overall. >> the risks are that the fed does have to be more aggressive. >> it is not the ideal, but perhaps it is a better people than what we speak of. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: good morning, this is bloomberg surveillance live on tv and radio alongside tom keene and lisa abramowicz. your equity market up .1%. the tension once again on the bond market. tom: two days to the inflation report which links into the bond market. we start strong and i start with a 10 year real yield up to a negative statistic, -0.4855, the trajectory of the real yield speaks volumes. jonathan: as they break out on a

nominal two yield as well. we need to talk about restriction so let us do that. australia opening itself up to tourists, states across united states of america loosening mask mandates, sweden dropping most curves and hong kong coming out with its toughest curbs yet, going in a very different direction. tom: it has really affected pacifica and global wall street in hong kong. i would point out cases, and hospitalizations still minutes. we need deaths to rollover and statistically they have not. jonathan: you can assume that that will follow. lisa: the interesting thing is is that we are seeing a covid zero fail and policy officially failing to really stop the spread of the virus over in hong kong and china, and will it mean are they are forced to release it, especially as the olympics are done? jonathan: multi-household gatherings will be limited to

two families in hong kong, never mind 2021, that feels like 20. lisa: you look like the protests going on in canada where the truckers are actually limited over some of the curbs they are seeing on their freedoms and ability to move around. you have to imagine there a similar sentiment in china where people are sick of not being able to see their families. jonathan: important elections coming up in various places including on trip -- including australia. good morning on the nasdaq, slightly negative. we are down to 0.2 percent. the attention goes to the bond market, the yields up. 193 on tens, through the curve as tom points out, it is about real yields. lisa: it is not about the nominal yield or the fact that the federal reserve is providing some sort of buffer to forget the inflation expectations. this is driven by inflation expectations continuing to decline. a: 30 a.m., the u.s. december

trade balance points to the most significant trade deficit going back to 1991, what is the significance? a lot of companies have ordered a lot of goods ahead of this year expecting the supply chain disruption. inventories are high and people are expecting the trade deficit to ease. 1:00 p.m., the treasury is going to sell $50 billion of -- exactly. this comes as the three year yield is the highest going back to the beginning of the pandemic. this is a sense of what you can expect. tomorrow we talk about the $37 billion 10 year bonds that will be sold. and thursday we have 30 year bonds. aftermarketpe -- aftermarket peloton is going to respond aftermarket. we had the ceo and cofounder

step down this morning. new management really stepping in. you wonder what the regulatory concerns for amazon taking over peloton. tom: she made real clear that this is about nike and less about amazon. she said she would be stunned if amazon stepped in. jonathan: what was the property called? do you have a name? i think that is also called " bloomberg surveillance." that was a trick question. 50 basis point rate hike in march, you think we should take this seriously, why? >> thank you for having me. i think we should take it seriously because what we are starting to see is that inflation pressures are rising. we have another number coming out on thursday and we have recently had some stronger payroll reports. right now central banks are worried about, and this is the one job they all have in common

which is fighting inflation is that getting a steeper phillips curve and wages started to move higher which is allowing companies to pass through higher prices. what that does is that it on anchors inflation expectations meaning that corporations are more likely to more freely raise prices in the future and consumers are willing to pay those prices and that is the spiral of inflation we are talking about. if we move into a situation where the fed really takes this very seriously and are concerned, i cannot rule out the 50 basis point race -- rate -- rate hike. i think we should take it seriously. tom: what is your dynamic on what foreigners will do given a higher yield across all of the morgan stanley yield state -- space. do they go into a voracious frenzy when they see higher yields? do they get afraid and wait? jim: i think it is the latter. when yields are rising they get afraid and wait.

once yield settle down into a comfortable range that is when you see the buying. when we see these yield rises we think there are limitations as to how high they can go as it feeds back to financial conditions and into growth and it impacts other asset prices like equities and credit. however, when you see these types of moves, they become somewhat unbounded. if we are looking at the 10-year treasury yield, what is to stop it from going to 2% or 2.5? people will be more comfortable with it above 2% saying maybe now is the time to buy. when we are making the journey up towards 2%, people tend to get nervous and want to seek out protection. tom: let me translate that to a question. is the journey we are heading for a bond bear market? jim: you know? i think we are in it right now. i think we are making an

adjustment higher in yields, but i think that it probably stops somewhere above 2%, 2.5% for this year. the reason i say that is that right now what we are seeing our that these rises in yields are having a negative feedback on credit spreads which are starting to widen. that will create more anxiety in the bond markets which can also lead to lower equity prices and effectively what i am really saying is that we get a tightening of financial conditions that has a negative feedback loop into economic activity and we are already seeing global pmi rolling over and some signs of slowing, so, all of this has a stopping point, but it might not be right here, it might be higher in yield, a little bit above 2%. lisa: the argument from a lot of credit investors is that credit spreads have not widen so much compared to where they were pre-pandemic, and frankly a lot of companies have borrowed for

such a long time that they do not need to borrow anytime soon. is this signal from credit really all that concerning given the fact that you have highly capitalized companies? jim: that is a great point. i do not think that there is a credit default risk that will run through the markets. i think that corporations, gdp is supposed to be good, earnings are decent as a result, so i do not think the fault risk is high. i -- however there is in all end yield credit. when the yields rise we are already seeing the year to return rates already down. as these continue to rise, you start not to see the inflows that you saw in the past, you start to see people pulling away from the asset class which is why i see this as a natural adjustment higher, it is not a default risk issue at the moment.

so, to your point, yes, coverage costs are low and corporations have more cash. they turned out their debt, all of these things are good, i think corporate america can handle higher yields. i do not think this is a default risk, but it is an all in total return issue when it comes to an adjustment higher in yields and this could think this -- there is more to come, are you hiding out in higher levels of cash? jim: we do and there are other places to look at. here is an index trading below

par, 90 nine, good yield per unit of duration. this is a sector that is a good place to hang out at this current point in the cycle. the other is that we look for a deeper value, where do we have higher real yields, where are we in places that are compensated to take the risk. in some of these places it is short end, emerging markets where many of the central banks are way ahead late in the cycle. they have the highest real yields around the world, the highest yields for even a credit rating and these are also opportunities. i am not saying it is about defense, we could pay it -- we could play a little offense if we watch the valuations. that is what we are doing. jonathan: awesome as always. morgan stanley on thursday looking for a 7.3% on cpi, that is your median estimate. goldman out with a call and they reviewed their call on the tenure blend with the year and plus 50 basis points is what they are looking for, positive 50. a big move, back to positive 20 on the german 10-year. tom: 30.3 zero. everyone is moving around. no question. i think it is time for the surveillance olympic report. we have to do it. australia won by one millimeter.

they literally got out by one millimeter. this is really a lot of tension. they are from victoria they beat canada, which is like beating -- jonathan: that is a country with actual snow. tom: what is so important, you are sweeping and the skip starts yelling at you the way you yell at me and you are sweeping and once i burst into tears and i was so upset. jonathan: you are watching last night? you need to resist the urge and need to do that. what is the olympics were coverage about? where did you find it or watch it? tom: i watch the curling channel. not on peacock? nbc curling. come on, get with it. jonathan: given how you have

just pretrade curling, i will take a hard past. futures entree -- unchanged. from new york, this is bloomberg. >> with the first word news, a warning from president biden, the controversial nord stream 2 pipeline between russia and germany would be stopped if vladimir putin orders an invasion of ukraine. the president's promise came after a meeting with german's chancellor. russia denies an invasion. justin trudeau is blasting the protest by truckers that has halted commercial traffic to the u.s. out of the busiest port of crossing. the drivers say they will not stop until all covert health restrictions are lifted. trudeau says the protesters are hobbling the economy and trying to undermine democracy. hong kong is ramping up restrictions as it fights a coronavirus outbreak. they are extending limits to

private premises is in order to keep people from socializing. multi household gatherings are limited to two families and hong kong's -- is expanding the list of venues. a state backed fund intervened in the stock market indicating a strong recovery from what is the biggest drop in august. the move by state funds was intended to slow the pace of decline. 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. ♪

pres. biden: if russia invades, that means thanks to troops crossing the border of ukraine, again, then there will be no no -- longer a nord stream 2. jonathan: the president said it. the chancellor, not quite. we will get into that in a moment. tom keene, lisa abramowicz and jonathan ferro. the nasdaq down four points. a lift on yields to the curve in the treasury market up two basis points to 1.90 377. our higher --are higher yields a good thing? some think that these shifts that these problems are nominal,

tom, they say that they are finally diminishing and that is good news. tom: we will have to see what the euro's -- but the euro does. i am using the euro as -- currency as a litmus paper. jonathan: had a bit of a bounce on the euro-dollar. 1.1426. let us see how far they are able to push this. tom: i read one of the articles carefully this morning and i have no idea what has happened in the last 24 hours. joe mathieu here to translate. the smart show, sound on on bloomberg radio. if you do it on nord stream 2, what is the biggest mystery? joe: who actually said what, to think that we had such a carefully choreographed dance, which seemed to play well for biden and schulz's respective audiences, we are not sure where

the german stand. joe biden, we will bring it to an end, a direct quote when he was asked what happens with sanctions on the pipeline if russia invades ukraine and russia says it is not planning that. but the line from schultz, we are acting together and absolutely united and we will not take different steps. he was pressed by reporters and reminded by reporters that he refused to say the word nord stream 2 out loud. the question today i guess is does that matter? and exactly what were we looking for from the chancellor? he did not clear nord stream 2. this is a pipeline that has a lot of money invested in it already and if joe biden says it will not happen anymore that is not as easy as it might seem. tom: to as -- to our american audience, let us get to first principles, is nord stream 2 a german property, is it a nato property? or does the u.s. have a piece of

the action, the answer is no. joe: correct, here we are and it started to get confusing as that meeting takes place at the same time as emmanuel macron is meeting with vladimir putin. that meeting seems to not be getting as much attention, it happened on the others to the world but might have brought more news. if you listen to what emmanuel macron said before he sat down for six hours with vladimir putin, he referred to the fin land -- findlandization as one of the models on the table. it means that they are going to have big changes with russia, forcing neutrality, not what the president of ukraine wants to hear, or what the white house wants to hear. it did not come up again, the reference to finlandization, but this was what was talked about. lisa: the narrative reports to

an easing intentions following yesterday's negotiations on what we have been hearing, is that accurate? joe: in terms of easing tensions i am not sure that is true. there has been no escalation and emmanuel macron and the french seem to celebrate that there was no deterioration what we are talking status quo. if you listen to what vladimir putin said following his meeting with the french president he was pretty tough and calling out nato and zelensky, accusing us of fanning the flames of war and they would be continued conversations. he liked some of the ideas but it was not after a six-hour session the sort of breakthrough that many hoped for. lisa: we spent eight years talking about nationalist policies and moving away from an international interventionalists type of model. are we seeing a shift back to the old normal when it comes to international relations and intervention in the u.s.'s

willingness to intervene. joe: it seems to be a parallel track. joe biden is going straight back to domestic politics to where he has a lot of issues on his own. incidentally he will be talking about steps to lower the cost of energy, even as he implies the german chancellor to kind of deal with this idea that it could hurt economically if nord stream 2 were to go away or if broader sanctions were to be implemented. this president needs to assure through a funding mechanism to keep the government from shutting down, and you will hear that 1-2 punch indefinitely. he has a crisis on the others to the world and you could argue one here as well. tom: where is the crisis with the liberals, mr. sanders in vermont and the rest. joe: it is nowhere. build back better is on the shelf and the president does not have a lot to make them happy except with a couple of federal reserve's nominees and this looming announcement on a

supreme court justice. in the meantime it is a little bit i see between the two. -- icy between the two. jonathan: weekdays at 5:00 p.m. eastern, catch them a little bit later. thank you. the nfib surveyed 1500 employers and here is the numbers, the lowest in the index and 11 months. it falls. various sub-indices and various questions and let me pick up on this one, the net percentage of firms anticipating higher selling prices rises to 61%. owners grossing the highest reading since 1974. tom: everyone will be gleaning these, including a legitimate series, very accountable. i will go to what we heard from jason rosenberg, and what a -- and what tom said about it yesterday, which is what they are watching is goods inflation,

and as you mentioned, not the level but the rate of change of that percent and goods inflation if it comes down hard, he is not predicting that but he is saying it could happen, and that would be a huge game changer within all of the different things we are looking at. the experience between the large and small business. lisa: if you are dealing with retention bonuses and trying to increase salaries, you are talking about goods and people are expecting the prices of goods to go down, but the price of labor is going up so dramatically that a lot of companies are trying to dig deep into their tools of retention methods, and i wonder if small businesses can do it as larger businesses with larger balance sheets. jonathan: bailey is getting -- is telling everyone not to ask for a big pay raise. he is till are still taking the stick for that. this is where i get told off.

futures down at 10, a little more. the voice in my ear sometimes, up three basis points. for our audience worldwide and on radio, this is bloomberg surveillance. ♪

jonathan: live from new york and the equity market, and change for the s&p, negative on the nasdaq a little bit. russell going nowhere. the bond market lifting on twos, tens and 30's. twos, tens, 30's look like this. three basis points to 194.32. up a little more than 40 basis points. talk a lot about speed, speed and levels. level, 132 on a two-year speed. up 60 basis points. up three basis points on a session. 60 basis points, 10 year real yield. went to pick up on that with you and lisa, i know you are gripped. negative one percent lisa to -47 basis points, just like that.

we've done levels and speed, let's talk about destination. how far can you push before something breaks? lisa: right now, we are not seeing anything break, we can see the stability. you can say nonprofit eltek companies roque, you can say pockets of the market are seeing stress -- broke, but it is actually giving a green light to the fed. that is what a lot of people are seeing because you are not seeing disruption. this has been about them withdrawing support, not about inflation expectations that have been going down. jonathan: credit justin to break out a little bit. -- just starting to break out a little bit. lisa: the companies are not at risk of defaulting. jonathan: a big move quickly. tom: this has to do with what we monitor across finance, we do that across the bloomberg terminal. there is a separation between twos and tens, the spread dynamic. we are seeing the real yield, we will wait for the inflation report two days on.

now with the bracing -- briefing, frances donald joins us with wonderful parsing of the american economy. i've been doing research, you are going to help me with a chanel classic handbag. the goldtone metal coral handbag, 8006 into dollars was 5000 something dollars days ago. are we going to have prices go up and eat it and accept the new inflation? frances: we will have to accept it, you are going to see higher prices probably for the next few months. you will probably see cpi continue to rise on the next readings. but are we going to be happy about it? no, consumers are already indicating they are not happy. most importantly, you're talking about real versus nominal yields, you have to be so careful in the coming months to look at real versus nominal spending. yes, consumers are putting money

out of pocket, but they are getting less for more money. that is not a healthy consumer, not a happy consumer. when you ask them, are you worried about jobs? not at all. are you worried about income growth? yes. this is the difference between looking at credit card transactions and looking at whether it is a healthy, happy consumer. tom: away from the chanel handbag at $8600, the marginal gallon of gas or down i'll through the grocery store, what is going to be the protest from the american public to 7% inflation? frances: we already seeing it, it has become political end infiltrated the fed. the fed understands inflation is going to qualify the year end, but can they stand and say they will do nothing when the public faces massive inflation?

remember, inflation is a change in measurement. as i said before, cpi is not real life. the base problem for the american consumer is even economist like myself tell you, do not worry. cpi will go back by year end. you are not going to see a cost-of-living deceleration. we are not going negative. the cost-of-living increases been extraordinarily painful and will continue to be painful for the consumer end no wage growth is not going to cut it. tom: this is gospel to me. the 12 month trailing time series means nothing to the consumer. lisa: it means nothing to the consumer if they see negative real wage growth. that seems to be what is happening, giving -- given the backdrop, you expect to do three fed rate hikes this year. you say they straight it missed the window, what do you mean? frances: they have a narrow window where the data will be

strong enough and the inflation number will be scary they can get marked right -- great heights. but we will see pretty sizable growth scale. it is going to be pmi decelerating quickly, the thing we don't talk about enough. they are not going to have a lot of maneuverability in the second and third quarter to hike interest rates. when the fed hikes, it is usually growth acceleration, not growth deceleration. lisa: there is a distinction between the fed trying not to disrupt markets and the fed being too late and the market already seeing a deceleration as a result of the consumer confidence. which is and wise important -- why is it important? frances: there are so many reasons the economy will slow in the first and second quarters, it is notched about the fed. global central banks are tightening over the past year. we have meant tycho, peru, rpi's are tightening.

this is the central bank that in my view needs to normalize and will normalize. but instead of frontloaded hikes this year that flatten the curve , there is a real opportunity for a slow and gradual increase in rates a couple times for several years. that is a far more bullish outlook even when it comes to companies with a slower growth outlook. it allows the yield curve to steepen. i may be wrong, but if you're going -- five to seven hikes in your forecast, to better incorporate a sizable slowdown in 2023. lisa: how are you betting against all the strategists who are saying five to seven hikes? frances: timing is an issue, this is the big challenge. the fed needs cover to pivot, they are not going to get that until they start to see the decelerating momentum in the data. it is probably not going to come for a couple months, they have

to go through more volatility and the curve flattening until you get to that moment. you have to have enough data telling you growth and inflation have been defined. tom: i want -- i do not want to go month-to-month, i will go quarter to quarter. what is your quarter to quarter guesstimate of topline cpi and in america? let's say 6.5%, 6.8%. then what, quarter to quarter? frances: we are going to drop pretty quickly, maybe down to 5, 24. just over 2% in there. it comes back to goods. cpi mass is not real life. are you and i going to feel it different? no. but goods deflation is a key component of the outlook. at the same time as another part of the story that is important, if i am wrong is here, that is wages. remember, wage growth is fairly isolated to certain

demographics. finance for example, we have not seen major wage growth in that area. leisure and hospitality, that is seeing wage growth decline. the american economy is incredibly dispersed, there is no one number that encapsulates the entire american experience. i have never in my career had to spend so much time industry by industry, sector by sector trying to parcel out what is moving the headline number. going to the second half of the year, in order for the fed to have that covered to pivot, they have to have faith there is no wage spiral. they're going to watch inflation breakeven which is been remarkably calm. as the fed talks about, can actually move goods or services inflation? not really, but they can change expectations, those are stable. tom: are you modeling that the average our earning shock we saw two or three days ago is going to come down as abruptly? frances: yes.

part of that as a compositional element of hourly earnings. we will probably see 4% to 5% wage increases for the next several months. but again, this is a short window where labor will have that power. it really depends on what sectors you are looking at. leisure and hospitality, absolutely. but a whole variety of other sectors are not going to see that growth, particularly higher income americans will not see that. that is why we have to be careful about one number dictating the entire american experience, that is not the case. jonathan: as always, fantastic. frances donald there, this is an important end of the debate, one side. matt miller earlier this morning referenced it already physics central banks around the world are making a collective policy mistake trying to use rapid rate rises to call inflation that is mainly driven by constraints.

he concludes by saying how long before the inevitable reversal? tom: to translate this, the bank of england wanted to go up even faster. what we heard from and in the trenches market economist is the same tone we heard from the monetary giant of dartmouth, this is going to move and change fast. it is going to be an eventful year, to say the least. jonathan: even though we priced in five hikes this year, there does not seem to be monster consensus over how it will turn out at the other end. lisa: it is not like fed officials are coming out saying we are going to hike five times, six times. some of them saved as a possibility, but it is data dependent. we were talking about the ecb and how they are hawkish. somehow, the president totally changed some of the freak out yesterday by saying they are going to take a gradual approach and be data-dependent. she said the same thing, that

people can choose their own adventure. jonathan: we are in the process dictated by the ecb before the discuss rate hikes. they're going to recalibrate in march. take a look from the most hawkish member, we are not recently talking about 25 basis points in quarter four, again in spring. that is why some people are pushing back against how much we priced and for the ecb this year. lisa: there is a humility among economists and central bankers, they do not know. i think that perhaps is what is giving the market free reign to say, maybe we do. maybe it looks bad. jonathan: the date of the last 12 months, that is what made them humble. humility on wall street. really? lisa: sure. jonathan: euro-dollar, 1420 six. yield higher by three basis points, 180 for 50 on tense. from new york, this is bloomberg. ♪

>> a day after meeting with russia's vladimir putin, francis president heads to ukraine to meet with that country's leader. pruden said his discussions between micron could form the basis of future steps. he also repeated his warning that ukraine should not be allowed to join nato. the u.s. is losing patience with china regarding trade commitment. american officials say they have not seen any real signs of beijing making good on its agreement. china pledges to buy an extra $200 billion in u.s. agriculture and energy and products for the end of 2021. a billionaire leading to pursue donald trump's agenda. it will focus on backing republican candidates to advance the former president policy. they've advised facebook founder

from was two decades. big changes on the way for pellets on, the fitness company's share priced after a slowdown in demand according to the wall street journal and the cofounder will resign as ceo and become basic of chair. he'll be replaced by the former cfo at spotify and netflix. meanwhile, 2800 jobs will be dropped. 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. ♪

>> i think there is room to move, we are going to see over the next couple months it is

going to be ok to slowly back down on certain measures we've been living with. 2022 is different than 2021, does not mean we are in 2019. jonathan: with the bloomberg school of public health, i am lisa abramowicz. --jonathan ferro. into the bond market, yields are higher through the curve come up three basis points on tends to 19468. the euro slightly negative, euro-dollar 11431. as we round out on the international scene, a serious degree of diplomacy taking place in washington dc and moscow, ukraine. backing off now, down 1.7%. tom: angela stent for piercing interview yesterday, putin's world is definitive. i want to point out the 10 year

real yield, evolving from the negative statistics to -0.46 right now. i exaggerate, but nevertheless a negative yield than the real yield trend. on the pandemic on confusion on masks, dr. amesh adalja joins us. on san francisco, california mask mandate is now going to go county by county. should we expect that nationwide , there'll be a city by city, county by county debate about indoor mask protocol? dr. adalja: i do think it is going to move from the state governor mention to each individual county or minister paoletti making that decision -- eunice the paoletti -- municipla ity making that decision on their own. it might reflect the transition in that given area. we are going to see is masking become something that is an

individual risk calculation. some people will continue to wear masks, especially those who are high risk and others will get rid of their mask. masking works. if you are somebody who is worried about getting covid-19 because you had a kidney transplant, you can wear our mask one way and it will provide benefits. but that is where we are going. i do not think you will see many of these mask mandate at the state level stand for much longer. indeed, many states including my own have not had a mask mandate for months. tom: what is the science of masks. i've been asked at least three times in the last 24 hours, if you are in a classroom -- you are definitive on this in pittsburgh. if you are in a classroom with a bunch of interns and they say, what is the actual science of wearing a mask, what is it? dr. adalja: the sciences, properly fitting masks that are surgical or procedure masks do provide two benefits.

they provide source control, so someone is infected, it is going to block some of the transmission from them and the wearer will get protection because those particles will not be able to penetrate the masks. most of that data is on medical grade masks, most of the data is in adults that are wearing well fitting masks. it becomes a little bit more fraught when you are trying to extrapolate that to real world views, because people do not wear masks the way they do in clinical trials. but there is data from the early days of the pandemic that paces of high mask ranks all cases fall. there is data that it works, but as long as you wear them. you to think about the context, with the marginal benefit is. wearing a mask outdoors is probably not going to have any benefit because the risk of transmission is already so low it cannot get much lower. it is all about trading off the benefits of the masks versus the discomfort people have and how dangerous covid-19 is.

lisa: we are talking about masks and mask mandates being lifted in the western world, even covid zero areas like singapore and australia have third in the towel and said we cannot pursue that strategy, we have to open up and deal with a certain level of virus. at the same time, hong kong is imposing even harsher curves to try to stave off the infections that are spreading. have we seen this fail? is this the zero covid policy in hong kong, beijing failing? dr. adalja: yes, it was distant to fail because it is not a policy based on reality or signs of the virus. it is biologically impossible to eradicate a sufficiently spreading respiratory virus with an animal host. covid zero was wrong from the beginning. as someone wrote the on an essay question on a test, i would say that is a wrong answer. i would not say australia and new zealand through in the towel, they should not have been holding one.

they should not have pursued it because it was futile. but we have to come up with is a sustainable approach that you are going to have covid-19, but it will be milder because the population is vaccinated. you teach the population what activities are risky and not risky. it is not surprising that an authoritarian country like china is the only one still holding onto covid zero. but what they are doing is pushing off something that could be a disaster, because they may not have enough immunity in the population because the vaccine may not be the best and may not have had enough uptick and no population immunity. that is a danger situation china has created, kindling for covid to hit their country hard because they been postponing the inevitable and not taking necessary steps to come up with a sustainable approach terrific the biology of the virus. lisa: explain the consequences. that is a significant statement, this idea you could be sitting the petri dish for a mass uprising a number of covid cases if they open up their borders

and have near zero immunity. what does that look like for the rest of the world? dr. adalja: for the rest of the world, so long as they are vaccinated, it is not going to look back from health standpoint. but it is going to be more disruption because china is a major trading partner. supply chains, all of that will be impact that if 10 is hit hard with covid-19. people talk of a natural immunity, but the fact is the level of immunity in a publishing is important whether it is faxing use. when it comes to how resilient your publishing is going to be, how much serious illness will occur. because they have such low levels of immunity in the population, when you start seeing spread and they back off of the policies if they do not have people vaccinated, you are going to see a lot of people get infect did and a lot of people need hospitalization, it is going to be disruptive. people will look back and say this is a result of what the policy was for so long and covid

zero put your population at higher risk even though you may have been bragging and pouting below number of deaths. it was not going to be that way forever. jonathan: thank you. dr. amesh adalja, the number one question we get asked. when is it over? my response, how would you know? how would you know if it is over? lisa: it is not going to just end one day. the restrictions we have all been living with for a number of years, when we start to go to concerts and bars, restaurants, you do not have to show your vaccine passport, you do not have to wear a mask. there is a feeling of some normalcy, it is already getting more normal. what he was just saying is really important. it goes into the whole supply chain disruption debate. jonathan: i donate my passport to get into a cafe in new york city. -- i need my passport to get

into a cafe in new york city. in tsa, they take a look at well for about 10 seconds. unreal. futures down seven on the s&p, negatives a little more than tense of 1%. 19460 eight on tens, bit of a breakout. this is bloomberg.

>> this fed is basically in the market. >> markets for the first time are facing less liquidity and tightening economy overall. >> the risks are the fed has to be more aggressive. >> it is not ideal for the fed, but perhaps a better people. -- evil. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. jonathan: for our audience worldwide, this is bloomberg surveillance on tv and radio alongside tom keene and lisa abramowicz i am jonathan ferro. takei tends at 195. tom: yields are on the move, this is a must listen and watch for all of you. i'm going to look at the real yield, it is moving. he mentioned the two year yid,