the classic trial balloons out there and say what if we did go 50? >> i think there was a significant risk of hard landing. let's say the word recession. >> he is trying to make us believe [indiscernible] >> we are going to get a recession at some point in the next few years. the question is when. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. jonathan: live from new york city, this is bloomberg surveillance on tv and radio with tom keene and kailey leinz. i'm jonathan ferro. futures -- futures positive .5%. tk welcome back. tom: there's a difference in paris to ukraine. you did not feel the war but the tension was there. nevertheless, you saw it across all of paris. as morning, we see it in nato. i hesitate to use the word pageantry as you see mccraw and biden but these are important

meetings. jonathan: going from nato to a g7 meeting, what you think is achievable? tom: i'm not sure what is achievable. i think we will see something on lng and for the bloomberg world maybe we will see something on further armament of ukraine, but what is achievable is you have allies together. mr. biden said that from day one of his administration. jonathan: the allies coming together today, kailey leinz, earlier, a statement from the g7 seed by bloomberg rees as follows, to warn putin against using chemical on -- or nuclear weapons. kailey: the words are statement and warning. the question is whether the west can get themselves on any further action. the president promised further sanctions announced during this trip to europe. without germany being able to get on board with oil and gas embargo, the questions around that especially as putin demands name it's in rules for russian natural gas, a lot of questions

circling around energy. jonathan: tom, strongly worded statement, does that get it done? tom: this is action on a dynamic scene. if you go to the bloomberg world, the major issue for me as commodity prices forward. maybe not out of high and maybe it is not wheat and corn, but they are working on a feast of market activity in the market is speaking about what they need -- what needs to be done. jonathan: you have been gone a while, 20 basis points to go two-year. right now we are at 215 on the two year yield. tom: i watched it off of the mobile bloomberg. [laughter] the entire time. i saw the bond move and i thought of you. jonathan: did you think of steve major? tom: i thought of steve major. here is a guy who says the set up for low rates, he still says low rates happened and said

stuff happens and he has to translate for an idiot like me. jonathan: 2% the year and call on the u.s. 10 year. he goes to 150 from 1%. that 150 pushes 12 months out. we see a big move. people off the back of that. tom: i did not bring back any swag. jonathan: nothing at all? no gifts? tom: i know you didn't want it. jonathan: thank you. the fed sent me shredded money. [laughter] tom: my kids a me some shredded money. jonathan: thank you, president, for that one. i'm not sure what he was trying to say. futures up .5%. the nasdaq up .6%. a really important day coming up. the president moving to a g7 meeting and then later and eu meeting summit. -- a summit meeting. crude clawing back .4%. still at 114.45. kailey: a lot of volatility

across asset classes. markets continued to weigh each and every headline when it comes to geopolitics. he will be expecting to get a lot of headlines today as we have been discussing. it is something of a summit extravaganza happening in brussels. the nato summit is ongoing and at 9:15 eastern time is when the g7 meeting will begin. later on, 12:00 p.m. is when the european council summit will take shape. as we discussed what tangible will come out of this other than words and looking for action potentially from the western alliance. we will also watch out for economic data today, 8:30 am, jobless claims, durable goods, economists looking for $211,000, continuing to see the pandemic highs. my question is how much to those incremental data points matter to a federal reserve that seems very much set on hiking potentially by 50 basis points? that is one of the core aspect of fed speakers over that --

over the last couple days. and there's a lot more fence be coming up today. i had to write it all down. they are all i different times. 8:30 eastern time, the fed president will be speaking. 9:10, christopher waller and 11:00 a.m. eastern time, atlanta fed president, and while there may be interesting given some of his hawkish commentary at the end of the week last weekend rafael bostick, when he spoke earlier this week, seeing the most -- seemed the most dovish of them all. we already kind of know 50 basis point is firmly in the conversation. will we get more details on the balance sheet today? jonathan: have we heard enough from these guys yet? in a few short days. kailey: it has been a lot of speak. but it all seems like they are saying putting much the same thing. the question is what can they say today that will be different? jonathan: even president daily,

if we need to do 50, that is what we will do. president messer, 50 basis points moves. looks like they will. tom: citigroup doing a reframe on the banks today. he is modeling in 10 rate hikes, eight this year and to next year. i am sort of with steve major, we have to wait for the data. i think we are way off. jonathan: they have waited for the data, it is gone. the story is gone. is it really about the data anymore? tom: no, i think we can ask here, another take up or to takes, up 75, but then what? we are assuming there is a then what right now. jonathan: the second half of this year could get interesting. take your time. how is your french? tom: [speaks french] jonathan: sounds great. in brussels, and remit -- and marie horton and maria tadeo. a busy day for the president of

the united states. what is achievable today? >> it is a great question. the trio summit, it first starts at the nato headquarters in the has a meeting at the g7 and then goes on to european union discussing with a slew of american allies about what next they can do, and it comes -- do when it comes to penalties and sanctions. we had a number of penalties announced i the united kingdom and we are waiting for the united states which are supposed to be going after a number of oligarchs and lawmakers and then the g7. bloomberg has seen a draft document of what the g7 is expected to announce and there will be sharp boards and a warning to president putin on the use of chemical or biological weapons with severe consequences. it is just wars. we do not know what that in some a could be in terms of sanctions because they have gone after the gambit of the russian economy and what is left is energy that will be incredible difficult for europe. tom: maria tadeo, what is the immediate war action in ukraine? there is all this diplomacy and

fancies chanel dress is going on, great. what is the war report this morning? maria: well the fight continues. the war report we have seen for 20 days and today we heard from president zelenskyy saying we will continue the war for as long as there's not a cease fire and we take it that russia is not serious about the negotiation. this is very important. i hear a lot of commentary about ukraine should just accept any deal and put an end to a horrible war but if you look at the ukrainian psyche, this is a country that believes they can win this war and they have been united i this aggression from vladimir putin. if you ask me are we going to see an end to this, what i hear is no, the fight will continue. they're not scared about this but they will ask again for weapons and further facilitation. this is why this meeting between

nato is so important. the lenski will jump on the call and also jump on the call with european leaders. the other big thing is not the meeting in brussels but the meeting tomorrow in poland between the polish president and another president. this is a country that plays in incredible role in europe. kailey: and we will look for the presidents travel tomorrow. today, you mentioned zielinski will be hopping on the phone in this nato summit. we already basically know that ukraine joining nato is not going to happen. what about the bid to join the european union? can they expect movement on that front today? maria: there has been a lot of debate about nato and ukraine and many will tell you this whole crisis around nato is completely manufactured by the kremlin. the reality is nato -- ukraine was never going to join the allies precisely because of the tensions with russia. ukraine now has accepted that and there has been a major

reality check from this country, but what they say now is we do not want a bilateral deal with russia. we do not trust the russians under vladimir putin so we want any international security deal and we want to join an international union. of course that means the european union. this will be the hot potato for european leaders when they talk about ukraine. do you want to accept a country at war to join europe? are you giving false hopes? when it looks at the final peace deal, if we get that, we hope we get on between ukraine and russia, the ukrainians will double down on this idea that we do not join nato but we are not going to be by ourselves and are not going to be on our own. so it is the european union we care about. jonathan: wonderful work as always. we will touch base with you on the morning -- through the morning with maria tadeo and annmarie hordern. . there cutting the tax on eu fuel to the minimum.

they are coming down about $.30 and they will do this for three months. you wonder how money others have to follow this act and how much support we will see. consumers across the continent need to pay a lot more for energy over the last few months and potentially for the rest of this year. tom: the inflation issue is there but far more, can the airlines get together? i would suspect on lng, liquefied natural gas, that will be a focal point. jonathan: watch this space. tom king, welcome back. missed you. you come back and lisa leaves. tom: all of bloomberg is in paris. jonathan: how was it? tom: great. love it. team surveillance, the election. jonathan: i bet you have been thinking about that. tom: i have. jonathan: did you find a bath? tom: no. [laughter] jonathan: from new york, this is bloomberg. ♪ ♪ >> keeping you up-to-date with

news from around the word, i'm ritika gupta. president biden and other members issued a tough new warning to vladimir putin today and brussels. they will tell moscow not to use nuclear or chemical weapons in their war with ukraine. the g7 also plans to say it will fully implement sanctions the companies ash countries already imposed and already to impose more. the u.k. is out with its own set of 65 new sections on russia according to a foreign secretary . they target strategic industries, banks, and business elites. also on the list, the world's largest diamond princess are -- time and producer. meanwhile, the u.s. and european union are close to a deal to/europe's dependency on russian energy and an agreement may be announced as soon as friday. president biden's national security advisor says there will be a surge of u.s. supplies a

liquefied natural gas to europe. kim jong-un has finally abandoned intercontinental ballistic missile for use. north korea launched its icbm -- first icbm in more than four years. south korea said the test violated the yuan resolutions and kim's promise to hold off on such lunches. a business is being launched that mimics hedge fund strategies. a manager -- they fell from favor when the fed's easy policy slain vanilla investments. i'm ritika gupta. this is bloomberg. ♪ ♪

>> we are actually trying to defeat the freedom of all people in europe, of all the people in the world. it tries to show that only crude and cruel force matters. it tries to show that people do not matter as well as everything else that make us people. jonathan: president zelenskyy of ukraine from new york city this morning good morning. i want to go through the price actions to give you more headlines. futures up .4% on the s&p. on the nasdaq 100, a .5%.

yields higher by almost nine basis points. we will stay on top of that for you, approaching 240 on tons. this just in from president zelenskyy, russia attacked chemical factories for a second time. he has been addressing the swedish parliament and goes on to say the following, that all of russia's neighbors live in danger and the russian government only understands the language of sanctions. it is to address nato this morning. tom: they are from syria where israel documented chemical use. i would say the chemical part is there and is immediate her all of nato and for those, you hate to say, but follow the wind and echoes of world war i. as i mentioned to maria tadeo, the backdrop of diplomacy work continues. this with the times of london and associated press. we need to be careful. this is all from the ukraine navy but within the war, 52 miles southwest of mar you pull -- mar you pull -- mariupol,

there are words here, damaged, sunk, i don't know what the word is but a major ship of russia has been attacked by the ukraine navy. jonathan: we will need clarification. outside the realm of speculation, we have to work out where this administration is on the moves if things do escalate from here. that has got to be part of the conversation between the administration and allies there today and tomorrow with that matter -- for that matter. tom: we will follow that over the next couple days or hours. right now, let us segue to economics, investments, and next moves. andrew slimmon joins us now. the famed investment strategist once told me the year always starts march 31. it is upon us right now with the great reset of december 31, reviews that should be thrown out the window. what is your reset march 31 as

you move on? andrew: march 31 will be ugly but not as ugly as it was earlier this month. i think the markets put in a noble rally off of the low and i would not be surprised if we get around here or higher before the end of march, but i do not think we have seen the low for the year. i think there is more pain to come in the second quarter and to the summer before we put in deal. tom: there is a kink where yields helps the banks, helps the markets, and then it does not. you'll gets too high. where that on equivalent 10 year yields? what is the level where it begins to hurt? andrew: you have nailed it. . tom: did i do ok? [laughter] andrew: i think that is the key question. these yield curves -- it is almost like choose your yield

curve that fits your narrative. oh, you want to talk about a recession and then you look at the two-year, 10 year. if you think things are not bad, then you look at the three month and 10 year that is steepening. i think the point is that financials run out of steam before the yield curve tops out. so that is going to be my litmus test of our we really headed toward a real slowdown or is the economy going to be able to withstand that tightening. i think the relative performance of financials, if they keep performing ok and in a rising interest-rate environment, that tells me we will survive the fed tightening campaign. i do not know what the number is, but i am looking at the relative performance to help determine that. jonathan: let's build on that. bank of america did work on this

recently. there is a difference between what the yield cold -- yield curve means for profitability for earnings and for multiples. what the yield curve means for investor attitudes too. do you think even if it perhaps should not as this model evolved drastically thanks to wall street, do you think the shape of that yield curve, twos out to tens, shapes appetite for this industry group? andrew: yeah. jonathan: that is the problem isn't it? andrew: i have heard what you said and we've got analysts that tell me this over and over and i watch the correlation to the yield curve and it still remains high. look what happened with the first invasion happening and there was a flight to treasuries, what happened to the banks, they got crushed. maybe because of exposure but i think it is because of yields dropping. so i hear what you said and i agree with that, except the

correlation of stock-price performance remain correlated to that yield curve. jonathan: perhaps it always will. andrew, you gotta stick with us. we are lucky to have a second segment with andrew slimmon. for your earnings, the yield curve does not drive earnings like it use to for banks. but for investor appetite for multiples, it still does. you can push back as much as you want but looking at what the market does off of the back of it, it is still very much the story. tom: corporations can address but you are right that it is multiple behavior. the multiple is a numerator and denominator, whichever you are looking at it is about growth. it is up top in the numerator and the denominator is the belief in prosperity. there is a consensus those margins come in. to pick number 22, does the multiple come in to 20 or to 17? that is a big difference and that is sort of the market forward. jonathan: we will continue on that. can we pick up on the headlines at a germany that we touched on

five to 10 minutes ago? the german example this morning, whether it is replicated in the weeks to come. kailey: cutting the fuel tax to the minimum by $.30, they will also every one 300 in reimbursement for higher energy costs. we are also getting a headline with the german association of water industry, bedw, basically saying there are signs that the situation will deteriorate, the gas supply situation will deteriorate given the russia demand yesterday that nations have to pay for that in rubles. jonathan: that was the message yesterday and the europeans are now on board. tom: i know damien is coming up to make us smarter on this, under 100 on ruble. i just do not buy it. i do not see the world trading in rubles. jonathan: kevin will join us on all of this, gas, crude, from raymond james. he do that later this morning,

7:45 eastern. look at this move in yields, a spate -- eight basis points on 10. welcome back, tom. tang. spike tang, is that what you are having now? tom: yeah. ♪

jonathan: a busy day in brussels for the president of the united states. a nato meeting right now then onto a g7 meeting later and u.n. . futures positive about .5% on the is a be a nasdaq as well. we are entering a more dangerous phase, more dangerous market cycle. we will build on that later. russia, we can call that a market, -- should we call this a market? let's discuss that. shortselling is banned in the well-funded is willing to prop itself up. russian equity market reopens after being closed for a sing a month up by almost 5%. i believe it is open for four hours. that is the story and russia. here is the story and the bond market, twos, tens, and 30's. closed out last month in the one

80's, back to 237. representative of hsbc making a call, seeing a big move up eight basis points. and it is not just market to market. the stories change in a big way in the first quarter. this is not the year people were looking for. tom: it is and what you are looking on the bloomberg terminal is the standard deviations, which is a little esoteric and the answer is we have moved hard and fast while i was gone. the center deviation is 2.45% and we are not there. almost up near the highs. the lows are way down like 1.62%. there is a huge spread right now. jonathan: look at what we have had to do across the world. we have had to kick higher the outlook for inflation and/the outlook for growth. u.k. has gone from a six down to a three handle. that is a big change. tom: i will suggest into the summer here, the politicians could care less about the bloomberg quotes.

they are looking at real wages and the middle class crushed. i see that nation to nation. jonathan: consumer confidence. it has been the story for a while. tom: absolutely. let's continue. we have a real treat. rarely do we do this and we do it with an awesome person, andrew slimmon. thank you for a generous amount of your afternoon. i want to talk about the idea of a pullback and what it means for the banks. a raging battle over the banks. been lately or -- ben ladler says they will be able to wade through this. do they manage their way through this or is there some secret sauce the bank sector has? andrew: i think they will. i continue to be overweight in this area. i think they will because, i know this is controversial, but i think the two-year could come

down later this year as inflation starts to subside. i think it will the second half of the year. i think this prize will be the yield curve re-stevens because we have lower inflation. in that environment, i think you will get return to the bank stocks. in the meantime, i am long equity management. where will i get exposure? i know as -- goes up, tech oriented stocks don't do well. i bet the banks will outperform that area of the market. tom: here's a question i don't think i've asked in eight years maybe, do corporations have the ability to cut costs? andrew: this is going to be very interesting to see what happens in the first quarter. earnings report -- order earnings report because as much as you and john just talked about slowing growth, weaker consumer confidence in the sector, etc., we have seen the

bonds up consensus estimate for the s&p come down and has gone up every week. so it will be interesting to see if corporate earnings are -- or the outlook for earnings in the first quarter reports bring down those estimates. can companies cut costs. we will have to see. so far have not seen signs of that. kailey: there is a narrative out now where people are looking for an answer to why s&p's would have rallied 5% in the days following a hike. they developed into equity and inflation has because the company has the ability to pass on costs. do you buy that argument? andrew: so far it has been true. the margins are high. the margins have not come down, and i have been hearing this over and over from the

strategist that margins will get crushed and earnings will get hit hard but these reports come in and companies pass on. when we talk to companies, they seeing confident -- seem confident. i am shockingly surprised how company didn't -- how confident companies are in passing their costs on. i'm not in the business of trying to predict. i'm in the business of buying good fundamentals and companies doing well. i push back on this doomsday scenario because i have not seen it happen yet. jonathan: that is the second time you made this point. maybe people in this market are getting it wrong. the strategists, you seem to be pushing back to that. what did they say to you when you push backend they hear you say these things? andrew: it's coming. companies are about to miss, just wait a second. i have been hearing it is going to happen. tom: should we bring him to the

show? he sounds like an anchor to me. andrew: i do this over and over. i'm not paid to be interesting, i'm paid to be right and i push back on that scenario. when i talk to companies, i do not hear the same thing i hear out of the wall street community. tom: look, andrew, the view forward, some of it is look over all of this, look over this war and diplomacy, look over this 2022. what you do with money with a 2025 perspective? andrew: look, so the market is down 10% and you say it is -- it has been an unusual year and i say now, last year has been unusual. usually we have a 10% pullback once a year and we did not have one last year. this year, you fill in the narrative of what caused the tragically.

i think it will morph. i think we get down to 4000-3800 before it is said and done. i know when you get 10% pullback, even if they get uglier, that is a good time to put money to work. if you get down 15%, 4000-4100, that is a better opportunity. i think looking out to 2025, these are the opportunities you have to take advantage of. you guys know down 5% and everyone eyes the deaf and down 10%, those people want to buy the dip, down 15% people start to go squeamish. that is just the reverse of what sets up for better opportunities. the more the market drops, the more opportunity present itself. i think you have to be prepared that we are going to have another dip here and you got to put cash to work. what we are doing in times of that, when you are raising cash and i'm not a money manager but

i have cash but i also have a lower risk profile in portfolios right now that i would if the market was down 4000. kailey: talking about opportunities, i look at the sector breakdown. everything is down with the exception being energy, up the better part of 40% year-to-date. is it too late to find an entry point in energy? andrew: yes. [laughter] i think you want to have some exposure. i've got some gray hair here and maybe i've been around the business. tom: here we go. [laughter] andrew: every time, energy is going to $150 to $200 -- $250. it is demand and supply and i understand we have a supply issue, but demand always contracts at some level, and i think that will be the case again. you want to have just enough energy exposure to not hurt yourself but to pile in

aggressively here. you are late to the game and i think you are vulnerable at some point to the inevitability of commodity corrections, because they all happen. jonathan: can we finish on energy with another comment? these quarterly earnings, how controversial will they be for some of these names that do not have the big russia write-downs? do they report profits and then run away and hide? andrew: if you are a ceo and you report that she look forward to have your great quarter of the earnings report to say how great you are, you are the ceo of an energy company. they are in a no-win situation. jonathan: the piñata in washington dc. andrew slimmon of morgan stanley there. we touched on this yesterday, what will it look like when those big profits come through for the first quarter? do they just issue that statement and then run off? tom: no. a really important question, i

followed a double yesterday as i was walking across the atlantic, so thank you united for a great flight. and the answer is, look at adobe. they came out but their view forward was light and the stock out hammered i think 10%. jonathan: i'm looking at bonds this morning, basis points on tens, yields higher in germany by seven tape basis points through the curve. tom: i'm looking at commodities where i see metals up. we are going to get a breakout in bloomberg commodities. a drawdown, we have not done this since i left. it is horrific. standard & poor's, negative seven, dow, that should be -12%. nasdaq, -12%. jonathan: that is what people wish the nasdaq was. away from the index level, below the index, it has been carnage inflation. tom: fair. profit matters. jonathan: what do you think of the entry slim and look? tom: it's great.

jonathan: we will go jacket free. tom: i've got 47 tweets, tom, don't take your jacket off. [laughter] jonathan: when we work this out and get some air, how that works. the lining, where is that from? tom: this is for the middle daughter, from product. product picked this one out. jonathan: the middle daughter is now called product -- prada. tom: there is a middle child that is not the middle child and then there is pa -- prada. jonathan: i know cash flow, i met cash flow a few times. a big day in europe for the president. ♪ ritika: keeping you up-to-date

with news from around the world with the first word, president biden and the group of seven nations have a warning for vladimir putin at their meeting in brussels today. the g7 tells russia not to use nuclear or chemical weapons in the war with ukraine. there has been concern putin may resort to drastic injuring as his troops get bogged down. the governor of russia's central bank wanted to resign after the invasion of ukraine but the president ordered him to stay. he was nominated for a new five-year term at the bank last week. the blackrock ceo says the invasion of ukraine has the potential to speed up the global shift in green energy because it may also do the same thing for digital currencies. he made the observations and his annual letter to shareholders has the world's largest money manager. the senate judiciary committee is expected to vote on the nomination of judge ketanji

brown jackson. on the secondary questioning, she again depended her record on sentencing criminals and explains how she decides cases. she is the first black woman nominated and it is all assured because the democrats control the senate. and -- the five-year bond will be determined by the rate of growth in populations of the animals. 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. ♪ ♪

>> we meet at the nato headquarters, facing the most serious security crisis in a

generation. >> vladimir putin already crossed a redline into barbarism and i think it is up to nato. >> this illegal, brutal invasion of a friendly democracy in ukraine by vladimir putin is absolutely on except of will. jonathan: globally leaders coming together -- global leaders coming together in nato for a summit. up on the nasdaq. the move we see in this bond market, just massive again. up nine basis points. that is a move on tens. seeing the move in the gilt market, bond market, front end of the curve on twos, up six basis points. 215 on twos. i want to talk about russia. the russian equity market reopening after a month. what you cannot do is important. foreign investor cannot sell.

ok. you cannot short sell. ok. the wealth fund wanting to step in, this sounds like china very 2015 or 2016. can we call it a market? i guess we can call it a market of sorts. tom: we are going to rip up the script and we do that with damian sassower, chief emerging markets and flow strategist for bloomberg intelligence. there are 14 ways to go here. let's go to where john took us, this idea of false markets. for a portfolio manager and the real world, how false is the broader russian market right now? damian: the russian equity market, jon nailed it on the head, you have the sovereign wealth fund and just a band from selling outright. i thing we have to focus on the currency market because the currency market has come back. tom: that is the litmus paper of the system. damian: that's the only thing we can look at. i think what you said is right, the dollar ruble is trading under 100 but more importantly, if you look at the repo market, russian banks going to the central bank because they have

reserves and have been borrowing the repo market to replace their lost deposits, you see that rollover. that means there currency market is reflecting reality a little more today than it was a week ago. people are transacting in it and it speaks to everything we are hearing about oil and gas. tom: the repo market, which i call the short-term trust market, is it a domestic market now or is there an international repo market to gain trust overnight in russia? damian: no, shortly for local banks. surely local banks that have to replace deposits from the cental bank of russia. what we saw was immediately that spike reminiscent of post-2014 annexation of crimea. that's with the russian banks had to do then when they were sanctioned. you see the same thing but it is rolling over and that tells me everything i need to hear about dollar ruble and the use of it by the chinese, by non-sanctioned countries, and the fact that is allowing putin to demand gas payments

will be denominated in ruble. jonathan: let's talk about that. maybe euro ruble is the appropriate currency to. . be discussing. how do you expect that to play out? andrew: we are sanctioning -- damian: we're sinking all purchases and russia, they have no use for hard currency so of course they will demand for ruble payment. they can use those to pay for things they need from other nonsanctioned countries. that is why i've been saying this from the beginning, that these sanctions will not work of china is not on board. as it stands, it does not look like they will be coming on board anytime soon. kailey: so we can talk about the european's ability to pay russia in rubles and also talk about russia's ability to pay rubles to pay off some of its creditors when it comes to bond payments. where do we stand on that? what answers do we have? damian: we don't have much answers since yesterday. citigroup is still waiting for that signoff in order to remit the payments to the underlying creditors. because a major steel producer

in russia only has 16 billion -- i'm sorry, i think there offshore holdings only account for 16% of the unsecured dollar debt outstanding, no one wants to default there. i think creditors will work to prevent that default from happening. we have to look at the impact on fund managers in the u.s.. now this dollar ruble is trading. think about this. if you are a foreigner holding russian local denominated bonds and you can take them off, those will keep paying off. so you are sitting there with a cash position in rubles but what does that do to your brother pope folio? your duration goes to zero -- portfolio? your duration goes to zero and means you have to take risk and other countries. these are things you have to think of. etf's cannot side pocket their assets. that may have to change. it is it impressive. jonathan: the dynamic you

describe, i thing we understand the ripples of that. damian: i think portfolio managers, at least the ones i'm talking to, are just really what it means for their portfolios. they are trying to work with their policy, basically saying can we side pocket these assets, strike them, put them in a separate portfolio and leave them there? you might be able to do that in some instances but in most you cannot. these are the equity and etf's now, they are either selling ahead of the deadline, selling aggressively to whoever will buy the shares, any residuals left over, you are left holding the bag? tom: what is the carnage out there right now? damian: i think duke is not going to do well against texas tech. [laughter] they may be a two seed -- tom: i need to find where my bracket is. kailey: i'm beating you, tom. jonathan: you are. given how little i know about all of this -- tom: what is the carnage on the

street? damian: if you have to look across the whole of emerging markets, they have been ahead of the complex in terms of their curves are and what that is telling us about the future of the stagflationary impact, what we are seeing in eastern europe and brazil and she lay and columbia is a massive flattening of these yield curves. the inflation impulse is just not as strong. if you look at asian curves, they are steep. i think you will see a lot of that change over the next few months. i think you will pay in the front-end of places like malaysia, thailand, the philippines. tom: on radio, this is important and pharaoh has gone all-cash today. i sort of buttoned it up and am going more formal. damian: jonathan looks good. looks like he has been working out. [laughter] jonathan: you know the cycle. tom: that's good. jonathan: i've got to can saga. how's that going to work? damian: i like gonzaga.

against arizona, that is what i had too. jonathan: i thought you had purdue? tom: i can't. i lie about it. i said i got them all away. i'm trying to go both ways. i have gorgonzola. jonathan: i've got gonzales, ucla, arizona, and kansas in my final four. tom: i have kansas, gorgonzola. damian: i like gorgonzola. [indiscernible] jonathan: thank you. enjoy to that. damian sassower a bloomberg intelligence. what is a market and what is a -- what is not a market. will they pay in rubles for russian gas? the answer? kailey: not possible. i wonder how much of the european union will follow suit. jonathan: seems to be the direction of travel. how this plays out and how the u.s. administration can assist in reducing the european

dependence on russian energy. tom: when i was gone, we went straight up in the stock market. do we know why? jonathan: no. and we spent a lot of time asking. in new york city, this is bloomberg. tom: what happened? ♪

>> the fed is concerned that they are behind the curve, they have waited too long. >> you are seem to fit the classic trial balloons out there and say what if we did go 50. >> i think there's a significant risk of a hard landing, and since we are being blunt, let's say recession. >> we are going to get a recession in the next few years. the question is when. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: live from new york city, good morning. this is "bloomberg surveillance" on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. for the president, the week begins right now. tom: it is on diplomacy. while the diplomacy is going on, including the