rising, natural gas, food. >> the ability for central banks to control inflation in this environment is certainly a question. >> knowing where the line is between slowing the economy and that you overdo it is murky. >> we can debate what the terminal rate will be but it has to be higher than we are. announcer: this is "bloomberg surveillance." jonathan: from new york city, for our audience worldwide, good morning, good morning. this is "bloomberg surveillance, live on tv and radio." this is "bloomberg surveillance." jonathan ferro, alongside tom keene and lisa abramowitz. futures up five. here come the downgrades on wall street. tom: more to come with the horrific story in ukraine. we are starting to see the growth adjustments. i would suggest many more this weekend. i will be riveted at 7:00

tonight to see what michael pearly and j.p. morgan do. jonathan: three points from goldman. lower consumer sentiment and slow growth in a europe. that means 175 for growth in america for 2022, a major move. tom: i would mention and look back to the struggle in your up. is there financial and debt construction given a substantially lower growth model than what we see in america. jonathan: annmarie: -- jonathan: on the punishment russian president is not done. lisa: how much work can he do. how much does he say this is the reason we are all observing higher costs to offset this war and end the russian invasion of

ukraine? much can he do that considering this is coming into this very high. jonathan: a suggesting that he opens the door later higher tariffs on russian imports. lisa: what will that accomplish? how does he dovetail the message of this is russia's war, this is the reason why gas at the pump is rising so quickly versus, we had high inflationary environment before this began? jonathan: there was a hope with the deal with the europeans and iran but now there is a pause in the talks peered what did you make of that -- talks. what did you make of that? tom: i am not up to speed on it because of the immense complexities. the elephant in the room is in saudi arabia, riyadh and over to dubai and abu dhabi and the

emirates. 113 a barrel for brent crude. jonathan: on the nasdaq 100, positive 0.48%. yields in and around 2%. if i told you on the weekend we would have a week of losses on crude, would you have believed me, lisa, the biggest loss of the year so far? lisa: i don't know what to believe in the crude space. we did see it to higher. what is the outlet -- outlook going to be and how long will it persist? we will get the latest from maria tadeo and curious as to what they will say as to increasing defense spending and immunizing infrastructure from russian supplies. this has to do with gas, wheat. at 10:00 a.m., this is the data

point of the day. the sentiment survey comes out from the university of michigan appeared this will be the first read on what the post ukrainian war sentiment really is. how much has that seen a further deterioration especially as wages go to the lowest level in data going back to 2007. this is because the inflation is outstripping how much wages are increasing. we do hear from president ayden talking about additional measures the u.s. may take to hold russia accountable for the war -- we do have from president biden talking about additional measures the u.s. may take to hold russia accountable for the war and blaming putin for the fact that inflation expectations are widening with the five-year expectation they stand breakeven rates the highest going back to 3%. jonathan: d think the putin gas price hike -- do you think the

putin gas price hike is catching on? lisa: no. certainly the oil and gas concerns are due to that but if you look to be at the headline in yesterday's cpi, it is health care also to other costs driving this as well. jonathan: and it will be with us for a lot longer. team coverage begins with annmarie hordern in washington and maria tadeo. maria, 10:15, the president. maria: he is expected to announce more penalties against russia and taking them away from the normal status of a trade partner and puts it in the likes of north korea. they are potentially meeting similar action at other g7 countries and the european union.

they are so much more reliant on trade with europe than they are with the united states. lisa: what would this accomplish? annmarie: i think it is a little more symbolic, even the fact that it is 5% the imf data puts on russian trade into the united states. we should note that it just shows that washington and capitals around europe are not stopping when it comes to penalizing the kremlin and the individuals around him and the russian economy. as the invasion continues it shows they are willing to take every single step deposit -- punish president putin. tom: and the bombing of airfields, one is 94 miles to people where you have your cameras set up. what is the significance of the

bombing of those airfields this morning? maria: it is very close to poland. poland is a nato country, that you can see the message the russians were trying to send is that the war from the air is going to get very ugly and the key morning is that if you send weapons to ukraine, russia will retaliate. this is what it comes down to. the ukrainians are begging for weapons. we get it, nato won't fight the war for us and we will fight it on the ground but we need weapons. i shouldn't note this is a major escalation. if they move ever so close to the polish border, i spoke with an official and they said the situate -- the situation is not about the economic fallback but is there even a diplomatic solution to this? many eastern your efficient

officials and leadership feel there isn't a diplomatic way out. they say what he is going to do what he did in syria is just destroy it. jonathan: reports this morning that on russian state tv the action of this president was criticized openly. it was called afghanistan but worse. what is happening? maria: first of all, it is very difficult for russians to get a clear picture of the situation because everything is banned. you can't say war on tv and anyone who criticizes immediately gets pushed back. vladimir putin came up this morning and said anyone who criticizes russia or is embarrassed to be a russian citizen is not really a russian. a real russian would never be embarrassed being a part of the russian federation.

lukashenko is on a flight to moscow. it means belarus can get actively involved in the war. vladimir putin said if you are outside of russia what you want to fight for russia, you can. what it tells you is the war is not going well for the kremlin. the country is facing a default. we have mothers asking where did you send our kids and why aren't we hearing from them? jonathan: great work as always, korea taddeo -- maria tadeo alongside annmarie hordern. tom: i would emphasize with all the distractions of the economics, finance and investment that this is a war in real time. i have been very distressed at

the partition between the european newspapers and the western, the american newspapers . i give bloomberg great credit for running the operation of the london in europe. this is a war in real time, including the bombing of the two airfields reported overnight and so close to poland. jonathan: this is what medvedev had to say, the russian government is working on measures that include bankruptcy and nationalization of foreign countries forced into exiting. i don't think we fully realized what is about to happen domestically in the russian economy. lisa: when the biggest and wealthiest individuals in russia came out and criticized putin say they stopped trying to completely eliminate your part as part of the world economy and how much our companies going to accelerate this exodus as russia pushes them out because they don't what the liability will be on the ground. jonathan: on the golden note,

financial conditions, lower consumer sentiment, issues around growth, higher inflation at home in america with oil and gas prices wells fargo said this, we have raised our forecast higher for cpi this year despite the uncertainties created by the war, we look for the fomc to rate by 150 basis points over the course of this year. the fed next week. tom: the politics of washington and this moment. wow. jonathan: looking forward to catching up with chris harvey from wells fargo. up .5% on the s&p and nasdaq. yields unchanged. crude at 109.82. with the first word news, i'm ritika gupta. president biden would move the

weight for increasing tariffs on russian imports. the president can change the russian trade states. both democratic and republican lawmakers -- the u.s. senate has passed a spending bill that includes $6 billion in humanitarian aid for ukraine, part of 1.520 dollar measure that will keep the federal government in operation for the rest of the fiscal year. a novelist to president biden for his signature. iran suspended efforts to revive the nuclear deal. it is likely to lead to a spike in oil prices in the persian gulf. diplomats trying to bridge major differences. a new study says the global

death toll from the coronavirus could be 18.2 million, three times larger than official pressure -- records. the british economy unexpectedly rose in january at the strongest pace in seven months. it beat levels on the coronavirus drugs. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> we need to be honest with the american people, a battle for freedom has its cost at home as well. people are already feeling putin's price hikes at the pump, as painful as it is the cost will be higher if we don't act now to deal with this tyrant. jonathan: the president of the united states. features of .4% on the s&p. when do we hear from the president?

10:15 this morning. we will take it for you. wti, 109.80 four, positive by 3% on the week facing its biggest weekly loss of the year so far. tom: 2020-ish has been stasis and we have come back. it may be more calm and it was two days ago. george bory is with us from all spring. also a wonderful note on what adults like you are thinking about, mark to market. how are we going to mark to market all of the distressed in the fixed income space? george: you bring up a great

point, tom. fixed income has been rattled this year, a seismic shock has hit the system and it is both financial and political. the whole morning session has been all about politics. when we look at capital markets, you have seen roughly a trillion dollar loss working its way through the system. that is a marked to market loss and the numbers are bigger than that when you inc. about the other parts of the economy connected -- when you think about other parts of the economy connected. credit conditions is a real challenge for bond investors one credit conditions start to tighten, risk premiums go up, default start to rise. the challenge is for the fixed income investors are faced with about certainty of payment. we have two challenges right

now, one is through the marked to market loss working its way through the system and the second is the fed and the fed is in the position to start raising rates. we have two major headwinds that are facing fixed income investors. what has happened over the last two weeks is the acute pressure that comes from an exam janice shock has increased -- an exogenous shock that has increased. tom: i don't want to get you in trouble with kate mckinley, but are we heading in the fixed income market something like what we saw at the lme and nickel are what we saw in the chrysler workout of 2009? is the system going to go bust because we can't find a bid different parties are happy with? george: i don't think so.

it is one half of 1% of the market. the bond markets outside of russia and russian bonds and ukrainian bonds, the market has been well behaved. if we look in the developed world at the activity and the treasury market and corporate bond market, liquidity is ok. it has gotten tighter than it was and coming off of extremely illiquid positions. but we are clearing at what seems to be reasonable prices. it has been a very meaningful shock. it is an over-the-counter market that is based on confidence in right now confidence is high. the banking system is well-capitalized to absorbed the component of loss working its way through the system. we feel confident the bond market is very robust right now but it is the secondary and tertiary effects of absorbing material marked to market as

they work through the system. a bond investor has to be careful. lisa: you talk about the marked to market losses working their way through the system and you talk about fed. pricing in seven rate hikes by the beginning of next year. our the markets pricing that? george: what is priced in is tighter policy and higher inflation excitations. what is not placed in are the economic consequences of that and there is an expectation of deceleration of growth to profitability trajectory that is still positive. those types of negative consequences that come from the combination of tighter monetary policy and no a big, exogenous shock in a marked to market loss

, those components are working their way through the outer edges of both the bond and ultimately the equity market. that is the challenge we face as we go forward. you can manage predictable economic risk and exide janice shock -- and exide janice -- exogenous shocks. we need to be very careful. we have a three-pronged strategy. one will be tight on -- inflation not going away soon. the trajectory that is priced into the front end may come down a bit but the fed wants to raise rates. the second is, be very careful with your credit positioning. liquidity matters. you asked about how the functioning in the market works. we want to make sure we are in liquid bonds and we can trade and exit if we need to. third, inflation will be with us

for a while, and there are winners and losers in inflation. this is not a zero-sum game. so repositioning portfolios to take advantage of material increases in trajectory of inflation is really the anchor of our portfolio, companies can reprice with inflation and some companies and sectors that benefit from that, we have seen clearly in energy but there are other sectors you may not think of, things like restaurants can reprice pre-much consistent with inflation. those types of opportunities look attractive. jonathan: i'm going to leave it there because i have breaking news. here is a line on vladimir putin, certain positive shifts in talks with ukraine. futures up off the back of that the s&p 500 futures up more than 1%. tom: you have to see that in

different trades as well period go right to euro swiss and it shows it. jonathan: we will return to that. the following is a line reported from the president of russia, certain positive shift in talks with ukraine. more on that. this is bloomberg. ♪

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jonathan: live from new york city, good morning. futures turning higher on the s&p 500. session highs are more than 1%. just on this line from president vladimir putin, the headlight reads, certain positive shifts in talks with ukraine. that is the witty story. yields, to's, tens, 30's higher by few basis -- twos, tents, 30's higher by few basis points. crude wti at 107, higher on the session but off session highs. we will go through the headline. this is according to interfax

reporting, president putin said certain shift in positive talks with ukraine. the other side belongs to ukraine. does ukraine see it quite the same way? we only have one half of the story. tom: the question is, waiting for president biden's comments. the thing i see in the zeitgeist right now is the gentleman from finland with a unique stance that they are speaking -- that finland is speaking with putin today. will they allow the headline from putin? maria: if you look at the structure the country has, they are members of the european union but not nato. at the start of the war, ukraine said it would not give up the bid for nato membership in e.u.

membership paired but the language from zelensky has changed over the past -- membership. but the language from zelensky has changed over the past two weeks. that is a potential way out. whether they see that as a diplomatic way out remains to be seen. but to the press conference yesterday, the ukrainians set the russians have not moved in position p what it shows in many ways that this war is not going well for russia. it has been 15 days and the economy is under pressure and their stock market has opened in two weeks. you could argue this point to a diplomatic solution but what i speak to the officials, they don't want to focus on what putin says but what he does. the first thing they want to see is a cease-fire and so far the russians have not agreed to it. lisa: we were talking about the

opposite as lukashenko from belarus was headed to russia and could possibly drive belarus into the conflict. are you surprised there is such a major reaction in markets to this optimism when frankly strategists seem to downplay the perspective of possible diplomatic relations? maria: i am surprised myself by this headline. there was a bombing very close to a polish site. poland is a country that has delivered and continues to deliver weapons for ukraine. at the same time lukashenko was flying into moscow, the idea is let 'er rip putin wants -- is vladimir putin wants more soldiers in the ground. i would stress the point of the cease-fire. the ukrainian authorities say that will be no diplomacy as long as russia continues to bomb

our cities. until we get to a cease-fire, i would be skeptical. jonathan: you have to see that everything you see in markets is relative to where expectations were and what the market has been doing. the market has been beat up and sentiment is low and it doesn't take much to move a little higher on the s&p 500. to say that this is important with conviction you have to have the other side of the story. this is the understanding from vladimir putin. over the last few weeks, everything he has told us, let's be fair, and hasn't been true. so until we hear the ukrainian side of the story, can we say we have made an improvement here? annmarie: i am following it from afar and i see what president putin is doing right now and

from what i can see following the reporting and the video, he is sitting down with lukashenko right now. he stages these events before he goes behind closed doors to have discussions and he knows what he is saying to a semester audience, and that is what he is conveying to a domestic audience that potentially there is improvement on peace talks. the market takes this as potentially this is a very big open window to that, but you have to caveat to the theatrics of president putin and what he is doing. at this moment, there is nothing on the ground that suggests that. tom: what she says nails it for the global audience, the staging of events. she has personally witnessed that in moscow. jonathan: couldn't agree more. the only thing we can do now is give you the headline and then go to the questions we need to be asking.

the headline is there are certain positive developments as regards to the talks. that is the move in the market of 1.4% on the s&p. until we hear the same thing from the ukrainians i don't think we can't move forward with confidence. tom: s&p futures, i would say the leap up is technical. where are we going from here? jonathan: thank you very much. let's get to the conversation with bruce kasman of jp morgan. your reaction to this headline. there are certain positive elements as far as negotiators from our side, the president of russia. your thoughts? bruce: on the political side, i am going to keep an open mind and recognize the wide range of uncertainty and recognize how far the conflict has gone so far

in terms of sanctions and damage to the russian economy. the damage will be inflicted on the global economy. i don't think the sanctions will be reversed quickly even if there is a good news. in the macroeconomics, we will feel the effects of this clearly for a while. tom: you know i would never front one -- front run michael. how are you going to adjust gdp? if michael for early is working -- michael ferolli is working on a slide rule, how do we see this? bruce: we see more pressure on rice. -- on energy prices.

broadly speaking, what we are doing is raising inflation and lowering growth and we continue to move down that path. i would emphasize we still have growth for the u.s. this year running above trend. we saw the unpleasant rate falling. these are all works in progress in terms of understanding the impact. we have not derailed our view on a still solid recovery. tom: i thought that was very diplomatic. he handled it well. lisa: you can expect a downward and a lowering of the growth estimate and it leads us to the recession call and goldman sachs put out the note with the downgrade of expectation, they could see a u.s. recession chance at 20% to 35%. is that consistent with what you are thinking of right now? bruce: i think somewhere in the

20% to 30% range makes sense to me, just recognizing a much uncertainty there is here. i would emphasize that the u.s. economy has shown already pretty significant resilience in the face of shocks. the underpinnings are healthy. what it reflects is how uncertain the potential outcomes are, at the fragility of the u.s. economy. lisa: at 10 :00, we will get the university sentiment survey. we expect a new low. how significant is that in terms of consumer spending and how long this resilience can last? bruce: the michigan survey has already moved down sharply and is telling us something important, that consumers are particularly worried about the rise in inflation. what is happening is it is pushing higher prices on energy, food.

u.s. inflation will stay elevated. the qualitative signal is important and i don't think the level of confidence lines was spending. we are getting huge resiliency test in terms of household purchasing power and we need household to feed into the larger reservoir to make it through this. we think that is going to happen but it will not happen without u.s. consumption and gross overall. jonathan: how hard will it be for the europeans to avoid recession over the next 12 months? bruce: much harder than the u.s. and the question there is really how strong is their commitment to take the pain in cutting off natural gas supply from russia and how willing are they to offset some of that fiscal support? right now we are thinking europe is going to be flirting with growth close to zero and i do think we need to see a

significant fiscal response here cushioning the blow to keep the european recovery going. jonathan: bruce kasman, thank you. blackrock hit by a $17 billion with of losses on russian exposure. tom: you get george bory up and he nailed it. and there is brooke masters doing math. focusing on the fact that this is huge scale and blackrock has $10 trillion in assets but that is a big number compared to what we saw at pimco. jonathan: the numbers are building and building quickly. lisa: the fact that we are not seeing the realized losses, the trickle-down effects and the instability people are worried about. we saw the london metals exchange, how much further do we have to go as it percolates to the system?

jonathan: don't get tk started on nickel. m putin quotes, there certain positive elements as far as negotiators from our side informed me. that was vladimir putin speaking to lukashenko. the market reaction obvious, up 1.5% on the s&p. a 10 year right now at 2.0057%. this goes both ways and we have seen it play out in the last 10 minutes. tom: i would go to maria tadeo's voice and the tone that she described in ukraine in the last 48 hours. there is such a separation, as and reorder and said, the staged moment from the gentleman -- and as annmarie hordern said, the staged moment from the gentleman. jonathan: i would detach myself

from the price action. market participants have to judge an ever evolving, changing certain range of events. the president of russia, according to a transcript and interfax, for me as a journalist , i needed the other half of the story. i need to hear from the ukrainians. tom: i wonder if he is distracting himself from the price action at blackrock? jonathan: we will pick up on that in a moment, the losses at lack rock. futures up 1.5%. the nasdaq up almost two percentage points. this is bloomberg. ♪

>> gdp growth has been revised downwards for the near term owing to the war in ukraine.

it is seen as increasingly likely that inflation will stabilize at his 2% target over the medium-term. the war in ukraine is a substantial upside risk, especially to energy prices. jonathan: christine lagarde, the president of the ecp, the forecast for inflation higher here will the fed follow suit? features positive 1.4% on the s&p, of 60 pursuant on the nasdaq -- up 60% on the nasdaq from a transcript of a transcript of vladimir putin telling lukashenko, the quote, there are certain positive developments as far as negotiators from our side informed the. -- informed me. tom: i noticed the vix. what is your observation? jonathan: the breakout tells you how the market was positioned.

the conversation more broadly around russia and ukraine, we 50% of the story. tom: there is the 50 and the 50 and then the biden story at the 10:00 hour. on the attitude of america towards war, mohamed younis joins us from gallup. they have never done work for this party or that party, they said fdr will win in the 1930's and moving to measuring america's tone. i want to know on the death of the liberal order, we have a reaffirmation of war in europe, not the liberal party or the left of the democrats but the sense of a liberal order coming out of world war ii, the end of the cold war, how have you pulled that in recent days? mohamed: there couldn't have been a better time to come out

of the field with our last survey. we ask americans basically what role should america play in the world and what threats does it face? we came out of the field literally on the people of the invasion of ukraine. before any troops or tanks crossed the border, americans were pretty focused on this issue, more than we usually see. i can point to many metrics. just the favorability of brush at an all-time negative high. when you think about china as a focus of the united states, it is only 79% favorability. russia has outdone this. for context, russia had a favorable rating and when we asked who the greatest energy -- the greatest threat, china comes out first. we asked about a series of critical threats to the vital interest of the united states.

we saw an uptick in americans concerned with the military power of russia increasing, 59% of americans. tom: how isolationist are we right now? mohamed: we are not that isolationist. when you look at the recent polls i would argue the public has thought ahead of leadership both here and in europe. every decision the biden administration has been supported by public position prior to it being taken. the notion that americans are isolationist or checking out is not supported by data and we see a huge difference between now and 2015 when there was a war between russia and ukraine and americans were not as dial-in. lisa: how much are they concerned about the inflationary backdrop does that trigger concern about their selves and the injustice in ukraine?

mohamed: before the invasion, 79% of americans that inflation is likely to go up in the next six months, a record high we hadn't seen in decades. you can only imagine now that oil prices have exploded that concern is only going to skyrocket. i do caution against thinking that because of that financial impact americans wilshire away, because the decisions -- will shy away, because biden's discussions and decisions have not slowed americans thinking. lisa: we were just talking with the resiliency of the american consumer and despite the concern of inflation and yet another crisis that people are going out and spending and still living here what are you looking for

the sentiment to shift -- are still living. are you looking for for sentiment to shift? mohamed: we asked americans how they saw it in the future and it remains in the negative. inflation has been dragging down . if i would look to something, obviously we would look to see how much that gets now that prices have moved on gas and goods. that is the critical question. we should not consume -- we should not assume that because inflation is hitting them hard they were not compromise on being supportive of ukraine. jonathan: around the inflation story, the putin gas hike, is that resonating? they still believe it is biden's fault? what is your read on that? mohamed: one thing we have known

from the biden administration they have failed at the number one objective which was to minimize the partisanship in the american public. people that support president biden will buy that line but all of the people who don't support president biden were complaining about gas prices long before this situation erected. party id will still drive primarily how people react to president biden's cousin tatian of the facts. jonathan: great to catch up. looking at the price action come up 1.1%. nasdaq futures up 1.4%. this line from the president of russia, there are certain positive developments as far as the negotiators from our side informed me. they are hard to identify with the exception of maybe the line around neutrality and the word we got from sergei lavrov yesterday. lisa: that was cast and a l

ess positive shift. the fact that president putin is coming out saying there is a positive shift and you wonder why. what are the motivations behind his signaling? jonathan: the rhetoric is one thing but what you see on the ground and the reality of what is happening in ukraine is quite another. tom: i don't think our audience on television and radio need us to recapitulate it. i suggest that the european newspapers have been much, much better of the horror of what we are seeing, the scope and scale and imagery and it has been shocking to see what bloomberg says about middle east fighters coming to the rescue of mr. putin. that is a story that needs to be developed. jonathan: futures up on the s&p

of 1.3%. 2% on tens. crude at 108 and wti. from new york on tv and radio, this is bloomberg. ♪

♪ >> crisis has certain put a few legs of support under the inflation risk scenario. >> it isn't just oil that is rising. it is natural gas, food, metals. >> the ability for central banks to control inflation in this environment is certainly a question. >> knowing where that line is between doing enough to slow the economy and doing so much that you overdo it is very murky right now. >> we could endlessly debate what the terminal rate is going to be, but it has got to be higher than where we are. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: equities with a bounce. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance, live" this is "bloomberg surveillance," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. tom: we are going to have good conversation on this