hangover and world capital markets. >> the fundamental system, liquidity, is continuing to drain. >> we need to move on division and rates. >> we are going to stay on the edge of our seats until we see the core inflation moves down below 3%. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. >> life, worldwide, this is bloomberg surveillance on tv and radio, alongside tom keene and lisa abramowicz. i am jonathan ferro. futures are down .2%. we have to start with the carnage of the last 24 hours. tom: this is an incredibly important report. mike mckee will join us in the early california morning. it is extraordinary. i'm going to say this is clear as i can. the difference is a previous pandemic correction that was

had, they were short and sharp. it has taken a long time for the peaks to get to a 10% correction, a drought down -- a drawdown. it is lengthen and prolonged. jonathan: we have to pick over the destruction. 49% of the nasdaq, and 52 week highs. the index is already in a bear market. tom: this is the case. a distribution that you see among any given index. i take your point here. the 500 is more ticket if -- indicative than the dow jones. what happened yesterday? was it governor bailey or something else? to me, it was the x access of inflation guest forward. it shifted, and equities took it on the chain. jonathan: what happened on

wednesday? let's talk about that. lisa: the intraday moves of someone unwinding. there is a particular trade being put on. the lack of conviction right now and the amount of volatility, the fact that we are not seeing buying is telling. the bank of america has come out and said there are more outflows and losses ahead. he does not see a technical bottom. jim reed said that the only conclusion you could draw is that the market quickly relies on being able to control the cycle. jonathan: a little later this morning, we will about payrolls. lisa: were going to try. does it matter? will it become a tell risk for the fed? jonathan: we will catch up with jeff and just a moment. good morning. a little bit of calm, and just .3% on the nasdaq 100, and another .4% read yields are up by four basis points. every single time someone comes out and says we are done, we

can't go down again. close to .34%. tom: it's done, it's over. you move on. i'm getting the most value triangulating foreign-exchange in some of the nuances, and today has a little bit of an em falling. when was last time we talk about turkish lira, giving away to 6.70. sterling is not an em currency. jonathan: we have been talking about that for number of years over in the city of london. in ecb official with plenty to say this morning. 10574. lisa: it would be impossible to get to a positive rate later this year. this is an info -- influential governing member of the bank of france. it is one of the main drivers in the increase of yields on the short-term and long-term because it is global. we keep her mentoring -- we keep remembering that because it is

impressive. this is the big moment. the april jobs report bit the estimates raced -- rate from 300 to 500 pre-at how much does it matter that the unemployment rate is expected to the lowest going back to the early 1960's at a time when fed chair jay powell says he is worried about how overheated the market is. joining you, jonathan ferro, marty walsh is here at 945 a.m.. how do we spend this? is it a good thing or a bad thing for the labor market to be this tight? the fed speakers will line up and they will all unleased -- unleash. the u.s. -- st. louis president jim bullard will be here britt i'm interested to hear what he has to say. mary daly -- how much does she push back against the complacency that was overturned yesterday? how much do they talk about the need to tighten faster. in the face of increasing headwinds? we spoke to the vice president yesterday. he will come out and talk about

-- or he did come out and talk about the concern for higher rates. the funds rate will i believe ultimately need to be raised well into restricted territory, by at least a persistent -- percentage point above the estimated nominal neutral rate of 2.5%. the reason i bring that up is that the former head of the governing council is going to be speaking to michael no later today. -- michael mckee later today. jonathan: he's told us what he thinks, hasn't he? he essentially came out, and thank you lisa, by the way, and said the reason they waited is they did not have clarity on fed leadership it they should've gotten on top of that in september. i'm so much looking forward to that conversation with mike a little bit later because at the moment, the only real transparency you get right now is through former officials. with the exception of maybe a couple fed presidents, former officials are swinging hard. tom: they are swinging hard.

it is a big change. you have been out front on this. i'm like do i want to do days of our lives are general hospital. answer is, i don't, but i would suggest you, all of this will be an books written three or four or five years from now. jonathan: are you suggesting this is a soap opera, tom? tom: these are sensitivities with -- which you journalists are correct to bring up but they cause discomfort. jonathan: let's bring things up with jeff. what is easier to explain, yesterday's price action or wednesdays? geoffrey: yesterday is easier to explain. there are two things, really. one, the markets are realizing that we are not doing 75 by 50 basis points on a consistent basis. it still puts the fed out there. it was the u.s. out there in tightening financial conditions. on the same day, the bank of england has said we are tightening in to recession. that is how things are going to

get. with a strong currency, with a hawkish central bank, that will determine the impact of asset classes, and we are seeing a divergence. tom: i want to go up the x access. i've been doing that for the last six months. with governor bailey, did the medium turn become the new short turn -- term. did we stretch out our analysis of inflation dynamics and change simply out quarters? geoffrey: just looking at the body language of governor bailey, he looked uncomfortable about the cost of living crisis in the u.k. for various reasons. you have a split bank of england. the emphasis seems to be on those significant bodies within the ftc who actually don't want to signal too much hawkish in us. they are very worried about what the impact for the consumer is going to be, and it felt like as soon they could stop, they will

stop. they could be ahead, but that underscores the growth -- growth risks. the economy is booming. i think we will see average earnings on a monthly basis be stronger then core principles. that means the fed could continue to forge ahead in equity markets and credit markets. they are wondering what that means for underlying assets. lisa: if you think they committed a policy error this week? geoffrey: i don't think they committed an error. it is always after the fact that we discuss this. the fed needs to decide, can the usb independent enough, and i don't want to frame this in a bad way, but be close enough, not to care about what happens with the rest of the world with the dollar at interest mechanisms. they need to make that decision, and they believe the u.s. can be an island to itself. they will say there is no policy error, but you only find out when it's too late when it is already too late. jonathan: it was clarified for

the right path for the summer for the next couple of meetings. that is not enough to tamp the volatility. what do you think will be sufficient? what do we need? geoffrey: tom mentioned, what kind of timeline are we looking at now? we need to have clarity for the entire forecast horizon. that is the amount of uncertainty in place right now. either you have clarity over the entire forecast horizon, for a two to three year basis, or you make it clear that it will be tactical. every meeting is a live meeting create it will be a case-by-case basis. there is 50 every meeting, and three or four meetings. you take each month data point as you go, and allow markets to be tactical because this policy mismatch is really causing a lot of pain. jonathan: also to catch up with you. an ethical rabbit with this one. they are striking in easing financial conditions. this will resonate with you.

the market is running with sufficient information to run that such a rally could not possibly sustain. lisa: this is one of the main questions. the financial conditions can't ease, can they? honestly, the fed does not want to see that, so will they not come in and change their tone if financial conditions effectively ease buy stocks gaining or bonds gaining? this seems one of the sentiments that is under driving and underpinning the volatility right now. >> the federal reserve he selected china, as well. they came with numbers today. the revenue to great china fell 35%. margins are starting to become problematic because costs are rising and they're not able to fully pass that onto the consumer. that is everything everyone is worried about. it is caught in one stock. >> it is a totalitarian state. david different calculus than everyone else, and the answer is on this lockdown, i didn't have

any information on the lockdown, but the shortest path given the party in congress, at this fall, and the lockdown right now, is to get over and get it done. oil, with 114 print hours ago, and the technical chart of oil screams breaking out. when it comes to chinese, are we looking for clarification that are really whipping this market? as far as china is concerned, we have to wait till the end of the year. tom: you have to get that fixed so you can get to the she regime. jonathan: equities are down about .38%. payrolls are just around the corner. 318,000 in our survey. this is bloomberg. >> keeping you up with news from around the world. there is concerned that the u.s.

jobs report will show that the federal reserve needs to be more aggressive with rate hikes to contain very -- inflation. it is likely to show the unemployment rate is dropping to 3.5% while raises -- wages rose. it is out at 8:30 a.m.. the eu is proposing a revision to its washington oil map to give several countries more time to comply. we've learned that hungry and survive pf -- slovakia will get until 2024. it will have until june until 22 a4 and all other eu members would rush out -- phaseout oil by the end of this year. state owned companies are being asked to get rid of foreign-made personal computers. it is one of beijing's most aggressive efforts to eradicate overseas technology that could result in 50 million foreign pcs being dumped. it is one more blow for a city battered by crime and coronavirus. boeing will move its headquarters from chicago to

arlington, virginia. that will put the company near federal government decision makers in washington. chicago has seen a rise in crime that has prompted the billionaire ken griffin to move his hedge fund elsewhere. a group led by the former guggenheim president is close to an agreement to buy the english football club chelsea, one of the most successful of the past two decades. it is the highest ever paid for an english club. the russian owner put it up for sale in march before he was sanctioned by the british government. global news, 24 hours a day, powered by more than 2700 journalists and analysts and more than 120 countries. this is bloomberg.

>> there are a lot of risks. we also think the core story here is a big income shock to the country, and that, we think, will slay the economy and it will slow the economy. we are probably already seeing some signs of that. jonathan: the governor of the bank of england setting down with guy johnson rid one of the best interviews out there. check that on bloomberg.com and the bloomberg terminal. we feature for 10th of 1% on the

s&p, and downs .6%. yields are higher by five basis points on the 10 year. was call it 0.68. euro to dollar is .38%. 2.2% for the year. 1.5% for next year. inflation, 7% this year, 2.9% next year. that is not a recession, but they say the buffers are small and the risk is large. it will stop the s&p from hiking. >> how do you get from seven to two point ask. jonathan: they just watched what the bank of england did yesterday, and i imagine they are incredibly nervous that they are about to experience the same thing. lisa: is there any way to avoid it? if they don't give an honest assessment, will it do its own thing, anyway? jonathan: the only way forward according to the ecb is to raise interest rates. a big meeting next month.

tom: there are some interesting conversations, and they are diving into the land of the fed hawks. we will have to see what is out there making first appearances after their accidents, and we have to see. right now, a different conversation. there will be no other story in washington today. all of that is pushed aside by a report from nbc news followed on by other reports. an explanation by the biden administration over the character and quality of intelligence given by america to the ukraine in the sinking of a russian ship with 500 sailors. maria is in southborough, austria. we will begin with emily in washington. emily, there is flat out no other topic. how does the administration respond delicately to the nuances here? at the idea of nato, mutual defense, and we didn't cause

this ship to sink, but we did provide an intelligence stream. emily: the report from nbc news which we are seeing seconded by a number of news organizations is really sort of putting it into light about where and out united states is thinking about assisting ukraine at this time. it is not quite clear exactly what the extent of u.s. intelligence was, compared to the extent of ukrainian intelligence, but it really is showing that president biden and american officials are sort of changing their thoughts a little bit on exactly how involved they want to be with the ukraine, and it shows a little less concern about the potential provocation and escalation with russia. tom: those are neptune missiles which are soviet -- i should say russian technology. this will have ramifications in brussels and london, and dare i say, in warsaw and southborough, as well. how will europe react to u.s.

intelligence at a new level of initiative? maria: you know, i am not surprised by it because moving away from this and looking at the overall picture, the ukrainians have said this on the record multiple times. it is not just a weapon, but the intel that they get from western partners. it really allows them to stay competitive in this war, but they also say, taking that intelligence and making good on it allows a country to defend itself. they don't look at this is eight -- as un-attack or counterattack. they still get the intel and information as a way for ukraine to protect its sovereignty. they have said that when you look at the u.s. intelligence, has been much better than the european, throughout the war. they were very correct on their assessment. they were correct about the timelines, and the ukrainians have said this repeatedly. this is been equally important, if not more, than the weapons themselves. lisa: his european sentiment

waxing or waning when it comes to increasing aggression? does it allow ukraine to be increasingly aggressive in light of the economic concerns russian mark --? maria: what you talk to 27 different countries and governments, i was just in berlin two days ago. this is the biggest economy, it has a lot of political momentum behind it. the german sent a signal, and everyone else follows. i was there two days ago, and it is very clear that the germans have not made their mind up. they are not like the united states. they are not like the biden administration. a really do worry about this potentially spilling over prayer there are a lot of risks attached to it, and they are not as facilitated as the united states has been. when it comes to that alignment, the germans our watched -- much more cautious. they are trying to convince the

ministration that he can we breed when it comes to the europeans that it is not about victory but a cease-fire. that should be the focus. is not a victory, it is a cease-fire. jonathan: you are where they recorded the sound of music. did you know that? maria: yes, i knew that. my name is maria, and by the way, the house of baron von trapp is on the other side of the river. i wish you could see this pre-it is a true story. jonathan: i've been there, i've stood there. lisa: tom is now going to start singing. jonathan: it's a beautiful place to go. it's a global seminar. i went there a long time ago. it is fantastic. thank you. rhea alongside emily wilkins. -- maria alongside emily wilkins. tom: when sound of music came out, there was no other technology, and it was the

birthday party movie for girls across this nation. i would suggest that the keene household saw it 50 times. my sisters were scarred for life. jonathan: you were scarred by it to. if you're just tuning in, carnage and the equity market. it looked like this yesterday morning. down by .3%. the nasdaq down .4%. tom: we had to write this up yesterday. may you bloom and grow, forever. nasdaq weiss, nasdaq weiss. bless the triple classroom -- cash flow. jonathan: folks message me about how you outperformed the market yesterday. tom: relative and absolute basis. jonathan: your questioning it. lisa: just saying. jonathan: were down .25%.

tom: i just killed that. jonathan: the estimate in our survey is about 380. in new york, this is bloomberg.

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jonathan: live from new york city, good morning. here's the price action. government payrolls are two hours away. equity futures are down .2% on s&p. nasdaq down about .33%. it is felt bad this year because it is bad this year. take of america out with this stat. nasdaq is at 877% bear market. that is the carnage and destruction taking place at the index level. it is been terrible this week, but if i asked where we were, would you guess that we were flat on the week? negative .3 3%. we may not get to that number. here is the market picture for you. fives are on the way out to 30's. every single point trading at .3%. just short of 3.1 percent. up for basis points.

up five basis points. that is the last three months. we are also talking about curves from march. that has been pretty relentless. it has called a lot of banks and strategist out. the 30 year's 316. i want to talk about foreign exchange. pound sterling with the biggest one-day for yesterday. going all the way back to 2020. we looked at the 122 handle a little bit earlier. 123 53. the bank of england and the ecb's future. just look at the inflation forecast for the euro zone. and ecb official, after ecb official, talking out the higher interest rates. lisa: is there anyway to hike into weakness? that is what the bank of england had to do. in my point -- it might be more of a move coming up. jonathan: just ask the fx strategist.

euro positive or euro negative? lisa: it's a great question. does that slow growth and lead to an even lower euro? at that seems to be what a lot of people are seeing in the near future? jonathan: just short of the dollar. 106 to 105. tom: that is the one pivot point we've seen. i went to go back to sterling. as you wake up across america, as a general statement, sterling doesn't have a paid yet. jonathan: we criticize them for not being honest enough, but they were pretty open and transparent. they have no idea what the future holds. they are not going to try and tell you they do. that is a huge division on the committee about what is going to happen next and what they should do about it. tom: we welcome you today. we are considering a six hour surveillance this morning. the news extraordinary -- is extorted. we have a killer set of guests.

answer joins us now. the chief u.s. economist at citigroup. his aggressive research has been out front with an incredible -- aggressive rate -- statement i should say. on the fed's trajectory. how do you amend your call on the fed trajectory of rates if we see a more persistent inflation? that seems to be the question of the moment. andrew: thank you for having me on. i think what we are seeing already is a more persistent inflation. that is why we are calling for the fed to hike in 50 basis points increments. we have guidance from fed officials for the next couple meetings, and i think the big question is how far do you need to go? where is the neutral rate? that is what chair powell is a lot quieter at the press conference and giving some indication that yes, it could be higher, but i think the reality is that we have persistent to

high inflation. we have heard chair powell say . 50 basis point hikes at coming meetings. how high will it go? tom: i was a nerd as a child that i would read economic papers. lisa finds this hard to believe. one of my heroes, and i had the honor to speak to him, he was from ucla. he was a marine coming out of the trenches in economics, saying let's get adult. is this one of his moments right now? andrew: great person. thank you for mentioning him. it is a pivotal moment for fed policy. we saw chair powell this week trying to get things right in that moment. representative walters looking back to this and saying he was willing to do the right thing to bring inflation down, even when it was not necessarily the popular thing. i think that is where that will

lay out. we are seeing some throwing things in terms of getting there. we are watching a price spiral. we are not quite there yet. but i think that is where we are going, and that is where the interest rates are moving higher. jonathan: are you setting up your clients to face deceleration and growth? is that starting today? how are you thinking about it and what does that look like in the summer? andrew: this is so much of what is going on broadly in the u.s. economy right now are we have strong demand. there is no lack of demand. to hire workers, we have two job openings for every unemployed worker. if you are being constrained by the demand side, but by the supply side, we tend to look at slowing drop growth -- job growth, historically. it must be the demand slowing down. instead, we are seeing the supply side becoming more of a constraint with the unemployment rate already so low. workers are just not going to be

available to be hired for these jobs. wages are moving higher. the risks are that we get a slow and jobs growth, but the real story is the risk to wage growth. it is picking up further, and again, it is the inflationary pressure that we have in the economy. we are just not balancing demand and supply. lisa: how are you going to use the number we get into ours time to parlay that into an estimate with where we end the year with inflation? how will it decline the pace from this year till next? andrew: it is the wage number i am looking at. the employment is a cause index of a broader measure of wages. employment costs are rising to flow to 6% at an annual rate in the first quarter. i am watching in these average earnings numbers, and we get them monthly. are we going to see a 6% rate of inflation annualized, 0.5% on a monthly basis? are we going to see that

accelerating? if it is exhilarating then i think we are really in trouble. the fed would have to move even more hawkish. or is this something that is stabilizing or coming down. if you are just stabilizing, that is a point we will make. it is not clear to us that the headline of inflation is speaking. underlying inflationary pressure is peaking. maybe it is plateauing, and things are stabilizing. the risk is stabilizing further. lisa: if it accelerates, if wage growth accelerates, it is in trouble. what does that mean in terms of how this inflationary impulse compares to the 1970's, or historic bouts in the past. andrew: this is better than the 70's in the sense that we had a long. of to height inflation, and institutions lost credibility. it took a crushing recession to bring inflation down. what i mean by the economy being in trouble or a difficult spot is that the potential for a soft

landing becomes less and less. it becomes a lower possibility event. we have heard that in principle, there will be a soft landing, and it is plausible. we could achieve a soft landing. it is a soft-ish landing. it is difficult the land to the extent that inflation takes up further. it could be a more significant slowdown. a more significant recession to bring inflation down. tom: citigroup owns the high ground on international economics with the work of catherine man. now, the bank of england, she has a profound impact on yesterday. the back end of the gdp equation is a complete mystery, and it is a propound importance -- profound importance. what is the big deal if we import a ton of imports because we are america? what is the so what on 100 get billion dollars of trade balance?

andrew: i would not focus so much on the trade balance itself, but instead, i would focus on the import number, and what it is telling us. why was q1 gdp negative? in a mechanical sense, it was because things were so strong. it goes back to what we were talking about earlier. the demand of the economy out running the domestic supply. the gdp is measuring how much you produce. you look at how much you produce, and well, americans are consuming more than we are producing, so you are importing these goods and that is pushing up prices. it is all part of the supply and demand imbalance. i think the near-term message from the widening trade balance is the same we are seeing across the economy, which is demand that is too strong, relative to supply. jonathan: that is why you think the federal reserve hikes interest rates. jay powell clarified that this week. he told us that the next one will be 50 and the one after that is 50.

most people think we get to jackson hole and reassess the whole thing. you think, when they do that, they reassess and do 50 again in september. why is that? why do you expect that -- what drives you to think we get another one after that and it is still not done? andrew: i listen to what the fed is telling us and i compare that to my own expectations for the own -- for the u.s. economy. the persistence of inflation, i know that chair powell said on's ago now that transitory is not the right way to describe inflation. he talks about inflation, he talks about inflation that is coming down for exhaustion its reasons. in my view, inflation will not come down until the fed tightens financial conditions sufficiently to slowed the demand in the economy, and that would be nominal interest rates getting probably above 3%. we had a former vice chair talk about 3.5%. it could even be more than

there. typically, you think the nominal policy rate needs to get to at least the underlying inflation rate. i don't know if there is anyone who doesn't think the underlying inflation rate is somewhere north of 3%. there is kind of a sense in which we are not at any notion of the neutral rate. that is what chair powell said. you have to answer the question now in terms of how far we are going. i think we will at least raise hikes until we get above 2% rate, and then even further from there. i think that is possible. jonathan: awesome as always. back in late march, andrew called it. 50, 50, 50, 50. it became a consensus pretty quickly for a lot of people. tom: it's a really important call. it is something we will remember a year from now. jonathan: futures -.3%. from new york, this is bloomberg.

ritika: keeping you up-to-date with news from around the world with first word. the u.s. is morning russian billionaires that there are no hiding places for their yachts. that is as authorities seized it three or $25 million super yacht. they claim it is owned by a russian billionaire. he is accused of money laundering and conspiracy. the u.s. worked with officials in fiji to seize the vessel. united nations says that global few -- food prices are at all-time highs. it was disrupted by the war in ukraine. the country has been one of the largest shippers of wheat and vegetable oils. the high prices and droughts have added to the problem. in china, top leaders have warned against questioning the president's covid zero strategy. they struck a more defensive tone as pressure increased to relaxed tensions. economic activity contracted sharply last month. british airways is having to

slow its expansion plans because of london's heathrow airport. they plan to operate at 80% of its 2019 capacity this year. seating capacity in the transatlantic market would be close to normal. q1 offering cost were worse than expected. there was a drop by 14% on wall street. the slowdown in ipo's and underwriting. that is according to a consulting firm, johnson associates. it could increases much as 20%. global news, 24 hours a day, on air and on global quicktake, by journalist and analysts and more than 120 countries. i am ritika grouped her, and this is bluebird. -- bloomberg.

>> i think the full are going up. it is trying to put a forecast

around this, and the floor for yields is high. it makes it untenable to expect yields to be lower any time soon. it is impossible to imagine yields all well central banks are hiking in the early stages. >> one of the best. steve major is rethinking the path forward for interest rates that call for 150. it is getting difficult with 10 year rates at 3.1%. in new york city, good prayed alongside tom keene lisa abramowicz, i am jonathan ferro. carnage on the nasdaq. the nasdaq 100 is down just 4/10 of 1%. in the fx market, the euro-dollar is just south of 106. the euro-dollar's where it was last week. it would take sterling much weaker over the last week. the penny has finally dropped. rates are going up. the economy is slowing sharply, despite the volatility, the australian dollar is this week's top g10 currency. would you have guessed that?

tom: i looked this morning, and i was internally -- internalizing arsenal, and it is its own beast. this is a lockdown. can we state that the lockdown may end? jonathan: when's that, tom? which lockdown are you talking about? tom: china. jonathan: same place. china. china jumps out because this morning we are looking at numbers. the stocks are down, and you are struggling to get a read on china. the perfect way of doing is to take a group of companies and look at their exposure and how they are performing. first quarter revenue is down 35%. that is a struggle. tom: it is. it is a six-hour surveillance this morning. we are talking and negotiating with our negotiators about the huge news flow we see right now. futures are -11 on this job

stay. right now, we i digress -- we digressed with one of the great thinkers. a legendary credit squeeze, and we are thrilled that he is joining us. he is the head of microstrategy etzel american. i love the justification of the hope and prayer of chairman powell. we will go from lower for longer. the whole rate movement, all of that, back to the hope and prayer of long rate coming in, and you say, fed action is possibly necessary and is possibly sufficient. discuss that. dominic: thank you for having me. the first point is that although people try and make comparison with the 1970's inflation, this inflation is all about the soap -- the supply side. we were led by the sector with all the shutdowns and similar

included. right now, the whole point of what they're trying to do is make sure it doesn't couple with a price spiral. that is regarding some sectors as read. if you target the labor market, and we have a lot. wages don't gain ground, and there is no reason not to be optimistic that the supplies that will come back, and basically bring down inflation, and the second point is, look at financial conditions. i disagree with people who suggest financial conditions are not tight enough. they are not accurately tight enough. the problem is they have to measure their own way. they put the interests rate in their own position. you need to exclude it. you need to look at spreads and look at the fx. by that basis, it is the largest we've ever seen them. that is the problem. tom: i have like eight ways to go here. let me cut to the emotion right now. the hawks are out at the hoover

institution. the land of michael boston, the land of john taylor and the rest, and they are scared stiff. you go the other way. what does dudley, what does clara, what do the others worried about being worried about high rates, what do they get wrong? dominic: i think the issue that they had is that they want to beat up on demand in order to make sure that inflation comes down. i agree that there is a big uncertainty when you are dealing with supply-side driven inflation. you don't know what it takes to bring people back into the labor market. you don't know what it takes to tell employers not to pay off higher wages. rightly, we have not been in the situation. we haven't had something like covid as far as i can remember in my career. that uncertainty is something we all face, including the markets. yesterday, with powell, they want powell to be up on the

market. they want to take down as it prices across the board in order to be absolutely certain that inflation is coming down as quickly as they want. a sickly, i understand that. i get it. i think the idea is not that rates are going higher for longer, if you like. i think the idea is rates are normalized where they should be. the long and. the problem they have is they are not going to stabilize until we see the data for the way that powell expects it to do. we are trying to get into territory, you don't know how far things will go. the biggest issue that people keep forgetting is it is not about the fundamentals. it is about the outlook. it is about the buyers. what are they worried about? there are a lot of foreign buyers, and they want stability. they will come back on stability but not when there is all of this volatility. that is a problem with stabilizing the market, which is why we are seeing overshoot territory. lisa: since you see the 10 year

yield ranging from 1.5 to 3.5, and not beyond like some people say, where do you buy the risk asset debt that continues? dominic: i would be more cautious on risk assets because the overshoot of financial conditions can weaken them more, and so, there is a problem that if the foreign doesn't come in, the domestic left to take up a huge amount, and allocation is way too skewed towards equities and against debts. it is a massive reallocation to equity, so the scope for the equity market to trade poorly until we stabilize rates is unfortunately very much there. i think the issue for us is to try and find stability in the long and first. that is going to be part and parcel of formant -- foreign in -- invested follow.

we have to follow that, but really, it is down to the basis to prove that was right. the problem there is that it is about to turn. no one is expecting a decline. that is the issue. jonathan: wonderful to get a different perspective. thank you. this is the long end, and we do not have stability. the third year is up another basis point. tom: yields are moving. dominic said that. out of oxford, he has always been pushing against consensus. he doesn't push. he crushes their consensus in the traditional economic framework that is out there. he looks at his -- it has a framework that frames economics. much more to a global system, and he expresses that through foreign exchange. that is what i would be watching. the litmus paper of the system. jonathan: as for the data, 380

on paper. -- payrolls. lisa: perhaps the tea leaves will be how much weight -- wages have gone up in this market? jonathan: the 10 year at 3.1%. 3.07 49. this is bloomberg.

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>> these are three central banks. >> slightly different challenges. >> right now, we are going through a hangover world capital markets. >> the fundamentals of liquidity are continuing to drain. >> inflation, we need to move on rates. >> we are going to stay on the edge of our seats until we see that core inflation move down. below 3%. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowitz. jonathan: payroll is 90 minutes away. good morning. this is bloomberg surveillance live on tv and radio come alongside tom keene and lisa abramowicz pre-i am jonathan ferro. some real damage done yesterday across the board. tom: it is really nuanced. in the last hour, the fx model improved a little bit. dollar weakness