> for the last 20 months we have basically gone sideways. >> we are going to be looking at a growth shock further down the line. >> the market probably once the fed to do nothing. >> ultimately i'm following the data like everyone else, and the data are externally confused, extremely confusing. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. jonathan ferro, lisa abramowicz, and tom keene. a most even for monday for you on radio and television. it is simple. we begin to measure yield up,

price down, and a bond bear market. jonathan: some big losses through the treasury market. the spread between twos intends in single digits earlier this morning. right now, 14 basis points. tom: you wonder when that shift is. wait a minute, let's check price. i think we are doing that now, and i think there is a sea change with the correlation into central banks looking at currency, the litmus paper of the global system. jonathan: dollar-yen through 125. we are starting to figure out which central banks will do what this year. may be a japanese yen that as a whole lot weaker. the federal reserve is ready to go big time. they need to do something about inflation. the bank of england seems to have a much more balanced view on the trade-off between growth and inflation. i hear from governor bailey, what i hear when he speaks is a man that has a much lower

confidence level about the outlook for growththan chairman told us -- for growth than chair powell does. tom: president biden back in the states after a moderate gaffe, to say the least. lisa: we are seeing a fiscal drag on this year. the u.s. consumer has been credibly resilient. that is the reason why people have found haven in the u.s. that is why people are pricing in 8, 9, 10 rate hikes and the next 13, 14 months in the united states. that gets called into question as you start to see the move in washington away from stimulus and toward reducing the budget towards higher taxes. that is going to be the conversation. tom: let's pause before the data check, from sea to shining sea and maybe worldwide. rents is one indicator of the angst of america. they are stunning. lisa: they are surging.

unbelievable, unprecedented pace, particularly in the sun belt, and places like ima, in austin, texas. we have seen some 39% increase in rents in certain places in florida. at some point, these rapid input costs are at a time when discretionary spending and cindy -- and savings have fallen back to where they were before the pandemic. tom: i am going to go to the equity market with a net recovery resilience here. jonathan: the bond market move fades in a big way. 2.46% on tens after reaching 2.50% earlier this morning. on the two-year yield right now, 2.3150% after breaching 2.40% earlier this morning. the range today from anywhere between 2.26% at the lows and 2.40% at the highs. tom: right now we will bring in matt diczok, head of

fixed-income strategy at bank of america merrill lynch. the first and second derivatives are extraordinary. are you more forecast -- more focused on the rate of change? matthew: i am focused most important the on the shape of the curve. as we have talked about many times on the program, one of the most significant fed pivots in recent memory, and a welcome one, better late than never. they are finally catching up to the inflation problem, and what the yield curve is telling you is that they will be able to get inflation back down to a reasonable level over the next several years, but not likely back to that to present level. at some point they might have to make that choice. do you want to keep that target at 2% or move away from that and try to keep growth

coming? they are reaching an inflection point here with breakeven inflation rates and five years 3.75%, inverting and meeting places -- inverting in many places. jonathan: they think you need to constrain this economy. you need rates also a lot higher. their view on equity prices, "they are roughly unchanged. the policy path being priced in is not yet conservative by markets. it is overly hawkish." would you agree with that? matthew: our forecast as well as that the market is basically correct. the market has nine hikes priced in right now. we are generally of the view we will get to a 3% plus fed funds rate at the end of this cycle, and that seems to be the correct place for now.

it is a real problem. you can see it everywhere. one of the best indicators to look at would be the michigan consumer sentiment survey. global financial crisis and the sovereign debt crisis, but it really looks like the number we saw in 1980, one of the worst recessions we have seen. we have university of michigan consumer sentiment level at that type of level, and what is really driving consumer sentiment is durable goods and inflation, how expensive things are. it is really starting to hit the consumer, which is why at the start of this rate hike cycle, the twos-tens curve was between 25 and 30 basis points. that is very unusual. you have only seen that back in 1999,'s a shallow, short hiking path, so it is very unusual to

be in this flat of a curve, but with the amount of rate hikes big den, it is necessary to get inflation back down. expect a couple of 50 basis point hikes. jonathan: let's go through some of the headlines coming out of germany from the economy must assure -- the economy minister come on the back of vladimir putin wanting ruble payments for russian gas. g7 energy ministers agree that they won't accept ruble energy payments. . those lines coming moments ago. lisa: basically slapping down the prospect of paying in rubles , fortifying the tit for tat. adding to this exit us -- this

exodus we have seen from the nation. from your perspective, doesn't make sense to lean into risk? we have seen a rally in credit spreads. if you're looking at a 3% fed funds rate at the end of this cycle, what does that do to the corporate debt complex that has relied on a low rate regime? matthew: generally speaking, there's a lot of factors. even though nominal inflation is quite high, it is for corporate america. number growth is high when nominal inflation is high. earnings are still growing fairly well. costs are not catching up as quickly. that is one of the reasons we are not that focused on a recession. we do not see a high risk of recession this year. it is going to be week to week,

month-to-month, but we are not seeing that right now. we are not overly concerned about leverage in corporate america. what was actually saying was that there were liquidity concerns there. they should be slightly elevated in this environment, but not at a recessionary risk. we are not overly concerned about investment-grade credit. jonathan: me -- matt diczok,. to leave it there. and i thought you were done. apologize for that. mentioning the news out of credit suisse come of news out of hsbc over the weekend from "the financial times, reporting

they have been editing their research reports to remove any references from war in ukraine, and choosing the word instead conflict. tom: with the memory of vietnam, this is a sensitive issue. i thought they did a very balanced job off of what they have seen. but the word conflict to a whole piece of america is a conflict in vietnam that was not a conflict, and that really hit a third rail with me. jonathan: they have 200 staff and russia, so they are clearly worried about their staff there. they pointed to a statement after the comment. this is the previous statement from hsbc. "our thoughts are with all of those impacted by the continuing conflict in ukraine." by not calling it a war, remember that putin actually made it illegal to report false information, including calling it a war, if they discussed that.

so how much was it those associated with that getting thrown in jail? >> i wonder how much of the decisions are employee based. i don't have an answer for that. jonathan: this is semantics. we know in other countries, some banks are even wary about their outlook on those economies, given the presence they have. that is a much bigger problem. that is a much bigger problem. this is about word choice. i much more concerned about banks that operate in certain countries in the refusal to give their actual outlooks on the economy because they are worried about their presence in that country. that is a different story, and that is a much bigger issue. futures up more than 0.1% on the s&p. from new york, this is

bloomberg. lisa m: keeping you up to date with news from around the world, with the first word, i'm lisa mateo. president biden will propose what the white house called the billionaire minimum income tax. it calls for a minimum 20% tax rate that would hit the income and unrealized capital gains of households worth more than $100 million. progressive lawmakers have complained that the tax code does little to tax the richest americans. president biden is trying to clarify his stunning comments that vladimir putin should be removed from office. he says he was not calling for regime change. european allies raised concern about the remarks and critics say he was further inflaming tensions with russia. the u.s. says a revival of a nuclear deal with iran may not happen soon. iran has made a number of requests recently, include in that washington remove the islamic revolutionary guard corps from its list of

terrorist organizations. the agreement limited iran's nuclear activities and returns for sanctions relief, including the oil -- including on oil exports. shares of tesla higher in premarket trading. the electric carmaker will ask shareholders to authorize additional shares in order to make a stock split possible. tesla has been trading at $1000 a share. 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 lisa matro -- i'm lisa mateo. this is bloomberg. ♪

>> the negotiation does not means that ukraine is ready for surrender. the negotiations mean that there should be a solution and diplomatic pressure to stop russia. jonathan: the ukraine ambassador to the united states on nbc over the weekend. from new york, good morning. futures positive on the s&p and on the nasdaq, up 0.2% on the gnostic 100. up a little more than 0.1% on the s&p. the move in the bond market fades through 2.50%. now down to 2.46%.

can we call it chaos six hours ago? tom: it was a bit messy. the pulsing on the bloomberg terminal is definitely calmer now. with the uproar over president biden and the trip, we thought we would talk to the adult in the room who could actually give perspective. wendy schiller at the taubman center for american politics at brown university is definitive in the span of american history. obama, 2008. i know that i don't look like the americans who previously have spoken in this great city. obama clearly talking about jfk. reagan with gorbachev, june 12, 1987, that was the weight on this president to fund the right tone. did he come near it or was it too much pressure?

wendy: i think he is concerned about looking to week. that is one of the things that was hanging over the obama administration, when it comes to russia. how do you stop people from doing terrible things? how do you stop people from doing military invasions, killing people, blowing up buildings? that is what americans are seeing nonstop, and they are wondering, with this massive military apparatus we have, why we can't do more. so please urge everyone to say we should not be here i think the problem for him, to me, it is the shadow of obama in syria, and i think this is governing a lot of what they are doing here. tom: this goes to your classic textbook. they did not have the speed of modern media that president biden faces.

how is he doing adapting to the new realities of new slow? -- new slow? -- news flow? wendy: what is surprising to me is the team around him has been his team for a long time. they should know better, or he should make sure to hire people who know better, who know how to manage communications or at least try better. the wisdom that comes with age is great, but if you are not willing to listen to people who know how to communicate the message, then you may misstep. lisa: based on your comment that it should have been his team to call him out, are you saying that this was perhaps a little bit predetermined going into this speech and not an ad lib? wendy: i think he is trying to establish that there is certain people that should not be in power.

he misused military power particularly, and invaded another country. just as george bush said about saddam hussein going back to the first gulf war, this person should not be in power. they are not legitimate, and the world to do something about it. that was the message. jonathan: is there a difference between the opinion of the president of the united states and the official policy of the administration, across a range of issues? i thing where used to the president speaking and that being the policy, but is there a difference? wendy: certainly, ronald reagan used to say i issue an order and waited weeks for it to be and plummeted because policy is a huge bureaucratic apparatus because the things that we have on the ground diplomatically, militarily, all of those things are set in motion separate from the commander-in-chief. it should be the same come about and how it plays out, i think it can be quite different. lisa: we are heading into a

midterm with consumer sentiment weakest since 2007. president biden is expected to speak today about the fiscal year budget. how much is this effort to tax the wealthiest an effort to channel the anger rather than plugging the gap and planning forward for a policy measure? wendy: the democrats are counting on this message to be something they can carry through to summer and that will be popular over the long run. i don't think it is anything for anyone paying too much money at the gas pump today. it is not a short-term boost, but it sort of positions republicans on the wrong side of struggling economically. i don't think it does anything for them in the short game. jonathan: typically a present

might wait until after the midterms. you think that is due now? using the need to get ahead of some of this? wendy: even though clinton had a shakeup before his first midterm, and certainly after his first term, that is the achilles heel the republicans. the blue go cycle has gotten so quick that we just don't know how much is baked in for the outcome and how much continues. jonathan: who do you think is letting him down? wendy: i think is messaging staff. . i think is communication staff has not figured out how to simplify things, and it has to be the same message as the republicans have been in lockstep.

that is simple to of zorba in a world that is more consuming than ever. these are confusing times. be simple if you are a politician. have one message and stick to it. jonathan: thank you, as always. there was not anything simple about it, was there? tom: as i mentioned, you caught me unawares jobs day, april 1, friday. it is going to be a huge week here, and we haven't even talked about the conflict in ukraine. jonathan: this will have a big effect, not just a direct sanctions, but companies feeling like they have a moral obligation to get out of russia. carlsberg group to leave russia. there's another. lisa: when they don't leave russia, you see the convocations of trying to tow the line and

protect employees while hewing to the desires of vladimir putin. jonathan: russia to no longer be included in revenue and profit from carlsberg, just moments ago. we'll pick up on those headlines in just a moment. this is bloomberg. ♪

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jonathan: live from new york city, this is "bloomberg surveillance." futures up about 0.1% on the s&p. yields fading from the highs of the session. now lower on the 10-year at 2.4530. carlsberg group to leave russia to seek a full disposal of the business in russia. that headline passing just moments ago. just working through some of the numbers. in 2021, russia and ukraine accounted for 13% of group revenue. the recent break out of russia on its own is about 11% of revenue. that was a year or so ago. tom: this is someone i talked to

years ago with francine lacqua. it is a thumbprint of business worldwide because they do roll ups. this is a baltic states roll up with russia. some of these companies are ancient. there is one i cannot pronounce out of lil wayne he and that goes back to 1784. you wonder how carlsberg peels off russia and yet maintains the complex relationships in the baltic states. jonathan: this is the issue. you have got the oil majors trying to pull back, bp. who do they sell? who is going to buy? everything is happening at the same time. i think we can call this a fire sale across a range of industries, a single country, of which there is a small pool of buyers. where does the money come from? how long does it take to fulfill the goals some of these companies have? tom: it takes longer than you think. i would go back to world war i as one of the tumultuous workouts.

certainly deglobalization tone is adjusted. we adjust now on this monday with michael darda, micro strategist at mkm partners. i have got to go to the symbolism of the bloomberg total return index breaching a long term moving average. is the great moderation over? is the great deflation from voelker done? michael: we will have to see about that. this is shaping up as a different economic cycle from anything we have seen in the recent past. looking at nominal gdp and inflation tells you all you need to know on that score. the last cycle was characterized by 4% nominal gdp growth, inflation below two. this one looks different.

more than 15.5% nominal lysed gdp growth, last year was 12%. this year, most of which will be inflation. we have to go back decades. tom: i channeled the inner michael darda years ago. i did the nominal gdp study of japan. their flatness goes back to 1994. do you look at japan as discrete and separate? do you have to fold the japan reality into your u.s. analysis? michael: i think japan is a case study on repeated policy failures. they did have a period of moderate reflation after 2013. they have had the worst nominal gdp performance if you look at three large regions, eurozone, u.s., japan is flat on its back

in terms of nominal gdp growth. the euro zone before this recent crisis was looking quite good with a powerful v-shaped recovery and nominal gdp, something that was not seen during the last cycle. japan does stand out as a laggard. monetary conditions are tighter there than they have been in the u.s. lisa: when we talk about the u.s., a lot of people say it is isolated even from europe. you are not that worried about the yield curve yet. why do you think people are making too much of this? michael: thanks for that question. people are getting worried about some of these measures that have flattened out dramatically. that is creating consternation.

most of the literature on the yield curve has relied on a short rate of the t-bill versus a long rate like the 10-year. those measures are steepening, around 200 basis points. the federal reserve released an updated study advocating what they call a shorter-term curve where they are looking at t-bills relative to the two year yield also just moved to year to date highs. the curve for forecaster sessions have been steepening, some of the valleys like to-year to 10-year have flattened a bit. we should not make that call. lisa: does that mean that you think this economy can potentially avoid the recession so many people are calling

inevitable, if not this year, next year? michael: i think this year will be a year of growth, elevated inflation. i am concerned it will be difficult for the fed to pull off a soft landing because they have fallen so far behind the curve. in the quest to catch up, that does raise a recession risk. it is hard to see this business cycle extending as long as the last. i hope i am wrong about that. i think it has got some real challenges in front of it as it tries to adjust, not just get to neutral, if they are going to get inflation rates back down to target, they need to take a restrictive posture. not in 2022 in my opinion. tom: the experience of this as something comes out of nowhere,

overcome by events, deutsche bank, acclaimed academic makes clear the currency dynamics are going to involve europe and others intruding in to move their currencies around to make it more flexible for their financial systems. should we look for devaluation, depreciation, stoppage by these nations where they come in with some form of intervention? michael: it is possible. we are not seeing much movement there. there has been quite a bit of concern about the potential for the dollar to weaken dramatically. the dollar has appreciated year to date. what i think is a more interesting story is what's happening regarding expectations of the internal price levels. we are seeing inflation expectations going up handily in europe as well as the u.s..

that comes down to accommodative monetary conditions in those conditions persisting too long. if you look at these credit market variables, they look different than they did during the last cycle. typically those were always associated with falling inflation expectations not happening, dramatic widening of credit spreads, also not happening. conditions have tightened very little. we talk about the yield curve actually steepening. that is a central bank behind the curve story not a premature tightening path story. lisa: do you think the bond and stock markets are moving coherently? we have talked all morning about how stocks are maybe not listening to bonds. is the message much more sanguine? michael: that is a great point. we have high valuations in the

u.s. the s&p 500 -- anything that will push long yields up will be a headwind devaluation. stock markets can come down because of growth fears, but also due to inflation scarce or valuation pressure. with the 10-year yield rising, we see how that is playing out with some of the more expensive areas like large-cap tech stocks , the blood that this year as long rates have moved up. in that sense they are sending the same message. jonathan: awesome as always. michael darda of mkm holdings. the three month 10 year curve has gone steeper over the last month. it has not inverted. it has gotten steeper, not flatter. credit spreads over the last few weeks are tighter, not wider. as you have pointed out,

financial conditions have become less restrictive on many days as well. that has got to be a head scratcher for this federal reserve. lisa: whether they want to change that, or whether they like this because that allows soft landing. then having to move 250 basis points as bank of america believes in citigroup believes. jonathan: if you want to get something done about inflation, you need a restrictive policy. that is what they are telling us. want to do something about it, you have got to get restrictive. this is not it. lisa: does this mean the market does not believe they are going to move or they are going to have to do more to crimp demand to show the market they are serious? john: i went off on my opinion. citigroup thinks it is not restrictive enough. therefore the federal reserve needs to do a lot more. tom: i will pick up where ian

shepherdson was of pantheon, which was respect for the x-axis. you can have a magnitude move, but there is the timing of it out the x-axis. shepherdson suggests the shortness of the citigroup move is a bit aggressive. jonathan: equity prices are unchanged. a sign that it is not interpreted by markets as overly hawkish. we will get into some of this of -- with jay pelosky of tpw. futures unchanged on the s&p. this is bloomberg. ♪ >> with the first word, i am lisa matteo. he talks between ukraine and

russia resumed in turkey. big difference is remaining on a cease fire. ukrainian authorities expect civilians to keep fleeing marable. he minutes carrying -- humanitarian corridors will remain open. this time, it is danish beer maker carlsberg, it says it has taken the difficult decision to seek a full disposal of its business in russia. the city of shanghai will be locked down to conduct a mass testing blitz for the coronavirus. residents will be barred from leaving their homes. public transport and car hailing services will be suspended. hp has agreed to buy plantronics in a $3.3 billion deal. it will help the laptop maker capitalize on the transition to hybrid work. the all-cash deal gives

shareholders a 53% premium for plantronics closing price on friday. while walmart is reportedly ending cigarette sales in some stores. the move comes after years of debate. a spokesperson would not say how many locations will keep selling cigarettes. walmart is not halting all tobacco sales. global news 24 hours a day, on air and bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa matteo. this is bloomberg. ♪

>> we think that they are going to potentially raise that cap on 10-year yields, probably above

0.3, 0.4, somewhere in that range. at some point it is going to be a lack of tolerance for a weaker yen. imports are going to start to get more expensive in japan. tom: terry wiseman there, legendary at bear stearns. we are thrilled he could join us today. in the blur of all the news this morning, on yield, the president returned to washington, and look for that budget discussion this afternoon. there is news that comes out of nowhere. this reminds me of a full by randomness, shut up and read this. this is the real world. bloomberg opinion columnist marcus asher joins us now on the surprising things that happen in

skyscrapers when you walk into a room and they go what? this is barclays about rescission and not recession. it is not 1661. it is somebody screwed up on a paper issuance. they said whoops. it is half $1 billion. >> we have all learned a new word today. it was tough. it was a simple filing error. they forgot to add an extension to the shelf. that is very embarrassing, which just shows you that the scale and size of this business, barclays can get relatively cheap funding by using these things as structured notes. the structured notes have a life of their own where you have to facilitate the size of back

buyer or volatility. it is almost like an etf. it is a huge business for them. it is very embarrassing. in itself probably a quantifiable error, hopefully not repeated. tom: is the city overleveraged like our perceptions of 1998 and 2007? is there a comfort on the balance sheet when things go oops, the banks are solid? >> definitely yes. one thing i would fly potentially is leveraged loans. it has caused a big think that was unexpected like barclays. credit suisse has had a cup time -- a tough time. the banks are in far better

shape in the u.k. and u.s. than they were on the verge of the financial crisis. the regulators have done a good job overall. they can always do better. lisa: there is this bigger question right now amid the normal gaffes we see that have been frankly routine on wall street for decades. how resilient banks will be to not get anything back if they try to close out their businesses in russia. i wonder how much that has been priced in or whether you think people need to do more work to understand the hit on top of the slowdown? >> it is certainly quantifiable. some banks have made decent money in the lead up to what has happened recently. some of the cooperations will be profitable for the bigger banks. it is a reputational hit.

it is a brand hit. that is what has got to be controlled. it is worth taking a potentially smaller hit on closing and operation. the question of whether or not it is a smarter thing to do to give the kremlin something for free. a lot of the self sanctioning does not make sense to me. lisa: you have been in the business a long time. when you talk to colleagues at banks, what is the mood? >> pretty good in the overall context. very good year last year. it is sort of a sick feeling like this roller coaster. so many bad things are happening that you would not have expected. not just the bond market, this does not seem to stop everyone was expecting all this other

stuff friday. another huge fount of repricing. that is causing problems. you do want to do new deals. it is hard to get a deal away in a volatile market. tom: thank you for the breed. marcus ashworth writing for bloomberg opinion. wonderful column today as well on japan. the one thing we have not talked about this morning is yield up, price down in credit in corporate bonds of quality and also the garbage you follow so closely. are they getting hammered? lisa: they are actually pretty resilient. you have seen them rally if you look at the credit spread aspect. they are considered a haven. tom: why is that? lisa: people believe the u.s. will avoid recession.

you have companies that don't have near-term maturities. they are not heading into a crisis in liquidity. if that is the case, they offer an extra cushion against the benchmark yield. as we were talking, 10-year yields are down on the day at 2.44%. at one point they had almost reached 2.56%. just to give you no idea of how wild this session has been. tom: when you were on sabbatical, we saw the same ip here. the range has gotten wider. that involves a lot of slack or sway in prices. lisa: how much is the fed behind the curve? i thinking about michael darda, this bank does not believe -- this market does not believe the fed is going to get ahead of the curve. we are still looking at accommodative conditions. tom: it has been an

extraordinary monday. thanks for our team from last night moving things around so we could give you the spirited conversations each day. stay with us this morning on radio, on television. this is bloomberg. ♪ >> welcome back to another miami open update for tv and radio, tennis channel. american stars enjoyed more success at the hard rock stadium. 18-year-old coco gauff had to fight for the first time in her home tournament. two tough sets in her second victory over a chinese opponent in the sunshine state. >> she is not an easy player. new the match was going to be tough. she has had recent success on the doubles court. she just won a title. i knew she was playing confident. i was trying to dig through

that. >> francis t off of -- tiaffoe, the american did not face a single brightpoint. don't forget, tennis channels daily live coverage from miami starts at 11:00 eastern.

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tom: -- jonathan: equity futures unchanged. the countdown to the open starts

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 big issue, a messy bond market. >> the curve is inverting. >> it is inverted. >> whether or not we will have inversion in the u.s.. the potential for recession is growing more. >> curve in version is coming. >> the timing is crucial. >> the fed is late and now we are going to make a policy error trying to fix the problem they should've fixed last year. >> what central banks is doing

n