>> i'm still a big believer that the physical level economy continues to further along. >> real consumption is still very strong. >> we are absolutely looking at the possibility of prices over $150 this summer. >> where is inflation going? how far is the fed going to raise rates? >> another inflationary shock might require more hikes as well from those central banks. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: it is a fascinating moment in global markets.

from new york city this morning, good morning. this is "bloomberg surveillance, " live on tv and radio. futures up 0.25% on the s&p. the fascination belongs in the bond market. lisa: with curves converging around the 2.25% to 2.50% range, how much our repricing in a recession in bonds and looking past it in stocks? how long can i continue? dashcam that continue -- can that continue? fed chair jay powell yesterday sounded like he was basically endorsing a 50 basis point rate hike, and he would have to be convinced not to go that much in the may meeting. jonathan: president bullard, 30 minutes away on this program. kailey leinz, michael mckee. what about the meeting still? to come? -- still to come? kailey: i think what is

interesting is the narrative we are hearing from chair powell and speakers across the board is that maybe there were more that are actually ok with the 50 camp. what stops them is the uncertainty around the war in ukraine. is that going to prevent them going forward? i wonder what color jim bullard will be able to provide on that. jonathan: always look forward to your responses on air. our audience always says the smartest out there, the sharpest. some of our subscribers said it always skips a generation. lisa, who is always bearish, i nearly went to bed yesterday, but her son will probably be buying the most aggressive stuff. crypto, and fts, meme stocks, nikes, and then he said he will be crazy rich someday, too. [laughter] lisa: you know what? he's probably right. last year he was begging me to buy an nft. he's always trying to hustle. i'm a little nervous. jonathan: he's been right so

far. lisa: he has been. he wanted to buy macy's at the heart of the pandemic, and i was like, you are 11. no. jonathan: you need to get him on the show. actually had young 'bramo on my radio show years ago, and he made some good calls than. he was about six years old then. futures up 0.25% on the s&p. on the nasdaq, up 0.1%. yields higher by five basis points. in the commodity market, 112 dollars. crude not doing much this morning. lisa: still at $112, a far cry from where we were. i keep coming back to this idea of francisco blanch talking about how $150 on brent in his -- on brent is his base case. i wonder what that would do to the empire commodity complex. how much would that disrupt stocks, given the fact that so many companies, you absorb those

costs and you start to see signs that consumers are pushing back? jonathan: i've mentioned it a few times, we have not done really in-depth on this story over the last few hours, dollar-yen. you have been on top of that, bringing together asia and what is happening in the states. dollar-yen pushing 121. kailey: this is a level we have not seen since the beginning of february 2016. what is so interesting is you are seeing this divergence between the fed, the boe, even the ecb sounding more hawkish, and the bank of japan, where kuroda says absolutely no reason to hike interest rates at this point, even as they are potentially looking at 2% inflation as soon as next month. jonathan: the main story for us is in the yield curve. if you compare twos and tens, the lowest since march 2020. this curve is getting flatter, and pockets of it inverting. joining us is patrick armstrong, chief and desmet officer at plurimi wealth -- chief

investment officer at plurimi wealth. are you comfortable being long the s&p 500 as this yield curve inversion starts to develop? patrick: i think you can do better than the s&p 500. i don't think this is a time to be passive. we've got a clear change in the macroenvironment, where we have gone from a goldilocks environment where everything was taking long, but inflation was not provoking the fed. now we see growth slowing and the fed is moving to hiking rates, so the goal is for 50 basis points at the next meeting and may be 50 basis points for the next few meetings. i am not averse to owning equities. i want to own equities, though, that are priced cheaply and not a. i want to be short big cap tech companies.

we are in an environment where governments and companies are going to be building strategic inventories so they don't have supply shortages. europe is going to need energy. if you are a producer of any type of goods, you have semiconductors. you're are going to probably going to produce goods. these resources that are in high demand that are scarce, i would rather not go in the s&p. i would rather pick equities. lisa: what are your economic parameters to stop picking? is it that we avoid recession? is it that that risk gets more intense later on? patrick: i think europe is probably going to fall into recession, just given what is happening in russia and the reliance on russian energy. i do think as russia continues an assault on ukraine, europe is

going to move away from russian oil and gas, natural gas even, and that is going to have a very strong recessionary force and stagflationary force. i think the united states is much more energy independent. the u.s. should be able to flirt with a recession and not fall into it. i think europe probably falls into it. but whenever you have a fed hiking cycle, whenever you have a twos-tens that are inverted, those are good indicators of a recession. if powell is as hawkish as he is trying to make us believe he will be, a recession is not far-fetched. kailey: you mentioned curves on the twos-tens nearing inversion, and other parts of the curve are already inverted, yet the equity market has seemed to look through that in recent days. i am wondering if that bonds are going to fare worse off in an aggressive tightening environment and equities. is there a point where you actually have bonds selling off to the extent that they then

become attractive because they have a higher yield and then tina is called into question? patrick: you still got negative real yields on 10 year. inflation expectations are still 2.8% right now, so that is the highest in the last 30 years. so bonds are not as attractive. equities still give you the hope of growing purchasing power by growing your capital investment. i think it is a clear tailwind for price equities, and it is going to be an environment where you want to be short duration because those yields are going to climb higher, and you want to be short the equities that are still trading at multiples even though these comedies have fallen 50%. jonathan: a number of weeks ago, we were thinking the europe trade is dead now. recession is unavoidable. the ecb will have to back away. then we erased all of the losses

since the invasion on the stoxx 600, and i think people have taken a stop and look and wondered whether those banks can perform again. your thoughts on that. patrick: i would not be buying european banks right now. got the ecb stuck at negative interest rates. you've got a looming recession in europe. there's no backdrop that creates a real boost for the banking sector. so incredibly cheap on volume, but not given what the economic environment is going to be. jonathan: patrick, thank you. the conversation for the last 10 years, value gap or value trap. i think you heard it from patrick, value trap. lisa: and yet, when you talked about cheap, what is cheap? he said energy companies are cheap. this comes after a nearly 40% rally year to date, and they given the fact that we have seen that huge commodity rally in

general, the fact that he still thinks they are cheap is you a sense of how difficult it is to pick your spots in a fast-moving market where the parameters seem to be shifting by the day. jonathan: we caught up with francisco blanch of bank of america. did not back away from that call for $150 on crude. heard the same thing from amrita sen of energy aspects. lisa: they attributed what happened last week to this idea of people actually pulling back some of the derivative exposure because of collateral calls. so this lack of liquidity is actually leading to prices being lower than where they were otherwise as we start to gain out what a prolonged conflict would look like. jonathan: would you like some of the twitter feed for young bramo ? "i can't believe you actually wore her down." i've been pushing this for a while. "i thing we would all bramo

index to replace the dow." i would be happy to quote that. "i hope he buys bitcoin and nothing else." lisa: he went through a period when he was into that, and then he was thinking about some others because of what is backing in fts and he was doing research. staying at home without a lot to do during the pandemic, dangerous. jonathan: an old story that when he first got his big job investing, it is because the older guys knew that he was too young and too dumb, which meant that he would be willing to be long, and the old guys were too scarred and too smart to partake, to participate in the upcoming bull market. i always found that fascinating. lisa: i should have listened to zeke when he said buy you theory him -- to buy eth -- to

buy ethereum. jonathan: listen to the kids, sometimes. this is bloomberg. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. ukraine's president of a lot of your zelenskyy has called on pope francis to mediate in the war with russia. in a tweet, zelinski says he told the pope about the difficult humanitarian situation and the blocking of rescue corridors by russian troops. meanwhile, the kremlin once again says peace talks are going more slowly and less substantively than it would like. ukraine accuses russia of negotiating in bad faith. president joe biden is warning the private sector, improve your defenses against cyber attacks immediately. the administration says the kremlin maybe planning cyberattacks in retaliation for sentience against them -- for sanctions against them. chair powell says the fed is

prepared to raise interest rates by a half percentage point added next meeting if needed. policymakers increase the benchmark lending rate by a quarter point. investigators trying to figure out why a boeing 737 800 airliner crashed in southwestern china, believed to have killed all people on board. the plane nosedived from 25,000 feet. china eastern has grounded its flights of the fleet. 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. ♪

>> the only way out is through diplomatic means. it is through dialogue. we know how the situation has evolved into very negative scenarios. i think what happens now is already worse than what much people expected. jonathan: before and minister from moldova. futures positive about nine points. the nasdaq essentially unchanged. bond yields higher by six basis

points on tends to 2.35%. all that bond market action continues to build. lisa: when you saw people saying that yields got to this level, that it would disrupt equities. this was the threshold where we would see some sort of market turbulence. he had market turbulence. is this what we call market turbulence? is this what we are seeing in equities? jonathan: tk is missing out today. you agree? tom keene is missing out in a major way. when this started a month ago, tom wanted one person on the show, and it is our next guest, and tom is not here. if tom was here, the introduction for our next guest would be about 30 minutes long, for good reason. angela stent is with us, the author of "putin's world." let's start here. there's this western centric conversation that there is some instability building in the russian government, that we could have regime change, that putin could fall. could you give me your thinking

on what is happening in russia? angela: i think many of us are clutching at straws in that thinking here. there are some rumors that some intelligence people have either been arrested or fired and blamed for the failure of intelligence at the beginning of that war. but these are just snippets. we know that there have been demonstrations against the war, that thousands of people have been arrested. they can face up to 15 years in prison for those protests. we know that 200,000 russians have left since the beginning of the war and gone to other parts of europe. but we really don't have any proof that in putin's inner circle there is any plot afoot, and it really would have to be his inner circle. he is very much in a bubble. he does not see very many people. some of the oligarchs have

complained about what has happened to them. they have lost their yachts in their home -- their yachts and their homes, we know that. so i think we have to be very cautious about assuming that a coup is underway. at the moment, putin appears to be firmly in the saddle. he's obviously isolated. he is lashing out verbally, as we saw last friday, celebrating the anniversary of the annexation of crimea. he is still very much in charge. lisa: when it comes to lashing out, how much are we going to see an escalation in the types of weapons used and some of the methodologies that putin opts for in light of what you talk about, the fact that he is cornered and isolated? angela: we are seeing the bombardment of cities, seeing humanitarian catastrophe. our government is warning that

the russians may use conoco weapons -- may used chemical weapons, and putin has made veiled hints about the potential use of nuclear weapons, so i think we do have to watch out. if you go back to the syrian playbook, the way the russians behave there with indiscriminate bombings in the city of aleppo and the use of chemical weapons, we do have to watch out for that , and that of course is a major concern going forward. kailey: it has been suggested by the biden administration, as well as others, that putin's ultimate ambition does not end with ukraine. he would like to see is a return to the soviet union in some sense. if that is true, what does that mean about the likelihood of a lasting peace agreement, or at the very least an agreement at all? angela: you might get an agreement to end this war eventually. it would clearly involve

ukrainian neutrality. the question is what about crimea and the donbass come of the southeastern ukraine region. that is a possibility. we are not nearly there yet. but beyond that, if the russians manage somehow to prevail, putin's ambitions go beyond ukraine. he has talked about a new slavic union state with belarus and ukraine. but he has also hinted that russia has its sights even further west, that it wants to reestablish not only in the post-soviet space, but may in central and eastern europe, too. the likelihood of a lasting peace agreement is really quite far off. we have to have all of the parties sitting down and rethinking euro atlantic security going forward, and that is a major task. jonathan: the title of your book, "putin's world: russia against the west with the rest."

i wonder if the rest once to be with putin for much longer here. using that china will back away from its relationship with russia, and do you believe that vladimir putin would listen to xi jinping's president xi tried to intervene? angela: i don't think china is going to back away from its relationship with russia. i think china is a difficult position because putin would not have done this had he thought he would not have chinese support. but xi jinping has cultivated this relationship with vladimir putin, and they see each other both as authoritarian leaders determined to push back against a world order imposed by the united states and its allies. i think we should not inspect china to back away from backing russia, but chinese major banks are apparently complying with some of the sanctions, so it will be tricky for the chinese to avoid having a major economic

problem with the west and sanctions, but i think they will remain backers of russia even though they say they believe in a territorial integrity and sovereignty of ukraine. india is another country to watch. the indians have not criticized the russians, not go along -- not going along with the sanctions. they have their own relationship with china, and arms relationship with russia. then you have south africa and parts of the middle east and latin america. so we have to remember that the west is united in its condemnation of russia, but much of the rest of the world is not because it also has a much more sectional view of the united states. jonathan: come back soon, please. angela stent of the brookings institution and well-known author. lisa: that is such a good point she made at the end, that the rest of the world other than the west is rather ambiguous about the u.s. leadership, especially

after the past decade, where you saw a bunch of -- jonathan: futures up 0.2% on the s&p. coming up, jim bullard of the st. louis fed with bloomberg's mike mckee. a conversation you do not want to miss. that is next.

jonathan: futures up 0.2%. the nasdaq unchanged. the s&p 500 up by 0.12% at the moment. yields are higher by five basis points to 2.34%. cons to talk about in the bond market. the curve just a bit flatter over the last few weeks. 18 basis points, the difference between twos and tens. if you compare the three year, the five-year come of the seven-year to the 10 year right now, all trading above the 10 year yield. that curve, pockets of it starting to invert. the perfect conversation now. mike mckee, one of the best in the world at following this fed, sitting down with the st. louis fed president jim bullard. good morning to you, buddy. michael: good morning to you, jon, and good morning to you, jim bullard.

thank you for joining us on bloomberg radio and tv. james: thanks for coming out to our new museum here. michael: this is the money museum. it is fascinating. if you are in st. louis, you should come visit it. you're sitting next to the sign that talks about hyperinflation, so it is sort of a perfect spot for us this morning. a week ago you were the lonely dissenter looking for a 50 basis point rate increase. now the chair has all but promised a 50 basis point increase, at least that is the way the markets are taking it, at the may meeting. what happened last week? james: i think those that are interested can read my dissent statement which was out last friday and is on our webpage. i think the fed needs to move aggressively to keep inflation under control. our policy as we sit here today is still a very large balance sheet and very low policy rate. we need to get to neutral at least so that we are not putting upward pressure on inflation ring this period when we have

much higher inflation then we are used to in the u.s. economy. michael: when you say we have to get to neutral, how quickly? you have been arguing for more than 200 basis points. james: i think faster is better, and i think the 1994 tightening cycle or removal of accommodation cycle is probably the best analogy here. that one was quite successful. the fed moved 300 basis points in a single year, then made some adjustments afterwards in 1995. the result was that we had our 2% inflation target over the next 10 years. the economy boomed in the second half of the 1990's. so i think this is a situation that is like that. it came out of the pandemic. we got surprised by inflation. but now you have to move the policy rate up discreetly a fair amount. not to be too disruptive, but i think 50 basis point moves should definitely be in the mix,

and then get to a level that we can be neutral, and from there we can decide if we want to be restrictive and put further downward pressure on inflation. right now we are putting upward pressure on inflation. it is the wrong place to be given where inflation is. michael: as i noted, the markets are now pricing and 50 for may 4. the fed does not like to surprise the market. should we assume that is what you are going to do? james: i am just one person on the committee. i don't know where the rest of the committee will be, and the chair has to manage that process. i thought that was a good speech yesterday that laid out the situation, and we will see where we are when we get to may 4. kailey: the -- michael: the economic data have been closely watched, but it does not sound like it really matters between now and may, that we are too low in terms of the fed funds rate and inflation is too high, and

those are the only two considerations. james: that is the big picture, and i think that is right, that we don't really need a lot more data here. but you never know in this world and in this business. you can always get surprised. obviously we've got geopolitical risk out there. my feeling on that is that we can't wait for that to get resolved. this could go on for a very long time, and certainly geopolitical tensions, even if the war ended tomorrow, the tensions would last for a long time. so i think the best contribution we can make is to get our house in order and make sure the u.s. economy is doing as well as we can achieve, and that will be the best that we can do to contribute to the global situation. michael: without going all r-star on everybody, the idea of neutral is a moving target. different people think of different levels. one analyst some dumb -- one

analyst summed up your policy now is the fed will keep hiking until something rakes. is that a good way to think about it? james: no, we are going to go to neutral, which is where we are not putting upward pressure on inflation. don't want up or pressure -- you don't want upward pressure on inflation when you've got high cpi and more coming probably ahead. i would probably get to a restrictive policy so we are putting someone downward pressure. history tells us the faster we moved to that, the better chance we will have of moving inflation back to target and getting a boom in the u.s. economy. michael: what is neutral to you? james: on the funds rate, i've got 2% because my r-star is lower than others. i'm willing to go with a zero, so that is lower than other estimates out there.

i would be 200 basis points on the funds rate, but i want to go to 300 this year to get restrictive, and then that will help us turn inflation around, and hopefully we also get some moderation in inflation from other sources. michael: what you worry about is inflation psychology getting embedded in the economy. what are ceos telling you about shortages, supply chain problems , and about what they are able to charge, the pricing power? james: most disturbingly, they are telling me that pricing power is not a problem, that they are able to raise prices and pass on the higher costs to their customers. that is exactly the kind of situation that you don't want. you want them to be more worried about losing market share when they raise prices, so that dynamic has been worrisome to me, and that is something i think we need to get under control. i think discrete adjustment to

the policy rate would help break the inflation psychology and help keep inflation under control in that sense. they are also seeing a great deal about supply chain issues and how those are going to continue, and they will probably not get resolved anytime soon. we may have to wait out into 2023. that is way too long for this policy process, so i don't think we can just wait for that. michael: what about the balance sheet? what is your best guess as to the best course for reducing the balance sheet, and what effect would it have an interest rates? james: i said in my dissent a statement i would be happy to just get started on the balance sheet runoff now. in retrospect, it looks like we allowed balance sheet expansion to go on for too long. sooner is better. i would've been happy to do it

at this previous meeting last week. i see no reason to not just get going on that process. we've got a long ways to go on that dimension as well. the balance sheet approaching $9 trillion pre-pandemic -- $9 trillion. pre-pandemic, it was $4 trillion. so you've got a lot of balance sheet reduction that could go on. it would be passive runoff. michael: before we let you go, how would you advise people to look at the summary of economic projections and make sense of it, given that it says interest rates are going to rise to be restrictive and inflation is going to just drop off over the next three years, but unemployment is not going to move at all? james: the real economy is doing very well. the u.s. economy, even with geopolitical risk, is expected to grow at above trend pace this year, next year, even the year after that in a lot of forecasts. that is going to continue to put

downward pressure on the unemployment rate and continue to have an even stronger labor market. if you look at the kansas city feds labor market conditions index, it is almost at an all-time high here. it probably is going to go to an all-time high, so one of the best labor markets in a generation. but i just think that the real side of the economy with continued reopening following as the pandemic continues to fade, i think there's a lot of reasons to think that it will have a robust economy going forward, and that suggests robust labor markets going forward. so what we have to do is adjust the policy rate discreetly, get to the right level, then we can make adjustments from there. michael: and you can get a soft landing? james: i think so. we did in 1994. we will do it again. michael: jim bullard, thank you very much for joining us this morning. jonathan: mike mckee the money museum. is it nice there?

michael: very nice, but i don't think they are giving out free samples. jonathan: inquiring minds want to know. mike mckee, thank you. great interview. as you might expect from mike mckee, with st. louis said president jim bullard. mike tweeted out the picture of the hyperinflation poster. for anyone wondering about hyperinflation, because we always get messages about it, here's the definition at the st. louis fed. when inflation, general sustained upward movement of prices of goods and services in the economy, reaches more than 40% a month. then they have a list of countries with the worst hyperinflation in history. germany, greece, hungary, china, zimbabwe, as you might expect. lisa: that was the first thing you thought i would you thought of the money museum, was whether or not they were giving out samples? jonathan: at the central bank of austria in vienna, you can go in and lift up a bar of gold.

they have a bar of gold in the entrance around the corner. i'm not giving anything away. you can go see it for yourselves. i'm just wondering what the experience is like at the money museum. that is all. let's start with faster is better. faster is better. i think 50 basis point moves should be in the mix. we are putting upward pressure on inflation. it is the wrong place to be. he's talking about getting up to a restrictive stance. 3% by year-end. lisa: and saying they don't need a lot of data to make these faster than expected moves. i thought it was really interesting that he said he was concerned that businesses are able to pass along the cost to consumers, that there is not pushback, and that has some very concerned about un-mooring of inflation expectations. jonathan: the hope is there. 9:30, mohamed el-erian has something to say. we will catch up with him in 50 minutes' time. kailey, thanks for being with us. i know you will be with us tomorrow again.

tk's extended vacation continues. this is bloomberg. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. a russian court has sentenced jailed opposition leader alexa navalny to nine years in prison on fraud charges. navalny is putin's top critic. he has been -- he has been detained for nearly a year after returning to russia following a nerve attack. questioning of judge ketanji brown jackson on day two of her senate judiciary hearing. if confirmed, jackson would be the first black woman on the supreme court. germany is backing in international marshall fund to rebuild ukraine -- international marshall plan to rebuild ukraine after the war. the u.s. created the marshall plan after world war ii to pay for the postwar recovery of 16

nations, including germany. in canada, prime minister justin trudeau reportedly nearing a deal that would keep his liberal party in power until pony 25. trudeau's government -- until 2025. according to multiple reports, trudeau's government is discussing a deal with the left-leaning democratic party. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> i think we are in a very volatile inflection point that will come down to whether or not the russians will be satisfied

by simply extending their effective orders and ukraine -- orders and ukraine. will they take kyiv? will they reach beyond the borders of ukraine? the letter is terrifying the markets. lisa: not just markets, but the world at large. that was ken griffin, the citadel founder and chief executive officer. you can watch the full interview coming up at 9:00 p.m. tonight, "bloomberg wealth" with david rubenstein. david rubenstein, we are so lucky, is here with us. as markets grapple with the conflict and ukraine, a big question has been why things have been so sanguine, if incredibly volatile. what was ken's response to this incredible willingness to look past some of the conflict and continue to buy? david: can hats -- ken has built one of the greatest hedge funds in our nations history, and you have to know what the

geopolitical forces are going to be and what they are likely to do in terms of their impact on the markets. so he has a team of people looking at the situation, but nobody really knows right now exactly what is going to happen. he's obviously worried about it because it will impact markets and affect his trading, and also affect his citadel securities business. ken has had more impact than almost any major financial percent in the markets over the last number years because citadel has become one of the artist market makers, the second most profitable -- one of the largest market makers, the second was preferable hedge fund in our country's history. lisa: how much do you talk about the need to keep a wall between these businesses, to keep them separate in both perception and actuality? david: he does keep them separate because there's potential conflicts, but he has separate teams of people owned by about 50 people, including

himself and his citadel securities is owned by about 50 people. he also recently sold, for citadel securities, he sold a piece of it, 5%, to sequoia securities -- or, i should say, sequoia venture fund, and to a crypto company. he kind of hinted in the interview that now they will probably begin to make markets on cryptocurrencies, which he had not done before. he has been a skeptic of crypto, and now says he is less skeptical. kailey: what caused that change of heart? david: when markets move a certain way and you are a force of the markets, you recognize markets are saying something that you did not recognize was the case earlier. so he has been a skeptic of crypto since its beginning, but now the market has $2 trillion of value in crypto, so if you're going to be a player in making markets for people, you can't

afford to not be in that crypto market. kailey: what opportunities does that create for him and for citadel more broadly? david: citadel has a janky following among people, and i think it is going to get bigger. what we have learned recently is that the governments can take away your assets pretty quickly. everybody is not a russian oligarch, but these russian oligarchs thought they had their money hidden in various places that they could get anytime they wanted, so the russian government thought they could get its assets anytime. now we can see the governments can freeze and confiscate your assets, so many people are looking at this around the world and saying which wait a minute, bbi need to have some assets that the government cannot get to, or that are headed -- are hidden or anonymous. so i think it is going to be a big growth business. lisa: it is one of the important things we will discuss tonight. i look forward to the full interview. i do want to shift gears a little bit. we have been hearing from that

officials. we heard from fed chair jay powell just moments ago. jim bullard of the st. louis fed saying he does think we can achieve a soft landing, even as the fed moves to a more restrictive policy. based on the on the ground experience you have with the firms you are investing in, do you think it is achievable? david: nobody really knows, but i think the fed has done a reasonably good job of recognizing that interest rates probably need to go up. the question is how much and how frequently. i think the markets are assuming about six different times this year we will have rate increases, probably about 25 each time, but it is not impossible there could be a 50 basis point increase at some point, depending on what the inflation numbers are. i think the fed may have missed the market a little bit. it may be could have been a little bit earlier, a little bit stronger at fighting inflation. i think the word transitory is probably not going to be used again. kailey: they stuck to that for quite some time. how much credibility do you think the fed has lost still has here? david: the fed has enormous

credibility around the world, but the fed is not perfect, and maybe they would say in hindsight that maybe they could have acted little bit sooner, but i don't think it is a gigantic problem, and we are on the right path, so i think it is ok. lisa: we all look forward to watching every week. thank you so much for being with us. that is bloomberg wealth with david rubenstein, tonight at 9:00 p.m. new york time, 7:00 p.m. hong kong on wednesday, and 6:00 p.m. wednesday in london. i keep going back to some of the comments by jim bullard moments ago. this idea of how fast the fed has to go to stop putting upward pressure on inflation, not necessarily suppressing it. kailey: jim bullard not just about getting to neutral. he wants to go to 300 basis points to get restrictive and start to tamp inflation down.

i thought that was one of the most interesting things he said. he thinks 50 basis point moves plural will be in the mix, and that echoes what we've heard from the likes of jan hatzius i goldman sachs. lisa: i have a reputation of looking at the negative. it is just genetically predisposed. but i will say there is a question of how far the fed can go before it curtails some of the dynamism in the market. you do a great job of looking at all of the companies as they come out with their earnings, and honestly, they have been robust for the most part. nike, a strong story in and of its own right. but each one shows that businesses just like jim bullard said have been able to pass the costs on to consumers and haven't really shown signs of letting up. on the flipside, that is giving people's incompetence to go into equities. kailey: the pricing power captured that profitability even

in an inflationary environment. in theory it is a good thing for investors to have money at stake in these companies. less so a good thing for the federal reserve. jim bullard says the pricing power ability to do that is something that concerns him, so what is good for the fed may not be what is good for equity investors and vice versa. i think what is also really interesting, and this is something raised in the bloomberg opinion column, the fed has faced two decisions here. you either act to tame inflation, knowing it could cause a recession, or let inflation run hot forget which one of those scenarios is better for the equity market? david: ian lyngen was saying b -- lisa: ian lyngen was saying the market might be more disturbed if the fed allows the right to get more on more. that's what we are seeing -- to get more unmoored. that's what we are seeing. you are seeing the lift continue, the s&p up 0.3% ahead

of the open. the euro a little bit higher against the dollar, a little bit of a reprieve after the dollar strengthening. 10 year yields a little off of the highs, 2.33%. more coming up on bloomberg. don't miss. ♪ ♪

jonathan: equity markets with a flatter yield curve start equity futures up one/three of 1%.

the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading. this is bloomberg, the open with jonathan ferro. jonathan: live from new york city, we begin with the market pricing in a slower fed. >> it's possible the cycle is faster and hotter. >> the market can handle it. >> chair howell told us that's exactly the thing that should be on the table. >> they have joked about raising rates 15 basis points. >> it puts a lot of pressure on markets. >> you look at the two-year and five-year, they have priced in a bit of this.