>> held in resilience that we start seeing -- there is some built in zillions that we are starting to see from the economy. >> that suggest a bit more permanence. >> this is a bloomberg surveillance with john mccain, jonathan ferro.

jonathan: live from the nations capital for our audience worldwide. good morning. i am jonathan ferro. tom: kate is a midterm election. they are different than a presidential election. -- it is a midterm election. they are different than a presidential election. the key word here is uncertainty here there has never been such uncertainty over the polling, outcome, whether we will know tomorrow morning when we do this in washington. jonathan: for last year has been inflation. what is not clear to me is who they will blame that on. will a to be the white house, the federal reserve. tom: there is no question

inflation is being blamed on president biden, even with democrats as well. even and inflation reports thursday, with massive uncertainty in the next year. jonathan: we had a two-year rally and the consensus on the south side has been divided government is good for this market. we are going to probe that a little more. lisa: how long is that good? if it is long-term, how does -- how long does estate long-term good -- how long does it stay long-term good? who is going to take the credit if republicans do win? is it going to be donald trump? honestly, the credit game is going to be issued a lot.

jonathan: did you see the announcement in the coming week? lisa: he is going to wait for november 16 and then he is going to. jonathan: the fact that a formal resident look set to get ready to make another run at this. tom: no question about it. it is very strange. for those of you internationally, even across this nation, it is strange for me always to be in washington on an election day. it is a out of body experience. jonathan: you can describe the out of body experience as the show goes on. the s&p 500 index just about unchanged to positive. in the bond market, no real price action by the 10 year.

euro-dollar, 99 92. lisa: i can't get a sense of direction from anything right now. we are going to watch tom keene's out of body experience. we will be watching everything to come out. i'm curious to see how much the republicans pick up in the house. all of the house seats are up. there are 33 races that are tossup's. tom: my number could be wrong in that. lisa: i think people are assuming, some of these might be closer than some people think. i think that is the balance of power. the out of body experience is gold. 1:00 p.m., this is just for you, there's going to be a auction of

$40 billion. how much pressure is the fed going to fill for the fed to back away in the pressure of the election. go to the mint. jonathan: this conversation is the same every single time. you start laughing. lisa: if you are let us know. we do get earnings. disney, amc, news corp., one of the noticeable ones. disney is going to be interesting. how much traction are they getting with the online offerings. that is great. i am just going to wrap it up. jonathan: bruce cashman joins us

now, chief economist at jp morgan. his divided government the best outcome as far as you are concerned -- is divided government the best outcome as far as you are concerned? bruce: it means you're not going to get a strong action in terms of things like fiscal policy, like the context of how much our deficit is and how much we have already done, that is a good thing. if you have a need for action because of a recession or other prices, it is going to the heart to see government mobilized. -- hard to see government mobilized. tom: we blame politicians for inflation. can politicians cure high inflation? bruce: inflation is always an interaction between things

happening in the global economy which are not in the hands of politicians, also what the political economy and not only the central banks do in response to that. i think what we can say of the spike the last year and a half, it is not primarily the central bank phenomenon, not a political phenomenon. how this is going to play out the next couple of years is going to be a response by policy and how much they are committed to bringing it down. we think inflation is moving down, it is going to move now in the core number this week. it is not going to move by enough to get us back to 2%. that is going to require the fed. unfortunately, it may require it recession. lisa: what components are you watching to understand the pace of how much it is coming down? bruce: we are going to see a big fan mimic of gifts pricing moderating.

i think core goods followed both because supply-side pressures around the pandemic are starting to ease, as well as the dollar having moved up here. we see core prices following glenn the u.s. -- falling in the u.s. i think health care prices in the cpi is a bit of a technical issue. we think we are on track for .4 this week. .3 in the next three to four months. that is a significant step down, but it is not bringing us down to where we need to be. lisa: we have been talking about whether a reopening in china or a re-acceleration in china will be a good thing and a bad thing. for supply chain perspective, that would be a good thing for

the u.s. economy. for example, with the i 14 right now. phone 14 right now. the question, does that increase demand so much that the supply does not keep pace. bruce: i think that the issue in china normalizing in asia is a -- impulse that is built into our forecast. the big story about china is how much is it slowing after a reopening balance in the third quarter. the housing sector is problematic. we see china probably growing less than 5%, which for china is a relatively weak outcome the bigger issue in china is going to be a negative impulse on global demand. if it was strong, that would tilt the direction than what

we are seeing. jonathan: the one thing that people agree on down here in washington -- d.c. is a strong stance against the chinese communist party. you expecting that to change after the midterms? bruce: there may be some opportunity for relaxations on tariffs. if that would happen, that would help on the inflation seen. i do not think that is going to be the main story on u.s. inflation or the main story in u.s. policy. i think in tech and other areas that are getting tougher, there is a more up decoupling here taking place and a contentious policy that just going to continue in u.s. china relations. jonathan: great to hear from you. today rally friday monday into the midterm elections.

the pressure is building in a bigger way. tom: a much more authentic to the los angeles mayoral race today, which has got to be front and center. there is no question it is broadening out. he got to believe when the results are in -- you got to believe with the results are in this is going to get heated on both sides of the aisle. jonathan: i agree. in the news conference last week, i have to say, if that was a rebuttal it was a pretty strong one. lisa: also his line, in order to have a good stable labor market, you have to have stability in the prices and inflation.

that is their argument. it is not reading through if you take a look at what is in the polls. it tom: the uncertainty today is on stroller neri -- the uncertainty today is extraordinary. it reminds me of 1984. jonathan: in the next half hour, wells fargo on the equity markets. looking forward to the conversation. from washington dc, this is bloomberg. ♪ >> up today from news from around the world, as millions of americans prepare to vote today, president biden admits democrats face a tougher challenge holding the house than the senate. republicans are favored to take control of the house. the battle for the senate is expected to be a dead heat.

come on trump told the rally in ohio he will be making a big announcement next tuesday. the formal president is hoping to take advantage of good election results for republicans. casualties in ukraine have let today unusual public outcry, that is according to the washington post. surviving soldiers and family members of the recently drafted troops say their units were slaughtered. russia's difference -- defense ministry now claimed the loss of life. it is also a follow-up to a pledge they made a year ago at the un's climate change summit. at this year's conference, 40 countries will outline their plans. nintendo has cut its fiscal year forecast, counsel sales by 10% to 19 million units. the chinese company blames it on a chip shortage.

nintendo is frontloading production to maximize delivery in the holiday shopping season. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪

>> remember, the power is in your hands. you are one of the reasons i have never been more optimistic in america's future. i know we are great people. we are the united states of america. jonathan: election day of america, the president of the united states. this is the price sector looking little something like this on the s&p 500. it yields lower about a basis point. 4.2033. then we go parity. tom: a surprised dollar weakness and someone told me it was back to the beginning of the pandemic. i did not realize how unusual that has been. jonathan: it has been that long?

i will double check that. lisa: it still is notable that you are seeing dollar weakness after everyone was saying there is no reason to be dollar weakness. how much is this is a serious reset? tom: you got to have a weak dollar to have --. jonathan: he said if you bought equity market, big tech in the last year, you are going to be remorseful for the next several years. tom: we are in washington, there is a midterm election. our bloomberg responded starting early. i want to talk some of the vignettes out there, one of them is in ohio. it is so delicate here about the dynamics state to state that the

democrat brian has to hold out dave matthews on october 24 to get it done. lisa: she just does not want anyone from the white house or any big name -- he does not want and more from the white house or any big name states coming in the middle. he wants them to vote for him. he knows in ohio, this is likely a referendum under the biden administration. what was more interesting about what is going on, is what happened last night at the j.d. vance rally, which might have been a former president donald trump rally. tom: what is the play of the formal president? lisa: he said it yesterday. november 15, he has a very big announcement of mar-a-lago. tom: did he get in the way of mr. vance's efforts?

lisa: i do not know if he got in the way of it. this has happened a few times. tom: dave matthews band is a band that plays here. jonathan: so easy to trick you guys. relax. let's talk about the spirit inflation is top in mind, we talked about -- let's talk about this, inflation is top in mind. we talk about the fiscal package in 2021, central bank policy, constraints around the world, who do they blame at all? >> the republicans blame it on the biden administration. they will make it back to things like the american rescue package . if you talk to economists, they

will say it is marginal and the impact on the final inflation number. you talk to democrats in they say this is a global issue. if you look at where the united states stands versus inflation, the u.s. is in a much better shape. we are seeing countries in europe that have much better inflation. they point to ukraine, supply chain bottlenecks coming out of the pandemic. the elephant moving in the body of the snake. that is how he views inflation right now. the issue is, most voters let myself have never actually experience this price pressure. you might not realize if your neighbor gets a job the way you would feel when unemployment rates going up. everyone feels the cost of things going higher, rent, food, and over the summer, gasoline. lisa: i am curious about the credit story because it is expected to be a red wave, this idea of republicans winning.

who gives the credit -- who gets the credit for that? is it donald trump? is it specific candidates who are argument to policy to counter inflation? >> i think we need to see how it shapes out. trump will get credit if his candidates get through, if jd vance get through, it memo too through, if herschel walker gets through. these are individuals that the minority leader, mitch mcconnell questioned the caliber of these candidates. if these individuals get through, you can paint this midterm election as another 2020 election in since of the characters of joe biden versus donald trump. jonathan: how is the governor of florida filling this morning? >> he is probably feeling, woke up the worst man in america. donald trump gave him a nickname the other day.

he came after an ad that governor desantis put out that really was talking a lot about god and how he was created by god. tom: do your sources feel we are going to have debates of 8, 9, 10, candidates, or are we going to two candidates? >> when you look at the republican map, it is not just donald trump, it is mike pompeo, mike pence, who by the way, november 15 is starting his book tour. that was a little dated to his formal vice president, i would say -- that was a little dig to his formal vice president. tom: you do it so much better. jonathan: based on the events in the u.k. the last couple of

months, i do not think a lot of people would agree we do it so much better. >> u.k.'s election is six weeks long. the united states election is made before. i covered both. six weeks, you can handle it. jonathan: i think it is starting already. lisa: obviously he has been dangling it. he was asked on a radio show on his age, what would a 80-year-old joe tell the 50-year-old joe. he would say, i feel like i am still 50. jonathan: thank you. you are killing me this morning. from washington dc, this is bloomberg. ♪

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jonathan: live from washington, here is the price action for you. equities up by 2/10 of 1% on the s&p. the nasdaq today winning street

on the s&p. can we continue the rally going into the midterms? year-to-year holding -- your two-year holding onto. the euro dollar holding on. that is the biggest move since march 2020. tom: we have the stock market live getting in front of the inflation report thursday or is about the election today? jonathan: i do not know. consensus view is we get a government. i would go one step further than that, no fresh unfunded spending. the difficulty i have with the

consensus around for you around divided government being positive, i understand that might be the near term, i think lisa and i have talking about this the last couple of days. i wonder if that holds true from a nine-month timeline from now. lisa: to put a narrative to the recent price action, i would say this is a range market with a complete lack of conviction to keep any narrative to it at all is ridiculous. you are seeing earnings come in weaker than expected. you are seeing downward revisions. you might get gridlocked, but this has been. known for a long time. what has been changed to create this rally? maybe technical? jonathan: it is just like this monologue and everyone is waking up.

lisa is out. tom: in washington for two days here for the elections and tomorrow morning with interesting results to say the least. as i was learning at the willard hotel, it is about oil country. oil country is oklahoma and texas. for stephen schork it is not about texas or oklahoma, it is about heating oil in new york harbor. it matters to so many on global wall street. would you explain the why? why is everybody talking about heating oil in new york and the northeast? stephen: in the northeast it is because 70% of the heating oil markets homes are located in the northeast. significant amount of homes are going through the winter and it simply do not have any supply. why is new york harbor important?

the heating oil contract. we are looking at inventories that are well below the normal. the pennsylvania turnpike had a that there feeling station on the turnpike was closed because adams town was out of diesel fuel. we are out of diesel fuel and we have not even come close to the start of the heating season. tom: if that is the case, can we say it is not in my backyard. is this a refinery matter or is it because the oil went to ukraine? stephen: here in philly, we have a refinery that refines the range of 30,000 barrels of crude a day. that is no longer there. we cut our refinery capacity in the east coast by more than

half, that oil has to come from somewhere, now it comes from houston, comes up through the pipelines or very expensive margins. tom: it comes up from houston because they won the world series stephen:. there enough. every time the philadelphia-baeball club, every time the phillies win, the united states went into a recession. with the diesel fuel, the problems here, we do not have refiners. gasoline is your biggest margin. what other refiners we do have existed, are maximizing their castling output at the expense of diesel fuel. we are going into winter, we do not have the diesel fuel, normally we would make up the difference by taking it over from northern europe.

that is not happening because of ukraine. now we are in a situation where we do not have enough refineries and enough diesel fuel. lisa: a lot of people are saying this is because of political backdrop because people are not investing. they insist on rewarding fossil fuel companies for investing in refineries. other people say it is because of wall street's, wall street does not want to see these investments and are not rewarding companies for building new refineries that are going to keep prices higher for longer. what is your view? stephen: i am partly in agreement with that. we have not built a refinery since 1970. that is a fact of where the markets have been my entire life here. with regards to your other point, well taken. absolutely. my smaller producer clients, their bankers are telling them,

financing. we will stick by you now, in five years we are only going to stick by the big guys. this is a fragmented market right now. the haves and the have-nots are going separate over the next five years. that is the signal being since from the wall street, banks, to the producers. it is a very scary situation because we are not investing in the infrastructure that we need to. fossil fuel demand is not going away. we are not investing in our ability to save this demand. we can legislate as much as we want, demand is not going away. the is not there. we are in a long-term bull market when it comes to fossil fuels. tom: is the biggest refiner in the americas still owned? stephen: oh yeah.

sally has ownership of it. it is the largest and the most productive refinery that the united states has right now. jonathan: what do you make of this relationship breakdown preaching this government, this white house over the last few months? stephen: the white house has dipped his hand in the campaign trail, they were going to cast saudi arabia to the side. i have not had any new drilling in my administration, yet we are going to a prior oil user to ask them to -- pariah oil producer to ask them. tom: not in my backyard, is it a political issue or is it like china were republicans, democrats and independents all believe in not in my backyard, it is really divorced from the election.

which is it? stephen: it is absolutely divorced from the election. this is a u.n. nature. this is i want to preserve my nation. this is not a democratic ranch or anything. -- rant or anything. i lived in the northern pound of the county. not in my backyard. we have to be honest with ourselves. the refinery had been there for 100. we sure was wish we had it now. lisa: on election day in america we are looking at the likelihood that republicans will increase the ability over the u.s. to export natural gas to europe. how much of that is on your

radar, the idea being we want to this in our backyard, we do not care what happens in that i there backyard? stephen: the epicenter in the industry in the 90's in the 80's , the steel mill employed decades of steelworkers. in that area, it is a skeleton up itself. it is now bringing life back to the area, it is keeping its young people, bringing in engineers and employment. this is a source of economic growth. that source goes from pennsylvania, the natural gas epicenter of north america, all the way down to houston. that is clearly on the radar. five years ago when natural gas could not break about $20

equivalent barrel oil, with thoughts we were building committee export facilities, now natural gas in europe trading $600 barrel equivalent. we are seeing, we have not built enough. -- saying that, we have not built enough. this is the natural maturation of the gas market. it is to be people in the market, i produced it in the area, i put it on the pipeline. that is no longer the pipeline, i produced it, put it on a number of pipelines. that is what is attracting the real investment in the industry. that is the league of the future of the energy market over the next three generations. jonathan: so many western governments. they want to brace the energy that comes from fracking abroad.

they were talking about ending fossil fuels? try to square that circle? lisa: it is a difficult policy if you do not have a clear message. jonathan: they codirector of the u.s. politics. with futures up 1%. this is bloomberg. >> keeping you up-to-date with a first word. the u.s. votes today in elections that will decide which party controls congress. millions cast their ballots in advance. republicans feel good about their chances. president biden admits it will be tougher for democrats to retain the house and the senate. it could be days before the final result to be determined.

, trump is holding off until next week before making a very big announcement. the formal president is expected to declare he will make a third bid for the white house. in china hopes are fading that authorities will list a lockdown surrounding the world's largest iphone factory. a seven day lockdown expires on wednesday. the local government may extend. japan is delaying plans to revise how it taxes carbon. the move slows effort to weigh in japan off of fossil fuels, it comes as rolet leaders gather in egypt at the u.n. summit. -- as world leaders gather in egypt at the u.n. summit. lyft said it will cut 13% of its

workforce, nearly 700 people in its second half of layoffs this year. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries.

>> inflation should come down, but do not expected to drop to the immediate and predictable. we have been through multiple shocks. jonathan: live from washington dc? . today winning streak, friday, monday, tuesday morning. yields are low a basis point. look at that, tk, just for you.

the u.k. dollar. 1.0000. tom: you go to four digits as well. we do that. no question about that. lisa: did anyone actually ask you that? jonathan: yeah. tom: the way you quote foreign-exchange is a huge deal. the way that julie moreland looks at currency. she joins us now from university college of london, center of u.s. politics and expert of

this world in terrorism. you are focused in on the shifting democracy of america. you used verizon on the border of mexico is the test tube all of this right now. how important is what we learned today and tomorrow morning to the democratic process of the first tuesday of november in two years? julie: it is going to be crucial for this election cycle to go smoothly for americans just to have trust in the system again. that is on the right and the left. we know that there is over 300 election deniers on the ballot today in both state and role offices. we know that many will probably be in offset of tomorrow. there might be some challenges. i think many of us are watching that closely. obviously, the democrats are trying to hammer this on. i am not sure if that messaging

has stuck. other issues are in the forefront of other voters like inflation and economy. inflation is driving the votes. we still have broader concerns for what this means for the system and if we can restore that faith. tom: select of court cases, i believe the one in arizona, due to suggest judiciary to the rescue as we move on to years? julie: i think we saw it in 2020, the judiciary was one of the main guard rails against some of these attempts to exploit the system. i do think we can see it again. everyone has the right to challenge results. if there is no evidence, there is when the courts come in and push back on the allegations. i think others are hoping for the reforms for the electoral count act goes through congress. there has been support for this in the summit. i think that is important to get that over the line for january, that will close in the loopholes

. with anything else it will be a strong outcome for a lot we heard this year for january 6 in the aftermath of 2020. lisa: a article this morning about how european nations are sleepwalking into the elections. they are not cap hitting what could be the withdrawal of ukraine aid if authorities do get majority in the house and the senate. what is your perspective over from europe's vantage point on how important this election is? julie: here, i do feel like people are asking that a lot. what is this going to mean for u.s. foreign policy, what is this going to mean for ukraine? we heard a lot from some on the right and some on the republican party not wanting to have this for ukraine and trying to have limits for that. i think we still have key leaders like mitch mcconnell

very on board with ukraine aid. if you have 70% of u.s. population on board with that. i do not see it shifting dramatically in short-term. i think there will be increased pressures for accountability on that aid. republicans tend to tie that to some of their other priorities to get it passed biden and get some of their agenda items through. i expect that not only in the u.s., but in europe they will start domestic pressures to try to figure out what is the best way to manage this aid to going forward. yes. lisa: you mentioned mitch mcconnell, we are watching for donald trump's potential announcement next week on tuesday when he has a big announcement that we expect to be launching his 2024 campaign. why are we looking at president biden and former president trump as the front runners of 2020 for peshmerga all of these people who have been in politics for a long time, even -- all of these politics have been in politics

for a long time, a leader in each of these parties are less clear than there were two years ago. julie: that is so true. biden, he has to project that he is going to run for reelection, whether he does that or not. after today, he will have a better sense of the democrats and how much they are going to lean into that and maybe start pressuring him otherwise. trump still has this rep over the party. he cannot be ignored. i think his momentum and energy will push them forward. we are seeing his leadership away a bit, desantis and other are making a stronger case. we are still 12 months -- 24 months out from 2024. our focus is on these two individuals. we can see.

jonathan: we heard enough in the democrats about a threat to the marc veasey, voter suppression, can you reconcile any of that with the turnout and engagement that we are seeing in america's elections? julie: this is one of the catch-22's. the public will is still strong over democracy. people are more engaged than ever in the u.s., we are breaking voter turnout records. there is a sense of everyone wants to defend democracy, whether it is voter security or voter access. each side thinks they are the ones leading the charge for democracy. i think the danger is when you have individuals like trump, some of his allies to exploit that passion for democracy to push light about widespread election fraud and push misinformation on these things. it is such a galvanizing and

demotivating thing for these americans. jonathan: fantastic as always. both sides speaking past each other on the same issue. lisa: that is not just this issue. they do say over the past couple of days, this one russian operative came out and conceded election interference by russia in some of the outlined medications. i am wondering -- communications. i am wondering how much of this is a feeling speaking past each other and animosity in a lot of the rhetoric. jonathan: that conversation continues. today rally, friday, monday, continues this tuesday morning 4/10 of 1%. heard on radio, seen on tv. this is bloomberg. ♪

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>> there is some built in resilience that we are starting to see from the economy. >> i think we are just globalizing more slowly. that is an