the rates market is the fear of a policy space. >> we've got real interest rates in the positive territory that probably is something that would be -- >> look for free cash flow. this is the most important factor in an environment of tightening monetary policy. announcer: this is bloomberg surveillance with john, jonathan ferro and lisa abramowicz. jonathan: this is only week three of 2022. good morning, good morning. i'm alongside tom keene and lisa abramowicz. your equity market, plus 11 on the s&p. tom keene, what a start of the year. tom: that is exactly what mr. kaine told me. we are all getting better, all getting healthier, but what an interesting market.

i want to frame it right now. percent changes one way to look at this. the other is the amount of movement of normal volatility. the nasdaq, 100. exactly two standard deviations below the trend. is that a capitulation? i'm not sure. but we are there. jonathan: very close to a 10% correction on the nasdaq 100. that german 10 year yield, no longer subzero, breaking back through it. tom: the first time i ever saw young ferro, he was like 15 years old at the ecb in stock for it. you've got some real credit. one is the symbolism of a positive tick? jonathan: i believe you got to go back three years the last time this one was positive. for me, the conversation has shifted. can the ecb sit out? the answer is yes, they can, but is this time different? it is a very different picture

from where we were in the previous cycle. tom: let's be quick here. 89 print earlier. jonathan: and a ton of earnings later. wrapping things up on wall street. lisa: frankly, the big banks have set the tone of whether we have accurately priced in wage increases. this is the biggest question mark. you have to look at the companies for you have not accurately priced in the margin compression. jonathan: the most important question on twitter, these wage increases on wall street and beyond, are they in reaction to what we see already or in anticipation of what still might be coming down the pipe in the next couple of years? lisa: it really speaks to j.p. morgan's move to raise the salaries of jr. associates for the second time in six months. wall street jr. salaries have gone up by 40% since the beginning of 2021.

is this trying to get ahead of something? regardless, a massive shift. and a lot of people are seeing those moves move away from them. jonathan: tons to talk about this morning, good morning to you all. a quarter of 1%. the nasdaq 100 bouncing back for tens of 1%. the euro-dollar, that is the move of the morning for tom. lisa, crude, 86.56. lisa: a report this morning basically saying they expect demand to exceed pre-pandemic levels as everybody goes back out. how does that factor into inflation? bank of america is expecting around six: 45, morgan stanley around 7:30 a.m. eastern time. the focus very much on expenses. jp morgan and yesterday, goldman sachs.

huge gains going into this year, at the beginning of this year. people take a look at these expenses and they say wait a second, revenues are growing as quickly and wait a second to your question earlier, the staying power is the beginning of an opening salvo of wage increases. the concern here is that people are seeing huge market shortage of housing and have not been able to build in certain areas. we are expecting permits to come down as a result of some of these southern states. 4:00 p.m., president biden is planning his first congress of the year, only the second since he took office. i'm very curious how he deals with oil prices. we were just talking about that. the idea that you are dealing with oil prices at the highest level since 2014, possibly heading to $100 per barrel. jonathan: some feisty q&a,

maybe. thank you very much. back to 2016, just about to take a visit to a negative yield on the german 10 year. at that time i ask a young man whether he liked europe and he replied to me i like europe for vacations. i was offended at the time but he was right. the u.s. equity market has delivered massive out-performance. i was offended at the time but you were spot on. at equity market in the united states has out-performed in a massive way. i wonder if that story is changing for you. >> i'm not even sure it is good for vacation anymore. i think it is. i would like to find that out this year. i tend to like u.s. equities more because they protect you a little more. there is a little bit less

geopolitics and the company remains strong. tom: been laid letter talks about -- bed ladler can go out and buy a gaming software company on a moments notice. do you believe in the new defenses? as you look at the whole mix of things, can you still owed what has worked for the last decade? >> honestly, it is a risk management. if you got over 20% of the s&p, it is also risk management not to hold close to the market. i do think the earnings growth will be the fall of the market for a long time. whether it is amazon or google or microsoft.

nine business, we use teams, we use edge to work, we use office. i'm not going to switch. tom: what is cash worth right now? you've always been very astute about the measure in the cash dynamic. >> for an asset allocator, i think it never really made sense to keep that too low. if you really have a lot on the sideline, you are saying to yourself i am a great market power and my guess is most people are not as good at that as they think they are. u.s. equities often have some combination of buyback and earnings. cash offers. above zero in europe. i think you want to be exposed

to cash flows pretty much always. lisa: how brave are you feeling right now as you see certain pockets of the u.s. equity market plummeted by about 40% since the november peak? i'm thinking of profit-led software and other tech stocks that we have seen take a hit. adam: you don't want to be owning profit with software after the selloff. you want to be focused on the margin expansion of cash flows. for me, i would rather be down from the peak in november or something that it was back in 2020. i really think biotech is worth it. you are down 45%, 50% from last year and most of these companies don't generate cash flow anyway. if they do, it is 5-20 years from now.

i think that is a pretty severe issue. i would rather long biotech innovation. tom: adam, how do you respond to what i'm going to call fed policy parler games? everybody is in the parlor sitting there coffee. john is better at this than i am. to me, the parlor game is out of control. is it? adam: for sure. there is excess capacity, there is a hockey league for people who follow every word these people say and memorize it yet have almost zero ability. of course you are right. it doesn't even really make sense to look at the interest rates in equities anyways. i will call that the jr. varsity team. what you see is expectations are

being priced in, far different from a few months ago. that won't last in terms of the increase in expectations. i don't think the fed is going to hike four times this year and four next year. i think they are going to have to be much more cautious in some of the pricing elements as you get on the others of the worst part of the shortages. i think people are going to focus a lot on labor participation in labor shortages as a complete picture of unemployment and i don't think the fed conveys a time in either market. jonathan: interesting stuff, good to hear from you. anyway, capturing just how diverse the opinions are right now on the federal reserve. i've been seeing surprisingly little on the theory that the fed is just jawboning to push inflation expectations to acceptable level. jawboning has been one of the best tasks for central bankers

for decades. that is just one of the views out there this morning. tom: and i would emphasize that dynamic analysis right now is critical. let's say the fed moves one rate, two rate increases. whatever it is, the markets will adapt, the markets will adjust. maybe the economy will slow. it is going to be moving parts in the analysis. >> jp morgan asset management took the other side of us in a massive way. they could talk about that a little bit later. he is looking for three and he does not like bonds. it will touch on that end little bit. futures this morning bouncing back up 12 on the s&p. up a quarter of 1%. from new york, this is bloomberg. >> inflation here in the u.k. has unexpectedly surged to the highest since 1992.

consumer prices rose 5.4% in december from a year ago. that has pressure to raise interest rates again next month. the 10-year treasury yield looks for it to surge past 2%. that would be the biggest move in more than two decades. the rollout of 5g wireless services in the u.s. is disrupting airline rights around the world. carriers from dubai, japan, south korea and india are among those canceling or revising flight pans to the u.s. they are concerned that new 5g signals could interfere with outdated equipment. u.s. secretary of state antony blinken meets with russian counterpart sergei lavrov this week over the you came -- ukraine crisis. blinken will press lavrov to immediately de-escalate tensions on the russian border with

ukraine and also has deployed more than 100,000 troops of the region. once again, jp morgan raising pay for jr. bankers. bloomberg learned that there is increasing salaries for wealthier investment banking analysts by $10,000 to $110,000. third-year pay goes to $135,000. political news 24 hours per day. 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. this is bloomberg.

♪ >> president putin has created this crisis by amassing 100,000 russian troops along ukraine's orders. this includes moving russian forces into belarus. let's be clear: this is an extremely dangerous situation and we are now at a stage where russia could at any point lodge and attacking brain. jonathan: the white house press secretary from new york city. with tom keene and lisa abramowicz, i'm jonathan ferro. the s&p, up eight or nine points. we found stack on the nasdaq 100. up one third of 1%. yields just a little bit higher. euro-dollar, slightly positive. positive to tens of 1%. crude, 86.40.

i promised to that quote from bob michele on bloomberg tv yesterday, here it is: it is too late for the fed to engineer a soft landing. they now have to focus on getting inflation back down. it goes on to say we have a fed funding rate. the final quote here, sell any bond market rallies. tom: i'm sorry, but there's a lot of different opinions out there. it is also about duration. where are you along the curve? lisa, there is an important auction treatment coming up here. right now while you can be distracted by ukraine and other foreign events, protect the president and a press conference in speech, many people anxiously await all of us worldwide on the president's day today. anne-marie, as you mentioned, the washington post typically more of a republican tilts.

does the president today have to confront his lived reality? what is the president's lived reality? >> he does have a bit of a right tilts, that opinion writer is a former speechwriter of president george w. bush and what he is saying is that the american people art stealing with the president is likely going to brag about and the president in that lived reality, so to speak, he will talk about his achievements of the first year. when he looks at the economy will talk about unemployment rates, about 3.9% in december. many were saying potentially we could be at 6% at the end of 2021, so those are gains. and finally, his heart infrastructure agreement which his predecessor was unable to make a deal on. but he is going to be facing a number of questions from the press because americans right now are feeling and omicron variant that they feel this administration did not prepare

for as well as inflation at 7% which, if you look at the latest polls, this is what americans while the administration to focus on. tom: what is his staff doing at the white house? what is fascinating is i don't have any handle on the staff and their advice to this president. you are there. they advising the president or is he in a vacuum? >> >> they are advising the president. we should note a number of members of his staff are individuals who work for president obama when they were dealing with other economic crises. they were dealing with a crisis of demand while this administration is dealing with a crisis of supply. they are surrounding him and many say the way this president governs is he hears from everyone but when he makes a decision he is steadfast in that decision. we have seen that a number of times over the course of the year. lisa: this is a rarity for president biden, a second press conference in this formal format by himself since he started his

term. what is the pressing question he needs to answer at a time when all the concerns that you laid out, with all these varying issues? >> there is a slew of issues and he has given a number of press conferences but as you say, this is one of the more formal press conferences marking his one year on and members of the press have been critical of the ministration for not getting as many interviews or press conferences to most of his predecessors barring ronald reagan after that assassination attempt. he has a number of domestic issues. what happens to his centerpiece build back better legislation? that at the moment there is pretty much been mum. about voting legislation is a massive issue. you have the omicron resurgence, you have inflation, 7% domestically. this is where things are going to be aligning. and on the far front, maybe questions about the hasty

withdraw from kabul in august, and what are they going to do about the russians amassing troops on the border of ukraine? not to mention now, belarus and russia talking about the joint military action. belarus and ukraine share over 1000 kilometers at the border. this is becoming very much a foreign policy potential crisis for the administration. lisa: the political strategists who use pii, do they think it will help president biden to actually grew some sort of predecessor, some person to follow him in the 2024 elections considering the fact that many people are thinking he will not be electable given his approval rating right now? >> is a great question. they definitely don't want to talk about 2024. they flirted with the idea of whether -- whether or not president biden will run and he says if he is in the mental and physical shape that he is, he does plan to run. it will be very difficult ahead of midterms especially for them to start to talk about a

potential successor because they don't want this president to become a lame-duck. jonathan: let's lean on your transatlantic experience. this see would you rather be in today, boris johnson's or president biden's? >> i guess i would have to say prime minister boris johnson. jonathan: really? lisa: really? >> at least he is looking forward to -- >> operation save big dog. jonathan: quickly, is that with the operation is called, save big dog? >> the independent reported that boris johnson has a downing street operation called "save the big dog" meaning himself. who are the other young staffers he is going to have to give up to make sure he can remain in

power? jonathan: you couldn't make some of this up. lisa: operation big dog... you mean because boris johnson is about to lose his job, whether voluntarily or not? it seems like he is not going to be able to avoid it. jonathan: there is a system to deal with this, tom. we have seen this in the history of the u.k. many times. here is an easy one. the likelihood that boris johnson, the prime minister, has to resign this week is higher today than it was yesterday. that has been a change in the last 24 hours. he might cling on, but the probability has shifted. tom: to me, what is the biggest distinction of the conservatives and theresa may? jonathan: you keep going back to the former prime minister. are you suggesting she might throw her hat into the ring? tom: no. i am a foreigner on this. lisa: she would never label the operation big dog. tom: guys, we need wine time,

that is what we need. jonathan: that would work out? who would pay for wine time? wine time with todd? lisa: operation big dog. [laughter] jonathan: from new york, this is bloomberg. .

♪ jonathan: very close to a 10% correction on the nasdaq 100. right now, we bounce back a little bit. on the s&p, up about 1/10 of 1%. starting the show this morning by pointing out we are only in week three of 2022, but how much work we have done in this bond market already. close to 40 basis points moved on a 10 year yield. fewer than three weeks. just unreal. up 32 basis points on the year as well. massive moves and expectations for the fed. i mentioned bob michele, he is saying 3% on the fed fun at a minimum. right now, you can't buy one. let's start thinking about this.

the u.s. versus the euro how high is the burnout for the federal reserve to do more than expected? gradually, we are starting to talk about a rate hike at the ecb, may be the end of this year. i want to finish on europe just briefly. it feels like the first time in forever. just a brief break, a small, mild break up a couple of basis points. but it is that euro-dollar move that gets my attention. is the bar now too high for the federal reserve to hop over? expectations keep climbing relative to the ecb. that conversation for me is only just getting started. tom: the first thing that i look at on the terminal when i come in every morning is you triangulate dynamics and you are right as you put your hand up on radio, doing the framing with his hands here of how they are the in a tight range and they don't signal a decision by the

markets on what we are going to see here. jonathan: the range of things, this is one of the most fascinating starts to the year and a long time. seriously, and a long time. excluding the pandemic for obvious reasons, this one for me, finally some real central bank diverging. china bringing rates down, the fed taking rates up. the ecb, let's see if they can sit this one out. tom: we will see. right now, and this is a joy as we move to the banking season, gerard joins us. what i know is when you've got a $10,000 raise in 1988 when you joined tucker anthony, it meant something in the paycheck. let's do the math right now for the jr. bankers today. a $10,000 lift. they are all conservatively 35% in taxes. federal, state, new york city, whatever. it is $125 per week raise. tell us your thoughts on the war

on talent. >> it is a real war and i remember those days from long island, new york and the city and my monthly ticket was $75 per month. that ticket today is over $400, see you are right. the war on talent is real and you saw it in not only jp morgan's numbers last week with the guidance of higher expenses in 2022, but goldman sachs, they put a very strong revenue number with the expenses up quite dramatically. granted, those expenses at both those firms, particularly goldman, are more incentive types. therefore, revenues come down as we expect they will in capital markets this year. tom: and what is your x-axis on lying compensation? i get the incentive compensation which is always justified of revenue, bringing it down to

even out profits, whatever. but what is your timeline here on the painful raises just to keep the truths? is that going to stop? >> no, i'm with you. it is not just your on wall street, it is across the country, as you well know. that pain line is going to continue to rise this year because as you know, wages for 9-10 months were negative, so that is going to require individuals to walk back to their bosses and demand even higher pay. if they don't receive it, they are going to walk across the street. jonathan: they have got to find the growth to keep delivering these pay rises. your line of questioning was about lending strategies. i didn't see any others jump on that story. why did you ask about that? >> it is a good question. we are always trying to position ourselves in terms of what we do with bank stocks and what is going to be in the headlines a

year from now. what are the three of us going to be talking about in january of 2023? i think what you're going to find is it is not necessarily going to be cop issues as we are talking about today, but it is going to be about credit. the credit standards are going to start to weaken to grow the revenues to help compensate for some of these expense costs. we've never seen it this good. that is another reason, it just cannot be sustained at these levels. i think next year's topic in 2023 is going to be the outlook for 23 and 24. lisa: concerned more about the consumer credit quality? >> initially, consumer because if you look at the data from the monthly credit cards, the so-called credit card receivable delinquencies and charge-offs, that data that comes out is incredibly low. we have never seen billing windows this low, we have never seen charge up the slope. however, some of our lenders

with the nonbanks are always trying to show some weakness in credit. the consumer will start first but if we get into a slower economic environment in the latter part of 23 and 24, it will spill over into corporate as well. lisa: in the meantime, do you think the selloff we have seen in the wake of some of these earnings was overdone on the expenses side of the equation, or do you think it is an actual repricing of some of the expectations of where we are in the wage debate? >> i think it was a little bit over an overreaction just on wages. if you just focused entirely on that, it may have been in overreaction. but the hidden message we saw yesterday from goldman sachs is the fact that revenues are very likely to be down this year in 2022 versus 2021 because 2021 as you saw, all-time record highs. 2020 and 2021 for the capital markets has been unprecedented. it is not sustainable.

that is what investors are also looking at and that is the biggest stock in our view. tom: the most important thing i've seen so far as page 14 of the 2022 jp morgan debt where they put a good jillion dollars into technology. the super regionals, the regionals, the non-regionals, the mom-and-pop banks, how do they compete with that? >> it is a really good question, tom, because it is a debate we have all the time and as you know, j.p. morgan chase is a global bank and needs to spend much, much more than your regional banks and community banks. what we do is we take a look at that spend relative to the size of the balance sheets. what you will find is that most banks will be spending between 40 and 45 basis points of that balance sheet in tech spending. the community and local banks, they will offer basic services. they may not have the bells and whistles you remember when we

were younger, and most of these functions we didn't use, we had a hard enough time turning the clock off. well, technology today, what we see is there is four basic functions that consumers want on their phones. they want to deposit a check, check balance, pay a bill and transfer money. all banks can do that. baking can be competitive but jp morgan spends an enormous amount of money on technology. tom: we didn't have you want to talk banks. the price of lobster is a scandal and it outrageous what lobster costs here. i know it is chinese imports pushing the market up here. it is outrageous. >> it is. it is interesting you bring this up because it is a topic of discussion here in maine, and what you are seeing is the cost of pulling that lobster is the problem.

just like what we are seeing with goldman numbers, look at fuel. think about fueling up your 40 foot lobster boat and going out into the bay and into the atlantic ocean. that is expensive. that is what is driving that cost up. tom: i could see you on a lobster boat, jon, it would be great. you could get a three-bedroom little shack up north of portland and you would go out there on your little picnic boat. jonathan: i don't think that line of questioning was about the people of portland, i think it was about you and what you are paying for lobster. tom: lobster to the moon, it is outrageous. jonathan: bank of america and a couple minutes time. give us about 45 minutes and we will hear from morgan stanley. tom: i would say so important to me, brian has never gotten

credit for the pieces he had to pick up. it has never really been discussed. jonathan: speaking of credit, we can talk about that a little bit later. i think lisa's question about how badly these stocks have been punished, goldman going down hard. jp morgan going down hard following earnings. surely we have adjusted to a different reality over the last couple of days. tom: it is way overdone. the war on talent is here, it is a new expense regime and he is optimistic about revenue growth the smaller banks to me are a complete mystery. jonathan: i agree with you. to wells fargo, the question, zero assurance that this historic increase will level off after this year. that is what we are grappling with. we are talking about next year, the year after that. is that what we have to factor in now? lisa: especially because loan growth is a question. where are they going to grow their revenues at a time when

they have got incredible competition from some of these financial technology companies, upstarts, just-in-time lending from the actual retailers themselves? how do they do this in a way that is constructive to loan losses down the line? jonathan: goldman was very careful with their language on wages yesterday. we committed to rewarding top talent. that conversation model is highly variable. lisa: even the one-time payout partners. it was supposed to be a one-time payout, but is it? jonathan: we will see. yields just a little bit higher, up a single basis point. bank of america earnings coming up very, very shortly, then onto morgan stanley to wrap up quarterly earnings on wall street for q4. from new york, this is bloomberg. >> with the first word news, i'm laura wright. the white house is set to

release 400 million masks from a national stockpile. americans will be able to pick them up from tens of thousands of sites beginning late next week. the cdc updated guidance last week. it suggested that americans may choose to wear n95 or kn95 masks. british prime minister boris johnson reportedly will announce a listing of covert restrictions in england today according to financial times. the paper says that work from home guidance and the use of covert passes are expected to end. meanwhile, the cabinet is set to continue the use of face masks in public places. the biggest challenge for american business is the cost-travel restrictions. that is according to a survey by the american chamber of commerce in hong kong that found 41% of those responding say they are likely to leave. president biden antitrust regime facing its first big test of the year. microsoft $69 billion takeover

of activision blizzard brings together two major gaming platforms any deal that directly affects consumers. he could also raise objections from some of their biggest rivals. the agreement is likely to get an extensive review. for expects to gain $8.2 billion in the fourth quarter on its investment in automotive. the electric truck maker has the largest ipo of 2021 in november. ford invested $1.2 billion with a 12% stake. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. i'm laura wright. this is bloomberg. ♪ jonathan: live from new york city for our audience worldwide on tv and radio, the numbers out from the bank of america. for the fourth quarter, equities

trading revenue coming in at $1.37 billion. fourth quarter eps, $.82. the ceo, chief executive saying the fourth quarter saw a record levels of digital engagement. we will talk about that side of the business in just a second. 1.5 7 billion dollars, the estimate $1.76 billion. overall trading, investment banking revenue. for the fourth quarter, $2.35 billion. tom: i go right to the ratios. return on tangible common equities, may be a little south of a few others, but that is not a bad number. what is so important is each of these stories is different, they are not all one bank. jonathan: there is no difference looking at the stock price right now. seeing that story again down off the back of the numbers. lisa: they also missed on trading revenues. how much of this goes to gerard

cassidy's point that year-over-year comps are going to be very difficult? last year, the blockbuster year that we saw, blockbuster underwriting and banking revenues. are they going to be able to repeat that and if not, is that going to take a hit? jonathan: i want to break down those numbers. you have been poring through the press release. >> yes, trading came in a little below expectations. fixed income being the big problem here. we have seen across other banks as well. net interest income, and little above expectations which is good news for bank of america. a small cliff note is that a 100 point shift in the yield curve could benefit income by $6.5 billion over the next 12 months. obviously that is a double-edged sword and we have seen the same disclaimer from j.p. morgan. this environment is highly sensitive to the curve and not just absolute levels. tom: what is the major

distinction between bank of america and j.p. morgan? >> one thing is the headcount. just a few years ago we saw brian moynihan slash billions of dollars in cost like it was nothing. he had that target in expenses annually. now, will investors be patient with bank of america as they seek to gain scale against a jp morgan and consumer here? tom: what is the valuation of bank of america versus a premium jp morgan? is there an opportunity there? >> yes, in fact that has been the argument on why you would want to own bank of america and progressively then jp morgan, because that valuation differential is to live. you touched on in your comment a minute ago, that brian moynihan has done a remarkable job in turning this company around from the ashy that he inherited -- -- ash heap that he inherited back during the financial crisis. lisa: perhaps the shares are

priced to perfection even amid all the other numbers that lead to this kind of a knee-jerk reaction. >> i think that is part of it. we also have to remind ourselves that bank stocks this year through friday's close. they were up about 9% year-to-date versus a market that is down. this is not abnormal, we have seen it in past years. but this has been truly remarkable. lisa: the fact that net income actually rose more than people expected is impressive and frankly, it is telling that they are not responding to that. has that story been baked in and yielded a curve to roughly where it is now, but entirely priced in? >> that is one of the big debates we are all having: how much is priced in in terms of rate increases?

the net interest income was better than expected due to the active sensitivity of the bank of america balance sheet. what we are thinking is that the fed has to raise rates this year four times and possibly three or four times next year. those rate increases are not entirely priced in, and that interest income is going to be the driving force for the bank stocks over the next 12-24 months. jonathan: i want some interest rate sensitivity in the market. i want it without all the noise we have been talking about over the last couple of days that has knocked around ap morgan. where do i get it from? >> it is going to come, believe it or not, and that is the trade now. the investment banks have done very well. only the universal banks have benefited as well, but inflation is an issue for the fed and they do raise rates four times this

year. leadership is going to transfer from the investment banks to the commercial banks. tom: you know i have been a harsh critic of the presentation of banks. they have really gotten better over the not -- last number of years. love the mobile dynamic, 45% digital sales is now 49% digital sales in the financial center branches as what mere mortals call them. that transition in banking is happening in real time for mr. moynihan. jonathan: it is a tough conversation, let's finish there. that branch number, how much does that need to come down? >> you might recall branches peeked out when the apple iphone was introduced, just under 100,000 branches in this company. we are down to just over 80,000. could we see another 20 thousand decline over the next 10 years? absolutely. we are always going to have

been, we're just going to have fewer of them. jonathan: gerard cassidy, good to catch up. we will get some numbers from morgan stanley. the numbers from bank of america, this is why people want to get paid. thank if america, best high sales trading revenue in a decade. the investment bank, it's best year ever in 2021. the stock slightly lower but it is those record numbers on wall street which is why a lot of people with 7% inflation are turning around and saying i will have some of that, please. tom: morgan stanley in a bit. on the pandemic, and frankly, let's get into banking today. the associate professor of emergency medicine. you are having a cup of coffee with brian moynihan at bank of america, james gorman of morgan stanley. they are leaning forward, talking to you. when does work from home end? >> probably after the summer,

but soon. definitely 2022. i do think there will be a hybrid available moving forward. people want increase flexibility. tom: certainly have seen it in washington which is usually service-sector-based as well. what do goods-producers do in the world of omicron? >> please expand, what do you mean by good typing producers? tom: manufacturers. if you have got it and you drop it on your foot and it hurts. people in the real world, not suits and ties. what do they do in terms of working from home in this omicron virus? >> good producers and service advisors, is extremely challenging. they still have to go to work. now, the policies in the workplace evolve. that means increase flexibility for individuals to get testing, increased days off, increased ability to protect yourself in the work environment.

new policies regarding lunch or times we need to be unmasked. we've already seen a lot of those pivots already in restaurants, in mechanical workplaces, in industrial areas. lisa: at 4:00 p.m. today, president biden is going to older press conference. if you were there asking about his covid policies, what would you ask? >> my biggest question right now, i would congratulate him on the pivot he has made by making at-home tests available, but i would say how are you going to sustain this? what is the long-term goal? the big issue that we face in the crippling effect of the pandemic is due to the vulnerabilities in our health system. we've got a lot of band-aids, thank you very much. what is your legacy going to be when it comes to health systems? lisa: what would you want him to actually say? >> i wanted to say let's talk

about how insurance companies support individuals who are unable to access insurance services. how do we support increased infrastructure when it comes to primary health care, community-based health services? how do we, in many ways, decentralize access to make sure it is more equitable, and how do we inform medical literacy? how do we improve health literacy across the country? jonathan: as always, thank you for being with us. tom, i think many people are congratulating the administration on the pivot we have seen for the s&p giving out test to americans for free, the effort to do something about high-quality masks as well. can we sustain that effort and how much longer do we need to sustain the effort for? tom: what is important as we are starting to see some statistics. the united kingdom leading, as i was coming in today i sent myself, what is next? what happens after? we don't have a vision of that

in any way, shape or form. jonathan: the u.k. seems determined to say this is over. in a couple of months, we are done with this. lisa: how much is this politically motivated, and how much it is motivated by science? boris johnson being on the cusp of being forced to resign. jonathan: that is the issue i have with the situation at the moment in british politics. whenever you see a situation like this, people are asking that question. are you making that decision because of politics or because of the science? if you're asking that, regardless of what the answer is, there is a perception problem, there is a credibility problem, and that is really difficult to address. lisa: but the problem with this pandemic and the entirety of the past two years is that it is an entirely social phenomenon. people give it to each other by being in close contact. if you prevent contact, people are going to vote. at a certain point, enough. i think that is the dilemma. we have to deal with the world that we live in and politicians are trying to cater that at a

time when science is a thief. jonathan: we have crossed that point, haven't we? lisa: where people are just basically saying a social versus science line? of course. jonathan: for many politicians, many people, they have had it. lisa: we have had to moonlight as health experts. we are all trying to figure how to proceed in these unprecedented times. jonathan: trying to get back to work, back to the office. futures up on the s&p, up a quarter of 1%. lisa: can i make a point on bank of america? jonathan: please do. lisa: non-interest expenses creeped up only 6%. to me, that is amazing, given goldman sachs'33% increase. tom: i saw her bring a bar to complete silence ones. jonathan: just shut things down? tom: the whole bar went silent taking notes. jonathan: and then quickly went to rate hikes. tom: you and i are feeling misty

eyed. jonathan: it is wednesday today, right? tomorrow is the balance sheet date. that is when we are super gloom. 4:30 eastern. the kids going high. tom: they do. [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible]

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♪ >> something has got to give this year, and it might be margins. >> i think we are headed for the tightest labor market since the 1950's. >> we expect the labor market to continue to rise over the cause of this year. >> the fed will have difficulty rising rates -- will have more difficult he raising rates rapidly than the market believes. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures up 13 on the s&p, up 0.25%. anka of america earnings behind us. morgan stanley still to come. tom: i am really fascinated by what they do. they've had these acquisitions, including eaton vance.