>> i think the fed's forecasts are so remarkably optimistic. >> all these numbers they threw out are fantasyland. the unemployment rate is fantasyland. the rate at which inflation is going to come down is fantasyland. >> if he is like global inflationary pressures have the upper hand. >> it will take a long time to impact the economy.

>> i wonder whether we will look back and say we were in a recession. we are already in a recession. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: a chorus of negatively there. from new york city, good morning. for our audience worldwide, this is "bloomberg surveillance." t.k. out of the building. in the sea, damian sassower -- in the seat, damian sassower. the push back against these forecasts. bank of america saying the fed funds forecast now makes sense. there growth and inflation forecast do not. lisa: for them to achieve lower inflation kevin -- given what they want to do on the right side, they have to reduce slowdown in demand. that will be incredibly painful. that has been the projection from so many investors because the input on the supplies i have not contributed to a softening on inflation. without that, it could be a painful period.

you asked the question how long and how deep? jonathan: chairman powell speaking later. do we expect anything from that? lisa: if he takes questions, i am sure people will be asking how do you view these projections, the amount of pain the u.s. economy will have to experience in order to dampen inflation. but he said what he will say, now we have to wait and see. jonathan: it is tough. if you are a central banker, leader of the fed, you cannot forecast a recession even if you think there will be one, right? damian: i think there were goo s words, "fantasyland." the fedput is in hibernation, so at what spread level is it, what level is the fed will come back and backtrack asset prices. jonathan: i say it is in retirement. what brings out of retirement? is it the market or in the economy, the economic data?

i am thinking more about labor market data. damian: i think it will be spreads. i think it will be liquidity driven. there will be problems in the plumbing, and the fed will have to act. jonathan: we saw that in the back end of 2018, the primary market for high-yield. no issuance through the whole month of december. what do you see right now? lisa: some people have speculated about this. others are starting to buy in bulk or they are providing that liquidity because suddenly a .5% yields on junk bonds -- 8.5% on yields -- 8.5% yields on junk bonds look good. jonathan: i've heard one complaint from the audience -- just so far. i am sure there is more to come. not enough golf talk in the previous hour. damian: rory mcilroy. one stroke off the lead. i am rooting for him this week. but there are other players --

johnson & johnson -- lisa: was that tom complaining? jonathan: tom and someone else as well. they just what the golf talk. maybe i do, too. phil mickelson, he got a decent reception. i thought he would perhaps get some jeering, boos. damian: his putting could have used more cheering. i think he ended 8 over par. i do not think he will make the cut. jonathan: he is making his money elsewhere at the moment, as we know. damian sassower on the seat, tom keene away. the nasdaq 100 up a little more than 1%. yields higher a couple basis points. if i had to pick an asset class right now -- foreign exchange is fascinating. euro-dollar native -- negative. lisa: dollar strength coming through after the fed signaled they will do what it will take.

but the stickiness of 1.05 i find interesting after the fed -- ecb came to -- seemed to support bond yields. here's what i am watching. 8:30, president biden hosting the major economies form on energy and climate. he ran on the greenification of the energy system, and here we are with gas prices exceeding $5 a gallon, and this is becoming a major problem for him, giving a how -- given how much it eats into the disposable income particularly of those on the lower income brackets. we hear from fed chair jay powell. you asked if i would -- we would hear anything of substance about what would cause them to retrace rate hiking -- he will talk about the dollar and the strength of it. how much they start to look at the international rule and the disruptions they could see outside the u.s. as the dollar does continue to strengthen. that is one thing he could talk

about. 9:15 a.m., u.s. industrial production. how much do we -- possible easing of inflation that comes from not simply dampening demand care this is what people secretly hope. they say we see inflation surprise to the upside, but there is a subtle transitory feel that is still alive and some of the discussions you hear. jonathan: following up on that data, responding to it, we will catch up with mohamed el-erian about 9:00 eastern time. the scores right now looking like this -- the dow down 17%. won't be doing that again. the nasdaq down 32% year-to-date. joining us now victoria fernandez, crossmark mobile investments. -- global investments. are you buying tech stocks yet? victoria: look at how far the

nasdaq is down and look at individual stocks in the nasdaq and how some of these individual stocks have come down. in -- nvidia down 40% year to date. but looking at a company growing with their data center, there gaming. there is a lot of companies with strong balance sheets out there who have taken a significant hit as yields have moved higher. i think you can go in and be opportunistic and add names. it is not just in the tech space. you can do it across the board. but you have to choose quality companies. don't just go all-in on one sector. lisa: you do not believe the recession talk, believe the u.s. can avoid one. why? victoria: probability of a recession went up over the last 48 hours or so, but i do not think we will have a recession this year. i still think the underlying fundamentals in the economy, if

we look at household balance sheets -- i know we have gas prices going higher, and that has taken a big hit, but when you look and split up balance sheets, higher wage earners are doing pretty well. they respond more well to household wealth and food or commodity prices. they are still strong. corporate balance sheets are still good. we have not seen earnings expectations come in yet. that is something we were looking for to maybe think recession is closer to next year, so we are sticking with next year on that. the labor market, you have talked about it all morning. it is still strong, even though the fed is trying to bring that down a bit to help inflation. we do not see a recession this year. we would see it more likely the second half of next year. but things can change quickly. damian: if the fed indeed engineers a soft landing -- "if," by the way -- inflation is unlikely to return to pre-covid

levels anytime soon. what asset classes in the environment, specifically in asset classes -- victoria: we have been short duration for an extended period of time, which has worked well for us lately. what we have started doing is extending duration, building up some of that credit. you talked about yields earlier, talked about spreads with high-yield and investment-grade. just like we like quality and equity, we like fixed income. we're looking at high quality, investment-grade corporates. we are getting more yet on them now, adding some of those to our portfolios. we are doing that will trying to extend duration a little bit to get closer to neutral, because we do think we perhaps have seen the peak in yields at 350 on the 10 year treasury, and we will start to see yields at a lower level. if we can build in some of the yield now and lock in the portfolios, i think you are well-positioned. jonathan: how do you expect that

relationship, the correlation between risk assets and treasuries, to develop through the summer? victoria: one of the things -- actually two of the things -- we are watching, energy and 10 year yield. they usually peak higher -- prior to data peaking. have we seen that? we do not know yet. if we can see their peak in yields and start to see yields moderate a little bit, that should be support for the equity markets over. the summer months. jonathan: awesome to hear from you. victoria fernandez of crossmark global investments. who said it a couple weeks ago, who said bonds are back? scott minerd saying he was thinking the long end of the bond market as well. lisa: -- we saw that yesterday. looking at the bank of america

merrill lynch move index, and that is still incredibly elevated. looking at levels going back to 2020 -- we have not seen these levels of implied volatility, so it may be a little soon to say we have seen that peak, especially as people reject out. jonathan: to build on that, i think i heard someone call the top one yields 20 different times over the last month, then we break out again. damian: markets are pricing in a 9% cpi put. if we break to 356, that is when things get messy. jonathan: what would you look to after that? damian: 375. jonathan: could you imagine 4%? i hear this a lot in the equity market -- we have adjusted to the rate story, fully adjusted, now it is about ray earnings. do you think we have? lisa: if we get 4% 10 year yield, everything changes that will be a game changer. what i am struggling with --

brent. how will they come down? we are not even seeing housing prices come down that fast. if people are priced out of buying homes, they will stay in their homes, rent more. jonathan: jonathan golub of credit suisse will join us and try to make sense of it all. he has a more constructive market. up 0.9% on the s&p 500. this is "bloomberg surveillance ." ritika: keeping you up-to-date with news from around the world with the first word, i'm ritika gupta. president biden will convene world leaders from roughly two dozen countries in a summit today it focused on propelling the fight against climate change. the virtual summit is on track to be the largest gathering of world leaders on climate.

president biden will highlight the war on ukraine as a need to accelerate clean energy. ukraine is one step closer to becoming a member of the european union. the european commission has recommended ukraine be granted candidate status, with conditions kyiv will have to meet on the rule of law, justice, and anticorruption. it is significant for ukraine, but there is no fast-track path to speed up the arduous membership process which can last more than a decade. russia's invasion of ukraine caused one of the fastest and largest displacement of people since world war ii and helped push the number forced to flee their homes globally to the highest annual level since the united nations began keeping track. the u.n. refugee agencies at the number of people displaced around the world top 100 million, and the wharton ukraine has displaced 8 million people within the country so far in 2022. hong kong's outgoing leader carrie lam is urging residents

to avoid banquets and other large gatherings i made a resurgence of covid-19 but stopped from imposing new restrictions. lam said the number of new daily infections have top 100 -- topp ed 100. global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> the fed has shown it is going to have to be very data dependent over data it is not necessarily have a great deal of control over. the fed is somewhat captive to

the incoming inflation data that matters a lot. than the growth outlook is. also very uncertain. jonathan: their chief cross asset strategist at morgan stanley, andrew sheets there. good morning. alongside lisa abramowicz, i am jonathan ferro with damian sassower. yields higher about a couple basis points, 1.2162 -- 3.2162. it has a 3 handle now. the euro-dollar negative about one third of 1%. this story just crossing from the washington post -- the second paragraph, biden officials taking a second look at whether the federal government can send rebate cards out to millions of american drivers to help them pay at gas stations. lisa: but the second or third line is also fascinating, that in the past, they have rejected this idea because of a shortage

in chips needed to make that card. just highlighting how multifaceted some of the shortages have been. you couldn't make up the fact that they couldn't get the rebate cards and enough supply because of the chips. you really want to basically keep demand at the same level? this is the existential question. do you want to keep demand at the same level and have this be a supply level that cannot be fixed and you end up in this inflationary spiral, or do you go at this differently? jonathan: even if the administration imposed -- embraces this proposal, it would require congressional approval. damian: i have to draw a comparison -- really to the middle east. quite honestly, fuel subsidies worker there. they have suppressed inflation nicely in places like saudi arabia,, qatar.

that is the only way we will get this economy right side. jonathan: it helps if you are the state producer and make money exporter to everyone else and/or out subsidies domestically. pretty sure how that's that is how it works. damian: the fact of the matter is it is not just fuel subsidies, it is food subsidies. if you look what is happening in pakistan, sri lanka -- it is a big deal. that social instability -- many of you guys know i am in emerging markets guide. i have to tell you, things are getting far worse. jonathan: let's get to emily wilkins in d.c. soaring gas prices lead the way, white house aides back to brainstorming. what are they coming up with? emily: at this point, you have to know there is this idea of potential gas cards. they have talked about a gas tax holiday, but that is something you saw house speaker nancy pelosi shut down, saying we are not sure if we try to give this

gas tax holiday, companies may not pass it along to consumers. they're looking at other potential revenue avenues. -- certainly some eyebrows being raised about the proposed trip to saudi arabia and what it could mean for the u.s. going forward. lawmakers are feeling the pressure to do something here on gas prices. i almost wonder whether we will see some legislation that will have subsidies or potential gas cards, even if it is something that is able to pass the house or not able to go forward in the senate, just so democrats can say we are trying to do something. lisa: there is a sort of unspoken truth that come at a certain point, people will start rationing how often they travel. they will start reducing certain aspects of their life in order

to offset higher costs. at what point will the administration lien into that and say, if we can all basically turn off the lights, as we were talking about earlier, take fewer trips, that will actually ease the problem itself? emily: it will be interesting to see. initially, the biden administration did begin to talk about it in those terms. they said they are high support in the u.s. for the war going on in ukraine, high support for ukraine. people have to pay a little bit extra at the pump so the u.s. can make sure we are not getting russian oil, that that might be something people would be interested in. that was before you saw gas prices get quite as high as they are now and really trickle into inflation and other items, like food, groceries, anything that needs to be transported. i think it is a major concern, and i would not rule out anything at this point, because the biden administration and democrats in general know that it is such a problem that they have to come up with some sort

of solution. i think there was initially a hope you would see biden tap into the federal reserve, that you would see lawmakers try to take smaller measures to address it, and you might see prices go back down, but that has not happened. it is summer, you have families looking to take these trips, and you have gas prices that are really prohibitive for a number of people to drive as far as they would like to. damian: can you clarify -- i see president biden reaching out, trying to mend fences with iran, venezuela, now saudi arabia. yet, on the flipside, he is accusing exxon mobil and domestic producers of price gouging. is this plain old politics? emily: there is certainly some politics coming into here. this is washington, d.c. democrats have made a khaki elation that most americans are not super big fans of major corporations, that it will be easy to pin the blame on them, particularly from some of the revenues we have seen from these companies. that exxon numbers led to

another round of the white house saying why are prophets so big, why is it not been passed down to consumers? the white house sort of looking everywhere for if there's any revenue they can -- they are trying to figure out what the solution will be and if they can get prices down over the next couple months before the november election. jonathan: emily wilkins of bloomberg government. we want to take the audience back to the end of last year, end of october when the energy secretary came on this program and we asked what you could do dramatically to boost output, and what did we hear? laughing. i do not want to understand what has gone from blaming opec to now blaming domestic producers when, six months ago, we had a similar story, and russia was not a factor, of course -- we can address into that -- but we can see the election of travel. energy prices were already

elevated at the pump, out of the ground drilling, all of the above, yet we got laughed at when it came to producing -- boosting reduction at home, and now it is all about domestic production. damian: emily did a good job of avoiding it. we are talking taxes and tariffs -- that is what the market believes. the market believes biden is picking his spots, and he would rather reach out to unsavory actors as opposed to domestic producers. that is a republican stronghold. definitely a -- jonathan: futures up 1% on the s&p 500. the president, seemingly, would rather go see the crown prince mohammad bin salman and do something there at the moment. this is bloomberg. ♪

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jonathan: futures positive by more than 1% on the s&p. nasdaq up by .4.

losses down by 6%. biggest week in close. it is been that bad, what is interesting about yesterday, we have energy crude rallying, energies falling. lisa: there was a host of selling people didn't understand yesterday. you do wonder whether people are selling what they can, maybe not what they want at a time when it is unclear what the trajectory of the economy is going to look like. jonathan: where the profits haven't been is big tech. backing up the truck for stocks like amazon, we will think about that. the bond market story, to year yield on the week, higher by 40

basis points on a week last week this week, up nine, including three or four basis moves today. are they getting something done on the periphery? 240, italy over journey. right now, sub 200. they are planning to make a plan, they haven't yet. there is a couple of steps to go. will words be enough to cap what is happened in this bond market? lisa: we have heard they are going to frontload reinvestment of the fed -- they are going to potentially increase their near-term purchases. that could potentially offset this. it is hard for me to imagine not to follow-up, it would not have

the exact opposite effect. jonathan: german 10 year bund, a huge turnaround. about 167, we were at -17 basis points at the end of last year on a german 10 year. in italy last summer, 50 basis points on an italian 10 year. a change we have seen the last 10 months -- 12 months has been massive. let's say good morning tough romain. romaine: some investors are trying to nibble, futures being higher, big tech names moving higher. apple up a percent, nvidia and ship semiconductor names up to percent. how much conviction is there in some of those nibbles, is it going to be broad-based in a market where we see a lot of declining liquidity and stakes in the economic trajectory? there is optimism when it comes

to chinese tech stocks, alibaba shares up by almost 10% on the back of that reuters report that the chinese government would allow -- to move forward with earlier plans to convert to a thin tech company and have that ipo. alibaba, j.d..com, a lot moving higher in the premarket. at the end of the day, it comes down to the commentary from the executives. we did hear from the head of the retail division, they are seeing a lot of muted growth with people not opening up their pocket books and spending. we heard from u.s. deals, which raised its profit forecast for the year, seeing shares higher by 7%. there are several analysts saying this is a temporary boom for that company, enjoy it while it lasts. we will be interested to see that share action, if it lasts.

blow out quarter by any stretch of the imagination, they did revise guidance by a relatively moderate amount. 17 point 7 billion in sales from a previous forecast of $17.9 billion. a lot of concern as people start to worry about the backlog with a lot of these companies that pitched being recession proof. the idea i.t. spending would keep companies afloat, and a lot of concern that may not be the case. keep an eye on revlon shares, up 67% after that bankruptcy filing on wednesday. a lifeline could be thrown to this company. reliance industries in india, a stunning report, they could be interested in buying revlon. jonathan: looking forward to the close later with romain. from michael mcdonagh hugh, in january, a monthly mortgage payment based on median existing

home price was $1200. it is pushing $2000. that is the big change we face. lisa: people base costs if they want to buy a home with a mortgage, have basically doubled in that period of time what are the consequences? jonathan: hammered. smashed. stocks are brutal. >> the indicator i look at is the proprietary index of westchester home price sentiment. you no longer have contingencies, you cannot waive your right to inspection or whether or not the bank is going to give you a loan. these are negative factors that are weighing on the house market. jonathan: thank you. chief global economist of morgan stanley, bank of america said the fed funds forecast since, growth in inflation forecast do not. they think fed is too optimistic

on those fronts. you -- do you? >> what they laid out in their productions -- projections is perfect soft landing scenario, they get growth to come down a little bit below potential and get the unemployment rate to rise. over a few years, at their estimate of the natural rate. that is very aspirational, that is what we should be trying to hit. it makes since they would write that down as that forecast, you have got to have luck to go with good policymaking to get that. lisa: based on where inflation is, with the economy have to go into recession to get what the fed is trying to achieve? seth: you've got the most difficult question here. over the past year, year and a half, how much inflation is the underlying macroeconomic inflation and how much of it is an artifact from the restrictions from covid?

the feds forecast, they are banking on a bunch of debt going away on its own. energy prices presumably do that , they stop when oil prices stopped rising. it is hard to say for sure how much of the rest of it goes away on its own. lisa: the stealth transitory line of thought. one aspect of inflation is the rent picture, the big component of cpi. we are looking right now at 6% average mortgage rate, which increased the cost of owning a home at a time when costs already were highly unaffordable. how much has this had the opposite effect of what the federal serve once to achieve, boosting rents further? it prices so many people out of the buying and puts them into renting. seth: what we know is there is a structural housing shortage, affordability is at its worst place in decades.

if people were thinking about giving up their rental to buy a house, they are probably reconsidering that now. rent matters a lot. central banks are having challenging moments with communication. you mentioned the 40% wave that rent gets, and cpi is less than half that in core ppe. with pce, the fed since a target for. those measures of inflation are going to diverge, they already have close to historic rates. that fact is going to complicate the feds challenge in communication. damian: i have one question, does the federal reserve have a credibility problem, and if so, what can it do to regain confidence in investors? seth: credibility for investors is critical. we have seen markets continue

the past six to nine months markup aggressively for their expected fund rate, that says the market believes the fed will be raising rates and they will follow through on those rate increases. if you look at the eurodollar futures contract, the market is pricing and reduction in the funds rate and out years, which will point out matches the feds -- in that regard, the market believes the fed is said to raise rates aggressively. we have seen the curve continue to flatten, so if the fed had no credibility and inflation were to run away, inflation the next 10 years, presumably, you would see or of that pricing in the long end. there is not a complete loss of readability. what is critical is the fed being clear with communication and following through on their plan. jonathan: always good to hear from you, thank you. seth carpenter of morgan stanley. the forecast of december 16,

this is what they have penciled in for 2022. the fed funds rate, 0.9%. this year, year-round. the core pce, they were at 2.7%. this year, year end. you are right, damien, that has changed in a massive way. for 2000 when he too, they see fit funds at 34, core pc at 43, headline pca debt 5.2. a big change. this fed has been struggling to forecast forever. forever. damian: the fed is chasing inflation, running out of good options and intensifying asset price volatility. this is the federal reserve we are talking about. i agree. credibility is an issue, it is going to take time to win it back. jonathan: you cannot forecast a war. it has had an impact, exacerbated things when it comes to inflation, specifically in

energy. the inflation story through the whole of last year, through the back end of the year. lisa: we got revised employment numbers that rejiggered how strong that employment market was. it has been a difficult market to get right. it is easy to cast stones, except for when you are in a house. this is a credibility issue for a market searching for direction. jonathan: we are throwing rocks at them. smashing windows. lisa: i have empathy. jonathan: you have empathy for the fed? the way you spoke about the fed the last 15 years, you expect me to believe you've got empathy for the fed? lisa: for how challenging this picture is. jonathan: no one believes you. you do not believe it. lisa: come on. jonathan: this is bloomberg. ♪ ritika: a new governor to lead

the sixth central bank at the end of the year, marks 17 years of steering monetary policy. he will be succeeded by -- who heads the swedish financial supervisory authority. the news comes as he has made a momentous policy shift, the central bank is addressing a surge in inflation. -- expressed interest in acquisition of abn amro bank. bloomberg learned -- biggest bank has reached out for a meeting with the dutch governor to discuss. 18% on the news, negative interest rates way on results and executives waited for programs on a banking union in the block. airlines working hard to convince passengers it is safe to fly, but having a tough time to convince staffers to do the same.

officials facing an unprecedented neighbor crunch resulting in long lines, delays and cancellation of hundreds of flights worldwide. the staff shortage is sure to be a topic of discussion at the national transport association meeting. global news 24 hours a day, on air and on "bloomberg quicktake." i am ritika gupta. this is bloomberg. ♪ zero-commission trades for online u.s. stocks and etfs. and a commitment to get you the best price on every trade, which saved investors over $1.5 billion last year.

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( ♪♪ ) what can we expect in the coming year? this has been a record- shattering year for m&a. five trillion dollars in deal value. and we're still very bullish on the deal market for 2022. in this kind of climate, what are you advising clients to focus on? we really think companies need to elevate their risk management processes and also scenario planning. what's your outlook, kim, for the 2022 labor market? organizations really do need to take a pivot on their lens of their people and talent from a cost center to make that a value creation center. for key insights into what matters today and what lies ahead for business, this is real time business with ey.

>> i am concerned global inflation may creep into japan. jonathan: he is a sharp dude. bridgewater co. cio. futures up .9% on the s&p, up a

couple of basis points on a 10 year. the japanese yen. what a mess this is becoming for the doj. lisa: the only recognition was a new line in their statement that came out, they were aware of yen depreciation as a potential headwind, a potential risk factor. it seems they were going to commit to this rate pegs that most people say is unsustainable. jonathan: i'm calling this operation: ostrich. damian: i think the bank of japan, they were plain and simple. they are targeting the cheapest to deliver contract, and are acknowledging the fact that the fx is an issue. the last time the pog -- b oj intervened was 1994. kriti: you have led me to where i was going to go, a two line

charge to the horror of tom keene. stick with me. we are looking at jgb yield, bouncing off against that key 25 basis point level. also looking in the context of ian swap. divergence is key. these are two lines that move together, move in sync. the last couple of months, you start to see diversion to the point the yen swap is getting higher and higher, weakness getting stronger and stronger. one thing to be concerned, do we touch 135, not just 135, the record high, the 23 year high of 135.59. that is what seems to be in play if you do not see the doj remove -- boj remove their stance. they would tweak her stance in light of not -- they are stance in light of not doing that. jonathan: a ton of weakness. let's carry that story with global head of current -- how

sustainable is the policy stance? >> i agree with your previous guest, there is stress is popping up in the jgb market. they have unlimited firepower. you made a comment, ostrich in the sand. they are the swing -- swiss national bay, that is saying something. we tight back with currency, they can express all they want about the currency. i keep going back to the possible trinity, you cannot have three capital flows, independent policy and target the exchange rate. with zero rates, pre-capital flows, that exchange rate is going to the moon. the 147 and change hi from the mid-1998 is the next target. lisa: what is going to stop them and be the trigger if it is unsustainable?

win: the yield curve control, a target 10 year yield in the sphere of high and rising inflation in the sense, it sticks out. it is sustainable, but they have to acknowledge the laws of economics. it is unnatural to keep rates targeted at zero when inflation is running so high. many of your previous guests, the doj will change, they will do it on their own terms. i do not think the market can force them into this, they have unlimited firepower. if there is dislocations in the jp market, so be it. i think it is a strong statement they maintain their current stance. placing lip service to the currents. there is nothing they can do about it as long as they maintain this ultra dovish policy and monetary version is the main driver for fx markets right now. damian: let's talk about the hawks, brazil, chile, the czech

republic. giving stimulus back into their economies and cutting rates. win: there inflation story is not going away. i think her is hope that some inflation measures are topping out. obviously, this ground war in ukraine has gone on much longer than many anticipated. food and energy prices remain elevated. it is going to be tough. we saw a shift in brazil earlier, they have been hinting that they are at the end. they were explicit that this tightening cycle is likely to go one further. the soft straw market has reacted. it is tough. it ties it in with the globally quiddity -- liquidity story. a rock and a hard place, they would love to ease, but global monetary policies are

tightening. it is hard to lean against what is a global trend. it is going to be a rocky road for markets the next six to nine months. damian: will we see the end of the cycle after the fed? >> non-dollar bonds comprised over half of the $59 trillion bloomberg global aggregate bond index. talk to me about king. what is it going to take to not king dollar off -- not king -- knock king dollar off its pedestal? win: the fed is the most aggressive to go to zero and crank up the machine. if and when, a recession will happen at some point. i do not see one for the next 12 months. if and when it happens, the fed is typically aggressive and will start the cycle -- lower

interest rates, etc. and will start the cycle again. the next 6, 12 months, the fed is continuing to tighten, the end of the tightening cycle remains in sight. remains robust compared to the u.k., japan. it is all about the relative story in fx. despite the worries about the u.s. economy, what stands out as the most resilient and prepared to deal with any issues. jonathan: awesome to hear from you. you mentioned at the end, the u.k.. do you since the currency is becoming more em like as the weeks go by? damian: you are opening me up to this. there are only four of 21 emerging market currencies that are up here today. 16 of the 21 are up year to date

in euro terms. yen, 19 of 21 are up-to-date. i am not diverging markets, looking at em currencies, saying some of them are winners and losers. it is not true in dollar terms. jonathan: top of the next hour, we catch up with jonathan of credit suisse. the median -- is 46.50 on the s&p 500. yes, it is still 46.50, 1000 points above where we closed yesterday. lisa: the fed base case is 4750, bear case is? jonathan: jonathan joins us next. ♪