do, tighten financial conditions. >> they need to do at least four to five rate hikes this year. >> right now there -- right now they are too stimulative. >> it will be a lot of inflation pressure the next couple months. >> we don't have a good experience for the markets to calmly go through a tightening cycle. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. jon: chair powell headed to capitol hill. from new york city for our audience worldwide, good morning, good morning. this is bloomberg surveillance live on tv and radio alongside tom keene and lisa abramowicz, i'm jonathan ferro. what a turnaround in the last 24 hours. on the s&p, up .4%. chairman powell, tom keene, in front of the senate? tom: it will be interesting to see. there are a whole host of things to talk about but maybe they will say thank you to jamie dimons. what he did yesterday, did you see the dot plot chart, the idea

of outdoing each other where goldman sachs's four rate rises, we be they will do five. it was jamie dimon to the rescue yesterday to assist jerome powell. jon: i felt sorry for mike rowley yesterday. it came out last week same thing, for hikes, balaji reduction. i have heard it from a few banks, including deutsche bank. tom: it is out there, and floating around, and we are staggering day by day. what matters is is it tomorrow we get cpi data? jon: yeah. tom: that is what matters. we have a look at the actual data and that is what you will see jerome powell see today -- say today. jon: and that will be the stick that chairman powell has to face later this morning. lisa: the stick and possibly why he is going to be talking up inflation. that is the tone. raphael bostic of the atlanta fed, these headlines crossing the terminal, saying i'm totally

open to the prospect of a march rate hike. this now baked into market expectations. the fact we have seen the buy the dip mentality comeback in is notable, especially with three rate hikes into the market. jon: what do we make a vice chair richard clarida to stepping down weeks early? lisa: making it easier for him to get a political path, in my opinion. the details will come out in terms of when he bought, when he sold. he sold the stock fund three days before a speech was delivered. before that, he bought that again. how much the timing was on a preset course, we will get the details but this is a political play into hearings. jon: chair powell should use pelosi's words, we are a free market economy and they should be able to participate. [laughter] you think that would work today if he used speaker pelosi's words? tom: to take the whole part here, it seems each story is different. i think everyone knows i'm close to the vice-chairman.

we go way back. he will go back to columbia but i do not think he has to go back to columbia with his tail between his legs. it seems there was an odd thing in trading of three days but it is not trading. he is in a bundled fund, a big amount of money, the guy has made a lot of money. that is all there is to it. it is different than trading stocks. it is not like lisa's kids where they are daytrading off of the cows. -- the couch. lisa: it's painful. jon: it's ironic to me the people going after the federal reserve are also the people that have been doing trading themselves. the market moves we have seen over the last couple years are not just all down to the federal reserve. we had a monetary policy response from congress as well. when speaker pelosi was asked about whether people in congress should have access to markets in the same way, your average joe does, she responds we are a free market economy and they should be able to participate. i think that is slightly ironic, don't you? that these are the guys going after the federal reserve. tom: i just retooled my 401(k).

am i guilty because all of the stuff i learned on this program? mi front running "bloomberg surveillance" because i went from schiphol leverage into all-cash and took a 2% leverage exposure? jon: some people say you face tighter restrictions then you would in congress as a journalist. tom: i do. there is no question. as one example, i have a handshake agreement with the founder of bloomberg news, i can never own financial stocks. jon: that is why you are in cash. tom: i sent to matt winkler, i am triple leveraged on cash and he said what is that and i said this is going to work out. [laughter] jon: it has worked brilliant for you over the years. the turnaround of the nasdaq 100 yesterday was phenomenal, down and down. tom: unreal. jon: this morning, up .5%. yields on 10 through 180 briefly, back down to 1.76 and unchanged on the day. lisa: very much a focus on the

fed officials and we get a host of fed speak today. 9:00 a.m., joining you on bloomberg television, cleveland's fed president, talking about her expectations for when lift off will happen. coming out this morning, comments saying march is on the table, every meeting is life. the main event today, jay powell takes the stage at 10:00 a.m. for the senate confirmation hearings. i want to see how much of an emphasis he places on curtailing inflation, the reaction function. in other words, how much work does the market have to do for a selloff of volatility to affect a tightening in financial conditions. one of the prepared statements, we will use our tools to prevent higher inflation from becoming entrenched, very much front and center. i want to clock p.m., the u.s. treasury department will sell $52 billion of notes, coming as the three year yield rises to

the highest going back to february 2020. how much does the uncertainty and entrenched feeling of rate hikes three, possibly for this year, lead to a lack of demand as we head into a more volatile 2022? jon: thank you very much. number one, we need to talk about this federal reserve, number two, another locked down in a tiny city and extra restrictions in hong kong. we have got to start with markets. we do that with the co-cio of cavalli funds. reading through your nose, markets shaped by the 6 i's. >> it's not today's word all puzzle. these are six dynamics we think will shape the world this year. it should not surprise you the first are inflation and interest rates. we have infrastructure and income taxes, physical policy. not much to expect there. i do not know where we are in build back better. longer-term, international and

internal relations, then finally, immunity. we put that one last on purpose and we think omicron will impact earnings to some extent in the first quarter and for the year, but we think that has already been discounted and we are looking at the end of this pandemic into stronger growth at the end of 2022. tom: a much stronger growth has to come from sustained revenues. i assume revenues are not going to grow at a chinese boom economy level which we are living now. what do you frame for revenue growth as you look out two to three years, five years? chris: we are looking at nominal revenue growth and that is helped by inflation oddly. significant pent-up demand in many areas of the economy. amongst the consumer, they will be an increase in capital spending we think whether it be for 5g, roads, bridges,

etc. we will get back to mid-si ngle revenue growth. companies have significant pricing power and they will be able to maintain this level of margins for some time. lisa: were you buying the dip yesterday in tech? [laughter] chris: we weren't. we have been enjoying this rotation to value. i think it is more sustainable than what we have seen in the past for fundamental reasons. i do think there is value in certain areas of tech. tech of course is shorthand for the big five companies. i particularly like google amongst those. i think they are probably oversold at this point. jon: you think this interest-rate conversation is overdone? chris: it is a process. this is not unexpected. the market is trying to figure out what companies have sustainable businesses and who does not, who is not going to earn their capital, and it

takes analysts time to chase their discount rates but it will take a little time. jon: christopher marangi, great to catch up. i tried yesterday before i went to sleep, it was dreadful at wordall. did you work it out? tom: no. anne-marie one yesterday. lisa: i'm good at it. tom: trivial pursuit, worst player in the world, you are looking at it. jon: i started googling five letter words. [laughter] lisa: that is so sad. jon: i have no idea what's going on. we talk about china and the shuts down in china and ray dalio. everyone is entitled to your own opinion but how comfortable are you in your opinion is used as a propaganda tool by the chinese communist party echo ray dalio, that is where the conversation is. tom: i was thunderstruck of the comments of mr. dalio on the relative prosperity and society

of china versus the western world as well. it is not for me to second-guess somebody of his stature, but the idea of billionaires running around, talking social policy, is hazardous to their health and our health as well. i was stunned at what he said, that the u.s. needs more common prosperity and a lot of other countries do as well. on a compare and contrast of china, i was stunned. jon: very casual with his words here, the u.s. drew its own system -- through its own system needs its own prosperity. i think people are focused on the more common prosperity by the chinese government. lisa: to tom's point, it is stunning he doubles down on this rhetoric after the backlash she has gotten from his own fund and let alone politically. the fact he manages chinese money, that bridgewater managed state money going back to 1993

really speaks to the conflict of interest of the entire complex of corporate america that is still trying to take advantage of the business opportunity, even as the u.s. tries to double down on these human rights violations and other issues they have with china. how does this dynamic play out? jon: there are two issues tom touches on and i think you are right to touch on both. one issue is how cozy the relationship is with ray dalio and the chinese government. the second is billionaires talking about inequality. tom: i don't know. we gotta get started. anne-marie says you are going to have to do it but i will not come on later. we m is in the wrong spot right now. the letter m is in the wrong spot. jon: will you try this through commercial break? are you sharing your score the end? tom: worst player in the world. [laughter] jon: futures up .3 on the s&p. this is bloomberg. ♪

>> with the first word news, i'm leigh-ann gerrans. ref i'll bostick says the central bank may need to raise interest rates as early as march. he also told bloomberg news that it could start reducing its balance sheet fairly soon after lift off to contain inflation. at the same time, he says the economy is quite positive. u.s. and russian diplomats have agreed to keep talking. that was about the only thing resolved in a first run of security discussions in geneva. there are big differences over russia's buildup near ukraine. moscow is concerned about the possibility that it may expand further east. kim jong-un is back switching up tensions as he restores talks for nuclear talk second time in weeks. they have fired to -- fired

what appears to be a ballistic missile. if lou at almost 10 times the speed of sound. in chicago, public schools reopen for students tomorrow. the teachers union leadership agreed to accept a deal with officials to restart classes in person. close have been -- classes have been closed. they demand the city have stricter protections against the coronavirus. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries. i am leigh-ann gerrans. this is bloomberg. ♪

>> i think they should go faster then what is priced into the market. obviously it'll depend on how

the economy evolves. my best guess, they need to do at least four to five rate hikes this year and it would not strike me at all if we get into in every meeting kind of cycle. jon: bill dudley there, the former fed president and bloomberg opinion, one -- bloomberg opinion columnist in yesterday's conversation. with tom keene and lisa abramowicz, i am jonathan ferro. your equity market advancing .3%. the nasdaq up .5%. bond market, 1.7 550 one, chairman pals reconfirmation hearings coming up later this morning. here's one for you, from punch bowl news, house minority leader kevin mccarthy is considering instituting new limits for an outright ban on lawmakers holding and trading inequities if the republic takes the majority in november. that was for moments ago. jon: the key word here, --

tom: the key word here, and we won't spend too much time on this, the keyword is trade. his trade moving mutual funds around, let's say a 401(k) broader portfolio, or is trading going outside the hall? jon ferro, people are outraged that they are daytrading. do you want to get rid of that? they can do it in a heartbeat. have they? no. you buy and hold. to me, this is all incredibly solvable yet it never is. joe mathieu knows that and he came to me for stock tips when he first joined us. joe, good to see you today. the political backdrop of all of this, of all of these themes is a president who we all know, after decades, is somewhat of a centrist and he is dealing with his left. how is that going this morning? joe: keep your ears open with

senator elizabeth warren coming up for questions today in the jay powell hearing. it is a great question. in terms of making progressives happy, the president is leaving the bubble today and going to georgia to talk about voting rights. you say there aren't enough votes to make voting rights happen. he is going anyway, using the pulpit to make progressives feel like this is the urgent matter they believe it is and one that will carry through a midterm election year. even if voting rights code nowhere and there is no change to the filibuster rule, this is something straight through november. and stock trades may be as well. that is where kevin mccarthy wants to go according to punch bowl but many others have gone here. jeff merkley, sheriff brown, aoc has put up similar legislation banning specific traits. i have to tell you, if they enforce the rules on the books, we would not be having this conversation. tom: exactly. joe: dozens of lawmakers have not disclosed what they are doing. people that work in financial

news know about this. we have similar personal trading disclosures, we just can't not -- cannot around with ours like they can. tom: it's a good way to fall behind. i look at where the president is here and i would suggest the january 6 speech written with john meacham was a centrist speech. how centrist will he be in 2022? joe: that is a great question. maybe not too centrist if he is trying to light a fire under progressives here. that was the opening salvo, the january 6 speech. you will hear similar lines in that speech. i will stand in the breach, moments like that will likely come back. jen psaki went further to say president biden today will articulate his supports. this could be a first, depending on how he terms it, to change the rules of the filibuster to make this happen. we know joe manchin and kyrsten sinema do not want any part of that, which is why this will likely not go anywhere, but it

could be more than a vanity project. if this is what mobilizes democrats in an election year as opposed to what we saw in those gubernatorial races, this could be worth president biden's time. lisa: i want to revisit the idea of kevin mccarthy coming out with a potential bill on restrictions to trading. they just enforced the rules, we would not be having this conversation, but the messaging is important, especially ahead of the fed chair hearings for confirmation. to me, how much does this set the stage for the argument for the moral high ground to take the main pulpit in these hearings? joe: it's a great question. it's all about the optics and perspective he is coming from. we are walking into a world in which kevin mccarthy will say similar things to elizabeth warren. if you are looking for bizarro world, maybe we have found it, knowing richard larry to his leaving two weeks early.

-- richard clarida his leaving two weeks early. we could be in a world where mccarthy and warren strike similar themes. lisa: how much is the get away from the inflation discussion which is less clear on how the fed should target? basically, our politician going -- politicians going to be asking the fed to take a more hawkish approach or is that a delicate dance given the consequences for the economy? joe: no, we will make lots of commercials today. that is partly what these hearings are for. everyone knows jay powell will be reconfirmed. that was partly why he was renominated. namely republican members will be hitting him hard, putting pressure on him about inflation. did we start tightening too late? how many hikes will be needed? was this joe's fall? this will be an airing of grievances today, even though everyone seems to know how it will end. jon: thank you. as always, in washington dc, don't miss him on bloomberg radio, weekdays at 5:00 p.m. eastern time.

tom, to the point you posted on twitter, the washington post op-ed piece about what this administration can do about inflation, where are the nominations outside of chairman powell i think was the question the piece was asking? tom: yeah, that piece was launched this morning and i thought many other informed people, a little history about how inflation occurs. some of that is a mystery, but far more the type to how it does not occur and there are all sorts of people, including democratic strategists, suggesting a president is barking up the wrong tree, going after the meatpackers. i would think ron klain and the white house is telling the politician types, stop blaming people that do not deserve the blame. jon: who thought that was a good idea? that's the question we have to ask. as if under the trump administration, companies were less greedy and got more greedy. try to make sense of that. lisa: it's difficult to have

nuance in a political discussion. this inflation debate is nuance as we have heard from strategist after strategist. from a market perspective, there is a huge question about what fed policy can affect, unless it causes a market selloff. a lot of people think they are reluctant to do it. this is this catch-22, can they bring down inflation if they do not cause a selloff? jon: can you move away from politics today? john matthew said something -- joe mathieu said something i think is spot on, you will see a lot of commercials get put together today for midterms later this year. this morning, we always make this mistake if it is for us, but often it is for the politicians, is this about politics today or about markets? lisa: it's always about the politics. maybe there will be something that affects the markets in terms of what fed chair powell says, but that is front and center. some momentum of getting a fiscal package past is more

likely. futures up a third on the s&p. from new york city this morning, good morning to you all. heard on radio and seen on tv, for your 10-year treasury yield at 1.5969 -- 1.7569, the this is bloomberg. ♪

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.

jon: live from new york city for our audience worldwide, your equity market, what a turnaround in the last one he four hours. lows on the nasdaq yesterday, then slightly positive at the close. right now, positive again, up .3%. the nasdaq 100, up .4%. investment banker in jp morgan saying yesterday by the dip. for many of you, that is what you did. that is that equity story and here's the bond market. twos, tens, 30. the move so far, 18 basis points higher on twos, 25 basis points higher on tens, 91 on twos, 176 on tens. translate that to fx, not much translation at all. yields higher, dollar flat. right now, south of 96.

why are high yields not translating into a stronger u.s. dollar? tom: what do you do on radio and tv? you have to listen to jon and others talk about the difference in yield, a spread market analysis. there are a million other spreads and i could care less but the answer is you go to the twos/tens spread. if the twos tends flattens, when does that get into the market? jon: he starting to question whether this is price in. on the fx side. something to think about for the next couple weeks. tom: we will have to see. interesting to see the data moving, futures up 17. right now on the economy, the chief economist of steeple joins us, lindsey piegza. thrilled to have you. i want to talk about the parts

that make up inflation. we have a great chart that shows the inflation energy, the inflation in goods, sort of like maybe inflation service sector. tell me about the parts of inflation and their movement, the parcel differentials of the inflation to come. lindsey: right now, what we have seen in the inflation data is every sector, every component of the inflation metric is moving higher. it is difficult to pinpoint one area and say this is the problem, this is where price pressures are stemming from. it is broad-based. as we see the cpi now expected to move near 7%, excluding food and energy up to 5.5%. this is a broad-based issue and something the fed chairman is really going to be grilled on, why inflation has gotten so out of control across virtually every sector of the economy and where's the blame, where is the finger-pointing from it? who is to blame for the rise of inflation? jon: what will goods do and how

does that fold into the politics and blame of america? lindsey: the goods component is really the transitory component the fed was focused on for so long. rising prices in goods was largely a reflection of supply chain disruption as a result of covid-19 or the policies aimed to stem the spread of covid-19. as these disruptions are smoothed going forward, the fed has been clear these price pressures are likely to evade. that is why they have been hesitant to address inflation because they expect a good portion of inflation to be transitory. on the service side, this is largely a reflection of upward pressure on wages, reflecting in many cases artificial policy metrics, really disrupting the structural balance of the labor market. this is where it will be more difficult for the fed to control inflation. even now, many of these

government programs have backed off and removed competition with the private sector to entice workers into the labor market. incoming workers, new hires still have that elevated level of expectation for earnings. so we do expect this upward momentum in wages to continue for some time. this is going to be more sticky. this will be a variable that the fed will have more difficulty controlling with traditional monetary policy by raising the federal funds. lisa: when did this move from being a good thing from the economy -- for the economy to a wage spiral that kills growth? lindsey: i think at this point, you could argue we are already in that wage price spiral. higher wages are already leading companies to increase prices even more, which are leading workers to demand even higher compensation. i think at this point, we can argue we see at least the early signs of a wage price spiral. this will be a very difficult scenario for the fed. yes, the fed wants to control inflation, yes the fed wants to

rein in inflation expectation, but we know it is a delicate balance with growth. we are on a pathway to return to prepare -- return to pre-pandemic gdp, around 2% even with extraordinary accommodation from the fed. the fed is going to have to walk this delicate balance. they want to control inflation and convince market players that they will control inflation but they do not want to pull the rug out from under this recovery. lisa: can the fed actually curtail inflation at this point without causing significant market disruption? lindsey: i think that's the point of monetary policy, removing this accommodation to cause the market disruption. the fed wants to slow the economy, the fed wants to cause prices to increase and interest rates -- prices to go down and interest rates to rise. the difference is, this time around, the fed wants more control of the yield curve. the fed is not comfortable

raising the federal funds rate and controlling the short end of the curve, this time around, they want more aggressive control via the balance sheet, which will allow them to manipulate the longer end as well. tom: that's a really important statement but we will stop the show here because we will do a little bit of history. lindsey, you can do this because you have done the history of this. is there any indication whatsoever that any central bank can go out and manage yield? lindsey: it is difficult. they have some control over it but do they have 100 -- 100% control? no. the fed is convinced, through this unprecedented level of control in the balance sheet, that they will be able to curtail history and be able to manipulate the entire yield curve. lisa: i'm digesting this idea of a wage spiral and you say we are already seeing it and it could potentially be out of the fed's control. what data are you looking for to

confirm this view we are in the midst of a wage price spiral that has significant legs? lindsey: i think the best evidence we will see, the most conclusive evidence will be when the fed raises rates. potentially as early as the first quarter of this year or at least by the second quarter of this year. as the fed begins the initial increase, if we continue to see price pressures rise, if we continue to hear from companies that they are being forced to elevate prices in order to offset labor increases, rent cost increases, that is going to be the determinant that the fed is not only behind the curve but too far behind the curve that the traditional metrics of raising the federal funds rate will be able to control inflation. lisa: how much is this view predicated on the idea the participation rate will never recover to where it was before? there are people that have not gone back into the labor market and they will never return. lindsey: i don't want to say they will never return, but i think it is a reflection of the fact we are not going to see a

return to the normal labor market in the near term. there was an expectation that, as government benefits declined, as schools reopens, as vaccination rates increased, these workers would immediately flood back into the labor market. it is clear that is not going to happen. this is going to take a lot of time, particularly when we talk about consumers able to accumulate such a sizable amount of savings that will now carry them for several months if not longer into the new year. i do not think it is an idea of will never get back to those participation rates but it will be a very prolonged recovery before we see the labor market getting back to pre-pandemic levels of activity. jon: thank you. lindsey piegza there of stifel. can we talk about china and hong kong for a moment? more restrictions out of hong kong, around flights into the airport, around school closures as well. here is the stat of the day.

i will read it twice so you hear what i said the first time and you know i did not just make this up. i will say it twice. the city tested around 920,000 people over the past two weeks. they found 42 positive cases, 920,000 people they have tested in the past two weeks. 42 positive cases. doesn't that capture the difference between the approach in china and hong kong right now and the united states? 920,000. tom: we are doing science based on statistics in the central limit theorem. they are not. they are doing social policy and a certitude. they can fix it. i noticed the philippines with restricted stock market hours. they have challenges. there is every other story out there as well but this is science.

amesh adalja will be with us and he is seated about this. jon: it is absent from the conversation of what is happening in china. inflation tight, they are about to do something about it but i wonder what the trajectory of the global economy looks like when we have a highly contagious variant circulating around the world. we have a vaccine in china that we know is not as good as the vaccines that have been used in the west and united states and u.k. across you are up -- across europe. they have a lower tolerance level for infections. throw in that there are olympics taking place next month too. lisa: this is a highly nuanced moment and we see this with retailers. lululemon coming out yesterday with earnings and going on the low-end of their forecast because of the disruptions due to omicron and the supply chains from china. we expect to see that from other retailers. how much does china have to give in, especially if they have people coming into their borders for olympics. how will they control this? if it is so difficult and

transmissible, they will not give up this year. jon: i sense many foreign people are not going into the country for the winter olympics. lisa: the athletes, someone can develop an infection hours later after a test, they become more vulnerable, especially without the herd immunity. jon: it makes you question around supply chain issues easing soon. tom: annmarie just emailed in and i think she is scheduled to come up. the g is in the correct spot. jon: you are busy playing that still? tom: i am. jon: have you managed to nail it down? tom: no, i haven't -- jon: they actually made the banner for you, lisa. tom: what can i say, the g is in the correct spot. jon: i'm letting it slide. from new york city this morning, good morning. this is bloomberg. ♪ >> with the first word news, i am leigh-ann gerrans.

the u.s. senate is set to vote to impose tough sanctions on the nord stream 2 pipeline. there is congressional opposition to the pipeline from russia to germany. some democrats are concerned the sanctions would complicate ongoing talks between the u.s. and russia. those discussions are aimed at easing tensions over russia's build near ukraine. the fed will reserve richard clarida to stepping on friday, two weeks before his term expires. that is following the revelations about a stock trading on the eve of a major central bank announcement. regional fed chiefs announced their departures after reports about their trading activity. in hong kong, authorities are doubling down on a controversial covert policy. they are re-imposing some strict limits since the pandemic again. passengers from high risk countries are said to be banned

from transitioning through hong kong international airport. a splurge on christmas gifts last month. retail sales in the u.k. rose 4.6% on the year. that is according to a separate report that consumer spending was up, higher than more than two years ago. in college football, georgia beat alabama for its first national title in 41 years. they came from behind in the fourth quarter two to vite -- to defeat the crimson tide. alabama beat georgia seven times going into that game. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪ over 120 countries. this is bloomberg. ♪

>> omicron presented an unprecedented challenge. >> it is mostly unvaccinated people hospitalized dying from

omicron. >> the protection does not last as much as before. >> this drug has shown it works against the variants. >> we have a good vaccine, and it is very tolerable. >> the world should be in a better position as we move forward. jon: some of the top pharmacy ceos speaking to bloomberg in the last one he four hours. from new york city, tom keene, i'm jonathan ferro. your equity market up 17, up .4%, up 83 on the nasdaq after yesterday's turnaround. closing in positive territory yesterday after being down almost 3% at one point, up .5% again this morning. yields are unchanged, crude advancing 1.5% and euro-dollar just about positive, up .1 percent. tom: the spread comes through and breaks down to where it was january 3, trading day of the year.

we are 83 basis points, 78 to 79 basis points would be back to 12.31 2001 he won. right now, my interview on what i have been through the last couple weeks, amesh adalja joins us. doctor, i have a question -- i have eight questions but i do not want to be selfish. what is the character, the nature of hospitals in america? when you see the new stories about hospitalizations, translate that to the real world you are living. dr. adalja: there has been an uptick in hospitalizations and that is not surprising based on the astronomical number of cases of omicron we had. these tend to be people unvaccinated, like during prior surges. what is different, even if you look at raw numbers, and we see we have a collapsed the national number for last winter, is it does not feel the same in hospitals, does not feel as bad. that is because there are, in some situations, 25% to 45% of

people admitted because of other reasons and they are testing positive for omicron because of screening going on in hospitals. that is why, at least in the hospitals i work at, it does not feel like what it was last year. although it is stressful and although hospitals are crushed and have staffing issues, it is of a different caliber than a year ago. i think that's a good thing, a testament to the vaccines and also a testament to omicron being such a prolific variant that it is able to infect a lot of people, many of whom who do not even know they are sick with it. tom: you mentioned testing. give us an update on your belief in a pcr tests. the united kingdom seems to have their own calculus on how to deal with pcr. what you want to see from the white house and dr. fauci to bring clarity and confidence in the longer-term pcr tests? dr. adalja: i think we have to have people take a step back and say, "what are we trying to answer?" what question are we answering

when someone does a test? the first question we answer is, am i a danger to others? is there enough virus in my nose and mouth to infect someone else? the other question, what am i sick with? the pcr is a great test when you are sick but it is not going to give you a gauge on contagiousness because it is very sensitive, can pick up minute amounts of the virus, and that might not necessarily your contagious. it could be remnants from a prior infection. we have two different tests, and they each have their own lanes. i think you see all this confusion in the media because people are conflating them and not stepping back and asking the more philosophical question, what question are you asking of the test? lisa: there's this angst among people who have not gotten the omicron variant, sort of an inevitability. our cloth masks useless when preventing the spread of -- spread at this point? dr. adalja: they're not useless but are becoming less and less useful. when you have variants that can affect people fully vaccinated,

a cloth mask will not be as efficient because this variant is less forgiving. the better quality mask you have, the more likely you are to avoid infection, at least for some period of time. we do think it is important to upgrade masks but also important to remember these people trying to where n95's and kn95's, then not fitting in their nose sticking out, that is not better than a cloth mask. the best mask is one that fits your face. for those trying to avoid infection, the n95 and kn95 might be for them, but i wear a regular procedural mask and i'm ok with that. lisa: there's a bigger philosophical question when we look at the approach of china and hong kong and approach here in the united states. there is a feeling in the united states and europe that this is an and make virus and we have moved to that phase. we are tracking it, however we

are ultimately try to stave off applications for our health care system. china is clinging to the zero covid policy. at what point does this become counterproductive and frankly an impossibility as this virus goes and gets around the world? dr. adalja: it has become a problem, it has become something that is impossible to do. actually from day one. when you talk about a respiratory virus that spreads efficiently, has a animal host, there is no elimination or eradication. the goal is to shift the spectrum of illness to the mild side. china and other countries like new zealand and austria have tried the covid zero policy with i think disastrous results because it is not feasible and it stuns the ability of the population of the country to be able to learn to navigate a world in which covid-19 is ever present, where they have to learn to make risk calculations, have to get vaccinated to prevent severe disease. as soon as you start to have any social interaction, you are going to see the virus.

it is not like this is a biblical flood and you can sit in noah's ark and wait for it to pass. it will still be there when you are done. i think that is what many people fail to come to terms with and it will be to the detriment of the chinese people because they do not know how to live in a world with covid-19 because they are used to lockdowns, mask testing -- masks, testing, and they think that is normal but that is not how you take care of covid-19. you need a sustainable approach where you shift and use science and medicine to teach the population to reduce the harm from the virus, not to eradicate or eliminate something that is not eradicateable. when it comes to severe disease, there's an evidence for a period of months or a year you are protected from severe disease. it is unclear how protected you are from severe disease. omicron can walk through prior infections like it walks through the vaccine. in general, we want hybrid

immunity, people who have prior infection to get their immunity topped off with the vaccine. that seems to be the best policy, not only to rely on prior infection. jon: dr. amesh adalja there. strong words for the chinese communist party and their approach to dealing with this pandemic. lisa: it's always been a possibility and its detriment because people are not learning to live with the virus. the key test will be the olympics, how do they open their borders to the world and have this global competition at a time when they are utterly shocked with zero covid policies? jon: it will be fascinating to see how this plays out in the next month or so. tom: i don't think they will open the olympics. didn't we see something -- didn't you mention this where they would not allow clapping? lisa: and cheering. tom: why do we think they will open the olympics? i don't think they are. jon: coming up, the cio of pws america. he will weigh in on the market

and the massive turnaround we saw on the nasdaq just yesterday. the nasdaq this morning up .6%. on the s&p 500, up 19. up .4%. from new york on radio and tv, for our audience worldwide, lisa, tom, and jonathan. this is bloomberg. ♪

♪ >> the aim of the fed is not an unintended consequence. what they're looking to do is tighten financial conditions. >> they need to do at least four or five rate hikes this year. >> right now they are too stimulative, and the economy, especially inflation, is too hot. >> we don't have a really good experience for the ability of markets to calmly go through a tightening cycle. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: chairman powell just a few hours away. good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market up 14 on the s&p, up 0.3%. even if the outcome is clear for chairman powell little bit later, this could be a heated exchange on capitol hill