>> it is the fed hiking that has set the stage for everything. if the fed does 75, i think a

fair amount of tightening is built into the market. >> service prices are going to be sticking. it is going to be hard for the fed to switch to cutting mode. >> i think the markets are looking for inflation to stabilize. >> if the inflation goes to 8%, that is a victory lap. >> this is "bloomberg surveillance." tom: good morning. the end of a second quarter to forget about, we will look forward in this hour. the president of the united states from madrid in this hour, claims. in this hour, we need to recalibrate for the third quarter. jonathan: and take stock of the pain we have seen. futures down by 1.4%. this is about getting inflation down and keeping financial conditions type. that is the fed subjective, we heard from mike shoemaker of wells fargo, it is a future, not

a bug. tom: that is the script. we have to see what the market says about that, and how the market and chaps. what i see is dollar strength. we talked about the euro in the last hour, 103.94. e.m. over the last nine years cannot get out of its own way, down 53% on a blended jp morgan index. jonathan: e.m. is confronting their own problems. that is the story, what do you do when you have contradictory issues, when you have conflicting issues, when you have the issue of inflation to high and growth starts to weaken and you need to support it? you cannot do both. they are choosing to do something about inflation. tom: e.m. is emerging market, the other idea is developing market, dm. all that matters is usd, that is u.s. dollar, what did jerome powell say? jonathan: when did you start to

define everything? what is going on? what is this? he wants to strip back the jargon from the program. tom: we are not going to lose the jargon. lisa, i am looking at the president, has to address domestic. somehow, maybe the r word won't come up, but the i word will. lisa: the i word is defining the market. we are ending a historic six months, this reframing we heard yesterday from central bankers, where there reaction function is going to be different in combating the "i word," inflation. it is a game changer creating a lot of gloom. tom: data check, i need to start with a spread market. we look at the german spread, it says it is wider.

fragility with italy. jonathan: you are in rare form today. fx market looks like this, dollar strength with the exception of the japanese yen, 32.10. crude, 108.50. down 4.2%. tom: chief global strategist joins us right now, you wrote a midyear report five days ago. what has changed in the last five days? what is the new, staggering into -- news staggering into q3? >> thanks for having me on. i do not know what is necessary change. all we have seen is the central bank up from what they are having to deal with. they finally emphasized that price stability has to be the

number one priority. for markets, it was given a wake-up call. this is not going to be an easy ride. making the assumption the fed is going to step back from that, we have a different view. we think things are going to get tough. jonathan: that is another way of saying, they are not going to tolerate easing of financial conditions, tightening, credit spreads. i want to know how much downside there is to risk, do you think this is a moment where markets cannot rally, or a moment where markets have to selloff more? seema: it is interesting. when you look at technicals, it is getting negative. there has been a fair amount of flow into cash, which means we could see a bit of a technical rally over the next couple of months, assuming there are no negative or positive prints on the inflation side. that doesn't mean there is a sustained rally, which is going to continue into 2023.

as soon as you start to see the second leg of the downturn, which is when earnings growth starts to come down, that is when you get your job in the equity market. i think you could get 10 to 15 drops from this point. between now and then, you could get a rally. lisa: if we are doing a jargon hour, we would be talking about a softer session. as we talked about how much this contour of this particular recession would be different than those of 2008 or 2009. do you agree with this assessment that it is going to be shallow, not as painful as previous downturns? seema: i do. when you think about the gmc, that was so much in balance. that dragged it out for quite some time. from our perspective, we see there will be a shallow recession, but once we start to see the fed cut rates in

response to recession and inflation fears coming down, how far do they go? do they go back down to 0% levels, or start to settle it before the new rate, 2%? i agree, this is an inflationary period going forward the next 20 years, monetary policy is going to have to follow that. lisa: how does that reshape your thesis in terms of how to rearrange your assets? 60/40 had its worst quarter ever. seema: i think this plays into the idea, it is real assets. we are looking at the medium or short-term inflationary. from a bond side, we can be thinking about higher quality moving into slightly longer durations, but the longer durations do not work for to long. u.s. treasury yields floating too far if you start to think in a recession, the fed is going to come to zero. jonathan: a couple of messages this morning and how quickly the

consensus has changed. he said, i think the fed won't hike much in 2023. the fed won't hike 75. inflation will come down in the fall. the fed will pause in early 2023. no recession, and a recession. 25% recession risk. 50% session risk. a new one, the new consensus view is, recession, but a shallow one. we have heard that several times this morning, a lot of times this week. tom: you are killing me. jonathan: give me something. tom: with all discussion, i would look at why y + g + x, it is about gaming the magnitude of a slowdown. john williams and the new york fed says there is not going to be a recession, we are going to get the agony of a more subdued,

positive -- jonathan:1 to 1.5, i think is what he said. recession may be a shallow one. are you comfortable with that, at a lot of people see it the same way, but we have had that story a few times and it has changed quickly? seema: i think investors in central banks have been called out in terms of the inflation view. through all of it and energy, they are going to be the wildcard. from the recession perspective, because we do not have major imbalances in the system, it is difficult to see it getting to the gmc perspective. unless, you get commodities continuing to rise, hitting the $150 a barrel. stagflationary shock is a deeper recession, and a longer recession. that is the wildcard. jonathan: thank you for that explanation. seema shah of principal global

investors. lisa: one of the big question marks i have is leading up to this consensus, people say is not a leveraged cycle. consumers are not overleveraged, banks are not overleveraged, yet, there is money in the system. it is very appropriate. what is the reset -- recent pain of dealing with companies that finance at a 5% rate, versus 8% rate? that is a huge question mark. if this environment persists long enough, you will have real pain at the corporate level when you deal with the new, financing regime of a inflationary environment. i think that is something that is difficult to came out. jonathan: you think vacations on boats, cruise liners, that is what you are thinking of? lisa: i personally was not advertising that, but i'm thinking of carnival. they borrowed money at 6%. not that long after the pandemic because of the free money from

the fed. people are speculating that there equity could go to zero. how much has the scene changed overnight, how anymore carnivals are there? tom: we are going to head to new orleans for carnival. jon, this reminds me of what we need to consider from a central-bank standpoint, the bramoput. it is more nuanced. you fold in a little spread market jargon and debt, the bramoput is important. we appreciate the males, the twitter feed. jon, we are taking in the strategic end of quarter lunch. team surveillance at mcdonald's on 3rd avenue. alpha new jersey emails in, he is looking for an all cliché surveillance to move into q3. [laughter] jonathan: dictionary corner with

tom keene. lisa: i am not going on a cruise. probably going to end up in the detroit airport. jonathan: what is wrong with the detroit? lisa: nothing is wrong with detroit. i think it is fabulous. really. tom: she is doing a home alone invitation. lisa: we are out of time. jonathan: down 4% on the s 70 -- s&p. this is bloomberg. ritika: u.s. regulators to expand the use of its covid drug, paxlovid. the drug is used on an emergency basis, now used to treat people at high risk of developing severe disease or antiviral treatments for people from mild to moderate covid. -- travels to hong kong calling

the city reborn, since he last visited five years ago. his comments were in apparent reference to the restrictions beijing and post. governor putin reacted to nato's decision to admit poland and -- finland and sweden to nato. allowing ukraine to join, nato -- russia will have to respond. liz cheney has formed -- has warmed -- warned republicans they cannot be loyal to both trump and the constitution. cheney is vice chair of the committee investigating the attack on the capital. 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.

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>> certainly, there is a risk. i would not agree it is the

biggest risk to the economy. the bigger mistake would be to fail to restore price stability. jonathan: reaffirming what you have heard so many times, na much more forceful way, from chairman powell of the federal reserve. president lagarde together with president bailey, a brilliant panel. futures, negative one point 4% on the s&p 500 great on the nasdaq 100, negative two. euro-dollar, negative .5%. we are close to those levels, 183.60. real dollar strength. tom: -- said there is no respite for the global economy. jonathan: love to dr. carson's. tom: we are waiting for the president of the united states in madrid, we are going to see how that goes under the 8:30

moment, michael mckee with us. i am going to rip up the script and go to what we heard from chairman powell once ago, this goes back to the wonderful neil sauce at credit suisse years ago. neil sauce would pound the table on asymmetric outcomes, the third rail of jerome powell and all of phd's -- all the phd's around him, is there is a asymmetry and a much bigger risk if they are wrong on inflation. michael: that is the argument the fed is making, that is the argument, to an extent, christine lagarde is making. you look back at historical inflation, you see when it started rising in the 1960's, it wasn't until the mid-1970's that it started to come down. you ended up with about 14 years of extraordinarily elevated inflation, that just away at and comes and living standards.

the fed does not want to repeat that. every central banker, it is like the stephen king novel for central bankers. it is the thing that keeps them up at night terrified. you read between the lines, it means they are going to go hard on trying to bring down inflation. they will raise rates. tom: fenway use to sit in front of lynch, what frightened stephen king was the release of the boston red sox. call it eight to seven, verses from five to four. those are two different worlds. michael: those will be two different worlds. they did talk in the session yesterday about the idea that will see a slower return to a lower rate. they need to keep going to that lower rate. they could adjust their rate levels, because they know they could come down relatively quickly to the 5% or 4% range.

it will take a while to get it back down to 2%. i have talked to a number of fed officials, they say we have got to get back to 2%. we promised 2%. if we live with more, people are not going to trust us anymore. lisa: it is hard to make the argument that they are data-dependent. the adp jobs report, we discount that as completely inaccurate. they are suspending it for two months to re-trigger the inputs. do we understand what has gone wrong with this metric? michael: not exactly. the adp originally was a look at the number of people who were on adp's payroll, they do data processing payrolls for thousands of companies. that did not work. they root -- retooled it and put in additional mathematics that included the jobless claims numbers, that improved the

numbers somewhat. as we have seen, particularly in recent months, the adp numbers, and often way off of where the labor department numbers are. so, they are trying to figure out how they can make it more accurate. it is something that is traded on every week. sometimes, influences economists views. it is not something that is an accurate predictor of what the jobs level is going to be. jonathan: looking forward to it tomorrow, especially the pmi's we had and the deceleration. what we have seen, i would love your view, some regional fed indicators have been dreadful. the dallas fed, richmond fed. i want to know how much weight you would put on those readings. michael: this is the kind of thing that makes you raise her eyebrows, makes you want to look deeply into the situation with manufacturing in the country. isf does not usually reflect change in any one of those

particular regional numbers, but if they are all going down, that may tell you something about what is happening. they are not as statistically valid or old as the isf number, but the ism is going to reflect some problems. we saw it go down last month, it is a question of, does it go into negative territory? we want to see the price index for ism, we want to see the employment index for ism. every data point matters. jonathan: mike mckee, thank you. more data points coming out and about six minutes. you will not hear from adp in quite a while. some of you will welcome that. live from madrid, spain. the room is getting ready for a news conference with the president of the united states, high-level talks of the present over the last week or so on the national stage. before he departed, we will hear from the president of the united

states. tom: we are not going to hear from the president of italy, i believe has left and goes back to a dollar a gallon vaseline in rome -- eight dollars a gallon gasoline a rome -- in rome. they are going away from the horror of the war. jonathan: that discussion influences the domestic pressure at home, the italian prime minister going home to what the american president will have to go home to. and, the german chancellor and french eater. lisa: how much does that inflation backdrop feed into the social unrest? how much support does he have heading into the second half of his term to make a difference, given some of disagreements enforced over the past couple of weeks? jonathan: you have to answer

that, given the proximate -- proximity of the issues. they have a much stickier path in 2022. tom: i am sorry, i thought you were going to lisa. i was looking to see where president biden's, i guess we are waiting for him. jonathan: good to have you back. to participate. tom: i was reading a memo on jargon. jonathan: sure you are. when the president takes the stage, we will take you to the news conference. the news conference from the nato summit in madrid, spain. this is bloomberg. ♪

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jonathan: mike mckee in the building, which means we are seconds away. on the nasdaq 100, down buying -- down by 1.6. morning, mike. michael: jobless claims higher,

going to see what the revision is to last month. we are up by 2000, not a lot. not a big change. 231 thousand jobless claims, and jobless claims for the week ending june 25. the income and spending numbers is what everybody has been waiting for. pce inflation numbers, up 6/10. it leaves the deflator at 6.3% on a year-over-year basis, which is probably good news for the administration and the federal reserve. on a month over month basis, core is up 3/10, the same of -- same as last month. that drops, the year over year number to 4.7%, from 4.9%. this had been expected, because of the base effects involved and we are getting a wedge between the core rate and the headline

rate. the headline rate is much more influenced by energy prices, the problem for the fed is that energy prices have come down significantly, but if they go back up again, they cannot do anything about it. they have to focus on the core to get a good idea of where inflation is. their favorite indicator on a core basis is a little better. scrolling through the data here, i want to point out incomes were up .5%. spending up .2%. that is after a 6/10 gained the month before, revised down from 9/10. taking some of the inflation out of what people had been spending. the news on income, better than forecasted. the same as last month that .5%. spending on an inflation-adjusted basis, down .4.

we are seeing inflation affect the spending numbers, i would imagine there is inflation in the income numbers, as well. jonathan: i'm going to borrow that phrase used earlier, a little better to the market. equity futures down 1% on the s&p 500. what we saw in yields is starting to roll over a little bit more, six basis points at 3.02%. euro-dollar goes to 104. tom: may be inconsequential, maybe not. we have the summit together with the other data. jon, as you mentioned, the data has been soggy. is this soggy data? i do not want to be gloomy. you saw yields move in basis points, maybe they are only in seven basis points. i am going to watch the 10 year yield, if that breaches 3%, that

will get my attention. jonathan: a couple basis points away. as i was looking ahead to the week, you did a great job. ism sat there going into the long weekend, i think we are focused on. i would love to know what you're looking for going into that. michael: i think we will see a decline in the overall headline number, given the regional indexes show a decline. it will be interesting to see what the prices paid numbers are, some of these headline energy numbers had other commodity prices, had dropped over the last month. we will see if prices come down, that will probably be seen as good news. the fed is looking at core, but any time you get a drop in the headline rate, it is good news for the fed. it pushes back the idea that inflation is going to get over entrenched in the economy. i was looking at the numbers for personal income and spending.

disposable personal income, up 5/10. not a major impact. on a month over month basis, on what you get after taxes. a reasonable figure there. jonathan: thank you. looking ahead to tomorrow morning at 10:00 a.m., eastern time. features down -- futures down 1%. tom: we wait for the president of the united states in madrid. what is your biggest mystery into q3 on the classic equation assumption, which is the great mystery? stanley: you need to watch the consumer and housing. the markets are starting to smell the economic slowdown, which is premature, but that is the issue of the day. if we are going to get a slowdown, that is where you are

going to see it. we have been focused on housing, it does seem to be cooling off. it is cooling from a hot temperature. these numbers on the consumer are is appointing. i think the consumer is going to have a big summer, people getting out and doing the things they haven't been able to do the last couple of years. the data this morning are not all that encouraging. lisa: that is where i wanted to go, we'll spending declined for the first time going back to december. more people expected this is inflation-adjusted spending per a how quickly is the consumer rolling over, and terms of their ability to accept the price increases? stephen: there is ability in willingness. the ability is unusually strong, consumers are sitting on a huge pile of cash that accumulated during the pandemic.

the fiscal largess, in particular. consumers have the wherewithal, at least in aggregate, to spend. inflation is going to create stress for certain households. there is a question about willingness, i think given the consumer confidence data, you have to wonder about how eager consumers are going to be to continue to spend. my sense is, they are enthusiastic, certainly any field trip to the airport would suggest that people are looking to get out. tom: lisa, you are getting back from the field trip tomorrow. lisa: it is going to be a nightmare. how much does this part of the story, a blip in revenge travel, people are reprising the past, were not able to live during the pandemic that ends. it ends with the fact people have traveled, they are exhausted, ready to start whatever it is that is a post-pandemic reality. how much of this is the last hurrah when comes to travel and

inputs that leads to the next phase that begins at labor day? stephen: it seems like there is going to be catch-up, there is a short run verse in the economy. that does protect any threat of a downturn in the near term. as you say, once you get past that, it gets back to the usual fundamentals. one thing that is on the positive side is the labor market, the employment rate around 3.5%. people have jobs, incomes are not necessarily keeping up with inflation the way we might like, but income growth has been strong. i think, sufficient to support ongoing growth and consumption. i think -- i take your point. the underlying fundamentals are still pretty good. i think what we have to see is how sensitive is the economy to higher interest rates? we haven't had a higher interest rates for a very long time,

going back before the financial crisis. it remains to be seen how sensitive the economy is as interest rates rise, housing is going to be the test case. jonathan: this conversation often comes up, economists often describe the aggregate story. kenny breakdown what the groups expect? from an equity perspective, that will have a friend outcomes for different companies. stephen: if you go through the pandemic period and the accumulation and household balance sheets, we are two stories. for the wealthy households, they were not getting the fiscal largess, but were benefiting from the markets, in particular, the equity market and housing. the people with more modest incomes were the ones who were receiving the rebate checks and unemployment supplemental benefits, things like that.

even the folks at the lower end of the spectrum came out of the pandemic, perhaps a lot, better shape than they might have been otherwise. of course, over time, that cushion will get spent. in particular, in this environment, inflation will erode purchasing power to a degree. it is going to be important for the labor market to stay strong. those folks at the lower end of the wage spectrum have been doing particular well, in terms of wage gains. we would like to see that continue. jonathan: stephen stanley of amherst. issues we have to think about when it comes to market and this economy. we were expecting to hear from the president of the united states 40 minutes ago. we were scheduled to hear from the president of the united states 8:00 a.m. eastern time, a lot of us expected we wouldn't hear from him than because it is late. no sign of that beginning yet, a lot of people seem ready to go when it starts.

we will bring it to you. tom: steve stanley was brilliant, that is the report president biden would like to hear. we need to reemphasize, there is a whole school of thought of optimism, not that this time is different, but the gloom is on a magnitude basis off the mark. jonathan: on the gloom of flying, i hear from delta that you can change your flight for free this weekend. i take issue with that. if they want us to change our flights, shouldn't they subsidize that effort? shouldn't they be incentivizing that? that doesn't work for me. lisa: we will see whether anyone takes them up on that. we will have to see if they have to pay up to do that, but they have to use that before july 8. i saw this, yes. jonathan: ridiculous. lisa: you have to change your plans. perhaps, you have less ability in all of your plans. it is fine with you. let's see what happens. jonathan: will you take a camera

with you to the airport tomorrow? lisa: do you really want pictures? do you want live narration? jonathan: i would love that. [laughter] lisa: oh, dear lord. [laughter] jonathan: futures down on the s&p. in the next hour, we hear from jonathan goldman of credit suisse. and, david of goldman sachs. and, the president will be our priority. we are waiting for him to speak any moment now from madrid, spain as the nato meeting wraps up. from new york, this is bloomberg. ♪ ritika: delegate seo pack and its allies have rectified the plan increase. the agreement calls for 600 48,000 barrels a day more. not all increases have

materialized. more consumers have been clamoring for more supplies for a while. it will be a historic day at the u.s. supreme court. ketanji brown jackson will be sworn in as the burke -- first black female justice on the court. she will replace justice breyer. justice jackson will join democratic -- increases in energy and food costs drove consumer growth to 6.5% in june. european and central banks stand to lift interest rates next month for the first time in a decade. setting the stage for an election in november the first, the end of the coalition could present an opportunity for the former prime minister to return

to power. his party is leading in the polls. 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 the fed those 75, i think a fair amount of tightening is built into the market if loretta mester gets her 4% next year, then i think we are seeing an inverted yield curve. tom: kathy jones of charles schwab, she was in -- she has been on fire reporting where we are right now. certainly, what we have heard this morning is a difference of opinion. the heated debate of this june already. we are preparing to hear from the president of the united states in madrid, we will bring

that to you as we see all of america waiting to hear his comments on the history of what we saw at nato, and his return to an 8% inflation in america. right now, we are going to try and squeeze in a chart with kriti gupta. kriti: surging shipping rates, we just got that pce data and still accelerating, but less than a margin less than what we expected. there is the prewar inflation and the postwar inflation. commodity inflation, we are used to talking about. check out shipping rates, a lot of the issues we had with supply chains came down to these shipping rates. my chart of the day shows the cost it took to transport a 40 foot container from shanghai to l.a.. for our radio audience, this is a massive surge coming down. it has rolled over. this is one of the positives, of

that inventory buildup. if you have a massive inventory, you are not clamoring for more supply, clamoring for more e-sports -- exports. demand is going to come down. that is exactly what we are seeing, a slowdown when it comes to shipping rates. tom: thank you. waiting for the president of the united states, we think momentarily. within his wonderful book, "bailout nation" is what a president can do about inflation. barry, what can i president do about inflation? close you are asking the question after the fact. it is what presidents can do that leads to inflation, that they need to avoid doing. >> it was clear that not only was the cares act one and two an

immense fiscal stimulus, a first cares act was 10% of gdp. it was a record of cares act three under biden, it is that much much -- it adds that much fuel to the factor. fiscal is part of the problem. once the genie is out of the bottle, it becomes more difficult to get things under control. i give credit to this administration for trying to work on things like medicaid reform and prescription drugs, but that is a small portion of the total inflation picture. energy, food, those are big factors now. that is out of the president's hands. tom: what do you say on a view of someone's portfolio, he lives with this every day. bonds are down 15%, 12%, 8%, whatever. equities are down, let's call it 10%.

what do you say to be steadfast in your optimism? barry: this is the future above, you do not get upside without downside. if arkansas only went up, if there were no drawdowns, corrections, bear market crashes, we would all be wealthy. it does not work that way. in order to get to the promised land, whether that is decades down the road or a couple of years down the road, your behavior matters more than anything else. you can have the world's greatest portfolio, but if it keeps you up at night to the point where you are sick and you capitulate and sell at the worst moment, you are going to do very poorly. the best portfolios in the world -- portfolio in the world gives up performance, but allows you to sleep at night. this is the cost of admission, there is no way around it if you are an investor. lisa: how does the nature of

sleeping at night change when you have a sea change when it comes to a fed policy and fed response mechanism? that is what we heard yesterday, which capped off a historic half of a year. where we basically saw bonds and stocks fall in tandem, and we have central bankers around the world saying, we are probably never going to go back to that low inflation environment. how you change the construction of your portfolio? barry: you have to put your money into the fed contra fund, which has outperformed the market by -- wait, that does not exist. [laughter] tom: be careful. you are going to have three firms come out with the fed contra fund. [laughter] barry: you have to ride it out. every time have the discussion about, i want to get out of equities forr x months and get in, history shows a third of

people who tried to do that never return to the market. you could look at this, you could look at. by the way, we could get together for dinner and talk about what the fed is doing wrong and how they were behind the curve in inflation, and now they are probably overreacting. i think the market anticipating a 75 basis increase, at that point, i move into the recession camp. they were behind at one point, now they are probably overreacting. lisa: ok, look. understood. this is the trading argument, where you have to stick to your guns and have some strategy. the strategy changes when you talk about rates not being in a bond market, you are saying this has been the death of it, we have watched this cycle breakdown. now, you are having central banks telling us it is over, and they are not going to hold your hand.

they do not have the ammunition to do that because inflation is their priority. how does that change the 60/40 mentality, the ideas of bonds, ballots, as a profit driver that helps you sleep at night when you have lost more than 12% in benchmark bonds? barry: i will give you a specific question based on what we did. earlier this year, we looked at the risk assessment of various treasuries. anybody who is long treasury inflation protected securities, those bonds are doing fine. when we looked at what we were getting paid for taking the risk of duration, the yield is the same in the beginning of the year for seven and 10 year bonds as they were for three and five year bonds. what makes sense as a strategy is shortening of your duration, not because you are forecasting the duration of interest rates, but if you are getting paid the same yields for tying up money

for seven years, then take the three year. tom: stay with us. let me do a data check. we are waiting for a successful press conference from the president of the united states, scheduled to make comments. he is at the fema building of modern construction in madrid, somewhat like a convention center. very poignantly, had 5000 beds during covid. this was a hospital for spain beleaguered by covid. the data is moving. barry, i am going to thank you. thank you so much. lisa, we have got a note that the yield giveaway, the two-year yield down nine basis points,

2.59%. we are a tick away from 3% ten-year. lisa: which is fascinating, when people are looking for higher yields with curtailed growth. where is that higher yield going to happen? where do we see the inverted yield curve when the short end goes higher and the long takes a bid? how long can we continue in that type of environment? tom: futures, negative 46. vix with a 30 print. ian langan looking out, a more coy assent inflation tone. bitcoin, i do not know what to make of bitcoin. i would suggest in the fourth of july weekend, where it trades 24/7, that is going to be a wow weekend for bitcoin. lisa: bitcoin has been

fascinating when you take the frost out of the market, that seems to be what is going on. from 47,010 19,000, that is what we saw this year and a couple of months from bitcoin. tom: i want to stay in the backdrop, i will suggest a nato never envision. two moments yesterday that lisa, jon and i made note of. the poignancy of the president of the united states sitting on his right and left with the leadership of japan and south korea speaking at a nato meeting in private about china was absolutely extraordinary. not enough can be said about the shock of finland and sweden and the headline two hours ago, maybe joining nato by tuesday. lisa: what a shock in the nato message, a couple of years ago that russia is not their

adversary, too, russia is clear the at -- clearly the adversary. we need to come up with some plan to counter china's dominance in certain industries. how did they balance that out, amid the backdrop they come home to? we have been talking about the idea of inflation looming large with distress among individuals. very difficult moment. tom: we are going to have to see. on the president and travel, he will come home to any number of things, including a critical labor report. lisa: manufacturing data comes out tomorrow. tom: is jobs day tomorrow? i can't remember. lisa: [laughter] i think jobs day is the week after. tom: we will have that for you. that will be important, to see if filing an erosion in the labor economy. we heard from powell and his testimony to the senate and joe

biden, the first sentence out of his mouth was simple, we have a strong economy. steve stanley just said that, we have another guest on in 20 minutes who will say, no we do not. that is the debate. lisa: how much can that strong economy falter, if you do have a fed raising rates and consumers cutting back in the face of inflation? this is what president biden will be addressing, what is impacting his ratings, his support at home and abroad. tom: we will have to see in the midterms with those important elections the past couple of days. kathy hogle as governor of new york state, winning her primary effort. on a data front, foreign exchange. dollar ascended, i would suggest if president trump was on the podium, the first thing he would mention is the dollar. the president, walking out in madrid after his meeting. here is president of the united

states. pres. biden: thank you for taking the time to be here. i think we can all agree that this has been a historic nato summit. some of the folks have been coming with me for a while. a year and a half ago, when the first g7 meeting took place in england, i talked about the need for us to reconsider the makeup of nato and how it unction. and, come up with a different strategy for nato and how we work together. in addition to that, we talked about the g7 taking on additional spots abilities. before the war started, i told putin that to invade ukraine, data would not only get stronger, but more united. we would see democracies in the world stand up and oppose his aggression, and defend the rule

of order. that is what we are seeing today. this summit was about strengthening our alliance, meeting the challenges of our world today, and the threats we are going to face in the future. the last time nato drafted a new mission statement was 12 years ago. at that time, it characterized russia as a partner, and it did not mention china. the world has changed a great deal since then. nato is changing, as well. at this summit, we rallied our alliances to meet the direct threats russia imposes to europe, and the systemic challenges that china poses to a world based world order. we invited two new members to join nato, it was a historic act . finland and sweden, two countries with a long tradition of neutrality, choosing to join nato.

some of the american press will remember when i got a phone call from the leader of finland saying, could he see me? he came the next day and said, will you support my country joining nato? we got on the telephone and suggested we call the leader of switzerland, my goodness, i'm getting anxious. about expanding nato. of sweden. what happened was, we got on the phone. she asked if she could come the next day. to talk about joining nato. allies across the board are stepping up, increasing the fed spending. a majority of them are on track for the first time to exceed our 2% gdp commitment that they made, they agreed to spend 2% of the gdp on defense. look, for example, germany has committed to spending 2% going forward and announced a special

fund for its military of more than $100 million. slovakia, czech republic, and the netherlands have announced they romania, latvia, lithuania, they are doing more than 2.5 percent, some as high as 3%. together, deploying more assets and capabilities to bolster our lines across all domains -- land, air, sea, cyber, and space. that commitment is sacred. an attack on one is an attack on all, and we will defend every inch of nato territory, every inch of nato territory. for our part, the united states is doing exactly what i said we would do if putin invaded, enhance our posture. we are stationing more air defense in