>> this economy has materially slowed down. we are not in the roaring 20's. >> what we are seeing is what you would expect. the economy slowing down. >> inflation is coming in a lot slower than i have been expecting. >> the inflation remains too hot for them to think they are going to stop. >> it was that meeting to meeting guidance from chair powell. >> this is "bloomberg

surveillance." jonathan: tom is not here, so what are we calling today? eci friday. live from new york city this morning, good morning, good morning. this is "bloomberg surveillance." live on tv and radio. alongside lisa abramowicz, i'm jonathan ferro. together this morning we are with kailey leinz. tk back on monday. the employment cost index, we get data this morning. lisa: how much does this shape the narrative that inflation is going and the fed can step on the brakes? we have seen the employment cost index rise at a record pace. we continue to see that -- do we continue to see that? jonathan: and we have really chipped away at rate hike expectations in a monster way in the last week. lisa: i'm really struggling with where people are getting the confidence, the conviction that this fed is going to have it, whatever you want to call it,

back away from one of -- from some of their hawkish projections at a time when we still have 9.1% cpi, and we still have rents climbing, basic staples that are climbing. how can you explain a fed that is going to feel justified to start cutting rates as soon the first quarter of next year? jonathan: let's do the earnings. the earnings from apple and amazon, exxon and chevron this morning. lisa: they are all doing great. everyone is doing really well and that seems to be the reaction in the markets. exxon and chevron are a different story. if you look at apple, if you look at amazon, the bar had been lowered. now we get to a question of what has been priced in. jonathan: amazon absolutely flying. kailey: i don't know if it is so much they are doing great as they are not doing as bad as people feel they might. there is revenue guidance that eases concern about a pullback in spending, but these beats were not by huge margins,

especially for apple. it came in just above expectations. dan ives, saying it was a top gun maverick quarter because they are dealing with a significantly difficult environment, like flying inverted in low terrain. jonathan: dan ives absolutely loses me. i'm going to catch up with dan around the opening bell. can they keep this up, given what we have heard from at&t and t-mobile about people delaying their bills? are they going to buy an iphone later this year? kailey: so far iphone demand looks like it was hanging in there. if we are talking about a deteriorating macroeconomic environment i can imagine that pictures going to get easier for apple or companies facing a consumer struggling with inflation. jonathan: apple right now up to .4%. if you are just tuning in, we have a rally again. a big tube -- a big two-day pop. equities up again, investors

piling in. yields with a little bit of a bounce. two basis. lisa, euro with some strength off the back of better-than-expected gdp figures, and at the same time eurozone cpi headed in the wrong direction. lisa: and where are the better-than-expected figures? they are not coming from germany. that is a problem. they you see a real deterioration versus some of the expectations. we are looking at the employment cost and that -- employment cost index. it had been rising at a record pace, and this comes as a lot of companies were dealing with an extremely tight labor market. do we get a sense that is softening? do we get a sense that employees have to do less in order to track -- employers are doing less to interact -- to attract employees? one of the conviction the market has that the fed will not go further? the michigan sentiment survey had been deteriorating at a

near-record pace. how much does this continue to deteriorate versus get a little bit fortified, at least by the feeling that perhaps this is near term pain for longer-term gain? that is what janet yellen is trying to paint it as. the issue is, how much does it become a self fulfilling prophecy of recession if we keep talking about it? today we got chevron and exxon earlier. we get palmolive and procter & gamble. how much do we get this reaction were even bad news is treated with good news? even the misses are treated with a rally two days after? at least if you take a look at the average of this earnings period. this has been an earnings period marked by not the worst case scenario. jonathan: is it something you want to fight right now? this move looks pretty powerful this morning. lisa, thank you. the nasdaq up by more than 1%. joining us now is solita marcelli, chief investment

officer at ubs global wealth management. i want your view on the following. is this something you want to chase or fade? solita: this is not something i want to chase. the market has seen earnings that are not as bad as feared, and perceives the fed to be dovish because their data is coming a little bit softer. i don't think the fed is pivoting here, i don't think the market is pivoting. there is a long way to go. in the short-term it is going to be choppy. i think we are going to see some of these gains taking out -- taken out. i would not be chasing it, however, if you put your long-term investor lanes on, and it is still a great time to invest. it is just that the next six months is going to be quite volatile. lisa: after this earnings season is over what you looking at as the catalyst for the declines you are talking about? solita: first of all in this earnings season we heard a lot

of talk of recession but we have not seen any indication in the results. we are not seen broad-based layoffs, slowing of hiring, and consumers are still resilient, even though we heard low income households may be seeing some pressures from walmart, from at&t. consumers are resilient. lisa told us credit card spending has been very strong. we are seeing travel and leisure seeing a lot of demand. i think what we would be looking at is, first of all, what is happening on the hiring or employment side? in any case, that is what the fed is looking at as well. more than anything else wage growth is important, and if they can see the vacancies are coming down and that takes off pressure from wage growth, that will give us a sense that maybe they would be able to pivot. if we see otherwise, then it

probably means that real consumer spending that has been flat so far will probably turn negative, and there is going to be a higher probability of a recession toward the end of this year. kailey: we were catching up with barbara ann bernard in the previous hour and she agrees that the market got this entire fed conversation wrong. that the pivot is not necessarily coming. she said for that reason, given the environment, she is sitting on a mountain of cash. is it right to be sitting on a mountain of cash right now? solita: i don't believe so. as an investor, our clients should have enough cash to get through the next six months and liquidity for two to three years for expansions, beyond that i think the benefit of staying on the sidelines in cash is limited. but the opportunity cost of being out of the market for the

long-term is much, much bigger. we did so many analyses on this in our team. if you wait for -- historically going back to the 1960's -- if you wait for a 10% downside and get in and sell at the brand-new highs, you are most likely to underperform 80 times versus a buy and hold strategy. like i said before, for a long-term investor it is still a great time to invest, because we have below average valuations. in the equity market we have seen 25% the rating -- de-rating . that is consistent with return expectations of 9% annual for the next decade. you have bond yields close to the highest since 2018, and before that the highest since 2008.

then you have an alternative in the private equity space. we might see for existing funds valuations downgrade in the near term, but data tells us funds that are launched a year after the peak or in the public market tend to have superior returns over the long term. i think staying in cash is not the best strategy if you have long-term horizons. jonathan: lisa, i have 20 seconds. i give you a buy and hold, what would it be? solita: it is a well-diversified portfolio. jonathan: of course it is. why did i ask? thank you. solita marcelli of ubs global more of -- ubs global wealth management. i imagine their clients see -- need significantly more cash than i do to get through six months. lisa: significantly bigger

mountain of cash. what did you think she was going to say? all in on pinterest? jonathan: just giving her a chance. lisa: this is been sort of the key issue for a lot of longer-term managers. they all want to say, we see short-term pain, but don't get too scared, everything is ok. jonathan: the nasdaq is up more than 14% after the lows of june. kailey: in the s&p is headed for its best month since 2020. this has been a powerful equity rally. how much of this is due to to the fact that a lot of negativity had been priced in and earnings are hanging in there ok, and how much is this banking on a fed pivot that may or may not come? jonathan: live from new york city this morning, good morning. we are up another .7% on the s&p 500. on the nasdaq, up by more than 1%. the data out of europe, not great on the cpi side of things. that comes in hot.

gdp doing ok unless you are looking at germany. can we call it stagflation in germany now? in the u.s. we can go there too, right? from new york, this is bloomberg. leigh-ann: keeping you up-to-date with news from around the world with the first word news, i'm leigh-ann gerrans. president biden and xi jinping have told aides to plan an in person meeting. that is according to a u.s. official. two spoke on the phone for more than two hours yesterday. the call centered on taiwan. matters could get worse if house speaker nancy pelosi visits the island. beijing is warning of a firm response if that does happen. the biden administration has approved the sale of $8.4 billion in weapons to germany. the package includes fighter

planes and cruise missiles. the state department made no mention of the war in ukraine, and it did say the sale would support a nato ally that is an important force for stability in europe. the euro economy has expanded. that comes at a time when inflation and a possible russian energy cut threatened to turn the region into recession. gdp rose .7% in the second quarter, but inflation set an all-time high in july. shares of intel are falling. the semiconductor maker/profit forecasts for the rest of the year. the ceo said intel needs more time to make its products competitive. at the same time he ensured investors that the third quarter would be the low point. 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 leigh-ann gerrans. this is bloomberg. ♪

>> this bill will reduce

inflationary pressures on the economy. this bill will, in fact, reduce inflationary pressure on the economy. it is a bill that will cut your cost of living and reduce inflation. it lowers the deficit, it strengthens our economy in the long run as well. jonathan: that was the president of the united states yesterday morning. from new york city, good morning. tk back with us on monday. your market looks like this. a lift of .7% on the s&p, up more than 1% on the nasdaq 100. the earnings really decent relative to expectations. amazon, apple, exxon, chevron after the tech beats yesterday afternoon. yields higher by a couple of basis points. fed funds, this going to get interesting. president bostic, i'm interested in what the fed speak is going to be given the reaction to the meeting on wednesday. lisa: raphael bostic saying the

u.s. is not in a recession, but sounds -- which sounds good, but bad news is good news. -- good news is bad news. the strength in the economy that is not the recession that seems to be suggested by the data is the reason the fed can talk about this, but here is the tortured aspect. they are trying to twist themselves and do an administration pivot and say, we understand people are hurting. this is a tough message to get right, what this seemed to underscore is there is a slowdown, it is not enough to stop us from raising rates. jonathan: the conclusion, there is more work to be done? kailey: the question is, how fast are they going to do this? bostic saying the pace and size of future hikes depends on the data. we are going to get more data an hour and 10 minutes from now, including that cost index. jonathan: those headlines from an interview with npr news this morning.

anymore fed speak, we will bring you. we need to talk about a call the president had with the president of china. when we saw that gdp dated the president was busy talking about the relationship between the world's two largest economies. millie wilkins is in d.c. two hours and 20 minutes. what was the outcome of that call? emily: the outcome could be the first in-person meeting since biden has become president himself. obviously the white house is -- has talked about keeping the line of communication open between washington and beijing. the fact that while there are tension points, there are also things they are working on as well. we are certainly keeping an ear out for additional news on that meeting. they also talked about taiwan in advance of speaker pelosi's reported trip there. president xi gave biden a warning. he said, those that play with fire will get burned. eigen reaffirmed the u.s. is

happy with the current status quo. that they do not want to undermine peace in the region. that is a point of contention. it will be interesting to see what speaker pelosi's trip is going to lead to. china has promised strong retaliation if she does go to the island. lisa: did we hear anything about tariffs? emily: i think tariffs are something that is on the line for washington and beijing officials. lisa: the reason i ask is because i did not hear about it in any of the reports from this meeting. i'm wondering if that in itself is interesting, that the emphasis was entirely on taiwan and nothing related to the economy. emily: it definitely is interesting, especially when you have heard that president wyden was considering removing some of the tariffs on these goods. when he talked about what impact that might have on the economy and inflation. honestly, lisa, there were a lot of big topics between the u.s.

and china that we not see -- that we did not see in the readouts. it raises questions about the extent of what was discussed, the tone of what was discussed. things could not have gone that bad if they are planning an in person meeting, there are lots of questions about what the relationship between the u.s. and china is going to look like. lisa: -- kailey: obviously we can talk policy between the u.s. and china and how if nancy pelosi visits taiwan that will be effective on a geopolitical scale. on a domestic skill if she does not make that visit, how does that play, especially among her colleagues in congress? emily: senate minority leader mitch mcconnell was encouraging her to go, saying if she canceled it would be handing a victory to beijing. have heard the same from republicans and democrats, really encouraging pelosi to continue with this trip. it seems the main concerns are coming from the defense department and pentagon, who

have to be concerned about the speaker's safety. they are trying to game out all of the potential scenarios that could happen. making sure that she remains safe. this is the highest-level u.s. official to visit the island in over 25 years. it is a huge trip and has to go off without a hitch. jonathan: i don't think we appreciate how serious this is. when you talk about, we need to think about how to protect the speaker of the house going to a foreign place, emily, when was the last time we had a conversation that sounds like this one? emily: there is usually a lot of security around any sort of -- jonathan: but this is different, and only -- different, emily. you're talking about potentially some kind of confrontation. emily: i think there is a really high potential for something to happen, right? if there is a miscommunication, a minor slip up, things could escalate quickly. i think that is the real

concern. certainly speaker pelosi has been in office for a number of years. she is an experienced diplomat on going abroad. it lies with the tension right now going around and highly sensitive -- and how highly sensitive that relationship is. jonathan: emily wilkins, great work in d.c., as always. emily wilkins down in washington. the more we talk about the tension between the u.s. and china and how taiwan is part of that, have to focus more on what is happening domestically in china. we just put out a story, china is considering a plan to seize undeveloped land from distressed real estate companies, using it to finance the completion of housing project have sparked mortgage boycotts. we have some social unrest in that country, and this has been a distraction away from that over the last week or so. need to make sure we watch both things at the same time. lisa: it is a well-put point.

the chinese authorities are trying to alleviate some of the social unrest is bubbling up from the bottom. what you hear about is all of these people who have put money down on homes that have not been built, and being forced to continue to pay debt for those properties starting to boycott and get really upset. china is potentially addressing that. it highlights their concern about social unrest. jonathan: both leaders facing domestic issues when it comes to the economy. futures up .6% on the essen. -- on the s&p. we will talk about the economic data in about an hour from now. some employment cost index figures just around the corner. ♪

jonathan: apple and amazon, two names that make up 20% of the nasdaq 100. when one is up 12%, it is guaranteed decent gains and that is what you have on the nasdaq, close to 1% higher on the s&p

500. exxon, chevron, pretty tidy as well. so far, so good. so far so bad and appellee that is good. that seems to be the story again on wall street off the back of gdp contraction and yields coming in. to tens 30's, down 10 basis points yesterday. this morning, up by not even a basis point. let's look to the data. the eci later today. then the consumer sentiment survey which has been important for chairman powell. lisa has some things to say on that. consumer inflation expectations, a critical point for them. about 500 or 600 phone calls and there you go. i digress. the data out of europe, cpi close to a nine handle on inflation. gdp was better than expected. does that open the door for more

italics from the ecb? germany stagnating and that will be a problem. this is only going to get worse in the minds of many people. jp morgan, goldman sachs talking about the prospect of a recession in the euro zone this year. that is the story for europe right now. a rock and a hard place and the ecb will keep on hiking rates. how long? i don't know. let's get you some better news. lisa: it is a better news story than the stagflation across the world. amazon is not walmart, that was my take away yesterday. we saw the downgrade of walmart, likely the same trend in target. amazon was able to maintain and beat which is causing a massive rally. those shares are up more than 12%. apple just kicking across the earnings beat and they are up 2.3%. they were able to maneuver

through supply chain issues, particularly in china. intel is the story of haves and has knots -- in the story of haves and have-nots, they are have-nots. talking about the lack of demand for chips. those shares getting hammered, down 11.2%. the darlings of the pandemic era that have gone the other way. roku is the poster child for that. perhaps alphabet was able to get advertising revenue up, roku, not as much. those shares are down nearly 23%. those shares trading expect to open at -- july of last year they were trading at near $500 a share. just to give you a sense of the momentum that has been kicked out from under these companies. jonathan: that is ridiculous. lisa: this speaks to how much

things got pumped up and then a crash. candidate a good job of parsing through the strengths and how they were trying to position it ahead of what the white house is going to say. chevron shares up, exxon shares up. exxon shares have absolutely skyrocketed this year. much more than chevron. jonathan: cash machine. thank you. joining us now is the head of fixed income research at strategists -- strategas. it is too early to price of the fitbit. is it too early? thomas: i think so. what we are seeing in the equity and bond markets is that the markets are saying because the fed is relying so much on using the fed's fund rate to tighten monetary conditions instead of

the balance sheet, the market is saying the fed may not be able to get to the point where the balance sheet can harm -- because main street may wobble into recession. i still -- i still think recession is the likely outcome. jonathan: talk to me about how much they are going to hike into this weakness? that is what we are talking about when it comes to the federal reserve. nominal gdp is -- but real gdp is contracting. how do you think the fed response to that? thomas: the fed has to continue to tighten. whether they continue at the pace they are going at worst they slow down that is the real question. i think the peak is likely to be 350 or 375. they are going to go another 350 basis points in the next meeting and then possibly cite -- and

then possibly slow that down. nominal gdp is so high. lisa: i am struggling to understand the rationale of the junk bond traders that have pushed up evaluations -- pushed up evaluations and the biggest monthly gains in decades. how does this make sense in a scenario of hiking into weakness and dealing with stagflation? thomas: it comes with the fed's lack of the use of the balance sheet. when you use the balance sheet to fund monetary policy, you put more of the strain on main street. the fed has said we are not going to use the balance sheet, it will be a passive tool. lisa: i am looking at the balance sheet which checked out into -- people are talking about quantitative tightening and it has begun. are you basically saying you are

going to feel it on main street more than in corporate america? thomas: yeah. to give you an understanding of how disproportionate this is, the amount of rate hikes the fed has put into place, we estimate a balance sheet reduction would have been $4 trillion. lisa: translating -- kailey: i know we have probably seen the peak. how far away away from the trough? thomas: our expectation of trough is not much below 250 itself. we think we will see 10-year gilts balancing between 250 and 325 for the next 12 months. kailey: what does that mean for the curve? thomas: it generally means that it continues to invert at is slower pace than what we have seen to this point. we could see another 15 to 30 basis points. that will depend on whether the market price is terminal at 320

54 350. lisa: what is more important -- jonathan: what is more important, eci or --? thomas: eci. simply put, wages will tell you where inflation is going to get sticky. it is telling us sticky cpi around 5% if the fed fed does not tighten further. jonathan: thank you. thomas tzitzouria there. we get the data later this morning. lisa: what do you think is the reaction in the markets? if it comes in hot, how much does that change this market? that is good news and -- in terms of having more buying power. jonathan: we have an adverse reaction in a market pricing out for fed, they might have to price it back in. lisa: if we get a weaker than

expected cost index, if there is less momentum in the wages for employees, how much does that give momentum to the trade versus already having been baked in? the parameters of risk are skewed to perhaps the bad news because right now there are a lot of potential pivot talks. jonathan: that is the trade. that is why the nasdaq is up close to 1% and the s&p 500 up. the road to september is so long. there is so much data to get through between now and then. we have a meeting in jackson hole where if they want to communicate something, they can. kailey: you will be there to hear it in person but you cannot guess what the data will look like in september and how the fed is going to respond considering they give up on guidance. we are told they did that

because they are tired of being wrong. you have to look at the data and just guess how the fed is going to react to it. lisa: it is difficult -- jonathan: it is difficult to guess what the fed is going to react to. if you really real this out -- if you really lay this out, the fed says they are data dependent. you have to define how you are dependent on the data and they have not really done that. which data matters? one minute it's eci, then it is the image, then it is headline. lisa: now some people say it is jobs. if there is weakness in the labor market, then what is the reaction function? do they pay for it and say we are not going to raise rates? or are they worried about the headline cpi number? they are not going to give anything to markets. we heard a fed manager say you are going to dictate the path of this market and people are saying this will be forced to be

dovish. jonathan: i don't know how much these corporations can offer guidance. these retailers don't know where their business needs to be a year out and they don't know how to calibrate their business for the economy. we talked about some of the retailers. they are not a to now for an economy -- they are -- jonathan: the demand -- kailey: the demand has evaporated and now you are stuck with inventory you need to get down. maybe that will be disinflationary, but it is not great for these companies that face margin pressure. we have seen it with more marked, we have seen it with target. jonathan: execution does not get talked enough about on the earnings season. if you looked at walmart, things are terrible. amazon, may be a slightly different story.

if you looked at of abettor versus facebook, there is much more dispersion than a lot of people are getting them credit for. lisa: consolidation among the stronger players. walmart does not have aws. jonathan: that is true. i got some investment advice from a terminal subscriber, go to cash. who do you think that is? lisa: good morning, tom. jonathan: go back to bed. from new york, this is bloomberg. ♪ >> keeping you up-to-date with news from around the world. nancy pelosi is set to leave on a trip to asia today. the question is if she still plans to stop in taiwan. reports that she plans a visitor there has drawn criticism from china who considers taiwan to be part of its territory. taiwan was one of the central

issues discussed between joe biden and xi jinping, biden warned against limitary -- against military action to realign taiwan with the mainland. the government is considering seizing undeveloped land from listed companies and using it to finance the completion of housing project's. developers have failed to finish building homes. french president amanda macron has called on -- to help your move away from russian oil and gas. he stressed the importance of continuing the coordination with saudi arabia. he has reached out to leaders of other oil producing countries, including the uae and iran. global news -- 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 am leigh-ann gerrans, this is bloomberg. ♪ at cdw, we get if your network power goes down, your business goes with it. recording: thanks for calling, we are unexpectedly closed today due to... cdw experts can keep you up and running with an apc smart-ups lithium-ion ups from schneider electric. it offers cloud-enabled remote monitoring and three times the battery life, so you can get the performance and certainty you need to stay open for business. for resiliency at the edge, trust schneider electric and it orchestration by cdw®. people who get it.

>> we do see significant slowdown in growth. that is to be expected given how rapidly the economy grew when it was recovering from the pandemic and all of those job losses and policy was designed to that. we should expect to see a slowdown. the economy is at full employment. jonathan: janet yellen after the second straight quarter of negative growth in america. tom keene is away.

lisa abramowicz, kailey leinz, jonathan ferro myself. yields higher by about a basis point, your 10-year is 269.51. that is quite a move. lisa: amazon benefited from a cloud computing at aws which did better than expected. they don't have the same kind of inventory. they have other people selling stuff on their platform so they are not left with the hangover amazon and walmart -- the hangover amazon -- hangover walmart is dealing with. kailey: the big -- jonathan: the big question in washington is if the speaker policy will go to taiwan. joining us now is isaac boltansky. i know you feel like this is lose-lose. which way will she take? isaac: it feels difficult for her to have to pull back at this

time. i think she has to go to taiwan. i think the optics would be atrocious if she skips out now and it would be a terrible signal given our relationship with taiwan. lisa: how does president biden deal with this and what does this do with his agenda? he spent two hours 20 minutes speaking about that with president xi jinping. isaac: from a practical perspective, whether she goes or not i'm not sure if there is much impact for the market. most of my contacts now believe we will not have a massive pullback on the china tariffs. there is a sense we will have targeted, narrow relaxation of certain tariffs with a focus on the consumer side. beyond that, we will not have the sweeping pullback some hoped. there was some chatter that we would relax all of the tariffs on chinese goods. that is not happening. as busy geopolitical tensions continue to mount with china

over taiwan and other issues, the most we will see are these targeted, narrow sets of tariff relaxations focused on consumer goods. lisa: which raises the question of how this administration will put pressure on bringing inflation down instead of just pointing the finger at the fed. they talk about legislation they are lining up that joe manchin not on board with. do you think that could do anything to reduce inflation? isaac: the simple answer is no. i don't think this bill, even though it is called the inflation reduction act, is going to do that much. there are some components we can point to that will have an impact over time. the drug pricing dynamics can have an impact. a lot of that is backloaded into a longer period. the minimum tax can have some impact over time. again, that is limited. it is only companies over $1

billion in income. there are elements we will see democrats .2 and say we are trying to tackle inflation. if you have a marginal impact and most -- in reality you have a marginal impact at most. kailey: what do you think about the odds of kyrsten sinema giving it a thumbs up? isaac: it is kyrsten sinema, the assault crew, and sickness. let's run through each of them. sickness, we don't know which senator is going to get covid and next. that matters when you need every vote to get through. on the salt crew, we have to watch menendez and the other senator from new jersey to see if they will blow up this deal that he sold it cap has not been lifted or eliminated. and that that is all eyes on senator kyrsten sinema. at the moment i think she will be a yes. most of my contacts believe she will get the yes and we will see

her blowing up this deal on things like the carried interest treatment which is something that has matter to her in the past. i am telling clients we expect this bill to become law. i think the odds are better that this bill becomes law by the end of the year. jonathan: can i throw in an extra s? secrecy. we can about this, i wonder how much more we don't know. how did they get this through chuck schumer amanda joe manchin in d.c. without anyone knowing this is going on? isaac: i take comfort in the fact that no one in d.c. can keep a secret. it is scary that two u.s. senators were able to keep a secret this long. my view on this is that it is pretty extraordinary. we have to not think about the next iterative dynamic. that has been political

retribution from republicans. we have to go back and realize that this embeds a pasty chips plus bill in descendant, joe manchin announced this deal with schumer. republicans feel they were ranked because they passed through the senate with any understanding we would not have a reconciliation bill. there will be some degree of political retribution from republicans which would make funding the government more difficult. it would make getting an end of the year tax agreement more difficult. we will have to wait to see. that is what i'm hearing from republicans. jonathan: what does retribution look like when the game is almost on? midterms are around the corner. isaac: we can have some degree of comfort in the fact that the midterms are largely baked. likely the balance will flip. i think the republicans probably

have some good attack points coming from this mention -- this joe manchin deal saying you're raising taxes in a time of economic slowdown. i believe the senate dynamics are more in play. my sense is that the lame-duck session is where things go to get done. that is where we usually see big bills and small provisions come together and pass because no one was to be in d.c. during that period. they want to get out of town. my point is that some things congress has waited for until the lame-duck session can get more complicated now that there is this dynamic of lyrical retribution. jonathan: isaac boltansky there of btig. senator joe manchin is always disliked by someone. the democrats like him now. lisa: the republicans are a group with him because he gave and i he was not going to sign on to any plan that raised taxes

and within 24 hours after that assurance allowed the chip bill to get past, they came out with his approval on this additional bill which is much broader and sense and minimum tax requirement for corporations. how much is this going to be a long-standing pivot? it raises questions about retribution, about the climate. jonathan: i like how they signed onto it because it is called the inflation reduction act. lisa: you think people are buying that branding? jonathan: i think the branding helped. otherwise, why college that? lisa: we can debate in this. jonathan: i am not interested in debating about it. it is. just interesting. this is bloomberg. ♪

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>> there is too much