>> north central bank wants to engineer a recession. >> a lot of countries are plain catch up to get inflation under control. >> the fed is going to have to be aggressive. >> at this point, i do not think a recession is yet inevitable. >> this is "bloomberg surveillance." tom: good morning. an important wednesday for the chairman of the federal reserve. he will -- the inflation, the

union -- inflation in the united kingdom, 9.1%. there is no other story. lisa: it is the input prices indicating you will see further inflation. we have not seen peak inflation for the global economy, that is concerning central bankers around the world. tom: jon ferro is off for a three week sabbatical. kailey, they go headline inflation, and go, jerome powell, i look at core inflation. today, it is going to be powell, core inflation, politicians, headline inflation. it is simple. kailey: powell talked about, consumer feels headline inflation, higher prices at the pump, higher prices at the grocery store. that is what the fed is going to be responding to. you look at a day like today where you see commodity prices coming down because of demand concerns, growth concerns, does

not make the fed's job easier. it brings the headline down. tom: enda curran in hong kong publishes the world's bubbly is housing market. kailey: it is global in nature under this global underpinning, this idea of how many years can we have a flow rate policies fueling housing bubbles when we get a reversal of that, how painful could it be. lisa: if you get financial markets --does that mean a deeper recession? i do not know if i buy it. you are not seeing housing prices rule that much. there isn't that much leverage, but nevertheless, a concern. tom: the united states up there with new zealand, topping out. czech republic at 100. a lot of stuff to talk about.

the basic idea, matt miller was talking a recession angst. i do not know if i buy it. is it angst, or we have no idea, uncertainty? lisa: this is the moody's summer ever. the most existential, moody. we both have teenagers. we are looking at scenarios where bonds and stocks are not selling off in tandem. bonds are rallying, stocks are selling off. this is a more traditional relationship having to do with some sort of inflationary or recessionary environment, i find that interesting. tom: commodities off the nine year, lonely, saying oil may pull back. 124 brent, reaching 110. lisa: you are seeing it across the commodities complex and metal. dr. copper, not well. tom: recession angst.

lisa: you are seeing that concerning commodity prices. kailey: gains of yesterday are not holding. our producer pointed out, in the last 10 days, we have seen a gain of 4% or more on the s&p 500. we cannot hold onto a rebound in this market right now. tom: data check, -58 on spx. nasdaq, i have got to get the official surveillance, negative. the vix on the 30 level, advances out more angst. dollar resiliency, that is where i want to go. 104.47. yen, 136. a huge talking point, the international economics, euro is

1.05. >> today, we are hearing from fed chair jay powell at around 10:00 a.m., how does he address the fact that consumer sentiment is in the gutter? tom: that is a killer chart. lisa: we see the lowest consumer sentiment going back in history, some argue this doesn't accurately reflect the core inflation that the fed wants to look at because it counters some of the issues with gasoline prices. nonetheless, it is clearly factoring into the fed's decision, especially given the fact people are expecting a stickier inflation over a longer period of time. today, we hear from fed officials, you should be happy we have all of the fed speakers back. getting back up and giving insight into what to expect. i am watching the dollar. tom, you mentioned the dollar

strength. at what point does this become a liability for a federal reserve that does have an eye towards international stability? this is going to be disrupted as some of the world grapples with the same issues of the united states. given the fact they will have to be importing more inflation from the united states if dollar strengthens. president biden is expected to speak on a proposal to suspend federal gas taxes, how much does the spring the price of gas down? it is $.18, a lot of people have come out against it to say it will only increase demand and counter the decline in pricing you see. very controversial. how much support will he get from the democratic party? tom: the tax differential we see between europe nation to nation and what we see in the united states, state to state. william dudley will join us in the 7:00 hour, the former president of the new york fed.

his essays hearken back to his magnificent work at goldman sachs years ago, he released one this morning. we begin this morning with -- yes we will talk about the yen, but bill dudley says economic history and a hard landing. he is predicting a hard landing. what does the dollar do if there is a deadly hard landing? >> you talk of history, history is clear. if the u.s. economy finds a hard landing rather than the goldilocks outcome, the dollar rallies. that is happening while the rest of the world is slowing, that will lead to that dollar bid. i think that is straightforward. lisa: are there any other

havens, any currencies that will get a bid? >> there is hope for the yen. what is combating at the moment is u.s. yields. and we are in a risk of mode, lower u.s. yields, treasuries. again, looking at history, in period's where you see the rising, that supersedes any yen safe haven. if you're thinking, we have peak -- we do not have to worry about eight u.s. recession, global recession, the yen is priced. lisa: you are saying the boj may not have to given if it doesn't reach that point? daragh: we mentioned boj recently, some members wanted it to be more explicit. monetary policy is not a bad

target in the exchange rate. it is the government, the and ministry of -- the administration of finance, they hold the trigger on currency intervention. from the boj perspective, in isolation, it is inflation. they are still low, and hard for them to offer rationale for why they are giving steps or talks of a tightening phrase -- face. tom: this is important, all of a sudden, or i should say, suddenly, philippine peso, there is a distraction on the election in the philippines. gives way. is em in the heat of june giving way to a new velocity, a new weakness? daragh: eh. i think volatility is part of

the global deal at the moment, emerging currencys struggle when you got the stronger dollar and a fed that is tightening. a lot of the ingredients are there on a macro scale, to pressure em lower. philippine pesos, they are currencies we see that have been much more cautious. there are potential outliers in emerging markets. i think you have got to pick your battles in em, there is not a one-size-fits-all there. the macro backdrop is challenging. tom: thank you, a great brief to get us started today. i want a brief on the william dudley column, you have taken a look at it, lisa. he has been heated, he was phenomenal on our fed show with

a statement on where the terminal rate is. this morning, no exception. lisa: the line says everything in the lead. a recession is inevitable within the next 12 to 18 months. the former new york fed president saying falling back to earth will not be pleasant. it seems like it is the inevitability that we are facing over the next year or so. tom: this is the berkley phd who did market economics and some would say invented modern global -- goldman sachs economic. paragraph by paragraph, how scary is this board. this note reads like a goldman sachs note 30 years ago, paragraph by paragraph. lisa: it is in response to edward from yesterday. perhaps, there is something more vulgar-esque.

tom: the toxic brew of this recession. team economists wrestling. [laughter] stay with us. this is bloomberg. good morning. ♪ ritika: president biden wants congress to do something about soaring gasoline prices. bloomberg has learned he will call on lawmakers today to enact a gasoline tax holiday. average gas prices in the u.s., around five dollars a gallon. federal taxes make up a little more than $.18 of that. it is not clear how long the president wants to cause the tax. in the u.k., inflation risen to a new high. prices rose 9.1% in may from a year ago, there were broad

increases in the cost of everything from fuel to food and beverages. there were more fines in inflationary pressures building at the wholesale level. china bowing more policies to boost the company's covid battered economy. the economy will speed up the sale of local government bonds. cabinet urging banks to increase leading for -- lending for infrastructure products -- projects. the senate has voted on a measure called the biggest breakthrough in a decade, designed to approve background checks securing funds to combat nonviolence. bitcoin resumed its fall, above that key $20,000 threshold eared for months, crypto's had been moving in the same direction as stocks big moves were no exception. appetite for risk assets have

been falling amidst the fears of global recession. global news 24 hours a day, on air and on "bloomberg quicktake." powered by more than 2,700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪ if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen...

and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity. how will your business adapt to change? for smarter trading decisions, you could hire an office full of peyton mannings. what's up, peyton? good morning, peyton. hold for peyton. they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world.

>> we need more money. we do not just need more money for vaccines for children, we need or money to plan for the second pandemic. there is going to be another pandemic. we need to think ahead.

that is something we have been doing fairly well. that is why we need the money. tom: the president of the united states on one of the myriad tasks he has in june, a lot of people saying he is overwhelmed with any number of topics. all of them pushed aside by possibly this afternoon, 2:00 p.m.ish, there will be a reduction in the gas tax in new york, montana, and new mexico. anne-marie horton has visited those states and joins us, futures -52. brent crude off to 109. i have never seen this. i guess i can summarize, the reviews are scathing. this once again is about the operational process of mr. biden's white house. it seems to be chaos. what does he do today? annmarie: today, he is going to

ask congress to get rid of the 18 since you pay for federal tax on a gallon of gasoline. obviously, this is something the administration is feeling the pain from. this is showing up in the polls, head of the midterm election. the issue is, congress is not going to act. you do not need to be human to think congress is going to move on this. for months, they have been talking about this. if democratic leaders, not just republicans, happen throwing cold water on it. tom: it has been a rough wednesday. i want to cut to the chase. i am less interested in the gas tax, more interested in the process in the white house. i cannot see this in eight of the last 10 administrations. how does this get vetted if not only greg valieva but many others take dead on arrival? annmarie: with the prior administration, there were concerns about how those processes move through the oval

office. what i think recent reporting bloomberg had really showed was that there was a small huddle, especially when it comes to economic issues, the first nine months of the president's administration. we learned secretary yellen was not invited in by ron klain to some of these cuddles. it does seem like there is a small group of individuals, most notably ron klain, and the president talking about these issues. the issue with today, this is very much so performative. this is the administration trying to spin inflation, trying to do something because we know this is hurting consumers at the pump. there is no substance. kailey: it is performative and failing at the performative aspect. it is jason furman of the clinton administration, people coming out with scathing reviews, wholesale. lisa: what is this performative exercise for? who is it going to be successful towards? tom: how come lisa asks clear

were questions than i do? lisa: at what point does this highlight the desperation in this administration? annmarie: we do not know yet exactly how the public, the everyday consumer is going to think of this. if you see a headline, biden acting on congress to get rid of a tax, you are not looking into the details of that, potentially, that is a democratic voter that says, i like what the president is doing. he is trying. again, they are trying to be seen as doing something right now. there is not a lot they can do in this market to bring down vaseline prices. that is first. it is going to be about making a speech, calling on congress, hoping the headlines get out. it is not going to happen. >> the administration is running out of cards to play, get continuing to coax energy players to pump more oil with constrained supply. they are meeting with oil

executives tomorrow. biden is sparring with the ceo of chevron. can you swear these things for us? annmarie: that was a moment yesterday, jennifer jacobs asking for the president's reaction to mike werth's letter. mike was saying there needs to be a different approach from this administration, we have done the work, the oil industry. he says this administration is vilifying and criticizing them too much. the present said, -- president said, he is mildly sensitive. i didn't oil executives couldn't handle this. he called for more refining capacity. we have not had a refining capacity or money capital investment in refining capacity before the pandemic, the same ceo told alix steel a few months ago he doesn't think another refinery would be built in the united states. the president is trying to get

houston on board, he is trying to get the permian to pump more, and calling them out. tomorrow's meeting is going to be interesting. lisa: is there anyone in the administration who is saying the approach to russia and tanning oil from that nation hasn't worked -- banning oil from that nation hasn't worked? annmarie: this cap on oil prices, russian oil could make it into the market. but, russia is not reaping the benefits of the prices we are seeing. this is something the president energy secretary said to us very early on when russia invaded ukraine. it was the fact that, not just you are taking russia product from the west, but that putin can still sell that same oil to china and india and get a premium. what did russia make last month according to the iea? $20 billion filling their fossil

fuels. tom: thank you very much. we have got to take time on the various strikes and rumblings of strikes in the united kingdom. you wonder, the largest train strike in 30 years, complete chaos in there. airlines, as well. does that come across the atlantic into a more fractious labor environment in the united states? lisa: especially if you have policymakers saying the inevitability at the unemployment rate is going to go up, and the consumers dealing with higher inflation, needing higher wages to keep pace with where prices are. there was an article highlighting how a lot of companies advertising job openings are removing those job openings. it is not necessarily job cuts, but after not being able to fill those roles, they just let them go. tom: you wonder on the cpi,

ferro does this better than me. there is no question about that. i am looking at cpi, pce did -- deflator, june 30. gdp noise, july 13 is the next cpi report before the july 27 report. that is going to be important. 8.6% is the survey number. kailey: what if it comes in hot? is that the deciding factor between 50 and 75 basis points for the federal reserve? that is not the only data information we will be getting until then. tom: it is a long ways away. 8.6% headline, six-point sent -- 6% core cpi. this is bloomberg. good morning. ♪

to finally lose 80 pounds and keep it off with golo is amazing. i've been maintaining. the weight is gone and it's never coming back. with golo, i've not only kept off the weight but i'm happier, i'm healthier, and i have a new lease on life. golo is the only thing that will let you lose weight and keep it off. who loses 138 pounds in nine months? i did! golo's a lifestyle change and you make the change and it stays off. (soft music)

tom: good morning. "bloomberg surveillance." thank you for being with us. what time is jerome powell? lisa: at 10:00 a.m. the testimony begins. tom: i am glad somebody is up to speed.

these are important comments. i would suggest, we talked about this yesterday, futures at -51, but yesterday we touched on this, the emotion over a longer weekend -- over inflation, it is tangible. lisa: yesterday there was a sigh of relief. today it is not nudgy. people are pricing in the inevitability of inflation. tom: there is the important conversation of the day with lots of years of experience, margaret patel at pioneer for years, now all spring investments, is brilliant when it comes to shifting to equities. we have never seen a bear market in bonds like this. the bloomberg total return

high-yield series is down by 13%. i will call it three years, and i will let you correct me on that. but forget about the genius of margaret patel in equities, what do you do in bonds to recover from the emotion of trying to catch up by clipping coupons? margaret: what you do, because of the huge correction high-yield and investment-grade, is weighted out. at least you are getting the coupon income. and we have the promise down the road because eventually the whole bond universe is trading at a discount, we could have capital appreciation back to part of the fed decides to reverse their course here. tom: you are on the adage, looking right now -- it's clipping coupons and you will get a gain at some point?

margaret: that is right, especially in high-yield. you have had a correction, not because of credit spreads, but treasuries. bond prices have gone from 103 for the average high-yield bond are to about $.87 on the dollar. that makes more return, about 7% to 9% for those decent companies with positive earnings. lisa: are stocks the head you thought they would be? margaret: i expected they would go down. the most vulnerable have gone down the most. the thing is, even if you do not own the spacs, the small companies that were able to come to the market, that could still rule over the other market and affect everybody's risk budget. and that is what we are seeing, it is rolling through two other sectors and people are fearful what will happen to the economy. lisa: we just had summer begin.

this is a reset moment where people take a look at the 20 plus plunge in the s&p and the massive disruption in the bond markets, and pimco is saying bonds are holding value now, more so than in decades, and look at them versus stocks. are you leaning toward that assessment? margaret: can high-yield, when you look at yield at 7% to 9% with 10% or 12% discount from face value, if you think it will do single digits to low double digits over the next 18 months, that makes high-yield bonds look competitive, assuming we do not have a big jump in defaults. it does not look like we will but we have not seen the fed complete their tightening, so it is not clear how much it will move over into the real economy. lisa: but because it is indirect wednesday, just to follow --

interrupt wednesday, just to follow that, is this still a moment where the stocks offer a better hedge, even after the losses? i do not want to say contagion, but the overleveraged areas of equities. margaret: i think so because the yield is a lot higher. and also because the yield is at about 400-6 hundred basis points more than treasuries, the investment-grade bonds are very sensitive to treasuries and trade at a small yield premium, so it is a bet on what treasury yields will do. with high-yield you are getting an equity like return. so that looks like a pretty good deal if you are a little bit nervous and you do not want to wait out what we will see with bonds and of the equity markets. lisa: there has been a relationship for some time where you see them go up, it puts

pressure on equities, especially those that command higher multiples. now yields are coming in, but it is because of growth concern. could that be a supported factor for the equity market? or is not more downside for equities? margaret: i think so far in the equity correction, but we have seen mostly is erosion in the price earnings ratio, up to 16 times earnings going forward, rather than people saying, oh, they are going low. what we are looking for as we see the quarter results, which will be in a few weeks, is companies talking about lower earnings, which could cause pe compression ending macy's stocks go down, clearly you have a bigger cushion with the pe's having gone down so much in the better parts of the market. kailey: i am looking at the nasdaq 100, trading at a

multiple of 30 at the end of last year, now down to 20 times. . where do you think it is safe to find an entry point? margaret: i think this is an attractive level because the average stock is down by up to 30% on the nasdaq, the price ratios are more reasonable over a longer time period. the question is which companies will maintain earnings? but still, with so much speculative money, that could rollover into the big quality names, too. tom: is 60-40 dead? 60% equities, 40% bonds -- is it finally dead? margaret: i think so because since the financial crisis a decade ago, and now, the fed has

discovered they can control interest rates and they seem to like to do that. i do not think they will ever want them to follow where the market wants to see. they'll be lower than anything we have seen in the past. tom: margaret patel, thank you. a lot is going on. we are watching yen, 1.36619. one of our interns sent in a note, you have to pay attention to deutsche bank. it's from lisa. oh, lisa -- what are they saying? lisa: i am looking at his comments about the likelihood of recession, a 50% likelihood for a global recession. also, how the inflation we are

seeing is a threat to democracy, which needs to be countered more dramatically. he's confident that there will be something to combat this. he also talks about a banking union in europe, mergers, and the idea of consolidation to weather the storm. we are looking at a new landscaper you have a growing number o executives saying thatf there is a greater than 50% chance of a global recession. that is the feeling on the tape today. tom: for the american audience, and i met him in davos, the only equivalent i could think of in american banking is brian moynihan. he's steeped in the retail experience. and this headline is not temporary inflation. it's the theme of the next 90 days, isn't it? lisa: chris in savings has a leg

up and that he took deutsche bank, when they expected it to be taken by another banking entity, and made it viable in a way that people had not imagined. he was heralded as bringing this new dawn to the bank. that's in the air, given the existential threats to the entire economy. however, looking at how the bank executives are gaming out recession, in the u.s. and europe, by the second half of 2023 -- that's a game changer. the new discussion is how deep will the recession be and how do we climb out. tom: it is simple, there is a headline buried on the bloomberg -- taking a look at esg after greenwashing allegations. if you missed the discussion on

crypto yesterday, you can see it on our digital platforms. how dead is esg right now? kailey: the problem with esg has always been how unclear the parameters are and the concept of greenwashing, saying things are green and they really are not -- tom: is that what it means? kailey: it is the idea that you are not making as much of a difference as you say you are. until you get the metrics, it is very money. this is a problem at dws. we saw this several weeks ago. i would know it is not just about the e. there is also social and governance. remember when we saw tesla get kicked out of the ascending -- out of the esg index? it was having to do with social and governance.

tom: futures -55. the vix at 31.26. it's a toxic brew of angst this morning. this is bloomberg. ♪ >> news from around the world. president biden will call on hong kong -- will call on his administration to declare a gas price holiday. paragon is around five dollars on average in the u.s. is unclear how long the president wants the tax to be not enforced. supply chain issues lasting until the end of last year.

and it is not the industry's only problem. >> we have a very large, sophisticated and somewhat fragile supply chain behind the airplane manufacturers. just as fragile are the operators themselves, the airlines, and the ability to staff with pilots. >> he was interviewed at the qatar economic forum. and the richmond fed president is going on central bank is raise rates as fast as it can, as owns it does not cause undue harm. go as fast as you can without breaking anything. fed policymakers raised by 75 basis points earlier this month, the biggest increase since 1994. in afghanistan, 920 people have been killed and hundreds injured in a powerful earthquake. 6.1 was the magnitude of the

quake that hit the country overnight. the government hasn't sent rescue teams. -- has sent rescue teams. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg.

>> we are seeing signs that financial conditions are weighing on economic activity already and we think that these signs are likely to intensify. we are getting the sense housing is feeling the pinch of tighter financial conditions. tom: at barclays yesterday, we do this with the median price in the u.s. taking over $400,000. i can equate it to dow 10,000. it is just a huge number for those tracking housing.

in the last 20 years in the u.s., the median price was up in the last 10 years, 1990-ish, up 4% a year. in the nearest 10 years, up 8%. so there has been a real adjustment, from 4% to an 8% year again. and enda curran in hong kong has done a global study of your biggest headache, rent and housing prices, and it is absolutely definitive. let me ask one question, how bad is it? enda: it is worrying, because what we are seeing is potentially a reversal of the huge gains we saw in the pandemic when there was very little borrowing costs. interest rates are still low. central banks are bringing of their interest rates. and households are trying to pay

back their mortgages. it certainly is a significant potential headwind for an already slowing global economy. lisa: this is not necessarily going to be the bottom falling out, because there is not the same type of leverage, there is not the same shadow banking system fueling the growth of houses for the flipping of them. at the same time, give us a sense on why it is more painful when the housing market does not cooperate and cannot be fueled by the same type of monetary policy that has already been used? enda: there are buffers now, beings are and better conditions, and labor markets are strong around the world. nonetheless, we are in the middle of a synchronized monetary policy tightening cycle,, the likes of which we have not seen for decades, and there will be in inevitable impact on mortgage costs.

that will flow through to consumers by denting household wealth, it will hurt their confidence and flow into activity around construction. we know real estate is a big multiplier in any economy, they are the core of economic activity. and you will see a slowdown, even without a crash. and that will come on top of everything else going on, which is a subdued consumer because of inflation, the ongoing supply chain problems. and so i think it is the last thing that mobile policymakers -- global policymakers need right now. kailey: wouldn't it be helpful that once it starts to lead to more demand it will help with the inflation problem? enda: exactly. the idea is central banks do want activity to slow down. when you have selectivity, the

thinking is it will slow down inflation and you have the fed officials going fast, but not breaking things. that is the crux of this. first-time homebuyers have been fueling a crisis, but can they cool inflation without sending the economy into a slump. we have done the hard numbers on this. there's 22 economies that are vulnerable, including canada and the u.s. some central banks see potential for a material correction in their housing prices as interest rates go up. it will be a tricky balancing act to have the price is off of an unstable place -- pace. kailey: new zealand, canada, the u.k., czech republic and

hungary, which is the most vulnerable or looks the most vulnerable to something more systemic emanating from housing? enda: probably new zealand is a standout but each has their own pockets of vulnerabilitys. and a lot will depend on how aggressive the interest rate hiking cycle ultimately proves to be. if we reach a point where it's clear inflation has peaked, then that's the point where the central banks will ease up. but if we go until the end of the year, the expectation is it will have a material impact, because it is the lag effective monetary policy and it takes months. tom: what do they get right? enda: we will find out if they are getting things right. we have already seen in the

cycle at the moment. we have to give it time. six months, one year from now it will be cleared out. and we will see what sectors are in good order. we are still early in all of this. tom: that is research from bloomberg economics reporter, enda curran. to me, it is like jonathan miller taking manhattan and distilling out five boroughs -- or taking new york and distilling out five boroughs. lisa: eventually, it will bring down inflation because eventually lower housing prices will translate into lower rents, and that will be a big decompression for some of the inflation. the concern is that there is so little housing versus demand that even if you get housing price declines, rents are still climbing at a record pace in some areas. i'm thinking of 40% in miami,

year-over-year. given the fact that is not the supply, and that people who would've otherwise been buyers can no longer do so at a mortgage rate of 6%, rents will only climb further. this is a huge concern to so many economists seeing pressure on the cpi. tom: we can talk about idiosyncratic, like the turkish lira is idiosyncratic, but i would suggest region to region, city to city in america, this is highly idiosyncratic. kailey: that is true, you talk about the five boroughs in new york. i live in brooklyn, because it has become so expensive in manhattan. matt miller recently purchased a house in westchester and he was like, move up here, get a yard for the dog. i cannot afford that mortgage. it speaks to the catch 22 people

are facing when you have higher mortgage rates, and rents are also high -- that's the problem. tom: i think the mortgage rate, lisa said 6% up, we are there in a matter of days. lisa: it is exceeding 6%, this is why people cannot get the same kind of mortgages. they are not getting approved. then they decide not to buy and they rent. tom: we will follow this on bloomberg surveillance. it's not the market, bond dynamics -- the 10 year yield at 3.22%, there, that is my bond coverage. lisa: [laughter] tom: which hotel is ferro in? this is bloomberg. ♪

>> no central bank wants to engineer a recession. >> countries are playing catch-up. >> i think the fed will have to be aggressive. >> i think that the chances going up every time the fed moves. >> i do not think it is yet inevitable. >> this is "bloomberg surveillance." tom: good morning. jonathan ferro, lisa