♪ >> for they break something when they raise rates too much. >> the question is what is different this time. >> i think we will get the realization that the economy isn't quite as good as we thought. >> this is a lopsided market. >> we think real yields start to rise this year. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: waiting for secretary blinken. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. nasdaq futures down 96, down 0.6%. the foreign minister of russia right now, sergei lavrov, continue to speak in his news conference. tom: you really see it in swiss franc and euro swissie of the tension within europe. this is what bloomberg news does best.

lavrov, "russia isn't planning to attack ukraine." it is at the president wilson hotel on the shores of lake geneva. we go uproot to the internet continental opto -- to the intercontinental hotel to hear secretary blackening just a bit. -- from secondary blinken in just a bit -- from secretary blinken in just a bit. we will cover that today, as well as what we usually cover. as you mentioned earlier and i think lisa mentioned, the compression here of news and the exhaustion of the moment of january 21 is just stunning. jonathan: three weeks into it, we haven't even closed out the third week. it all started not to our news conference. at some point, and president -- at some point, the president,

and the minds of many, the cleanup act has been quite intense. lisa: it has been intense because of the backdrop of inflation and oil, and russia being a major supplier of oil to europe. how's this factors into the rails and ship between the u.s. and europe at such a perilous time with the price of all consumer goods coming up so much , how much does that tie the hands on a diplomacy level when you are trying to both push forward in economy, or at least let the air out slowly, while also having a hard line with an opponent? jonathan: that is geopolitics. we are not even three full weeks into this trading year. if you have been long the nasdaq or netflix, it feels like you have been trading for 10 years through the first three weeks of this year. netflix down hard in the premarket following earnings after the close yesterday. lisa: how much is this an idiosyncratic story of one of these pandemic plays? everyone was willing to pay to watch on the screen.

now they are not. how much is this a netflix story, and how much does this indicate we have brought forward so much demand for some of these stay-at-home stocks, and it is not going to continue at the same levels as prepended -- as pre-pandemic for a long time? jonathan: this was a 200 when he billion-dollar name -- a $220 billion name. 220 billion-dollar names should not be moving to any person. -- moving 20%. your equity market is lower, -0.4% on the s&p come on the nasdaq, down 0.7%. as we have talked about already this morning, typically as the year goes, the bond market is shaking up the equity market. this time, the equity market is shaking up the bond market the other way. lisa: as you mentioned, we are wedding to hear from secretary of state antony blinken.

the expectation is for a 7:30 a.m. eastern press conference following the meeting with russian foreign minister sergei lavrov in geneva. we already heard from lavrov, basically saying everything was great. it seems like we have heard a lot from blinken that he was happy from the meeting. now we hear in terms of what the road ahead looks like, what the potential consequent is offer russia should they perhaps tip their toll more into ukraine if they are not planning to invade it. tonight like a.m., we get conference board u.s. leading index for the month of december. less interested in the specific components of this dataset, more in the overall momentum of the data coming out. the akamai trajectory has been indicated lower and has been disappointing. how much is this the omicron bump? how much will it subside? how much is it deceleration in an economy where consumers are worried about how high prices have gone? at 11: 30, we hear from u.s. treasury secretary janet yellen, speaking at a davos confab. she said yesterday she expects

inflation for much of the year to remain above 2%, but if we are successful in controlling the pandemic, "i expect inflation to revert to normal levels by the end of the year around 2%." how much does that and that being the story, the people look to the new normal of 11 inflation kind of environment? jonathan: lisa, thank you. we can talk about this bond market with subadra rajappa, the head of u.s. rates strategy at socgen. you published last night. "the fed is likely to push back on market pricing of more than four fed hikes in 2022 as it prepares for massive balance runoffs -- massive balance sheet runoffs." how much are you looking for? subadra: they are looking at $100 billion for month and a total of $1 trillion within a year or so, so i think $1 trillion by the end of 2023 is

definitely doable. that is a pretty rapid pace with a lot of moving parts they have to deal with. they own bills now. they did not own bills back then. there's a lot of details to iron. but i think they could bring down the balance sheet quite meaningfully over the next year. the conflicts, the treasury is going to have to assure a lot more to offset the fed's purchases. so there's a lot of moving parts from the fed, as well as the treasury, when it comes to balance sheet unwind. tom: if we shift over the research of the weekend and the end of the month, and people at four rate increases go to three rate increases, the people at three rate increases tilt toward two, etc., what does the market do at the margin when we see the marginal rate increase chat adjust?

subadra: i think right now, a lot of the pricing lower you have seen in risky assets has come from a very sharp rise in real yields, as well as the market taking a very aggressive path of rate hikes for this year. more than four for this year and balance sheet unwind on top of that seems like a lot for the market to digest. so i think the fed is going to dictate very measured approach to policy normalization. really, what you're going to see is the fed talk back the market pricing of rate hikes a little bit at next week's meeting because what they want to do is not raise rates too soon and slow down the economy. so the key is going to be a very measured approach. they don't really have a lot of clarity on data for this year. the first quarter might turn out to be a very slow quarter, just like we saw back in q3 after the

delta variant. you could see the same thing in q1 because of the omicron variant. under the circumstances, i think they will be very cautious when talking about monetary policy and how many hikes they will be able to deliver this year. lisa: i am glad you mentioned real yields, the inflation-adjusted yield. even though nominal 10 year yields are down today, real yields have risen to a less negative figure, the least negative going back to june 2020. i am wondering how far it can go. what happens if you continue to see the real yield climb closer to zero? what is the consequent of that? subadra: typically when you talk to asset managers who manage risky assets, either credit or equities, that into look at that zero basis point real yield as the point where it will start impacting risky assets, broadly

speaking. policy has been extraordinarily accommodative for the last couple of years. we have had real yields -1% for a good time. the rapid rise in real yields from -120 basis points, -50 basis points in a very amounts top -- a very short amount of time has to be in concern. that is the number i am looking at, when real yields start getting to zero, and what that is to inflation expect patients because we have seen a pretty sharp decline in inflation breakevens. the five-year forward five-year is close to 2%, not anywhere near 2.5%. so under the circumstances, the fed is not going to be concerned about raising rates too soon because that is not baked into the expectation. i think the rise in real yield is going to be very important

for the outset. jonathan: have a good weekend, subadra rajappa of socgen. in geneva, the focus right now on the russian foreign minister sergei lavrov holding a news conference. a little later this morning, we will hear from his u.s. counterpart, the secretary of state antony blinken. at the moment, the headlines as follows. russia isn't planning to attack crane. ukraine issue needs attention. it is not a cornerstone. the u.s. has promised a written response next week. putin is always ready for contact with president biden. can't say if we are on the right path or not. just a few of the comments in the last 10 minutes. tom: his first post i don't have any expertise on this other than to say he's not part of the inner sanctum of strip putin. this guy is a diplomat within the foreign service, and there's

very mixed reports on him from western country diplomat. it goes either way. the guys challenging, to say the least. i will let others decide. but this guy is a diplomat, and doing diplomacy here with the circuitry of state. jonathan: -- the secretary of state. lisa: i am cleary us -- i'm curious to see whether he gives a more conciliatory tone, whether he is confident that russia is not, legally -- is not imminently going to invade ukraine. jonathan: sergei lavrov says russia is not pining to invade ukraine. we will get too secure very blinken in about 20 minutes. futures down on the nasdaq 100. yields coming in by a single basis point on tends to 1.793 6%. with tom keene and lisa abramowicz, i'm jonathan ferro. on radio, on tv, this is bloomberg. ♪

leigh-ann: with the first word news, i'm leigh-ann gerrans. u.s. secretary of state antony blinken and russian counterpart sergey lavrov held security talks in the midst of rising tensions over ukraine. blinken told lavrov the crisis is at a critical moment. lavrov said the u.s. needed to come up with concrete answers to russian proposals. president biden has warned that moscow could be planning imminent intervention in ukraine. russia does deny that. investors are bracing for the prospect that netflix is entering a new phase of slower growth. shares of the stream giant fell as much as 20% after its forecast for new customers disappoints. netlist says the slowdown will continue for at least another quarter. china is trying to root out corruption and what they call the disorderly expansion of capital, a sign that beijing may expand a regulatory crackdown

that raised more than $1 trillion -- that erased more than $1 trillion of market value last year. the rock superstar known as meatloaf has died. is late 1970's album "that out of -- album "bat out of hell" became one of the best-selling albums in history. meatloaf was 74 years old. 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 leigh-ann gerrans. this is bloomberg. ♪

♪ >> any assembled russian units move across the ukrainian border, that is an invasion. it will be met with severe and coordinated economic response that i have discussed in detail with our allies, as well as laid out very clearly for president putin. but let there be no doubt at all that if putin makes this choice, russia will pay a heavy price. jonathan: exterior message from the president of the united states. -- a clear message from the president of the united states. your equity market down on the s&p 500, -0.7 percent. we are down 0.5% at this time. yields a low bit lower on tens

. sergei lavrov has been delivering a news conference in the last 30 minutes or so. we still wait for the secretary of state antony blinken in about 10 minutes. tom: let's dovetail this in at the president wilson hotel on the shores of lake geneva. annmarie hordern, last time i saw her she was skiing south of geneva. she joins us now, or bloomberg washington correspondent. i want to dovetail the domestic item with the foreign policy the moment. this from the team at "the new york times" this morning. i thought the way they captured this quote from the president, "the public does not want me to be the president senator. they want me to be the president and let the senators be senators." how is he taking this moment to be more presidential? annmarie: he's taking his for us an -- his foreign policy mom

has president. yesterday was a bit of a cleanup act -- cleanup act after realizing that as president, your words matter. president really cleaning up some insight which many resonated with, the fact that he said this issue on minor incursions which that would mean for sanctions, potentially some fighting between the united states and its partners on what that response would be. the president looks down at a piece of paper yesterday and he categorically explained to the american people, and to moscow and capitals around the world, about an invasion on russia, what that would mean, and that would mean sanctions on the kremlin. lisa: what was tony blinken's goal in geneva today? annmarie: really, there's no gold for these talks in the sense that going into them, you know they are going to fail. the russians have said two

things they want, which is one, ukraine and never be a part of nato, and that they want nato to redraw the map, basically, from 1997, when boris yeltsin was meeting with mr. bill clinton. that is what russia wants, and that is a nonstarter for the united states and nato members. so going into these talks, the fact that they are talking is really the key objective and the goal here, but it is tough deliberations. as tom was saying about sergei lavrov, he has been the russian foreign minister for decades. he's known as mr. nyet, which means no and russian. it is said you cannot tangoe with him because demand is not dance. so very complicated discussions, and there both coming in with hardlines, but the fact that they are talking is optimistic for many.

there's two things when you look at the oil market. one is that the entire russian economy is enslaved to oil and gas. for years they have tried to diversify, and they have not been able to do that. the second nature is it is a double-edged sword for the west. you see oil prices, brent approaching $90 a barrel. you have inflationary issues in the united states that is hurting the president domestically. if you were to sanction energy companies or even banks in russia, you are going to see a rise in oil prices, and that is going to be very difficult for the united states and other western countries already dealing with higher energy costs. jonathan: i would like to get back to the heart of the issue. you came out with two points president putin would like. he would like for ukraine never to be part of nato. he does not want strategic weapons stationed in ukraine. the president said in a news conference they could do some the about .2. they can't do anything about .1

-- about point two. they can do a knitting about point -- do anything about point one. of course, any member of nato is going to say crane can't join, but will they join? how likely is that? annmarie: you're never going to see a western leader say that ukraine cannot join nato, but the fact of the matter is, and you're getting to the heart of the issue here, that, and president putin knows this, nato does not want ukraine to join. these are conversations people will not admit in the open, but if ukraine joins nato, that basically sets nato up digitally for having to go to war with russia, and that is something they do not want to touch. jonathan: annmarie, thank you. that is what is difficult about this moment filled with so much tension.

what they will say privately is very different to what they say publicly, and sergei lavrov, the russian foreign minister, is speaking to that of the moment when he says the following. "we are not sure if we will publish the u.s. response. we will ask secretary blinken to make the response public." saying nato is ewing ukraine as its zone of influence. there was a private conversation here. there's a public one. of course, all we are getting is the public side of things. tom: we are seeing the imagery as well. i am getting from the first images from the diplomatic part of geneva, right near the united nations efforts in geneva, so historic off of world war ii, i think the imagery speaks volumes. you had mr. lavrov at a desk in bad lighting wrapped around with press, just three flacks behind him. not much going on. the blinken press conference is much more choreographed, with a single american flag, very

fancy. the iht hotel. the two worlds apart just up the shores from the geneva may be speak to the two worlds apart of this debate on key have in the future on kiev in the future of ukraine. lisa: yes, the european union and the united states have been allied, but there is a sense that perhaps the united states does not have the dick black leadership -- the nomadic leadership that it once did. -- the diplomatic leadership that it once did. i wonder if this is an effort to regain the helm. jonathan: secretary blinken moments away. we will catch up with george survey looks -- with george saravelos, head of fx research at deutsche bank. nasdaq 100 futures down 104, -0.7 -- negative 0.7%.

this time it is different. during the first two weeks of this year, it has been about higher yields and an equity market getting messy. this time it is about an equity market getting messy and sending yields lower. the u.s. 10 year at 1.78 47%. this is bloomberg. ♪

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♪ jonathan: two hours away from the opening bell in new york city. on the nasdaq, down 0.8%. on the s&p 500, down 0.5%. the take away from bank of america of rate shock is just starting, not ending. the fed is hiking into an overvalued reddit and equity market. they call it very 2007. that does not sound good. switch up the board and get to this. this is the story year to date. information technology on the s&p down by 9.6 percent. on the nasdaq 100, down 9%. 10% off the previous high. they call that a correction. this time around, it is interesting. it has all been about the bond market shaping the equity market. this morning and yesterday, the

equity market shaping the bond market. yields lower yesterday, lower again today. what do you make of this? we are down on tends to 1.7794%. tom: we are waiting for the secretary of state right now, and you see it with euro swissie at 1.03446%, a strong swiss franc. tom: this is why some people call this -- jonathan: this is why some people call this a self-limiting selloff. lisa: it is driven now by declining expectations, as well as rising real yields, so it could still be potentially damaging for risk assets, even as the nominal yield goes down. jonathan: that is the price action. we are waiting for sec. blinken in geneva. that's get you some single names now with romaine. romaine: we talk about official correction territory for the nasdaq 100 and the nasdaq composite sentiment. certainly not going to improve today, with netflix down 20% in

the premarket. should this carry over into the close, this will be one of the worst days for netflix since at least 2012, maybe worse than that. you don't see moves like this for a stock this size. only six times since they went public have we seen a 20% decline. a lot of that has to do with the slowdown in subscriber numbers. i think a real issue here, the fact that the company really gave no explanation for it. there were a couple of questions on the conference call, it much more staged conference call then we get from other companies, and could not come up with a coherent explanation as to why things slowed as quickly as they did. keep an eye on disney and viacom . down 3% for disney, do percent for viacom. lots of questions now about these streaming services and the potential for a slowdown in growth. the big stock everyone is going to be talking about is peloton. they were down 24% yesterday. they are higher in the premarket by 6%.

peloton came up with a statement last night basically saying the initial reports that they were shutting down production was false, but they did say they are cutting costs related to production, and that they were considering layoffs. they also came out with preliminary numbers, some ab that is why you are seeing a modest bid, but you're talking about it when he 4% decline we saw yesterday. tom: the top of market for peloton is when i bought it and went a mile. jonathan: i don't believe you have ever gone on that bike, tom. tom: romaine bostick has. some important earnings into next week as well. as far as i'm concerned, this is the domestic and finance interview of the day. george saravelos has been brilliant, filling in all of the research at deutsche bank into foreign-exchange research. this morning, and absolutely brilliant tour de force -- brilliant tour de force paragraph from saravelos.

let's go to it now. "this is very different from the 1970's when real wages were growing sharply. this is leading to a very different message. the consumer is differing as opposed to accelerating consumption like in the 1970's." let's try this as we can. you take a starkly different view on what inflation will do to our economies. where will we be in april or may? george: thank you. if you look back through various commentary, we try to find parallels. is this 2008, is this 2018? i think the reality is this is 2022, and it is just very different to anything we have seen before. part of that is the inflation picture you are losing, and what you are seeing in the u.s. now is pretty remarkable.

u.s. real disposable income is below its pre-covid track, so everyone is focused on these excess savings, but in terms of future expectations for income, they are going down. you have the story of supply that was friendly terrible. the labor market is shrinking for the first time since world war ii. i take issue with this idea that it is all about strong demand, moving demand. the fed will have to hike, but there's also bad things happening in the background. i guess the last point to make is if you look at the starting point of inflation, we are talking about a totally different environment to the last 30 years. the last few hiking cycles have always started with inflation at or below target. so this idea that somehow the fed can maintain easy financial conditions, keep things nice and smooth, that was the objective in the last hiking cycles because inflation was not as high, and again, this is a very

different environment and a very unique one, so to speak. lisa: to that point, there's an idea embedded in your words where the fed has to tighten policy in order to keep the economy from slowing down more because of its restrictive inflation that you talk about from the negative real wages. can you talk about how they might try to orchestrate a soft landing, or rather you think it is too late? george: this is really the big question, can the soft landing be orchestrated. i think that is precisely the worry of 2022. it is going to be this stage of the cycle, will would be able to stay midcycle, or are we going into a more late cycle environment. i think the jury is still out, but what we can say for sure is it is going to be much more challenging than last year, where if you look at real yields , they made record lows back in october, november, so this is a very fresh story. i guess the last point to make is if you look at the fixed income market, yes, we have to

reprice more for the fed a near-term to bring inflation down, but more medium-term, the rate market has been giving you this message that neutral rates, trend growth has issues, and i think of this continues, what we will see is an aggressively flattening curve. potentially the curve can invert because essentially, the fed has to hike rates. the purpose of hiking those rates is to bring inflation expectations down, and at the end of the day, that is actually positive for the long end of the fixed income market. lisa: give us a sense of what you would say to people who find the labor market incredibly tight, and may real wages are negative, but they are going to go up because you are going to see a rolling over in the inflation and you are going to see wages continue to accelerate as we have seen in some of the earnings reports that have come out so far. what would you respond to that? george: i very much agree that

the labor market is tight. i very much disagree with the phrase that the labor market is strong. the labor market would've been strong if u.s. employment had recovered back to where it was at pre-covid trend. the australian labor market is strong. the canadian labor market is strong forget the u.s. labor market is weak, and that is what is creating this wage pressure. you don't have enough workers coming back in and shrinking at the fastest pace in many decades , and i think that is precisely what is going to create the issue for the fed. wages may be going up, but essentially for bad reasons, and it ultimately means the speed limit of the economy is lower than what we assume. tom: george saravelos with us with deutsche bank, an important conversation on our economics, finance, and investment. we await the press conference of the secretary of state in geneva , after we heard from mr. lavrov earlier. i want to go all peter huber on

you right now. my criticism is the static analysis is out there right now. you and your team are wonderfully dynamic. which part of the dynamic continuum matters right now? george: i think for the market at the moment, it is really all about the speed of this expected inflation slow. if you look at current inflation, core pce around 4%, it is expected to go down onto the 2% handle. any deceleration that is not assessed is that will create pressure on the fed. the key question is how that interacts with a slowing economy. it has the potential to impact all asset classes. the big question for this year for me is really are we midcycle or late cycle. i worry we are in the late cycle situation. jonathan: the end is near.

sounds like 'bramo. [laughter] lisa: i am loving this. it is fascinating. it goes against the narrative we have heard continually, so thank you. i appreciate it. jonathan: george saravelos of deutsche bank making lisa abramowicz happy. george, thank you. that conversation i think is so important. unlike the 1970's, these consumers are not chasing these prices. there is a risk they run away from them. it is the point deutsche bank are making. lisa: and george is saying the retail sales numbers that everybody shrugged off, that may be omicron demand was pulled forward, is actually a demonstration of exactly this, exactly the fact that people are not spending as much because prices are so high in their wages on a real basis are actually falling. jonathan: this is the big risk, the risk the fed starts hiking and they hike into weakness. that is the problem for so many people, and for others it is too late.

it doesn't matter what they do. eight cycle, game over. lisa: and frankly, if they hike rates, it is not a policy error because it is leading to a real pernicious cycle or potentially the lowest income earners. the idea that they are having a more difficult time being able to afford groceries and gas and other basic materials. jonathan: we are about to head over to the intercontinental hotel geneva to hear from sector terry blinken. that could be just moment away. tom: i want to squeeze this in. -- from secretary blinken. this could be just moments away. tom: i want to squeeze this in. this is the tension, this is the back story no one is talking about. i'm trying to get that up on bloomberg television right now. let's pass on and stay with this image. jonathan: we've heard from the russian foreign minister sergei lavrov and got his view of events. he is saying that russia is not

preparing to go into ukraine area i think it is very important on a morning like this one to hear from the man himself, the secretary of state, antony blinken. that could be minutes away. given what sergei lavrov said so far, what would you like to hear, just briefly? tom: i think what we would like to hear is a reaffirmation of what we heard from the president at the press conference. please, the secretary. jonathan: the secretary of state , antony blinken. list take a listen. sec. blinken: foreign minister lavrov and i finished our meeting, and i want to begin by thanking switzerland for hosting us, for its traditional hospitality, which is very much appreciated. i came to geneva following up on last week's discussions at the nato russian council and the osce on the crisis in ukraine and broader security issues. our objective was to determine whether russia is prepared to take diplomatic path and other

necessary steps to de-escalate the situation in ukraine and ultimately to resolve our differences through diplomacy and dialogue. the discussion today with mr. lavrov was frank and substantive. the position of the united states and our european allies and partners, that we stand firmly with ukraine in support of its sovereignty and territorial integrity. we have been clear, if any russian forces move across ukraine's border, that is a renewed invasion. it will be met with swift, severe, and united response from the united states and our partners and allies. we also know from experience that russia has an extensive playbook of aggression short of military action, including cyberattacks, paramilitary tactics, and other means, advancing their interests aggressively without using

military action. those types of russian aggression will also be met with a decisive, calibrated, and again, united response. that is the clear message coming out of my meetings on wednesday with ukraine president zelensky, and with german chancellor scholz. we committed equally in our resolve to massive consequences should russia choose the path of confrontation and conflict. i stressed again to mr. lavrov that on the security concerns russia has raised in recent weeks, the united states and european allies and partners are prepared to pursue possible means of addressing them in the spirit of reciprocity, which means, simply put, that russia must also address our concerns. there are several steps we can take, russia included, to

increase transparency, to reduce risks, to advance arms-control, to build trust. i conveyed directly to mr. lavrov are specific concerns for russia's actions not only in ukraine, but throughout europe and indeed in the world. also laid out several ideas to reduce tensions and increase security which we have developed in consultation with our partners and allies, and where we believe we can find common ground again based on the per and support of reciprocity. this was not a negotiation, but a candid exchange of concerns and ideas. i made clear to mr. lavrov there are certain issues and printable's that the united states and our allies are committed to defend. that includes those that would impede the sovereign right of the ukrainian people to write their own future. there is no space there. none.

foreign minister lavrov and i also talked about the way forward. let me say as well that he heard from us and from me that what is for us and unviable rule, nothing about ukraine without ukraine, nothing about nato without nato, nothing about europe without europe. based on our discussion, i believe we can carry forward this work of developing understanding agreements together that ensure our mutual security, but that is contingent on russia stopping its aggression towards ukraine. so that is the choice russia faces now. it can choose the passive diplomacy that can lead to peace and security, or the past that will lead only to conflict, severe consequences, and international condemnation. the united states and our allies and partners in europe stand ready to meet russia on either

pass, and we will continue to stand with ukraine. i believe that foreign minister lavrov now has a better understanding of our position, and vice versa. today's discussion was useful in that sense, and that is precisely why we met. i will return to washington this afternoon to consult with president biden and our and tile -- our entire national security team, members of congress, and allies and partners in the days ahead. based on the discussions today, foreign minister lavrov and i agreed that it is important for the diplomatic process to continue. i told him that, following the consultations we will have in the coming days with allies and partners, we anticipate we will be able to share with russia are concerns and ideas in more detail and in writing next week, and we agreed to further discussions after that. we agreed as well that further diplomatic discussions would be preferable way forward, but

again, it is really up to russia to decide which path it will pursue. i should mission as well that the foreign minister and i have the opportunity to discuss iran, and how the united states and russia can work together on security issues of shared concerns. the talks with iran about a mutual return to clients -- to compliance for the jcpoa have reached a decisive moment. if a deal is not reached in the next few weeks, it will make it impossible to return to the jcpoa, but right now there is still a window to bring those talks to a successful conclusion and address the remaining concerns of all sides. we did not ask any major breakthroughs to happen today, but i believe we are now in a clear path in terms of understanding each other's concerns, each other's positions . let's see what the next days bring read with that, i am happy to take your questions.

>> thank you, mr. secretary. mr. lavrov has spoken today about what he calls historical rhetoric from the west about an invasion, and president biden has said that putin will move in -- [indiscernible] do you think as of today you have a better understanding from mr. lavrov of what putin's intentions are? do you have any commitment that they will stop the aggressions standing in the way of any agreement? he says that you are going to present what you just confirmed which you and everyone in the ministry should have said from the beginning our nonstarter's,

proposals to limit nato expansion. have any different responses about nato expansion, what you said is nonnegotiable? where you see any kind of engagement to diffuse this crisis? since you brought of iran, do you think there is the possibility after talking to mr. lavrov that you and russia, the u.s. and russia, and the other allies, can get iran to agree to come into compliance, and will the u.s. then agree to lift sanctions, perhaps simultaneously? sec. blinken: thank you very much. first, we are not proceeding on the basis of the motion. -- of emotion. we are proceeding on the basis of fact. the facts are that russia has amassed varies in if it enforces on ukraine's border and

continues to do so. 100,000 troops, most recently including forces deployed to belarus. that would give russia the capacity, if president putin so chooses, to attack ukraine from the south, from the east, from the north, and we have seen plans to undertake a variety of destabilizing actions, some of them short of the overuse of force, to destabilize ukraine, to topple the government, a variety of things. so as i said, this is not on the basis of emotion. it is on the basis of fact, and also history. russia invaded ukraine in 2014 in crimea, provoking ongoing conflict in eastern ukraine, changing ukraine's borders by force. that is what we are looking at. we have heard russian officials

say they have no intention of invading ukraine. in fact, minister lavrov repeated that to me today. but again, we are looking at what is visible to all, and it is deeds and actions, not words, that make the difference. i suggested to minister lavrov as we have repeatedly that if russia wants to begin to convince the world that it has no aggressive intent towards ukraine, a very good place to start would be by de-escalating, by removing forces from ukraine's borders, as well as engaging in diplomacy and dialogue which is what we did today, and what we plan to continue doing in the days and weeks ahead. we have said all along that we intended not only to respond to the concerns that russia has

raised, but to share our own concerns, which are many, about the actions russia takes that we see as a threat to security in europe and beyond. so it was important in the course of the conversations that we've had to date, both last week between the united states and russia, at the nato russian council, to make sure that we fully understood each other's positions, each other's concerns . after that, and after consulting very intensely with allies and partners, president biden wanted me to have this opportunity, having digested what we have heard over the last week and presumably the russians having had an opportunity to discuss what they heard initially from us with president putin, to really see where we are directly

with foreign minister lavrov, to determine whether there is a path forward for dialogue and diplomacy, and then to look at how we would pursue that, and what was agreed today, which was that we will share with russia a response to the concerns as raised. and put some ideas on the table for consideration, and then we plan to meet again after russia has had an opportunity to look at that paper, and we will see where we go from there. let me also be clear about this. to the extent that russia is engaged for now in clumsy come but at the same time continues to take escalatory actions,

continues to plan for aggressive action against ukraine, we end all of our allies and partners are equally committed to make sure we are doing everything possible to make clear to russia that will be a swift, severe, and united response to any form of aggression by russia directed towards ukraine. jonathan: you have been listening to u.s. secretary of state antony blinken in geneva following talks with his russian counterpart sergei lavrov amid tensions over ukraine. not in negotiation, a candid exchange of concerns and ideas. tom: this is the secretary of state within the span of our history, with the one exception of dr. kissinger, who totally understands the fabric of this territory. he has family members who are ambassadors to hungary and belgium. hugely steeped in the history of the region. he speaks with a certain authority from geneva. jonathan: in his own words,

"they can choose the path of diplomacy or the path that leads to consequences." nasdaq futures down about 1%. good morning to you all. heard on radio, seen on tv, for our audience worldwide, this is bloomberg. ♪ ♪

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>> is going to be a market where people have to have a slightly longer term view. >> the markets are not asleep on this. the fed has been very clear that one way or another, they are going to bring inflation down. >> monetary tightening most hurts risk markets. >> the economy this year will be will to flee solid, but valuations need to come down. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. it is a domestic,