virtual. that seems like a headline from august. lisa: the moderna ceo did not

want to be seen at the conference in person. a health care conference. tom: everything we have talked about today, that is the bombshell headline. there is a fed special this afternoon. the fed decides. rumor has it jon ferro will be there. this is bloomberg. ♪

michael: -- jonathan: your fed decision just around the corner. your equity market negative a single point. "the countdown to the open"

starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: we begin with the big issue. it is decision time. >> this may be a very different powell. >> the fed has been pushed in a corner. >> they are walking a fine line. >> they do need to act. >> the fed does need to tighten. >> we will likely see the fed accelerate their tapering. >> double the pace of tapering. >> tapering is coming. >> we are penciling in two rate hikes for 2022.