>> we have seen a true regime shift. >> right now we've got to deal with the disruptions in food markets, the rise in food prices. >> you are seeing the consumer generally still plugging along, spending very strongly. >> the fed needs to readjust policy to the current circumstances. >> whether it happens in 2023 or 2024, that depends on the fed. >> 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 momentous week.

tax day is so over. we look to may, and we do it within instabilities and witnessed by the speed of weakness. weakness in the japanese yen. jonathan: it is over, but it still stings for a lot of people, including me. bearish through this year with higher prices as well, and how people cut back on discretionary spending i think is going to be the focus for us all, particularly with netflix after the close. within foreign exchange, the macro story i think is fascinating. you bring up the japanese yen story. we've got this break out in yields in america. breakout in germany. yields higher. japanese bond yields aren't doing anything. so far, the stock observer in foreign-exchange teams to be the u.s. dollar taking all the strength and the japanese yen taking all the weakness. tom: folding into that, maybe less so for service sector america, is the commodity boom we are seeing. simon casey is just lights out for bloomberg. that was a clinic on corn comedy

softs and -- on corn, the softs and all of that away from oil. jonathan: let's talk about the things that would need to happen. what they are modeling is the idea that the french get their way and you get a russian oil ban, and oil embargo. how they get phased-in is important. is it a cut off or something that gets phased-in over time? if it is an immediate cut off, they think crude could go to $185. we don't know what is going to happen. certainly prices have gone up in a massive way. here's a comment for you. "just filled up the car in notting hill. now i have to go cap in hand to the imf." a lot of people feel that way. there's a lot of people in that particular part of london. lisa: but tom mix a really good

point. when we talking about the end of mask mandates on public transportation in a lot of places, the pandemic is over, and yet the rollover factors of inflation have not shifted, and people are changing their view on inflation. you're seeing that in bond markets and currency markets with the dollar ever stronger. i do wonder at what point people start talking about what happens if the inflation only gets down to 5% by the end of next year, let alone 2%, which is what the fed is forecasting. tom: that goes to our conversation with adam posen in washington and olivier blanchard the week before that. maybe what we are talking about here is not getting back to 2% inflation, and there is a new level that says 1960's. lisa: this stuck out. "the wall street journal" put out a report saying the amount the fed would like to reduce inflation over the next two years has never been done before in the past 80 years without causing a hard landing. tom: jon, the hard landing is

the bramo gloom. i get that. jonathan: dudley is in the club, isn't he? tom: but can we stop and state it is essentially a fully employed america? jonathan: in some measures, yes. some people would push back. but it looks like a very tight labor market. what you are picking up on i think is really important. there's a difference between a mechanical peak in year-over-year inflation because the base effects start to kick in one way or the other, a difference between that and the cumulative damage of persistently high inflation through the rest of this year, which is what host economists still forecast. so you can come down from 8%, 7%, 5%, but if we are looking at 4% through next year as well, we've got a problem. tom: what does blanchflower know? he is stuck in a snowstorm in hanover this morning. dow futures up 18. jonathan: thank you for that. on the s&p, up about 0.04%. tom: i don't have the fast

bloomberg, jon. jonathan: every time you mention the dow, i am going to say a currency pair is up or down instead of weaker or stronger. the bond market is a story for me. we are out another to basis points and getting really close to a 3% handle on the 30 year yield at 2.97%. tom: we will see. michael bell with us now, global market strategist for jp morgan asset-management. i've got to go to the outlook we will get here in maybe an hour and a half. the question is ignored in all of ukraine and europe as well, how is e.m. doing? are we set up for a 1992, where e.m. gets a shock given what commodity prices are doing? michael: china is obviously the largest part of e.m. and it is being weighed on by lockdowns and covid, which has just

exacerbated the inflation problem in the developed market world because of the ongoing supply constraints. in terms of some of the other emerging market economies, some of them obviously benefit from higher commodity prices in terms of trade. but i do fear that because those higher commodity prices are going to lead to more central bank tightening in the west, particularly from the fed, that could create an environment that is difficult for some of those emerging market economies. jonathan: have we taken down earnings expectations enough given what is taking place? michael: i don't think so, actually. i think the risk is that forecasts are still too high. as you were saying earlier on, ultimately the question is going to be over the next reach is a months, to what extent does consumption start to decelerate or at least grow at a less strong pace on the back of these higher energy prices? it may be that in the u.s.,

consumption is able to hold up ok because people have still got pretty high savings from the pandemic. it suggests people still have about half the savings -- about double the savings they had before the pandemic. because they are paying much higher gas prices than the u.s., i think the risk to consumption is higher. jonathan: where does that leave the equity trade europe versus u.s.? i've got a year to date breakdown of the stoxx 600. outperformance, basic resources, energy, up you to date. the underperformers, as you might expect, the retail players, down by 27%. i wonder how much work the market has all ready done to and dissipate the story we are discussing and whether it is time to go the other way or not. michael: i think you look back to the low on european equities that we have seen this year.

at that point there was quite a high recession probability already being priced in, but we have seen a bit of a rally since then. you look at the u.k. market, one of the better performing markets globally year to date, but of course that is being helped by the fact that the big commodity producers which make up a large part of the u.k. market are doing pretty well. i think you've got to look beneath the hood of the market a little bit there. i do still think there's a bit of a risk that in the u.k. and europe, markets are being a little bit complacent in the potential for a potential slowdown in higher energy prices. the economic outlook is better in the u.s. senate is and you can direct, but as bond yields move higher, as we have seen, that can weigh on the tech stocks which make up a larger part of the u.s. market. so i think i would probably be looking at u.s. value stocks which are less exposed to that higher rate environment, and

also less exposed to the growth shock from higher energy prices. lisa: given the lack of resilience relative to the u.s. in the european region, do you think that people are overestimating how much the ecb can raise rates? michael: i think they probably are. certain in the u.k., it seems to me that the pricing on rate rises is pretty aggressive given a likely slowdown in growth that we are going to see. i think the likelihood is that over the next six months or so, certainly as we head into next winter when these higher gas bills are really going to start to bite, and it becomes clear that both the boe and the ecb are not going to be able to hike by as much as is priced. jonathan: mike bell, thanks as always. looking ahead to the boe, may 5. for the federal reserve, may 4. lisa: hiking into weakness seems

to be a scene. i do wonder whether they will be able to back away given the optics of what people are facing in terms of the bills they are paying. it was not an accident that the people cutting back on their streaming services in the u.k. were cutting back at a record pace. it has just been incredible how much the price has risen of oil and gas. jonathan: can we revisit the equity question? the market is meant to be a discounting mechanism to price and a lot of this ahead of time. mike bell suggesting we have not done that sufficiently, but we have had massive moves from the like of netflix already, down 4% your to date. lisa: this to me was the most interesting thing he said, that what is it going to take, and how much more do we have to go. we were talking earlier about the idea of big tech possibly needing another 10% because of the valuation story, if not the slowdown story. what will it take? we have all been talking about this. there have been outflows from equities.

what will it take to actually tip the needle into even more bearish territory? jonathan: spent a lot of time talking about the index on the s&p 500. if you look at the homebuilders year to date, we are down by 32%. it has been a monster move already. tom: the equity market is getting upfront, trying to guesstimate what the news will be. certainly we have seen that. what i would suggest is where his growth three years or five years, if you have any sense of optimism that some of these challenges be resolved? that is not in the zeitgeist right now. jonathan: tom keene, lisa abramowicz, and jonathan ferro. your equity market shaping up as follows this tuesday morning. up a little bit more than 0.1% on the s&p, up 0.25% on the nasdaq 100. yields up by three basis points. 2.838% on the 10 year. this is bloomberg. ritika: keeping you up to date

with news from around the world, with the first word, i'm ritika gupta. ukraine says russia has launched a full-scale offensive to take control of the dundas area in the eastern part of the country. russia has made capture of the donbass its main goal in the war since it has failed to seize the capital kyiv. st. louis fed president james bullard says the central bank should not rule out increases of 75 basis points to fight inflation. in a presentation, the council of foreign relations, bullard says the fed needs to raise rates quickly get he also said the talk of recession is premature. most major u.s. airlines are no longer requiring passengers and employees to wear masks on domestic and some international flights. the airline industry has lobbied the biden administration to ease the rule. meanwhile, uber is dropping its own mandate in the u.s. halliburton has written off all of its ukrainian assets seven weeks into the russian invasion.

the company took a pretax charge of $23 million, the first major oilfield services contractor to announce plans to halt work in russia. the russian energy industry is heavily dependent on foreign expertise. a new study finds that most bosses are actions to get their staff back into the office, but the rules do not always apply to them. only 19% of executives can say the same, according to a survey by a research consortium backed by messaging channel slack. 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. ♪

>> i think the most important thing for the united states right now is to say united with its nato allies to continue to put pressure on the sanctions and try to squeeze them and enforce them, and to provide the weapons that are absolutely essential if the ukrainians are going to continue their brave fight. >> that was leon panetta from the panetta institute of public policy. up 0.2% on the nasdaq 100. on the s&p 500, up about 0.1 percent. yields higher by three basis points to 2.88% on the best 10 year. 12 minutes away, we will catch up with mike mckee and get some housing data. building permits, housing starts for mike mckee, for the u.s. in

about 10 minutes. tom: they may not show a 5% mortgage rate, but there we are with a new high mortgage rate. jonathan: it is going to hurt a lot of people. tom: it is tangible now, certainly the talk was a new york city as well. this is a joy because if you grew up in the plains of kansas and you go east over to washington to the foreign service of this nation and truly serve for decades, that describes the former ambassador to india, robert black will -- robert blackwill, who joins us now. thank you so much for joining today. you alive at this moment are the defenders voice -- the definitive voice on the hope we have of force reductions in europe. you were there not in the 1970's, but in the 1980's. the warsaw pact and the allies trying to figure out how to calm

europe down. that world has been turned upside down. tell me how the allies do a mutual and balanced force increase in europe against mr. putin. robert: first of all, the most important change, and it is a stunning change as you forecast it, has been this very robust european reaction to the bloody invasion of ukraine by the russians, let of course by putin. it was not anticipated because americans for decades, and secretary panetta did his part in this, have urged europe to increase their defense spending without very much success. but it is european publics horrified by the brutality of the russian armed forces in ukraine that are driving this, and there will be two consequences. a lot more money spent in europe, led by the germans,

which are doubling their defense budget, and second, a forward deployment much closer to russia by nato forces. tom: what is interesting with all of the different interviews we have done, i think of general kimmett all the way out to others worried about world war iii, when you hear people in america with not a reticence, but just a worry about a larger war, how do you respond to that? robert: i think there is reason to worry for sure. we see perhaps the beginning of an evolution of events that will accelerate that worry. that is to say, the events which apparently began overnight in the donbass by large russian forces. it depends very much on how that fighting goes. if it turns out to be pretty much a stalemate, we didn't --

we needn't worry about escalation. if the russians are routed, putin will not accept a defeat in ukraine, and what would his options then become? it is not likely that he would use a nuclear device, but it is not any longer impossible. so americans and world citizens are right to worry about how ukraine could escalate. lisa: how does china play into this? is it something we should be talking about more or less? robert: china has russia as its only strategic ally. the united states has about 35 of them through treaty commitments and arrangements. so they are going to stick by russia. but they are is and shall he a bystander on this. according to the administration,

china so far is not providing any weapons to russia, and it will do what it can within the sanctions regime, but it is a bystander, and of course hopes that russia is not humiliated. lisa: just to pull this all together, are you saying that if russia does not succeed in its offensive against donbass, that potentially vladimir putin will start to be a little bit more rogue and expand the fight to nato countries? robert: not to nato countries, i think. that would be an enormous step because that would trigger article five of the nato treaty and trigger a war between nato countries and russia, and let me make clear again, but i am speaking of with respect to escalation is if russia is defeated in the donbass and the ukrainians are on their way to driving russia out of ukraine,

and that instance one would have to worry about putin's belief that he now faced an existential threat not just to russia, but more important to himself. i would not rule out in that case extreme measures on his part. jonathan: awesome to catch up with you, as always. robert blackwell of cfr. the human tragedy is some thing we are following still and hoping that the west can do some more to help. bruno le maire, the french french minister, earlier this morning making a renewed push on an oil ban. you wonder if that would bring the situation back onto the markets' radar. tom: $110 on brent crude. the wraparound with lemaire is the bitterness of this french election, which just in the last number of days has really almost

hour-by-hour of campaigning gone topsy-turvy. you've got to fold that domestic story into the french foreign story as well. jonathan: round two this sunday. what are you looking for? tom: i am looking for we get in at about 12:00 noon and we get the results around 4:00. jonathan: i am looking for two-year recreation of that macron photo with the buttons undone. does that work with the electorate in france? tom: i saw the same thing. i was not going to bring it up. jonathan: do you want to go there? tom: no, i don't. jonathan: i am not suggesting you go there now. so just and whether you want to talk about it. let's not. five mins away from housing data and america. housing starts and building permits around the corner, with mortgage rates back to 5%. maybe that is not the story for march, or so in may, june, july, etc..

the data coming up shortly. with tom keene, lee sabra >>, and jonathan ferro -- lisa abramowicz, and jonathan ferro. this is bloomberg. ♪

jonathan: live from new york city on tv and radio, waiting for some economic data and america. futures just about positive on the s&p, up by 0.06 percent. on the nasdaq 100, up about 0.1%. with your economic data on the housing market in america, here's mike mckee. michael: we are getting some numbers on housing starts and building permits, and they do seem to have gone up. building permits -- well, give me just a second because housing starts are up by 0.3%. that is acing for can decline from the 3.8% the month prior in march, and the total number has been revised in march to 1,000,806 to 5000 on an annual rate -- 1,865,000 on an annual

rate. so we saw a stronger march then we had seen before, and that makes the percentage change for a stronger february, and the percentage change for march a little more. building permits are up by about 0.4%. the shortfall in housing in the united states, whether or not the fed is going to be cooling that market, we have seen evidence that mortgage applications have fallen as interest rates have gone up. you mentioned the mortgage rate, now over 5% by most measures. what is interesting is housing completions are 4.5% below the february estimate, and that is going to keep the builders going. you take a look at what has been happening in the housing completions market, and we have been negative since the pandemic in terms of demand versus the actual housing come so there is

still reason to keep building, even if rates are going up. tom: is 5% mortgages effective in these numbers, or do they wait for next month? robert: it is not going to affect -- michael: it is not going to effects of fed. market rates have been going up even without the fed doing more than one 25 basis point raise. jonathan: the other thing -- tom: the other thing is steve dixon is out with a great story, blackstone buying into the private real estate market. this time it is student housing. what is your research on private equity's effect on the american housing market? michael: it has apparently been quite drastic. there's a shortage of supplies for homes, not just new homes being built in the data today, but existing family homes, and especially the starter homes have been snapped up by a lot of private equity, which makes it harder for people to get into the housing market. there are fewer houses available, so prices go up and

affordability goes down. jonathan: mike mckee, awesome as always. looking at this data in the months to come, to your point, that rate has not kicked in yet in a big way. the housing stocks have already started to anticipate this year to date, and as we have talked about them repeatedly, they are down in an ugly way year to date. tom: i am burning up the two-year yield. we are at a 2.50%, right? we just popped up to a new high on the two-year yield. jonathan: yields higher across the board. tom: it is incredible. jonathan: you wonder whether the situation starts to kick in, and i think lisa has spoken to this a few times already, that the fed's past is not sufficient for what they need to do, and they have to rethink it. this goes back to the 75 basis point thing from jim bullard. that for me is a distraction. the issue for me is that you want to 3.5% by year end. the committee, and we are getting conflicting signals about this, they are ready to go may 4. the rest of the committee is talking about neutral with a low

2% handle on the fed funds rate, may be going a little but about that and stopping. jim bullard thinks you need to go much higher than that. think bill dudley is making the same argument. if that data in that particular part of the economy does not respond in the way that some people anticipate, maybe that is the story still to come. tom: let's get on that with someone who has won a number of trophies for trying to get the economic estimate game correct. gregory daco joins us, chief economist at ernst & young. you are with the consultancy in a meeting with a client, and they go, where are we in a year? where are we in a year? gregory: i think we are at a lower point of economic activity. we are seeing the fed pressing hard on the brakes and wanted to press even harder on the holiday breaks is going to ask enjoyed that. tom: how do you respond to the

recession blue man trying to go out 12 months, 24 months? when you are an award winner at this, how do you guesstimate out 18 months with this crazy economy we are in? gregory: first you have to understand where we are in the business cycle. we are in an economy that is still quite robust, but in a very unusual environment from a policy perspective. we have a number of central banks around the world wanting to tighten, and that is a very unusual cycle when it comes to synchronize global tightening of monetary policy. that will weigh on economic activity in the u.s. and around the world, and we have a number of geopolitical developments. the war in ukraine, lockdowns and china, those are all going to impact economic activity going forward. so it is not a question of whether we are in a recession or will be in a recession in a months time. it is a question of how rapidly the economy slows and how strongly the fed presses on the policy breaks over the coming months. i think 2023 is going to be a key year in terms of economic activity. lisa: how does the fed begin to

gauge this at a time when they have not even started to unwind their balance sheet, they have not made massive moves on their rate hikes? we are not looking at a fed that has gotten aggressive. they are just talking with some aggression perhaps. how much further do they have to go in the market is expecting in your view? gregory:gregory: we have seen the effect of forward guidance filtered through to longer-term rates. we saw mortgage rates and we are seeing mortgage rates up nearly 200 basis points over the past three months. that will weigh on interest rates. real estate activity will cool and we will see it not initially in the starts data, but actually in the sales data. that will weigh on starts data later on. construction activity we know has been lagging on the real estate front. that will still continue to hold up over the coming months because there's a shortfall in terms of available supply, but overall, this fed tightening of monetary policy will weigh on the economy via the credit channel, but also, perhaps more

importantly, the financial conditions channel. lisa: if the fed goes through with what is expected of them which ready you think the inflation rate will end next year? gregory: i think inflation will take time to come down, even if the fed is more deliberate about raising interest rates. probably 50 basis points at the next two meetings, and a rate hike at all of the other meetings through the end of the year. even with that tightening, inflation will take some time to come back down. tom: let's go to your wheelhouse on that. if we get 50-50, whatever the parlor game is, and the old days we used to go what is it mean for business, what does it mean for corporate america. is that? anymore? -- does that? anymore? -- does that question matter anymore? gregory: i think it does. that is the key uncertainty right now because businesses are uncertain about the outlook. we were in an environment where man was quick and tightening of

interest rates would affect the cost of credit, but as we look into 2023, there is a question about pricing power, and in an environment where you more constrained, how do you pass on the higher input costs, the higher wage costs in an environment where interest rates are higher? tom: do you agree with bill dudley, saying that it is walter heller in the 1960's? gregory: i don't think it is good to compare to any historical precedent. tom: it makes good theater, you've got to admit. gregory: but this is much faster than anything we have seen. there are two important themes to remember. when you are rebalancing, you rarely come out where you wanted to come out, and the endpoint is very different from the starting point forget we have to be cognizant of the fact that this rebalancing will be unique in its own, and it will lead to a very different economic cycle this time around than anything we have seen in the past. lisa: do you agree with bill

dudley that if the fed does not somehow spur or at least allow some time of downturn that the fed terminal funds rate is going to be a lot higher and the pain a lot greater in the long run? gregory: i think it is clear that the fed once to get control over inflation. it wants to regain control of the inflation narrative. it will tighten monetary policy and use its full arsenal to do so. the key question is how high it needs to go to do so. i think we have to remember that the fed is in this very unusual position of having to tighten very late in the game in terms of monetary policy. the tightening cycle this time around will probably be the fastest since 1994. it wants to get back to neutral as quickly as possible to avoid having inflation move further up , but we have to consider the fact that there may be some recalibration even in 2023 of monetary policy because they are going to be tightening in an economy that is slowing, not accelerating. that will make a soft landing a

very difficult task. jonathan: greg daco, great to catch up as always. tom, you picked up on the move at the front end. we are very close to 3% on the 30 year. i think we can round that up, 2.99% 30 year. tom: there's a thrust here is the way i would put it. maybe that captures it. housing comes out and the key reports on it, and with all of the destruction we've got, i think we are forgetting about looking actually at the market data, and you see it with a surge is the only word for it, and the two-year yield almost up to 2.52%. jonathan: that the u.s., the move in germany, too. global ex-japan, how about that way? lisa: i just wonder, do we get to the point where economic data suggests that the fed is not working to curtail inflation?

how much does that become a liability for markets? the idea that we got better-than-expected starts data, that we saw the fastest pace of housing starts going back to 2006 seems to be jarring to a market looking at 5% mortgage rates. jonathan: someone asked whether you are holding that masked burning party later this afternoon or into the weekend. lisa: details tbd. but they can bring a kegger. jonathan: you don't know what that is? lisa: it is a term. jonathan: i didn't know that. education on this program. the things you learn. [laughter] really important stuff. troy gayeski of fs investments is going to be joining us on the show in 20 minutes. tom: what show? jonathan: the show. this is bloomberg. [laughter]

ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. in ukraine, president volodymyr zelenskyy says a long anticipated russian offensive has begun. russian forces are said to be targeting the donbass region in the eastern part of the country. the assault is taking place along a front of more than 300 miles. it is a fresh blow to russia's billionaires. president vladimir putin has dropped the curtain on the era of foreign stock listings. putin has signed off on legal amendments that require russian companies delist their overseas shares. that can force tycoons to reconfigure the structure of businesses they hold the overseas shares paying foreign-currency dividends. blackstone is increasing its bet on student housing. it has agreed to buy college housing owner at about $12.8 billion. rent for student housing stayed high during the pandemic and there is relatively little new construction going on.

blackstone formed a joint venture with landmark properties for college housing. johnson & johnson has cut its profit forecast for the full year. the guidance missed average analyst estimates. meanwhile, jj is -- meanwhile, j&j is suspending guidance for its covid-19 shot sales. the japanese lender tried to expand its sterling based inflation trading business. 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. ♪

>> increasingly we are moving our securitizations onto blockchain. we are taking stakes and backing

challenges to the financial system. fintech is here to stay. blockchain is here to stay. crypto, i think jerry out -- i think jury out. tom: marc rowan in conversation with david rubenstein at not cot p.m. -- at 9:00 p.m. david rubenstein here right now. tell us why this is important. is the company stabilized after the uproar of the last few years? david: i think apollo is in really good shape, but they have a theme which is roughly the same size of their other part of apollo, and a scene -- and athene is a cash cow. he is now in a very secure position. tom: this is a guy who has done it right, superior academics at pennsylvania, and then he has

built out the career. what is distinctive about him among the private equity people you deal with everyday? david: the people who are the so-called second-generation running these large private equity firms, he's one of the few people who was actually a founder, and he's extremely wealthy. he has already made his mark. he has made apollo extremely successful. he has the luxury of being secure. he's already extremely wealthy. he is well-respected and well-liked, and i think he's enjoying the job because before, he was not as visible as others, and in some ways he had a semi-sabbatical. now he is there full-time. he loves the job. i've never seen him as a happy. lisa: how much does he embrace the idea that the shadow banking system, private equity firms, private investors are really taking over a lot of the banking functions of the traditional finance companies, which jamie dimon of jp morgan last week was complaining about? david: jp morgan is in pretty good shape. i don't think they have to worry about private equity firms. the private equity firms

have moved into areas like private credit. but they are not anywhere near the point where they are threatening jp morgan's core business. it is just a different niche that the private equity firms have moved into. lisa: how much are we talking about blockchain and these other types of nontraditional finance, of codified financial tools that will become the next frontier that perhaps traditional finance moves too slowly in, and some of these other firms can be faster? david: that is the bigger threat for the large commercial banks, whether somebody comes along with a new technology, blockchain or some other kind of fintech revolution, that changes dramatically the core business of banks. that is what they should worry more about than about whether private equity is getting into their core businesses. tom: are guys like you taking over real estate in america? you must be asked this six times a week. is private equity with their suppleness, with their private

he -- their privacy, are they taking over forms of citizen real estate in america? david: i don't think so. private equity is still a small business compared to large commercial banks and so forth. they have grown a great deal, but private equity is not threatening anybody. tom: that capital input does not change the price theory of an individual home? david:david: i don't think it does in any material way, and to be honest, private equity is not as controversial as it was 10 years ago. 10 years ago people were upset about private equity buying companies. now people recognize that private equity people care about yesterday, private equity is doing the things people should do. i don't think it is seen as a big threat. in washington, d.c., private equity is not even in the top 100 things people are worried about on capitol hill. lisa: do you still think there's opportunity in the housing market for, say, buy to rent than three years ago? david: private equity has some

challenges for sure, and the debt markets are challenging for private equity because it will be more difficult to finance some of these transactions. i think the biggest problems private equity people are worried about today is the economy generally. tom: i don't want to start any rumors here. but i saw you tweeting before we went to air here. do you have any comment here on the transaction known as twitter? david: actually, that is a transaction a lot of people would look at. tom: let me get my phone out so i can tweet it. jonathan: if it gets done by -- david: if it gets done by any private equity firm, there will be lots of private equity firms involved. tom: is mr. musk treated differently by mr. gensler and the securities exchange commission then other executives, the 6000 executives you have had experience with?

david: i can't really say because i can't say exec to what is in his mind, but there's no doubt if you are the wealthiest person in the world, people will look at you somewhat differently. tom: i am getting the i'm never coming back look. [laughter] david: i am always coming back. lisa: apollo global was named as somebody who might be interested in this transaction, so i am sure it is deeply relevant, but there is this question about what the new frontier is for social media and whether there might be more regulatory involvement. i do wonder going forward, what is your strongest conviction as you look among myriad threats in a world that seems highly uncertain? david: the strongest conviction i have now about where the world is going is that we are likely to see an economic slowdown at some point. i don't think it is a recession, but obviously higher interest rates are coming. we are likely to have a 50 basis point increase the next on the fomc meets. until the russia-ukraine war is resolved, i think the markets will be really jittery.

it looks like that is going to go on for at least another month or two, so i think markets are still nervous about where things are going. tom: we appreciate your weekly attendance here. david rubenstein with carly le, and his conversation with the apollo global management ceo, look for that on "bloomberg wealth" this evening. i guess we've got to go to the two-year yield. while mr. rubenstein was speaking, out to 2.53%. lisa: the idea that we are looking at housing starts that came in at the fastest pace unexpectedly since 2006. is the fed working? is the fed being effective at talking down inflation? if you have inflation expeditions on the longer end that are actually rising, you don't seem to see any material slowdown and some of these dynamic aspects of the market, including housebuilding. tom: this goes to jan hatzius the other day talking about a fully employed america. if people have jobs, is anybody

talking about reduced labor? lisa: no, no one is talking about that. people are wondering how much we are going to get an overheated kind of feel to it, but we are looking at a participation rate that is still pretty low. those people are not coming back in. we had expect that to be the case given the fact that we already seem to be shifting towards end, phase -- towards endemic phase. tom: want to drive towards the close with netflix earnings as we begin the postbank earnings season. the haves and have-nots of revenue growth. we saw that with j&j today, j&j with some challenging forward view. you wonder if that will be a trend in the equity markets. the equity market is all over the place. i don't know really what to say. all red slightly and fractionally on the screen. the number one thing all of us are looking at today is weakness in the japanese yen. is it possible we will see ¥130?

a timely conversation, "balance of power" at noon today, the former treasury secretary. stay with us. this is bloomberg. ♪

jonathon: live from new york city this morning. big tech coming into the close. just a little bit negative. the countdown to open it starts

right now. announcer: everything you need to get set for the start of u.s. trading. this is bloomberg the open, with jonathan ferro. jonathon: live from new york, we begin with the big issues, struggling for a clearer outlook. >> there a lot of uncertainty. >> growth has been in a very difficult place. >> tightening of the liquidity. >> we have to watch those costs. >> what's being said about current conditions. >> the market focusing on the hard numbers going forward is probably going to be more focused on the guidance. >> this is a time for defensive ay