>> they are not tightening, they are moving toward neutral. >> it is overdone. >> this is "bloomberg surveillance" with tom keene, jonathan ferro and lisa abramowicz. jonathan: three more days left of this snoozefest. good morning. this is "bloomberg surveillance ." your equity market up seven. as we look to close out the week, still waiting for this. >> he is currently on vacation in delaware. it seems unlikely. there has been some reporting overnight on the potential of a nomination for the role. that is the one the market is focused on. jonathan: we can talk about that

later. the equity market is doing well. in europe, all-time highs, reflecting what we have seen. matt: i do not think it is a snoozefest. i think there is some interesting news that investors can sink their teeth into. on the corporate side, you have the apple store with surprise bonuses. on the central bank side, the survey is out and it worked its way into the economy and supply chains, as well. on the bitcoin side, the biggest slide since may. there is a lot going on without getting to the fact we are at all-time record highs on the indexes, or near them. i am excited about this wednesday. jonathan: i have known you a long time and i know when you are genuinely excited and the difference between what i just witnessed and what i witnessed

several years ago we got your house several years ago and there was a maserati ready to use, that was a genuinely excited matt miller. i am confused about some of the restrictions around quarantining. what we learned earlier this week from the cdc is if you have tested positive for covid-19, you have to isolate for five days. if you fly into the netherlands, you might be quarantining for up to 10 days. kailey: if you are flying from the u.s. you do have the option to test on the fifth day of quarantine. if that is negative, you can exit, but it might take a couple days to get the test results back. you are realistically looking at one week of isolation. jonathan: the equity market up six or seven. the nasdaq 100 up around 46,

advancing .3%. yield about one basis point. kailey: sub 150 at the end of 2021, year where we thought we would end closer to 50 basis points higher. we will talk to sarah house later this hour. what is she thinking about the economy and how does not inform what she thinks the fed is likely to do. when we are thinking about fed policy, what will the impact be on the path of the dollar. jordan rochester will talk with us. we will talk with james paulson. a 10% to 15% correction at some point. we will talk all things tesla with dan ives. he sees a strong year ahead. jonathan: elon musk close to the

$10 billion tesla share target. the stock up 2% on the day. matt: what has he raised in total, about $13 billion from his stock sales? his tax bill could be $11 billion for one year if he exercises all of his options. not only will be the world's richest person, he will have paid more taxes than anyone in u.s. history, which i think is exciting. in terms of tesla, you have to wonder if -- the entire e.v. space -- is there enough of a market for all of these players, tesla, you can go on and on for the smaller, more niche players, it does not seem like the market is big enough to support everyone. tesla's market value is

confusing enough. jonathan: when you said the market, do you mean the infrastructure to support car sales or the people willing to make a change? matt: i think it is all about the infrastructure. the estimate is for something like $700 billion in electronic vehicle sales. the infrastructure is not there yet. i am constantly thinking about what car to buy when i moved back to new york. if i get an electric car without having my own multimillion dollar garage, if i live in manhattan, where am i supposed to charge it? i don't see that being a viable option. jonathan: that will be a question for dan ives. this is a guy who covers tech stocks and a lot of people say throw tesla into there. he started covering gm, too. you have covered these names for a long time. we have been waiting for them to be valued differently.

is this the year for that? matt: if it is, a lot of investors are missing out because they have not bought stock in general motors and volkswagen to nearly the kind of levels -- even a fraction of the valuation we see in tesla. i would love to ask dan about that. what if you put tesla-sized valuations on general motors, ford, volkswagen? you would have multitrillion dollar market caps and you do not see that. these companies are 1/3, 1/5, 1/10 the size of tesla. jonathan: gm up around 37%. chief strategist, want to start with something we have been covering. the lessons for 2020 one before get to the calls of 2022. steve: the same lesson it has

been for a better part of a decade, do not fight the fed. we have seen said throwing liquidity -- we have seen the fed throwing liquidity at the markets. all of that money has to flow somewhere. until this year, it was only flowing into asset prices. this is our third year in a row of multi-double-digit gains. the lesson is, do not fight that wave. kailey: the liquidity provided by the fed and the stimulus provided by the fiscal function in the u.s. led to retail traders with a lot of cash in their pockets and were active in the market. do you think that sticks in the year ahead or will we see the impact fading? steve: there is a bid to unpack in your question because retail investors, you cannot imagine a better scenario.

i have first someone used the phrase -- this is unfortunate. pretty much 1/3 of the people investing now only know the environment since april 2020, since they got their stimulus checks. this is unrealistic environment to be a part of. the problem i think we get into is, as you do not have this tsunami of money and this backdrop of fiscal stimulus coming at you, the dip has been shrinking and i think people have to inflating that with the idea that the fed is higher. matt: how has the retail army done here?

i posited that maybe they spent their stimis on gamestop. what are your expectations about the size of retail investors right now? steve: the individual investors i think, for the most part, if you have not been engaging in a true gambling mentality, you are doing great. you still have to think the average person has not necessarily gone crazy with crypto or gamestop, or amc, the memes, or whatever, you are doing wonderfully. a certain amount have been bit hard because they have been a bit out over their skis, but

most are finding their assets are up, as long as they were investing as opposed to outright chasing the next hot trend. that is a good thing, generationally. matt: if you bought gamestop one year ago or bitcoin one year ago, you are in the money big time. as long as they held onto it, they are super rich. steve: absolutely. the question i have is who bought in, when. the problem is, gamestop had its moment at the end of january, early february. we are talking almost one year ago. there were a lot of people came in on the back of that who have not thought of those things. those people are taking some tax losses into the end of the year. that is the conundrum we have. crypto being its own animal, the

early adopters and crypto, we know they are doing wonderfully. some of the later people, it has been tougher. jonathan: good to hear from you. you said it, unbelievable it has been several months. kailey: january is when it started. the targeting of short-sellers and how much things have evolved, i cannot believe that was one year ago. jonathan: if you get a bigger bonus on wall street, i wonder how tempted you are to throw some money at those stories as we kick off 2022. the equity market up six on the s&p 500. from new york city, this is bloomberg. ritika: i am ritika gupta. there is no sign the pandemic is slowing.

the number of coronavirus cases went over one million. the omicron variant is triggering hospitalizations appeared according to a forecast, a squeeze thanks to rising energy bills. a foundation think tank said wages will stagnate in 2022 and inflation might hit 6%, the highest in three decades. china's economy expanded at a moderate pace at the end of the year. external demand is clouding china's outlook. apple is paying some engineers unusual bonuses of up to $180,000 to keep them from leaving. some employees in operations groups. former democratic senate majority leader harry reid has

died. he helped implement president obama's agenda. he also engineered a change in senate procedures that cut off debate on most presidential nominees with a simple majority. harry reid was 82. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪

>> shake it up. if it is not serving you well and you are having messaging

issues, you have to make a change. you need people who can pivot, to learn how to focus on the things that people care about in their daily lives. jonathan: coming out swinging. from new york city this morning, good morning. kailey leinz, matt miller, jonathan ferro. a really small move in yesterday's session, we bounced back five points. a single basis point to 149.45. some bad news for you, matt miller. jordan rochester joining us later at 7:30 eastern. he is looking for 1.10 on the euro-dollar. kailey: 1.20 would have been your happier place. matt: anything above 1.20 would

have been strong for me. it is what it is. i am moving back in nine days and i will have to transfer the small amount of euros i have into dollars when i do that. it is not a material number. jonathan: i look forward to a balance line of questioning for jordan rochester. one thing left on the agenda for me down in d.c.. we have to wait from -- for the fed picks. >> it was supposed to be early december, and then before christmas. i don't know when it will become a but it is later that it was expected to be. their way -- the way i am looking at this, they will skew toward the progressive end of

the spectrum. it is fair to assume the michigan state professor will be one of those three picks as a governor. given press reports, philip jefferson at davidson college, a professor, is on the short list of possible. i am most interested in who the white house will pick for vice chair of the supervision spot. it is such an important spot given the oversight of the financial system. it looks like a former fed treasury official is a front-runner. jonathan: some reporting from bloomberg, the wall street journal in the last 24 hours, i would say of course the administration wants doves,, this time i'm not sure. isaac: i think they are looking for wins. they want to get people who can be confirmed by the senate. there have been some major missteps in terms of the

confirmation process in the last year. even if you just look at financial services, where we are waiting for a top cop. first and foremost, they are looking for a win and people can be confirmed in a 50-50 senate. number two, you are looking for folks who are willing to stick with the consensus of a powell-led fed. when i think about the writings, those are folks who will be consistent voters with the chair and that is what the white house is thinking about. getting folks who can be confirmed in a 50-50 senate and trying to get consensus with the chairman. kailey: there has been a major question offed independence -- question of fed independence.

president biden has tried to de- politicize the fed. you think that separation has happened? isaac: i think there is a reality that the folks at the fed get the newspapers, too. they feel the political pressure, as well. the idea that they are distinctly independent is not true. they have had to step in and save the economy repeatedly, including in times when our policymakers on capitol hill and in the white house have been unable to address some of these problems. and i think back on the most recent crisis, everyone on capitol hill was waiting for the fed to act and the expected the fed to act. the capital bank still believes the fed will act at any moment

and be the first responder to any crisis. there is harry lee politicize nation -- there is inherently politicize. that will be a fed board vote. you are telling me there will not be politics? the whole idea of the fed being a political is tough to swallow in the current climate. matt: i do not know if it is fair to say fiscal policy has been more important than monetary policy during the pandemic, but it has been larger in terms of absolute size if you look at additions to the balance sheet compared to the amount of money congress has earmarked for spending -- borrowing and spending. what do you expect in terms of build back better? will we get anything out of what was supposed to be $1.7 trillion?

isaac: build back better is dead, long live build back better. the house's version is dead. the various constructs with varying timelines is dead. senator manchin has made it clear he does not like the various programs -- congress tends to extend those programs out, making the cost analysis useless in some cases. the way that i think about this is what was true in january is still true now. we are trying to figure out what is possible, all we have to do is look at centrist democrats in the senate. i think the white house and democratic leadership is going to move toward those senators and ultimately we will get $1 trillion-plus package done in early 2022.

it will not look like the build back better bill, but it will have programs funded for longer. universal pre-k, obamacare subsidies and climate change. the big unknown is what they do to the child tax credit, which was expanded in the last year. i do think if there is a package , we will have some sort of -- there is enough of a constituency in the democratic caucus and the house to make it so we will see some salt relief. jonathan: music to matt miller's ears. matt: not just me. jonathan: i know not just you. a lot of people are in the same boat. but the only reason you are is because of you, and not for everyone else. my right? matt: you have such little faith. jonathan: conditioned by

experience. advancing .1%. yielded time by a single basis point, 1.4945. this is bloomberg surveillance. ♪

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jonathan: good morning to you all. the price action up three or four points on the s&p, .1%. the nasdaq up .2%. the bond market, no different. about one basis point. the curve is a little bit steeper. after flattening for much of the last several months. foreign-exchange, euro-dollar, 1.1298. that is the high of the year for euro-dollar. i know you -- euro-dollar is

down 7%. the dollar lira has had a 66% move the other way. up 4.8%. it could be much, much worse. you could be moving from turkey instead of germany. matt: that is absolutely true. a lot of times of the year, turkey is a much nicer place to be. the volatility in the currency has been insane. difficult for people on the ground to live with. as a journalist, following it has been exciting. the moves we saw over the last month, both up and down -- or down and up, depending on how you look at it -- have been incredible to follow. jonathan: dollar lira up 4.6%. kailey: both of their respective central banks were not talking about them hiking. for the fed, it is a different

story as we grapple with inflation in the u.s. sarah house from wells fargo joining us now. i know you think we could see a seven handle early in 2022. you see 5% for the full year. does the omicron variant provide upside or downside risk? sarah: for inflation, omicron does provide an overall upside. i think you might get some offset in the near term on things like travel related prices. i think the recovery in travel prices gets pushed back a little bit further to the spring. there are some offsets, but overall, given the pressure we have seen on supply chains and what that is doing to goods inflation, omicron does provide a risk. kailey: is the upside larger

than the potential impact the growth? sarah: it is probably fairly balanced. we have seen some give back. you look at restaurant reservations, you have seen some moderate fallback. overall, the effects of each new wave has had diminishing impacts on growth and to some extent inflation, as well as people are tired of the pandemic. we have a great deal of covid fatigue, people are not changing travel plans around the holidays, even in the face of this very contagious variant. we are seeing the overall effects on the economy, whether it is growth, or to some extent spending patterns, is diminishing. matt: when do you see that playing out in the data? sarah: we will see some of that in the december data. we will see some of that when we

look at the inflation numbers, areas like travel services picking up again. you will also see perhaps some of the hiring numbers in things like leisure and hospitality, numbers could be bracing for somewhat of a giveback. it will be more present in some of the january and february data. we will not get a full sense of the dent from omicron until later in the first quarter. matt: but it will likely be a dent rather than a major crash, right? i look at crude oil still hovering around a one month high. it does not look like mr. market does not expect a big drop in demand. sarah: we have seen the idea of fatigue and people have the tools to carry on more with their lives than we did this time last year.

we are not seeing that degree of impact on activity. to some extent, this way it has to potential to be relatively short-lived given how contagious it can be, the potential to burn through quickly. the overall outlook for 2022 is on track in terms of another year of growth, even if we get off to a weaker start than we envisioned a month ago. kailey: obviously, do not necessarily see any risk to demand from omicron. on the inflation side, when we saw the personal income and spending data come out, real spending menu and just for inflation was flat. will we see a consumer who is less tolerant of higher prices and consumption start to wind down as a result? sarah: we will see greater pushback in terms of the inflation picture in the year ahead. we have seen over 2021,

consumers, many businesses seemingly -- we are seeing demand growth moderate over the coming year. still very strong, but you do not have as much support at the backs of consumers. that leads to more moderate growth. we have seen eye-popping inflation rates. people are considering thinking twice about certain purchases. businesses might not have the same degree of pricing power. i think they still have quite a bit. underappreciated is a spending picture is just how strong demand growth has been. we will see that moderate, but still very strong. matt: i almost forgot that i was super excited about the richmond fed manufacturing survey. i really am. i am looking at sarah, the

supply chain. i am trying to figure out when this will get rolling again. when companies will start putting inventory back into stores. the richmond fed survey had a headline number of 16, compared to 12 last week. shipments went from zero to 12 in a month. goods inventories went back up. negative seven from -23. does it look like the wheels are starting to turn again? sarah: we have a long way to go we look at the inventory picture. we have seen some positive signs in manufacturing service in addition to the richmond index. if you look at the retail numbers, go further down the pipeline, retail inventory numbers have really made no headway from the outright

collapse we saw from the last year. this is a start, but we will still be dealing with supply issues for the better part of the upcoming year. there is a long way to go in terms of rebuilding inventory. we have strong demand. it is not quite as riproaring as we saw in 2021. kailey: the fed cannot necessarily do anything about the supply issues but it will do something eventually to try to rein in inflation. sarah: in our last published forecast before we have the december fed meeting, what we learned is it is more aggressive than we anticipated. the risks are pulled forward. we might see a move as early as the second quarter. to your point, there are some limitations in what the fed can

do given were a lot of the pressures are coming from. they can signal there is a change to inflation risks, they are in a better position to tackle them if they should persist in the second half of the year, which we think they will. that should get the fed moving more aggressively in the second half of the year to signal they are on top of this inflation issue facing the economy. jonathan: this was too serious. my final question, windows the christmas tree come down? sarah: new year's day. matt: how can you do anything on new year's day other than sit in bed with an ice pack on your head, watching a movie? sarah: i wish. probably the day after new year's day.

matt: we are constantly moving from country to country, we do not have any place to put a tree right now. jonathan: sarah house, thank you. i believe the actual date is january 6 when it arrived. the 12 days of christmas, that starts christmas day, and then you get to january 6, the three kings arrive, and that is when the decorations come down. kailey: is that around the time matt miller moves back? matt: you guys are all invited. matt: no gold -- jonathan: no gold? matt miller, kailey leinz and jonathan ferro. nasdaq 100, up 35. equities up .2%. in the bond market, yields are

up around one basis point to 1.4945. when i think back to the surprises of 2021, i think about calling the economy accurately and if that benefits you. when you look at the 10 year, if i told you where inflation would be, could you guess where the 10 year would finish the year? matt: absolutely not. especially considering the hawkish pivot. jonathan: inflation, very close to seven. sarah house pointing out she expects a seven handle through q1 2022. more to come on radio and tv. this is "bloomberg surveillance ." ritika: i am ritika gupta. there is more evidence the omicron variant has a milder symptoms than other strains of

the coronavirus. a lower rate of hospitalizations than the earlier ways. a seven day average of people hospitalized just under 9000. elon musk is closing in on his goal of raising his stake in tesla by 10%. he has sold another $1 billion worth of stock in the electric car company he runs. he is selling shares to cover taxes. coming to the rescue of mcdonald's patrons. a shortage of potatoes caused the chain -- they will fly three 747's to ease the shortage. john madden has died. he guided the oakland raiders to

the pro football championship and walk away from coaching at the age of 42. he became one of the best-known tv analysts of his time. john madden was 85. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪

>> we have to make these cheaper. $25 for two test is not of

people's reach. tests have been undervalued. we have not had a testing program in place. it did not optimize. this will be the key part of how we move through the pandemic. jonathan: from new york city, with kailey leinz, matt miller, i am jonathan ferro. good morning to you. about yields higher by a single basis point to 1.4911. crude up to 75.58. joining us now is dr. bhakti hansoti. i want to talk about your experience in just a moment because you have been knee deep in this pandemic. the decision made this week by the cdc to cut isolation time

down from 10 days to five days, a group of people said this was not a scientific decision, it was a business decision. helping the economy get back to work. what was it for you? dr. hansoti: it felt like a kick in the gut. the cdc media release was targeted toward health care workers. the incubation period is lower, but this idea that because you are a health care worker, you are needed to support the response, we will decrease your isolation time, it was challenging. i am also a mom, daughter, i have people in my household that will be sick with covid that i need to look after. i have been through covid and it is terrifying.

i may not be ready to come to work. i think health care workers are also humans. health care workforce does not respond well to the press release. from a scientific perspective, we need more data. it seems that individuals are more likely to be asymptomatic and the incubation period are smaller. i think the data does back it up. jonathan: that is a good step forward. how close are we to treating this as a normal, seasonal virus? are we taking a step toward that? dr. hansoti: that is the $1 million question. i do not think we are there yet. the impact on the health system is manageable, the impact of every person -- we are not there yet. the virus is evolving.

people are still being hospitalized, people are still dying from covid. if we think of this as a seasonal virus, and we become complacent, i do not think we have room for that. matt: i can understand perfectly, your emotional response to the reduction in the suggested data. it depends on if you are looking at this as an economist who wants the wheels to start turning and business to get back to normal, then you are like, five days is great. if you are looking at it as a human experiencing disease and it has taken an emotional toll, you don't want to go directly back to work in five days regardless of what your job is. i feel you on that 100%. in terms of the hospitalizations

, i know a lot of people are showing up in emergency rooms and hospitals who do not need to be there, and i should be discouraged. it does not seem like omicron is sending people who are severe enough back to the hospital as much as delta and elsa has -- alpha has. dr. hansoti: is omicron independently less. the population right now is different from the population inflicted with delta. people who are getting sicker are younger and less likely to have comorbidities. however, when you look at the actual number of hospitalizations right now per 100,000, it is way lower than what we saw with delta. kailey: obviously, as more

people are getting infected, that will bring the numbers higher just by pure math. how quickly do you think this could spread through enough of the population that hospitals could become entirely overrun? dr. hansoti: right now, i am sitting here in bethesda, maryland. i work at johns hopkins hospital in baltimore and we are overrun. several hospitals have declared a declaration that means we event to suspend regular operations. i was telling folks yesterday, i was not meant to be working. i was called in because we were so overwhelmed with the number of patients in our waiting room. jonathan: can i just say thank

you for everything you do. you have been absolutely brilliant this year and thank you for working so closely with us over the last 12 months. hopefully we get some better news. dr. bhakti hansoti of johns hopkins. we have been talking about the five day reduction from 10 for the isolation period. i talked to my uber driver. how would you feel if one of your passengers tested positive five days ago and now they are out and about and all they have to do is wear a mask? a lot of people feel so uncomfortable with that. matt: i, personally, am not that scared about this whole covid situation. if you have just been tested five days ago, i do not necessarily want to be meeting up with you, standing next you getting my tea.

please just stay home. i understand the cdc guidelines and suggestions -- and maybe scientifically it makes sense -- but if you work with me, please stay home for 10 days. jonathan: it is easy to sit here and say it is great it has come down from 10 to five, but when u.s. someone individually how you would feel with them sitting next you, they are uncomfortable. kailey: the science may support it, but it is unclear. even though the guidance has changed, you might not see the actual behavior of businesses and what their guidelines are about bringing employees back to the office will remain that simple. jonathan: they will want a negative test in many cases. kailey: you have to get one. jonathan: it can take a number of weeks. kailey leinz, matt miller, jonathan ferro. in the bond market, yields higher by a single basis point

to 1.4911. from new york, this is bloomberg. ♪

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♪ >> the fed is behind the curve. they should act fast. >> we are going to see higher inflation then we have seen in the past. >> what remains to be seen is how quickly the fed will be. >> the conversation about tapering and tightening i think it's overdone. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: what a year it has been for the keyword -- for the t-word. good morning. this is "bloomberg surveillance" on tv and radio. alongside kailey leinz and matt miller, i'm jonathan ferro. 1.49 percent on tens. yields higher by a single basis point. the story of the year, inflation, the t word, transitory, no. kailey: