>> tightening financial conditions as part of the fed's solution to the problem which means the market will go lower. >> we are not seeing any elevated sides of credit risk that would suggest a problem. >> there is a path to a soft landing. it is perhaps narrower than many of us would want it to be. >> the probability of a hard landing, i'm not convinced we are priced for that. tom: good morning, everyone. not your average wednesday. economic data tomorrow, but economic data in one hour, francine lacqua speaks to the world's central bankers. jonathan: chairman powell, governor bailey, christine lagarde. how much will they tolerate higher inflation and for how

long? 5%, 4%, 3%? tom: david rosenberg with a blistering note out of toronto, saying let's go. this is the frontloading concept. let's get it done, raise rates to get the first tranche of inflation slowdowns to happen. jonathan: loretta mester on board. mary daly onboard. 75 basis points all over again. it is not just about the fed and now, it is the ecb, as well. art us up for 25, will they have to go more? we had a little bit of a lead into that from the regional cpi print out of germany, looking for that downside surprise. we get the headline number this friday. tom: double-digit inflation in spain.

it leads to the tea leaves, brent crude exploding out 115 to 119. lisa: a different story from last week when people thought there would be an economic downturn that would reduce demand for oil. that lasted about five minutes, as people realize the market was tight. i want to pick up on something you said earlier, euro-swiss. you see in moving back just a bit. how much does the ecb dovetail this nuanced picture of inflation, economic picture in europe with a call being hawkish enough to support the euro? how much will that be the main theme out of this panel? tom: let's get a data check. kit juckes will be joining us later on.

jonathan: a bit of a lift. up a third of 1% on the s&p. yields in a couple of basis points. 3.25 on the 10 year. largely because the data has not been great stateside over the last few weeks. tom: what do you make of the german inflation number? jonathan: there is a story about travel and train tickets there: things lower. does it change the mood music? i think it just changes the volume, not the track. tom: erin browne is the multi-asset strategies portfolio manager and is with us.

no one i know is as invested in girls as you are in finance with girls who invest. you have put some quality time into that. tell us where you are now with that getting more women into the business? erin: we have spent a lot of time trying to build a pipeline for more women. tom: 7, 8 years old? erin: we are starting with sophomores in college, prompting them to be prepared to enter the workforce as they move into their junior and senior years, really look at the industry holistically to attract women as investors into the business. not just looking to hire women into finance but specifically as investors. tom: this is about enjoying losing money early on so you become adult at it. lisa: when you talk to

individuals that come into the market, how do you frame the moment at a time when uncertainty seems to be the catchphrase for everyone? people looking at potentially a new paradigm for inflation and growth. erin: that is really what we are seeing right now, the transition point in the market. this is a market unlike any we have seen before. these growing pains and volatility creates opportunity. we have seen real violence in the markets year to date but we are now getting to levels particularly outside equities, fixed income market is the most attractive it's been in a very long time. 10 year bonds yielding upwards of 3%, cash rates offering pretty chunky yields. it is the first time where you can feel like fixed income offers value in the markets. lisa: pimco has come out with

this call that there is even value integration. i wonder how you frame this out in terms of near-term versus long-term bonds, where you would go for duration? and how much are you fully invested? what is your conviction in this fixed income call? erin: i would not rush into buying blindly now. we will still have some pain as inflation stabilizes. we're looking to get much more bullish in terms of buying fixed income, seeing inflation stabilizing rollover. we are not there yet. we probably have a couple more painful months. that said, you can look at duration more attractively as you own against a broader multi-asset perspective, given the fact that from a correlation perspective it is starting to be more negatively correlated to

risk assets. ig bonds are starting to look pretty attractive. high-yield has given some of that negative convexity in owning those assets, more downside to go particularly in the risky credits. ig, high-quality duration bonds, i would start to dip my toe in now. lisa: to get a sense of the timing, how you see the fraternity arising, you would dip your toe in now but remain in cash, remain in liquid fixed income, and then wait for what before becoming fully invested in fixed income? erin: owning a little bit of cash, corporate, owning a little bit of duration makes sense as highly liquid instruments. as you see inflation crest, that is when you will want to buy fixed income more holistically within your portfolio. the one thing i would say, you

have been in a market where duration has been selling off as a result of inflation, but we are coming to a point where each basis point higher in inflation is really tipping the scales of the u.s. economy closer to recession, albeit a shallow recession, but it is getting closer and closer. at this point, we are quickly moving from lifecycle into recessionary conditions. that is when you want to increased fixed income in your portfolio. tom: there has got to be a tipping point on inflation where you act. pimco has been incredibly active on this. is that headline inflation or some custom core inflation index you have? erin: we have a custom core inflation index but right now

what is impacting the consumer is necessities. shelter, food, inflation. tom: you link those into your financial instruments? erin: you have to. tom: tell that to jerome powell. does he? i don't think so. erin: and that is why you have the fed tightening into an earlier than expected recession. that is what is hitting the pocketbooks in terms of consumers right now. you have already started to see non-necessities rollover in terms of inflation.inflation keeps on ticking higher on those necessities. that will create a shallow consumer recession. i think we have already seen retail goods, durable goods spending rolling over. that is an early canary in the call light from what is to come in the broader economy. jonathan: awesome to hear from you, erin browne.

amazon recession, consumer? tom: erin browne got all of those girls into that austrian piece, and they are down 70%. jonathan: loretta mester has just come out with some interesting remarks. we have written up a story, so allow me to redo a paragraph. that research shows it is more costly to be wrong about inflation expectation to be well anchored when they are not as opposed to being -- that tells you where they see the balance of the risk and why they are looking to frontload the effort. tom: i mentioned this yesterday. this is going to be a huge debate.

going back to jackson hole, 2005, the confidence we have in inflation. lisa: front loading. expect that to be the word of the day. jonathan: in about 48 minutes, you will hear from chairman powell, president lagardere, governor bailey, sitting around a table with francine lacqua. full coverage here on bloomberg. ritika: keeping you up to date with news from around the world, i'm ritika gupta. nato leaders are preparing to boost the alliances defenses in the face of russian aggression in europe. they want to establish a new force model which would put 300,000 troops on high alert. president biden says that u.s. will set up a permanent headquarters in poland. nato leaders are meeting in

madrid. the u.k. has imposed sanctions on russia's richest person. he is worth more than $37 billion. pressure is building more on european central banks to raise rates for the first time in more than a decade. inflation in spain has unexpectedly rose to a record of 10%. it dashed hopes that inflation in spain had peaked. a former white house insider portrayed violence. she says she was told the president tried to grab the steering wheel of his limousine after the secret service refused to drive him to the capitol on january 6.

global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg.

>> this is a of voelker-esque type of fat where they are focused on getting inflation down and they are not going to throw away 40 years of credibility. they will not throw that away just because the markets are telling them.

jonathan: he is not constructed on this equity market. we will hear from jay powell in about 40 minutes time. futures up a third of a percent on the s&p. downside surprise on german cpi relative to what we expected yesterday. once we got the regional breakdown, it was longer than expected. 3.14 the 10-year. i was reading through those remarks from loretta mester, really interesting stuff. this is a massive change at the fed and they are working through it in real time. the current challenging situation have contributed to inflation being at 40 year highs calls into question the conventional view that monetary policy should always work through shocks. in some cases, it would require policy action.

the world we have been in in the past 18 months. tom: she is the mathematician of the fed. john williams joints her in that ability, as well. but it speaks to these uncertainties. brent crude out there near 120. greg valliere is with us. we had an election with some real results. i want to go to what the democrats need to do to not focus inside the beltway and have a democratic party strategy across this nation. the new york times destroy the democrats this weekend saying they failed to go across the

nation in terms of organization. greg: i think there is the need for something more unified. maybe the abortion issue will finally get the party together. it has given them a catalyst, but you and the peas are right. there is a lack of strategy. tom: your note this morning on the governor of california. what does mr. newsom need to do? greg: i think he is running. he is starting to make noise like he may run. everybody is frozen in place right now because of joe biden. if he announces he will seek a second term, which i doubt, changes everything. if he doesn't, i think newsom runs. and don't shoot the messenger, i think hillary clinton make give one last thought for a run. lisa: say that again? greg: [laughter]

there has been a lot of speculation in the last few days that if biden does not run and the democrats don't have a clear favorite, she might hop into the race. she is 74, fairly young by today's standards, but i don't rule out one last run by her, if biden doesn't run. lisa: there is a lot to go on that line of questioning, but i want to go back to the task at hand for all legislators right now, which is try to deal with inflation, the primary concern for investors. social issues creeping up in terms of voters. is there any chance this congress could really take action in a legislative way in terms of financing different programs, offsetting some of the inflationary pressures, given the polarization you are talking about? greg: logically you would think the answer is yes. but logic does not dominate

washington. while there is a lot of talk about tariffs, other programs that might help a little at the margins on inflation, i don't see it. frankly, i think ukraine is more important. as long as this war continues, we will have high energy prices, high food prices. that is the bigger factor. lisa: if that does pereyra session, where is the fiscal impulse to respond? greg: typically doing the wrong thing at the exact wrong time, you will see congress get frugal. not a lot of spending. republicans will take the house, they don't want to spend money. just when you have monetary policy tightening, you'll have fiscal policy tightening, as well. tom: the end of march, 1968, lyndon johnson overwhelmed by vietnam among other things said

i am not running again. i remember it clear as a bell, a nation stunned. what is biden waiting for, or does he have to wait for march of 2024? greg: what you referred to with lbj, november 8, the election. if the house flips, which is likely, the senate is a tougher call now, but that could slip as well. that could be the catalyst to push biden out. it is not just his age, it is his pulling numbers and the elections on november 8. jonathan: that testimony yesterday. your view on this, does that change the support that the former president gets, or does that open the door wider for the governor from florida? greg: june 2022 be the month

remember that finished trump. it is not just that he has been indicted, that he has lost power in the party, but more of his own supporters are telling poll takers that one term is enough. we are not excited about him running again. that his is own supporters saying that. jonathan: greg valliere. music to the years of ron desantis in florida. tom: i read his biography the other day. down south he is really known within republican circles, but he has an extraordinary biography. i was quite taken by the history, the path he has taken, and then with all the notoriety and polarization in florida. it is somebody i have to get to know. jonathan: after that testimony

yesterday, will be talking about that. a certain panel coming up in 35 minutes time. a whole lot more on bloomberg tv. cannot wait for this. i have said that repeatedly for the last 24 hours. tom: some intellectual firepower at this panel. jonathan: ultimately it is about the other three on this occasion. tom: it is what they don't say. jonathan: yields in a single basis point on the 10-year. laser eye focus on crude. from new york, this is bloomberg.

jonathan: futures are positive .2% on the s&p 500. 30 minutes away from hearing from chairman powell, governor bill lee, president lagarde. it is one of those operant

things that you have to ask the other person question but people only want to hear from three of them. tom: that is the way that we are on this show. jonathan: the amount of hate that tk and i get. tom: euro-swiss through parity. 119.50 brent with a spread to west texas intermediate. netherlands natural gas, which i don't understand, other than javier bloss saying is important. jonathan: don't be too selective with the stories. yesterday we talked about china coming back online after easing some quarantine for travelers. xi came out and said herd

immunity, no thank you. let's stick to covid zero. that was a pretty strong statement. such strategies as herd immunity would lead to consequences that are unimaginable. stepping away from covid zero anytime soon? the leader of the communist party in china has other ideas. tom: there has been a little tick up in the variants, and the statistics. not concerned but something to watch out for. we welcome all of you on bloomberg television, radio. jon, are you going to stay with us until mine :00? 28 minutes away from the conversation of the year in central banking. francine lacqua leading central bankers.

we start the half-hour with jay bryson from wells fargo. i want to take the other side. something david rosenberg talked about. there can be high inflation and then suddenly there is not. world war ii, 20% inflation, down to the eisenhower disinflation. is there disinflation out there that we don't see right now? jay: i think disinflation is coming next year as the economy slows because of the central bank rate hikes around the world. the question is where you settle out in terms of the inflation rate. are we going back to 2%? i don't think so. what if we settle out at 3% in the u.s.?

is that that happy with that or do they think they have to get us back to 2? that will be the interesting question going forward. tom: posen advances the idea of 3% at the new level. you remember the modeling of 4% at the ecb, and he was taken to the economic cleaners for mentioning 4% as a viable goal. what do we do when we get back to 4% inflation? jay: what we will be looking at going forward is what the fed did in the 1990's, the first part of the century. they called it opportunistic disinflation. the inflation rate throughout the 1990's was 3.5%. that sounds high relative to the last 20 years, but the economy performed pretty well. what the fed decided to do was not put the economy through the

ringer. they called it opportunistic. when recessions came along and expectations came down, they went from there. i wouldn't be surprised if we settle out at 3%, 3.5%, the fed says that we will wait until the next recession to bring it back down to 2% or something like that. lisa: that was the consensus last week but it seems that we are getting some increasing angst about that, that the fed can step away once there is the right amount of it nation and then be patient. i want to go back to that loretta mester quote where she says fed research hints at a greater risk of not going hard enough with respect to rate hikes, allowing longer-term inflation expectation to become onboard. it is more of a risk to not be hawkish enough.

perhaps why she believes in a 75 basis point at next meeting. how much is this the new idea the fed, that they have to be more aggressive or. repeat of the 1970's? jay: interesting to see what the consensus will be. president mr. is on the more hawkish side of things. i think she would be closer to where bullard is right now. but there are other members of the fomc that told take such a hawkish view. what is john williams, chairman powell thinking right now? it will be interesting to see how this plays out. i don't think we are talking the difference between 12% and 2%. we are talking about, hopefully, the difference between 2 and 4. reasonable minds can differ there, but to your point, if people are thinking that inflation will be 7% over the

next 10 years, that is a different story. you look at the most recent university of michigan long-term survey, 10-year survey, that is still around 3%, maybe a bit north. i wouldn't say inflation expectations have become completely onboard at this point. jonathan: you have an inflation call? jay: we think we are looking at a mild recession sometime mid-2023. jonathan: what brings you to the conclusion, what tells you that if we get a downturn it will not be severe? jay: if you look at the underlying fundamentals, let's start with consumer balance sheets. they are in pretty good shape right now across the board. the household sector is not levered up. debt to income ratio is back to lower than it was before the housing inflation.

business balance sheets are also pretty good right now. the banking system is well-capitalized. i don't think we are looking at a 2006 sort of scenario, where the system was levered up, the banking system was not well-capitalized. the economy should be able to withstand all of these other sources of stress. that said, there may be things out there right now that not of us know about. the problem with recessions is, if there are cracks in the foundation, they tend to really wind. lisa: the counterargument to this, recessions are usually created, they don't happen naturally. economic expansion don't die of old age, they are murdered by the fed, and we are seeing that now. the fed will have to go so

aggressively, there could be a lot of downside because of how much the fed has done in terms of easing the past decade. what is your counterargument to that? jay: if you are looking at -- d id the fed kill the expansion in the early 1980's? yes. the real fed funds rate at that time went up into the high single digits. interest rates were extremely high at that point. i don't think we're looking at the fed raising rates into double-digit territory here. what we are looking at is session, but i would say it is benchmarked to the 1990-1991 recession. peak to trough then was 1.5%. in the early 1980's, it was 2.5%. the great recession, the

financial crisis, that was 4%. i don't think we are looking at those sorts of things. it is more of an early 1990's downturn we are looking at. jonathan: jamie bryson, thank you. looking forward to potentially recession next year. forgive my choice of words. bed, bath & beyond, the recession is here. erin browne said that the amazon recession is here already. bed, bath & beyond is down 15%. comp sales down 20%. some of these numbers coming out of these retailers are remarkable. we have talked about this for a number of weeks, whether it was target, walmart, bed, bath & beyond. why are we surprised by any of this? when we talk about the retailers and the difficulties they are having or will have, we get

quite a bit of pushback. why are we not forecasting this? then you see these moves in the stock market, and it is not well priced at all. lisa: it's difficult to get your head around what the challenges for retailers. it is not just apply chain disruptions anymore or inflation pressures, which are well understood in some parts of the market. it has to do with changing appetites of consumers. they are by different things. how much do you deal with inventory, ordering things that suddenly nobody wants? tom: never seen this before. at nato, there is a meeting with the president of the united states and leadership of south korea and japan. secretary blinken and austin in attendance as well. all the rules are being broken. this is on china. nato will adapt.

extraordinary. jonathan: future dad a 10th of 1%. you'll be hearing from chairman powell, governor bailey in about 90 minutes time. this is bloomberg. ritika: keeping you up to date with news from around the world, i'm ritika gupta. cleveland fed president loretta mester and says central bankers should act forcefully to curb rising price pressures. in remarks, she said central blanks should not be complacent about increases in long-term and ocean expectation. she said that that is just at the beginning of raising interest rates. turkey's president will meet with president biden to push for the purchase of new f-16 warplanes. they will talk in madrid.

erdogan is seeking to capitalize on a relatively positive atmosphere in relation to the u.s. and nato. talks have gone cold after they bought russian air systems. the wife of supreme court justice clarence thomas has declined her request for her to testify. a lawyer for ginni thomas says there is no reason for her to appear before the panel. meanwhile, it has been shown that her efforts to keep joe biden from taking office were more prominent than known before. carnival cruise lines and royal cruise line saw the revenue plummet during the pandemic. shares down 50% for the year. the european year is -- voted to eliminate carbon combustion engines.

global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg.

today's challenges require real insights, to get to tomorrow's opportunities. ( ♪♪ ) 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.

>> we are not picky. we will see the front end of the curve under pressure to go up. recession risks continue to go up. that is the story for the next few months until we see a pivot at the central banks, which will come, but not after some pain has been done. jonathan: what's about to happen in 12 minutes time, the panel of the year, all the ingredients for the most interesting panel of central bankers that you'll see in 2022, maybe for the next several years.

coming up shortly, you'll hear from chairman powell, governor bailey, president lagarde. tom: jackson hole will have a tough act to follow here. a three-day panel. lagarde, sizzling. loretta mester, sizzling. they go to this panel. jonathan: how much pain while they inflict on this economy as they try to bring inflation down? tom: the times we live in, as russia is at war with ukraine, president biden meeting with the leaders of japan and south korea at nato. kriti gupta. >> the key question is how much work they have to do, how hawkish does the federal reserve have to go? a gauge to figure out how hawkish they can go. take a look at the two-euro tip sealed. real rates are negative for most of the yield curve, unless you

look at the front end of the curve. as we ask how much hawkish we can go, this is a part of the market that is still in negative territory. since 1990, that that has never ended a tightening cycle while real rates were in negative territory. the fact that this is still low suggest there is still work to do. tom: we are honored that kit juckes could join us from societe general. decades on central banking. what will you listen for on this panel? kit: i'm expecting to hear a lot of resolute comments about making sure they get the job done, a lot of talk about inflation expectations needed to get under control. effectively that fighting inflation and winning the battle is the most important thing facing central banks with everything else going on.

i expect to come out of this more convinced rather than less convinced, that they will end up over tightening because they have no other choice. tom: things are very fluid right now, including a resurrection of divine confidence from a 2005 paper, but the new kid on the block may be frontloading. christine lagarde dealing with the polarities of europe. you live to this with your five or six residences in the iberian peninsula. how do you deal with the fragmentation that she doesn't want to speak about? kit: they are trying to come up with a plan that they can sell credibly to fight fragmentation. it will involve sterilizing some bond purchases. you have to play a confidence game to stop people selling bonds, stop people from wanting to get the additional yield on the. challenge they face is that u.s.

treasury yields rose. their side, they said they want to stop buying bonds, then raise rates, but i don't think you can stabilize the bond market without buying bonds. you need to sterilize the purchase,, with some sleight-of-hand, the kinds of things at the european banks have been doing, hoping that that restores confidence. i don't know how confident they are about how fast they can restore the confidence, but that is the line they will try to tread. jonathan: i don't want to be overly disparaging about the individuals on the stage, but at a crossroads of a pretty difficult moment for the economy. what do you make of it that we are being led by a couple of lawyers? kit: i don't think people are running committees need to be

the world's greatest economists, they just need to listen to some great economists. equally, some pretty great economists say pretty foolish things, get stuck in their own perceived division of how the world looks. having seen so many events come together which gave us so much inflation so quickly, it is impossible not to conclude that you have to hit inflation with a big hammer to get it back down because you cannot afford to get it wrong. your respective of the individuals -- and we could put larry summers in charge of the whole thing and we would get the same outcome. big hammer, significant slowdown after some rate hikes, and then pick up the pictures. then in 10 years now, as we do with paul volcker now, did we really need to go that hard? jonathan: that is what the writer mr. is addressing today, she thinks the bigger mistake is not going are not. i want your view on the differences between europe, the

ecb, u.k., bank of england effort, the u.s. and the federal reserve effort. we have put this up as a big conference. how big is the difference between the u.k., europe as they tackle this problem? kit: the biggest thing going on in europe is the war in ukraine, and they are dependent on natural gas supplies from russia. european natural gas consumers, which includes industry, are paying a far higher price than what has already been seen in the u.s. that is a particularly european peace. the biggest danger for europe is a recession that come from that reliance on russian natural gas. the u.k. has already got much tighter fiscal policy, and economy losing momentum, more labor market shortages and the rest of europe.

i think the u.k. is done in the sense that we will see higher rates, but the economy is losing momentum here. what everyone has in common is that households are seeing their real income growth turned sharply negative at the same time as everywhere else in the northern hemisphere. we told the kids they could have a holiday in the sunshine. we booked planes and we all want to consume services instead of goods at the same time. by the end of the summer, we will have less money. that is universal across europe, particularly in places that cannot get to the beach by some means other than the airport. lisa: i feel like you are talking directly to me as we look at the vacation plans we have lined up. there is an issue in paying for all of this, the currency transmission. it brings us back to your world, the heart of policy

differentials, the kinds of economic backdrops that jonathan was talking about. what will be the main driver in terms of the differentials? the rate hiking cycle and how quickly central banks can catch up to one another? or the economic outlook in the disproportionate impact from a 50 basis point rate hike at the ecb, versus a 75 rate hike in the u.s. ? kit: it is a combination. the report that came out the day before really highlighted how everything is being moved by interest rates at the moment. it is fed hiking that is setting the stage for everything. in my world, the u.k. with the first to raise rates, the u.s. followed, and the europeans are coming last. normally we get the dollar strong earlier, sterling strong even earlier, and then the euro strengthening for longer. that is where the situation in

ukraine messes up everything. i don't know how you by the euro with that elephant in the room with us. coming out on the others of a slowdown, what kind of economic recovery we'd expect in different countries, will become important. it has to be something sustainable. that will be a nice problem. at the moment, we are just trying to engineer soft landings, rather than facing hard landings. central banks tackling these multiple shots at the same time. going in, everybody gets dragged in. it doesn't matter where the global recession started. if we get a hard landing, we will all feel it. the bigger question right now, do we get a hard landing? lisa: last question. do you have a sense that the dollar is speaking -- peaking?

in terms of the range? kit: the dollar peaks's earliest we have a really soft landing, start pivoting from investing in the dollar to where they will be raising rates, normalizing rates where yields are more attractive. i don't think that is something we can do safely this side of september at the earliest. i think we will get april 2 of volatility where have to answer one question before we answer the question on the dollar. 10-year notes have not even peaked. if they have, they will be extremely bumpy because the fed has not peaked yet, probably not for several months. i think the dollar certainly has another high in it. if it doesn't, it will be awfully messy. tom: stay with us. jonathan ferro, lisa abramowicz, tom keene on bloomberg radio and television.

in preparation for the panel of the year. i like what the bis set off of the report in geneva. there is no respite for the global economy. jonathan: mike mckee is with us. walk me through what you are looking for from this panel set to begin in a couple of minutes. mike: the obvious question flows from what kit was saying, how far do they go and how fast? i'm not sure anyone has a good answer. officials focus on the idea that we don't know what will happen going forward. a lot of what is in inflation right now comes from external shocks that we could still face. while we know we have to raise rates, why do it all at once? there's an argument made to ripping off the band-aid, but in case you are wrong, you can do these big rate hikes: forward. the other point to come out of this, the inflation problem is

different in each of these three central banks. in the u.s., it is covid and the war, energy prices, external stimulus from the fiscal side. the brits have energy prices and brexit. much of what is going on in europe is from the war in ukraine and energy prices. they each have to approach it a little bit differently. jonathan: we have set this up as they are tackling the same problem, and to some degree they are, but there is some difference from country to country, the economy to economy. tom: brent crude at 119.88. we have had a real run on oil. forbrent crude is the worst outcome, but for europe, it is the crucible of their problem right now. jerome