most difficult situations in our lifetime. >> we are at a point in the cycle where inflation is a major issue. >> quantitative tightening and rate hikes to bring down inflation and to slow the economy. >> i don't think we are going back to the 2% pre-covid inflation environment. >> landing this perfectly is going to be a difficult task. >> this is "bloomberg surveillance." jonathan: it is cpi thursday. from new york city, for our audience worldwide, good morning, this is "bloomberg surveillance." alongside tom keene and kailey leinz, i am jonathan ferro. equity markets down on the s&p. the data a few hours away. tom: but it is the scope and scale of, when did we last see this? when did we last see it for a set of time? i love what we had in the opening, what are we going back to? that is the number one question. what is that new terminal rate on inflation? forget 2%.

is it an adam pozen 3%? doing we need to get used to -- do we need to get used to 5% inflation? jonathan: 7.2 is the median. two-year yields very close to the highs of the year at 1.35. tom: you nailed it, as usual. equities, bonds, currencies, commodities, oil, coal, the twos , 10's spread went down to new flatness. jonathan: monster demand for that 10 year issue yesterday. what does that tell you? tom: i am in the camp, would everybody calm down? i don't think we need to tantrums here, we just need to look at the data as it comes in and the trends of the data. jonathan: 1.93 on 10's.

let's talk about the earnings. the walt disney company knocking it out of the park. kailey: blowing it out of the water, beating on profit to the tune of 86% from analyst estimates. the parks division exceeding expectations. the all crucial steaming service -- streaming service, blew it out of the water. the street was looking for 8.2 million. far and away exceeding expectations. a good start for bob chapek leading on his own. jonathan: listen to this stat. average customer spending, 40% more than before. tom: paul sweeney says it is you bit. margin -- ebitda margin. have you been to disney world or disneyland? jonathan: i've been to disney

paris. you want to tell the walt disney company it's not the same thing? tom: shanghai is not the same thing. you've got to go to disneyland, that's the only real disneyland, near anaheim, it is small, tiny, and it is just what it was. jonathan: when did you first go to disneyland? tom: 1950, whatever. we are focused on inflation, focused on the economics of financing investment -- finance and investment. this is the worst chart on banking in the world. the success of jp morgan as compared to bnp paribas, just getting itself above the 2007 level, deutsche bank coming back to be as weak as credit suisse. i'm sorry, the credit suisse today was a disaster. jonathan: we've got the broader complex of european banks, tom. let's talk about negative real yields, negative rates. you've got credit suisse, which

is its own beast. today, down about 4.7%. massive restructuring costs for the investment bank and scandal after scandal after scandal. tom: they never sent you to zürich because you are too rude. are they going to be taken out of their misery? jonathan: there are some long-term investors who have held on. i wonder when they capitulate. tom: for global wall street folks, for some of you, this is a sideshow. this is just stunning to see. jonathan: ugly. down 5%. tom: i hope i did not take too much time on that. jonathan: down about .1% on the nasdaq 100 down about 0.25%. 10 year yields down, two-year yield up. that was the story of yesterday. on foreign-exchange, we will talk about the yen later. kailey: all of it leading up to

that inflation data we are getting later. there's going to be some micro stories to watch. twitter is due in about an hour, 7:00 a.m. eastern is when we are expecting this report. this stock is down 12% in 2022, dell 44% over the last year. can the advertising business may become to the rescue or are they going to suffer the same kind of headwinds as meta when it comes to those apple rule changes? the big news of the day is when we get that cpi print. 7.2% is what we are looking for, the highest inflation going back to 1982. i was not yet arrived on this planet. it is going to be a very monster number. what does that mean for the fed? if it comes in hot, if it comes in cold, does it put 50 basis points on the table, take it off? it will be interesting to see the market reaction to that print. we will get jobless claims at that time. finally, doing my best lisa abramowicz impression, you

talked about the massive demand for the 10 year option yesterday -- 10 year auction yesterday. will the takedown be as strong? jonathan: what an auction we saw yesterday on 10's. kailey: those sound like fighting words. jonathan: very good. jack ablin joins us now, cio and founding partner at cresset capital. can we start with 8:30 eastern, what are you looking for in this inflation report? what are you focused on? jack: yeah, so i am calling q1 inflation readings the darkest hour. this is going to be a very difficult period for investors who are watching inflation, looking at interest rates, focused on the fed, having to try to, you know, muddle through this q1 where we expect inflation to peak.

the month to month number is going to be important. expectations are pretty high. we are looking for something like .7. i am hopeful, at least on a month-to-month basis, we do better than expected. but you know, economists ar expecting 7.2e -- are expecting 7.2 for january and going out from there. it's going to be very difficult for those of us who think inflation is rolling over slowly to get through this quarter. tom: kailey leinz brilliantly mentioned 1982 on inflation, just to begin with that. jack: i was working at sotheby's. i was a new employee that year. tom: i want to get back to the idea that, at the time, a larger scope and scale was the iran-iraq war. we don't have these distractions now. we have the pandemic and we know the story behind inflation. why should we presume that goods

inflation will come down? jack: sure. goods inflation, well, a number of things. one is the wage price cycle was essentially contractual back in the late 1970's, and 1980's when a good number of u.s. employees had cost-of-living adjustments built into their contracts. that was sn automatic -- that was an automatic. we saw new york relaxing mask rules yesterday. consumers and households are going to shift attention away from goods, which is where most of the inflation is, towards services. services are still running at three or four, but it's not 13, not seven. they are not going to buy anymore refrigerators. so, i do think just the mix of demand is going to push things lower. kailey: you mentioned wage prices. are we at or heading into a spiral, jack? jack: i don't think so. one of the things i wrote about yesterday, which was entitled

"the darkest hour," is the offset of productivity. q4 productivity was through the roof, something like 6%. now, i don't expect that to continue, but i do expect business investment to continue. you get companies like mcdonald's taking what would be employee jobs and turning them into kiosks in 600 or 700 stores last year. they would do it again this year. businesses are responding. i think we will see productivity. we are seeing it in the employment cross index, which is running well below wage growth. so yes, wages are going up, but i would not call that a spiral. jonathan: favorite sector right now, what is it? jack: you know what? u.k.. if you look at forward earnings in the u.k., the earnings yield is like 9% at a 4% dividend yield, i think you are looking at 13%.

jonathan: you're not flying solo. a lot of people looking over to europe. jack ablin, thank you, sir, of cresset capital. the administration finally dialed but asked for the extension of king salman. i wonder if it makes a difference. tom: the negotiation is up to speed on this, our dialogue on oil, weather with the king or crown prince, against their dramatic need for defense comfort. we actually have a negotiating chip. i believe president biden is scheduled to speak with him today. jonathan: crude right now, $90.43. kailey: for the administration, this is a problem. inflation is one of the reasons the president has seen his ratings in the polls growing increasingly in the lower direction. how do they manage this

messaging if we do indeed get a 7.2% or an upside surprise in the data today? there's not that much the administration can do. they are trying to address the chip shortage. this is a problem president biden cannot necessarily fix on the supply side which is why he is looking at the federal reserve. jonathan: do you want to do spurs now? do you want to get that out of the way? not touch it? did that hurt, was a painful? quite a game, quite a second half. tom: i think the chancellor of the east chequer had a good afternoon. jonathan: you think he's going to become the next pm, too? tom keene, kailey leinz, jonathan ferro. tom: i was watching curling. jonathan: don't get me started on the different platforms. that drives me nuts. tom: canada-norway, it was good. i don't remember. jonathan: futures down 1/3 on

the nasdaq. tom: that's like me at 9:00 a.m. jonathan: you and i should commentate on curling on radio. that's what it's going to sound like. this is bloomberg. ♪ >> i am ritika gupta. today's report on inflation in the u.s. could push the federal reserve to its largest rate hike in more than two decades. the consumer price index is out at 8:00 a.m. u.k. time. 7.2% annual increase may pressure the fed to consider its first half percentage point hike since 2000. eight university of michigan economist will become the first black female to lead one of the federal reserve's 12 districts. susan collins will be the next president and a rotating voter on the central bank's policy. russia and belarus are beginning their largest joint military drills in years today.

they are being watched closely by the u.s. and europe amid tensions over neighboring ukraine. thousands of troops blocked by tinkers. missile defense systems are involved in the exercise. that protest blocking bridges from the trip to canada is set to hit a crucial supply chain. ford is sent to shut off its canadian factory. protesters have blocked the bridge between detroit and windsor, ontario. global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

♪ jonathan: cpi in america two hours and about 12 minutes away. i am jonathan ferro. price action, markets set up as follows. we are down on the year now by not even 4% year to date. in the bond market, yield return unchanged. a flatter curve this morning, just a little bit steeper as the front end comes in just a little bit. in the commodity market, positive, 1.2%, $90.73. this administration sensitive to what happens at the pump and about what people get paid. this story dropping from "the washington post," the president to propose a 4.6% pay rise for federal employees.

five is the new flat. five for many people still does not get it done. tom: this deals perfectly with what kailey leinz said about 198 2. in the story, and the year 2000, 4.x% up, i believe you can add those numbers together and do simple math. federal employees up 9% over a 24 month period long ago. will we see that? jonathan:jonathan: will they feel good about 4% to 5% nominal? tom: this is really important behavioral economics. it's not that they will feel good, jon, if they won't feel miserable. the goal is not to be miserable. the memory of that is the 1930's and the united kingdom. jonathan: we see the consumer sentiment numbers right now not supportive at all, not supportive at all. tom: the goal is not to go to

omg, i got a huge pay raise, but to move away from the desperation of going nowhere. jack fitzpatrick joins us. the president acts according to the washington post on a 4% lift. your thoughts? jack: not necessarily surprising. keep in mind, this would be a proposal for fiscal 2023. we are kind of getting into a longer-term conversation about how inflation and inflation expectations play into federal spending. i've talked to republicans involved in the budget process about whether they could support higher federal spending including for employees,, because of the numbers we have seen. on the defense side, the answer is definitely yes. potentially yes in a broader way. but you're going to hear more and more about bigger numbers being proposed, obviously by the biden administration, maybe with some support from congress because of the inflation.

tom: this is a whole new world after all, two playoff disney and their earnings yesterday. i am fascinated about what happens. does secretary yellen try to give us an inflation study, does the president speak? how do they respond to a report of 7% inflation? jack: they have struggled to figure out exactly how to respond to this. you have heard them in the big picture talk about the jobs gains. some of the more detailed issues that the president has brought up may be don't resonate with everyday people. to get into, here's what we've done on meat processing competition, here's what we've done on semi conductors clearly does not resonate that well with the broader public. and that's why you've heard the president pouring out a number of times they are looking to the fed for this, and really acknowledging his own limitations. kailey: the president obviously has limited cards to play in

this kind of scenario. as he tries to manage this messaging around the economy, how does the build back better failure and the parts of it that may or may not come to fruition factor in here? jack: for one, there really has not been concrete talk on capitol hill about where they are going with this. we have heard about some options of a very limited selection of things that could pass. it is worth keeping in mind, the president is supposed to talk today about prescription drug prices. that was something in the build back better agenda that seemed to have enough support that they can actually do. they will talk about a little slice here, a little there on things like prescription drug prices, not the child tax credit, but may be pre-k education and climate spending, but it is vastly reduced, and they've had to take a lot of losses. kailey: let's talk about what else congress is looking at.

we started this conversation on the wage side of things. another way legislators make money is by investing through the stock market. are we going to see legislation when it comes to stock trading for lawmakers come to fruition or is there too much pushback? jack: there has started to be some pushback but it seems to be a little more focused on the details of how they would work this out and not the general idea. we essentially heard an endorsement of the broader idea of doing something on this by chuck schumer, speaker pelosi has started to come around and said the house administration committee should look at this. there are still pretty important questions about, would this be a ban on holding individual stocks or would it be requiring a blind trust? would it affect their spouses, congressional staff? the broad idea seems to be getting momentum on capitol hill. tom: the idea is gaining

momentum but the other momentum is the mixture of foreign policy we have. and my right that there is scheduled call today between the president of the united states and the king of saudi arabia? jack: i believe that call happened. maybe because of the time difference, it may have been late last night. they talked about opec. not a massive amount of news coming out of that call. but obviously, the president bringing up opec with king salman makes sense and i guess gets another sort of way in which the president can look to address a slice of the inflation problem, and make some news on that. but that happened i believe late wednesday. jonathan: just quickly, just to jump in, i apologize. the difference between this administration and the previous one, dealing with the king instead of the crown prince, what do you make of that? jack: i don't know if that is an explicit reference to human rights issues. i mean, keep in mind, we just

saw news come up on the terminal that jared kushner, who has communicated he went to saudi aramco headquarters, and so you even still see a contrast between former trump administration officials who communicate with mohammad bin salman. you are right to at least note that it is noteworthy that the president spoke to the king and not the crown prince. jonathan: interesting. something jen psaki said at the start of this administration, that's where the focus will be, with the king, not the crown prince. let's get to the earnings quickly. pepsico, decent numbers, that outlook pretty tidy. eps, earnings growth this year 8%, high single digits. tom: spx, 4574. the real story is the resiliency of equities. it's a drawdown, let's call 5% or so, but i'm sorry, there's a constructive reaction in the corporate world.

jonathan: s&p futures down 4. we will catch up with the pepsico cfo later this morning. on the nasdaq, down 0.25%. yields settle down, unchanged on 10's. two hours and four minutes away from cpi data in america. ♪

yep, it's go time on the most reliable network. you get unlimited for just $30 bucks. nice! but mine has 5g included. yep, even these guys get it. and the icing on the cake? saving up to $400 bucks? exactly! xfinity mobile. it's wireless that does it all and saves a lot. get the new samsung galaxy s22 series on xfinity mobile. and right now, save big with up to $750 off a new samsung device. switch today.

♪ jonathan: the losses year to date now are inside 4% on the s&p. down three point 8% on the s&p 500 year to date. futures this morning just a little softer. on the nasdaq, down 0.25%. here's the bond market picture. really strong demand for that 10 year auction yesterday. we will have more supply coming in on the end from the treasury. we pull back a couple of basis points. the numbers, you know them well by this point, 7.2% the median, 7.6% the height, 7% the low.

this big grouping on wall street. for wall street, i think the month on month numbers going to be critical. do we start to see some sequential deceleration in the number? you hope so. the unknown, it's all about rent. it's got to be all about rent in america for the rest of this year. tom: we've got to get to mark howard, but this is important. oer, within all of its permutations, john. i'm sorry, these people are trying as hard as they can to measure this, but wow, is a difficult. jonathan: it's been a really difficult and they've missed it in a massive way in the last 12 months. the fed is coming its way, the ecb may be coming with it, bank of england already moving. kuroda at the boj, are you going to make a shift? no thanks, no chance.

kuroda the last upstanding in many ways. they are committed to zero interest rates, apparently. tom: rather, committed to a 30 year struggle with disinflation. we talk about the japanification of all that's going on. mark howard with us now, senior asset specialist at bnp paribas. what i love about your note is you say simply the credit cycle is turned. that sounds ominous. is it? mark: well, it is concerning, not ominous, tom. my colleagues on the credit strategy team here at bnp paribas have had a great call of both being constructive going back over 18 months, but also turning in december and becoming more. cautious they are not worried about defaults, not worried about meaningful credit erosion anytime soon but they are worried about valuations. we saw a taste of that in january, probably see a little

stability in the short-term, but then a return to wider spreads in the u.s., particularly for investment grade. that is a bit concerning. tom: i want to dovetail what we are doing today, which is a look back to 11% 1981 inflation and 7% 1982 inflation with real estate. the arch being counter over listed across america is back with, guess what, new york city rents, we are back to where we were. mark: real estate runs under very long cycles, as you know, tom. new york is a bit of a different beast from many other locations so it's hard to directly extrapolate. but certainly, in new york, there was this huge buildup of capacity. and now that the window has opened for them to fill that capacity post-pandemic, they are

raising rents as quickly as they can, because when the sun is shining, you got to make hay. across the country, there is a dearth of affordable housing and that is allowing landlords to boost oer, and that's going to flow through to cpi. cpi is a funky number, hard to parse. we are looking at 7.3 is our estimate for today. it's going to be a concern for the fed. tom: this dovetails with the jp morgan's housing note of the weekend. the supply is not there. kailey: it's a supply issue. in that rent story, inventory is down 83% in terms of available apartments compared to january of last year. as someone who has to move in new york city in a couple of months, those are the headlines i hate to see, especially as a consumer. this lens into the idea pricing power for companies, how much

more can you tolerate these higher prices? how much more can the consumer tolerate these higher prices? we are starting to see sentiment dwindling and savings rates r-star -- are starting to deplete. mark: the equity market has got a bit of a reprieve. people are feeling good about some of the earnings they are seeing today and recently. but that's backward looking. we are focused on what's going to happen going forward. there is still stimulus in the pipeline, consumer balance are still flesh from the stimulus checks and the mortgage deferral. that is increasingly going to go away as the year plays out. bookings at theme parks are going to be great in the short-term. people, you know, the governor'' announcements in the past couple days are going to encourage spending at restaurants and theaters and other places, which is terrific in the short-term, but we think that moderates as the year plays out. kailey: the stimulus checks playing a role in retail traders

entering the market, all of the abundant liquidity out there. as that starts to drain, do you think the market fully recognizes that impact? mark: thanks for asking. we look at signs away from the equity market, and even away from the 2's, 10's curves, for example. cross currency vol has picked up notably, suggesting we are moving back towards a more normalized central-bank policy. i mentioned credit spreads, not just spreads, but what's happening when you drill into supply and demand. what we see from borrowers is they really want the money because they see higher rates in the future. investors are pulling back gradually. a number of your clients on this show have been talking about building cash positions and becoming more defensive around u.s. credit. yes, i think as the year plays out, we are going to see more defensiveness. it's not going to be a straight line but in particular, we are going to be watching the minutes

next week and what is said about quantitative tightening. that is a much bigger issue for broader capital markets, and that's what some of these signals are warning us, is that qt is coming in the latter part of this year. jonathan: let's talk about it. we were told a story a number of years ago that this would happen in the background, it doesn't matter. we were told the same story recently. she said i want it to be like paint drying. may have been president harker on this show. can it be like that when we are talking about a balance sheet and reduction of maybe 1.5 trillion over 18 months? mark: you know, it's a great question. i wish i had an hour to go through it. tom: you do. mark: but there's a massive ecosystem, when you talk about real estate, for example. private equity and other people have gotten into real estate that weren't in it before and they are in it because of qt, which pushed them out of other

asset classes. same thing with venture capital, other areas. there is a massive affect that qt created, squeezing people into more esoteric things, all the way into bitcoin. it's going to have meaningful knock on effects. i wish it could happen smoothly but i am not a firm believer. jonathan: it's never as smooth as i would like it to be. we've heard from j.p. morgan's bob michele, who talked about his cash position, rick rieder of blackrock talked about a bigger cash position, pimco talked about a big cash position. once you make the decision to go to cash, you've got to make a second decision, when to come back in. when you start to think about dislocations off the back of qt, about a bigger cash position for the rest of this year, help me understand the process you go through to deploy that cash, redeployed that cash into this market? mark: well, i think there are tactical deployments and more

strategic deployments. i think those very astute guys you just mentioned have a lot of experience at doing that. and so, there are going to be pockets, like we saw at the end of january, where the window opens for a tactical trade. it may be buying get the most liquid vehicle in your asset classes choice, whether using cdx indices for credit or futures or something else. i think strategically, that cash buffer, you wait to see some serious dislocation, so far greater stress than we have seen so far this year. frankly, you don't do it when there is just talk of higher rates or talk of qt. we are still buying securities in quantitative easing. i think that cash allocation is going to stick around for a while. bits of it will be put to work when there are opportunities. more strategically, that's a later year trade. jonathan: mark howard of bnp. you know this dilemma well. you make the call to get out of the market, the hardest call

after that, get back in. tom:tom: no question about it. it's wildly asymmetric, i can't say that enough. i've had that problem for years. think of the entry points i have missed. jonathan: over the last decade or so. tom: it's been painful. i see it. . while kaylee was talking, i was watching -- while kailey was talking, i was watching low lights. walker peter of southhampton, that goalie should just shoot the puck. jonathan: are we comparing this to ice hockey now? tom: that's the language in america. you got to shoot the puck in sports. in this fiscal mess we are in, it takes a certain amount of courage. jonathan: i cannot show a football game anymore. all i think of is you. shoot from further out, that's all you want. tom: a kids shot the puck last night. jonathan: liverpool-lester later

on today, tom. tom: i did not know that. jonathan: i would go for lester. some professional advice for you. t.k. alongside kailey leinz, i'm jonathan ferro. here's how the markets are set up going into cpi. futures softer on the nasdaq. yields behave on 10's for now. the number we are looking for, 7.2% is the median estimate in our bloomberg survey. the range is in and around 7% to 7.6 year-over-year. the month on month bigger. crude $90.65. this is bloomberg. ♪ >> with the first word news, i am a ritika gupta. jared kushner held talks with saudi arabia's the factor ruler

in recent weeks. kushner met with top officials from saudi aramco. kushner formed a close relationship with saudi crown prince mohammad bin salman during the trump administration. kushner has been criticized for seeking investors from some of the european countries he dealt with in the white house. they u.k. will propose legislation that would let the government impose sanction on russian oligarchs in the event of an invasion of ukraine. russian billionaires have been buying up property and assets in the u.k. since the 1990's. russia has repeatedly denied it to invade ukraine. disney's quarterly results have given a boost to a ceo who is finally out of the shadow of its predecessor. they report earnings and streaming and subscriber growth that beat estimates. bob chapek has been ceo for two years. bob: it's really almost directly a function of what the new content is that's flowing into the service.

obviously, that content was impeded and made a little choppy even more by the fact that, you know, we had covid and it interrupted our production cycles. >> his predecessor, bob iger, retired back in december. elon musk's spacex has lost dozens of satellites to a geomagnetic storm. as many as 40 of the 49 starling satellites were hit by the storm the next day. spacex says the satellites either reenter the earth's atmosphere or are on track to do so, burning up in the process. global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. ♪ i am a ritika gupta. this is bloomberg. ♪

♪ >> this is time we say it's the right decision to lift this

mandate for indoor businesses and let counties, cities and businesses to make their own decisions on what they want to do. jonathan: there is a shift taking place around this country, particularly in blue states. that was kathy hochul, the new york governor. i am jonathan ferro. futures are negative. skiing for the next 4 days. kailey is not sticking around tomorrow so we have a suit rise guest to close out the week. find out who at 6:00 a.m. on friday morning. futures down on the s&p. yields unchanged. can someone tell me, maybe you can, in new york now, when i go out for dinner this friday, do we need to take photo id to get into a restaurant? on saturday morning, do we need photo idea to go to a café? kailey: it depends. there is no longer the mask or vaccine mandate as of today.

a business does not have to check your identification but that will depend on business-to-business. they are free to make their own decisions. it depends on where you go. tom: the mcdonald's on 3rd avenue is taking a very loose tack. jonathan: would you like to test this? tom: every they when i go there for breakfast, we check it out. christian breyer is going, what are they talking about? one of the world's experts on epidemiology, mr. breyer joins us with john hopkins in south africa. so happy he could attend to us. it is an important moment for me. i noticed in the washington post the chart where i can report deaths have rolled over. they are not like cases, they are not like hospitalizations, but now that we've finally seen the moving average of deaths roll over, do you feel that will

continue on down to the nirvana of 900 deaths. >> well, we always knew that deaths were going to lag behind hospitalizations and hospitalizations behind cases. cases are down, hospitalizations finally coming down. the decline in deaths is what we expected. it is still high. we started at a high baseline before omicron in the united states. but yes, it is trending in the right direction. we are paying attention to the new omicron subvariants. but again, it looks highly infectious and not as pathogenic as delta. tom: what should we know about that? give us 30 seconds on these new subvariants. >> these have emerged within omicron lineage, and they share that same high infectiousness, but it does appear that they are not more lethal, not more pathogenic.

it's taken over very quickly in south africa. the omicron ba.2 is now the predominant variant turning appear. what we are seeing happily is while infections, you know, are rising with that variant, deaths are still declining. yesterday, 22 people died in this country. a week before that, it was over 100. that's really good. kailey: we are talking about different variants in other parts of the world. dr. anthony fauci, one talking about the situation in the u.s., said the u.s. is heading out of the "full-blown" pandemic phase of covid-19. do you agree with that characterization? >> well, i think part of what dr. fauci was referring to was the fact that, first of all, we now have the neutralizing antibodies, antivirals, treatment is getting better, and the omicron wave is declining.

we have many more tools to manage covid. again, of course, we have an epidemic of severe disease in the unvaccinated and the unboosted and in the elderly. that has not changed. the toolkit has greatly expanded. that's what he's referring to. we have so many more options. kailey: part of that toolkit is boosters. he went on to say that he does not think that every american is going to need regular boosters. where are we in that conversation, whether or not we can create a vaccine that addresses all future variants as well? >> there's obviously a great deal of work underway on that front. people have been working on a pan-coronavirus vaccine. both pfizer and moderna are working on an omicron specific vaccine. that's absolutely happening.

the challenge we are seeing is there is a lot breakthrough infections, even in fully vaccinated people with omicron. that's part of why it is spreading so effectively, as we all know. but the boosters really make a difference in terms of whether you get severe disease, whether you go to the hospital. tom: is the language a breakthrough infection nothing more than endemic? is that honestly the definition of endemic? >> not really, tom. what we mean by a breakthrough is a confirmed infection, pcr positive in somebody who's been vaccinated. omicron has had the ability to do that. we do also see infections, breakthrough infections in people boosted, but of course, much less severe and less common. by endemic, what we really mean essentially is that there will be upticks, but the majority of the population will be protected, either by natural immunity, by having recovered from covid, or by vaccination

and boosting. you are better off if you have the vaccines. jonathan: we are struggling to identify whether certain policies are backed by science or politics. the recent guidance around mask mandates, the removal of them, adjustment of them, what's been your reaction? >> we are on the right side of the omicron curve coming down. we still have a high number of deaths, hospitalizations. many hospitals are stressed. so, the idea that governors, particularly in the blue states, are lifting these restrictions because they are so unpopular at a time when they are just getting out of this does feel epidemiological not supported by the evidence. i think that's why you heard rochelle walensky say, as far as the cdc is concerned, we are not ready to do this yet. there is a disconnect. i think that disconnect is largely political and not epidemiological driven. jonathan: thank you for being so clear.

dr. chris beyrer. there is, a member of the health care community, an official, basically telling you this is backed by politics and perhaps not by science. tom: a lot of politics going on. i don't know where this is in new york or new jersey but how does devolve into the city level, the borough level, in upstate new york, the villages and towns? i am unclear on that. jonathan: and the schools. the difference between the mask mandate for adults and kids in school. kailey: when governor made this announcement yesterday, it did not apply to a a lot of areas. the efficacy when it comes to children, which under five still are not vaccinated either, is a different conversation. jonathan: we are down more than 0.8% on the s&p. give me a second. go on. tom: continue, please. jonathan: yields unchanged. kailey: he just wanted to be

heard. jonathan: you got a couple of seconds. tom: inflation h: 30 but we got here in 10 minutes. usa-denmark in curling live. jonathan: you're going to watch that and do the show simultaneously? wonderful. i cannot wait for the next hour. from new york city on radio and tv, this is bloomberg. ♪

♪ >> in terms of the fed, i think they are in one of the most difficult situations in our lifetimes. >> we are right a point in the cycle where inflation is a major issue. >> the fed needs both quantitative tightening and rate hikes. >> i don't think we are going back to the pre-covid inflation environment. >> landing this perfectly is going to be a difficult task. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: cpi 90 minutes away. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance, " live on tv and radio. alongside tom keene and kailey leinz, i'm jonathan ferro. tom: twitter out with earnings right now. they do a share buyback.

wh