♪ >> inflation has really been dragging down americans' perception. > we have some buffers to eat through before the risk of recession becomes real. >> the market has been relatively well behaved. >> in the equity options market, things are still business as usual. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: live from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures up 1% on the s&p. big week coming up. tom: the fed meeting on wednesday, we will have full coverage. it all wraps around the next step in this war. what is fascinating is on the

warfront, maria tadeo will give us perspective there, what is next? far more is the embedding of sanctions. that is the great unknown this week. jonathan: on all of those fronts, china's role in all of it, as jake sullivan sits down with the top security diplomat today. tom: damian sassower said flat out, russia is going to default this wednesday. when you do that, you've got to go do your best friend in beijing. jonathan: his best friend has his own problems. 17.5 million residents in shenzhen locked down. lisa: and a lot of factories very relative and -- very relevant to the rest of the world. the fact that they are still trying to do zero covid at a time when you are seeing an outbreak in a number of chinese

cities, how much does this slow global growth and push inflation that much higher by interrupting some of the supply chains that already have not been working normally? jonathan: the policy shift out of china compared to what we will see out of the federal reserve this wednesday. lisa: does this give them an excuse to cut rates further? such a complicated issue. whether this will give a boost because it ends up easing policy more on the monetary front, or whether it will deteriorate global growth on the margins because they aren't being as active. we jonathan: -- jonathan: we've got some big moves this morning. here's your move in the bond market. 2.1% on the horizon on a 10 year yield, 2.07 percent right now, up eight basis points. twos, 1.81% on the two-year yield this morning. tom: it is not only the elevation in yields come up at the curve that is out there.

it is important that twos-tens is not 28 or 30 basis points. we've had some curve steepening, but it is ever so slightly as we search for the terminal rate. jonathan: a break of $104 on crude, down by more than 5%. yields on treasuries, 2022 highs. lisa: which is potentially a problem if this is the peak and we are beginning the slowing cycle. picking up on the crude story, how much is this optimism that talks will actually be successful between the ukrainians and russia? we will hear from the ukraine minister of foreign affairs holding a news conference in kyiv to talk about what comes next, how things are going on the ground, how much do we hear more optimism and how much that could potentially shape the. shape the narrative ahead -- the narrative ahead. we also hear from u.s. national

security advisor jake sullivan, meeting with his beijing counterpart in rome. how much does the u.s. pressure china to come to the table and cut off russia, despite the fact that they still seem aligned? finance ministers our meeting to discuss coordination at a time when this expectation of possibly tightening, of inflation, has already sent yields incredibly high relatively to where they were. if you take a look at how much debt has negative yields, it has dropped to about $4 trillion from as high as $17 trillion that long ago. how much have we seen a changed landscape as we now start to think about borrowing money to support the european economy? jonathan: just quickly, a comment on the turnaround in europe. 10 days ago we had a negative german 10 year yield, now positive about 35 basis points. a massive turnaround post ecb last thursday. lisa: there was speculation that the ecb would stay on hold for longer to try to allow the

european economy to recover. that reaction function seems to be dead because inflation is calling the central bankers' hands. how can they stay on hold with inflation running at the fastest pace in decades and with further inflation stemming from this conflict? that is what we heard from the ecb. jonathan: inflation forecast up, growth forecast down. we are expecting the same thing from the same thing from the federal reserve this wednesday. what does it mean for strategists? goldman lower their earnings are lower prices. the revised target of 4700, 10% upside from today. previous target, 4900. they say a surge in commodity prices and a weaker outlook for u.s. and global economic growth lead us to lower our eps estimates. tom: i agree, but i think it is completely normal even the shock we have all been through the last 3, 4, 5 weeks that we are

seeing these adjustments down. we can go down just as fast. jonathan: what would you need to see? do you not think we have seen a sufficient enough growth hit on the equity market this year? tom: bruce cast men of jp morgan and their weekly note was adamant this has not been derailed. the gloom is feasible, but not certain. i just don't want to go to a woe is me, world is going to interview when we have a lot of pros trying to map out the probability that we can sustain some of this or improve with some sort of end of this war. jonathan: there has certainly been a reset and a bigger way. the change into her three-month has been pretty stark. lisa: transitory is dead. now we are dealing with inflationary inputs that have not gone away. the fed, the ecb have to face-off off the potential risk of stagflation, which is basically the central banking nightmare. jonathan:, fired up this morning. lisa: he's always fired up. tom: i did a lot of reading this

weekend, and the summary is putin's loneliness. that was the message, article after article, book after book. jonathan: let's cover that with bloomberg's annmarie hordern in washington, d.c. speak to vladimir putin's loneliness. annmarie: he's incredibly lonely on the international stage. we know that, especially when it comes to the west. his one friend, and that is going to be the topic to discuss today, is beijing. where it is beijing potentially move a little bit of the pendulum towards moscow or k yiv? russia has asked beijing for military assistance. the issue china has if they were to do this is that would be escalating, getting rid of that veneer they have of neutrality. this is something they have wanted to maintain. they have not come out and criticized or condemned russia directly, but at the same time,

they have not exactly helped the ukrainians, so they are put in this difficult decision, and that is what jake sullivan will discuss today with the top chinese diplomat. lisa: what are the additional steps? we heard late last week the u.s. was going to sanction seafood from russia, as well as alcohol. what is next? are they basically just looking for small items to sanction that aren't that big economic revenue-wise, but that basically are symbolic in terms of how hard they are going? annmarie: the united states, the president talked about getting rid of russia's neutral and normal trade relations at the wto, but that needs congressional support. this week, congress will be focusing on that. when you look at what europe is doing, potentially some export bans on top item cards that are over 50,000 euros per you think of bmw, mercedes, and the like. this would be, as you say, a little bit more attempt

from the west to try to find any avenues to continue ratcheting up that pressure. the goal is to target the russian elite that potentially the west inc. still have a little bit of impact on president vladimir putin. we know that putin is very isolated and really only listening to a small group of people within his security apparatus. tom: in the new social media of a new war and with the intelligence dump we have seen from president biden and the white house, it really comes down to what is out there. what is out there are all sorts of war and military specialists going down to the actual bullets the ukrainians are using. one of those is a need to ammunition, whatever that is. is that the stuff we are sending to ukraine? do you have any confidence we are doing that? annmarie: there has been a lot

of military aid sent to ukraine. the big issue right now is whether or not they're going to get those fighter jets. you do here ukrainians once those polish fighter jets, but the issue with nato countries is they don't want to be the final hand to touch those fighter jets were dispatch from their potential base because russia would view this as an escalation and a provocation, and potentially view it as nato getting involved in the conflict. we should note the other issue ukrainians continue to push, and we just heard from dmytro kuleba on twitter talking about this, is closing the skies. they are processing the west as saying you don't want to get involved in world war iii, but risking that potential that russia is going to come to your doorstep as well. over the weekend, russia came very close to the polish-ukrainian border. jonathan: thank you. much more on that story throughout the day on bloomberg tv and radio. on lighter news, over the weekend on saturday, tom's team

lost to manchester united 3-2. cristiano ronaldo scored three games in that game. in the crowd, a certain tom brady. after that game, cristiano ronaldo on the pitch, asking tom brady, you're finished, right? and then you just get this grimace of graded teeth -- of gritted teeth. i don't think so. then brady announces one more season. it cristiano ronaldo get it done over the weekend? tom: he called him up and said, let's go. [laughter] he's extraordinary. i can't say enough about how original, for our international audience, original the brady career is. jonathan:jonathan: you know when you've got something left in the tank, it is so hard to step away from the sport. good morning. futures up 0.7%, off session

highs. this is bloomberg. ♪ ritika: keeping you up-to-date with news from around the world, with the first word, i'm ritika gupta. the u.s. and china will hold the first high-level in person talks since russia's invasion of ukraine. national security advisor jake sullivan is meeting in rome was china's top diplomat. the administration once beijing to use its influence to end the war. unusual request suggests flatware putin has faced more setbacks in the of aged -- in the invasion than he expected. north korea may test an icbm as soon as this week, according to south korea's news agency. south korea and the u.s. have

detected signs of an eminent test of an intercontinental ballistic missile. north korea has not test launched an icbm since 2017. china has placed the city of shenzhen into lockdown for at least a week. they have been told to stay at home and will undergo three rounds of coronavirus tests after cases nationwide doubled to nearly 3400. apple and foxconn are halting production at one of its shenzhen sites, one of which makes iphones. tom brady is not retiring after all. brady will return in the national football league. the tampa bay cornerback says he realizes his place is still on the field and not in the stands. i'm ritika gupta. this is bloomberg. ♪

♪ >> we saw a russia and china come closer together, and at the same time we have seen china pretty uncomfortable with invasion of a sovereign country. i think the p.r.c. is watching very closely and has to make some tough decisions. jonathan: wendy sherman, the deputy secretary of state come on fox over the weekend. good morning. futures up on the s&p. the move this morning fades a bit. in the treasury market, too.

crude back down to 103 dollars and threatening to take a look at $102. we are negative almost 6% this morning. this just in over at hoffenheim -- over at oppenheimer. "it is too soon in the year to call the ballgame in terms of how things will unfold this year." you and him are on the same page. tom: john does acute work. john does very careful work faced on fundamentals. the fundamentals are the resiliency of the american economy, across the atlantic from this ugliness in ukraine. but we really don't know what is going to happen from a geopolitical standpoint. the uncertainty is immense both ways right now. jonathan: divisibility is exceptionally low. tom: what is divisibility for april? help me -- the visibility for

april? help me. jonathan: get me to the end of the week. tom: a task force to ensure russia sanctions work, that is exactly what i was talking about. the embedding of sanctions is crucial this week. jonathan: are there more to come, particularly in europe? tom: when you're doing missile attacks x kamala hunters x -- x kilometers from poland, we will have to see. let's do this with the chief market strategist at federated hermes. i absolutely love buried in your note, january, february, may pril. there is something about the window of getting out of winter that is important. can you be optimistic on american spending given the slow down saw in february? phil: we had a terrific january, no question about that, as

consumers went out and redeemed all of their gift cards. february tends to be a short months. people right size their budgets and hunker down. you've got the impact of inflation, energy costs, the war in russia and all of that. as we get into march and april, we are hoping that as the spring , the swallows return, people start to spend money again. so we will have to see. there's a giant wildcard out there, and that is russia, but we are optimistic. tom: he said right size your budget. what that means is pay taxes, just in case anybody really wanted to know what that phrase meant. in the equity markets, would you talk to the great people at federated and what you people do on blue chips, how do you approach a stock market year in crisis? phil: we were bracing for a lot

of volatility this year because of the spike in inflation, because of what we thought was going to be a dramatic hawkish turn in fed policy. the wildcard, we did not expect a russian invasion of ukraine. that complicates the situation. we are overweight stocks still, but with that overweight dedicated to domestic large and small-cap value stocks and international stocks that are cheaper, have lower betas, have higher dividend yields. we are underweight global technology names. lisa: you are still overweight at an international level. are used to overweight in europe? phil: we are still overweight in europe, and we think that europe has significantly discounted a lot of the risks and the problems that are there. your follow-up question as well, there is still a lot of fun turton see -- a lot of uncertainty, but to a significant degree, we think the market has priced a lot of that

in. we are trying to say a year from now, we think this russia situation will be resolved behind us. we will have a better sense of what is going on with the federal reserve. we think inflation will have peaked by the middle of this year and start a long slide back to normalization. it may take two years or so, but as we are looking out over the course of the year, purchasing europe on an oversold spike down here is not a bad trade for us with a longer-term viewpoint. lisa: my follow-up question was are you buying the banks right now, considering how far they have been beaten up in europe. phil: our european team actually likes the banks. they recognize the risks, but there are some pretty good values there. jonathan: there's always value in european banks, isn't there? why isn't this a value trap? phil: it certainly could be because of the uncertainty of what is going on with the russia-ukraine situation. the way we are looking is that

we are looking at a wounded, cornered animal here that thinks when all of this is done, he can stroll into the united nations and make a speech or join a g20 meeting or give a talk at donbass, and i don't think he understands what a pariah he has turned his country into and what the global economic ripples are associated with that. we don't know if this ins peacefully tomorrow or if we end up with a nuclear holocaust next week. that uncertainty creates pause for all of us. jonathan: it is a wide range of outcomes, that is for sure. phil orlando of federated. how many times have we heard people over the last decade say there is value in european banks? you lost count. tom: i've lost count. david haro is doing the counting for us out of bnp paribas and credit suisse. i'm going to go back to growth. somebody said, why do you

mention the arch liberal joe stiglitz of columbia? stiglitz did phenomenal work on the growth rate over the years, and the growth rate dynamics in europe are starkly different from the united states. jonathan: i mentioned a couple of times we were set to hear from president zelensky. president zelensky has informed the council of europe he is now unable to address them have urgent matters in ukraine. the ukrainian prime minister will address the council instead later today. that is coming out of cnn on ukraine. i understand we hear from the foreign minister still, perhaps in about five minutes. lisa: that is the understanding. you will be holding a press conference of any possible develop ins when it comes to some of those negotiations. there was a more optimistic tone out of the ukrainians over the weekend on negotiations, which possibly is why there is somewhat of a risk on feel in certain areas, a little bit. jonathan: to be clear, these are scheduled times. this is a country, a government

fighting a war, and these times are going to move around a lot. of that i am sure. on the nasdaq, up 0.25%. the rally this morning fades a little bit more. crude, $103.65. ♪

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♪ jonathan: equity futures, that rally of a few hours ago, it fades. futures up 0.5% on the s&p, the nasdaq down 0.1%. the headlines rolling in from the kremlin this morning. tom: they really bring up to date their feel. they talk about china. there's a set of other headlines. what it means is the market moves. i go right to the german to year. yes, it comes in. it has not given up half the good news of the morning, but almost half. jonathan: they deny requesting military aid from china, and they look to realize their objectives in ukraine on schedule, whatever that means, and they are still calling this a "operation." lisa: saying that russia has all the resources needed to complete

the ukrainian action. but this idea that it is on schedule, that they will realize all of their goals, and their careful warning that they did not request china military aid does not say that they did not request other aid or did not have discussions, but how much do we trust any of the utterances out of the kremlin? jonathan: for a country that repeatedly denied any plans to invade the country, there's a schedule now? what is the schedule? lisa: and obviously came far short of their expectations of how quickly ukraine would fall. is this your schedule? jonathan: this market turns around. we are negative on the nasdaq just about come on the s&p, positive 0.5%. goldman's year in price target now 4700. still implies 10% upside from where we were at the close on friday. switch up the board and get to the commodity market. crude, 107 dollars $.46 on brent, down four point 62%. this is not just about the story between russia and ukraine.

you've got to believe this is about china and city after city locking down. the population of shenzhen, almost 20 million people here. these are huge numbers. lisa: going into spontaneous lockdown that was not expected. it is a one-week lockdown with an uncertain recovery. but also factories, this is still the factory of the world at a time when we were hoping for supply chains to get restored. jonathan: the inflation story is stickier. for the federal reserve, they've got to do something, for the ecb . they've got to cut the growth forecast and lift the inflation forecast and talk about tightening monetary policy as well. that is really difficult. finish on the bond market. yields highest since 2019. tends approaching 2.1%. tom: again, this is a fed meeting that is going to have to adapt to the news flow today and tomorrow. jonathan: two days away, and it

feels like a long time away. that is the cross asset price action. let's say good morning to romaine. romaine: let's stay in china here. a lot of the u.s. listed chinese companies in the u.s. lower in the premarket. we had a pretty brutal selloff last week. it looks like we are going to resume that here. alibaba group down about 5%. this is coming off of a stunning 29% drop we have seen over the past four weeks alone. by do down about seven but -- baidu down about 7% in the premarket. then of course, we had headlines a little bit earlier this morning about russia apparently asking china for some sort of assistance with regards to its military invasion of ukraine. you were just reading the latest headlines denying that report. nevertheless, the damage done. apple shares down about 1% on the shutdown of shenzhen and profits in china because of the covid crisis. keep an eye on apple, as well as

apple suppliers. let's see what else is moving here. flip up the board. anyway, guys, back to you, tom. tom: you are doing great. finish out with las vegas sands right now. romaine: las vegas sands, we are seeing a lot of weakness because of concerns about the crackdown. tom: he's running the boards. it is the dog's full. the close this afternoon, you will see the boards on time. megan greene has put together an exceptionally thoughtful and transit lentic essays on economies. she now has to confront war. she is the global chief economist at kroll, but far more at chatham house, and truly our transatlantic source. i want to discuss today germany, and at the bottom you go all patrick o'brien on me,

napoleonic wars, and you say time is of the essence. what is the time is of the essence for the new german government? megan: i think for the new german government, time is of the essence mostly applies to the politics to what they will be a plan, with respect to the economy and the conflict between russia and ukraine. by that i refer to the policy between fiscal and monetary policy. the ecb came out pretty hawkish, accelerating their tapering process so they can start hiking rates. if they actually stop buying bonds, the ecb won't be able to reduce yields from creeping up. at the same time, the eu is recognizing it needs to become a big spender on things like defense, the green transition, so the eu is trying to come together to figure out some way to raise money for that. the time is really crucial because the ecb will stop its

asset purchases in the third quarter of this year. it could take that long for eu leaders to put together some sort of package so that the eu can reduce its energy dependence on russia and other things. the nightmare scenario is that both sides fail, so the ecb stops buying bonds and the eu doesn't pull it together. tom: are you optimistic -- at the beginning of the post-world war ii experiment, they did not have a choice. they had to rebuild. is there in those e.m. out there -- is there enthusiasm out there? megan: there is enthusiasm for that, but we just had the pandemic. the eu issued debt jointly to fund a response to the pandemic. i would say that crisis was probably a bit more acute than this one, so there is a question about whether or not they can do at this time you get the new german government coalition agreement forbids any more recovery funds. determine finance minister said there are other frugal countries

that also are not interested, so as is always the case for the eu, time will tell, and they will probably do something at the very last minute, but in the past the ecb has always had to be the one to step in and be the only game in town, so that may well happen this time as well. lisa: of course, they don't have that much ammunition, so i wonder whether a recessionary environment is europe -- it environment in europe is not a given. megan: i think stagflation is very likely in europe. certainly a scenario where you've got virtually no growth across europe and really high inflation, that is my base case scenario at this point. that is the ecb's absolute worst nightmare, so in my view the fed is tapering first and will then hike rates. the ecb has been intent on taking the same path. i think the ecb is making a mistake and should have done it the other way around, play with rates while continuing to borrow assets. that will keep costs low.

lisa: in the u.s., given the fact that there does seem to be similar reliance on the fed to try to equalize some of the inflation, how realistic is that? if the u.s. does not see stagflation, how concerned are you at other economic ramifications, specifically when it comes to inequality? megan: i think the u.s. is further away from stagflation then europe. the recovery is much further ahead. but it is not for any other reason then it needs to maintain some credibility and keep in place and expectations grounded. in terms of inequality, i think the fed gets a worse wrap then it probably should. the fed is winding down its bond buying purchases program, so it is finishing tapering. that has really boosted asset prices, but we don't know the alternative. if the fed had not stepped in to make markets in march 2020, unemployment would be a holland higher. that would have them vocations for inequality as well.

i think the role for central banks is more ambiguous than most economists really suggest. we don't know what the alternative scenarios might have been, but it would have been lower growth, and that might have been worse for low income families. tom: you mention the european frugal countries. is america a frugal country? megan: that is a great question. our debt burden would suggest not really. we did spend really big and the pandemic. that is partly why we have seen broader based inflation in the aftermath then europe, for example. that being said, it has become really difficult for congress to pass any kind of fiscal spending package, so the u.s. is getting more frugal than it was certainly, but i view it as taking our foot off of the accelerator a little bit rather than slamming on the brakes in terms of fiscal stimulus. i think we could still get more pieces of the boat but better legislation passed through congress as one-off pieces of

legislation, so there might be a bit more spending ahead, but it will be over 10 years and largely backloaded, so i think the brunt of the fiscal stimulus that the u.s. has to provide is probably behind us. what might come up now is support for americans paying really high prices at the pump, so we might get some sort of alleviation even the spike in energy prices we have seen and are bound to see going forward. jonathan: wonderful to catch up with you. megan greene of the kroll institute. the nasdaq down about 0.1%. we got some headlines from the kremlin about 15 minutes ago. they read as follows. "russia will realize all of its plans in its ukraine operation -- the language the russians have been using for whatever manaus considers an invasion --

for what the everyone else considers an invasion -- they say, "russia has the resources needed to complete ukraine action and complete it on schedule." tom: to me, the headline is a nonstarter in that "operation." we've got to remember which russia basically has a pre-good cash flow off of resin commodities, and that may change any day. i'm going to go back to what is important, and that is damian sassower late last week saying a default is in order. that is a different moment for mr. bruton. -- mr. putin. jonathan: two interest payments due this week. hard to square the commentary from the kremlin with what we heard over the weekend and these hopes about another diplomat a breakthrough. lisa: i would agree, especially because they will be paying the dollar bond in rubles. jonathan: apparently so.

we will get into that in a moment. from new york, this is bloomberg. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. russia and ukraine holding another round of talks today. they come at a time when there are cautious hints of progress from both sides. the focus has been on securing a more substantial cease-fire. so far there have been only brief halts to allow russian troops to leave. companies criticized by the government of pulling out of the country. prosecutors will consider a broad range of companies to deliver their warning. the finance minister minister told state television that the country -- and about $300 billion can't be used because of

an asset freeze. he says russia will repay debt in rubles until its cash pile is unfrozen. the british government set to offer a new system for refugees coming from the war and ukraine. after several weeks of criticism, new system includes payments for household's of cupping refugees. cabinet minister michael gove said he expects tens of thousands to be admitted. apple plans to roll out seven all the -- ford plans to roll out seven all electric vehicles in europe. i'm ritika gupta. this is bloomberg. ♪

>> i estimate that 7.9%, we will

probably get very close or above 10% before we come down, and that difference will be all because of the disruption that putin's war implies for commodity prices, supply chains, and shipments. jonathan: what a call, 7.9% now, and perhaps above 10% before year end. mohamed el-erian speaking to cbs over the weekend. good morning. futures fade, up now just 0.25%. we are down on the nest at 100 0.3%. moments ago from the kremlin on the nasdaq 100 0.3%. -- on the nasdaq 100 0.3%. much ago from the kremlin, they will realize all of their goals and ukraine. over the weekend we heard from the deputy chief of staff to the president of ukraine -- the chief of staff, not the deputy chief of staff. there is a dialogue, and that

was seemingly enough to lift things out of the gate this morning. tom: the range is wider. jonathan: i would agree. tom: when the range is wider comedy trading and investment speculation can ever be wider. but with ranges wider, everything changes moment by moment. who knows what the headline is going to be over the next two or three hours? we will have to see. futures pullback big time, up 10 right now on spx, and the vix, 31.42. kriti gupta on shipping. what do you have? kriti: s&p futures higher. we are also seeing commodities lower. that is a big part of the asian over the weekend. we've heard that the shins and region of china -- the shenzhen region of china has been put on lockdown. foxconn, one of the plants there, has actually shut down. that is one of the suppliers of apple. the reason this ties into commodities, this is the connecting piece, is those shipping rates. we have heard about how shipping rates continue to rise, really

feeding into inflation, and then they kind of came back down after their september peak. given this year's geopolitical tensions, the commodity rises, the run towards getting your hands on commodities, whether it is we'll, wheat, that is pushing rates higher and higher. as we start to factor in some of those covid lockdowns, you start to see shipping rates entire -- rates inch higher even more. keep an eye on these shipping rates because this is something that factors into consumer costs and ultimately mix those prices higher. tom: and part of a loaf of red, where wheat is much lower than you think. this is without question our interview of the day on food. michael was at glencore, he holds court as senior commodity analyst at rabobank. rabo is peak on the dynamics of europe.

when you are doing cocktail conversation in london and somebody goes omg, there's going to be a food crisis, how do you respond? michael: we are seeing it develop across the board. if we think about ukraine and russia, we are really talking about the global food strain being stopped right at its source. these may seem like products you will never see in the supermarket, but they actually come down through the supply chain, and we are seeing massive inflation on that front. tom: where is the greatest elasticity, a supply dynamic or a demand dynamic to adjust price? michael: there's both going on in the moment. we have seen demand continued to be strong, irrepressible even, and pressuring supplies. it has all been exacerbated by this war in the ukraine, which is creating an unreachable dynamic in the largest country in the eu and making russians supply somewhat untouchable.

that dynamic is stopping the flow and the supply of goods out of the boxy, a critical exporter to the world. lisa: meanwhile, we heard from presidency lenski of ukraine, -- president zelensky of ukraine, asking for farmers to get back to the field. how much could we still get a crop that could supply the global source? michael: i am not at all convinced that will happen. i think even if you do get a crop, it has to be exported through the black sea. as we have seen, that is where a lot of the conflict is taking place right now. i think ukraine is very concerned about its domestic consumption and ensuring food security for its people. exports are not going to be a factor in the foreseeable future, and i have concerns that the longer this plays out in terms of a conflict, the higher the repercussions will be for the world market. ukraine should be about to plant

its spring crop in the next five to six weeks. that is looking highly unlikely that there will be any sort of normal crop. as a result, critical corn, vegetable oil supplies, the world will be deprived of those. lisa: we've heard about a number of countries trying to stockpile wheat, stockpile soybean oil ahead of what they expect to be increasing disruptions. i'm wondering about places like egypt, places that rely on this area for the vast majority of their grains. how much can they get ahead of this? how well have they done stockpiling in advance? reporter: -- michael: that is the big question going forward. as long as we see this continue, the shorter the stockpiles are going to be. what we have seen initially is a large short squeeze within this market where basically, we saw we prices rise 50% a matter of weeks. it is still about 30% higher. what we have to be concerned

about is north africa, the middle east, sub-saharan africa. i like to say it is actually russia we need to care about because we should not be worried about an iron curtain, but a week curtain. that -- a wheat curtain. that wheat that comes out of russia feeds about 800 million people. so i am concerned that stockpiles will fall and these countries will have to pay much more for their wheat, even double the price going forward. jonathan: everyone on the team believes this is such an important conversation, and we would love for you to come back and catch up again. that is the senior commodity analyst at rabobank. we are just hearing from the ukrainian foreign minister. when we get some headlines from that address, we will bring them to you. one thing that jumps out to me, did you see that note from steve englander at standard chartered? tom: it is real simple, he's trying to gauge what happens wednesday.

it is important. jonathan: we see five fomc projected hikes, neutral given market sentiment. lisa: but that is different than it was before. earlier, he thought they were going to frontload it and then stop, and increasingly you are seeing people increase the number of rate hikes as they try to figure out this new inflationary regime we are and. jonathan: the big question, and steve suggests they will try to ignore it, the fomc may avoid indicating whether we need more or less tightening. that debate will be hard to avoid. tom: i believe it is the may 4 meeting, a single sentence from englander, optimism on growth and labor market performance. that is the other side if we get an ok economy. that is why the average is seven rate hikes.

jonathan: anywhere between five and seven on the street is where most of the street are right now going into wednesday. futures up 0.2% on the s&p, down zero point 5% on the nasdaq. down 5% on wti. from new york, this is bloomberg.

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♪ >> we don't know how this is going to come out. >> pushing higher prices on energy, higher prices on food. >> it has been a seismic exotic net shock that has had the system -- seismic exhaustion is -- seismic exhibit -- seismic exogenous shock that has hit the system. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, it is a

monday of immense