the early season, it's a good time to on volatility. >> inflation is primarily a concern for the first quarter earnings reporting season. >> we are late cycle but how late are we in the cycle and how much pressure on corporate profits? >> the question remains, can the market go higher? >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. it is a day most special, bloomberg surveillance this morning from the headquarters of the international monetary fund during their most historic crisis since world war ii with war in ukraine and food inflation. this is a most unique spring meeting. we have seen in one week. lisa: you set it up perfectly, reconsidering as the court try to understand what their new role is at a time of such crisis, entering into what could potentially be even worse.

you are right to bring up food. tom: food crisis front and center. tom:for me what is so important, this will be a long -- we are lucky in the markets are quiet and. this is a moment of multiple crises for all of economic international -- international economics. we start strong. lisa: i'm struggling to understand exactly what the crisis is. in 1944, it was a monetary crisis and now it is a real crisis over goods -- crisis of goods. tom: and that may be the globalization theme. you talk about the globalization and discontent, fine, but what it is about is the immediacy of the moment and we will talk to the managing director, the deputy managing director and

some lead talent at the imf about things in america we are not focused on and that is sri lanka. in pakistan, not only political unrest but food inflation and egypt is front and center for the managing director. lisa: especially considering they import aid 6% of their wheat from -- 86% of their wheat from russia. there is a lot on deck and preeti goop to has been checking that in new york city -- cree t goop. -- kriti gupta. >> you are looking at the s&p 500 down -- actually it is flat but it was down. talking about the ecb, the euro of .3%, the consensus when it comes to the ecb, no change in policy but that does not necessarily mean traders aren't

going for pricing. there is the highest level since december 2020 so we will keep an eye on watch it is after the ecb. the 10 year yield also about flat. not a ton of movement. that could change once lagarde starts speaking. we have a little bit lower into crude, 103 dollars, anything above 100 is not good news. tom: thank you so much. lisa abramowicz and tom keene on a day here and i can say with and all the years i have been doing this, this is may the most packed day. let's slow things down and i want to start with the international fund today. not only discussions with i officials including the managing director but we're thrilled to bring you angela and daniel. this is truly one of the high points of the year. i also want to talk about what else is out there. christine lagarde was mentioned,

familiar with this atrium where in. one in ecb today and bonus round, we have a few banks reporting as well. lisa: just a few. it is everybody under the sun. morgan stanley, goldman-s its -- goldman sachs, and others. tom: we will start strong with the gentleman from jp morgan, the chief economist of global economic research. i think he wrote about 50 pages of jamie dimon's letter and we are thrilled he could bring us the acclaim letter on our international economics and what it means of course coming back to what we see in america. doctor, thank you for joining this morning. first, there have to be amendments and adjustments. kristalina georgieva will react with the world outlook, what we saw from wto, which was 2.8%

global gdp. is it that grim? >> i guess the issue now is we have to get through what is a fairly large set of -- hitting us this year. the big one is inflation and the spike we have seen in march is unprecedented. it is unprecedented even against the backdrop of the last year. that is combining with a china drag which is coming and there grappling with a covid surge. we think it will stand the global economy's substantially. we think it will be a subpar performance in the aggregate. however, i think we have one of the more fundamentally healthy environments in terms of where balance sheets are, and terms of the major industrial economy, that and em economy. i think you will see resilience and if we are right, we get

through the next few months with a significant slowing growth and we set the stage for a rebound, given the health and resiliency and given the idea the energy and many of the other price impulses begins to fade. but we have to get through this next few months and we are going to be hurt by it. lisa: bruce, to that point, we are at the imf talking about all of the world challenges. in particular having to do with food inflation. how long can the u.s. remain divorced from some of these catastrophic trends in the developing world and continue its momentum, despite all of that? >> let's first recognize the developing world is i think in a very different position depending on where you look. there are a lot of commodity exporters doing quite well here. the asian exporters have done generally pretty well. what you do have is a number of low income countries which are

suffering quite significantly on the back of both the pandemic and these import prices of food and energy. that diversions, the problems of burden sharing, is what i think the imf has got to grapple with here as we go forward. from the global economy point of view, i want to emphasize the countries under the most pressure are not ones who share systemic and really a big threat . i think the issue for the u.s. is whether or not the consumer buckles under the weight of the high inflation. consumers have been eating into their savings and the bad news is we have been getting hit. when we get the retail sales report, we will see a nominal increase but we think the need to service will get the second month in a row of a real decline in u.s. retail spending but also in overall spending for the u.s. consumer. there is definitely a drag there. u.s. is not divorced also

sheltered somewhat relative to what is happening in europe where i think that is the region most at threat from the shots hitting us at present. lisa: a lot of us talk about peak hawkish in's and peers in the united states. given the momentum you see and trends starting to see among u.s. consumers, how long do you think it would take to remove some of the momentum and send us into something that looks more like recession? kriti: i think there are 2 -- >> i think there are two issues here on recession. the first have been talking about -- we have been talking about is the intensity of the dry cutting households from high inflation. other issues around trying to slowing -- china slowing. we are in a healthy position to absorb shock. i think we will not see a derailment. i think the chances of recession in the next three to six months is quite low. the bigger issue on recession as if we do get through this, the

combination of tight labor markets, change in inflation process going on is going to leave the fed with a difficult challenge of containing inflation and that is a story which definitely poses a risk of inflation -- recession, excuse me. that is associated with a fed that would have to go further to neutral, which is what they are signaling now and that would take time. i do not think you get a recession off of that with the fed on 2.5% ad rates. you will need to see considerably higher and that will take a while. it is probably more of a story for late 2023 or 2024 as a legitimate recession risk to the united states. tom: the first thing i read this morning was off of your age and affects desk with jp morgan really making clear, japanese yen is a global indicator on a path to weaker yen and a 130. your colleague in crime at deutsche bank it's extremely

worried about strong dollar and the depreciation of selected currency. you agree there is a risk here with chairman powell's policy, that we could see an descendant or resilient dollar that forces depreciation, devaluation, and currency protection by other nations? >> i certainly think there is a risk and i am a buyer of a young that continues to stay under downward pressure. let's first recognize the dollar, even through all of the turmoil and for the fed moving in a hawkish direction on its rhetoric, is staying pretty much in a narrow range year. we have moved through the last three to six months. that is a reflection of the fact that the fed economy has been benefiting from the commodity price surge and there is also a significant amount of tightening going on there. what i think it's crucial for the dollar is the idea that we do not get thrown off course in

terms of the global expansion and end edition that the european central bank is going to be in a position of joining the fed tightening if we get through the shot. we think they will be starting in september. if that is the case, the dollar does move up but not in a way that is threatening. if we have a weaker global economy, we have a much wider divergence between the u.s. and europe, i think that story is where the dollar comes under more significant upward pressure. tom: bruce kasman, and christine lagarde out of the ecb. one of the busiest days in the history of bloomberg surveillance. we have bank earnings out and we will cover all of that for you. we have the ecb as well and very important lagarde press conference but far more important like, our view of international economics with the imf during a war in ukraine. markets are fairly quiet but the 10 year yield is 2.70%. from washington, this is bloomberg. ♪

ritika: keeping you up-to-date with news from around the world, i am ritika gupta. president biden is sending in heavy weapons to ukraine. the president authorized $800 million in new firepower for the ukrainians including artillery, armored personnel carriers, and helicopters. the president announced that a package after a phone call with the ukrainian president. the european central bank is likely to prioritize the fight against inflation as a risk to the economy caused by the war in ukraine. the bank is said to maintain withdraw of stimulus when it ramps up a meeting in frankfurt ahead of germany's blunders bank. the june meeting will determine the next monetary policy step. the suspect in the new york city subway shooting is facing a federal terrorism charge, arrested a day after the attack entering more than two dozen people. police say james has an

extensive arrest record. in china, xi jinping says his government will sit to its zero-tolerance -- stick to its zero-tolerance report despite public anger and mounting economic costs. she spoke the same day shanghai reported a record of almost 20,000 new cases with 25 million residents locked down several weeks. you may soon see higher prices if you buy from amazon. the giant will levy a 5% fuel and inflation fee on online merchandise -- merchants that use its shipping services. global news, 24 hours a day on "bloomberg quicktake," powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta and this is bloomberg. ♪

tom: good morning, everyone. tom keene and lisa abramowicz and the meeting of the international monetary fund.

our conversation later with the managing director of the imf. she is on twitter, we are on twitter watching elon reeve mosque, the economics major of the university of pennsylvania look at the physics of twitter. [laughter] abramowitz is up to speed on this because i was on twitter tweeting elon. what is mr. must doing? lisa: he filed an amendment where basically he was coming out and saying he wants to buy twitter in all cash for -- cash which represent a 50% premium over where twitter traded in january and he talked about how he can unlock the potential of twitter. tom: folks, this has been in the bloomberg museum. would you suggest he is doing this in a proper manner where it is not like devious on twitter or anything like that? lisa: this looks formal. devious manner, there's not

necessarily saying should i buy it or not buy it poll. tom: alex webb joins us, bloomberg opinion columnist and a guru on twitter. how does twitter respond to this? how does the management of twitter respond to this one weekend this the next week? alex: there are two things at play, the financial and influence peace. as far as elon is concerned, this is about influence. if you a director of twitter or on the board of twitter, you are looking at the financial peace and value for shareholders. this is a premium to where was at the end of january and significant discount six to eight months ago. clearly you could make the case that price was inflated and not justified but if you are a twitter shareholder, you are maybe thinking at -- thinking maybe i could expect my money from this. lisa: how much is this a bid to take it private? elon musk says twitter has

extraordinary potential and i will unlock it. we see shares up more than 12%. what does this mean if this communications tool of the modern century is currently a public company? alex: twitter, even though we think of it as being almost like a west coast tech giant, it is not. it was just short of $50 billion valued. facebook is a 600 something billion dollar company. twitter's revenue is the same size as the old british telecom profits. it does trade at a significant premium to facebook. it trades at something like 50 to 60 times is forward earnings. you could make the case it is already, contrary to what i said before, already valued quite generously. does elon send those earnings -- and triple or quadruple the

numbers? which then brings you back to the point that it is more about influence than about unlocking the financial potential. lisa: one final -- tom: one final question and we will follow the story. i look at this and i want to observe what is not happening. where is apple? where is google? where are the others you follow each and every day? ? how do they respond to what i believe is an unprofitable jewel? alex: so google already has a significant social media operation. we think of it as such, youtube. youtube is a social media platform and that is where people post content. apple may tiptoe into the social media space and i think they assess there is more reputational risk in owning a social media platform than would be worth it for them. in the grand scheme, the $2 billion revenue that twitter makes is a rounding error in apple's profit. for apple there is more risk in

getting involved than opportunity. google for antitrust regions will almost certainly not be allowed to -- reasons will almost early not be allowed to. lisa: john dupree messages in and wants to know where it is 50 but $4.20, where that came from. alex: it is a valid point, for 20 of course is the price of which he was taking tesla private and it is a joke in sort of stoner land, for 20 being the date where people -- [laughter] elon there. tom: i am so out of touch here. when you are john and in capri, it is like 12 noon and he has number ella in his cocktail, so explain this to me? lisa: for 20 was the name of a piece of legislation having to do with the legalization of marijuana and so remember when jon ferro was exploding the

meaning see on air? this is a similar kind of discipline except from capri. tom: get my walker, i need to go. [laughter] thank you. it joining us as someone who does understand what elon musk is doing but far more importantly understands that it is about american politics and of course the meetings of the imf, we begin the meeting strong with annmarie hordern. janet yellen says get over it, we need trillions of dollars a perspective not billion dollars a perspective. how would you suspect the international community will respond to a primal call of janet yellen? annmarie: it depends on who you ask, who she is speaking to. there was a stark warning to china saying if you are beijing and you want the world to respect your territory and sovereignty, then you need to do the same. we are seeing the world rally behind ukraine. what did we hear today? president zelenskyy [over talk]

tom: in the last few alley, -- few hours, there has been a rally. we annmarie: are not talking about just offensive weapons, we're talking about weapons that could help in the offensive. so lenski asked for them to send money so they can continue to pay salary. lisa: you said offense and. what is the line now? annmarie: fighter jets. lisa: how close are they getting to that line? annmarie: they are sending these drones, sending intense military equipment, even some they will have to train ukrainian military officials and soldiers on some of this equipment. also other things which i think speaks to volumes what the united states see the next stage of the war, sending individual equipment to protect against chemical and biological weapons. tom: what will you listen for from the managing director today?

lisa: good question. -- annmarie: good question. i think today will be about who is rallying, what other countries rallying, and what message she has those are potentially on this line. tom: she's got a step of the message. this will be one of our themes through the morning as well. bruce kasman -- annmarie hordern with us and at the white house as the morning breaks here in washington. i find the complexity of this april for this imf is absolutely original. i think in 1992 maybe had allusions to this and the financial crisis of 1998. other than that, the complexities are at record levels. lisa: one thing talked about is the unprecedented uncertainty. how do they go against that and create the war chest for it when somebody members are trying to create their own war chest for their own problems? tom: we will be here through the morning with good conversation.

we will have our guest joining us in the 10:00 hour of the show. it joining us today, daniel juergen and angela stent. stay with us for the office of the international monetary fund in washington. good morning. ♪

tom: "bloomberg surveillance." good morning from washington and washington international monetary fund and world meetings in one week. we will get out front of that later today. jon ferro on sabbatical and he will be joining us at some point after that is done. let's do a data check. we are lucky with a huge new slow this morning. we have a data check, there is not that much going on in the market. i have yield from two days or three days ago coming to an end. oil even at a 107. elevated but stable. i think we really with a lesser data check this morning. except there is twitter. help me here. lisa: twitter shares up about

11% on a premarket activity after having been up more than 30% after elon musk offers to buy the shares at $54.20. do you get it? tom: i still don't get it. my email is bernie -- lisa: basically, there will be questions on twitter and what his goal is with it whether it is a toy for him. tom: we will have a conversation in the 10:00 hour of the managing director -- with the managing director, the deputy managing director here at some point this morning. frankly none of that matters because they understand at the strategic level what you need to do, just do it. there is the tactics of the imf in this time of war in this time of massive inflation. joining us now, and i will butcher this name.

thank you. anyways. i can pronounce erdogan but i am having trouble. there it is, the director of strategy at the imf. >> good morning. tom: you have a visceral understanding of the nexus of istanbul, of the challenges of the nations around it. let me cut to the chase. the affinity of your turkey with egypt. egypt is in trouble and many other nations as well, food inflation is tangible. what is the tactical effort that you as director of strategy will do to help them? >> thank you, tom. thanks for being here. first, we are seeing stock aftershock in the world economy. we have crises, the pandemic, we now have of course the war, devastating in many ways. the impact is from three main channels, one is food and energy

prices and the countries you mentioned import their wheat and other grains from ukraine and russia, so that is on important channel contagion to those countries. second is to many countries in the region, refugees, 3.4 million refugees, and of course we have the indications in terms of investor confidence and tightening financial conditions. so all of this together means very difficult conditions for those countries. what are we doing at the imf? we are supporting them as much as we can with emergency assistance, without program, with our policy advice, but also with initiatives. tom: the wrapper and i don't mean argentine over the last three to four years but the wrap on the imf going back decades is there is a procedure. you are in trouble, sri lanka is one example. you go to the imf and there are conditions. is your process or the formula

of your conditions changed given a war in ukraine? ceyla: we are a learning institution as you know and we have been changing in terms of the pandemic, we had emergency loans during the pandemic which basically had no conditions. the idea was you use it to deal with the pandemic. tom: what is an example of a change process that you as managing director are doing on food inflation? ceyla: yesterday the managing director, the world bank president announced a global food action, so what are we doing as a fund? we are looking at these countries and we just had a program, $276 million. lisa: argentina central bank raised rates by 250 basis points to 47%. a big part of this is because of the conditions tied to the imf loan, the $44 billion loan that requires them to keep rates

above the rate of inflation. is that the kind of condition that could potentially get changed at a time when inflation is crippling the economies further? ceyla: inflation is crippling the economies. inflation is also hardest on the most vulnerable people. in argentina, 47 percent are below the poverty line. this inflation needs to be tamed. it is actually a program that is agreed with authority. they are trying to tame inflation and that is why they raise rates. lisa: how much do you work with the fed or count on the fed to necessarily have an eye toward the international? a stronger dollar creates that much more of a perilous situation for the countries that you're trying to create plans for. ceyla: of course the fed is in a difficult condition as well. there is slowing of growth, the pandemic, the crisis, the war now, and of course the econom y is slowing down.

they have been looking at data and trying to make decisions. in terms of indications in other countries, the key is they communicate their actions in a way that is timely in the countries can take action. tom: it would be inappropriate to me -- of me to ask you about the specifics of your turkey. it is not appropriate thing to ask an imf official of their nation but with your experience with service to turkey, your work at georgetown, i must ask you about the greater black sea region right now. i am fascinated by the arc up to romania, up to the horror we are witnessing in the black sea and over to russia and onto the caucuses and such. how do you perceive with all of your expertise the black sea will work out with nato and with the western allies? ceyla: that is a difficult question. i am not a political expert. all i can tell you is this is a difficult time.

these countries in the neighboring black sea are having difficulties and one needs to be done is for the international community to come together and support them. lisa: does the imf have the tools to deal with crises of this nature when the imf was born out of fiscal coordination, not necessarily securing food, getting the silos of corn and wheat and preventing conflict on a military level? ceyla: the imf was precisely to manage crises, many different crises, and just yesterday, we approved a new instrument. we added a new instrument to our toolkit called the resilience and sustainability trust to support countries with a 20-your loan, much longer than what we have right now, and with terms. we have the emergency landing and we have the policies option and growth to help the low income countries which have -- tom: is that where we are

heading? with lisa's question, the physical structure of the imf, is that where we are heading towards, almost an extend and pretend? we have a war, multiple inflations we have never seen before in our lifetimes, and the only solution we will come up with constructively is to extend duration, to have a 10.5 your moratorium on interest. that is the only solution, isn't it? ceyla: basically yes and there is an indication in terms of how these countries are going to manage their debt. there are many countries that have unsustainable debt. the key question in my mind is, at a time when you have many countries 60% of our low income countries at debt distress, you have also needs in terms of dealing with climate change, digitalization, and so forth, you need long-term debt. you are right.

you need long-term and concessional debt, but that does not just mean from the imf. we have regional, financial authorities, banks provide concessional long-term lending and the private sector needs to come. so the conditions, the policy environment for the private sector to come in is critical. lisa: can you give a number to give us a sense of the size and scope of what type of fiscal action is necessary to prevent the crisis we are facing from becoming something catastrophic? ceyla: you mean in terms of support to countries? lisa: the imf, what kind of package for all of these fiscal plans that you have, what kind of number are you looking at? ceyla: so we have our own emergency facilities that we can land, we have $1 trillion, we have used $250 billion of it so we have our war chest if you like to deal with problems. just yesterday we announced the sustainability trust which is

another $45 billion we hope to put together so the numbers are very large. tom: 30 seconds and i am so sorry to ask this question but i have to, did you bring out your financial stability report? does your institution have a clue of what russian reserves are made up of? or is it just a mystery with this war and all that is going on? ceyla: all the countries report their reserves. tom: even russia? ceyla: all the countries that are member countries. it was regular intervals. and you are talking to the author of the global financial stability report later and they can tell you bit more. tom: you slipped out of that one nicely. [laughter] she punted that beautiful. would you say goodbye to her because she does -- lisa: i need to look at my phonetic. ceyla pazarbasioglu, thank you so much. thank you, that was great. tom: the international monetary

fund meaning but of course a much is going on and now we have the overlay of mr. musk in twitter. we will have more coverage of twitter through the morning, a modest meeting in frankfurt. who is the president? lisa: lagarde. tom: yes, lagarde i think is running the show and we will be there. guy johnson will give us perspective on that and a host of thank earnings today. gerard cassidy, we are thrilled will join us, the dean of bank analyst -- and bank analyst on what we will see today after jp morgan's report yesterday, rbc capital markets. it's an adventure foam morning, a special "bloomberg surveillance". lisa abramowicz and tom keene. in washington, the beatings of the international monetary fund and world bank next week. ritika: keeping up-to-date with news from around the word -- world with the first word, i'm ritika gupta. elon musk launched a $43 billion

hostile takeover of the country calling it a best and final offer. musk says twitter has extraordinary potential anti-can unlock it. there's a roughly 9% stake right now in twitter. russia is threatening to deploy nuclear weapons in the baltic sea region. sweden joined nato after decades of saying out of the alliance. both countries are considering the move in the wake of russia's invasion of ukraine. russia says it hopes that reason will prevail. the european union is warning its own members against vladimir putin's approvals for gas demand. it requires european countries that by rushing gas open two accounts, one in rubles. the eu says by giving into putin, it will violate sanctions. hong kong will roll back social distancing week because the world's deadliest covert outbreak has started to wane. restaurants will stay open later

and can have four people per table. jp morgan has plans for its new global headquarters in manhattan , a 60 story skyscraper the bank says demonstrates its commitment to you new york city's revival. jp morgan offers lots of amenities at the tower to entice employees such as yoga and cycling rooms, meditation spaces and state-of-the-art food hall. the building is set to be completed in 2025. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ this is bloomberg. ♪

tom: good morning, everyone. the international monetary fund today, a day of international

economics, a day of the ecb. we have the twitter news with elon musk and bank earnings. wells fargo is a different bank than the other banks. there is the housing experience and challenges of the last decade. they readjust for earnings announcements this morning. sonali: you seal a continuation of what you see with jp morgan with losses coming in higher-than-expected. we will want more commentary from charlie sharp on why that is the case. you also have revenue in line with expectations but efficiency is not as low as analyst expected. that is the story you have been focusing on, the story of cost. can wells fargo maintain costs as some businesses come under pressure? we will see what citigroup has to say as well but so far you have a mixed picture on the consumer here as rates rise. tom: thank you so much. wells fargo with other big news today. we were -- before we get to gerard cassidy, i think it is

important, given all that is going on in a presumed slowing economy, the age-old answer of the banks is to cut costs. lisa: that is definitely what we saw it wells fargo, however they are huge lending bank and it is interesting some comments about broad-based loan growth for both consumer and commercial. tom: what do they say? lisa: it's results reflected continued economic recovery of process -- progress. that's notable and interesting. tom: some of the southside has been a beat on wells fargo. let's bring in gerard cassidy, head of u.s. bank equity strategy at rbc capital market. to lisa's point, it is banks adapting and adjusting, adapting to the new digital model that is required. which bank is winning right now? gerard: i would say the banks that have the best digital products include some of our banks and bank of america would be at the top of the list followed by j.p. morgan chase and we are seeing more and more

businesses through the digital channel, not just with consumer but also with the commercial customers as well. tom: if we presume an economic slowdown, how do the banks adapt to that? gerard: that is a really good question. a lot of investors are wrestling with that today because if you recall coming out of the pandemic-induced recession, the federal reserve and federal government moved aggressively and as a result, one of the outcomes was the incredible credit quality the banks had over the last eight quarters. what is happening is that credit is so strong, even in a normal environment, it is not sustainable area did when you listen to jp morgan's call yesterday, there chairman and ceo pointed out their credit card net charge-offs were hovering around 1%. they should be 2.5% because that is how strong the consumer is. what they will do is have to

focus in on costs and what i expect to hear downsizing announcements later this year, particularly in investment banking does not recover. lisa: we are also hearing a similar tone about the war in ukraine and some of the uncertainty that introduces even if they talk about how the consumer is doing well and expanding their loan books. they did say the war in ukraine adds additional risk to the downside as charlie sharp, the ceo of wells fargo. how much of this is a hit versus a tail risk becoming evident in the bank commentary? gerard: it's more of a tell risk as you pointed out. the reason being is that we have a relatively new accounting standard that came into being in the beginning of 2020 called the cecil current expected losses. what this is is the banks have to take a look at their portfolio every quarter and look at the life of loan losses in that portfolio. they have to assume an economic

scenario when they do that. imagine what it was like december 31 versus march 31, the world changed dramatically. as a result, banks have to now change their economic outlook for that incredible change of tragedy going on in ukraine. so they are all going to do this and you start with jp morgan because they are global. regional bank reported their provision of loan losses would not -- was not that materially higher as expected. wells fargo had a higher provision. lisa: i wonder if there is some kind of benefit that more domestically focused banks like wells fargo have versus some of the global became it's like jp morgan when it comes to global risks here. we hear from charlie sharp about how much this could be a benefit in terms of the rising interest rate for there, considering what lending presents they have, the united states. you have seen those shares outperform. do you expect them to continue

to outperform because of the recovery story but also because of domestic focus at a time of geopolitical uncertainty? gerard: i think you are right. you put your finger on it. domestic banks with the expectation the federal reserve is going to move numerous times this year, possibly bring in the federal funds rate up to 2% i the end of the year, and in wells fargo's specific case, they are what we refer to as --, meaning every rate rise they see they will see their as has reprise much faster than funding cost. so the domestic oriented banks i think we'll have a big advantage over the global players as long as the geopolitical risk remain elevated -- remains elevated around the world. tom: you and i have been doing this a few years and i had a dinner with prime rib in washington and i paid $100 for a two pound lobster. you are in portland, maine and

iconic with new england securities analysis. can you report to us that the price of lobster will come down so we don't file for bankruptcy this summer when we have to buy four lobster rolls for the kids? gerard: well, tom, you certainly have to dig into your piggy bank because they will cost you more than last year because of gasoline and fuel for the boats to go out and all those lobsters. is more expensive. so bring a few extra dollars in case. tom: a few extra dollars he says. it is an outrage. gerard cassidy with rbc capital markets. this is serious, we are talking deadly serious talk. lisa: are you? tom: i am. it's everywhere, even in maine where fancy people are having fancy lobster, down to egypt which is eric martin's number one focus at lead imf reporter. the subsistence in red in egypt

is uniform with something as esoteric as lobster. it is a crisis. lisa: and the cognitive dissonance talking about lobster rolls and the pity of having to pay. however, the reality on the ground of red costs surging, trying to figure out how to subsidize that so you don't see a rise in sure longer. tom: particularly for an american audience, bloomberg had a very important interview yesterday with the finance minister of sri lanka. that was incredibly -- the intensity they fill in the building is not what is felt in most of america. lisa: considering they had to stop paying their debts to pay for food. they are willing it is not a lazy day at the international monetary fund. a week from now, they will release their international outlook. taking on new important duties

at the imf, first deputy managing director. coming up, -- lisa abramowicz and tom keene, jonathan ferro is off today. our special coverage from the international monetary fund, stay with us. ♪ nd, stay with us. ♪

>> the surprise of the first four tough months of the year are resilient of how big equities have been. >> it's a good time to own volatility. >> inflation is primarily a concern for the first quarter earnings reporting season. >> we are late cycle. how late are we in the cycle and how much pressure on corporate profits? >> the question remains, can the markets still go higher? >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning. jonathan ferro, lisa abramowicz, tom keene, it is "bloomberg surveillance" but decidedly different today. from washington and the headquarters of the international monetary fund, thrilled to have you with us on radio and television and on a most historic time. jonathan ferro's off today. forget about him. what is so important here is