to do is catch up. >> the mantra is pricing hikes. >> the path is the fed. >> if the fed overreacts, they may be in a tougher spot in the fall. >> this is "bloomberg surveillance." jonathan: from new york city, for our audience worldwide, good morning, good morning. this is "bloomberg surveillance, on tv and radio." futures positive up .2%. pushing ahead to earnings season. tom: we really vaulted yesterday into next week. next week is packed. lisa and i will be in washington at the meetings of the international monetary fund. the ecb meeting is the thing to think about over the weekend. jonathan: ecp looking to be a

big print. tom: is not the level, the magnitude, the duration, the magnitude of time each is gaining out of this high inflation. how do we know inflation is going to disappear? jonathan: the hope is that it peaks. and does it change anything for the trajectory of the federal reserve? lisa: wednesday will be the key day when jp morgan kicks off the season. can i pass on as robustly as they have to the consumer. jonathan: the banks are not responding to higher rates your the 10 year is up 30 basis points. the banks are lower. every day the banks index is weaker negative. lisa: this comes as the federal reserve says we need to slow

lending and how else will we get inflation down? basically, they are not hoping for some base effect to kick in. they need to see evidence and if they don't they will slow demand. jonathan: no one wants to get cocky at head of a 50 basis point height. can't make my mind up if it is stagflation. there is no consensus out there. tom: we did a great job of pushing back. our job is not to give an opinion but there are people pushing against the recession call. jonathan: equity futures up .25%. on the nasdaq 100, positive, around .3%. at the bond market, yields higher. crude, positive .9% for wti 96

.87. lisa: we have seen a decline in crude prices. almost back to where we were before the invasion of ukraine. what i am looking at is the german chancellor making his first trip to london meeting boris johnson. i am curious to see what germany's tolerance is to potentially sanctioning russia and frankly banning gas imports from that nation. at 12:00 p.m., the world agricultural supply and demand report is coming out on corn, soybean, week and cotton for the week of april as food prices soar to the highest prices on record, according to the united nations food engage. how much can we get a supply-side change.

we are watching the french election. i want to understand how much of a risk it is for marine le pen to win this election with them heading likely for a runoff. going back to may 2020, how much is is an existential threat to the region due to the fact that marine le pen is much more nationalist, less committed to the whole euro project. jonathan: your focus going into the weekend? tom: it is obviously what everyone is talking about, micron--- macron-le pen what does it mean for americans? it means a follow-up from the shock we saw in hungary. the hungarian outlook, outcome, rather, shifted how we look at paris and france into sunday.

what matters is how many bags of ice tiger woods had in the last number of days. jonathan: yep. tom: have you ever done the bags of ice thing? it is painful. jonathan: yesterday was hard work for him. i thought it was great. it look like hard work. at the end it looked like hard work. the greatest challenge for tiger is whether he can get around four times because it is a tough course to walk. tom: if he drops out in the second hole today, it was a success. jonathan: he looked great depending on what he has been through. let's kick things up with ebrahim rahbari. are we getting a slowdown or something worse than that in this market?

ebrahim: for now we are only pricing in a slowdown. i don't think the market has made up its mind whether it is going to be a recession or a growth recession. we do need a new employment to go up to contain it had for now i would say a slowdown rather than a recession but fine-tuning that will be incredibly difficult. tom: i want to talk about the barbell that everyone in economics is talking about is the how and horse lagarde -- hollanhorst-lagarde. how do you -- with all the challenges lagarde has with euro stability? ebrahim: i would say as clear as the direction of tightening the u.s. and the vanguard for

anticipating it. i think the minutes yesterday were remarkable because i think a little less notice has been the hawk us -- hawkish shift. the minutes yesterday projected very clearly that many people at the ecb the policy is very much in the wrong place and behind the curve and frankly they have a hard time understanding themselves why the ecb is still carrying out qe at a time when inflation in the euro zone is north of 7% and unemployment is below seven percent by eurozone standards, which is extremely low. i can see lagarde time to catch up by a longer way than anticipated. lisa: you started out by saying it is not clear we will see a slowdown or a recession. when you take a look at when the euro and dollar are priced, what a pricing in versus what will be

the slowdown and the recession? ebrahim: euro-dollar is very directional in recession, whether global recession or u.s. recession. it is really only the european recession that reacts sharply and that is what we saw in 2010, 2012. markets are pricing in the risk of that. global recession isn't really the main risk for euro-dollar. what we are looking at for euro-dollar specifically more be related to the election. if it is just a global recession or u.s. slowdown, there is a good chance the euro-dollar will go up rather than down. jonathan: great to catch up. ebrahim rahbari of citibank.

negative interest rates. the accounts of the ecb's last meeting, reading through that, given the extremely strong starting point and the anchoring of medium-term expectations for inflation, is it really difficult to see out this might come about? i think it is quite easy. that it might happen. tom: their political calculus come which christine lagarde is experienced at, is clearly different from the fed. but with the amount of times i trash on young ferro, i am in awe that you read the ecb minutes. jonathan: i read it during this program when it came out. i think there is some signal. the agnes of the prosthetic --

prospect -- the ignorance of the prospect of stagflation is to move away from ecb monetary policy. lisa: you are seeing a row correction in the german bond market and the entire european market because that is the signal they were taking. they want to project a certain confidence about the european economic trajectory. jonathan: next week it is all about earnings season. lisa, you have been atop of that. it is the forward look. the forward look for this economy. lisa: credit suisse put out a report where they say first corning quarters -- first quarter earnings they expect lower. after this rolloff from the weakness from the ukrainian conflict, how much do we get companies pushing forward to the same momentum and what does it do for the fed? tom: this is math, don't quote

me the full digit. french gdp, the animal spirit of nominal gdp of france is down 8% over the last 13 years. that defined stagflation. the malaise, which is the angst, when you and i go to paris, we walk across and we go to the mcdonald's. we save money when we go to paris. the answer is, that is what america sees. a france flat on its back and that is why le pen is doing so well. and you see it on the bloomberg terminal and nominal gdp. jonathan: that is what i'm speaking to that you have an audience of one. trying to sell a trip. why don't you just be to him directly through the camera?

you might as well mention his name. tom: [speaking french] jonathan: this is bloomberg. ritika: for the first time the european union has targeted russia's energy revenues they agreed to ban russian coal imports japan may follow -- coal imports. japan may follow. the war in ukraine entering a new phase, six weeks after vladimir putin launched the invasion. ukraine have -- may just have weeks to acquire weapons. dozens of refugees killed today

after russians allegedly held a train station. in france, latest polls have emmanuel macron beating marine le pen to 2-48 in a runoff. emmanuel macron's -- beating marine le pen in a runoff. it was tiger woods' day at the masters, who shot a one under. he has been recovering from a car crash that nearly cost him his right leg. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> the united states policy is the sanctions continue until president putin is no longer there. there. >> we can in europe make a virtue out of necessity, not only moving away from russian energy, but moving toward sustainable energy, renewables. it is a process. it takes time. my strong sense is europe is committed to doing that. jonathan: antony blinken, the year -- united states secretary of state. the s&p down on the we come up on the session about .1%. yields higher by a basis point

on the u.s. 10 year. on china to pelosi, not wishing for the best after she tested for -- tested positive for covid. here is the quote. it will be a malicious provocation to china's sovereignty, gross interference in its internal affairs. they say an extremely dangerous political signal to the outside world. not exactly get well soon to the foreign minister. tom: when i first heard of closely' trip, i thought -- pelosi's trip, i thought was a provocation. i think everyone within international relations -- is looking at the linkage of what we see in ukraine and moscow with any potential in the south china sea. jonathan: we understand a congressional delegation trip to asia would speaker pelosi was

leading is now being postponed. tom: we are thrilled to bring you marc champion, who is wonderful on european relations. i guess of the french election, it is the new autocracy or new refined autocracy within europe. we see it's with the elections in hungary and with the war in ukraine. synthesize before us the new autocracy and how le pen on the right is doing better than micron -- macron. marc: macron was playing a leading role in the war in ukraine and initially that worked but as the campaign has

gone on, le pen has focused on bread and butter issues, color issues, all -- blue-collar issues, and now it is a tight race, what tighter than last term. that would be an extraordinary change of guard in france if le pen was to win, especially at this moment, far more important than similar kinds of leaders that have arisen, for example in hungary. tom: with the oddities of the double election and the uniqueness and fracturing of the french republic going back to degaulle, if she does better allah reagan -- a la reagan moving to the center, can she do that? marc: she had been doing that

and that is why she is in the position she is in now. this is not her first rodeo and trying to become the president of france. she has been gradually trying to shed the connection between herself and her father, for example, who was far more right-wing. she remains very much on the hard right. she has been moving towards the center and trying to focus a bit less on identity politics, although she does still focus on immigration and more on bread and butter. lisa: this sends a message to the current administration, yes, foreign policy may be a positive point now when it comes to popular support, but that does not matter but it is the bread and butter issues. how is the white house positioning head of the cpi report? emily: president joe biden and the entire party recognizes the

current level of inflation, gas prices will be the biggest hurdles going into the midterms in november. that is the thing they will have to push against. you saw president biden trying to address that, releasing oil barrels from the reserve and you are seeing members of congress working on a bill that will bolster u.s. competitiveness. but to a certain extent, there is only so much that can be done from washington to address what is really a global problem. lisa: talking about nancy pelosi and the trip to potentially taiwan, what is the thinking when the geopolitical relationship among so many nations is so fraught? emily: have to correct the timeline jonathan laid out. we first heard reports of the trip wednesday night. then we heard the response from beijing. and that it was not until

thursday at pelosi announced she tested positive for covid. there were a lot of eyebrows raised about that trip. i know a number of bloomberg reporters went to her office and said, is this true? we are going from reporting from other for news agencies, but it would have been a major thing for the third-highest ranking politician in the u.s. to head to taiwan, particularly at a point where there are lots of lines being drawn between russia and ukraine and china and taiwan. jonathan: emily wilkins and marc champion, thank you both. the cpi, the meeting estimate 8.4%. 8.5% is the number out of barclays. you had the conversation about the politics, food prices earlier. those things are so important

right now. lisa: to put into perspective, the 8.5%, should that come to pass, that would be the fastest pace of consumer inflation going back to 1981. we haven't seen this before. consumers have the cash. will they keep spending it when they keep seeing the ticket at the grocery store rise at the pace it has? tom: 1981 is a shock, because then you had the oddity of a yield market at 10 percent, 11% and the volker breaking of inflation. it was still a negative 10 year real yield. we have come a long way but the yield difference between 1981, there is no comparison. jonathan: massive move, of 30 basis points a nominal yield. in the equity market, how

unresponsive the banks have been in the face of that. that correlation is broken down. lisa: they are pricing at a slow down, not necessarily higher rates at a faster economy. jonathan: from new york city, good morning. hunting you down to the weekend and really important week ahead. from new york, -- counting you down to the weekend and a really important week ahead. from new york, this is bloomberg. ♪

jonathan: three hours away from the opening bell. equity futures positive by put 1%. the nasdaq 100, up. the bear is still bearish. talking about the recession shock still to come here the bank and how defensive the market has come beneath the surface. let's talk about the bond market. twos, tense, 30's -- 10's, 30's, the 10 year breaking out by 30 basis points. not enough to support financials. earnings season next week for

the big banks. jp morgan kicking things off on april 13. the euro, german 10 year, french 10 year, over the past week kicking higher and starting to see the french yield, widening out a little bit going into this election this weekend in france. tom: in currency showed as well. with a broader perspective with euro and dxy coming within a touch of 100, it is a currency market looking to sunday. jonathan: you go through the scenario, she said if she when she make it euro-dollar down, goldman and their point is the basis point is a rally back to 120 and escaping negative interest rates in europe is a big deal.

it looks like perhaps, perhaps on the road to doing that. tom: guy johnson in my experience was that at the last election you rally down towards a decent dinner. guy johnson and i and you went down and rallied back. jonathan: can i just explain what actually happened that weekend? tom went to france and set with guy and i was in a studio in new york. what happened to my trip? tom: they don't start dinner in france until 7:00 p.m. i am on the surveillance schedule come walking around at 5:30 trying to get dinner, it doesn't exist. peter guber is -- peter h ooper is going, what are they talking about?

the whippersnapper who has the recession word. dovetail in your fed misery index into the audacity to call recession out the end of 2023. how can you look through the hooper crystal ball that far? peter: this doesn't happen usually. the economy is looking good through the rest of the year appeared the number of times historically when we saw a fed -- rest of the year. the number of times we have seen historically when we saw the fed with un-limit plus inflation and things ideally at 6%, the fed misery index is a name i would like to give to this brilliant index that matt and his team

have come up with. the sum of the amount i which the fed seized -- sees inflation over its target, which is now three and a half or four percentage points, and the unemployment rate below current estimates. the natural rate of unemployment has been rising for a number of reasons and estimates are now close to 5.5%. that is another 1.5 percentage points. add 1.5 percentage points of undershooting on underlayment to the four percentage point of overshoot on inflation, you are up around 6%. tom: this shows, along with a traditional role that is distorted that john taylor could ever imagine, that the textbooks don't work here. if the textbooks don't work based on the deutsche bank u.s.

misery index are classic taylor role -- rule, what works now? peter: we see inflation that is way too high and it has been increasingly driven by labor markets way too high. inflation broadening out, the labor market hot, wage inflation going higher that is -- then is consistent with wage inflation, and increasing demand driven. at says demand needs to be slowed. it is simple supply and demand. the fed it to step in and take some steam out of labor market and needs to raise un-limit of it in order to take the pressure off. it is not too difficult here and surprising that the broad consensus and economic

forecasting has not put up with this. jonathan: you have a month, not for the fed but for the ecb the amount of pushback i am getting, i imagine you are getting it. so hikes from the ecb this december to next december, how is that achievable for the ecb? will we talk about the fed, i see that. walk us through the process you have gone through to get to the number. peter: all credit due to mark wall, or chief european economist and his team. they have been out front on this for quite a while. u.s. inflation is pushing 8%. euro area inflation pushing 8%. competition is different, driven more than commodity, oil, gas prices and it will reverse some

extent more quickly. but there is increasing evidence that this is a broadening out and you are beginning to see some and the labor market as well, no question. the same inflation psychology we are worried about in the u.s. is starting to take hold in europe. the ecb is if anything, more concerned about the inflation outcome than the u.s. we think, mark has been talking about the possibility of 50. he has lift off in september. i saw your survey this morning that had consensus into december. we think lift off in september and possibly more aggressively than the 25. lisa: what is the distinction between a slowdown and a recession, policy, the pace of

inflation, something else? peter: we have a recession in the u.s. and what we call a growth recession. europe is facing a somewhat different picture. in the u.s., huge fiscal stimulus is being reversed. europe, we see delay in the fiscal picture and getting more help on the fiscal side in europe. with prices likely to come down a little faster, real income is not as great. we think we see a slowdown getting very close to what could be technically called a session, growth close to zero at the beginning of 2024 in euro area, skirting by and avoiding an actual recession. a recession would be to quarters of negative growth and half increase in growth, within a few 10th increase in unemployment and one quarter near euros --

near zero growth. jonathan: that is some of the best research. it got me thinking. peter hooper of deutsche bank. a fascinating read. we are now projecting a recession in the u.s., growth in the euro zone in the next two years. on rates, this is what they said about the federal reserve and ecb, we expect the rate to peak at 3.5% next summer. we see the ecb raising 250 basis points between this september and next december. tom: the rate above 3% is something all of you, whether pro or amateur, you will focus when he mentions terminal rates. i believe bank of america has a much lower terminal rate, benign terminal rate for europe. the leadership with the great peter hooper, looking at how currency is signaled and the

answer is, if you get the yield structure, you get strong dollar, week euro -- weak euro and they can't sustain that. jonathan: what kind of economy do you get? i think there would be conviction if the ecb hiked rates 250 basis points, could they escape an recession? that would be huge come with italy in mind. tom: look at nominal gdp and productivity and technology. macron is pushing the technology. the difference between the two sides of the atlantic are stunning. i go to the malaise out there, again away from the terrorist areas -- tourist areas. i think we have such a wrong view of the angst of this election in franch like in hungary, this is huge.

i talked to --, you don't have to go to paris, go to --. jonathan: john claude knows something about hiking at the wrong time. tom: he lived it. jonathan: that was the last time the ecb hiked rates was back in 2011. lisa: momentum in the european economy isn't strong enough to sustain the same pace of rake -- rate hikes as the u.s. some people think it will be more material in the u.s. i am trying to wrap my head around it. jonathan: the pushback was aggressive. euro-dollar unchanged. coming up, the founder and geopolitical strategists. from new york, this is bloomberg. ♪ ritika: keeping you up-to-date, i'm ritika gupta.

congress put russia in the same category as north korea and cuba. lawmakers voted to strip russia's normal strata status and ban imports of gas, oil and coal adding to the economic squeeze by the u.s. and at allies to punish moscow for the invasion of ukraine. global food prices raising at the fastest pace ever. the war in ukraine has choked off supplies leading to panic of shortages of key staples. according to the united nations, food prices rose 13% last year. judge brown jackson confirmed nomination to the supreme court. all 50 democrats voted and three republicans. a dhl cargo plane broke into after it skidded off and -- an

landing. talks with jetblue over the takeover bid. spirit said the jetblue offer could lead to a superior proposal. it talked rivals, atlanta air, which they accepted to months ago. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> what we do is watch carefully, what will it take to

maintain the effect of these sanctions, because the russians tried to find a way around it. we do what we can to handle this on the ground and whether it is used as a way to escape. jonathan: margrethe vestager there. on the nasdaq come up .1%. yields are high come up a basis point. what a move we have seen here yield up around 30 basis points on a 10 year p euro-dollar little -- 10 year. euro-dollar a little higher. tom: i am glad you mentioned it. i think we have underplayed the shift we have seen this week in yield as witnessed by yield inversion, back up to something less inverted. the 10 year real yield has been underplayed by all this week and

has come back. jonathan: with the exception of one person. at least has been on for take as we get -- tick for tick. lisa: it has been driven by real yields. we are still negative but the idea that inflation-adjusted yields of the highest they have been going back to early 2020 puts it into perspective. tom: all the more reason to tune in with jonathan ferro on the real yield. it will be a uniquely inspired program. tina fordham is with us. we are thrilled she could join us after a strong debate over what the west should do. tina fordham, i can say in all my years of doing this, to have john bolton saying will washington get over it, they are not going to start world war iii. and alanna farkas saying, working with president obama,

they are not going to start world war iii. absolutely extraordinary to see the common feature of your people saying washington, calm down, get focused. do you believe with bolton and farkas we are not going to start world war iii if we are more assertive? tina: i am not sure we are in control of the trajectory of events, and i think that is something that has been much underestimated regardless of the administration in power. no one expected putin to undertake these actions in contrast to russian interests. i think that putin once -- wants to drag the west in the conflict in ukraine and that would show his view of nato. the this is a dirty war russia

is conducting and it will test western resolve in that respect about not getting involved in the fight. tom: there is an immediacy here. what should be the resolve this weekend? tina: if we think about how sanctions have historically worked, we have seen significant moves that are barely making the news in this environment, like finland saying it is ready now to apply to join nato. that is a big deal. finland has been at war with russia. it knows how significant such a move is. so putin is getting a lot of backlash to the steps that have been taken in ukraine, not showing any sign of deterring the moves. lisa: one notable development

has been an apparent strengthening of nato through this, a real community and perception if not in reality. how much of a blow will that unity take if le pen wins the presidency in france? tina: i guess i haven't taken seriously that marine le pen will w fifth french election that i will have covered in my time as a political risk analyst. she has had a boost. the cost of living campaign she has been on is showing some effects, but i don't think anybody is ready yet to start talking about a french president le pen. lisa:, which is the unity affected by the fact that france is still dependent on russia for gas? tina: this is something i have been talking about quite often,

and i see some talking about enabling putin. political risk, is what i do for a living, and it is supposed to be about advising investors and companies about things they might do that would bring risk to their bottom line to profits into everything else. i am thinking that we need to redefine political risk and think more about what it is we do as consumers in this energy sense that is enabling other countries to inflict harm. i know i'm not alone in that thinking and the other idea i am thinking about is resource curve. we have a country managed to finance its military through oil and gas and using that in effect against us. it isn't like germany wasn't warned. germany is 40% dependent on russian gas.

you have a steady stream of german politicians today saying we got this wrong. that notion, that commercial interdependence would lead to peace has been completely blown open and the urgency to reverse the dependence is only going to pick up. jonathan: tina fordham, thank you. it is one of those strange things in politics where one country comes out and says we got this wrong but everyone was saying you are getting it wrong at the time. this is not even 2020 hindsight p this is in the moment, at the time -- hindsight. this is in the moment, at the time. president trump went over there, but i know for many that name is unpopular and he said exactly the same thing and nobody at the time liked the message, did they? tom: mr. trump may have been the

messenger, but there were many messengers. on angela merkel, i would take it further to the justification, rationalization of doing business with russia for germany that was flat on its back in terms of energy. you have to get the energy from somewhere and in hindsight it was easy but incorrect decision. nobody predicted what you would see from mr. putin. jonathan: the late 2000's, georgia, crimea, can we say that nobody would have predicted what president putin would have done? tom: i think a huge body did not predict that to the eastern front? lisa: this really raises issues. if tina fordham is right and we are rethinking our issue of security, what does it mean for china? that is why it is so important that pelosi is thinking of going

to taiwan? what does that mean on the stance from the west? they are talking about potential sanctions and all sorts of things. it is notable they are still talking about it. jonathan: from new york city this morning, good morning. this is bloomberg. ♪

>> a lot of what the fed has to do initially is just catch up. >> pricing hikes it is clear that is the direction of travel. >> the fed is almost price to perfection. >> if the fed overreacts they might be in a tougher spot in the fall. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: live from europe city, good morning, good morning. this is bloomberg surveillance. futures just about positive on the s&p, setting you up going into the weekend, with cpi and earnings in america. tom: it will be interesting to see earnings. ecb just as important. the market speaks volumes. i am looking