tom: good morning everyone. on radio, on television, we welcome you to america in new york on a day of job claims and onto the jobs report. we are data dependent. jonathan: and we are looking for more data later this morning, the adp report about 15 minutes away. onto jobless claims at 8:30 eastern come onto tomorrow morning, it: 30 eastern, with a payrolls report and an unemployment rate predicted by many to come down to 3.5%. tom: the trend of that to 3.5% is away from what the fed really wants. many people talking about a need for a 4% unemployment rate. most americans don't agree with that. jonathan: you have seen how this market is digesting the economic data. you get a strong data point, the ism manufacturing. you get treasuries lower, yields higher. this fed has more to do. tom: we've got to go to hydrocarbons, particularly with christyan malek joining us in the last hour from jp morgan. dimon says it is a hurricane out there, and the hurricane starts with $113 brent crude. jonathan: this white house has

this is bloomberg, tom. tom: alice, thank you. brexit override.ohnson plans to scrap part of his deal with the eu. but how much can the prime minister actually get done after barely surviving the confidence vote? we will explore that next, this is bloomberg. ♪ tom: welcome back to the open. we are 53 minutes and 30 european trading day. losses across european equities of .2%. the s&p e-mini is down .4%, similar picture for the nasdaq as well. let's take a look at things to watch out for today. at 10 a.m. u.k. time we will have euro area data, including gdp and employment, the ecb decision tomorrow. at 10 a.m. the oecd outlook report is released. at 5 p.m. we are due russian cpi, the russian foreign minister sergey lavrov will visit turkey for talks on unblocking ukraine's grain exports. the u.k. chancellor of the exchequer rishi sunak has promised to cut taxes at his next budget. some members of boris johnson's conservative party almost oppose the prime minister earlier this week. johnson plans to present head with legislation to override parts of

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tom: levels of nervous. lisa: neurotic. what do you expect? tom: stay with us.t if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create mom: how was school? dad: wow! ♪ vo: music can help you express how you're feeling. when you can't find the language, find the lyrics. ♪ tom: good morning everyone, let me get right to the data check here. futures, -92, now -88. they are a little bit off the bottom but i don't really want to spell that to you. rounded up to 5.5, 30 2.71. they made clear they are looking for catharsis in a 40 level, not at the 30 level. the expert on that would agree with that assessment 3.20%, a 14 basis move higher in the two year yield. all you need to know is yiel

tom: thank you so much. really good to hear from him and the broader allocation strategy at blackrock. lisa, we have the surveillance will the decks out and said has gray hair and remembers inflation. there are not many cards in the rolex -- in the rolodex. lisa: we get out in the to edgar if he is listening. tom: he is a giant. express inflation in the abramowitz house? i will express it in the bill i got from levi store and 501 genes. what was the story in the abramowitz house? lisa: buying groceries this weekend and seeing a bill that is $170. tom: kailey leinz moving to brooklyn, the moving trucks extended the entire length of the brooklyn bridge. it was amazing. how about the inflation in moving? kailey: don't even get me started. not even the movers, the furniture, the clinic supplies. i have spent so much money on amazon the last week. tom: isn't that true? jesse hides it in a separate account. good one to amazon. -- morning to amazon. stay with us, edgar denning is coming up. this bloomberg. ♪ ritika

tom: j.p. morgan's collateral bit saying positioning could see further upside for equities this week. after that sell again on wall street friday. stocks ending one of the best weeks in about a month, european stocks ended higher on friday. some of the concern about recession seems to be ebbing, but for how long, the debate about recession versus inflation continues to play out and whether we have reached the peak in terms of bond market bearishness, as money flows out of sovereign debt this morning. the ftse 100 up .2%. spain gains. the geopolitical front and center as we look ahead to the g7. let's check in on fixed income. futures stateside pointing range bound, they had been in the green. the u.s. 10 year 3.15, just a little money coming out of sovereign debt after that move towards lower yields. a move up up three basis points. the dollar index softer by about a 10th of a percent, brent with not a lot of movement. the last few weeks some pressure on brent. we continue to watch the nuclear

tom: good morning, everyone. it's a tuesday before a fed wednesday and it is extraordinary, the market turmoil yesterday continues today. character of the market this morning is different than 24 hours ago. lisa: it felt like it was in freefall yesterday but it is fragile, there is a feeling of a lack of -- conviction step we saw a sell off unlike what we have seen in the long time. is it capitulation or buyers stepping away? we are the watching the end of a low interest you're in real time. tom: we all have our own red and green, this flow into us and i'm looking at my tea leaves, sterling is $1.20 and jonathan ferro might not be able to afford to return from capri. kailey: what i'm watching is the spread between 30 year and 10 year treasuries which have turned negative again for the first time in years. that's for more than a decade. a long-term feeling that we could not be growing all that much. tom: that's price up, yield down, worrying about economic growth out there. lisa: it's a lesser high than 10 year yi

tom: is europe any different? jonathan: they are dealing with the same problem, all these retailers are. the note from target's second-quarter pressure in the second half release, they think they can do something about this. based on the guidance we have had from them in the last month, many people in this market might be doubtful. tom: corporations will adapt and the profit makers will reign supreme. that includes target with the market down. what's really going on here to your point is the time is moving. you cut corporations within autumnal mentality in june. jonathan: when we started seeing this from the likes of amazon that we gone from being understaffed to overstaffed to not having not enough space, that's the big turnaround. these corporations are set up for the economy of last year except its 2022 and they are facing down a weaker next year. lisa: consumer spending habits are changing so quickly and they cannot get out in front of this and you add higher commodity prices and that's dovetailed into the gol

tom: that is the oil story. i think lisa chimed i got a three point 02% on the 10 year yield stopped our first guest will talk about that stuff these rt leaves of the shift of a new regime. jonathan: yields are up and last 24 --24 hours. tom: surprising what half a percentage move highlights how the central banks are trying to get ahead of the inflation they see that continue to have legs. there was a story on the bloomberg this morning about how supply chain disruptions are starting to ease a little bit. is it enough to bring inflation low enough unadjusted basis. there is a half a percentage point move into market expectations by year end by the ecb. here we are as a base case at year end. tom: can we do a dumb question? jonathan: there are no dumb questions. tom: how did japan get away with not raising rates? jonathan: the inflation backdrop is very different. tom: for so they say. jonathan: they cannot ignore what's happening with the bond market. for a long time, the center of gravity for the global market

tom. tom: coming up, j.p.lays off hundreds of staff in what has been a red hot housing market in the u.s. more on the next, this is bloomberg. ♪ tom: welcome back to the open. 52 minutes into the european trading day. pronounced risk off, assessing comments from jay powell who admits there is a risk of recession in the united states. data from germany and france, manufacturing and services much weaker than expected. pressure in the euro zone, significant moves into german debt and yields on the 10 year german bund down 13 basis points. as you see a bid for german debt as this risk off mood solidifies. euro-dollar is weaker, down by .5%. across the benchmark, losses of 1.3% currently in the session. let's take a look at other things to watch out for today. 10:30 a.m. u.k. time the eia will publish the latest crude oil inventory report. at 1:30 p.m. we have the initial u.s. jobs claims data. they eu will discuss energy, the cost of living, russia's invasion of ukraine and membership applications of ukraine, mold

tom: tom metcalf, and i believe we will get the sense of getting you back on.ncine: gottstein is actually speaking at the conference in rome coming up. tom: coming up, we have the policy for the euro area ahead as the ecb confronts the inflation threat. we will look ahead to gottstein speaking at the rom conference next. this is bloomberg. ♪ francine: come back to the open. 30 minutes into european trading day. the ecb will pave the way today for its first rate hike in a decade to battle inflation. credit suisse seesaws. there are reports of a potential takeover bid that has now been -- and what they want to do in asia. post-covid disruptions ease in asia. tom, we are looking at monetary policy. tom: we see brent above $120 a barrel and restrictions of gas out of -- out of texas. on the china side, their export numbers but further restrictions in shanghai. they have some additional covid cases and restrictions as well in a key diplomatic district in beijing. that continues to be a headwind for the economy. in terms of how things are playing out across the marke

tom: thank you very much.have got to take time on the various strikes and rumblings of strikes in the united kingdom. you wonder, the largest train strike in 30 years, complete chaos in there. airlines, as well. does that come across the atlantic into a more fractious labor environment in the united states? lisa: especially if you have policymakers saying the inevitability at the unemployment rate is going to go up, and the consumers dealing with higher inflation, needing higher wages to keep pace with where prices are. there was an article highlighting how a lot of companies advertising job openings are removing those job openings. it is not necessarily job cuts, but after not being able to fill those roles, they just let them go. tom: you wonder on the cpi, ferro does this better than me. there is no question about that. i am looking at cpi, pce did -- deflator, june 30. gdp noise, july 13 is the next cpi report before the july 27 report. that is going to be important. 8.6% is the survey number. kailey: what

tom: 3.0 on that two-year. lisa scheduled an important conversation for bloomberg with the president of lithuania. this is a critical conversation or the states lisa:, especially given the threat of russia and what is going on with gas and germany talking about rationing gas in order to prepare for russia curtailing some of the supplies. an important conversation. tom: green on the screen. futures are up. nasdaq gives me 6/10. 32 down to 29.17. brent is down. west texas is down. the two year yield, 0.1%. we will have to watch that. yields are coming in on the recession. we close out with dxy. euro cannot get out of its own way. they have a slight recovery in the last 20 minutes off that pmi data. sterling 122.11. we to have a brief brief on claims. lisa: i want to say one thing about the bond rally. the idea that we are seeing a front and rally even as jay powell says we will hike into weakness to prevent inflation from getting worse. still, people are expecting that they will not have to go as far as he is say

tom: i think the three of us. jonathan: get that to management this morning, tom, and ask for that. [laughter] lisa: that is what we are hearing right now. jonathan: are you signing off on this? is this a trip we can make or how do you feel? lisa: i feel like it will be something that will be affordable. tom: there we go. jonathan: very well-set. lisa is the sharpest of us all. 120.70 on sterling. we have had a 50 basis point hike today from the s&p. 25 from the bank of england, 75 from the fed yesterday. and more still to come. this is bloomberg. ritika: keeping up-to-date with news from around the world, i'm ritika gupta. leaders of germany, france, and italy are in kyiv today for talks with president volodymyr zelenskyy. travel together by overnight train in a show of solidarity for zelenskyy. the trip comes ahead of an expected recommendation from the european commission that ukraine join the eu. some eu members are looking to germany for cues about how to boost the alliance's defenses against russia. bloomberg has learned the allies are considering adopting a new german model.

tom: second? we tend to look at the year-over-year figures because it is the most dramatic and those double figure numbers are certainly scary. but if you are the fed or other people, you look at the month over month because you are looking for sequential gains. that is what we are seeing. the situation is getting worse. the base affects bring the year-over-year number down, but we doubled the ppi in the month of may from april. the increase was 4/10 in april and 8/10 in may. a lot of that is energy but that is what the fed is talking about tomorrow. tom: i have got eight more questions. we will have to do it later. michael mckee leading at 2:00 p.m. in washington with chairman powell. michael mckee whispering always at the fed. carl weinberg with us, chief economist from high-frequency economics. lisa wants to dive into the field. i have to go to your scathing china note yesterday where you say flat out, we cannot trust the chinese data. how close to worser is china? carl: good morning. china's n

tom: the data is critical.his is looking at five years and the guesstimate is another five years and the question is inflation finally anchored as it has been predicted or is it unanchored and that squishy concept. what it means is a lot of uncertainty within the market. we certainly heard that this morning. lisa: uncertainty is the word of the year and the word of the moment in light of the fact that we hear this optimism some jim bullard about earnings, consumers, the strength of the u.s. economy in light of a rally into bonds that indicate slowing growth and something more recessionary. try putting those two ideas together. tom: this is about resiliency. goldman sachs is looking for a tad bit american economy in q4, what he is suggesting is the system is in place including the balance sheet of individual household of businesses where we can maybe have a shallow recession which is that resiliency that bullard leads with. lisa: we are looking at perhaps the first week of gains for u.s. equity market but they a

tom: lisa, are you filling up?e top thing, you spend $22, spend more, spend another $22. lisa: we ended up trying to empty the tank to see how much it would cost to philip the whole thing, -- fill up all thing. it was great. we had the kids in the car, it was fabulous. tom: she got the matt miller gallon. i think she is out $250. we are watching the markets this morning, and the underlying economics of them. futures at -90, vicks 32.79. on chairman powell, francis dowell, next. this is bloomberg. stay with us. ♪ tom: good morning. a historic monday with vicks up five point -- futures at -90. bitcoin tanks, no other way to put it. lisa, let's do this quickly. here is a board i am looking at, the 10 year yield is three basis points above flat. crude is off, showing that global slowdown. euro comes down, 104. futures, -90. what is the symbolism of inversion? lisa: stagflation, possibly a recession. i think stagflation first, we haven't gotten inversion. we are looking at a fed that is expected to raise rates by 75 bas

tom: japan. every pro i talked to, japan is the elephant in the room because they are playing by a different rules. they are playing by different rulebooks by everyone in the room. jonathan: on a serious note, what can -- seriously do? tom: they are going to have to do what they have done to spend the decade. jonathan: -- number 1.9%. from new york, this is bloomberg. ♪ ritika: keeping you up-to-date with news from around the world. i am ritika the. -- goop duck -- gupta. the u.s. has warned kim jong-un -- the united nations there are signs it could set off its first atomic device since -- firing missiles at a record pace. knocking down more merchandise. elon musk is threatening to walk away. the deal is proceeding. -- the terms of --. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪ >> the key metric right now that tells you households aren't really that worried about

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♪ tom: good morning, jonathan farrow, lisa brim with and tom keene. mr. off, kailey leinz is here today. the straw that broke the back, maybe the inflation patients report. an ugly morning, and futures negative. -83. dow futures, -600. the nasdaq down 2.7%. lisa, how strong is the stronger dollar? i mean, it is stronger, but it didn't break out. lisa: this highlighted the differentiation in monetary policies of the two nations and is breaking out when it comes to the euro. how much do we see this push the stress points at a time when perhaps policy isn't doing the trick? and i would point to the bank of japan for that one. tom: the tank this morning is too strong. lisa: they will be very concerned. tom: this is an important interview. the best economics of anyone in the street. he has earned his way to being chief economist at city global wealth. stephen, let's go to your wheelhouse. our profits threatened? >> yes, we are in a. of -- in a period of very high profits. we think the 2023 will be a year of decline but we don't see the need for plunge in every

tom: exactly.aid that in his lead sentence, he said it is a strong economy -- chairman powell said that. yet recession dominates this week's discussion. lisa: how much are people saying that this is what the fed has to eventually cause to bring prices down, and how much is the narrative running ahead of reality? that is what we are seeing with yields coming in, bond prices up. people expect already in a recession. it is mind-spinning. hard to put together especially at a time when you have companies and individual analysts saying, everything is still really good, we don't know what you're talking about. tom: one viewer from virginia beach says, you lose the lobster and give us some virginia crab cheddar. from everything you see, it is a boom. for our international audience, we need to say this, it is a crazy boom economy. kailey: that's the thing we talk about, sentiment has been sour for some time and it is only starting to reflect at the margin on activity data. we had retail sales disappointing,

tom: discontinuous feel.ng the way there will be massive data dependency which will allow the fed to adjust. they will not do it in a big jump condition. they will be massively data dependent. jonathan: it is the last 10 years in reverse for policymakers on so many fronts. lisa: i was referring to the deutsche bank report talking about more defaults to come. how do you parse out what corporate credit is worth at a time when 10 year treasury yields provide actual yields? all of a sudden, the fed is not try to put or calm markets. this is uncharted territory and people are trying to understand what the credit market used to look like, transpose that to what we are looking at now. higher corporate credits, i will give the argument. jonathan: you have been asking for this for a long time. introducing some price discovery. lisa: i am not asking for it. people are worried about zombie companies getting money that don't deserve it. that is the fear. will we see a reversion to a lack of free money, and what does that

tom: 7, 8 years old? erin: we are starting with sophomores in college, prompting them to be prepared to enter the workforce as they move into their junior and senior years, really look at the industry holistically to attract women as investors into the business. not just looking to hire women into finance but specifically as investors. tom: this is about enjoying losing money early on so you become adult at it. lisa: when you talk to individuals that come into the market, how do you frame the moment at a time when uncertainty seems to be the catchphrase for everyone? people looking at potentially a new paradigm for inflation and growth. erin: that is really what we are seeing right now, the transition point in the market. this is a market unlike any we have seen before. these growing pains and volatility creates opportunity. we have seen real violence in the markets year to date but we are now getting to levels particularly outside equities, fixed income market is the most attractive it's been in a very l

tom: i think that is true. what he underscored yesterday is there are extreme data dependency and it comes with important economic data today. here in the opening, you have pcs and we are going to look at the savings rates, personal income, personal spending. how flat on their back is the american consumer? we will know this morning. jonathan: i spoke to lisa for too long this morning, just brought down. lisa: hold on. literally everybody is talking about recession. jonathan: they know the rules. that nasdaq 100 pound down -- down by one was its percent. yields coming in. this is where things get interesting. bonds behaving like bonds, yields down by three basis points, about 3.05% on the 10 year. lisa: you can blame me for being somewhat down and beat in terms of the investment. even the biggest market polls are getting bearish. i pointed neil over there, seeing a greater probability of recession. yesterday he was talking about being more bearish on this market. a big part of the story is oil. opec-plus holdin

tom: dr. your denny made clear that he thinks the comparisons to the late 1970's come early 1980's are not there. i am hesitant to say yen plunges but we are getting close to the use of that word here at a 136 .32. lisa: how much are we looking at examining the contours of recession what has already been priced in in terms of the gloom of whether we will reach a breaking point, at a time when earnings are still solid, when you see lennar coming out with better-than-expected earnings after losing 44% this year? is there a sign with analyst recommendations note that you are reading that we have peaked in terms of pessimism? kailey: the likes of jp morgan already calling for peak pessimism earlier, saying that the second half looks better. recession pricing has been overdone. at the same time, you have peter oppenheimer at goldman sachs saying only a moderator session is priced in. the s&p needs to be lower by another 15 to 20%. but the earnings question is a good one because if the market is thi

tom: it's a power game.mi mellon said her outline case is from another time and lace, 12 times earnings. that's from my youth and i had less gray here than step it was that long ago. the multiples here are adjusting rapidly and i agree that the streak is out front of the sell side under earnings adjust. jonathan: they said they found a weakness in the energy names. tom: this is the story this week stuff $118 brent is what i'm looking at and you have economic data tomorrow. jonathan: looking forward to that. equity futures are down about 2/10 of 1%. the nasdaq is down about one third of 1%. $112 for crew this morning. lisa: this follows on the concern about the fiscal market incredibly high even if you see some softness in the futures market will step it still early before the drama starts. that is when the market drama usually transpires. we are watching officials heading to nato in madrid with the summit they are having their including joe biden. how much they talk about finland and sweden and how much they

tom: was he pushed out?aine: i don't know about that but he has been there for some time, some concern by investors that maybe he was not the right person to lead the company he will still be there as an executive chairman. jonathan: can you tell me what pinterest is? what do you do on it? romaine: you can plan out your wedding, holiday. you want to find a nice shirt, shorts. tom: i was asked to study it. i never figured it out. it is hugely female, as a real geographic bias. jonathan: keep going, tom. what does that mean? tom: it is like planning weddings, like romaine said. lisa, weigh in here. lisa: no. jonathan: she is just giving you more room. romaine: i am done. coinbase is down. jonathan: romaine bostick, we appreciate it. tom: i am glad he mentioned general mills. the 10-year piece at 1.02. i am showing it today at 81. kathy jones is here. she told me to get into bonds. fixed income strategist at charles schwab. that is the reality, not a bunch of bond strategists talking about spreads in credit qua

tom: it's all data dependent. do the calendar on inflation were words and that's the major thing here stop the jobs report as part of the dual mandate of the fed and they are massively data dependent. we were talking about jackson hole yesterday thinking that somewhere we need to be so could that be a big moment for this fed? >> jackson hole always has a lot of attention given how quickly things are moving with the market and the economy and fed policy. he could be a forum for another big indication of where the fed goes. when we look at where we will be in august, i we will still be dealing with what we have today step we are seeing an elegant a degree oven nation and an overly tight labor markets are not sure how much of it shift in fed tone there will be. a lot could change in there is likely to be a lot of focus in at least some guidance on where the fed could go but i don't think the circumstances will be all that different step jonathan: thank you. lisa: a lot of people agree with her but you are not necessa

tom: good morning. jonathan ferro, lisa abramowicz and tom keene, we are back on track. lots of distractions in the last hour. it is about inflation, recession. william dudley says it is about a hard landing. lisa: specificity is what struck me about the column published this morning, talking about how it is inevitable that we will get a recession in such a short time frame, building on what others have said, that there is a growing chance of a downturn. now the question is how steep it will be. tom: this is the gaging of the many different types of recessions. we do not need a history lesson, but each one is different and lisa, you mentioned the distinction between two world-class phd's, the gentle recession, dudley with a hard landing. what about the hard landing? lisa: whether he will be the new volker of 2022 is the distinction, how much has the fed committed to getting inflation back down to 2%, but eminently by the end of next year versus five or 10 years out? how much of the urgency is about getting inflation numbers and check shows and they are creeping higher ov

tom: good morning everyone. on radio, on television, a monday after the jobs report and more even for than i expected. coming up, must listen for global wall street, the past a higher yield. jonathan: higher yields through next year as well. talking up a yield north of 3% not just this year, but next year as well in the first half of 2023. try to reconcile that with the view over at deutsche bank. they are looking for a severe drop off in economic growth. tom: all sorts of different opinions reframed as we go to the midyear review. certainly equity markets like they see. people can give you a level, but you need a timeline as well, and the morgan stanley timeline is out there somewhere. that is the economist linda ronstadt out there somewhere. jonathan: michael williamson has been pretty clear, 3400 on the s&p. that is the downside he is looking for by mid to late august. tom: ok, that is the gloom view, but there is some optimism as we mentioned in the last hour. i'm going to go with what goldman sachs wrote ab

tom: exactly.he pros on the street, i think it was a colossal nonevent come i thought it was timid and tentative and the difference is, there is a difference of relief from inflation versus moving the needle of inflation lower as we will state test speak to adam pozen later. jonathan: it's how we can provide some relief. tom: william poole says you got a monetary solution and you've got a fiscal solution in an election year, the fiscal solution is out step you will not do a fiscal contraction to slam the nation into recession. on the monetary side, what we are arguing is the speed to get there to get to some for of -- to some sort of mystery. we will have to see. i will leave it to anne-marie to tell me. she was more focused on k pop. wendy schiller is from round university. i want to talk about one term president's suggesting that maybe mr. biden like mr. trump is a one term president. what do the last two years of one term president look like? >> your pointing out with speculation. what kind of c

tom: that is the region.hen it comes to the sectors, you're still positive on commodities can i check that you still maintain that view at the moment? joost: it is interesting how long that will hold. i think there is a bit of a buffer because when you look at the energy sector, relative to oil prices for some extent, there is a buffer there. and energy prices can be volatile. we know that there is a lot of energy off the market from russia, but i think what also is in play is not just the oil price. when you look at gasoline price and refined product prices, there are fairly high so the margins for refiners are fairly high. that is due to the dropout from russia but also china, which could reach its refining goals. it is also the margin that it can move for other prices. tom: just briefly, anything you like in credit? we see some looking at the credit markets and the analysis is pricing in 6% historically. you get 1% in investment grade and the opportunity to get it within the higher investment grade credit

tom: thank you -- joe, thank you so much.s you mentioned earlier, is demand just within a touch of a 136 level? dow has weakened down. it has been -- we come up here just in the last number of days. we, just touching 135.90 right now. lisa: to use your phrase, this is in a parlor game. at what point does japan have to cave? they are not going to cave. they can work on their own schedule and control this market for a long time. they even recognize this as a risk. they recognized their policy is unsustainable. if -- even as they double down last week's meeting. how long can this game of chicken go on? that seems to be where the end is going. tom: it seems distant. it is over there, why do we care in that? it is about the dynamics along the pacific rim. kailey: if it is going to be a problem domestically for japan, doesn't have ripple effects? also talking about the weakness of the yen. talking about isolation. the strength of the russian ruble is not the conversation we thought we will be having two or three months ago. that ha

tom wanted the definition, that sorts that out. tom: we are all jargon this hour.ure this, high-yield spreads. you see three peaks. one in the mess of november 2020, one right now, one in 2018. think of those three peaks and high yield credit spreads. what you will see is 550 at the right end, where we are now. at the end of 2018, 550 basis points. in between, this parabolic mess. the first is a problem, at the end of 2018, the inflation was still low, the fed turned dovish. the second one, inflation was low and the fed could be max dovish. the third peak you see on that chart, that is a feature, not a bug. that is a different story. this federal reserve is trying to get inflation down, not up. as they do that, they want to tighten financial conditions. when you hear people say it is a future, not a bug, that is something you have to get used to. tom: you've gotten easy move on inflation as you take out some of those non-core features, and it is heavy lifting from 5%. jon: i think that was jargon free. tom: i think it was. jon: you look like you are in pain. ok. [l

tom: it is symmetric. it works. lisa: thank you. tom: are you with us?ng where you are taking this. [laughter] jonathan: futures are down. this is bloomberg. ♪ so many people are overweight now, and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now there's release from golo. it naturally helps reverse insulin resistance, stops sugar cravings, and releases stubborn fat all while controlling stress and emotional eating. at last, a diet pill that actually works. go to golo.com to get yours. >> does not matter how you slice it, i think there is a tight labor market. >> record demand from labor and the supply side is falling short. >>

tom: thank you so much. this goes with what you and ms. foley were talking about, not just the 8:30 report, the ann arbor and university of michigan report. i am looking at the one data point. five years out, five years out from that, the inflation guesstimate. lisa: how sticky is it? how tractable will this come, a self-fulfilling prophecy? how self-fulfilling is an inflation if consumer sentiment starts to weigh dramatically? consumers account for 70% of the u.s. economy, that becomes a series economic problem -- serious economic problem. tom: is high inflation good for the banks? lisa: wow. that is a really deep question. of sensibly, if rates are higher , and demand is increasing and real wages are. that is not happening. because of that, it could become a headwind. tom: critical if we come from 8% to 1%, we get demand come back in and recession fears to end. we will have to see. this is interesting, and roughly one hour from the most consequential inflation report in ages. this is bloomberg. ♪ ritika: t

tom: good morning.n a most important consequential friday. matt miller in for jon ferro. the world will stop at 8:30. lisa: we get the cpi reading for the month of may. what otherwise is a dire picture of inflation that continues to persist outside 8% in the united states looking for some sort of easing when you take out energy and food. how much will the conversation be? can we strip out these key components? tom: this is the polarity that we see in this report today. lisa: of the nation, whether it is the lockdowns reinstating themselves . if you can strip out some of that, what do you have underneath and how much does it matter? are we looking at airfares? . tom: president biden on his way to long beach. we're looking forward to where europe and america go with this inflation. matt miller has lived in europe. explain to me the difference between 6% inflation and 6% inflation in america. matt: clearly, in germany, they had already high gas prices. here, that is a new thing for us to deal with. we have

tom: >> it is. announced this, twitter was trading around $50, twitter had been higher before. but tech has fallen a whole bunch, and tech has fallen, which he was using as collateral and helped them to restructure the deal. but it is looking less and less attractive for elon musk. francine: legal experts say he is going to leave a paper trail. thank you so much, dani burger with the very latest on twitter. let's get to the first word news with alice atkins. alice: russia has banned 61 senior u.s. officials from entering the country in retaliation for it calls constantly expanding sanctions. treasury secretary janet yellen and blackrock's larry fink are on the list. president erodgan says his government will continue to cut interest rates despite one of the worst inflation problems. turkey's central bank has cap its benchmark rate at 14% since december. the annual inflation rate accelerated about 73%. india is eager to take on discounted oil from russia's rosneft. state-owned refineries are in talks

from new york -- they are doing better, tom. tom: they could not do worse. [laughter] jonathan: this is bloomberg. ♪ leigh-ann: keeping up-to-date with news from around the world with the first word news, i'm leigh-ann gerrans. more problems for credit suisse. the lender has issued a sixth profit morning in seven quarters and expects a loss at the groupwide level and investment bank in the second quarter. bloomberg has learned credit suisse is considering job cuts. here in the u.k. bloomberg understands boris johnson will go ahead with legislation to override parts of the brexit deal. that risks inflaming tensions with members of his conservative party and the european union. the prime minister's government has been pushing to rewrite a northern ireland protocol that keeps the region in the eu's single market. the oecd says the world will pay a hefty price for the poor in ukraine. the organization slashed its outlook for global growth this year from 4.5% to 3%, and doubled its inflation forecast to nearly 9% for its 38-member countries. in san francisco resi

tom: indeed.ou have a great piece on the terminal on central banks, how they got the inflation call wrong. do they restore their credibility if they come out with 75 basis points? or does the end of gradualation actually put another dent in the credibility of the fed? >> there are two schools of thought on this. those who say the central banks go hard now, go hard and go early, and get control of inflation, say that shows you have the central bank doing what they are supposed to, delivering on their mandate, but that feels like a stretch when you consider only six months ago the monetary authorities were preaching that much of the inflation pressures around the world were tempering. here we are now in mid-2022 and we see the fed going to do what it is about to do today and what other central banks are doing in terms of jacking up interest rates. the big concern is that, what does it all mean for growth? we could be heading to a prolonged period of stagflation. there are legitimate question marks o

tom: i'm at a loss for words. lisa: tom keene, speechless.'m smokey bear and i made an assistant to help you out. because only you can prevent wildfires. -hey assistant smokey bear, call me papa bear because i'm "grrr-illing" up dinner. haha, do you get it? -yes. good job. -so, what should i do with all of these coals? -don't just toss them out. put them in a metal container because those embers can start a wildfire. -i understand, the stakes are high. assistant smokey vo: ha-ha, ha-ha. -see, smokey think's im funny! >> if they are going to do 75, it's better to do it sooner rather than later. >> the fed doesn't have much reason to slow the pace of rate

tom: the vortex. jonathan: she did. tom: that was to her children.n: from new york, this is bloomberg. ♪ >> keeping you up-to-date from -- with news from around the world. the prime minister boris johnson is fighting for his job. forcing a confidence road at -- vote after a series of scandals. it will give the party a chance to end weeks of speculation and take the party forward. it may make sense to lift tariffs on some products to ease inflation. household goods and pet -- bicycles could be exempted from duties. president biden will take executive action to boost the solar industry. it will provide support. he will announce a tariff that will allow them to continue using foreign-made equipment while u.s. any fracturing ramps up. chinese regulators can map up their investigation of the company and restore the main app to mobile stories. in france, the military reenacted and gathered to mark the anniversary of the d-day landing forces. they eventually ousted the occupying forces. this is bloomberg. ♪ >> we would not want them to open the floodgates r

tom: yes, 9:00.t is interesting, we are going to get the april statistic , but again, housing up 21%, far beyond what we witnessed in 2006 into 2007. lisa: even if there is a cooling down, it is going to take a long time to find its way in the end. tom: futures up. stay with us on radio, on television. this is "bloomberg." today's challenges require real insights, to get to tomorrow's opportunities. ( ♪♪ ) what can we expect in the coming year? this has been a record- shattering year for m&a. five trillion dollars in deal value. and we're still very bullish on the deal market for 2022. in this kind of climate, what are you advising clients to focus on? we really think companies need to elevate their risk management processes and also scenario planning. what's your outlook, kim, for the 2022 labor market? organizations really do need to take a pivot on their lens of their people and talent from a cost center to make that a value creation center. for key insights into what matters today and what lies a

tom: good morning, everyone. jonathan ferro, lisa abramowicz, and tom keene. on radio, on television, and obsolete extraordinary fed day. the ecb gets out front of jerome powell and holds an emergency meeting of what we have reported is mystery. all we can do is look at euro-dollar, which moments ago began to give way from the enthusiasms of the morning. jonathan: we are still waiting for a statement. for the ecb it is about numbers. the spread between italy and germany last summer was inside 100 basis points. yesterday it threatened to blast through 2.50% and beyond. tom: it is the banking problem as well. very different than in america. i am thunderstruck they are doing this meeting out front of the federal reserve of the united states. jonathan: what are they going to do, wait to see what happens with the federal reserve meeting? they are seeing the outcome front and center. it is the one they are worried about, fragmentation. they know the detail they put out last week to address the potential fragmentation is not enough because this market needs to see a

tom: good morning. tom -- an important friday. six days from that media point. kailey leinz is in for jonathan ferro. is he back monday, lisa? it's like 50-50, right? [laughter] he is on a runway wherever he is and he can't get home because of reddish airways or whatever. lisa: we can look forward to his return. there is an issue of what happened this week, it was a fascinating week. maybe biggest question, is the bond market rally we have seen a good or bad thing for risk assets? what does it mean? tom: the spread has not removed all that much, maybe it is a churn. we will look at that with amy wu silverman. what i want to go to the tea leaves out there, javier blas on hydrocarbons nails it. on the european coal, he is noting, $434 per ton. a little more than $100 per turn from where it was during the invasion. this is a serious statistic. lisa: it is, because of the plan germany has in place. if they pass the threshold in terms of depletion of their natural gas, they are going to turn to coal. this is a nation that has been trying to make energy cleaner. and i

tom: the nation galvanized. no other way to put it. lisa abramowicz and tom keene. preparing for another property. i want to say congratulates to david shipley and tim o'brien, with the leadership of noah felt he of harvard, bloomberg was informed about the raging debates around our supreme court. owning the high ground of on all of this is gregory's store. to say he is bloomberg supreme court reporter barely describes his authority. i want to drive the story forward. last week sandra lancaster versus illinois, adam martin versus klein warded, new york versus new jersey. i do not know what that is about. what are the orders and why did they merit -- and why they matter this morning? gregory: we will get a whole bunch at 9:30 today. this is the brain court saint we will take up that case or not take up that case and there are big ones they will be taking on. a big one affects the airline industry. the federal appeals court said the airlines had to comply with california's labor laws, including meal and rest breaks for flight attendants. the airline industry is tellin

tom: laura, thank you.suisse is said to hold deep dive sessions on risk management and compliance as it is hit with an historic money laundering conviction. details are next. this is bloomberg. ♪ tom: welcome back to the open. 53 minutes into the european trading day this tuesday morning. some of the earlier gains being paired a little bit, upside out .3% on the european stoxx. and a sell down in terms of sovereign debt, german bund yields down by about six basis points on the 10 year. let's get the corporate stories in focus. the continuing saga around credit suisse which has about to boost the business with clients and cut costs. it comes as the bank is hit with a historic money laundering conviction. we are joined by tom metcalf, who has been across this story for many on month. talk to us about the abilities for thomas got stayin -- the ceo, to convince investors this is a pivotal year for the bank. >> that is his remit today. to go out there and set ship. in terms of the size of cost cuts, about 200 mi

tom: thank you so much.r chairman powell, coming up with headlines at 9:30 and to his testimony after opening statements. you will hear that and see that on bloomberg. we need to breathe, we need it from where the televisions and radio will be tuned in, that is 1600 pennsylvania radio. anne-marie horton joining us, what does president biden need this morning from jerome powell? annmarie: how he is received on the hill. what is the tone of his reception going to be? very harsh? you are not going to get a standing ovation, but is there going to be reception that senators like what the fed is doing in terms of wanting to tamp down inflation, becoming more hawkish on it. the questions are going to be about inflation, and while you are trying to control inflation, how much does a risk -- how much of a risk as chair powell see when it comes to a scope of not going into a u.s. recession? tom: the panic of recession, amy cohen saying we need to look at fundamentals. the fundamental for pearman -- chairman powell and

tom: i was going to tell you later today. jonathan: tom said to me this morning, i thought you were not coming back. he said, i need a pay cut. two hits a week. tom: i see the three of us on a grand canal in venice doing work. jonathan: you do a 30 minute daily show, tom. let's work it out. lisa: i feel like i have just been part of something and i am not clear on the implications. we do have an auction brief and it is good. 9:00 a.m., we get the home price index. we have known that home prices have been climbing at a record pace. expect deceleration, but will it be enough to puncture inflationary input, especially as it translate into rent, considering the housing market lags behind the rental market by a big margin? june consumer confidence data comes out. this is one -- been one of the biggest debates among economists. you have consumer sentiment falling off a cliff and consumer confidence hanging in there. what is the difference? some people point to one of them and the other one points to the other one. the issue is cons

with tom keene, jonathan ferro, lisa abramowicz. tom: good morning. bloomberg surveillance. one year ago, brent crude up 66% in 12 months. jonathan: the s&p 500, a massive move. that is where bank of america is still pretty comfortable taking that exposure in the equity market. tom: everything we do we talk about the fed, the president, ecb, all of it is backed by a commodity foundation which is a commodity boom. jonathan: which is why a lot of people think the fed has a job to do, take out demand. bill dudley said moments ago that the challenge for the fed is so difficult. how do you take out that demand from a hot labor market, rebalance supply and demand and do that without having on a plumbing climbing? in reality, that is so difficult. tom: 14% unemployment, down to 3%. maybe bill wants to model 24%. what is the risk that all of a sudden 4.1% becomes 5.1? that is onyx optimal to americans. jonathan: are they still hiking? cpi will be going in a different direction, or maybe it won't. that is the fear, you end up in a situation where inflation persists and growth goes lo