taylor: taking a look at how markets performed on the day, my goodness, bond yields are at the height of the session. let's digest what happened today. the s&p 500 was off 1.8% and technology is where you saw the pain. why? i want to point out that this is a one-day move. 24 basis point increase that has us now at 160 with a massive flattening of the yield curve. why? the two year yield is moving a lot faster than the 10 year yield, even on a day when the 10

year yield broke above 2% and hovered at 203, it's all that focus on the bond market and the reaction to a hot cpi trend. that's the market wrath. -- market wrapup. ♪ -- "what'd you miss?" starts now. romaine: and the reaction to a very hot cpi and the reaction to some hawkish comments. the st. louis fed president once his order supersized when it comes to rate hikes, saying that he supports raising interest rates by a full percent by the start of july and his comments came after received the hottest inflation report in four decades. price pressures were felt across the economy. let's start with some of the numbers we saw. sonali: 40 year, that's a generation, you could call it, worse than most of wall street's

expectations. year-over-year you had cpi above the seven point 3% that analysts were expecting and if you strip out food and energy prices that was leading a lot of the gains, it was still beating what wall street had expected. month over month, the number is also still worse than what wall street was expecting. .6% on core cpi and month over month, taylor. taylor: and if you fold those cpi actions back into the bond market, we had mentioned of course that we spoke with the st. louis fed president earlier who said that he would like to see 100 basis points in the bag by july 1, which had been more hawkish but i have now pulled up dramatically on what i think the committee should do. let's welcome sarah and cameron for more. i want to quickly start with you. i was a little surprised. you have a 210 yield curve at 40

basis points and both of your comments are to stop worrying about the yield curve and to ignore the yield curve. why? cameron: it's descriptive. everyone knows that if the yield curve converts, it leads to recession but i would say a couple of things. one, the models that use it refer to the three month versus the 10 year at cyclical highs on the one hand. two, it's not what the yield curve really says. it says that where policy is what is expected to be relative to neutral, it's almost pavlovian. the yield curve flattens. at this juncture there still isn't that much to worry about.

there are other things to talk about in detail if you are so inclined. romaine: another cpi report, the big question is, how will we get to that march meeting without any action? sarah: there won't be anything until even that possibility of the floated inter-meeting hike and the door has gone wider to the possibility of that basis points increase in march out of the gate for the tightening cycle and we have already seen markets more or less price that in. roughly an 80% chance right now that they will go 50 basis points in march. i'm wondering, cameron, but of the biggest missed price opportunities for traders as we start to go along with not just talk of rate hikes but the actuality of them.

yeah, i mean it's, i guess lonely in retrospect, right? if the fed is going to be aggressive in putting rates up, you have to look at what areas of the financial sphere are most sensitive to interest rates. you could argue that given valuations, some of these tech stocks are still pretty vulnerable to a pronounced tightening cycle that goes further than many had thought possible a few months ago. sarah, it's interesting, we always talk that the market is not the economy but it's hard to see red days like this where inflation runs hot where we don't even talk about the impact it could have on the economy. what are some of the biggest impacts that you see, inflation, what is the biggest impact that you see?

this is a major -- sarah: this is a major challenge to consumer spending. some of the strongest gains were being driven by rent, electricity and food. items that consumers cannot sidestep the way that they could maybe the big inflation print that we saw last spring where they could put off buying a car or not go on the vacation. it's a big challenge to the consumer spending outlook. we are already expecting to see consumer spending growth slow as we see less help from the fiscal side of things with the tailwind declining. this just makes it tougher and we are looking for real disposable income through the middle part of the year. taylor: -- romaine: in terms of raising the rotation from services to goods and going back again here, what happens there?

everyone's income gets eaten up by the essentials? sarah: everyone's paycheck doesn't stretch as far. savings has been a great point of optimism this year, but this doesn't stretch as far and it could contribute to what is already likely to be a moderation as it slows down faster. sonali: i had that conversation with david rubenstein a couple of weeks ago how inflation is going to hit lower income work occurs -- workers worse. look at if actions rising, rent rising, is the inequality story going to become a bigger issue for the fed and the biden administration in the wake of all this?

sarah: i think the distant person impact is a bigger issue in something the fed should tune into as well. last cycle at the end in particular there was a lot of focus on how monetary policy, if they ran the economy hotter it could disproportionately benefit some workers on the lower end of the socioeconomic spectrum but in many ways, the inflation we are seeing has had the opposite effect. it could put the fed in a really tough position when trying to balance out policy priorities. romaine: we will have to leave it there, sarah. great to catch up with you, sarah, cameron. coming up we focus on the rental aspect of it. rental costs are at record highs in cities across the country. john ziegler, ceo of redpath, joining us in just a minute.

romaine: all right, today's triple take is focused on the surge in u.s. consumer prices. demand for housing is red-hot, apartment continues to take higher. taylor: what is so hard about it is its unique. metropolitan area by metropolitan area. i know we are trying to paint a broad brush and do this on an international scale but manhattan rents are back to almost exactly where they work two years ago. this is a cool chart, robust apartment demand across all major housing markets, 12.5% in

2021? romaine: and not to throw cold water on this, you are seeing this in suburban areas. there was a great chart on the terminal about bellevue, a suburb outside seattle, phenomenal home price increases. i mean phenomenal in a bad way. lots of areas in the midwest, the dakotas and idaho, prices are really going through the roof no matter where you are here. sonali: everyone can't afford the right -- the rent now. romaine: can you even get a bargain down south? alabama? sonali: and i know we want to discuss this with our next guest, the region now that he trend as we migrate away from new york city. john ziegler is the ceo of rent pass. it's great to have you here, you can shed some insight on what you are seeing regionally and you can start off with us here

about the big rental inflation that you see. john: thanks for having me. rental rates have increased at historic highs. the average rent across the u.s. over the past year is 22.1% and 18.3% respectively and we see that continuing successfully from december to january so really it is across-the-board. primarily uc markets in tier two cities getting the highest appreciation in the market. romaine: supply is not enough to meet demand, is that right? jon: there is a lot of supply in the next 12 to 24 months and with the liquidity that the

government has put into the market, the rising wages, a competitive job market, you also have a move with the work from home trend towards a desire for more flexibility which, combined with higher mortgage rates and the fact that some people do not want to the home because they want the flexibility, there is higher demand overall across the u.s. taylor: goldman, dallas, that's a huge office down there. i'm wondering, for the people who are looking to live in a place different from the traditional new york, san francisco, are they still going to be facing surging rent? jon: the interesting thing is it's very dependent on the city. some of the cities with the highest increases year-over-year, 40%, 50%, 60 percent increases are austin,

cincinnati, st. petersburg, arizona. you have others, frankly, declining year-over-year. philadelphia and atlanta are two. st. paul, minnesota, and tacoma are other ones. sonali: can you explain the why behind that? jon: i can't. a lot of it probably has to do with where the population was at the time with a lot of different economic factors as well. and probably a lot of the workforces that were there at one point that maybe now have a choice to move away and are choosing another town. romaine: what have you seen in the data regarding rental increases on the back of some of those discounts that we saw during the pandemic that at least in certain markets the landlords had to dangle out there to get people in the door? jon: what are we seeing? well, the fact that we are right now at 97 .5% occupancy in the

market, if you looked at pre-pandemic, 94% to 95% would have been considered full occupancy. we are at historic highs. it's hard to catch up with that without driving rental prices up. it's very much the property manager owners market at this point. with that amount of demand it's hard to get rental prices down, to need to put these incentives in place. sonali: 22% is a lot. to what extent are people getting driven out of their homes? jon: all of the moratoriums on evictions have gone away. we have not yet seen significant increases in evictions yet. we have seen an increase in what's called non-pay, a pre-eviction action. a lot of it is due to the fact

that you really do by and large have a strong consumer in the market. a very strong employment market with rising wages. now with liquidity coming from the government now being pulled back and the fact that we have significant, you know, no longer transitory inflation that we are dealing with, i think we are going to see probably an increase in evictions over time as those particularly fuel and food prices increasing are going to hit disproportionately on the lower segment of the market. romaine: john, great to catch up with you. giving us a little have -- insight into the housing side of that report. another important sector there, autos. interesting. year-over-year change is phenomenal. 1.5% of course, 3% gains in

previous months. let's bring it in now with more insight into this. it's our detroit bureau chief. david, let's talk a little bit about what first contributed to the drawdown, the slowing, the moderation and some of the price increase? david: a couple of different things. the first quarter was pretty rough. but it did start to get better by the end of the year and it is getting better in january as well. still tough out there but supply is gradually improving and the main thing going on in january is so many luxury vehicles were sold -- stolen -- sold at the end of the year. people parking and escalate under the christmas tree. it's a big purchase. do people really do that -- romaine: do people really do

that, the big red bow? david: december to remember? it does that. -- does happen. the average transaction price was still 46,400 in january and that still 12% over the year before, down 2% from december. we have not as many luxury vehicles sold in the month. better supply. overall non-luxury vehicle prices were down a bit. so you are seeing some relief. some people thinking we are starting to see the peak of auto prices right now but we will still see tight supply going out as far as the eye can see. i wouldn't expect a big collapse anytime soon. and used a vehicle prices were at near record levels. cars are going to be expensive for a while, but we might be seeing a bit of a relief and a peak for the phenomenon. taylor: talk to us about new vehicles. 9.8% as a three-month change. 12.2% as a 12 month change.

have consumer started to push back and say you know what, i'm going to wait six more months before i buy this car because maybe they are not willing to pay a 12% increase year-over-year? david: some certainly are, no question about it. the problem is a lot of the people that use to look at new cars during times of strong economic activity and higher pricing would go to the used slot and can't now, there's not a lot of used inventory. people are priced out of the market and it has been going on for them -- as a macro trend for quite a while now, even before the semi conductor shortage cut the supply of vehicles. they were getting more expensive, you had more gadgets and content driving prices up. automator's have gotten rid of the small contact -- compact cars and people getting priced out generally. romaine: we were talking about the potential normalization, at least that was the hope and the

last time i look at the news in detroit, you got a traffic jam on the bridge connecting canada, auto plants shutting down. what's going on up there? david: there's always something, right? right when you are about to get some relief you get this big protest in ontario and it's something like 400 million per year in parts and cars going over the bridge. it's quite a big deal and right now we have got these six plants, sorry, yeah it's at least six plants shut down in the u.s. and canada who have had to cut production because they don't have parts. that is still blocked off. we are looking at yet another supply shot on top of the big one. romaine: i know it's all temporary and it will be resolved in whatever episode of politics we are in in this world but it just adds a blackeye to what has already been a supply chain issue that's already bad.

taylor: cupcakes and cookies, up 2%. sonali: less conversation about semi conductors, more about tires. taylor: we will be back in a moment with our final take. that is next. this is bloomberg. ♪

>> time for our final take off the triple take. the cpi report that we got this morning new york time really rattled markets and what also rattled them was the comments that we got about the fed needing to be more aggressive. taylor: some of the biggest news we got was the wirp function going up 60 points as it thought

about what a march hike would look like. sonali: micro, macro, stu leonards, they are putting rockley in your guacamole to keep your avocado costs lower. romaine: that might be more of a sign of impending doom then innovation and inflation. after hours trading, we know that it's lower on the day and we will see how that carries over in the morning but talking about the yield moves, we should point out that this is a global story, not just a u.s. issue. taylor: looking at the nasdaq, we change over in a few minutes with that global inflationary story. sonali, take a look at this, spiking on the three year. sonali: it's incredible in there is nowhere to hide in this

market. taylor: pushing forward, " bloomberg technology is up next. if you are overseas we will be talking more about the australian. romaine: broccoli in guacamole? how does that even work? taylor: we'll discuss. this is bloomberg. ♪

emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, the musk mission to mars. he's about to announce the progress for his starship that is one day going