raise rates? >> if he is trying to make us believe he will be hawkish, a recession isn't far-fetched. >> it is going to be volatile for a while. >> the backbone of the economy is impacted by these exceptionally high fuel prices. >> live from new york city for our audience worldwide, good morning, good morning. this is bloomberg surveillance on tv and radio. futures down one third of 1% on the s&p. lisa's job is to explain to you why the nasdaq 100 is up almost 9% since chairman powell started his news conference several days ago. lisa: this is not going to be a very illuminating next three hours because i have no explanation other than perhaps people view this as safety. the only bright spot where they can capture some of the upside

slopes from increased prices around the world. jonathan: good asset. there is a relative world relative to other asset classes, there is an absolute world where we start to factor in what he thinks is going to happen with the global economy. we laid it out piece by piece, it sounded very worrying about the next 12 months. lisa: i'm very sympathetic to his view. i recommend everyone go back and listen to it. there is an issue of timing, and i think this is where the confusion comes into play. people are piling into equities saying there could be a recession, but it is not going to happen for another year and a half, so you may as well dance while the music is still playing. jonathan: depression in russia and ukraine. recession in europe, stagflation in the u.s. and a number of commodity and emerging economies

running into debt problems. kailey leinz, that is the year ahead. kailey: he is not the only one that shares that view. the study out of the dallas fed said if you don't get russian oil back onto the market this year, the global economy is all but certain to fall into a recession and according to the dow, that slowdown could be more protracted than that of 1991. jonathan: this line just crossed from novak, talks on raising oil flows. we are trying to work out how much russian crude will come off the market. it wouldn't go to the u.s., it would go somewhere else. >> this is why i'm really interesting to hear what president biden says about renewed sanctions. the plan to tighten the screws on china, penalizing them for buying russian goods. how much can they close those backdoors and eliminate purchases vs. simply redirecting these flows? jonathan: the president in

europe tomorrow, a big couple of days coming up, down one third of 1%. since 2:30 eastern time on wednesday when chairman powell started speaking, we are up almost 6% on the s&p 500. we pulled back just a little bit this morning. that selloff in treasuries pauses for now, but we had more weight to crude rally. kailey: i really wonder what fed chair powell thinks of this rally. how does he explain it? how to see effect a policy if you don't see the tightening of financial conditions? we've seen the same reaction in credit, too. credit is speaking from the same hymn book. central bankers speak on a panel at 8:00 a.m. and i am very interested to hear. it includes fed chair jay powell as well as governor bailey, among others.

you got negative yields and bonds, total volume up. the lowest going back to 2016, absolutely plummeting. how much they talk about the dissonance between the bond market and stocks that are still dancing? eia oil inventories. and curious to see how much we've really drawn down in the united states. how much has the fundamental story changed? is this a trading distortion, or is this something edified by the data, edified by the supplies starting to build up again? i'm really curious to hear not only from the covid president, but the u.s. commerce secretary. this comes after an agreement between the u.s. and the united kingdom on removing steel and aluminum. how much is this the new normal, trying to reward all the allies

and even frenemies to gird the economy for a possible disruption from the conflict of the russian war in ukraine? jonathan: a conversation you don't want to miss. we have had a massive move in the markets lower. more than 70 basis points on the month so far for a two year yield. deutsche bank pointing out we are on course for the biggest month in the game going back all the way to 2004, and this equity market has been rallying. chris, let's start right there. why are we rallying in the face of what we are seeing play out in this bond market? >> i think there is an element of "sell the news" on two fro nts. the war, which was also pretty well-telegraphed, maybe things are not as bad as we first

thought, but i hate to echo there is no alternative to u.s. equities. there are few better places to put your money than the s&p and the nasdaq which are dominated by balance sheets, pricing power , little or no exposure to russia and ukraine. >> there is no alternative work once you have an actual recession. christopher: one of the things that will be different this time is those same companies have gotten so big that they are no longer as -- and they once were. the secular growth won't necessary open -- necessarily overcome the cyclical pressures that google and facebook and others face. that is going to be a surprise for some people, but other than that, a recession is probably

not good for any company around the world. but you've got to put your money somewhere and treasuries are probably still not a great place to do that. >> that is the larger cap. what about elsewhere within growth? is there anywhere that may be safe to be? christopher: i think there's going to shake amongst some of these companies for value investors. some of the broken growth companies are going to survive and do well. but again, we are pretty focused on cash flow generated pricing power. industries like price collection, broadband, luxury goods. we have always invested and that is where we continue to find value. jonathan: is a pet on luxury goods still a big bet on china? christopher: of course, and to a

lesser extent, russia. sort of a luxury goods company, those are pretty resilient brands. still going strong as people returned to on premise bars. >> what is the warning say to you that perhaps you should rethink the thesis that perhaps the consensus is wrong? christopher: wrong in which direction is the question you have to ask. there are very positive outcomes in which you can see a result. that is a pre-low probability. we are going to get a recession at some point in the next two years. the question is when. again, we are not ones to time

the market and go to cash. obviously, if he stayed in investment two years ago, we were at the bottom of the s&p. you did pretty well and it is the same case here. jonathan: the man who would actually have known every brand that you recommended is not here today and i'm sure he is really upset. tk is back tomorrow. you are stuck with me. equity futures down a third. down for temps on the nasdaq 100. just getting some reporting, they repeat the line we've heard a few times over the last few weeks. >> that germany is again a russian and gas oil import ban. what i think is interesting is contrast this with the remarks earlier today, saying that germany will cut back on russian energy as soon as possible. yes, they want to transition away from russia, but they

aren't ready to cut cold turkey because they are so reliant on the energy source. that essentially said that basically europe had better be thinking about energy supply this winter, a noncovalent threat. jonathan: what is achievable this week? we have to think about that going into an important two days when the president lands in your. we are prepared for service sanctions. what are the sanctions they can all agree on in the coming days? >> what i am looking for is how to tighten the screws, particularly on china. china very much center stage for this because that does seem to be the backdoor way of commerce continuing in russia. what are they risking at a time when we've heard yesterday, yes, we have a western alliance but the rest of the world is so convinced of the dominance of the united states-led coalition. how do they sort of solidified

their support of one another and create the economic effect in russia that they desire? jonathan: did you see the comments from china on the g20? china still wants russia to have a place in the g20. that is the issue at play here, the west doesn't. >> and china is speaking from two different lines because on one hand, they are saying they really don't like the conflict and on the other, they are encouraging chinese businesses in russia to build a gap and take advantage of the opportunity and to really hunker down. jonathan: we will get you team coverage on that story next. for our audience worldwide, heard on radio, seen on tv, this is "bloomberg." >> keeping you up-to-date with news from around the world. president biden is heading to europe where he will try to rally allies around tougher

sanctions to punish russia for invading ukraine. the president will join back-to-back summits with nato, the g7 and the european union. the fed hawks and doves are joining jerome powell's calls for higher interest rates by inflation on monday. a half-point increase on the table in may if needed. mary daly now backs robust acts. and one of the two flight recorders from the china plane crash monday has been found. the black box is the key to figuring out why the plane suddenly plunged out of the sky, approaching the speed of sound before crashing. a tornado ripped through new orleans, causing severe damage

and killing at least one person. thousands of people were left without power. the u.s. and u.k. have resolved a long-standing irritant on trade. it will allow 500,000 metric tons to be imported duty-free. the u.k. also will end retaliatory tariffs on more than half $1 billion of u.s. equities, including consumer goods. 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. this is "bloomberg."

>> you're going to see a stagflation, and higher inflation within that. a recession in europe, stagflation in the u.s., and a number of commodity inputs running into debt problems. that is the sort of world we are given at. jonathan: mohammed el-erian with a warning. nasdaq 100 futures down, yields lower by a couple of basis points. we come back, crude higher. just to echo something he said

at the end about developing countries, dependent on imported commodities, there is something in politico that many of you have sent across to me. here are a couple of the quotes. "if you think we've got hell on earth now, you just get ready. a few extra billion dollars means you are going to have famine, destabilization and mass migration." lisa: we talked so much about the crude story, the real story is the food story because this is the bread basket of europe and it supplies so much wheat and other grain to egypt and other areas around the world. jonathan: team coverage with jack fitzpatrick in washington, maria tadeo in brussels. i want to start before we get into the president of the coming days, the tension between poland and russia and latest moves. maria: if you ask me, this really is the bilateral

relationship of continental europe to case a really close eye on. the president is going to --. we talked about the 2 million refugees that have crossed from ukraine into poland, but there was also a political background here and the tension between russia and poland is going in crescendos. the polish government has now expelled a number of russian diplomat's. russia in response has said it won't go unanswered and they also say poland should watch out in terms of the unilateral actions it has taken. remember, the polish have made themselves very clear that they are not owing to reaching ukraine but we should consider a peacekeeping mission to the country under the nato umbrella. with that, it would be an enormous provocation that would trigger a big reaction from the russian government. this is definitely the bilateral relationship to watch out for in europe to increase in tension between the two of them.

kailey: meanwhile, russia seems to be looking for nonmilitary ways to retaliate against europe or perhaps as people are interpreting, the fact that certain oil pipelines, gas pipelines have been shut off and russia has been saying what does this have to do with the repairs that have to be done? how concerning is this to european officials that so deeply rely on these supplies? maria: it is. on the one hand, we have the nord stream i that depends entirely on the russians. secondly, when you look at the map, a lot of that gas is being transferred through ukraine, a nation at war. this is not the first time we hear from the russians suggesting that they have to repair some of the infrastructure, but also that the infrastructure in ukraine is old and could break at any time. the ukrainian government says if something breaks, this will be a russian action deliberately trying to mess with our constructors. it is a real concern considering one is a country at war and the

other is coming from russia, a country that has now, for weeks hinted that if things continue to get ugly between the european countries, russia, and they continue to take economic measures, they could face a tax. >> we have heard in the last 20 minutes or so from the chancellor of germany saying that germany is again, as we have heard, oil and gas imports banned from russia but also saying that they are open to further sanctions. at the president gets ready to travel to europe, what form of a take? -- what form will they take? >> it is supposed to be focused on european energy independence from russia. that is going to be the focus of the sanction conversation. the president goes to europe. they haven't announced the exact field of the -- details of that, but obviously it would be very difficult for a country like germany to cut off imports of

russian oil and gas. they are looking broadly to impose something swifter on european use of russian oil and gas and also to have a conversation about locking down any opportunity of evasion on currently imposed sanctions, so it is trying to take some steps forward to ratchet up pressure on russia. somewhere short of a blanket ban for a country like germany on imports. jonathan: just getting some comments from the greek prime minister, a good friend of the program over the years. saying the lawmakers in athens, energy companies should get part of their current profits. it is not an original idea. we've heard this from many other countries around the world. i just wonder if it is going to be a bigger asset in the recent months to come. lisa: if europeans need to rely on russian oil and gas, how much do they need to impose taxes on it to get funded, propping up some of the households, or even

ukrainian funds. there have been some any proposals about how to use extra taxes on russian assets in order to continue the flow while also giving some sort of incentive and removing the financial incentive for russia. jonathan: maria, what is the latest effort europe-wide on that front? maria: the greek prime minister is repeating what i've heard from my own country, and also from the italians, the portuguese, the french. president macron hinted that this is inevitable, the government will have a much bigger state underachiever the companies, hinting that any extra -- and the prices across europe, the states are going to have to pay for a lot of things and they are not going to get extra benefits, going directly into the coverage of european government to deal with the repercussions and the fallout from this. i do want to say one thing, there isn't a european energy

market. it does not exist. after today, there isn't one. what you have are 27 countries with 27 different systems. are we going to see if ban on energy from russia? the answer is probably no. are we going to see an agreement from the europeans in terms of what to do with their own internal infrastructure? we are not going to see that, either. the issue is that there is not a cohesive energy market in europe. it does not exist. they are having to work on one as we go, hitting europe at a time in which they just do not have it. jonathan: maria, thank you. jack fitzpatrick down in washington, d.c. the president landing in europe a little bit later this evening. put this in your diary. april 28, before the market opened in europe, quarterly earnings. i think this is going to be one of the most controversial quarterly earnings seasons for these energy companies, particularly in europe, in a long time. >> they have said they are not

exiting their russian assets, and the ceo said of the company's art, either. they can't figure out how to do it. jonathan: going to be one to watch in about a months time. from new york city, this is "bloomberg."

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jonathan: last wednesday, chairman powell's news conference started. on the s&p 500, up almost 6% through yesterday's close. on the nasdaq, up almost 9% through yesterday's close. we have heard this morning the why. there is still no alternative. let's talk about the alternative in the bond market. yields down three basis points. yields back and away from the levels we have seen more recently over the last couple days, down two basis points.

jim read at which pointed out the two year is the biggest move on a yields going back to 2004. lisa: earlier this month, we were talking about bank of america pricing and seven rate hikes and now we are saying maybe that is overly conservative. maybe it is eight rate hikes this year. how much have we rejiggered our expectations to the fed response to the inflationary environment? jonathan: are we on for 50 in may? lisa: that is the rhetoric from all the fed officials. jonathan: that is the bond market. let's talk about the spread between the twos and tens. we had all this optimism pick in -- kick in post-pandemic. you can see where 2/10 topped

out into early 2021. that yield curve has come in and it is flatter over the last months. lisa: a lot of people are looking at this and saying the bond market is starting to price in a recession. is the stock market paying attention? i am looking at the underpinnings of the u.s. economy. i wonder how much we are seeing a softening, how much some of the surveys are starting to pick up consumer pushback, not buying certain things because prices are going up too fast or staying away when prices go up. lindsay has been tracking the underlying components. are we seeing signs of pushback by consumers, if not in the data at least from rhetoric from consumer companies? >> absolutely. consumers were reported -- supported by government stimulus

flooding into the market, but most of that savings -- we are seeing ongoing volatility in consumer spending and households had to shift what they are spending on month-to-month to absorb these rising price increases, particularly in a nondiscretionary sectors such as groceries or gasoline. the consumer is showing signs of weakness or fragility ahead of -- before what we saw in terms of international conflict, which is likely to exacerbate this upward trajectory in prices. lisa: jon started the show saying i was going to spend the next three hours explaining why stocks are still rallying and despite bearish data. my explanation came up short. do you have a better one? lindsey: investors are looking to the fed and repeating their message that above all else the fed will reign in inflation -- rein in inflation.

we will avoid a stagflation scenario where we began to see an organically declining level coupled with rising prices. that is the worst case scenario and the fed has been clear they will do everything they can to rein in out-of-control inflation. at the least, the market is saying, we may see slower growth but we are going to avoid stagflation. lisa: talking of the data, does any of it matter to the fed at this point? lindsey: it does. i think the fed is watching the inflation data. the data is telling the same story, that inflation is too high. the fed is saying we need to reach into our toolbelt and make sure we execute appropriately to get inflation under control. so a 25 basis point increase in march, the fed says maybe that

is not enough. maybe we need to go in 50 basis points increments to rein in that inflation. the fed is concerned that they are behind the curve and waited too long and now inflation is broader based or seeping into the broader segment of the economy. lisa: a 50 basis point rate rate hikes in general are one tool in the toolbelt you speak of. where does the balance sheet come in? lindsey: the fed clear that the conversation around addressing the balance sheet was further along or more developed than the statement indicated and we could see the fed make a move on the balance sheet sooner rather than later. we originally thought it would come late summer, it may be early fall, but it could come as early as the next meeting. the fed balance sheet has ballooned tremendously, giving the fed a lot of wiggle room to

begin to roll back those purchases -- at least reinvestment. we have already tapered purchases. now the fed will per -- focus on the rolloff. they have not been specific in terms of mechanics but have told us it will be similar to the prior cycle. we prior cycle was slow, deliberate in terms of allowing that rolloff. under chair yellen, it was just $10 billion a month. this time, we would expect a much more sizable approach to the balance sheet, maybe in the range of $70 billion to $100 billion to begin to taper that back down to pre-pandemic levels. lisa: now for the confused surveillance take. i am listening to your explanation of how socks -- stocks can continue to rally despite this recession fear that if the fed gets inflation under control it is all ok. can the fed get inflation under

control without stocks selling off more maturely? >> that is the million-dollar question. the fed is trying to navigate a soft landing. as long as that soft landing is still possible, i think the answer is yes. once it becomes clear the fed is overly aggressive, that the fed is tightening too soon, the answer turns to know -- no. the fed is trying to orchestrate this delicate balance where they slow growth but do not force us into outright negative territory. it is going to be a challenge, as the chairman said, with monetary policy. it does not have the ability to be precise, so the risk of recession is real. looking at the fed track record, they do not have the best record for navigating the soft landing.

if the fed does move forward with its aggressive plan and they are not willing to back off , if we see more indications of weakness in the data, i think the data, i think the fed does tighten us into recession. lisa: we are talking about a hawkish fed, yet since that press conference financial conditions have eased. credit spreads are lower. stocks have rallied. it has gone in the opposite direction. they have eased financial conditions with that hawkish rhetoric. given this trend, can they effect some sort of control on inflation with the measures they are talking about outside of market conditions, which has been their main tool? lindsey: this is what is so interesting. so much of fed policy stems from the rhetoric we hear from fed officials. this is what chair powell is in parts trying to do, to avoid the mistakes of the 1970's. when we look back, we are seeing

similar supply shocks as we saw in the 1970's, but back then the market did not believe the fed was going to take any steps to rein in inflation, so this time around a good part of the toolbelt is communicating the position of a hawkish fed, suggesting we are going to do whatever it takes to rein in inflation but it is a question of whether we have to see the fed employ those tools, that aggressive policy. right now currently fed is trying to communicate this hawkish position, which the market is responding to. if we do see the market do much of the fed's work for it, the committee will be able to back off from this position and potentially navigate the soft landing we spoke of. jonathan: lindsey piegza at stifel. that was just a monster supply-side response.

the labor market, global trade. lisa: the fed came out yesterday and the day before. fed chair jay powell indicated they needed proof that supply chains were actually improving, that there was some sort of supply-side response to change their stance right now. to me, they have shifted their view on inflation from this quietly transitory to it is not transitory and we need evidence that it is coming down to move away from being hawkish. jonathan: does the suggestion make more sense that you frontload some of this with bigger moves and wait to see what you have to do later this year? lisa: that is what we are hearing from more people, two back to back 50 races point -- basis point hikes. that is why we have seen such a massive move in the two year.

stocks have not responded except to say this is good news. jonathan: do you know how to get people to turn down the volume on the radio in 2022? up next, the omicron subvariant. do we have to cover the subvariant? it has not gone away. no one wants to talk about it, but it is still there. lisa: my focus would be on china. how much does this continue the supply chain response? people have moved on. nobody wants to talk about it. we want to talk about getting back to normal, but how quickly we can see an end to the horrific war in ukraine. jonathan: next, the omicron ba.2 subvariant. i'm excited to catch up with johns hopkins because it has been a wild but i am sure we would like to be talking about something else. >> keeping up-to-date with news

from around the world. ukraine's president volodymyr zelenskyy says about hundred thousand people remain in mariupol. they were are without food, water, and medicine aren't are under constant russian bombardment. -- and are under constant russian babar meant. the cdc says the subvariant is the most common in new england and the new york region. it is not believed to be more dangerous than other strains but may be more infectious. shares of cte soared in hong kong. a u.s. court decided the chinese networking giant should be allowed to end a five year probation for violating american sanctions. it has been struggling since the penalty was imposed. judge ketanji brown jackson is getting closer to becoming the first black woman on the u.s. supreme court. she held her own against a

barrage of republican attacks centering on crime and race. republicans have all but conceded that she will get confirmed. the top ranked player in women's tennis is calling it quits. ashley bardi -- ashleigh barty has decided to retire. she has won three grand slam finals. she says she no longer has the physical and emotional drive to play at the top. 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 am ritika gupta. this is bloomberg. ♪

>> everyone wants to get back to normality. thankfully, we are going in the

right direction with regards to all the parameters of infection, hospitalizations, and death, so we can assume a degree of normality. that is what we all want. we have been in this long enough, but we cannot claim absolute victory at this point. jonathan: dr. fauci they're speaking yesterday from new york city. good morning, your equity market down about .4% of the s&p met the nasdaq down .6%. yields coming in a couple basis points down. a selloff in the treasury market settles down. the rally in the crude market continues. up by 2.5%. more than a third of last week's u.s. covid-19 cases were caused by the omicron ba.2 subvariant. something to worry about? lisa: you started this segment with a sigh.

we hate talking about this because it is like the same movie over and over that we feel like we are emerging from. even with the subvariant, as we heard yesterday, dr. adalja was saying it is not leading to deaths or hospitalizations so far. jonathan: the doctor is more fed up than we are. associate professor of emergency medicine at johns hopkins joins us now. how much better are things now versus two years ago as we deal with a new subvariant? >> there are so many more tools. in the past, we had a lot of unknowns, a lot of hospitalizations, a lot of loved ones dying. right now, we have test and treat programs. we have vaccinated individuals and vaccination levels are high

and we have great policy and procedures in place to protect children less than five and patients in immuno comfort my states. this is a test for normality. can we survive the covid subvariant and can that subvariant not cause a strain on the health system? ? can we provide care for people with medical issues other than covid in an adequate matter? if we can, we can put on the brakes. lisa: let's fast-forward and see when we can say it worked according to plan and we never have to talk about it again. dr. hansoti: if you watch the u.k., they are starting to see a surge again. they saw a statistic recently on the covid database which said one in 24 new cases of

symptomatic covid. we are not seeing a rise in hospitalizations, so they seem to be in a good way. even with omicron, we did not see the deaths we saw with the earlier wave. so for to six weeks before we start surging, and my opinion. we are already seeing a significant proportion of our covid cases in the united states are due to the new subvariant. then we have to watch and what we should be watching is not just a number of cases but number of hospitalized patients, number of deaths, number of emergency departments that have high wait times and hospitals that have to go into disaster. lisa: it seems the u.s. has moved on because of these tools in terms of passing the tests, china not so much, still trying to figure out the right approach after years of zero covid

policies. what do you see as they most likely progression as a supply chains are still cramped and factories are still shut down occasionally as the virus passes through? dr. hansoti: there are a couple different things at play in china. the challenge with zero covid was there was no natural immunity. it depends on the health policy for having individuals with covid still engaging with the workforce, still being able to interact with others and impact on the health system. what we saw in the united states with omicron was even if you had covid you can come back to work after five days of being asymptomatic. china needs to think about adopting similar policies to ensure the workforce remains whole. lisa: on the subject of

immunity, we were discussing this off air and i will ask you on air as well. i have had my vaccine and my booster. i have tested positive for covid twice now. do we have a proper understanding of what my immunity level or someone like me would be and whether we would be susceptible to potentially getting a case of this subvariant? dr. hansoti: average americans are asking questions. who really wants this answer are folks on chemotherapy. can i live my life? the question you're really asking is what is our promise of protection? there are a couple thoughts there. people talk about antibody levels and how much is a good antibody level to say you are now immune, so to speak. antibody levels are absolute

number. can we measure the amount of neutralizing antibodies, anti-bodies that stop the infection from taking hold? that is the first thing. the second is you have hybrid immunity, which means natural immunity and then vaccine based immunity. a recent study cited by the cdc shows people who have been vaccinated -- sort of have more heterogeneous response. some people are really high and some are low. we do not know if that correlates with how sick we are. what is good news is if you have been vaccinated you have hybrid immunity, which means a stronger immune response. the real question is how does that correlate with how you live your life. does that mean you can go for

dinner and restaurants? does that mean you can take a plane? and not wear a mask on the flight? immune response relates to how we live our lives. it is still a big unknown and should we even know this answer? when it came to flu, i do not know what my immune response is to the flu virus. i do know how to treat my children. i know how to manage my symptoms. jonathan: that is the good news. i am not going to pretend i enjoyed this segment, but it is good to catch up. dr. bhakti hansoti of johns hopkins, thank you. people used to come to work with flu. are they going to do that now? lisa: that is good question.

jonathan: i am not advocating for political policy except i am. you should be able to say i'm not coming to work because i am ill and not feel like you have to because you are worried about not getting paid. that is a massive problem. futures down a third. from new york, this is bloomberg. ♪

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>> what we're really seeing at the moment is we are seeing the fed doubling down on being extremely hawkish. >> how far is the fed going to raise rates? >> how is it hawkish if he is trying to make us believe a recession is not far-fetched? >> the backbone of the economy is being impacted by this exceptionally high fuel price. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. jonathan: can this equity market keep rallying in the face of what the fed might have to do for 2022? good morning. this is bloomberg surveillance live on tv and radio. i am jonathan ferro. futures down a third of 1% on the s&p. >> the bond market is bringing forward the expectation for a