amid the digestion, you have breakevens powering higher.tennenbaum says the bond market is pricing that the fed will get this right, but there are other elements that say breakevens are highly tied to the energy picture as well with oil going back above $100 a barrel. mark: -- manus: when we challenged carl and we put this chart to him, there is something that could have been a monumental trade that went through the sometimes we do not get a disclosure of. this is spectacular volatility. a 22 basis point rise, breakevens moving the most in one day since 2009. to a certain extent, i would say, and it is only me and i am not the chief economist of northern trust, not the chief economist of anywhere for that matter, that is spectacular volatility. it does say to me there is somewhat of a mistrust. dani: it is a fascinating back and her than you have a bond market that is challenging the fed to go with 50 basis to start the year -- a 50 basis point hike to start the year. we have had equities power higher. bridgewater called it a magical scenar

breakevens. it will give the fed comfort to make that kind of a move. where breakevens going?ore broadly going? let's get a technical perspective on that. david sneddon joins us now. let's start with the breakevens. i think with the fed humming and hauling as to whether it is 25 next time or 50 next time, what happens in breakevens could be crucial. what are you seeing? david: good afternoon. i think the breakevens story has been one of the strongest teams. it is interesting to see the change in the dynamic we see through this year in terms of nominal yields higher. the rise in nominal yields was driven by the rise in inflation breakevens. at the beginning of this year, that changed and we saw breakevens breakout and real yields darts arise and that became the drive of nominal yields. the market was pricing and a lot of hikes on that growth story. russia-ukraine has acted as a huge flip on that. rather than staying capped at the highs that have capped breakevens, russia ukraine has taken breakevens through that high. that is a hugely significant break and suggest inflation bre

five-year five-year forward breakevens, a bit more tame given everything that is going on. it will be very fascinating to see what i expect will be a divergence between headline inflation and core inflation that develops over the course of the next three or four months. that will put the fed in a very difficult situation in terms of 50 basis point rate hikes. 25 think will resonate with the market, but if it is all headline, and what you are seeing is consumers have their real spending capacity undermined, that is going to be a more persistent problem for the fed. kailey: to what extent do you think jerome powell is talking up this hawkish narrative, allowing the market to price reflective of that to give himself the flexibility if needed, but also give himself the leeway to not take it that far? ian: i think that is precisely what is occurring at the moment. you are seeing the fed put the classic trial balloons out there and say what if we did go 50, is that going to materially impact risk assets, are equities going to selloff as a result. one could argue that powell is as

that can adjust the breakeven of a trade.w more nuance and call a put or selling it. that is just a bet on a stock's direction. >> what are your thoughts on the direction. >> i've chart so we can see that together. the first and looked at the sideways action, proceeding incidents like this. this is a five year jar. we know amazon effectively doubles and then press. 18 months doing nothing and then it doubles again between march and september of 2020. for another 18 months it has been resting and consolidating. here is the second chart. the question is, is this some sort of topper applause to refresh. people will make bets both ways. my bet is the consolidation phase is not and and then it stays range bound and purchases made for longer-term plans will be money cut. >> how do we play this? >> so, the expensive way would be to sell& something like that will cost -- it's 450 premium trade. that is $45,000 with risk. the way to use this bread is to buy a calendar spread. i was looking at the april and june call calendar. spending

breakevens are high but spreads are low and real yields taking a turn. manus: those breakevens suggest that inflation could turn into stagflation shock. we know that parabolic schism within that on the soft metals, let's have a look at some of the red. you have brent up 3.6%, saying that there is not enough spare capacity to produce nickel. bold is up 2000 dollars as easy goldman sachs raised their three month price forecast by some 18%. you are seeing an 18 month high on the growing inflation narrative in the gold market. danny, what have you got? dani: don't bet on a turnaround on tuesday. weakness continues in europe after $1 trillion was wiped from the global cap yesterday. dax, which entered the bear market yesterday, down another 1%. the u.s., it is nasdaq futures suffering the most, down 0.7% in the premarket section -- session. manus: let's get to our top stories. maria tadeo is in brussels covering the russian threat to cut off oil to europe, bruce einhorn is covering the u.s. reaction, and jules is in singapore with the latest on the risks. wha

at the highs of the year last week, on tenure breakevens, isn't that what stagflation starts to look like in fixed income? david: you are right to highlight that, but also i would say look at the five-year-five-year in terms of inflation breakevens. that is actually not that far above what you would consider to be over the medium-term the fed's target. what the market has done, with the bond market has done is say we've got a stagflationary shock coming from the russian war on ukraine. we don't know how severe that is going to be in terms of growth and in terms of inflation because it depends on how that conflict develops, what happens in terms of commodity prices. but we do know the reflection is going to be higher as a result of that, particularly in newer terms. clearly the market is pricing a broader distribution of risk, and i think that is why we are starting to get a bit of a bid at the longer end. that inflation pressure is feeding through in terms of the fed, but i actually think now we are pretty fairly priced at the short end. we closed our short duration positions at the

that's the highest ever for 10 year inflation breakeven. it goes to show that people see oil prices, inflation hi. weekly jobless claims the u.s. this week down the lowest level since 1969. it looks like the economy is holding up even as inflation rises and the fed gets ready to hike rates. haidi: president biden is in brussels for high-level meetings over the war in ukraine. he is calling for russia to be removed from the g20. >> my answer is yes. it depends on the g20. that was raised today. i raised the possibility that if it can be done, if indonesia and others don't agree, then we should in my view have to have both ukraine be able to attend the meetings. haidi: let's bring in our white house correspondent who joins us now. what did we hear in these discussions particularly pertaining to our next round of actions against moscow and also some kind of protection for the eu against ramifications of these actions? >> first, we had more sanctions put in place on russia from the united states. this after individuals, most notably the head of

the tenure breakeven hitting a record intraday high. we will keep you up-to-date on the latest when it comes to politics and markets. coming up, the latest on the leaders gathered in brussels. later this hour, we will speak to the former u.s. ambassador to the european union, anthony gardner. this is bloomberg. ♪ kriti: president biden is in brussels for a summit with nato, the european union, and the g7. the president trying to ramp up pressure to end the war in ukraine. joining us from brussels is bloomberg's maria tadeo. what can the united states and its european allies actually get done? maria: i would argue in many ways goes beyond the symbolic nature of this. we are already seeing on paper how this is changing the face of european defense. we know we are going to get or troops deployed on the ground, particularly on the eastern flank. the secretary-general of nato, who was supposed to join the norwegian central bank, is going to stay on for another year to deal with this crisis. we are about to hear from the germans, in the rotat

the backdrop while nominal rates have repriced swiftly, you had the backdrop of breakeven inflation going higher. what are rate strategists have emphasized is that it's not so much the inversion and the nominal yield curve that should be concerning in terms of signaling recession risks but watching the real yield curve and that remains upward sloping because the inflation curve is still inverted. that has allowed credit spreads to digest this in a resilient way. the high-yield index is below 400 basis points. that is not really indicative of recession risk. i think the market understands the fed needs to get inflation under control. jonathan: this is a massive move. earlier this month, we were down in the one 20's in the middle of the session. now we are in the two 30's. that's a massive move. can you reconcile that and doesn't tell you about something -- the work the fed needs to do? >> i think they have work to do. markets have been beating the two drums. you have what the fed's trying to do then the war in ukraine. the one thing we haven't focused on, jay powell hinted the minutes are

german breakevens are at a record. since breakevens existed, this is a record.ve an inflationary problem. that is where the focus will be. they will look for more clarity in terms of what will materialize. able will look for more stability but ultimately that is the direction of travel. this will delay it. there are areas they may talk about. the fx channel, will there be intent to boost the euro? a weaker euro does not help with the inflationary story. you need to see a big shift in the euro to affect trade. we may see some effect and conversation around the idea you can boost the currency, that would not have a meaningful impact. we are heading for an exit. the ukraine crisis made the inflationary situation worse, and we are likely to see an exit from the extraordinary monetary stimulus. there may be a delay but that is the direction of travel. today we will probably have to wait until the summer to get the details of how this will happen, but that is probably where the ecb is now. very few options, not a lot they can do. the system has plenty of liquidity. if

it is breakevens. the 10 year breakeven yield just shy of 2.73%.arlier at was at its all-time high when it comes to inflation expectations over the last decade. also have the dollar getting a haven bid. the bloomberg u.s. dollar index trading around 1200, its highest going back to july 2020. it has been a wild session for oil. at one point, wti was north of $130. now it $119, still well off its highs. guy: mark dowding going us. we have an incredibly whippy session behind us in europe. the market is struggling to price the uncertainty right now. in terms of the price action you see in front of you, how do you gauge what is really happening out there? mark: i think it is dealing with a lot of short-term uncertainty. you are pointing at lots of different scenarios, so the sort of short-term uncertainty is very understandable. i guess you try and take a longer term view of some of this, and i would suggest on the one hand, you are torn by inflation risk. the other is recession risk. i don't think there will be a big fiscal policy response coming out o

the breakevens might stay higher for quite some time.isa: this is the aspect that really does not make sense to me, that not only do we see 10 year treasury yields still relatively oversees the -- relatively low versus the expertise and for inflations, but also, people are pouring money at some of the fastest paces we have seen in the past decade. does this make sense to you that people feed value into the 10 year? leslie: our expectation is looking for about 2.3% in year yield. you have to remember how quickly we have moved. now that the fed has become fairly aggressive, not to mention the fact that we do have qt in may, there is a normalization of the yield curve. so i understand why people would want to stop and some interest-rate risk on these levels. kailey: twos-tens, does it invert? if so, when? leslie: i think there is a potential that twos-tens can invert in the latter half of the year, but i think it is also important to note that it is the magnitude of the inversion and how stable that is. we all know when the curve inverts, i

german breakevens that records. i appreciate that german inflation has been higher over history, but since breakevens have existed, they have never been this high. as you discussed, it's mandate is inflation. what is happening here is the ecb is going to focus on the inflation side and it is going to leave the growth shock to the fiscal side. the ecb can do very little about the supply side stock. there's not much they can do about this oil shock. so effectively they have to leave it to the fiscal authorities to be able to manage that. we are already starting to see that happening. i would look to both sides for more action on that front. from the ecb's point of view, they are way off target in terms of the inflation narrative. i'm looking forward to seeing the projections in terms of how they see inflation coming down. the ecb is still transitory, but it looks like transitory is going to be pushed back a little bit, and they have to deal with this problem. it looks like they have decided to deal with it may be a li

i think it was driven to some extent by safe haven flows and also flows into inflation breakevens.aine: always great to catch up with you. helping us kick off today's conversation. we will continue the conversation with anna wong, former economist of the federal reserve board and the council of economic advisers. she now works for us, bloomberg economics chief u.s. economist. let's talk about what powell said with a lot of people focusing on the comments about 25 basis point hike, the idea we will not get 50 basis point. is that what you heard? anna: what i heard is a more dovish powell. even though he kept open the option of potentially a 50-basis point hike in multiple meetings even, what he is saying that i heard is that ukraine and russia player parody -- play a pretty big role in the current policy thinking and because of the high uncertainty, the central bank wouldn't not want to add uncertainty. any large size hike or anything that is not well-communicated ahead of time, those options won't -- they'll be likely heard of, that type of move. yeah, i think overall, this address

we can see they've hit the tenure inflation breakeven, a record high., they could go even higher to $200 a barrel. at the same time it's interesting because yield curves are flattening. the yield curve is actually coming down because of the fact that stagflation, growth and inflation at the same time, and you see the recession of 1990, 2001 and 2008, those red bars, were all preceded by a doubling in oil prices. some people say what we are seeing right now is like the 1970's in the u.s., the oil embargo. the slowdown and then inflation that caused the big rate hike. it's a double whammy in terms of the effect on recession. if the fed starts raising rates, it could really be a problem, and not just a problem with the u.s.. europe will be hardest hit by the surgeon oil prices and natural gas prices as well. even in asia, a lot of net import nations, it will hit manufacturers and exporters. so it's hitting everybody around the world and definitely something being watched not only by investors but by central banks. haidi: the trajectory that we thought most

when you add from the reserve, you add some, but the breakevens are 30 or $40 per barrel.y are just printing cash and they are not putting it back in the ground. they are giving it to shareholders. haidi: we've seen a strong rebound when it comes to large-cap stocks. does that continue given its counterintuitive to what you might see in the tightening rate environment? >> i like to say we have to pick through the charcoal to find the diamonds. there are some areas got hit hard. we are bullish on semiconductors. everybody is taking a hard look at their current cybersecurity and beefing it up. we think there are pockets of potential. your to be careful about the growth prospects. we're going to be in a rising rate environment. they need to be companies that produce things now and have cash flows now and not just hypothetical products in the future. you want your portfolio to focus on cash flow, companies that are making money and making profits now versus the potential unicorns in the future. i wouldn't go chasing unicorns or rainbows right now. i want companies generating c

when it comes to the 30 year breakeven rate, the highest since 2013. markets pricing in at least a 25 basis point rate hike, coming from the fed this week. haidi: we are seeing the inflationary surge, the pressure coming from gas and oil prices bleeding through to the asian session. muddying the outlook winter conservation and aquatic currency markets. looking at the start of trading, new zealand is off .3%. a muted gain at the start of the cash session, the downside of about 1%, the friday session. when you look at equity futures for japan and hong kong, looking like we could see a pretty downward day. a jampacked week when it comes to the latest developments in the war and the fed and the direction of the dollar weighing in as well. taking a look wh comes to central banks, that will be key as to how we see that global reaction. shery: we are focused on what will happen with the bed and how the inflationary pressures moving forward. we are talking about a collective insight into the state of the global economy. eight of the g20 central banks are due t

as we go into this, inflation is at 10% but the breakevens, this is the challenge. hawkish a hike do you expect or am i being presumptive? william: that is a good question. we obviously don't know. the tendency now has gone out of the markets to look for more commentary about the 50 basis point hike. we have a brief fluctuation with that idea. the expectation is that the first half of the year is not going to give us too much information. a lot of the question marks is about where it ends? the market is still consistently expecting that real rates aren't going to make it into positive territory. that is the assumption is in the context of what we are seeing for inflation. one of the things about the u.s. economy at the moment is you have giant forces at work. the fiscal cliff is at four percentage points. you have giant savings calls on the other hand, you have covid, consumer sentiment bizarrely low for the situation, so there are giant forces pushing on the economy, but the labor market is smoking hot. that suggests they are right to get going. what they will find

they are reaching an inflection point here with breakeven inflation rates and five years 3.75%, inverting and meeting places -- inverting in many places. jonathan: they think you need to constrain this economy. you need rates also a lot higher. their view on equity prices, "they are roughly unchanged. the policy path being priced in is not yet conservative by markets. it is overly hawkish." would you agree with that? matthew: our forecast as well as that the market is basically correct. the market has nine hikes priced in right now. we are generally of the view we will get to a 3% plus fed funds rate at the end of this cycle, and that seems to be the correct place for now. it is a real problem. you can see it everywhere. one of the best indicators to look at would be the michigan consumer sentiment survey. global financial crisis and the sovereign debt crisis, but it really looks like the number we saw in 1980, one of the worst recessions we have seen. we have university of michigan consumer sentiment level at that type of level, and what is really driving consumer sentiment is durable go

for the fact that inflation expectations are widening with the five-year expectation they stand breakeven rates the highest going back to 3%. jonathan: d think the putin gas price hike -- do you think the putin gas price hike is catching on? lisa: no. certainly the oil and gas concerns are due to that but if you look to be at the headline in yesterday's cpi, it is health care also to other costs driving this as well. jonathan: and it will be with us for a lot longer. team coverage begins with annmarie hordern in washington and maria tadeo. maria, 10:15, the president. maria: he is expected to announce more penalties against russia and taking them away from the normal status of a trade partner and puts it in the likes of north korea. they are potentially meeting similar action at other g7 countries and the european union. they are so much more reliant on trade with europe than they are with the united states. lisa: what would this accomplish? annmarie: i think it is a little more symbolic, even the fact that it is 5% the imf data puts on russian trade into the united states. we should note

looking at breakevens, even in europe, they are near their peak.t does signal that the market is not really convinced by any success from the ecb to actually fight inflation and inflation is the major risk for the recovery in europe. i think what is very interesting to look at is how the market is pricing more a stagflation scenario into the u.s. with a flattening of the u.s. treasury, whereas in europe, there is no such signal. i think it is probably in mispricing. in the u.s., given the high economic indicators, it looks more like a risk of hyperinflation than stagflation. manus: that is a heck of a call. more like hyperinflation instead of stagflation. if we were worried, we should give up and go home. what does hyperinflation mean in 2022 and where do you hide in a hyperinflation? is it a weimar republic, something is crazy is that? >> very high inflation scenarios are negatively correlated, but if you look at more defensive strategies especially in these negative real yield environments , you can still look at income for example, if they are u

breakevens now slightly higher, but we did see that coming off of higher inflation expectations as the tries to fight higher prices. the yen at the slower rate differential and brent crude just topping $100 a barrel. it is also bank of england decision day. the announcement is expected at 12:00 p.m. today and a clear majority of economists are expecting a third rate rise in a row. we are joined by lizzy burden who is outside the bank of england. just yesterday, raising rates for the first time for the fed since the pandemic. has expectation for the boe also gotten more hawkish? lizzy: just when you thought a march rate hike was in the bag, russia invaded ukraine pay while u.k. inflation is already at a 20 year high, now war is threatening to push up prices even higher. the bank of england response -- if the bank of england responds too aggressively, the war will break the rate of recovery. economists are expecting a third straight rise from the bank of england, but the question is how big it will be. there are plenty behind me who are arguing that they need to frontload and tamp down o

is bond market breakeven?re they ok with 7.8% gpi and the fact they have inflation wrong and continue to? are they ok with where we are in terms of inflationary pressures exacerbated by the war in ukraine? there are so many ways for them to be concerned. they have to basically look past the flattening yield curve tort other dynamics. jonathan: a sneak peek of the oil market. it is trading higher. this line came from the foreign minister of lithuania. it is unavoidable to talk about the energy sector. lisa: for europe, energy is still on the table and the question of whether it will will come to a full embargo. as pressure grows, they could retaliate in fuller measure to russia. energy is something the european union has to consider and have to wean themselves off of russian oil. jonathan: let's turn to boeing. 177.10 on boeing, trading lower by a little more than 8%. kailey: you had a jet with 132 people on it crashing in the southwestern province and no news on the casualties but this is a 737 800g, not the 7

we have never seen the breakevens curve this inverted. some of that is oil hedging, but some of that is genuine concern, and we need to hedge inflation by hook or by crook. if and when we start to see inflation rollover, i think you will start to see deflation happen merrily at the short end, and we could have a steeper yield curve. i thing that is a bullish scenario for stocks, credit, and short-term treasuries as well. jonathan: brian nick of nuveen. wrapping things up in brussels, that nato meeting. then onto a g-7 summit, then onto an eu leaders meeting later. we can touch base with brussels right now with maria tadeo. talk to us about what happened netmeeting as we wait as what happened in that meeting -- what happened netmeeting as we wait for the secretary asked what happened in that meeting -- what happened in that meeting as we wait for the secretary-general. maria: ukraine, they have had a major reality check about joining nato. they now know this is just not going to happen. they know that nato is not going to help on the groun

at what point do you think investors should look to breakeven on an inflation adjustment basis rathert returns from financial instruments the way they have become accustomed to? bill: if you're talking about tips? lisa: in general. i think there is a feeling where you were talking about investing in riskier assets to try to get bigger returns for pension funds and foundations and you have a lot of big investors saying you have to lower your expectations in order to not just lose your shirt and risky assets. what is your view? bill: going forward, i've shared this for a few years, not with the faangs, i think an investor can only expect 5% to 6% going forward. these are days in which interest rates will be rising, they will be pressuring corporate profit margins, they will be affecting the housing market. there is less liquidity in the marketplace. a 5% to 6% return instead of a 10 like peter lynch used to call it or even 20%, which most millennials and new investors think they deserve is probably a pretty good number. lisa: which asset class would you choose as having the most,'s if y

when you look at breakevens, they are at record highs. three basis points, 2.80 seven in terms of inflation expectations over the next decade. we actually are starting to get a little bit of a steepening in the yield curve. now we are sitting around 24 basis points. i wonder if that is a little bit of a repricing of whether the fed is going to be able to tighten aggressively given this stagflation fear on the rise. >> absolutely, those fears definitely felt here in europe. the ecb expected this thursday as it tries to figure out what the economic impact of all of this is going to be. they don't have that luxury of sitting on hands, they have to price what they are going to do. the year to date, down by 18%. put that price in a recession. does that fully factor in the risk that we take in europe as the result -- a result of the war in ukraine? 18% is the downside for the euro stoxx 50. does that represent the risk that europe faces right now, do you think? >> it is hard to say exactly at this moment in time, but one thing i have been reall

the two-year breakeven, the short-term and flesh and expectations in this market, up 18 basis points on the day, 4.64%. another record there. feeding into those expectations is the price spike we have seen across the commodities complex. a lot of volatility, to be sure. oil is heading for a weekly loss, still up 3% on the day per wd -- on the day for wti. guy: let's talk about the politics and how they are driving the market right now. eu leaders wrapping up their two day meeting in versailles, just outside of paris. the slovenian prime minister is urging the eu to impose a complete ban on russian energy imports "as soon as possible." he spoke with bloomberg's maria tadeo. >> it is a war crime. it is very clear that russia is denying it. but we have seen the horrible pictures in recent history, and the same propaganda and the same denying. but we have to do much more than we are doing now. guy: maria joins us now from versailles. we are wrapping up the meeting. what progress is being made? where are we seeing common ground forming? where are we likely to see further action being take

the five-year five-year breakeven is hardly out of control. this is a 1984. this is 2022. to me that does not mean the fed has to overdo it. inflation expectations are not embedded yet. it is not permanent. lisa: meanwhile, i was looking at this dashboard that gina martin adams put out, where basically only 10 out of 15 indicators were flashing yellow or red, and only five remaining are green, including relative earnings-per-share growth. of these flashing signs, which are you actually watching to see if you should change your constructive view? brent: i think people are focusing on the yield curve come first and foremost. let's stick about what is actually happening with quantitative easing over the past few years and how distorted the term premium is probably on the 10 year treasury. to me i would take that with a grain of salt. certainly it shows that we are aging and the cycle, getting further along. a recession could still be two years away, and during that time, the markets move higher. we kind of put this into numbers but cannot -- because i noticed the spread betwe

what we want to see the breakeven curve with more short term than long term.we should get more and more comfortable with the idea sub2% inflation is in the rear view mirror. charles: let me ask you about this, a report out this week from lending club. 64% of americans living paycheck to paycheck. that is from january. up 12 percentage points from last april. how does this, how do we deal with something like this, if wages are stalling? >> well, wages are probably going to lose some momentum. forget just nominal wage growth, everyone focuses on 5% wage growth. it doesn't matter, real wages, your wage increase adjusted for inflation is the worst it has been in the history of my chart which goes back to 1998. real wages are dropping faster than they have in the prior two recessions. so it isn't wages that we need to fix as much as getting the cost of living down for americans and that will not come from fed hikes. the fed can hike as much as they want. it will not solve a war in russia and ukraine, it will not solve food price. a lot of pressure will come from go

inflation breakevens are very impressive. it will come early which will cushion the yields. do you want to learn? >> it is difficult. growth equities will probably do a little bit better than value equity. across the board, lower returns is the name of the game. this recent with russia and ukraine, there been a correlation brakes, know that. the data is too short. we don't know. gold will be in very aggressive demand going forward. that is something you will want to be earning. the u.s. stocks, both grow in value. in europe, we are long financials. if you don't get further worsening, the consumer is quite cheaper. it is quite selective in europe. in the u.s., within the context of lower returns, over the next three years, are model suggests a return of about 4%. that compares with about 20% returns over the last two years. it is a significant step down, 1/5 of what we've seen. look where growth is going, which is slightly lower. liquidity slightly tighter. growth was at 100% distribution. liquidity was at zero. both of them are moving in opposite directions. alix: we should

breakeven down 16 basis points today. a still elevated 4.5%. federal reserve decision tomorrow. 25 basis points essentially baked in. how does the fed look at how we are doing today and how does that influence the guidance going forward. this is bloomberg. ♪ guy: let's talk about what we will looking at over the next 24 hours. the main event is the fed kicking off its meeting, it will conclude tomorrow. president biden will also be in action signing the bills funding the government until september the 30th. tomorrow the focus on the fed, that will be by far and away the main event. kailey: that meeting will end and they will make their decision likely a 25 basis rate hike. we will pay attention to jerome powell's press conference. president zelensky's virtual address before the u.s. congress will happen and an extreme meeting of nato defense ministers. the war in ukraine front and center. let's get more insight into the fed meeting. michael mckee joins us now. give us the rundown of what we should expect. michael: you just did. the war in oil p

your breakeven on the 10 year is above 3% for the first time ever since 1998.uy: how do you position for a recession? should you position for a recession once it has arrived? i'm wondering about what stock investors should be doing as they think about the possibility of a recession coming. what is the right place to be? victoria: first, there is a lot of variables on the table. a recession is probably going to come. pmi is still above 50. unemployment is 3.8. that is very low. the curve is close to inverting. has not converted yet. you have all these signals on a precipice. we are thinking the inflationary drag is going to put pressure. what do you do? i think you want to shore up your portfolio. you want to be higher-quality. you want companies that have cash flow, strong balance sheets, ability to whether a tighter market and probably not trading -- guy: you got any names for me? victoria: we like the energy space still. we think energy prices will remain high. chevrons are a good place to be. we like devon energy. a name not a lot of people talk about, we li

you have to have scale in order for the end of the work in childcare to breakeven. can't do that in small rural programs so this precipitous decline in family-based childcare is coupled with a squeeze and even worse or rural programs and again, ccdbg is foundational. it's critical and it hasn't solved the problem of rural childcare in america and what the proposal on the table does is create the incentives, the structure for rural communities to be able i to invest in ways that the scarcity that sits in ccdbg hasn't allowed us to do. we always hear from rural communities they feelas though their left out ,that their left behind and it's true . that is the case. that is what they've experienced and creating this floor of quality expectations and creating a florida financing that says we're with you, we've got this even if these are tiny programs thathave trouble making ends meet , we will be there as partners . >> e i look forward to continuing to work with you on this. miss ballivian thank you for the work you're doing to support kids in your care . i want to highli