let's bring paul donovan back in and the floral acidity of paul donovan on these debt ceiling risk.s is what paul has written in his notes. it is to be hoped that biden explains the situation slowly and clearly, possibly using hand puppets to help congressional leaders understand the consequences of their inactions. paul, they do not understand the risks that they are potentially running up against. paul: i think this is the problem, they understand the political risk around this, but they are prioritizing the political risk over the financial market risk. yes, some are saying we must take a stand on this for political reasons and this is why we have this whole debt ceiling farce in the first place, but they are not perhaps fully understanding the financial market consequences, the dangers that we get with this constant uncertainty. the uncertainty is an unnecessary cost in the u.s. economy at this stage. manus: but here's the thing, we also have the federal reserve, complexion of the federal reserve that has never been in the scale of the hiking cycle before either. i need to doubl

is this a concern because we speak to the likes of paul donovan at ubs, he says he sees signs of disinflation in parts of the u.s. economy. is this a concern, you could get a snapback in terms of price pressures in the months ahead? or is getting inflation back to target a much hyper -- to grind? valentine: core inflation remain sticky. the u.s. labor market, even if it is cooling, it is still very tight. rising wages is not in line with the 2% inflation target. the u.s. labor market is short to million people. this is the same story on the u.s. residential market. fundamentals are very good. the prices on the u.s. residential market are expensive, but u.s. households still have cash and inventory is low. we have an environment where demand remains solid and we have constraints on supply. on the labor market and in the u.s. residential market. this means we will need to have contraction in economic activity to bring inflation back to 2%. so far, the tightening in monetary policy is not enough. this risk is completely underestimated by risky assets. tom: so they go again, the fed, in june? jay

i'm not meant to have favorites but paul donovan is absolutely brilliant.'t exactly diplomatic. he started talking up to the idea that we have to accept these prices. tom: they are still living a keynesian theory that we can jawbone the poor into acting like responsible citizens. if you did that in the united states, you'd last about 20 minutes. lisa: he subtly said it wasn't perhaps the clearest message. the way he said it, consumers have to start pushing back at some point and not just accept the prices can keep going up as much. it's not necessarily an exogenous event, it's simply they are lining their pockets and that's what you are seeing with expanding profit margins in six quarters. jonathan: i see that on the corner of soho all the time with drug prices. it's organic. free range. tom: lumber is back and eggs are back. is it true that eggs are back to normal pricing? jonathan: they have been less greedy in the last month. tom: that's the smartest foolishness today. lisa: also the black market for eggs was rough. they had to crackdown. jonathan: let's

we heard from paul donovan at ubs and he does see disinflation now in areas of the u.s. economy. we have pushed back on this new already but explained to us why that view around to cuts, they are mistreating it? wei: the focus is really around our read of inflation. inflation is coming down for high single digit mid-single digit. that lag has been somewhat smooth but going from there to target will be a lot harder. we have seen softness in core service as part of the inflation but not quite where we wanted to be. if you look at university of michigan consumer sentiment expectation, inflation is coming in higher which is not bode very well for service inflation to come down. actually, goods inflation is starting to trend up again. i think are definitely not out of the woods in terms of fighting inflation. the difference in terms of the cycle versus previous cycles is that we have inflation problem and previously we did not. applying the old recession playbook this time around and expecting the fed to be able to come to the rescue of the economy is the old regime. we are in a new r

and this to me will be interesting because one thing that paul donovan pointed out is that factory prices are rising at a slower pace than the prices that consumers are paying meaning higher profits for companies. tom: this is cpi and ppi, and ppi used to be higher watched and then it drifted away. i agree with you it has some merit. here is the inflation structure in america for those keeping score. services inflation the peak is 7.3. it is 7.1, and now 6.8%. it is moving in the right direction. i looked at the united kingdom and it is on the edge of double. lisa: 10.1%, all in inflation. this comes based on expectations that was 9.8%. it is not coming down quickly enough. what do they do with that? do they acknowledge that inflation is not able to be brought down. tom: you will do disney and a brief but it did not happen. lisa: subscriber growth is a concern, they did not add subscribers and we will get to that later on. but we are looking at is what is going on with the bank of england and ppi inflation rate. at 7:00 a.m. we have the right decision on how they parse the weakness in the