accommodative for lessee. accommodative policy. >> is something going to break? >> you want to wake up one day and have inflation back to two percent but that's not how things work. >> this is bloomberg surveillance. jonathan: live from new york city for audience worldwide, good morning, this is bloomberg surveillance on tv and radio.

buffett buying in a way that he hasn't in many years, he said everything was too expensive, valuations are too rich. we have seen valuations coming dramatically recently. where have they come in enough that you are finding an entry point? >> equity sector strategy hasn't

changed much, and i would agree that the entry point today is much better than maybe four months ago, the height of november, december of last year. having said that, there is still some concern. you have to factor in a slower growth in the economy, higher cost of capital, financial tightening. ridley, the fed is going to be increasing rates at a blistering pace, plus qt. all of that is a bit of a cautious approach. one, on the cyclical/reopening trade, so you can think of homebuilders, collective industrial materials, chemical, maybe automobile industry. those represent some value. then some of the areas more recently, the technology space and financials. tech really had a high bar going into the equity markets.

people are still expecting them to create growth numbers as if we are in the pandemic, which is definitely not the case. for financial, maybe a little bit of a dent, even the background being favorable. where you have some quality growth and some reopening cyclical names makes sense. the one underlying point i would make is that the companies with little to no growth who have the luxury of having access to capital at a quick and lower rate, i think you want to factor in the best of the best in equities when you want to invest in these kinds of markets. >> awesome to catch up after a pretty tricky month. just on materials, bank of america, for the cut to the index level, on the s&p 500, this is what they had to spend in materials. materials exposed in big-ticket

spending by housing and has the highest china sector, a sector they do not like. >> and they are shifting into another phase where they are expecting that slowdown to begin, especially as there is saturation and some of these industries. he is talking about the reopening stocks, and he is talking about better entry points. isn't it better entry point for some of those reopening stocks versus the pandemic darlings that have gotten so beaten up? that is so interesting with bank of america. two people started leaning against some of these trades and saying look, at this point, you need to start rotating some of the less-love areas to mark >> last month was tough. yields were higher. a lot of people came into 2022 looking to materialize. the least favorite overweight on the session risk. it is interesting that that is what we're talking about.

lisa: people are looking beyond that. it is a foreign-looking instrument, the idea of the stock market. at the same time, we could get china slowing down and you have the influence and you still have the war that is raging that is suppressing some of the demand and frankly, some of the supplies. lucky have kailey leinz with us in the seat this morning. i'm jonathan ferro. find out why tk is not with us today in about five minutes time. this is bloomberg. >> keeping you up-to-date with news from around the world come here is the first word. jerome powell could shift the

needle on how high investors expect the central banks to raise interest rates for inflation. the fed is expected to boost half a percentage point when the meeting ends on wednesday. another half-point hike is expected in june. policy may require a more restrictive stance. coronavirus lockdowns and china are taking a significant toll on the country's economy. official data show that both manufacturing and services activities longed to their worst levels in more than two years. indexes for imports and exports also slumped. hungary is drawing a redline as the senior prime minister said hungary will never support extended e.u. sanctions to russians energy sector. bloomberg has learned that the e.u. is such a pose a ban on russian oil by the end of the year. the u.s. homeland security chief warned that the immigration system could be strained by the end of the fast track policy. alejandro mayorkas says that could lead to a search of up to 18,000 migrants at the southern

border. the biden administration is preparing to lift the policy on may 23. and warren is buying big. berkshire hathaway made $41 billion worth of net purchases in the first quarter, the most in at least a decade. berkshire boosted stakes in chevron and activision blizzard. 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. this is bloomberg.

biden: this is the first time a president has attended this dinner in six years. it is understandable that a horrible plague followed by two years of covid. >> the president of the united states on rare form over the weekend. one line that stuck out, a healthy dose of self-deprecation. >> did he also say that the event was launched in the 1920's and he remembers it well, having attended as well? he definitely had a good dose of self-deprecation in addition to

a little bit more exciting. >> one of us had a few more drinks than the other and he is not here today. looking forward to catching up with tk. good morning, tom, good to have you with us. jokes and humor over the weekend, some serious sides as well and the focus is still very much on what is happening in you brain. what can they do now? >> just quickly, at the dinner, the president was the first one up out of his seat when there was a montage late of all the journalist lives that were lost fighting on the ground. this is something he says a lot to the press in d.c. and more thanking the press for their unvarnished truth on the ground. over the weekend, speaker pelosi has unannounced to enter the country. it comes as the u.s. will be

negotiating $33 billion that will be going to military and humanitarian support stuff you can expect more eight coming out of the united states in a symbolic trip for the speaker and a number of other democratic leaders. lisa: i want to get your sense of the 2600 people that attended. trevor noah said welcome to the biggest super-spreader event of the year stop what were you guys thinking? has there been a lot of pushback in the aftermath? >> the president himself leaned into classic biden and said what are we doing here? there was a lot of people and has been a lot of this is the fact that this huge room did not have a ton of ventilation. trevor noah said this, do you read your own newspaper? it was a red iron event. a lot of people and secretary

romano contracted covid-19 potentially at this event. you had thousands of people. i was also at that event. i think a lot of people now are just taking the appropriate measures which is just rapid tests every day. i think the president wanted to show we have to get back to normalcy. lisa: amid a very abnormal chair. the european finance ministers and energy ministers are meeting today to try to understand the road ahead will stop it seems like the splintering is getting more entrenched. is there any consensus emerging and how to create an embargo on russian energies lies? maria: when you look at germany, this was the country that was opposed to russia and said they

had concerns about the impact it would have on the german economy but the germans have dropped the import of russian oil and the numbers speak for themselves. when you look at russian oil going into germany, that has dropped from 35% before the war to now 12% step this is something that is manageable for the germans. the vice chancellor will be here today but the issue is countries like hungary. we had a warning from the hungarian minister who said we don't see how this will end the war we don't or this. his a lot of bravado that comes with us. a lot of this is negotiated tactics within the european union. there has been unanimity around this. a lot of this has to do with the optics. you have to be seen as fighting hard for your text payers and

diplomatically within the eu 27. yes, we are moving closer to the embargo. lisa: let's stick on the sanctions story because we are talking about further sanctions that could be place. we heard from the german foreign minister early today who said they will stay in place until russia is entirely out of crimea -- out of ukraine including crimea, is that a possibility? maria: these sanctions will not go away anytime soon. the reconstruction money that is going to ukraine is not something that changes from one day to the other. european leaders are trying to push this because russia has an incentive as a sign of goodwill to reduce the sanctions. pulling back the troops the beginning of the story. there will be a lot of damage

and sanctions will stay here but fundamentally, this goes beyond that stuff when you look at the germany's from -- when you look at the numbers from germany over the weekend, they are cutting down the imports. coal was 50 now is 15% so a lot of these are structural changes and will not go away anytime soon. jonathan: great to catch up. crude market is difficult now. maybe wait -- maybe we get's decision in the next month or so. what happens with china and when do the chinese blank. some think it won't happen until the big meeting at the end of the year. that's the big issue that could get unresolved for the rest of this year. lisa: we will speak with ed from citigroup who has more on that perspective step

on the flipside, people say there are tight supplies and that will be the driving each are and demand will come back certainly in the western world when it comes to travel. then we don't get the same kind of suppression to cost once the oil reserves have been used up stuff this push/pull on both sides makes it in credibly difficult. jonathan: even the hungary when it comes to russian energy. lisa: could be moving closer to some sort of deal. it's hard to know what their view is. he phased in oil embargo? two companies really start paying in rubles? do you have any sense of what will happen? jonathan: i'm still confused on what happens with russian energy why some countries got cut off. crude is down by 2.6%.

equity futures are positive for/10 of 1%, bouncing back from a brutal month of april. the chief economist of wells fargo's coming up as we count you down to a big fed decision this weekend payrolls friday just around the corner.

jonathan: live from new york city for our audience world wide on tv and radio, this is berkshire island. equity futures are up 4/10 and the nasdaq at five or six. the biggest monthly to climb going all the way back to the end of last year. equities are lower and bond markets were lower and yields were higher on the two year. this is the story this morning, down about one basis point on the two-year to 270.68 step euro dollar is the biggest monthly decline going back to january 2016. generally, 2015 around the time the ecb announced they would

suffer intent in the bond buying program, qe kicked off a couple of months later step this time, we are not talking about qe, we are talking about a reduction of qe and not rate cuts. we are talking about re-hikes and that move in the euro is a standout move last month. lisa: if they move in the opposite direction more aggressively, does that give wind to the euro or does it go the other way? the qe experiment was heating up in 2015. jonathan: did you get the impression that this is made this harder for them, the fact that the euro keeps breaking down? lisa: the ecb president did not

want to address that. they tried to deal with it as it comes. it clearly makes it more challenging because it's not a additive vantage. it's a potential headwind because of the inflation they will be importing from the u.s. and in china. jonathan: we do not target the exchange rate but it could be proper for the medium-term outlook. the next time they come out with forecast, there's got to be an adjustment is on what's happening with the currency. kailey: a euro at $1.05 we were talking about the euro north of 120. it's interesting how quickly this has changed and it's not just a story in europe. there's been a weakening against the dollar in general. it was reinforced by the data

over the weekend. lisa: did he answer that question? jonathan: he said it would change the forecast at the ecb and they would have to take into account what happened. how much can they push back against that without raising interest rates? it's not about the first hike but how much further we go but they are ready to go and they have told us that. that got to wind down qe and kickoff interest rate hikes. this is similar to the conversation of the federal reserve. we know the next hundred basis points, there is a large consensus points. 100 basis points is all but guaranteed. this fed does not have the luxury to be data-dependent the next several months, they just have to go. what happens at the end of the summer will be very interesting. at the end of summer, when you get to the jackson hole timing

at the end of august, that's when things get more interesting for me. you start to have year-over-year declines in cpi. that's what i will pay attention to in the next couple of months. lisa: the runoffs will start to accelerate and the rate hikes take of fact. then we can truly gauge how things will go. jonathan: let's go to the chief economist at wells fargo. where is the space for surprise this wednesday? >> i think the scope for surprise wednesday is not necessarily in terms of being a rate hike. everyone is primed for 50 basis points. could they go 75? possibly. the bigger chances in terms of the few e, how big is it?

we are expecting a $40 billion cap in terms of treasuries and a 20 billion cap in terms of mortgage securities. they can go bigger than that and that's where the scope for surprise is. the other thing is what does chairman powell say at the press conference? does he come up really hawkish in terms of the press conference? those of the two places i would be looking for. lisa: what do you view as the fed goal? do you have a sense of the economic ramifications now instead of three months ago? >> in terms of that, what they want to do is show that they are serious about tightening step frankly, the mortgage-backed securities, those caps really are not going to find because

there is very little going on in terms of mortgage-backed so they do a 25 cap or 20, most of them will not bind right away. the signal they are trying to send is we are serious doubt inflation so that's why we think they will come out a little more aggressive in terms of the caps. not because they are binding but a signal they are sending. lisa: what's the signal by companies halfway through earnings season. the earnings have been quite optimistic step anything the fed will hone in on that's important for their forward-looking outlook? >> that's a good question. there is clearly information in terms of what companies are saying going forward. the earnings season so far is mixed. you folks said earlier about the next few months, they are not data dependent and i agree but

when you look out to the summer in july, that's when they start to be data-dependent. that's going to be key for me. lisa: what about the data we are seeing elsewhere like china over the weekend, the worst you might reading on manufacturing and services since january 2020? do you see china's a greater growth whisk or inflationary considering it example -- exacerbate some of the supply chain issues? >> i think is a little bit of both. the bigger risk for us in the united states will be this light chain. if you look at what we send to china in terms of exports it's $100 billion. we are more dependent in china

in terms of the supply chain so i look at that in the near-term as being the biggest risk. case cancer coming down in china so i wouldn't expect lockdowns to continue indefinitely. if you have supply chain issues over the next few months, it certainly exasperates -- exacerbates the supply chain issue. lisa: i wonder if it comes back in relation to china. do you expect chairman peller indicate whether he thinks the fed needs to go beyond neutral? kailey: will we get a clear signal of that wednesday? >> i think he will be more edgy --hedgy. he is a little less hawkish. chairman powell will be speaking

for the committee but not himself on wednesday step there is a little bit of a split on the committee. i think he's going to be very careful what he says because he speaking for the committee and not for himself. jonathan: awesome to catch up, thank you very much. we know where there is consensus on the federal reserve so let's get to let -- let's get back to what they think is neutral. there will be a division around the outlook after you get to neutral. the chairman's job at a news conference is to try and reflect the consensus on the committee. it's hard when there isn't one on a key part of the story for the next year or so stop lisa: that's the reason why he has said is littlest possible stop different fed speakers

stick to their guns and you don't necessarily get consensus. jonathan: are you comfortable with the numbers on qt? lisa: i don't know. what's the circuit breaker in general? what kind of tightening would make them stop? when do they get nervous. what are they looking to do. are they looking to create disruption or are they ok with more disruption they have seen. jonathan: will china back off from zero covid? they don't see china blinking till after the 20th congress likely to be held in the fall. this is q3/q4 russians and we

might not get those answers until late this year. lisa: it will be a long couple of months. to the point on china, china thinks they will be able to maintain zero covid because they can provide support for the chinese economy through monetary policy and infrastructure spending. kailey: how much will that be successful considering it's just words for now and how much does it help the economy if they are still in lockdown. jonathan: man u factoring 47.4, down from 9.5 in march. some of the lowest readings we have seen in a couple of years, futures positive half of 1% on the s&p 500 step this is bloomberg surveillance. ♪ >> house speaker nancy pelosi

has told ukraine president that your fight is a fight for everyone and she became the highest ranked american official to travel to the country and she told the president of ukraine that they are dedicated to be there until the fight is done germany says sanctions could be lifted from russia only when they leave ukraine. moscow would be unlikely to give up the crimean region. a blistering heat wave has scorched wheatfields and could be a serious flow to global wheat surprise after trade flows were ended at of the black sea. they want to connect australia's east coast with new york and london. the airbus can make the 20 hour journey. they will begin service from sydney in 2015 warren. buffett made 41 dollars worth of

net purchases in the first or which is the most in a decade step they boosted its stakes in chevron and activision blizzard. the creator of the popular yacht club nft launched virtual land over the weekend that crashed the blockchain site. users scrambled for 55,000 parcels of land stop global news, 24 hours a day on air and on bloomberg take -- quicktake. this is bloomberg. ♪

♪ >> we are doing everything enforceable on the battlefield but the diplomatic front to stop

this war as soon as possible. is this war was started with russia, it has to be in the eye russia we really hope they will make that decision faster. jonathan: the ukraine ambassador to the u.s. on abc over the weekend, from new york city, equity futures look like this -- it was an ugly month of april. crude is negative and about $.90 but a new sound out of germany. lisa: country finance minister saying an immediate russian oil embargo is possible. we just learned last week that germany was not going to stand in the way of a wider european embargo and they were prepared to back a gradual reduction, not necessarily immediate step

kailey: that's an interesting change of tone but it's no longer germany that has stood in the way. the focus has shifted in hungary. jonathan: it might come to the individual country level with some countries making that decision to cut back on russian gas in russian oil. lisa: if germany does it, how much will that affect the rest of europe? it's basically noise around the edge. it has an implication and people are saying that an oil embargo would have some affect on the overall market. jonathan: let's get to the program director of the corbyn foundation.

what if the war in ukraine does not end? >> we try to think through that if the war doesn't antenna becomes protracted, whose side is time on our answer would be at be favorable for russia to keep work going and dragged the fighting on because it might be better than accepting a humiliating defeat. for ukraine, it would be a terrible out come because it would mean best territories of the ukraine would be devastated but it would be a challenge if it continues because western society would have to keep up the support for ukraine. we might see an economic recession and other painful domestic measures. lisa: how does that potential outlook affect the european

content if the war does not and in terms of a protracted slope lead? >> it will be a continued security risk on the border of nato and the european union. will give you the feeling that there is a constant threat of escalation with russia. that's something that moscow wants to achieve. they want to project power beyond ukraine and demonstrate that they could go further ahead. for europe, it would also mean economic pain. that is important for political reasons and it's a step taken for support towards ukraine but also a step that needs to be taken for europe's own security because if russia wins in

ukraine, it will be emboldened to look further. lisa: is there any positive potential outcome but a more constructive outlook you have? >> most positive outcome would be that russia is pushed back closer to the lines of february 24. there is a situation between ukraine and russia which allows ukraine to negotiate from a stronger position and not russian capitulation. such a negotiated outcome would allow ukraine to keep his independent also keep its military and prevent russia finishing the business in a couple of months or years that it has not been able to finish now. this is -- this negotiated position from a stance of strength ukraine would be the best outcome we could imagine right now. lisa: president vladimir

zielinski spoke to a german newspaper over the weekend and said the war will end when we win so that is his outlook on that. given that you say this could last for a long time for henschel he, what is the appropriate policy response from the west? they have been giving on a sheer economic basis to ukraine. kailey: does have -- does that have to continue into affinity as well? >> ukraine is not opposed to negotiations. they have negotiated and they must be willing to continue negotiations where russia would accept terms that keep ukraine's independence and territory. to come to this point were we can negotiate from this position, the west needs to continue to support ukraine in

the long term they will support with western weapons but putting up pressure on russia and that's where the energy sanctions come into play. the only way to prevent that the war becomes a long drawn out war is to continue to support ukraine and prevent this becomes a war of attrition because ukraine is too weak to push russia back from those territories they have captured so far. jonathan: it sounds like you are saying we need a ban on russian gas. >> that is something which has already been discussed in europe and has been planned for in the mid to long-term. only question is the timeline exit overlaps with the timeline that you rain has whether exiting russian gas can support ukraine and the threat of

exiting russian gas can help ukraine at the moment stop the fact that germany needs to end its dependence on russian gas, that is something which is commonplace in almost all european capitals. jonathan: fantastic to catch up with you. lisa: where does germany get their gas? that's the big question and do they get it from qatar? there isn't enough yet coming online to really plug the whole of gas of russia truly being banned by germany. jonathan: this is the story on oil. germany is already cut their share of russian imports to around 12%, down from about 1/3.

lisa: that is not the main dependency and they can probably get oil from other players, not just oil. jonathan: from new york city this morning, this is bloomberg surveillance. ♪

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>> the fed is in warp speed in terms of trying to get to neutral and past neutral. >> the fed needs to get to above 3.5%. >> the fear on the fed hiking cycle is something going to break. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. >> live from a stormy new york city. this is bloomberg surveillance on tv and radio. kailey leinz alongside lisa abramowicz, futures up about a third of 1%. it is all about the fed this week. lisa: do they go 50 basis points. do they signal a forward look.