to be a lot of inflation pressure in the next few months. >> the fed has to a better job showing us what they are thinking, how they are thinking. >> it is what they are looking to do, tighten financial conditions. announcer: this is bloomberg surveillance with john keene, jonathan ferro, and lisa abramowicz. jonathan ferro: good morning. alongside tom keene and lisa abramowicz back in the building, i'm jonathan era with equity yours posed to be unchanged. the calls from goldman, deutsche bank and others, all calling for a march start and four hikes this year. tom: a real recalibration that we have seen on this monday. transitory is out the window. i would also point out the gloom in the equity market, you can

cut a knife through it. jonathan: we no longer think the starter runoff will substitute for a quarterly rate hike. the interplay is pretty interesting. lisa: they expect july to be the time when they allow the balance sheet to rolloff, possibly earlier. my issue is why the stock market not waking up to the same kind of catastrophic scenario we were seeing earlier after the past week? jonathan: it depends where you look. the nasdaq 100 down. that was a sizable move. >> a joke. we are right where we were in november and october. yes, we have seated move down, but the standard, -3%. the dow doing a little bit better. as you say, the nasdaq cratered, -6%.

jonathan: i hear you. that is a massive performance. being in the same building where we don't have to time ourselves on the delay, it is beautiful. lisa: since we don't have a delay, and nasdaq was down 4.2%. long-term treasury etf was down 4%. just throwing that out there. jonathan:jonathan: equity futures down two. the nasdaq 100 was down 5% last week. in the bond market, six straight days yield higher, make it seven. very briefly, breaching 180. tom: it is coming back as well. here is what is important,

seriously. people look at percentage change. the pros look at standard deviation. i take your point. the nasdaq 100 has a greater two standard deviation move down, but it is well within the comfort zone, within the range and the zeitgeist that we plunge forth with standard deviations. jonathan: get him excited about the week ahead, because what i weekend we've got. lisa: today is not perhaps as exciting, but we have the cpi that is going to be coming at you as well as retail sales. of course, just for you, i whole host of treasury options that we get to see. we are so lucky to have bill dudley joining us to discuss the recalibration in markets. sort of waking up to the reality of the fed, or is the dead going to get concerned about what they are seeing in markets?

hitting the highest level earlier this morning, getting back to january of 2020, a complete seismic shift in expectations over one week. i keep saying this. at what point are stockmarkets going to wake up to this, or have they already done so question interesting to see how this goes. it is like a tea leaf into consumer sentiment from the university of michigan. the hvac tatian's for it to deteriorate further. people take a look at this and prices are just so much higher that people are starting to refrain a little bit on the edges. today, and host of pharmaceutical ceos joining us here as well as merck ceo robert davis. jonathan: really timely

conversation coming up at pfizer a little bit later. pfizer paying up to $1.45 million. the mrna effort will catch up with pfizer a little bit later. we kick things off with the head of u.s. equity strategy. you came into 22 and said it would be a story of two halves. >> great to be here as always. last week we sale -- so i a lot of things expecting to make. we thought the first at of the year was going to be defined by another big hurrah. things like financials and energies lines, we certainly didn't expect to see energy up 10% on the week but we did think that we would see this being move. you typically see strong value leadership before first read --

that rate hikes. what is interesting to me is that with all these changes on rate hikes, we are still seeing economic community looking for very strong growth this year. we have still got some wood to chop. it will be quite some time before markets start digesting. it has a little bit more ways to go. tom: you are killing me, down 2% and the dow is paying for. i want to talk about the most important research piece of the weekend which is the fabulous essay on apple. i want to use that as an overlay to your world, which is, will corporations adapt given rising rates?

the answer is corporations well, corporations can adapt to the scenario. is that true? >> i think that we have seen all the way back to 2018 when the china terrace lee came into view , it is going to cause a growth scare, but companies aren't going to be able to navigate. but whether it is the pandemic, supply chains, the tariffs, companies have been able to manage around. it is hard to bet against adaptability in corporate america going over. lisa: you said a lot of people to expect some of the pain to continue. and wondering where in particular it was really struck. more than 50% from the 52 week highs. a complete recalibration of certain tech evaluations.

>> i do expect we will be able to buy those areas back before the year is up. it is still ranking second, still ranking pretty extreme. this repricing still has a lot of room to go. jonathan: what is the difference between a rotation and brought-based risking that we could see off the back of the course later this year? >> people don't want to sell out of their equities if we are not on the precipice of a recession. that of the real difference here. if you go back to a quantitative tightening was, we are hopefully

at the tail end of this pandemic. markets are going to run the risk of having a substantial decline. jonathan: a timely conversation. we have had call after call on this. we believe fed officials are coming to the same location. tom, they are not alone. jp morgan, goldman sachs, take your pick. tom: wonderful note with bloomberg economics on this. the idea that if you don't seasonally adjust back-and-forth, it was really a spectacular number. can we talk about the zeitgeist

that is out there? the wonderful christopher harvey over here, you know what he calls a correction? a cathartic upchuck. jonathan: tell me what that means. tom: well, the dow will read. i got that right on the exam. we are at a point where we make enough phrases for a pullback. jonathan: i can put a number on that, just to be very clear, here. 47.15. lisa: just to respond to the cathartic of stock, there is a feeling that it has been something of a catharsis in the

equity markets but not the wholesale collection that they were talking about and that was a great question, the fact that this gives the fed some ammunition to go ahead with a more aggressive tightening plan. jonathan: i get that we are all downplaying the move yesterday. that move in the bond market intends to go through. lisa: put this into perspective on a total return basis, the 30 year bond in the biggest one week selloff in the early nine year trajectory that we had. jonathan: what a move it has been. tom: the cathartic upchuck, it is like arbery. jonathan: is that what you're going to say all morning? how much reading did you do this week? tom: i watched "pitch perfect" three times. jonathan: this is bloomberg. >> with the first word news, i

million. the biden administration and u.s. allies may impose export restrictions on russia as seizes more of ukraine. discussing limits on electronics. meanwhile, today in geneva, senior american and russian officials begin talks at easing tensions over the greatest -- ukrainian situation. central bank balance should runoff in july marked earlier. fed officials signaled they are preparing to move quicker than the last time they tightened monetary policy. chinese officials less than a month before the winter olympics.

novak djokovic may be able to stay in australia and go for a record 20 -- 21st grand slam victory. he was argued he was granted a valid exception to vaccination rules after he had a positive test covid last month. 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.

>> the administration has not made a formal ask for more funding but it is clear from the opportunities that is there and against the challenge that is therefrom this resilience of this virus. jonathan: speaker pelosi speaking over the weekend, this is a trade this morning in new york city for someone tom keene is back in the office aside lisa abramowicz. so much love for lisa. [laughter] jonathan: we are down about 1/10 of 1%. a brief breach of $1.80 really appeared lisa went through the events today. retail sales on friday. some confirmation hearings for chair powell. this is quite a week. tom: quite a week, but let's get to earnings. i'm going to suggest bank pr people are going to underplay earnings because they are making so dam much money. we've got three banks on friday

and then we've all been to procter & gamble. i just suggest the corporations are going to downplay how much money they are making jonathan: weekly move last week on the banks, did you see? 9.4% with the moves last week. a huge move to start the year. tom: recalibration, maybe able to grow later this year. anne-marie joins us after the washington football team tore apart the new york giants. her new york giants, i should say. anne-marie, we have got to recalibrate in america. with great credit to jon ferro who has educated me across this pandemic, i'm sorry, the united kingdom seems to be way out front of covid policy adaptation and adjustment in america. why is it so tentative within the biden administration as they talk to all the other institutions including the cdc? annmarie: it seems like when you

look at what the u.s. is doing, they've been at some point behind with europe is doing. now at this moment, they are behind the highest peak of the omicron variant. the federal government wasn't set up in issues like a pandemic where a lot of these issues in terms of testing and getting vaccines out, the most part it is set up for the states to do. the issue there has been miscommunication in terms of what the cdc has been guiding and you see them act tracking and then having to come forward and say, well, we actually need this. maybe you could take a test, he shouldn't take a test. this is where there is a lot of criticism and why in moment

testing they seem to be behind the curve of what you are seeing in europe. tom: speaker pelosi was talking about aid for covid. are we funding tests? something as simple as whatever one of those tests have at home? are we funding that? are we going to get there? lisa: this week we should have that website launch from the government where you can sign up and request the at-home test and the white house is working with the u.s. postal service to make sure those tests can be mailed at home. this is one of the criticisms. some countries for doing this well over a year. when it comes to funding, already the u.s. government had spent especially dollars and covid relief. speaker pelosi was talking about on face the nation that there has been a direct ask for more funding from the biden administration, but we talked about this last week on this program. the washington post was

reporting that there are these bipartisan talk to potentially aid funding. you are thinking of hotels, venues, sports teams like minor-league baseball. these kind of businesses that are struggling at the moment. where that funding could potentially be linked to is the february 18 what we have to fund if the stopgap funding measure. lisa: this is personal and so i apologize in advance, but there has been a lot of focus politically on schools and keeping them open. is there any cohesive message from the democratic party in particular on how they keep schools open and whether that really does rank in importance to a lot of the other issues they try to push forward? annmarie: the president in his speech last week made clear he wants to keep schools open. the issue is in some vary widely-held, craddick states and

counties and cities, look at what is going on in chicago last week. you are seeing this infighting with these local officials and the that are a government which is really trying to make a push to keep schools open. now, one area where the federal government which doesn't really have a lot of control over have these schools operate in what chicago is asking for, they could help potentially more testing to potentially ease teacher concerns. but this is a really big issue, even if schools are open, they are seeing a ton of absentees. it is a struggle making sure students are back in the classroom. lisa: what is the party line? glenn youngkin won the virginia governor race a couple months ago and a lot of people were saying it was because of the education issue. so what are the partisan lines here? annmarie: democrats and the

white house certainly are pushing for schools to remain open and so are republicans for the most matter. republicans say that they want all freedoms back in the open, they want students to maintain in school. the issue is how you go about it. most democrats would say let's make sure most students and teachers are completely masked. a lot of republicans have pushed back for that. democrats with support vaccine mandate for those universities while you are likely not going to get that kind of rhetoric from the gop. jonathan: quickly, novak, what is the latest? isn't this the biggest issue in world politics right now? annmarie: it is the first thing i checked this morning. i believe the latest is that the judge has set you can leave his quarantine, but the australian government is saying that visa is null and void. there is a lot of protests in australia. i think that is correct.

i mean, it will be interesting to see if he plays. my friends in australia are incredibly annoyed at the fact that he was even allowed into the country because they felt like they had been under the credibly hard, pretty rules from the australian government while someone who is unvaccinated is allowed to enter. if he does enter that court, he is going to be welcomed with a lot of boos. jonathan: imagine being there for that first game to be played there. i understand it is down to the immigration ministry in australia to make the final call. he won his appeal and now it is over to the australian government to make the final call on whether they could send him home or not. tom: i looked at it over the weekend and i just got -- i just don't get it. jonathan: did you almost say "i've got better things to do?"

tom: these unvaccinated. jonathan: i understand. tom: then to me there is no debating. they represent australia. jonathan: that is the final world for you? from new york, this is bloomberg. bloomberg.

jonathan: the nasdaq cannot get break, down another 4/10 of 1%. the s&p 500 negative about a 10th. the underperformance is absolutely riddle. we take more weight off that indexed -- brutal. we take more weight off that index. 25 basis points higher in a single week. all of the talk about the fed rate hike, four hikes from them and citibank and jp morgan. if this conversation about banishing reduction, the start

of so-called qt, there was some discussion that may be that announcement would rub place -- replace a call for a rate hike. tom: i get the overlay of the balance sheet dynamics but i would overlay that with the possibility that we get better growth and persistent higher inflation that is unacceptable to all. jonathan: that is the mystery of july and august of this year. the fear is that growth fades in the back half of this year. maybe it starts with the cyclicals this year then may be in the back half it is back towards the growth story. 25 basis point moved to 1.77.

we went through 1.80. we are going back to highs we have not seen since 2020. tom:tom: i look to the german 10 year yield to see if that goes positive. it is january and you need to do something now so you may be smarter 12 months from now. the shortest -- best answer i know is a physical subscription to current affairs magazine. this month is no different. " the digital disorder," a tour de force. daniel kurtz-phelan joins us

now. she did some great work with eric bremmer a few weeks ago. she parses china and to says " china may win the battle, but will they win the war?" >> liz was one of the first people to remind all of us and point out how ambitious xi jinping is when it comes to what he wanted to do in china and globally. liz was on the ambition of xi jinping. what she sees now is the mobile extent of what he is trying to do. you see it in china's ambition in its own region. we can see crisis in the

economic world globally. this tension between xi jinping's leadership style and the extent of those ambitions. xi jinping faces a log of real challenges. he may be his own worst enemy when it comes to a lot of this. you have xi jinping not having left china in a few years. you see this gap between ambition and ability. tom: you are an expert in another time and place about china's and the u.s.'s fractious relationship. there is -- who is the george

marshall for the president to get this done? daniel: what you see that is similar between that time and now is in spite of the -- to spite the -- there is a similar fight today among different parts of the administration to decide just how tough we need to be. you have someone like john kerry trying to find ways to work with china on climate change. you have others at the pentagon trying to craft a tougher line. it is this process of working out so you can see some slightly incoherent elements to this over the course of this year.

the challenge for the administration going into this year is to craft this into a strategy. lisa: i want to stay on china but i want to address another answer i thought -- article i thought was interesting -- the price of oil. how does the global revolution in green energy read duger mobile power -- rejigger global power? daniel: even as we start to think about new energies or -- sources, the long term not go away. in the short-term, there is no better example of this than russia, ukraine and europe.

in the long run when you look at angst like rare materials -- things like rare materials all of that will become geopolitically complicated in the same way oil has been traditionally. a lot of the dynamics and risks that are familiar to us will not go away. in the short term they may go up, especially if policymakers do not appreciate those risks in the short-term. lisa: kazakhstan is the saudi a arabia of uranium. who will be the powers of the green future? daniel: china has been very deliberate as you all know in building up its power here.

before other governments were thinking in these terms, china saw that by becoming the green energy superpower, it said about trying to dominate the supply chain and subsidize these industries heavily. you have a light of complicated geopolitical spaces where mining is prevalent. you have the congo where there are important minds. you have-- mines. you have chile and bolivia. now it will be a major policy consideration thinking about is materials that are in some complicated countries that will bring political challenge of theirs -- challenges of their own. jonathan: daniel kurtz-phelan,

thank you. tom: by no means am i an expert on this but to go from its to give -- minsk to kiev because extent -- to kazakhstan, it is almost like the peter the great era for mr. putin. it is the kind of contained -- jonathan: until it is not. tom: i'm fascinated -- your thoughts on the united kingdom and china in year two of what we

are dealing with in hong kong. jonathan: it is sad. i think on several issues when it comes to the europeans, they are distracted on how to deal with the chinese communist party. the chinese communist party has been fantastic at building commercial relationships with places like germany. this commercial relationships become sensitive weak spots in geopolitics. tom: it is a new germany. it is a germany that has to go up in eastern europe. jonathan: talking of tensions between the u.s. and the chinese communist party, you can find many companies who are happy to criticize the administration in

america. they will not speak about it when it comes to the chinese communist party. tom: i have my boots on today. jonathan: we would sit down with oc as and say -- those ceo's and say " what do you think of the chinese communist party?" they will shudder. they do not want to talk about us. tom: -- futures down 11, down 2/10 of 1%. from new york city, this is bloomberg. >> i'm leigh-ann gerrans. in kazakhstan, security forces are restoring control after

crushing demonstrations. almost 6000 people have been detained. tennis star novak djokovic just won a court battle to stay in almost really a and play -- australia and play in the australian open. the judge ordered that djokovic. -- djokovic be released from prison. meta platforms are releasing what will be the largest sized crater -- they have recently announced plans to expand in the area. bob saget has died. he was best known for his role

as a single dad in the said column for house. later wish sitcom -- sitcom full house and later as the wisecracking host of america's funniest home videos. i'm leigh-ann gerrans. this is bloomberg. ♪

♪ >> we are on a path to make this disease caused by this virus

much more mild, much more contained because we will have population immunity, we will have vaccines that are effectively knocking down severe disease. there are ways we can control this disease, but this virus will be around for a long time. jonathan: brilliant as always. from new york city with tom keene and lisa abramowicz, i'm jonathan ferro. last week, 10 year yields up 25 basis points. this morning, a very brief breach of 1.80. tom: rates are moving up. in my right that at the heart of delta early on when it was

really serious in new york, we were trying to get to a positivity rate of 3%? jonathan: i don't know. i know the right now is materially higher. close to a third. tom: i did not know that. good morning. we are going to dive into this with joshua sharfstein. he is with the bloomberg school of public health. i want to clear the air -- what is the next step for the trips in atlanta? what is -- troops in atlanta? what is the next step for the cdc? >> getting the u.s. through this

wave. deaths, the peak will fall after that. getting through this. -- getting through this period is a challenge. it is stressing out the ability of health care to provide treatment for everybody. tom: the rest of us talk about this. you are doing it. dr. sharfstein, from where you sit, are other countries doing this better? is the u.k. doing omicron better than we are? dr. sharfstein: i'm not sure any country has figured out omicron. other countries are willing to

shut things down for a few weeks. certain countries in europe have gone that route. we will have to see how it works. i understand in countries where people really follow what the government says, you see cases coming down quicker. you are taking away in those places the locations where the virus can transmit quickly. a country said that you cannot sell alcohol in bars or restaurants. lisa: will we reach some baseline immunity to call the pandemic " over"? dr. sharfstein: i'm not sure we will ever call the pandemic over in one day. the other side of this omicron wave, we have a chance for things to look a lot at her ==

better -- better. at a minimum, omicron will, be behind us, and we will have put in place some measures that can keep the virus from disrupting our lives. among those, new medications, contact tracing and other basic public health measures that will help us feel like we are into the new normal, and we are not stuck reeling from one covid crisis to another. lisa: how long does it take for us to peak, rollover, and for it to become a rarity?

dr. sharfstein: the health care system can still be coping with the fallout for a while, but the models are that it could be a matter of weeks from the peak to cases way down. the explosive growth of cases on the way up is mind-boggling. that comes down quickly. we are trying to get there. we want to reduce the strain on the health care system during this period. it gives us a chance that 2022 will look different than 2021. jonathan: on this whole issue of vaccinating the world, we know someone here -- all know someone here in the united states who has had a previous infection.

i'm trying to figure out if a previous infection is equal to, better or worse than vaccination. dr. sharfstein: the answer is yes. it is both equal to, better, and worse than being vaccinated. some people got very sick. it is unknown. when i talk to people who say " i'm not going to get vaccinated because i got sick," getting a vaccine for someone like that, it is a benefit, no matter how much immunity you had. it is a benefit for those who had a glancing blow with the virus. it protects them a lot more. when a lot of people get omicron it will create higher population

immunity overall. jonathan: dr. joshua sharfstein of johns hopkins. you can see how this will become a bigger conversation given how many have tested positive in this country. tom: i like your idea from two years ago when you said " maybe the year starts in march." lisa: kong has quarantine camps for people when they come into the country. jonathan: 2 different worlds. i know which world i would rather live in.

i'm living in it. yields are higher by half a basis point. heard on radio, seen on tv, this is bloomberg surveillance. ♪

every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers

with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

>> we are clearly being a fed that is going to move faster in terms of rate hikes. >> rate hikes don't -- >> the fed has to do a better job telling us what they are thinking, how they are thinking. >> the aim for the fed is to tighten financial conditions. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: what a crazy week last week was, kicking off a brand-new trading week from new york city. good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market unchanged on the s&p. anything but last week on that -- on the nasdaq. tom: you mentioned a 1.80 10 year yield.