ecb will have more confidence. wasdp talking about, that is all about the history, not about where we go from here. loan growth in the eurozone remains reasonably robust. mario draghi should not talked on the recovery. wage inflation is the key. alix: a couple of the sentences lookingabout they are at incoming data when it comes to bond purchases and they anticipate to end asset purchases in december. it seems to me that they are hedging a little bit. -- athat take in air print near-term catalyst off the table for the euro? >> yes, i think that is their intention. they want the biggest amount of flexibility as possible. .hey are still unsure the downgrade in the growth forecast shows there are headwinds. but they hope there will be other places of strength. waiting.stors are also can the ecb go forward or are these headwinds picking up and the euro will stay down a little while longer? david: david come on the growth picture in europe overall, focus on trade -- david, the growth picture in the europe -- and when yo

the ecb has a huge footprint. jonathan: there is a feeling that ecb policy is on autopilot.e that feeling? >> i was almost going to say that they endeavor to be boring for the near term. i think they took a lesson from our taper tantrum. it was not fun for the marketplace. it was a change that was not anticipated and you had a stark market reaction. the ecb has invested in avoiding such an outcome. they don't want to destabilize the market. jonathan: can they keep it boring? kathy: they can for a while, but as italy runs into big political problems, outside offense could force them to have to soften their stance going forward. jonathan: that's where i want to leave this conversation. i want to do the rapidfire round and get some quick final questions with quick answers as well. do we round out the year with a fourth rate hike? yes or no? rj: yes. kathy: yes. diana: yes. jonathan: is the path of least resistance for 10 year treasury yields higher or lower? the path of least resistance for 10 year treasury yields, higher or lower? rj: higher. kathy: longer-term lower. diana: h

the ecb target. so i think it's about the surprise that it now is, not only for one year, but for relevant,that is also that is 2.5%, 2.4%. keeping in mind, if you look at the most pragmatic was 1.6% and the widest was 3%, it's somewhere in the middle. at the end of the day, i do not think -- it's important but i think it's more about the expectations going into the announcement. jonathan: another set of expectations was the finance minister would be a moderating force. and capital economics pointing out, and quite rightly in many people's minds, he would be that moderating force if you look at what has come out the other side of the budget discussions. is there a moderating force in the italian government? is there one left? colin: i don't think there is one left. this didn't surprise me, the 2.4% that -- this did surprise me, the 2.4% that came out. i think what we need to expect is more volatility with respect to italy. what i find somewhat encouraging, though, today is the fact given this news, w

listen to ecb commentary at the moment. they seem optimistic about the situation, the fundamentals of europe. to put a bit into bunds at the moment, you have got to believe the ecb's monetary policy stance will move from where it is currently. diana: it is interesting to me. we talk about the contagion being limited, but you have to look at correlations. the euro-dollar still reacted. the moves are marginal in other sectors, but it does not mean we have not seen a slight repricing. it is something the ecb will be watching very closely. they have to deal with the italian headache. they also have brexit around the color. is them, the policy outlook much more -- by this outcome than if he had the 1.9% budget number we would have. jonathan: the market is drawing a distinction between supply risk and redenomination risk. do you think the tailwind is there that we could be on the path for exploring redenomination risk in a eurozone country? colin: i don't really think we are at that point yet. i think we need to take it a couple

the fed ecb, boj, they are , also retreating.ou have this liquidity that is coming out of the system. when you have them giving you more than 2%, you should reprice risk premium elsewhere. e.m. thingt of this is absolutely quantitative tightening. even the rate market reaction to e.m. has changed. earlier on, it was being viewed as more idiosyncratic. in the last month, the markets are saying, maybe the fed can't hike that much. i think the rate market is saying this is more than argentina or turkey, this is contagion, this is systemic. this has the chance of potentially slowing the fed hiking cycle. lisa: this is contagion, this is problematic. iain, i want to get your thoughts. you said you see opportunities and need to dig in there, do fundamental research. what are you doing with your portfolio? are you buying mexican bonds and bonds of other places? if so, is it corporate debt, sovereigns, what are you doing? iain: we are looking for the areas we like. we like areas like mexico. we have been adding areas like that in the por

i think we have an ecb leadership change coming up.on't think the ecb is seeing a lot of inflation. that's what i think even bunds are capped. as much as i would like to tell you about the basis point selloff happening here, i think it is 20, 30 basis points in bunds in treasuries, i think it could be interesting. and the boj -- lisa: real yield! priya: the boj is actually trying to inject a little bit of volatility in the market. can they gap it at 20 basis points, or can they not? if they start rising, we have a bigger global route. we're not looking for that, but that is a risk factor. lisa: where is the big excitement going to be going into the end of the year? iain: i think it could well be in the emerging markets. i think that is where we could see some volatility, but also see decent returns. i would say on the german, on the core government rates, i think we could see yields push a little bit higher over the course of the back end of this year. although when i look at germany, i agree. you are capped by what the ecb is doing on

. >> this is happening right as the ecb is dialing down qe.t is going from $30 million to $15 billion and then likely zero in january. we are wondering who is going to be supporting italian debt going forward. jonathan: joining me is diana amoa, and scott thiel, plus coming to us from chicago is colin robertson. diana, talk about what is happening in italy. how big a risk is a budget deficit of 2.4% of gdp? diana: markets have been expecting something below 2%. the last few weeks we had numbers closer to 1.6%. 2% was really the top side the markets had been expecting. 2.4% is not a great number, particularly in the context were -- context where in the past they have been able to meet their one-year projections. this time they don't necessarily have the tailwind that they have historically had, and you have higher rates coming through as well. scott: it's important to take the number and context of the market. italy had been meeting with investors to talk about this number in particular, but more generally the italian situation overall. they gu

ecb andlk about the turkey.is the one that seems to have the power to move markets a little bit more. wide range in the bloomberg survey predicting a 325 paces point hike. -- basis point hike. how are the stakes, not to -- just delivering on expectations but exceeding them? ter monetary policy -- the big question that investors have is will the economy reduce some of the underlying imbalances that are causing some of those concerns that we have seen recently so the central bank is moving in that direction. it would be a step toward calming some of the europe -- they need to deliver. there is a big expectation. the hike could be enough to calm investors but is that going to be enough if we get a hike from the central bank to address those imbalances you were referring to? they a to add a fiscal leg. there is a huge account deficit. which means they need to import a lot of capital. tot, ultimately they need accept the economy will slow a little bit and that will help calming some of the markets. punch response rat

it is the ecb headed there as is the ecb headed there as well?to see the divergence and policy -- in policy. halved and taptered and -- tapered and ended by the end of the year and next year we will probably ecb first rate hikes by the ecb. the ecb is moving slowly in the direction of the fed, but much later. i want to point out this great chart our producer put together, which shows the route in the emerging-market stocks. rout in the emerging-market stocks. if you look at what happened in when you saw this big boom across em stocks, it similar.ily people are using the word contagion. if we start to see the kind of contagion we have tied in the past with emerging-market slumps -- have had in the past with emerging-market slumps, is that change the trajectory -- does that change the trajectory? are less healthy and more healthy emerging markets. market, sucheaker as thailand's was during the asian crisis. eurozone,olicy in the the troubles we see in will not directly influence the eurozone monetary policy. troubles in single countries will hit se

looking ahead to the ecb, i want to get the view from london.u looking for from president draghi through the next 12 months? that given thet forward guidance, we think they have given themselves very little wiggle room in terms of there's not as much excitement forward guidance, we think they around the ecb as there used to be. exiting qe is telegraphed on its way out. what is interesting is we will see to what extent they take into account italy on their periphery in changing the tone of the statements. of the statements. also if the language around growth, given we had a pretty of the statements. also if the language around growth, given we had a pretty soft start to the year sounding a little more bullish making the , end of summer more likely than later down the year. it was a change that was not anticipated and you had a stark market reaction. the ecb has invested in avoiding such an outcome. they don't want to destabilize the market. jonathan: can they keep it boring? kathy: they can for a while, but politicaluns into big problems, outside

i think it is clear the ecb will be on a slow path.e are forecasting six times until the end of 2019. in the short term, i think you might continue to see divergence. krishna: if the framework works out, convergence/divergence won't matter, all of this will go in the tank if the fed tightens six times and the ecb doesn't do anything, because the dollar would strengthen to a level that would be unsustainable for the global economy. at the end of the day, the conversation about divergence/convergence has come down to economic fundamentals. the markets are diverging because economic fundamentals are diverging, and until they start converging, there is not going to be respite. the real question for me is, does this convergence that we are looking forward to, does it come about, but more importantly, if that convergence comes through, what? with u.s. growth slowing down, or the rest of the world growth speeding up? i think that's a very important question. jonathan: where do you answer that question? which side of the debate? krishna: i thi

the ecb in frankfurt.y is not really expected to be much of a market moving ecb per se, but i think the expectation is that they may lower growth forecasts for this year tonight you think it would be difficult for them to justify the actions taken in june if they sound too dovish on the outlook? >> yeah. i don't think he'll go as far as being completely dovish and completely negative about the economic outlook if you go through the speeches of recent public appearance, the ecb is still optimistic, very optimistic even for the economic outlook. they're still thinking that the economy or the recovery is intact and they even go as far as saying that recent developments in wage growth is surprisingly positive also for the inflation outlook. if you look at the prime mandate, inflation is the issue. and what we could get today is also somewhat higher inflation outlook which could mean that some people could think that a first interest rate hike could be earlier than previously expected if innation would really -

for the ecb, it looks like a bit of a snooze fest. do you think the policy path does adjust over the next 18 months? subadra: we have the ecb meeting this week, and we didn't get a whole lot of specifics on what they are going to do on the policy front that is new that we didn't already know. they're going to lower the pace of asset purchases in october. they are anticipated -- and they were very careful about their wording -- they are anticipating to end qe at the end of this year, and normalize policy sometime in the middle of next year. they are basically telling you, we are aware of what's happening in italy, but it's not really a policy concern as of yet because the rest of europe seems to be doing quite well. jonathan: what we see in european credit is different. gershon, a stat came from your team that i thought was phenomenal. u.s. high-yield has outperformed global high-yield for the most since 2002. is that really true? gershon: it is not that big of a gap. you are just talking about corporate debt. u.s. high-yield market ha

and that brings me to your role in the ecb.a lot of talk about who will fill positions including the chief economist. any thoughts on whether you are in the running for that position at this time? gov. lane: there is a lot of speculation about different jobs at the ecb and elsewhere. i applied last year for the vice presidency. i stand ready if the euro group and the european council look in my direction, i am interested. but equally, there are many strong candidates out there and i should emphasize that the job i have is a great honor to have it i am -- and i am fully committed. europe has to find a replacement for the very strong group we have right now. we will see what happens. anna: given the job that you do have right now come if i ask ise about ireland, how ireland reacting to the tighter mortgage rules? that anome it is acceptable drop-off in house prices? gov. lane: i would say this is good news. i have signaled for a wild that another factor behind the flatlining at the moment is more supply coming from the market. th

the ecb cannot agree on what summer means. is already uncertainty there although i do not think they will change their forward guidance but growth is their biggest concern. if you look at their forecast, they were looking at the

the ecb -- for an oddity. nejra: the ecb on autopilot for quite a while.it comes to the bank of england, no change expected today. is there any argument we could get a hawkish signal given the pricing in markets of future rate hikes? >> the u.k. economy does have a little inflation problem. it is not big. it has a tight labor market. the case is clear. the u.k. needs higher rates. hikes nexto rates year and tomorrow the following year. it is too early for the bank of england to really provide clear clues as to what they would do if brexit goes ok. i don't think there will be a major hawkish tilt in the minutes today. all week, we have been marking 10 years since the collapse of lehman brothers, the defining moment of the worst finance a analysis century. discusses the meltdown and what it means for europe and the united states. barclays was a major player. trees were quite imported in investment banking. the u.s. were absolutely taking over that market. that is good in a climate of america first. should europeans try to change that and to have one global i

that,ind it interesting in the way you pose your question, you left the ecb out of it.r of fact, the ecb a major, biggest player determining how fragile government bond markets are. the ecb on its own, with a discretionary decisions that would be better suited for the euro area, could provide more security and calmness and markets. let me -- calmness in markets. people at the ecb always say that markets determine interest rates, we don't. that's not true. ratesmarkets and interest and best there is always this threat, just a couple of downgrades by a couple of rating agencies can out ofthe government collateral. that is the ecb policy that could have been changed to something more reasonable that is not as punishing. julie: i do want to ask you about another topic that has been relevant in cyprus. money laundering. we are seeing some executive departures in ing about allegations of money laundering. how relevant do you think that is in europe at this point and are regulators doing enough to fight back against it? i have to agree with some of the statements that have bee

what would it take to throw the ecb off course?i think at the moment it's on a very slow course so while they are tapering -- going to seever rate hikes in the ecb in this economic cycle? or is there something that would stop them from raising rates? managers say they're going to struggle to raise rates. that's because of the fed. throw in the italian story and maybe we are in a scenario where they can't move. marilyn: i think at the moment, the way the eurozone economy is at the whole, you have these temporary issues in italy but if you look at germany, it's doing incredibly well. if you look at markets across the eurozone, they are doing well. i think overall still, it's hard to see the ecb being thrown off course at the moment. at the moment, the market is expecting some sort of change in interest rates. draghi said himself after the summer, the market is expecting something. given rates and negatives at the moment, the ecb does want to hold it together and it's done in incredibly good job so far supporting eurozone projects. th

we will bring you the ecb policy decision at 12:45 p.m., u.k.io draghi's news conference. this is bloomberg. ♪ ♪ to rent a movie? showtime. or buy the hottest shows. even here? we've got you covered. now they are all yours. to take on the go. on any screen. bingo! alright! and watch whatever you buy. wherever you are. head to xfinity.com/stream to start watching. simple to rent, easy to buy, awesome to go. >> trade optimism as beijing welcomes washington's in this -- imitation to come back to the table -- invitation to come back to the table. day, anbank decision announcement from the ecb and the turkish central-bank. only the latter is expected to take any action. welcome to surveillance. it was risk on in the equity

my concern is if you listen to the ecb this week, they are pretty much on hold for a good portion of next year. qe is anticipated to end sometime by the end of this year, and what that really leaves them with is very cognitive policy, in contrast, you have the u.s. raising rates four times over the next year, which makes it very hard to time monitoring policy if the u.s. tries a slowdown for the later half of the next year. divergence could stay on a little longer than we anticipated. gershon: i agree with that. we are forecasting the six-time until the end of 2019. in the short term, i think you might continue to see divergence. krishna: if the framework works out, convergence/divergence won't matter, all of this will go in the tank if the fed tightened six times and the ecb doesn't do anything, because the dollar re-strengthens to a level that would be suitable for the global economy. at the end of the day, the conversation about divergence convergence has to come down to economics under metals. -- fundamentals. the markets are diverging because economic fundamentals are diverging,

the ecb staff has a pick up in core inflation draghi talked about it yesterday. he talked about this being a vigorous increase in core inflation. we think the increase will be more gentle. that means the ecb will not reach its target any time soon that's why i think they will push out the timing of the first rate hike. also i think they will want to see the euro weaker. then the issue is if and when the fed stops tightening, there's a risk if that's the time when the ecb wants to hike rates that the euro appreciates too much that's why the ecb will be cautious and a rate hike next year is not a done dell yet. >> balancing effort as ever. thank you so much for joining us on "street signs." >>> theresa may says it would not be in the uk's national interest to hold a general election before the uk leaves the european union she traveled to the u.n. general assembly and may once more vowed to secure a good deal with the eu she also said a canada-style agreement with the bloc was a non-starter. >> i said no deal would be better than a bad deal you talk about a canada-s

ecb hawkishness is a catch-22. this could exacerbate the move in spreads. , and potentially inflames political tension in the northern portion of the bloc. the marketthat what is reacting to come up eventually that this is the whole european project that risk? >> in a way, yes. in a way, no. we still have a very long way to go, and there are going to be many twists and turns. but if you look at the eurozone and analyze it structurally, two structuresy here. over the will break up long-term or sit in a perpetual state of crisis where it can not get to grips with solving the fixrlying problems to what's wrong, and can't fight the crisis efficiently. there have been writers that have described the eurozone is the calm as just the period in between two crises. i think that is what people are looking at when they analyze the structure of the eurozone. vonnie: the european commission is going to be a big problem, but megan, and the meantime for italy, i guess it is all guns blazing when it comes to spending and social pr

an ecb meeting tomorrow. euro rising against the hungarian currency.eu voted to place sanctions on currency --ch made the group anymore that is a look at the european markets. vonnie: in the u.s., wti took a big jump higher with inventories. ,fter inventories, 2.3% higher approaching $71 after the major drawdown more than 5 million barrels, a 4 million barrel drawdown the week before. spread,ook at the 210 22 basis points which tells you the two-year yield is moving up and staying there. i wanted to mention discovery communications has flown under the radar. it is the best performer on the s&p 500, gathering steam on reports of china negotiations starting again. currencies andhe other asset classes. the australian dollar, much stronger today. the canadian dollar as well with oil currencies having a good day. russia having a better day. bonds are higher, yields are lower in russia. julie: in a bloomberg scale, the ecb forecasting lower euro area growth because of trade tensions according to familiars -- people familiar. ofe is karsten schroeder amplitud

fits with the ecb scenario. he says the guidance on how long the ecb will reinvest is vague. a number of things coming through here. we see the beginning of emerging price pressure. meanwhile, italian bonds have been reeling today. be nation's deficit will 1.9% under the plan, below the eu's 2% limit. we bring back in grace and sara. to go to mario draghi's comments, and yields spiked bond yields and spiked yesterday. are you seeing these pressures? he used therah: word vigorous and i think that was seen as quite unusual way to define what is going on. the inflation story is relatively muted still and if you look at core inflation, we are still close to 1%. some ways to go. it does reiterate what was said at the last ecb meeting. there is a confidence which has been evident in recent meetings. governing council clearly sees that inflation is moving towards targets. they have the confidence to into qe at the end of this year. their formal guidance is still very cautious. our own view is that they will have to wait until september before we get the first rate hike. nejra: europ

this is important for the ecb rate decision tomorrow.omberg terminal, you get a slightly quicker stream of the audio, i think. mittenook at some of the -- mid-cap movers in this morning's trade. here is dani burger. dani: some positive news sending shares higher. they have been approached by several pe firms and might even consider a possible sale. -- fallingr side, with the rest of the european energy space, almost 3% after a profit warning. finally, the best-performing cup 14% on thes positive news of the study on its rheumatoid arthritis treatment. >> coming up, the former new york fed president joins us for an exclusive interview at 2:00 p.m. u.k. time. you will want to hear that. we will get more from andrew wilson. we will get to ask him what his clients are doing, how much cassis on the sidelines -- caches on the sidelines. this is bloomberg. ♪ anna: welcome back. this is "bloomberg markets: the european open." this is jean-claude juncker speaking in strasburg. matt was so excited about what he has been saying about the brexit neg

the ecb may be at the beginning of raising rates.an external shock from the united states, either a bear market or recession, the ecb would find it difficult to continue hiking. nejra: thanks so much to alexis gray, senior economist at vanguard for joining us. if you have missed any of our lehman 10 years on interviews, head to the bloomberg. you can rewatch all of our shows as always on tv anytime you want. ♪ >> it would be an important element of the banking unit. >> when banks are selling half of their book value or less, that is telling you something about the underlying health of those institutions. that, ido not recognize mistake make a serious area >> the downturn in be debt crisis will not be debt. it will also be pension obligations, health care obligations, unfunded obligation. >> we are doing a much better job of monitoring. we have much more in the commercial banking sector than the shadow banking sector. it does not suggest that if we had a big new shock we would not have contagion. >> the biggest issue for elected

the ecb is investing in their effort to avoid such an outcome.y don't want to destabilize the market. can they keep it boring? >> >> they can. outside events good for some to be -- to soften their stance going forward. >> that's where i want to leave this conversation. i want some quick final questions with quick answers as well. do we were around out the year with a fourth rate hike? >> yes. >> yes. >> yes. >> is the path of least resistance for 10 year treasury ?ields higher or lower higher longer-term lower. >> higher. >> final question. dollarntina or turkey, debt for 12 months have to sit and hold selling and 12 months do you by argentina or turkey? >> argentina. >> can i pass? argentina. >> argentina. >> great to have you with us. it is been great to get your thoughts on a week of fixed income. from new york, that does it for us. we will see you next friday at 6 p.m. in london. thisincome. was bloomberg really yield. this is bloomberg tv. ♪ i'm mark crumpton. national security concerns, president trump says the justice department should inv

if the ecb does not want to help, what next?g about the implosion of the zone? it is not an easy position for germany. the other option is someone will do what mr. draghi used to do. exactly what the previous president had done. it creates issues for the german government to have a german national at the european central bank. we are finding some other solution probably more rational. francine: what would be the difference of whether someone in france gets it or someone from a smaller nation? think there will probably always be a sense that if it is a frenchman, there would be a sense they would be more dovish. i am not too sure because historically france has been fairly orthodox and i'm sure any know how tould make sure germany would become trouble with a new policy. the north,meone from it makes it easier for the big betweens to divide themselves and the other jobs, european commission and the parliament and the imf. thank you so much. he is from the bank of america merrill lynch. he stays with us. coming up tomorrow, we spea

ecb and also the path of eurozone growth at inflation? the big challenge the ecb, and they will certainly have this in mind, is where will rates being the next time the economy slows? if they do not start moving, given that rates start from below zero, if they do not start moving rates until the end of 2019, there is a real risk that it's just above zero by the time the next downturn comes. if the outlook is fine, which are currently is, and the wage rose continues, inflation will stay on target. nejra: so just to sum up because it is the end of the hour with michael metcalfe, how are you positioning globally with equities? michael: we favor the u.s., actually. in general, in terms of the global outlook, we are relatively constructive, and we think people have been a little bit overly concerned about the trade war, and that is starting to keep out of markets now. nejra: thank you so much to michael metcalfe, global head of strategy at state street markets. take a check on the chinese equity market. take a look at the shanghai composite, t

before you had the ecb as a pretty price in different buyer of debt. we no longer have that.nvestors left to support this market need to factor in the fact that the 2.4 might not be a disaster but it's still a deterioration in credit. at which point are you willing to take that risk when there's no sign of consolidation on the horizon>? jonathan: i'm guessing you don't have a price right now? >> no. >> the liquidity has gone way down. one of the interesting things is the spread between the treasury market and the bond market. if you look at the liquidity and trading volumes, they have gone way down as a program has been winding down. i also think that there is a strange liquidity premium isping the bull market lockout what you described earlier. jonathan: black rock me, as well as jpmorgan. coming up on the program, the auction block. amid all the concern on italy, the government offering up some yes. this is bloomberg real yield. ♪ ♪ jonathan: this is bloomberg real yield. i'm going to head to the auction block now where we saw another big loan sale through this week. we've

manus: a little bit of news on the ecb. russian federal bank, the bank of england, this is not the latvian central bank. you have handing over voting race to the deputy in a statement from the latvian central bank. and that has any implications in terms of the timing of the european central bank, that will be one to consider. let us see how the week goes. board, neare you on nejra. nejra: thanks for making it such an easy start. that is it for bloomberg markets. "the european open" is up next. the open for european equity markets. this is bloomberg. ♪ >> good morning, welcome to bloomberg markets, the european open. i'm anna edwards alongside matt miller in berlin. .att: welcome equities lower in china and hong , a bearenchmark index market. european futures are pointing to a mixed open. cash trade is less than 30 minutes away. anna: u.s. president donald

ecb, the market has priced in some extra rate hikes from the ecb.o you see the relationship from the two big central banks working? in some ways, it could find itself in the difficult position that the fed gets to the point where it has got to neutral and has servers course because we get a recession sometime soon. what are you creasing best pricing? >> we are -- what are you pricing? >> we are assuming that the ecb raises rates a year from now. we are challenging ourselves if the risk of a sooner. it is not something we are suspecting right now. but the labor market in europe looks similar to where europe was two or three years ago. europe was two to three years behind the united states. in the u.s. federal reserve two years ago, with the labor market having more confidence reaching full employment. europe is not there yet. if the ecb still has negative interest rates in a year with some improvement in the labor market. : i'm wonderingie how you are senior approach at the moment. seeing a strong participation by investors. just given some of the he

the ecb has to reappraise.in the eurozone that the ecb said is an aberration. now we have had no acceleration in the second quarter and they are telling this is a little bit longer. even industrial production in soy off to a soft start, there is this constant recalibration of the ecb. i think that has been tricky for them. boe has brexit. and boj are on hold. we come back to the ecb with the problems and greatest debates between doves and hawks. what do you see europe doing? the zero also move? move?s the europa also >> there is the verge and's and monetary policy. the ecb is asking us to recalibrate and way through the summer of 2019. all of that continues to play out. it goes lower. we have a forecast of 1.13, next year 1.10, and consensus pushing in the opposite direction. i think they will have to capitulate like to have for the last three to four months. you alluded to the idea that inflation again disappoints, or the character and make up of inflation disappoints. is that part of your contrary and call? >