>> ukraine has been a concern and that is playing into the equity market. >> i think the market dynamics will shift a little bit as we get into the second quarter. >> we are in a phase where there is a degree of optimism. >> i tend to agree with powell, this is not an economy that will go quickly into recession. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. futures down 0.7% on the s&p, two hours away from talks between the president of the united states and china. lisa: i feel like this is a really important one. even with vladimir putin and other leaders, however, this one

has some legs given the fact the u.s. has been hardening its rhetoric against china and china has not taken a real stance in this war. warning china that they will impose costs when it comes to backing russia. where will xi jinping come down on this with that kind of hard threat from the united states? what is he willing to risk? jonathan: in your equity market, down 0.7% on the s&p. on the nasdaq 100, yields and three basis points on tens. after this week, a monster move on the two-year yield last week and again over the last few days. lisa: how much hasn't this been swinging around? and of course, with inflation, i keep going back to what we were just discussing. drew matus of metlife coming out and saying the fed does not

really have control over inflation, so they are going to back away from rate hikes so they don't slow the economy. that is the belief. that is not what we heard from the fed. jonathan: not what we heard from jim bullard either come of the st. louis fed, who voted for a 50 basis point move into has just come out with a series of headlines recommending the fed funds rise above 3% this year. let's get to mike mckee. michael: it has become something of a tradition for fed officials who dissent on decisions to explain that decision the moment the blackout lifts. jim bullard is explaining why he voted against the 25 basis point move the fed made on wednesday. he said the economy is stronger than people think and will remain so into 2023. he has a rather scathing criticism of the open market committee, saying that the policy rate is currently far too low to manage the u.s.

macroeconomic situation. he goes on to say u.s. policy has been unwittingly easing further because inflation has risen sharply while the policy rate has remained very low. that pushes real yields lower, and he goes on to say the committee will have to move quickly to address this situation or risk losing credibility on its inflation target. bullard points to 1994, when the fed moved 50 basis points, and even 75, and managed to bring the economy in to a soft landing. he said that should be the model. so jim bullard making a very strong case for another possible dissent in may. we will be talking with mr. bullard next week to get his full thinking on this. lisa: one thing i am curious is how much dissent there was broadly.

really trying to tie together so many disparate points of view. michael: i think that is the case, and i think there is a lot of division. we will know a lot more when we get the minutes. one of the interesting questions is why didn't chris waller dissent? he was the former research director at the st. louis said, who was very strong at the idea of going 50 basis points at this past meeting. agreed with his former boss jim bullard, but then voted with the majority on the committee. it will be interesting to read the minutes and see what his thinking was, if we can define his from the rest of them. but i would imagine the fed is just guessing at this point. they are doing their best, but they don't know exact they would is going to happen. they erred on the side of caution. jonathan: it would be pretty rare for a government to dissent. you wonder if that opinion does show up in the minutes. perhaps that is a platform for some more hawkish voices in the coming weeks. it michael: -- michael: it has

been since the 1990's as we have seen a fed governor dissent. it used to be a common occurrence. jonathan: jim bullard with us on tuesday, eight: 30 eastern time. one you do not want to miss. a lot of people with doubts about the fed's ability to get to do .8% next year. the st. louis fed president wants it at 3% by year-end. lisa: if you don't believe raising the rates and shrinking the balance sheet can control inflation, than they want to let the economy run hot so they can perhaps absorb that inflation more easily. jonathan: futures down 0.7% on the s&p. team coverage starts now on ukraine and russia. about two hours away from the president's conversation with the chinese leader. what are we looking for from that conversation? emily: i think we are looking for two things here. number one, as far as how

president xi response to president biden, noting that china runs the risk of being sanctioned by the u.s., should they be seen as helping moscow either through military aid or a lifting of sanctions, and number two, if there's any more clarity about how president xi sees his relationship with putin and the kremlin at this point. they have been very careful about their messaging at this point. they have been very careful about what they have said in regards to ukraine, and regards to russia. an official describes this as a pro-russian neutrality, where they have said things about one and do have peace in ukraine, about not invading ukraine, but at the same point, they really have not condemned russia for the invasion. kailey: have we heard anything from the europeans in regard to china? they are economically dependent on china as well. maria: it is a very good

question because we have not really heard from them directly about china. the concern that they have is the same that the u.s. delegations and the u.s. government would have. one is that china is going to prop up the military operation of the russian federation, and two, that china could help russia circumvent some of the sanctions the european union has put in place. behind the scenes, i have heard from a number of officials behind the scenes say that any country that helps russia will have to pay eight nop, but they have not really referred to china by name. the other big point is that this is happening at a time in which the european union's relation with china has become very icy. ever since angela merkel left office and we have a new german government, the trade deals also have been called into question. as you know very well, there is now on the table the eu-china trade you'll, which has been frozen -- trade deal which has been frozen, and for many it is now completely dead. but when it comes to china playing moderator here, bringing

the two sides for many europeans, that is not the role china is going to play here. lisa: what is the latest on germany given the fact that they are incredibly dependent on the gas from russia and there's been a lot of pressure to try to reduce that dependency much mark willie -- much more quickly than they are willing to do so? maria: what we know is that the nord stream 2 pipeline is politically dead. to bring it back from the dead is going to take a miracle. that is what one official told me. certainly we are not going to see the day of light when it comes to nord stream 2. there are other pipelines working, particularly the nord stream one, feeding through into germany. with the germans have said is that at this point, it is unrealistic to say that germany could work can afford a full embargo on russian energy. are we going to see an eminent ban the way the united states did? the answer is no, the germans

fear the repercussions this could have on the german economy. very briefly, you can also sense sanctions fatigue from a number of countries. they believe they have done a lot already for ukraine and they want to see the full impact of this before they go into the next stage. jonathan: let's talk about the next round of talks. we are setting ourselves up for a massive week of talks asked week. the president of the united states will be attending to them, as we have reported through much of this week. what are the deliverables for those conversations. are they just going to meet up, talk, and not deliver anything? maria: i don't want to be pessimistic, but that would be my impression. we look at the ukrainians and the russians, they still see this as a conversation that we need to have results. this is almost an existential question for the two countries. how can the two coexist at this point? for president biden to come here, in many ways, this is just a show of support. he wants to show particularly to eastern numbers -- to eastern

numbers that they will protect them from an eastern spillover of this war. but when it comes to the ukraine situation, it is becoming very clear that for the ukrainians, it will only be solved if vladimir putin and zelenskyy got a peace deal. when that is going to happen, my guess is as good as any, but my impression is that we are heading for a conflict that is going to last weeks, not just days. jonathan: thank you, maria tadeo out of brussels, emily wilkins in d.c. i was just working through this statement moments ago, after dissenting on wednesday to a decision to hike by 25 basis points. he wanted a 50 basis point move. he said the following as well. "in addition, i recommended that the committee try to achieve a level of the policy rate above 3% this year, 2022." lisa: how much is this the

division between the fed officials that see the fed as having some control over inflation and those that don't, that still believe in the transitory kind of discussion and things that are out of their control? if that is the case, how willing are a lot of the participants to allow inflation to run incredibly hot, at least in the short-term, in order not to sacrifice growth? jonathan: this is why news conferences are so difficult for any leader of a central bank because you have to try to reflect a consensus. i think we want chair powell's opinion and what he think about the situation, and you would imagine that carries more weight than the st. louis fed president who dissented earlier this week. lisa: and i would gather he has a more dovish take, probably reflected in the lack of conviction in the markets that he's going to go through with this. jonathan: you will hear from chairman powell a little later this week. 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. president biden will try today to persuade xi jinping into ratcheting up pressure on moscow to end the war in ukraine. it will be his first phone call with the chinese president since the invasion began. u.s. officials are trying to figure out chinese position on the war. beijing has avoided criticism of russian president vladimir putin and offered rhetorical support for ukraine. russia's finance ministry said that those coupon payments onto dollar bonds are now with citibank. that means it has fulfilled its obligations to investors. the statement confirms earlier reports that $117 million have been sent to citi, the payment agent. still, s&p sees the risk of nonpayment either now or in the future and it cut russia's ratings once again. oil is extending gains after the biggest daily surge in 16 months

pushed prices back above the $100 a barrel threshold. crude is still set for a second weekly loss. general electric has slashed ceo larry culp's controversial pay package by $10 million a year. it is a surprise move in response to last years rebuked rebuke by shareholders. culp's total target compensation went from about $21 million to $11 million in a nonbinding resolution -- million. in a nonbinding resolution, shareholders went --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. ♪ upta. this is bloomberg. ♪

>> we believe moscow may be setting the stage to use a chemical weapon and falsely blame ukraine to justify escalating attacks on the ukrainian people. jonathan: secretary blinken not holding back, going into talks with china. president joe biden speaking to president xi over the phone in about one hour and 40 minutes. going into all of that, futures are negative by 0.75% on the s&p come on the nasdaq down about 0.7%. yields into 2.1314%.

chancellor sunak in the u.k. saying the priority going forward is to cut taxes. kailey: obviously the u.k. it was a cost-of-living crisis. what is interesting is in contrast to rishi sunak, who will speak later on next week, with what we heard from the been coming when, who seems to be a little more concerned about growth, maybe not prioritizing inflation so much, i wonder how the dance goes between the monetary policy and the fiscal policy. jonathan: moments ago, the fed president jim bullard put out a statement online, on the st. louis said website, after dissenting to this week's decision. they voted for 25. he wanted 50. he one to say, "i recommend the committee try to achieve a level of the policy rate above 3% this year." katy kaminski joins us, chief research strategist at alphasimplex. can we just work through that? what would happen if they try to

raise to 3% this year? katy: that is a hard one because the truth is i would love to do that and raise the fed funds rate to 3%, but that has repercussions and it needs a little bit of balance in terms of not affecting growth and causing disruption in the markets, so i think the fed is probably choosing to be a little bit more conservative to kind of ease into this new decision and move into a regime of raising rates, so i think there is a difference between what one might want and what is actually achievable in short order. lisa: achievable without the disruptions you talk about. is this basically the new form of a fed put, that they will move much more slowly than perhaps they would want to simply because they do not want to incur huge losses in the equity markets? kathryn: yes because i think the challenge is, as rates rise, we have industries that have more duration exposure, potential tightening of credit, other

issues that could cause businesses to be a little more squeezed with higher rates. so i think the challenge is balancing between not affecting growth and encouraging good economic practice, but at the same time, not disrupting the market. traditionally whenever the market has been faced with a rate hike, you usually have a selloff in some way, so the market was relatively calm this week about this decision, but maybe that is because everybody knew it was coming. lisa: at the same time, we did see a changed tone from fed chair jay powell, even indicate balance sheet reduction as soon as may. i'm just wondering, are we actually reacting to the words? are we actually reacting to the press conference? or are we reacting to the fed we have known over the past 10 years, which is one that is beholden to a certain calm in markets? kathryn: that is a good question. i think we have been asking the same question all last year. are we ever going to see this

type of move? on our side, what we do see is the sort of technical signals which show that rising rates are coming in the trends themselves really has been indicative that we are going to see rising rates in the long term. i think the real challenge is them shifting regimes and being more actionable, and i think that is something we really still have to see, and i think you indicated that in the sense that we are seeing them being a little more complacent in this area. but i think when you are dealing with inflation at the level we are seeing right now, the pressure is going to come from a lot more places, and that will push them more. kailey: the markets knew coming into this year the policy resulting from that. what it could not have anticipated was a war in eastern europe. do you think the market is still under the risk around those things happening simultaneously as we see the s&p 500 coming off of its best three days since 2020? kathryn: that is a good question

because i think most people are asking themselves this right now, but from our cross asset perspective, we have really seen that some of the trends going into the ukraine crisis really just extended, so what that means is we saw extension of currency, the inflation theme extending even further, so there may be some consolidation after this point, meaning that some of the concern and some of the supply chain issues are priced in, but there is still definitely room because, as you know, geopolitical uncertainty is very difficult to predict, and things can change quickly and in different directions then we would like. what i would say is we may not be pricing it all in, but that is just because it is hard to know how to do that. jonathan: just quickly on the fed come police and i were talking about this with tom earlier this week, this felt like the december fed meeting

where chairman powell said everything he needed to say in the news conference and people did not really listen to it, and then they reacted to it when the same thing came out in the minutes, as if the minutes were some sort of hawkish surprise. do you think we are setting up for the same kind of thing again? kathryn: to be honest with you, i wish i knew the answer to that question. i think most people are really in a period where they are not reacting much. the question is, does the market already and is a paid that -- already anticipate that? people had bet on this move, and now they sought, so there's a little consolidation. what i would say is short-term respite, a little bit of back-and-forth, and then more focus on the next time we have

an opportunity for a hike. jonathan: thank you, katy kaminski of alphasimplex. this is a difficult time. i would hope you peter tchir later of academy securities. he is stressing the massively wide range of outcomes we still have on either side of this debate. the guests always put it better than i can. earlier this week, "the dilemma for many investors, allocate capital towards the inflation story or allocate capital to the increasing likelihood of lower growth and higher unemployment." lisa: that really comes down to the fed's willingness to slow growth, to hike rates in order to try to bring down inflation, and honestly, i keep going back to drew mattis's point, whether they even have control over that at this point. jonathan: it is a guessing game. it always is, but this time they put forward the dot plot, and people are saying they might not have to do it because people will start to tighten financial conditions, and then they can

back away. lisa: we don't understand inflation. we haven't understood inflation for years. the fed got inflation wrong, now we are scratching our heads trying to understand the next leg of this path. jonathan: that is the 'bramo i know and love. it took a while, about 90 minutes. this is bloomberg. ♪ . ♪

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jonathan: a really important morning of talks around the russian invasion. president biden speaking to president xi about an hour and 30 minutes away. looking for do coverage of that a little bit later. this week so far, big week of gains on the s&p 500. through thursday's close, up almost 5%. it would be the biggest weekly gain of the year so far. we are -0.75% on the s&p. on the nasdaq, down let's call it 0.8%. that's the equity picture. here's the bond market story. on the week, two-year yields up about 15 basis points or so. this week we came very close to 2% on twos, just about beneath that level.

then we backed away. we've heard from st. louis president jim bullard. put his hands up for 50 basis points this week. now he's put out a statement saying he would like to see the fed funds get to 3% this year. can jim bullard find some friends by the time we get to early may and this fed sits around the table together again? lisa: they have moved a lot already. i think we cannot underestimate how much they have shifted talking about a 2.8 percent fed funds rate in the near future. that alone is a huge move. however, it seems like the leadership does not agree. the leadership seems to have more hesitance than the rest, which make me wonder how much traction you can get. jonathan: chairman powell coming up. we will hear from him twice, i believe. that's the fed. this is the boj. kailey leinz, the ecb think about making a move. the fed has made a move. governor kuroda wants no part of it. kailey: the message from the boj is follow your other central

bank friends are jumping off the bridge, you don't have to go, too. they see no reason to raise rates even as cpi could reach 2.8% in april. the commentary on the yen also really interesting. saying sometimes it could be a positive if the yen is weaker, but it is more about dollar strength at this point then yen week this -- yen weakness. jonathan: let's get some single names and say good morning to romaine. romaine: keeping an eye on the rally we've had over the past four days, the idea is whether that is going to continue on this friday and into next week. we should point out that on a weekly basis, all of the stocks in the nasdaq 100 are higher, headed towards weekly gains, but a lot of the names that led us to where we are today are softer here in the premarket. that includes apple, down about 0.6%. a lot of the big cap tech stocks either flat to slightly lower in the premarket, as a lot of people still have their eyes on ukraine and this conference call

you talked about between xi jinping and president biden. fedex not doing any favors for this market as well. they came up with earnings last night that are pretty big here. the biggest issue was labor costs. just the cost to hire people, but the idea that they had a lot of shortages of labor at certain hubs, and those just region hubs had to reroute packages elsewhere, and that raise expenses to weigh on the company earnings. shares down about 3.6%, which puts some of the blame for this on omicron, but a lot of analysts saying they are -- saying there are bigger issues here. one of the bright spots on the day, moderna up about 0.6% on the back of the news that it will file with the fda for a second booster shot for adults. keep it going here. we keep an eye on some of the other names out there. pushing forward to next week, you went to keep an eye on these names that have high international exposure. nike is going to report earnings on monday. six analysts on the sell side

have lowered their expectations for those earnings, cut their price targets and shares, down about 0.7%. -- targets, and shares down about 0.7 percent. the expectation is that the growth we have been seeing in north america is going to be disrupted by supply-chain issues. combine that with another bad quarter in china, and expectations are moving to the downside. so lantus -- still lantus -- still lantus -- ste -- stellantis down about 4%. stonecoltd, they reported profit expectations that were low. they came in well above those expectations. the share up 29%. jonathan: i'm not used to stella ntis. it is like meta, but worse. at least i know what meta is.

it is meant to be facebook. stellantis, i'm like, oh yeah, it is chrysler and fiat and jeep and the like. that data that romaine pointed to on eu car sales, yesterday dropping 6.7% to a record low for february. lisa: we are dealing with supply-chain disruptions that have only gotten worse, and we are dealing with that kind of supply chain stock in addition to the extra costs that people are feeling because they cannot absorb it as easily as here in the united states. jonathan: are we going to start to conflate some of this data? we are talking about consumer confidence in america for a while now. decade lows on u mich. kailey: the conference board measures have come in a little stronger, but there is still this great divide between consumer confidence and a

consumer that is still showing up in the spending data. it does not yet see that all the inflation fears out there is ultimately affecting behavior all that much. jonathan: joining us now on the path forward, tom tzitzouris, head of fixed income research at strategas. you think the federal reserve has already made a policy mistake in the last 12 months. you think they are about to make another one. walk us through it. tom: absolutely. there were some comments from jim bullard there. we think it was a policy mistake to not begin tapering last may, waiting until november. we thing it is a policy mistake to delay balance sheet reduction any further at this point in time. lisa: what now, what are you betting on and how this plays out in bonds? thomas: if the fed were to pollute -- were to follow the path it is on at this point in

time, then very likely they are going to invert the curve on the twos-tens racist by the end of april at the latest, and quite possibly invert the curve between ones and twos by the end of this year. inverted curves are not just the leading indicators of recessions. they are causing factors of those recessions. what's worse, they cause wealth inequality on the other cited those recessions. so we take curve and version very seriously, and we think the fed should as well. kailey: when chairman powell said the probability of a recession in the next year is not particularly elevated, would you disagree with that? thomas: today, no. if the fed implements its rate hike past, it becomes almost a guarantee that we are going to have a recession byerly next year. i don't think we can handle 80% that funds rate by the end of this year. i really don't think we can handle that at this point in time. jonathan: if we invert fed funds twos by year end, surely the

rest of the market is pricing a recession. i just wonder what that means in the credit market, how you expect that to evolve alongside your call on the treasury curve. thomas: once you start to invert , it pretty much tells you you are in the recession at that point in time, so we would expect growing credit market indicators to be widening out. but at this point, i would say the credit starts to pull from the cash burners. the market is pulling credit from pretty much everybody except u.s. treasury, and that is when you get a broad credit weakness. at that point, i think equity and credit markets will be off a substantial amount. jonathan: i sometimes ask this question. let's say i can guarantee a recession in 12 months. what do you do differently today? thomas: take a slower path with the fed funds rate and implement balance sheet reduction sooner.

this is why we continue to harp on this point, where you need to implement balance sheet reduction sooner because the sooner you do that, it allows you to go slower with the fed funds rate. the reality is you think the fed funds rate puts way too much strain on my street -- on main street. it forces the market to ration credit away from where it is needed, and pushes places that need at least, so you have to go slower on the fed funds rate. we think that is the path the fed should be following. lisa: what they should do and what they will do our to do very different things. fed chair powell would be more willing to be more aggressive with the balance sheet and take it slow on the fed funds rate. thomas: that is what i am hearing when i hear powell speak, but that is not the message we are getting from the broad fomc, and that tells me there is disagreement. whether that this agreement is political or along academic lines, i get the indication that powell wants to go faster with

the balance sheet. obviously bullard does as well. i get the feeling that the market believes powell doesn't have the votes right now, and that is why the equity merck has rallied this week and the curve has remained flat. jonathan: if you are just tuning in on tv and radio, this is what happened about 40 minutes ago. st. louis fed president jim bullard came out with an explanation for his dissent earlier this week. he dissented against the call for a 25 basis point hike. he wanted 50. he wants immediate reduction of the balance sheet. that process should have started for him this week, at least implementing the plan this week. he wants the fed funds by year end more than 3%. so while tom might agree with him on reducing the balance sheet, i am not quite sure he's with them on where fed funds should be by year end. lisa: and he said perhaps j powell would agree with jim bullard -- jay powell would agree with jim bullard.

we were talking during the press conference about the balance sheet. i wonder if it is because of exactly what tom was talking about, that he would rather see them rely more on that reduction then some of the other tools. jonathan: going through some of the data, march 21, jay powell speaking at an event, and then on the 23rd, he takes part in a panel on innovation. so you will hear from them a couple of times next week. it is his chance to tell us what he thinks. lisa: and perhaps what he emphasizes after a press conference that seemed to send a different message to everyone, depending on what they want to do here. jonathan: isn't that always the way? [laughter] lisa: for everything. jonathan: futures down 0.6%. we are down 0.7% on the nasdaq. 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. it top aide to ukraine's president zelenskyy says the aim in russia should be -- in talks with russia should be to stop the fighting now. >> if you have serious diplomatic talks, you immediately get a cease fire. just to remind you, we started the first round of negotiations on the role of delegation, and the promise was to have a cease fire. that was not the progress for the second and third round of negotiations. cease-fires should be unlimited immediately. ritika: he says the lack of a cease fire shows that russia is not serious about finding a diplomat a solution. the vladimir putin could threaten to use nuclear weapons if the invasion of ukraine drags

on. in china, president xi jinping has pledged to reduce the economic impact of his covid fighting measures. that signals a shift in strategy that has minimized -- on the economy. meanwhile, shenzhen is easing its lockdown and will allow factories and parts of the city to resume operation. it was another glitchy opening for nickel trading in london today. the trading limits were introduced for the first time in the wake of last week's frozen price spike. i'm ritika gupta. this is bloomberg. ♪ ♪

>> this is an opportunity for president biden to assess where president xi stands.

there's been rhetorical support or the absence of clear rhetoric and denunciation by china of what russia is doing. the fact that china has not denounced what russia is doing in and of itself speaks volumes. jonathan: that is the issue right now for the u.s. administration. it is not what china has said. it is what china has not said. a seven hour conversation with jake sullivan going into talks with leaders later this morning. lisa: they say that they want to support ukraine, that they are against the conflict. they have still a pretty close line to russia, and they will not give them an out for that. jonathan: good morning to you. on the nasdaq, we are down about 0.7%. treasuries rally, yields falling . no drama there. crude up about 0.25% to $103.23. this line from bluebay earlier

this week, "we think russia will be in the isolated wilderness for a long time to come. regime change in russia is probably a prerequisite for reinvestment for many, along with the lifting of sanctions. that last lin -- of sanctions." that last line is phenomenal. lisa: -- kailey: about russia default risk, the idea being that this is not just a near-term issue. it is not just about this week's $117 million coupon payment. this is long-term because a lot of the sanctions put in place when a country becomes a global pariah, that takes a very long time to unwind. jonathan: cristian maggio joins us now, head of portfolio strategy at td securities. with the murder of jamal khashoggi, people stepped back from saudi arabia. do you agree with bluebay that russia will be in the isolated

wilderness for a long time to come, a regime change is probably a prerequisite for reinvestment for many? cristian: i think i agree with that statement. the two situations are very different because the saudi case was against one single person, while here, you are talking about a whole nation. there will probably be some money coming back. some money will not leave at all. when you remove sanctions, what is the reputational risk with being associated with a regime that many considered to be murderous? lisa: what is the contagion risk to other emerging markets given the fact that this is not going away for a long time? cristian: we see contagion right now through risk aversion and commodity prices. commodity prices were already on the upside, but they are

definitely getting pushed much higher because russia is a great commodity producer. energy, agricultural, metals. that is not going to go away immediately because we just have too many supply-side disruptions involved in this conflict. you could have the russian default that everybody is talking about. that is another risk. kailey: but the markets use that -- the market views that as a lesser risk. we have seen russian cdf's coming in substantially. is the market being overconfident? cristian: no, you're right. the point is what you are talking about is two coupon payments that were due a couple of days ago. they were paid with some delay, which is not a very good sign, but we have numerous more coupon payments and redemptions coming

through the rest of the year and over the next 12, 18 months. so the 28th and the 30th of march will see another couple of interest payments of about $190 million. so the market will be holding its breath for quite some time, every time these payments come due. jonathan: i wonder how you think the global pool of central bank reserves and the denomination of them is going to you all in the coming months. if you are a central bank governor, a leader of a state with questionable leadership in the eyes of the west, what you will do with your dollar reserves right now that's what will you do with your dollar reserves right now? cristian: i would not want to be on the bad side of the u.s. that has weaponized the internet reserves, going the way of freezing their assets. the first point is where do i diversify my research, into euro?

but the euro is also subject to the same risks. then you can go into remember, -- into renminbi, but renminbi is not a currency you can use for international payment. so it is a conundrum. maybe you can begin physical gold, but that is not as liquid as currencies. wherever you go, the dollar is the global reserve currency for a good reason. lisa: do you think there is still a very real risk, going back to the russian default scenario, that the payment could get stuck in the pipes? this is something we have been talking about. we really have not seen this before. are there bigger implications for this? cristian: yes, that is probably the biggest risk because russia demonstrated willingness to pay. they definitely had the capability to pay in this

account. is it a default if the payment does not reach the bondholders not because the debtor did not make the payment, but because there are restrictions and international sanctions? i think this is completely uncharted territory and it will be very controversial, but the risk is very real. jonathan: we've got to leave it there. this is a fascinating conversation. we would love to continue it with you. isn't this the really difficult part of it all? typically we would sit here and you'd have two things. do they have the ability to pay? do they have the willingness to pay? they have the ability to pay. they have the reserves. the problem is that they cannot act because -- they cannot access them. it is pretty unique looking at many situations like this. lisa: it is unprecedented,

having a deliberate cutting off of a nation from the global financial system. how realistic is that going the ongoing tenure? we are seeing this with citigroup. how does citigroup exit russia given all of its ties, given the fact that it is a custodian for this type of asset? jonathan: which is why so many people are uncomfortable with what we are seeing playing around the screens. to fully price something, you have to understand it. i don't understand it. i don't know many people who do. kailey: it is difficult to price this kind of uncertainty. that's what we got from goldman sachs this morning, saying this is i -- this is an equity market that still looks quite sanguine. that is when it comes to the energy supply as well. jonathan: great opportunities in high beta. lisa: i did laugh when i saw

that headline. i thought to myself, when has he not been bullish? jonathan: two views make a market, don't they? futures down 0.7% on the s&p. this is bloomberg. ♪

>> i think we are facing the biggest inflationary challenge we have for several decades. >> the very high energy and food prices means that some households will be hurt. >> the markets are pricing and tighter policy because of the boost to inflation. >> as time goes by and we see if you hikes, the growth aspect will become more real. >> it will be tricky for the fed to follow what is going on. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: 60 minutes away from a conversation between the u.s. and china