it easy as far as policy. >> we have a front and center policy here. >> the last thing the fed wants to do is raise rates to weekly. >> this is bloomberg surveillance. jonathan: from new york city for our audience worldwide, good morning, this is bloomberg surveillance wide on tv and radio. futures are up one point three on the smd in the nasdaq as well. -- on the s&p and the nasdaq as well. tom: what vladimir putin means. brent crude is doing better this morning. jonathan: this market whipsawed by ukrainian rhetoric yesterday

that russia is returning some troops to bases and that's giving the market a lift. tom: i think this is dangerous. we will just report to use just to you the news slower and not reported in an inflammatory way. the headlines are treated as good news. lisa: i am struck by the idea that even though you are seeing yields at the highest levels going back to the pandemic, surpassing 2% in the 10 year, you are seeing the momentum in tech. what does that say? we are moving to a constructive deal. jonathan: can you comment on the price action in the last couple of days? lisa: people are not positioned with conviction out and people are so jumpy on the sarcasm. the ukrainian prime minister was

a former comedian. that was literally his job and to give you a sense of what's at stake in how much markets are moving. jonathan: reading headlines can be difficult. tom is a little tired because he slept on my couch last night. tom: i appreciate it. john's house is like being in a hotel room in hong kong. he's got four soccer games going on at any given time. jonathan: all on the same wall. tom: i just loved it. jonathan: i love this price action. the snp up 1.4%. -- the s&p up 1.4%. yields are up on the bond market. the tone is improving and crude moves lower. lisa: this is the aspect with

olaf scholz heading to moscow with vladimir putin and the german chancellor. i would like to see what comments come out about oil prices. you have seen crude come in and the polarity is fascinating. the price of crude could surpass $100 per darrell or it could go -- per barrel or it could go back down. this bifurcation of views is what you can feel in market action. 8:30 a.m., january pti as well as february empire manufacturing data which will be the first read on anything happening in the month of february. there is data coming out of the new york fed showing the first to climb in near term inflation expectations by consumers going back to august, 2020. does this matter considering we

are expecting inflation rates at the highest levels going back to the 1980's in the near term? does it indicate a peak? 2:15 p.m., the southern banking committee will vote on fed chair jay powell and nominees for the federal reserve. the nominee for vice chair is sarah bloom raskin who is one of the most controversial nominees. how much do we get pushback? the senator from west virginia says it's time for the federal reserve to stop pussyfooting and meet inflation head on. the longer we or the federal reserve waits to act, the more economic pain will be caused. jonathan: does anyone think that vote might be trickier than it was a few weeks ago? lisa: at what point is this a

liberal or conservative issue? who are you messaging to when you have inflation surpassing the increase in wages? when is coming from places that the fed can't affect like oil prices. jonathan: let's start a conversation with the senior equity strategy -- strategist at federated. you say everything is going to be ok, why is that? >> is going to be ok because what the market cares about is corporate earnings. is there a recession on the horizon? the most errors out there cannot see a recession this year. -- the most bearish out there cannot see a recession this year. the earnings estimates for the s&p 500 today are at an all-time record high. companies are experiencing inflation but they are pushing it to their consumers and the coup -- and the consumers are

paying up which is good news for markets and earnings and the stock market. they have excess savings on their balance sheet so it's all good for the moment. tom: good morning, federated is arguably known as the mentor of tess as the inventor of money market accounts. when i ask you what you are doing with cash, that's an informed opinion. are you building cash at this time in equity and diversified portfolios? >> we are mostly fully invested and we let the advisors decide what to do for their clients. we are seeing the flavor of that question, we think it's a good idea to have cash on the sidelines. just before i came on, we were finding a hard time to find conviction in this market.

the idea of whether this is a long-duration asset, may more defensive income and that includes some cash but more of a pullback. we have had our first pullback this year. tom: i want to show the imagery. mr. lavrov was speaking and there is an image, a typical ornateness of moscow with this german/russian meeting. mr. lavrov said troops are partially returning as the drills have completed. how do you put foreign policy adverbs like partially returning into your investment confidence on a given day? >> on any given day, you could have something like that that

seems like we can't figure out what the future holds. you really cannot get your arms around it. if i was a long-term student of history, maybe i could but when i look as an investor, i focus on what i can get my arms around. bonds are a really bad buy. lisa: how much do you stay away from energy at this point given how fully priced people say it already is? even as oil prices increase yesterday, energy stocks fell and people expected it to become a self-limiting cycle of price rising. >> i would say energy is one of

our highest considerations at federated. it's been the only positive sector this year so i wonder if people want to take money off the table. i read recently that the price of oil has pierced through a 14 year downtrend. maybe that means it's going toward $114. if you are worried about inflation, energy is a good idea to be invested in. if you are bullish on global economic growth, which we are, energy is a good place to be invested. if you are looking in an area of the stock market that's a tiny part of the s&p 500, you might not have enough energy in your portfolio. seems like a good place to invest some of your money, relative to its long history. jonathan: thank you very much for being with us.

an important date in moscow, the foreign minister of moscow meeting with his counterparts from germany. looking at the headlines, troops are partially returning as the drills have been completed. you say russia is beginning a pullback and implies a process has started and that implies it will be complete. the only thing we can say is the troops are partially returning from drills. the german chancellor olaf scholz will meet with his russian counterpart in moscow. i guess we have to look for further headlines? tom: russia says pullback begins and then you go to the washington post and 20 minutes ago, russia said tuesday more than 30 of its naval vessels were carrying out live fire exercises in the black sea. i want to emphasize that it's a cacophony of headlines right now even as the screen tells us the

market likes what it sees. jonathan: we have to work through some issues today and a whole lot longer. lisa: the fact that you see a whipsaw in pricing action given the fact that we are getting headlines that are cloudy tells you everything about the lack of conviction. i was struck by yesterday's action in the energy stocks. energy prices increased in energy stocks fell, that was curious. tom: february 15, roses go on sale today. jonathan: you should turn up with those. 1.4 percent on the nasdaq, from new york, this is bloomberg. ♪ ritika: keeping you up to date, some russian troops are fulling -- are pulling back.

that's according to the russian defense ministry. the troops have completed their drills and the u.s. still warns of a russian invasion. germany's chancellor is in moscow to meet with vladimir putin. demonstrators against vaccine mandates hold their position at two major border crossings in canada. prime minister justin trudeau wants to end the blockade. the border has been closed and commercial traffic to the u.s. has been halted. the european unions top diplomat says he strongly believes that global powers should reach a compromise. he says iran should show their

true intentions. the trump accountants sever ties with trump. one company is stepping up reduction in chip manufacturing. global news, 24 hours a day on air and online from more than 2700 journalists in more than 120 countries. this is bloomberg. ♪

♪ >> we have not seen any tangible signs of de-escalation. we have been consistent that we want to pursue diplomacy and we want to resolve this through dialogue and diplomacy and communication. we hope the russians have a similar willingness. jonathan: the u.s. state department spokesperson, the market has improved. future is down by 1.5% and the nasdaq up by two percentage points. crude oil is lower 3% on wti. i think we just read the headlines verbatim from sarah guy lavrov that some troops have

partially returned from drills. tom: it's a choreographed set of headlines out of russia. we will bring those to you across the bloomberg services. we have less angst today. you mentioned oil at $2.89 and gold is at $13 so they are correlated to better news. it's important to show sound with voices. what to do learn from leon panetta yesterday? >> vladimir putin is just looking for a crack as he meets with the new chancellor of germany, any crack in the alliance is these guys sit down and start talking about issues that could lead to a very different outcome.

i applaud you for your restraint today. this is changing as we speak and unless you are on the ground there, it's difficult to know what's going on. headlines suggesting arsenal withdrawal tempered by this news and the washington post, 30 ships and the black sea right now complete with air cover as they prepare for what's being described as a major naval exercise. russia has about 40 ships and the plexi altogether and 500 combat aircraft are still currently within range of ukraine. this day could go in several different directions. tom: what you are good at is the measurement of an ancient phrase which is show the flag. the nato flag was shown at an air base in romania and number of days ago. do you see any prescription of how america will show the flag? >> that's a great question because we have been doing this as an alliance, as nato. this really may hinge on what

happens today with the way germany conducts itself. imagine being president biden sitting in washington while emmanuel macron meets with via mayor pugin and olaf scholz meets with vladimir putin. you don't always have a lot of control over this. is he going to mention nord stream 2 in this meeting or in public after the meeting? those are the questions we have this morning. lisa: there is a question as to whether this is exactly what vladimir putin wants with a string of top leaders from around the world coming to kiss his ring and make peace with him. is this the goal and why would he have any incentive to de-at this point? >> other than the expense of keeping 130,000 troops and that a man we just described on the order, maintaining troops in a combat ready position is a very expensive and very concerted

endeavor. we are talking gasoline, food, feeding that many troops is an incredible outlay for russia and they are watching money go out the window. is he getting back what he wants? yes, he's getting a lot of attention. we spoke with the retired general last night was had vladimir putin is looking for off ramps and we may see one right now. the headline could be vladimir putin veering off the highway. lisa: what has he already won? >> he's one attention. he wants to be a factor in the world, not to be overshadowed by china or other emerging economies as he tries to envision the old reach and power of the soviet empire. this is vladimir putin and a lot of leaders are meeting with him. jonathan: thank you.

vladimir putin has exposed division in a big way. lisa: frankly, it's splitting the world powers and putting up how expensive it is to keep troops there. how much will is there in the united states to throw money at troops and have them positioned in eastern europe to potentially be better positioned to combat russia? jonathan: also exposed to divisions between corporate italy and corporate germany. lisa: the idea that when it comes to trade and oil and basic industry, companies are voting with autocratic leaders rather than the democratic leaders and it will be a big problem going forward. jonathan: sergei lavrov making

headlines this morning saying some russian troops are returning to basis today. tom: away from nato and part of the tension of a nato debate is this phrase which is in international relations. it's the near abroad. vladimir putin's focus is not just on ukraine, it's on the millions of russians of the former soviet states and those adjacencies, the territories directly adjacent to russia. that infects every single conversation you will hear from him. jonathan: is it a baptism of fire for chancellor olaf scholz? tom: i'm not sure what the reset will be. what's important with chancellor

merkel is not the same as the new guy on the lock and they will be an adjustment to the message given the baggage back to world war ii. jonathan: he has inherited some problems on the domestic front. lisa: not only his he dealing with inflation but he's also dealing with their dependence on autocratic nation that will use that as leverage. why isn't there more being discussed about investing in infrastructure that can move away from the fossil fuel? they don't even take green into account. jonathan: the commercial dependence on two autocratic nations, not just one. lisa: and this is the reason why they're using the division between the corporations and these nations and the government to their benefit and they can continue to do that.

jonathan: the mood in this market proves in a big way with a oz on the nasdaq 100 and the s&p 500. yields are higher by five basis points and crude is lower, down by 3%.

jonathan: we get a bounce on the s&p 500 and futures on the nasdaq are 1.9 percent. a bounce in equities and yields as the treasury market and the bund market are up to basis points. -- are up two basis points. when the story around russia moves to the side, yields want to go higher. germany is up another two basis points and we haven't seen this for quite a while in europe. it doesn't sound like much but in the context of what has happened in the european bond market, people will take it

going up. euro-swiss captures the tension around the story in ukraine. it's getting back to about 1.05 and crude is backing away. what is the perception now? it is perceived de-escalation in the last 24 hours. tom: there is a sense of de-escalation but i think everybody has their radar up from moscow to washington to kiev. the vix is at a 32 level at 26.35. the chief economist at wells fargo and has a number of years of experience. how is wells fargo recalibrating global gdp? i see a lot people on real u.s.

gdp, nominal u.s. gdp, what is your global statistics for growth? >> we are looking at a 4% number this year. to put that in perspective, you look at the last 40 years and take the average of that. 4% is above the 3.25% over the last 40 years. when you look at next year, we are looking at a below trend growth rate for next year. as we go into here, we think it will be a strong year for growth. tom: do you see the struggle within monetary policy being a struggle that will have stability of markets, strip -- stability of growth or do you see instability out there? >> i think it will be volatile for a while. the fed has a very tricky road

ahead what it's trying to do is keep inflation expectations in check and trying to show they are on the ball and they will raise rates to not let inflation get out of control but they will be tightening -- but you don't want to be tightening so much that you choke off the recovery. the ecb has moved to a more hawkish position as well. until we start to see inflation subside in the central banks relax a little, i think they are in a tricky situation and markets will be volatile. lisa: our markets underestimating the dynamics you are seeing with respect to the consumer and spending despite the university of michigan sentiment data which sometimes can be an outlier? >> i think they are somewhat of an outlier. it reacts more to price pressures than the labor market.

when you look at the underlying fundamentals of the economy, they generally are good. household balance sheet probably the best shape they have been in two decades. business balance sheet are also generally in good shape. fundamentals are good. how much of that spending shows up in terms of real economic data? and the interplay with the fed tightening on policy as we go forward. lisa: the threshold is people expect a deceleration in inflation with some people think is happening now. we don't hear how quickly inflation needs to come down to sustain that consumer spending. what are you hoping for? what is the bandwidth of outlook that you see in terms of how much in nation can go down or not go down and it could mean a bifurcated outcome for the u.s. economy? >> what i'm hoping for is at the

end of the year, a cpi inflation rate around 2% and i don't think that's going to happen. we are forecast at the end of the year to have the cpi inflation rate above 4%. what's happening here is service sector inflation is starting to pick up. housing comes in with a relatively slow lag. inflationary pressures in general could be strong we look for the consumer spending to accelerate over the course of the year. growth in consumer spending in the late orders of this year will be an indicator. tom: a completely unfair question here but you can do it. what does the cpi signify today?

remember when the world stopped for three levels of ppi statistics and it seems like we are back to that step does that matter? >> speak for yourself in terms of being a fossil. ppi generally measures is the good side of the economy. it's important but the good side of the economy in terms of consumer spending represents only about 1/3 of the economy. it's not a one for one transformation. it's important but there is much more weight to put on the cpi. tom: after what we saw with the bank of england and the ecb 10 days ago or so, how much of a

level is jay powell central banker to the world? >> the fed is still the most important central bank in the world. u.s. on me still the largest economy in the world the u.s. economy right now is feeding the world in terms of growth or at least the developed world and in terms of inflation. clearly, what happens in the u.s. is a big impact on what's happening in the rest of the world. i think the fed characterized as the most important central bank of the world. jonathan: thank you always. that meeting between chancellor schulz and vladimir putin has started about 50 minutes ago and getting some headlines from that as it was starting. it was broadcast on russian tv. russia has been an energy partner for a long time, the

russian president said and there hasn't in a few single failure from the supply in russia. there are absolutely no questions of doubts here. the focus on energy is there. tom: brent crude is 93.46. it's not $50 per barrel and i looked at the bloomberg commodity index. i'm sorry, i will not say it's a super cycle but i get the attention the commodity bulls are giving to the bloomberg commodity index and that's the backdrop of commodity russia serving those who do not have energy. jonathan: if russia did invade ukraine and western powers activate for county and sanctions, i would expect to see wti crude oil trade to higher levels. lisa: i think that underscores

the fact that you will see fluctuations that are so great because there isn't necessarily the flexibility with respect to the increase in production usually see when prices go up this much. there is a lot of uncertainty especially with storage facilities low on supplies. there is uncertainty about how much demand will pick up and you get these ranges from 150 down to 60. it's all over the place. jonathan: crude oil markets are already tight and russia will take that tightness and the price level to the next level. that's the fear around the story. crude is lower by 3.3% now. wti is 92.13. tom: we are a hold into the headlines. the panic yesterday has given us better statistics today. i would suggest it's multiple

fronts of one thing, what diplomacy does which is drive with control and with containment a dialogue forward. the key attribute here is how we allow mr. putin to save face internationally and critically, domestically as well. that's what ned price at the state department said as well as others. jonathan: looking at the bond market, yields are up on tens by five. the conversation around the fed except speed tomorrow with fed minutes that gets squeezed into this week. tom: i am worn out by fed speak. jonathan: are you fed up with the regional fed presence or the lack of leadership with jay powell? tom: i am fed up with jay powell not saying there is enough.

i understand there has to be a modern communication but it's out of control. jonathan: if you want him to get control of the narrative. tom: i will leave it to the pros and historians, people like lawrence summers and david blanchflower. these pros have to figure out what modern communication is. it isn't what we've got now. jonathan: someone has to fill the space and the regional fed presidents are filling it all . lisa: how do you take hold of a narrative like this? jonathan: and one that's gotten away from you? lisa: it feels so uncertain. jonathan: futures are up 1.4%, from new york, this is bloomberg. ♪ ritika: keeping you up-to-date with the news around the word -- around the world. russia announced that some of

the troops involved in drills have started returning to bases. the military exercises had raised questions about a possible attack on ukraine. u.s.'s continuing conversations with china despite beijing's failure to live up with trade agreement. that process could soon come to an end. the biden administration's of schulz considerate unlikely that china will make any further concessions. china is not buying the amount of american goods they had agreed to. overwhelmed by a corona outbreak, there is no indication of a lockdown to bring that numbers back to zero in hong kong. five point -- $5.7 billion was -- of tesla shares were given to charity by elon musk.

the world's top tennis player says he will not get a coronavirus vaccination. he says he's willing to sacrifice trophies and skip wimbledon to avoid a covid shot step he said freedom is at stake. global news, 24 hours a day, on air and on bloomberg take, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪

♪ >> as far as hong kong is concerned, we need to find our own way.

we have no plans for any widespread city lockdown as you have seen. jonathan: the hong kong chief executive. from new york, futures are up 1.5% on the s&p and the nasdaq up 2.6%. tom: i thought you were going to do a j norma's data check. --ginormous data check. we will get a 25 vix in a moment and that is good news. there is good news on the pandemic. i watch the moving average of the deaths and the answer is it's very good news. and yet, good morning.

i want to talk about reinfection in the duchess of cornwall camilla is reinfected and prince charles is reinfected and a good of america seems to face reinfection. the unvaccinated get more reinfected. what do we need to know this morning about getting covid a second or third time? >> when it comes to coronavirus, the reinfected how they survive. they reinfected us -- they reinfected is routinely. the omicron variant can get around some of the protection our antibodies provide. seems to be reinfection's will be more common in people not vaccinated because when you look at what's most protected from hybrid immunity, reinfection's are not to worry about if they are mild. they are to be expected and we

have to move the focus to severe disease. to make sure your reinfection is mild, it's best to have the hybrid immunity and be someone who has been vaccinated after your infection. tom: as an amateur, reinfection is normal within endemic pathogens? >> that's the case and that's what the other coronavirus is due routinely. we can expect the reinfection's to occur and be generally mild especially if they occur in someone vaccinated and has had prior immunity. we shouldn't panic about reinfection's. all of us will get this coronavirus probably multiple times. but they will be mild because who got these tools to deal with them and make them more likely to be like the other viruses that cause the common cold.

lisa: the world is moving on with the exception of china and hong kong. the chief executive of hong kong spoke at a briefing this morning and set the scale of the virus has overwhelmed our capacity in the fight against the pandemic. what kind of visibility do we have with the spread of the virus but the potential variants that could emerge with those who don't have the protections were talking about? >> this virus will continue to generate new variants and it will likely occur in low vaccination populations where the virus doesn't have much to check its spread. china is a place where they don't have a lot of natural immunity and their vaccinations have not been the best and they been using lockdowns instead of the health guidelines. places like hong kong and china and much of the developing world will be a continual place where new variants emerge and that's

why it's important to get the first and second doses if we are going to be resilient because there will be more variants. lisa: how much visibility do we have in terms of tracking any variants that come up so we don't get blindsided by another one? this is one of the criticisms when the pandemic was spreading rent and you wonder if that's an incubation for something to happen again. >> we don't do enough surveillance of variants. we see the tip the iceberg. many places don't sequence even in the united states. we do a moderate level of sequencing so we miss a lot of variants that are emerging but we are getting better. it has to be a major priority because if we stay abreast of this virus, we need to adjust our vaccines. all of that will require more

situational awareness than we have. as we try a sustainable approach, we need high levels of sequencing capacity around the world so we are not left in the dark about what's circulating. jonathan: thank you and good to catch up as always. we are trading on some news by the ironic statement from the ukrainian president which is incredibly difficult to read for any market participant. to say it is one thing but then to write it out in a separate meeting was bound to get the wrong kind of attention. lisa: he expected the attack to happen wednesday? jonathan: something like that. lisa: how does an algorithm trade off of that? jonathan: they cannot read sarcasm. it's a serious moment.

we are going on headlines from sergei lavrov. beyond that, there is a meeting with the german chancellor and president vladimir putin. tom: look for the headlines on the other side and it will lead to a reaffirmation for markets. with the vix trying to get under 26, the nasdaq305, up 2.5% is an improvement. jonathan: drain some of the drama away and futures are higher and yields are higher. 10 year treasury yields are breaking out in a bit of a lift on the two year yields, up five basis points. we are getting comfortable at the moment. lisa: which is shocking considering many people did not see this happening until the end of the year and many people

shrugged this off as an impossibility in the near term. i'm struck by the nasdaq outperforming when yields are continuing to decline. the bank of america survey comes out and many are at least allocated in tech stocks. have we seen recapitulation? jonathan: we can discuss that manager survey later. bearish but not extremely bearish seems to be the takeaway from the bank of america survey. tom: it's the parlor game we are in and trying to get away from russia-ukraine and the geopolitics. ppi is secondary but at this point, secondary data points matter on the continuum of getting to the jobs report and onto march 11 and 12. jonathan: any read the data can

provide us will get attention. tomorrow, we get minutes from the federal reserve meeting. i wonder what they will be a platform for? futures are up, from new york city, this is bloomberg. ♪

♪ >> right now, it seems have -- it seems as if inflation has nowhere to go but up. >> we've got a hot mess here. >> inflation is a front and center problem. >> the last thing the fed wants to do is to reach policy to aggressively, flatten out the curve and lead to a recession. >> this is bloomberg surveillance. jonathan: there is a big bounce in this market, from new york city, good morning, this is bloomberg surveillance live on tv and radio. at one point, 5% on the s&p 500 and the nasdaq up as well. tom: it's a perception shift. we will monitor headlines as we

a