♪ >> the market is pricing and today what is going to be a transition year for the economy. >> i think it is going to be a volatile for a while. >> we have a more volatile market environment. the optimum value of cash increases. >> investors also need to be patient to figure out what is going on here. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, across this nation, we welcome you. retail sales in 30 minutes. an important consumer metric.

the buoyancy of this economy. the destruction of ukraine, russia, and washington. the secretary of state moments ago with a statement. jonathan: let's get to that statement. i will read it out verbatim. "the russian duma has stated it plans to send to president putin an appeal to recognize the peoples were publics is an abundant. it goes on to say, to be clear, this would amount to wholesale rejection of commitment send the minsk agreement's, which outline the process for full political and social integration of the ukraine region controlled by russian led forces and political proxies and's 2014. enactment of this resolution would further undermine ukraine's sovereignty and territorial integrity, constitute a gross violation of international law,: to further question russia's engagement in diplomacy to achieve a peaceful resolution of this crisis. tom: very direct. you wonder, after what we saw on the press conference yesterday,

how moscow will react. i listened to that press conference off of c-span in translation. mr. putin was direct as well, so maybe this is the beginning of where conversation actually starts. jonathan: that statement ends with saying that if the president did that, it would necessitate a swift and firm response from the united states in full coordination with our allies and our partners. tom: we will have maria tadeo dissect this through the morning. dow futures -61. i see a bit of a market move here. jonathan: we are down about 0.2%, just a bit softer. on the nasdaq, off by 0.25%. retail sales in america down a basis point to 2.03 47%. crude higher by 1.3%. no big changes here as far as i can see. just a subtle, softer move lower on the s&p tom: you see that ash

on the s&p. tom: you see that with the -- on the s&p. tom: you see that with the swiss franc as well. on radio and television, we welcome brent schutte, chief investment strategist at northwestern. this is long-term money. is three years short-term for brent schutte? brent: certainly we try to navigate the markets for our clients. we look longer-term but it just shorter term. we do see and lesion pressures receding despite backed out of that shows inflation is lying. i think you will see inflation cooling in 2022. that is going to be an impetus for a move higher in markets. tom: what is the opportunity, given hysterics? brent: that is a good question because you have seen sentiments hour. if you weeks ago we had a bullish survey of 21. it has only been lower than that 58 times back to 1987. 50 six of those gave way to future market returns that were

higher. i think that is whatever and always says, climbing the wall of worry. lisa: using that as the threshold, that it has to be a recession in order to tank market valuations and not just a deceleration that is more than people currently expect? brent: that is what the data would suggest, looking at history. certainly if the economy is higher, the market is higher. there are nuances within that, but if the economy is still push the word, i would suggest the market would be higher, but i think it is in different areas of the market that have valuation cushioned. if you think about the s&p 500, it has a 5% earnings yield. the s&p 600 has a 7% earnings yield, which is a bigger cushion relative to rising just rates, and i think where investors should focus in 2022. focus on the here and now earnings, not those that are far out in the future. lisa: can you do that if we have

already brought forward some any of our earning expectations? this is already conundrum if you have valued profitability based on that interest rate. all of a sudden, it is a higher bar to cross. the oxygen is getting thin. how do you .2 earnings revisions that have been downward the great payson years -- at the greatest pace in years? brent: certainly is accelerated by the offset of the covid recovery we have. i don't think that is going to be the death knell for the stock market. typically, a stock market decline is a recession. i would think the only way we would have a recession in the next year would be if the federal reserve had to get really aggressive and had to hike rates because expectations became on more. the five year-five-year forward is at 2%. even though we keep making

comparisons to 1980, that was a very different time. certainly there is risk, but i do think you are going to see a market pushed higher, and just for perspective, that 7% earnings yield means those stocks are trading at 14 times earnings, which is historically cheap, not just relatively cheap. tom: this goes to the clientele, the corporate and business nature, the commercial nature of northwestern mutual. what is the response you have to a fully employed america? brent: i am not sure we are fully employed yet. i think you will continue to see people come back in the labor force. i think there are risks, and this is where in the second half of the year become more cautious because you could be getting back to where we were in 2019, which was closer to full employment. i think we have four to 5 million people to bring back into the labor market. you have seen 1.4 million americans in that january jobs report come back.

you have seen companies suggesting it is not as hard to find workers, and that coincided , the peak in that, with the benefits that expired in september. so i think we still have room to go. i am more worried for the back half of the year, but then i think it is a profit ability story that carries forward. tom: the profitability story does include a labor component. if wages lift, how does the fed react, and how to set rebound onto people's portfolios and investment? brent: as you get towards the second half of the year, if wages aren't rising because we are running out of employment, or employees to hire, we need productivity to keep up with wage increases. if those actually pay fruits, then we are good. if not, we could be in more trouble, and 2023 could be a year what we are talking about the end of an economic cycle.

i think we still have room to run. i think there's positive news on the horizon, so we are still optimistic as we look at the first half of 2022. lisa: are you hedged as you invest more fully into the russell 2000? brent: we are not in the russell 2000, so i think there's a difference there. our conviction has certainly waned. in april 2020, we went back to overweight equities. we still want to own equities versus fixed income, and we have a tilt towards things that are cheaper, the value style, things of that nature. i should note that the market is certainly off, but most of the damage has been done in really high growth stocks with earnings far out. i expect that to continue. jonathan: brent schutte, thank

you very much, of northwestern mutual. picture this story. steve schwarzman wants to be your landlord. this is the paragraph in "the wall street journal." "blackrock has agreed to buy an apartment owner and a five point it billion-dollar deal that demonstrates strong investor demand for multifamily properties. atlanta-based preferred apartment owns over 40 rental apartment properties, was about 12,000 units in states including georgia, florida, north carolina, and tennessee." joel murphy out of the south, i have known the name for years or you he's out of chapel hill. this is a real southern acquisition by blackstone. it speaks to multifamily, but i would really emphasize the name is a little deceptive, and that preferred apartments does more than just apartments. it is played much -- it is pretty much a blended real estate acquisition from steve schwarzman and others buying up

apartments from sea to shining sea. jonathan: as i read the story, they also own 54 shopping centers as well. how long before this becomes very political in a big way? lisa: it already is. take a look at rents climbing at the fastest pace on record in many cases. they are not slowing down. they are accelerating. you hear anecdotes about first-time homebuyers being bid out before they can even get into see apartment because of these institutional buyers. at what point is there some kind of pushback, and can we calculate how much of a bid to give the housing market that is just on fire? tom: the key phrase is is on fire. in my walk up, there's an apartment down the hall. we could live down the hall from each other. jonathan: we used to.

tom: there's an apartment that just went up $500 in rent off of a year or two years ago. granted, it is new york city and it is a walk-up, but those are the metrics. everybody watching and listening is feeling it right now. jonathan: they are going up in a big way. to higher interest rates change this, or is there a rush to do more of this before they actually start going up? lisa: a lot of people look at rental properties at an -- look at rental properties as an investment, as inflation hedge. at what point does become a soulful filling prophecy? jonathan: blackstone to buy preferred apartment communities in a five point billion-dollar deal. lower by a basis point to 2.03%. from beautiful new york city, with the sun rising, and about 20 minutes, retail sales in america.

from new york, this is bloomberg. ritika: keeping you up-to-date with news from around the world, with the first word news, i'm ritika gupta. russia has announced more troops are returning to their bases after moves in did in crimea. nato's secretary general says there's no proof of de-escalation on russia's part, and the current one has not announced pullbacks of large numbers of troops along the ukrainian border. moscow has rejected warnings it is planning to invade ukraine. in the u.k., inflation on a spec italy accelerated for the fourth month in a row, a surprise that adds pressure on the bank of england for a supersized rate increase next month. rice wears in january rose to 5.5%, a new 30 year high. it is a standoff in the senate banking committee. republicans on the panel blocked votes of president biden's five picks for the federal reserve. the dispute has to do with only one of the nominees, sarah bloom raskin, the nominee for vice

chair of supervision. senate banking chair sherrod brown says he will reschedule the votes. china's president xi jinping has ordered hong kong to get the city posco run a virus outbreak under control by all necessary means. the intervention could lead to stricter measures and possibly a broader lockdown. it comes after hong kong chief executive carrie lam said the outbreak had overrun the government. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ i'm ritika gupta. this is bloomberg. ♪

♪ >> let me say first of all that our hope is for peace. if tanks were to move across the border, we are prepared to levity most severe sanctions on russia in its history. jonathan: from new york, with tom keene lisa abramowicz, i'm jonathan ferro. we are down 0.2% on the s&p. in the last 20 minutes or so, the state department laying out a plan of what they would do to respond to the president of russia if indeed he recognized ukraine's separatist provinces. he said it would constitute a gross violation of international law. sick or terribly can went on to say it would necessitate twist and firm response from the united states, and full coordination with our allies and partners. tom: extraordinary, and we don't

have enough time this morning with greg valliere. his morning note read in all of washington. i know there's other topics at hand. an absolutely stunning, direct statement. does it garner bipartisan support of congress? greg: i think so. i think most republicans headed by lindsey graham will go along with this. there would be some sign of conciliation on both sides. since if? of afghanistan, it seems like this administration has gotten a testosterone implant. they are talking tough. tom: putin always once a bilateral discussion. does mr. putin speak to america separate from the allies? greg: may be, but i think the

intermediary to watch is macron, who has his own election to worry about in april. i think macron will be a good middle ground seeker. he will talk about security for russia without sounding as strident as either putin or blinken. jonathan: how important is china in the mix here? greg: it is huge. if this ends badly in ukraine, everyone will start talking about taiwan. with the olympics over in three or four days, i think that we have to look at the rhetoric coming out of beijing. jonathan: just getting a headline that macron reminded xi of the importance of ukraine's sovereignty. these will have domestic implications. the oil story, the energy story is pretty obvious. there is something typically you and i will be covering almost every 15 minutes, the fed picks. we are not talking about it. the republik and's aren't picking a fight with the president on the foreign policy

of the moment. they seem to be in agreement on the approach of this white house. they are picking a fight on the fed picks, more specifically, sarah bloom raskin. how do using this has evolved through the coming days and weeks? greg: i think four of the five get confirmed, headed by jerome powell, but i think the controversial pick of sarah bloom raskin, i think she's on thin ice right now. it's got very little to do with this company she worked for in colorado. it is all about the fed's mandate. there are republicans who feel it has exceeded the mandate, which really stipulates only that we have stable inflation and full employment. she has gone beyond that on environmental issues. lisa: so she has gone beyond that with environment to issues, but is there a clear message from senators willing the fed nominees about what they want the fed to be doing, how much they want them to be aggressive with was back to inflation? greg: aggressive in terms of inflation, yes. the other issue i think has to

be considered is how aggressive this administration is going to be on regulatory policy, headed by gary gensler at the sec. if you have sarah bloom raskin confirmed, you've got an environmental climate that republicans and businesses are not going to like. lisa: i was thinking of the block trading crackdown we have seen recently. is that something that resonates among voters? i am trying to wonder as we get this potpourri of issues of democrats trying to get out from under the main issue, which is inflation, what is sticking. what are the posts as we had to midyear? greg: if they start talking about revelatory reform, people's eyes will glaze over. i think if we don't get all of the confirmations done for a while and sarah bloom raskin has

to withdraw, that is not going to resonate with the american public. they want to see tough talk on inflation. tom: do any income but democrats remain in congress? -- incumbent democrats remain in congress? greg: we went up to 30 yesterday, as we know, 30 numbers of the house not coming back. you've got several senators in trouble as well. so they will grasp at straws. they will be -- they will may be in the gasoline tax for the rest of the year. i think people will acknowledge that and most importantly, environmentalists will go bananas. this is something the environmentalists would strongly oppose. jonathan: final comment on inner-city crime right now. how did they start to on this in a better way? greg: you've got inner-city crime, illegal immigration,

inflation. there are so many issues right now that cut against biden that the bottom line is not only will the house go to the republicans, the issue is by how much. it could be 20, 25 seats, may be more. jonathan: greg valliere of agf investments, thank you. that last issue a massive issue at the moment. tom: it is february, which i can't believe. it feels like may or june. but what is so important here is this midterm. to me, it is all starting way earlier than anyone expected. jonathan: let's start with the economic data. it is the calendar of economic data on their side? the good news is the midterms are near the end of the year. lisa: they are expect it to be on their side, the calendar dates, expecting deceleration in inflation. i think this has been the big issue, and the reason why ppi data we got yesterday was quite interesting.

how much are people saying it is not transitory, but it is going to fade? jonathan: that is why others are looking for 50 basis points on march 16. i can see michael mckee ready to go to break down these retail sales numbers. tom: to be honest, it is sort of like the jobs report. beneath the headline data, it can be very valuable. jonathan: this is how the stage is set five minutes out from retail sales in america. futures come in a couple basis points, down eight points on the s&p. on the nasdaq 100, we are down 0.2%. in the bond market, yields are in a single basis point to 2.039 percent. crude is higher by 1.2% to $93 $.18. the numbers you need to look for, the retail sales control

group. the estimate, 1.3 percent. the previous read, -3.1 percent. month on month, the headline number, looking for 2%. the previous read, -1.9%. the numbers just around the corner. this is bloomberg. ♪

jonathan: the main data point of the morning just seconds away, retail sales in america. michael mckee ready to break that down. futures going into it. yields in one basis points on tens. michael: retail sales, a strong advance in january, big rebound from what we saw in december come up 3.8% on a headline basis. it was down 1.9% in the prior month. ex autos and gas up 3.8%, the forecast was for just 1%. the control group you mentioned, economists watch this, that is up 4.8%. it was down 3.1% in the prior month.

it looks like americans are still spending. it has been the story that with the follow-up in government payments we would stop spending. it looks like we are still spending money and retail control is interesting. that does not include gasoline. gasoline prices went up eight. jonathan: futures stay lower, down .2% on the s&p and down the nasdaq by .25%. what didn't her hire was treasury yields, and alan j -- what did turn hire was treasury yields. one basis point higher on the two year yield. nothing stopping the federal reserve from hiking. that is a nice upside surprise on u.s. retail sales. tom: let's detail this to what we hear from had speakers. the most interesting comment is

the president of the st. louis fed believe in optimistic real gdp. bullard is up here at 3% or 4% for the year and a lot of other people are at a lower statistic. does this kind of data buttress the bullard optimism on the american economic experiment? tom: to an extent -- michael: to an extent it buttresses it going into the march meeting. it does belie the story i was talking about that we would see depressed spending going into 2022. let's take a look at some of the numbers that did go up. motor vehicle parts up 5.7%, which is a nice rebound from what we had seen it does suggest maybe cars are getting out there. furniture and home furnishing stores, housing has been huge. a 7.2% increase in january is significant. building materials and garden stores, 4.1%.

housing and construction doing well. grocery stores up 1.2%. here is the surprise. gasoline stations down 1.3%. these are calculated in dollars. if you look at the price of gasoline it went significantly higher in january. in december it was lower. it was down in terms of retail gas prices. the number of dollars spent on gasoline down 1.3%. lisa: can you understand the idea of retail sales david hotter than expected, how do you pair that with university of michigan consumer sentiment survey coming in with the weakest readings back a decade or more? michael: the easiest thing to do would be quote alan greenspan who once said we watch what people do, not what they say. those numbers show people thank the overall economy is terrible

but their own economic situation is pretty good. there seems to be a dichotomy there that may be driven by us in the news media. let me mention -- tom: why are you looking at me? [laughter] michael: non-store retailers up 14.5%. that could be gift cards. everybody is giving gift cards and those do not cap as retail sales until they have been spent. we will have to take this apart more but there could be a reason. jonathan: in case anyone missed the conversation, just wrap this up. does this capture price or volume? michael: this captures price. the 3.8% change in retail sales would also be something you would have to adjust for inflation. we will have to leave that to another moment. jonathan: thank you. lisa, that is a point you have been on top of. lisa: peter cecchini noted this

is a key issue. if you strip out the inflation pressures, in addition to revisions downward in december, that does not look as hot as the headline might suggest which might explain why you're not seeing a big reaction of the bond market. jonathan: just a bit flatter. tom: the curve flattening, 47 down to 46. subtle is the word for the day. a lot of subtlety going on on the bloomberg terminal. simona mcuta joins us. my question is does this kind of data assist you in deciding when inflation breaks? if we are at a high level of inflation, the game is a guesstimate of when it starts to roll over. does retail sales help with that? simona: i don't think so.

what i see in the data is a lot of month-to-month volatility. the january numbers were strong but put those against december and you get something much milder. that is how you gauge the trend of this economy. i do not think retail sales will help you with the inflation question. -- when we will see meaningful signs of inflation deceleration. it seems we are pulling on the strength and as time goes by, i will lose hope. it is possible when the change occurs it occurs quite solidly. you go from nothing is here to plenty of evidence of inflation accelerating. tom: what is the linkage between inflation and onto a growth estimate? simona: is very simple. it is a basic concept.

the higher the price come the fewer the quantity sold. high inflation, think of it as a demand headwind. you can offset it if you have persistent income flow to absorb that inflation destruction or income destruction, but even of itself high inflation will lead to lower growth. lisa: are we seeing that is not coming to the for the way a lot of people are expecting. we are talking about sentiment deteriorating but it does not seem to be dramatically crimping purchases. at what point does that start give you a sense maybe that narrative is not working? simona: the narrative works, the time he not work precisely. the reason it does not work precisely is because you have a consumer with a huge amount of

accumulating savings. you do not need to have our demand response immediately. you can draw down those savings. that work for a while. eventually there will be a demandeventually there will be a demand response. it may not be apparent until the second half of the year. let's not forget in today's data you have the strong help, there still a lot of pent-up demand in parts of the spectrum. this is the tricky spark -- the tricky part, trying to dissect the real message. you cannot take any single data point -- put too much on any data point and take a view this is over the year and not for the next month. lisa: what about the fact we have not necessarily seen inflation decelerate or give signs of peaking the way people had expected. how high does that mean inflation could go?

how much are you revising your estimates about the trajectory of this cycle? simona: it has been a tough journey. i think the inflation revisions are still upward as of this point. i think what you are starting to see is leading indicators of returning inflation, things having to do with shipping costs , having to do with expectations of inventory buildingsee is leaf returning, things having to do with expectations of wage increases. in the small business survey you had conversations of current wage increases but compensation decelerating. this is all you see at the moment. it is not even in the inflation data. it means in leading indications of inflation your start to see something. jonathan: simona mocuta of state street global advisors.

thank you are much. at the top of the hour, fantastic line up on fixed income. subadra rajappa, bob michele of jp morgan asset management, and matt hornbach of morgan stanley. looking forward to a fantastic conversation about this economy and the central bank. tom: no question better than anything we did this morning. beside that, these are people who have to adapt and adjust. we launch into march and everybody will have to recalibrate. what you recalibrate to? jonathan: you see how quickly they took that promo down when you said that? that is not true. loads of great stuff. pgim and mike collins had a lot to say. lisa: what he was talking about the 10 year treasury that got my attention and what you are seeing is an inverted yield curve. you're getting more yields from 20 or treasuries because they do not have liquidity. i want to add this one thing.

the federal reserve. buying bonds for its assets in march, march 9, including for the 20 year notation -- rotation. that could lead to huge disruption in the market that is not dated the same kind of traction. tom: the great matthew mitch at ubs says credit looks good now, and then what? his thing -- his then what is this fed has to keep walking up tight rope. the area where lisa is familiar, ccc. jonathan: the junkiest of junk? retail sales is massing green. the fed is ready to go in the middle of march. from new york, this is bloomberg. ritika: news from around the world.

investors will get fresh clues on the fed's next move minutes from last month policy meeting will be released as speculation the fed may act more aggressively to get the highest inflation in 40 years under control. that could include a larger than expected interest rate hike. the bite administration says new trade tools are needed to confront china. the u.s. trade representative's office says china's model has harmed american companies and workers and accuses china of failing to keep promises to pursue market oriented policies it made to join the wto. eric said may have made payment -- erikson may have made payments to i set to gain access to certain transport routes in iraq. ericsson says it invests in an investigation into its iraq oppositions -- operations.

the goldman sachs offered says the office is valuable -- the firm will not create jobs that can be done from remote locations such as jackson hole, wyoming. stanford university edged out harvard at the biggest fundraiser in the u.s.. 10 million more than harvard. they were the only two u.s. schools over $1 billion. 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. ♪ schools over $1 billion. 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. th

>> people around the world are retooling. in america do you think ford

motor company and general motors, which have completely retooled and are retooling their factories to build electric, they will suddenly cite no object is not the future? electric is the future for automobiles all around the world. tom: john kerry, former secretary of state and the u.s. special envoy for climate. thank you bank of america and brian moynihan on climate. i was thunderstruck how statistically well-informed the senator was. it is massachusetts. i kill -- i still call him the senator, how the senator was informed legitimately on climate. peer-to-peer conversations with david rubenstein. i was thunderstruck how this guy did not mail it in on climate. is that what you observed? david: he knows his stuff cold. most people when they finish being secretary of state never

want to go back to government because any position would be less significant. he is so interested. he came back as a subordinate to the secretary of state. not as significant as the soup -- as the secretary of state who used to be his deputy. now tony blinken is secretary of state and john kerry is in the state department. he wanted to do this because he really cares about climate change. tom: we have other topics, but one more question on john kerry. he is big-time frustrated over where we are. headlines today, water will rise two or three feeds. baltimore's camden yards will be flooded. climate change is going the wrong way. david: we have had a lot of problems with climate change. people recognize it is here, but the truth is it is nothing we could do overnight that will change the situation. it will take years. that is why we talk about standards we are talking about things we can do by 2050.

there is a goal to be net zero in terms of emissions by 2050 but it will take time to get there. tom: secretary blinken speaking on msnbc, no evidence of a russia pullback. lisa: i know john kerry did want to talk about the climate change issue. he was a former secretary of state and tony blinken was his disciple, which leads us to understand some of the framework as to how they have grappled with the situation. to the degree we have gotten rhetoric out of tony blinken giving a threat that if this region of ukraine gets recognized as independent by russia, that is a game changer and necessitates a response. how do you think about that in terms of gaming out the potential for an escalation or de-escalation? david: this is reminiscent of what george herbert walker bush did in the kuwait war. he put together a coalition and in the end the allies were so strong there was no chance for

saddam hussein to prevail inchoate. right now the allies are so united there is no chance vladimir putin can move forward and not realize there will be a big problem for him. at this point my view is he is looking for a graceful way out. diplomacy should focus on two things. how can we give him a graceful way out and not brag about what happened? we want to do what george herbert walker bush did after the berlin wall fell. he did not trumpet what he had done. he was graceful. he gave a face-saving way out for gorbachev. that is what we need to do with vladimir putin. tom: my father told me they hid the miss -- the newspapers from me during the cuban missile crisis. the team had to allow khrushchev to save face. what did we learn then that we can apply now? david: we did give him a way out because we gave him something. we gave him missiles to turkey,

we said we would pull those out. we did not brag about it in the way we have to do in the future as well. we should not be saying we just beat vladimir putin. we do not want to do that. what you want to do is say we have an agreement, it is good, and both sides won. that is what he needs to do as president of the united states and what joe biden is doing. lisa: from an exit -- from an executive perspective, i wonder what your feelings are with these rising geopolitical tensions and how to prepare for sanctions or how to prepare for a shift in the regulatory landscape? david: no one can prepare for these kinds of things because the regulatory landscape changes so quickly and in the private equity world do tend to be a long-term investor. there's no doubt firms like ours have shorter-term investments. there is no perfect way to do

it. anytime you do a long-term investment or short-term investment the private equity world do tend to be a long-term investor. you now look increasingly at geopolitical risks in the united states and abroad. this risk this one people are taking a strong look at. we recognize it is likely energy prices will go up if vladimir putin were to invade, but energy prices should go down if we come up with a peaceful resolution. lisa: the news flow has been dramatic. the wall street journal is reporting the justice department is pursuing a wide-ranging probe of short-sellers, including carson block, prominent short seller who received a subpoena. from your perspective, what is your view on some of regulatory crackdown we are seeing right now from this and ministration? david: i would not use the word crackdown. i would say the chairman of the sec thinks there should be more disclosure of hedge funds and private equity fees, no doubt there will be comments about that. it is important everybody who invests in these funds that does

have good information and fee should be disclosed that a not think anybody should be against that. that to be worked out to everybody's satisfaction. tom: let me bring it back to your conversation with john kerry. here is a guy who has devoted years and years of public service and now he is dealing with something that appears intractable as well. what is the john kerry agenda to get something done in the coming quarters and years? david: john kerry is 78 years old. he is not somebody at the beginning of his career. why does he want to go back and work on this issue? because he seriously cares about it and thinks he can make a difference. everybody wants to have a legacy. he thinks his legacy will be related to climate change if he can get some agreements. tom: i am running out of time. what can you with all of your advantages and your firm do to assist in water or the broader

scope and scale of drought management? you have meetings on that? david: we have a large esg program which means environmental, social, and governance. all of the companies we look at, we care about this. 30 years ago we did not care about esg. mallory but he cares about that. when we buy -- now everybody cares about that. we try to do things that will make the environmental practices better than they were before. tom: david rubenstein, thank you so much. peer-to-peer conversations with john kerry tonight at 9:00 eastern time. the news flow is so busy on the terminal, i barely kept up with the headlines over the last two minutes. lisa: the biggest take away this morning is on the surface it looks like retail sales came in hotter than expected. as people adjusted for inflation it looked different and you are seeing yields come in, which is an interesting to element

concerning the headline read. tom: stay with bloomberg through the morning on bloomberg radio and bloomberg television. extraordinary news flow. particularly maria tadeo in brussels. good morning. ♪

jonathan: from new york city, good morning, good morning. cbi hot, ppi hot, retail sales,

the fed is ready to go. "the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: live from new york city, we begin with the big issue. a bright green light for the fed. >> what is the fed going to do from here? >> the number one issue is inflation. >> the fed is being dictated by inflation. >> whether the fed goes 50 in march. >> they will only do it if the market allows them to. >> member the dual mandates of the fed. >> lower unemployment and lower inflation. >> that is the wife and kids. investors are the side