tv Bloomberg Surveillance Bloomberg September 23, 2021 7:00am-8:01am EDT
♪ >> typically the fed hiking cycle does end up killing devalue trade as well. >> as long as the public consistently believes in the market and consistently money in it, i think it will continue to move higher. >> the fed is usually comfortable hiking rates only if the economy is doing well. >> i think 100 days from now, we are in a better position. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: what a week. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance, " live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your market advancing 0.5%. we are taking a couple of things very well, the federal reserve and the story out of china. tom: you've got the moonshot of
the norwegian thing, the bank of england moments ago. turkey with a bombshell, and the lira weakening dramatically. all of these distractions around the central banker to the world, and what he said yesterday is we've got to plan, and markets said no. jonathan: and we just got a surprise rate cut, 100 basis points over in turkey. this chairman has no interest whatsoever in taking anyone by surprise. tom: exactly. jonathan: that was handholding through to tapering in november. tom: you should tune in on our breaks. it is really interesting. on radio and tv, jon mentioned brazil which is really important. there's only one book that matters, and that is the book of jerome powell. jonathan: we will catch up with norway a little bit later. lisa: the idea that they raised interest rates is a bit of a shocking development.
they are off zero officially. there doesn't seem to be a major market disruption either from the suggestion of taper or the first rate hike among major markets lisa:. -- major markets. are they doing it right? they want to hold their hand, but they are not causing a huge market disruption. they seem to be on track to start tapering. jonathan: the bank of england guiding you toward something possibly as well, maybe possibly. "some developments strengthen the case for modest tightening." tom: governor bailey said yeah, well, i'll tell you something i think you understand, when i say that bank of england something, i want to hold your hand. jonathan: that is beautiful, tom. and again, the music to go out
to break with any moment. tom: no, i've got to pay a royalty. jonathan: you will do. don't mess around with that. there's a lift in this bond market. yields higher, up two basis points. euro-dollar, $1.1713. a time to get to into the weekend. lisa: this has been an incredibly exciting week. it has been interesting to see how we have a shift in monetary policy and no shift in markets that is material. we will be speaking in about 15 minutes with norges bank governor oystein olsen after that rate hike. what are they going to signal in terms of subsequent rate hikes, and in terms of the krona and the strength we have seen, how much will it hinge on further communication about how much they can really tolerate higher benchmark rates? at 8:30 am, we get a view into the labor market in the united
states with initial jobless claims. the more interesting part of this story is how money people are getting back into the labor market after the expiration of the enhanced unemployment benefits on september 6. this is really the big story in addition to the fed, which is the payment of $83.5 million in interest that is due on some dollar bonds from evergrande. we find out today that china is discussing with local officials the potential fallout from a failure of evergrande. this is significant. you put it well, it is not just because of the specific bond. it is because it is hinged on the entire real estate market which accounts for about 1/3 of the entire chinese economy, the second biggest economy in the world. jonathan: this is something else we've got to talk about as well. and you bring up dollar-lira and get to intraday?
record weakness, that currency pair moving out by 1.6%. is it fair to say the president erdogan got what he wanted, it 100 basis point cut? tom: i'm not going to speculate on that. what is important here is the turkey finance is much like china in that they've got lira debt and dollar debt, and those are two separate dynamics within their very troubled economy. jonathan: a bit of dissent at the bank of england as well. tom: what do you think? jonathan: 7-2 to keep on diane, and the target unchanged. that is not a big shift in my mind. you want dissent over not getting it now versus in november? tom: we had two adverbs in one
statement yesterday. i thought it was very add verb heavy. lisa: he's blaming me. jonathan: you know he hates people taking time off. steve chiavarone joins us now, federated hermes portfolio manager. we are up 0.5% on the s&p in the face of a fed that took a little more of a hawkish tilt in the face of the situation in china. what you make of that? steve: i thought the market took yesterday well, access adverbs notwithstanding. if we anticipate the fed to maybe communicate a little more aggressive tapering schedule, i was a little surprised to see them signal three hikes in 2023 rather than two. the market seems ok with that, which tells me the market acknowledges some of the upside risks.
they are getting tempered to the plan ahead. they're comfortable with it, or at least that is the initial reaction, and we will see how the fed executes from here. it is a little more hawkish, and the market seemed ready for that. tom: i want you to explain on an allocation basis your comfort in being in stocks for the rest of the year. steve: we cut back our equity allocation a couple of weeks ago . we were at 60% of maximum overweight. we went to 50. we saw the opportunity for a 5% to 10% correction. we had that 5% number, but it might go a little bit further. i also think we have exited that first part of the economic cycle , that recovery, that point where you're going from the end of a recession where gdp gets back to its prior peak. that's where we have gotten the biggest returns and the least
amount of volatility. the fed is now starting to come into play. gdp is now in expansion. we still like equities. we are still overweight. but we are going to be a little more modest in that unless we get a big pullback. we are thinking more along the lines of being around 50% of aramex overweight in equities, not something like 70% -- of our macs overweight in equities, not some thing like 70%. we recognize there are more opportunities for volatility, somewhere in the 10% to 15% range. lisa: to build on that, jp morgan analysts signaled their perhaps isn't as much of a buy the dip mentality. are you less inclined to play in some of those more volatile days? steve: no, not at all. we think we knew are in this part of this regime, where
you've got gdp that is expanding, but now you're going to start to get the fed in play, that could last for a very long time and you do want to buy the dip. the story is that pullbacks can be sellable. if you are evaluating against 10% or 15% upside with a risk of a 10% correction, and now makes sense to be able to take 1% or two off and then by that debt -- and then buy that dip. it is kind of like picking up pennies in front of a tractor-trailer early on. now there's some pullbacks you could try to buy. we thought we could buy this pullback, and it may be over already. it may be quicker than we anticipated. jonathan: will you let me talk sterling and run?
sterling, 1.37 handle. the bank of england voting 7 -- voting 7-2 to keep bond buying unchanged. a modest tightening, and there among which. look at sterling right now. just a little but of a move higher. tom: there's a lot of trends here as well. one of the smartest guys out there, bank of canada expertise, he just put out three brilliant tweets, and he talks about the blackrock view of a muted new nominal theme. think about boe, what we have all set about the fed. are they trending towards a new nominal set of yields that is shockingly lower than our historical framework? jonathan: every cycle over the last several cycles, that is what we have witnessed. just lower, lower, and lower.
so much to get through this morning. all of the central bank decisions, turkey, let's focus on the main two. the federal reserve, and the second-story for the week, china. we are taking this very well right now, up 22 on the s&p, advancing 0.1%. yesterday was a tidy session, too. lisa: that is the most interesting thing. we are talking about tightening policy and the potential risk from the chinese economy, and no one cares. i am trying to understand. jonathan: someone cares, lisa. lisa cares, tom. good to have her back. next on the program, on tighter monetary policy, an exclusive conversation with norway's central bank governor. from new york, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta.
japanese prime minister yoshihide suga is warning about china's growing military influence ahead of the first in person meeting of the so-called quad group. he said the changing power balance could threaten japanese prosperity. he will doing leaders from the u.s., a straley, and india tomorrow at the white house. beijing says the quad group is engaged in cold war mentality. philippines president rodrigo duterte has signed a law taxing casinos. tax collections will be used for universal health care and to develop medical facilities. the law is also said to be part of the government efforts to regulate all forms of gambling. a wider reopening is seem to be delayed by a low vaccination rate. the department of disease control officials said the reduction in quarantine from 14
days will help boost thailand's economy and tourism. the u.s. food and drug administration has authorized a third booster dose of the pfizer vaccine for at-risk groups. that includes people over 65 and those at high risk of severe illness. the total hit to revenue this year for the world's carmakers is estimated at $210 billion. that is the latest forecast from alex partners, which says the industry will build 7.17 -- will build 7 million fewer vehicles as a result. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪
continued to discuss progress towards our goals. since then, the economy has made progress towards these goals. if progress continues broadly as expected, the committee judges that moderation in the pace of asset purchases may soon be warranted. jonathan: a baby step from the chairman of the federal reserve, jerome powell. good morning. your market looks like this on the s&p. we got a lift, up 24, advancing 0.5%. a lift on the nasdaq, up 83, up almost 0.6%. in the bond market, yields higher three basis points to one point 328%. they are moving towards tapering ashtead 1.3328%. -- to 1.3328%. they are moving towards a rate hike 2020 two. that seems to be the split at
the federal reserve. tom: the jp morgan home is where they decided to build the fed. it was the crisis of 2007. some iterations that michael mckee is expert on, our bloomberg economics and drone powell correspondent. there's eight ways to go in this press conference. to me, it was far more interesting and nuanced. one of the issues here is a dovish chairman versus the regional hawkish presidents. that is a generalization. kenny presidents tell the chairman what to do -- can the presidents tell the chairman what to do? michael: no, the chairman generally has the votes because there will be those who are in the same boat. he's got the board, and he has six votes on the board right now, so he's got enough votes that he can push through what he wants. there's not that much disagreement, though.
there's basically a split over a couple of months may be in when you start raising interest rates, and of 2022, beginning of 2023. doesn't it really matter all that much? tom: whatever the books are, the beige book, whatever, have we ever had a smart, well-meaning people at the fed try to game out the mystery of 2024? michael: no, because we've never had anything like this. we've never shut the whole economy down, and had problems that you don't know how long they will last like these supply chain problems. lisa: do you think this has actually been incredibly successful, and they are going to exit this extraordinary policy without a major hiccup? michael: so far, there isn't a whole lot of movement after yesterday. i think they have signaled they
would tell the markets far in advance. no we got the hint, and next is the announcement. it looks like this has all been absorbed very well. people understood what was going on. so it is working at the moment. the guidance that they have given. lisa: do you think there is perhaps a little too much relief or disregard for the dots? the idea that people look at those and say that was -- say those don't matter. michael: we will talk about this later, the dots have changed significantly over the past year . in september of last year, there was only one dot the thought there would be any kind of move, and now you have nine. so as the facts change, that's where they are. they are watching the same way
we are. the problem is the fed makes a forecast four times a year, and people on wall street make a forecast every day. so the fed often looks like it is behind, but it is not really when you are talking about with their current thinking is. jonathan: give me the current thinking when it comes to investment decisions at the moment. there were some questions yesterday that were pretty firm from journalists on the decision of certain regional fed presidents. what did you make of the response of the chairman? michael: i think he's doing his best to clean up a mess that people didn't really see. can argue they should have seen it coming, but it hadn't been an issue before. powell himself has been criticized for owning munis, and the fed buys muniz, but as he pointed out, munis were what they did because the fed didn't
buy them. so when you look, the trading looks bad, but it was under the rules, and it wasn't something they thought was going to be, when you look at what they traded, they thought was going to be influenced by the fed, and all of the sudden it is. so they had to anticipate something they had not anticipated before. jonathan: were you surprised by the hawkish tilt? i didn't expect them to say we are expected to complete by the middle of next year to wind down bond buying. did you expect them to say that? michael: i expected it to come out, but not necessarily yesterday. but i think they are trying to do here is set the markets up for a possible change in policy if, for example, we don't see inflation start to fall, and it isn't as transitory as they thought. setting out a fairly rapid timetable means that they can move up that timetable, and
powell alluded to that, if they need to start raising interest rates sooner. so they are trying to give themselves maximum flex ability. they are not promising they are going -- maximum flexibility. they are not promising they are going to raise rates, but they are. . letting off know that it is possible -- but they are letting us know that it is possible. tom: diane swonk was ministerial yesterday. she delicately traipsed through this investment scandal we see. you and i remember the day windsor howard davies resigned instantly over the libyan flap at the london school of economics. are you surprised that these selected presidents have not resigned yet? michael: no, i am not surprised because i think their argument is that we followed the rules. tom: no question.
michael: and they believe that what they actually did, we don't have the final details of what actually was traded and how it was traded, wasn't a conflict of interest. that is up to the fed board to continue investigating to decide if anything should be done, but i think also the argument that rosengren and kaplan were talking against their book in terms of what would have benefited them personally in terms of monetary policy is also a defense they are going to use. tom: michael mckee with a huge day in international economics. nothing more surprising than what we have seen from norway. they have their own pass, some of it based on oil prosperity. wasting olson joins us now, norges bank -- oystein olsen joins us now, norges bank of honor. you are raising interest rates. why? gov. olsen: the background is that we have been hit by the
pandemic, but through the last year, we have seen this recovery of the economy, and we are now close to a normal level, and the environment which has come down significant leap. given the normalization of the economy, it is possible to start from a very low level. so we made the first today and will increase by 25 basis points. tom: you see the central banker to the world, as mr. powell is called, take a certain tack yesterday as well. discuss the independence central banks have now against the federal reserve. discuss how comfortable you are with a norwegian path versus reliant on other more large central banks.
gov. olsen: well, obviously, any central bank targets the rate based on considerations related to domestic economy, to the norwegian economy in our case. we have the oil still. we have had to can and fiscal policy. when things are normalizing, to make a link to the recent fed decision i think it's quite interesting. they have more monetary policy tools than we have. they have these asset purchases which they are about to start tapering, and it is also
interesting if you take the dots which are presented from the board members and go-ahead three or four years, they are actually indicating that they will start perhaps next year and ending up with a level of the policy rate which is actually very similar to ours. lisa: do using that is dangerous for your fellow central banks in the developed world to not be raising rates sooner? to be signaling a tepid move to getting to a point where perhaps they can start thinking about it, but not taking the steps you did today? gov. olsen: no, we are in a quite different position. we have not gone into the area of unconventional policy, although i should add that through the pandemic, we had our own measures of providing the
markets, the banks with massive supply of liquidity. that happened from march 2020 and onwards. that was our version of monetary policy measures. those measures in our case are tuned back. all of the loans the banks got are paid back to the banks. we are much smaller than the u.s., a more complex economy. we have the oil. we have had the room to maneuver in fiscal policy. i guess there is some confidence in the markets due to the strengths. for this time, to spark a gradual normalization of the policy rate also, which i think is extremely expansionary in crisis and which remains
expansionary the next year or two. jonathan: it is good to catch up with you, sir. oystein olsen, the norwegian central bank governors, thank you. speaking about exposure to evergrande, saying ubs has direct exposure is "immaterial." says margin calls related to evergrande were "well executed." that is the latest out of ubs. we have really got to find out who holds that debt. everybody's got the exposure on the credit and the equity side. tom: you are 100% correct. what i would say is the obvious crisis is never what gets you. there will be tangential things such as margin dynamics and the rest that will surprise the street. that is the risk that is out
there right now. jonathan: we are not in the business of guessing, so let's talk about what we know so far. we know today the two interest payments are due on two bonds. we know based on reporting that the local currency bond might be downwards. the dollar bond, not so much. we heard from "the wall street journal" earlier today that china is making preparations for evergrande's demise. there's something north of $600 million of interest payments due . what bugs me is how may times i have heard the name lehman. the starting point for everyone's exercise seems to be, is it systemic? is it lehman? move on. my concern is this is potentially a symptom for
something developing. it is a conversation that is going to be with us for quite a while. lisa: that is where to get deep. that is the concern, how much this slows the chinese economy further in the lack of willingness to respond, if that reporting is accurate. we have been talking about the lack of understanding of who owns the bonds and equities for the dollar-denominated debt for the equities. this highlights the uncomfortable relationship china currently has with external investors, another big issue that has significant revocations. jonathan: equity futures up 25, advancing about 0.6%. we get to the bond market, shaping up as follows. yields up three basis points to 1.3345%. yields up a couple of basis points on 30's.
this is where the attention is right now, on this bond right here. $0.29 on the dollar. that is a deeply distressed dollar bond out of evergrande. there's an $83.5 million interest payment due today. tom: the textbook convention here, as the stress goes to $0.21 on the dollar, 29.60 is not too far from a 21 level. jonathan: we could joke about it, but i'm not sure how that is helpful. we talked about it through the morning. steve chiavarone said the same thing. surprised to the equity market has taken a lot of this in the near term. with your movers this morning,
let's say good morning to romaine. romaine: apple setting up for a third straight day of gains, as is microsoft and alphabet. facebook climbed to about 4% yesterday on concerns about some of its ad business. the cto is stepping down. they are appointing someone to replace him who has actually been there for quite some time. he has known mark zuckerberg since his college days. he will be taking over. he's a relatively young guy who has been leading the vr and ar efforts. investors seem to like it. there's also a big meeting going on at the white house today. a lot of the chipmakers being called back to the white house. taiwan semi, intel, as well as some of the chip customers. this is the third big meeting the white house has had. the white house basically asking
for more information about some of those supply chain constraints and whether companies are sharing off information in order to resolve this chip crisis. pfizer shares slightly higher in the premarket on the fda approval for booster shots for 65 years and older people. tom: i'm ready. you will have to come hold my hand, romaine. . romaine: and after you get that shot, you can take them out to olive garden. darden restaurants up 3.75%. tom: we are basically going to stop the show to help you get your 401(k) out to 2023 or 2024. wells fargo has written the clearest equity bull market note i have seen in weeks. there's a lot of bulls out there. michael schumacher joins us now,
wells fargo global head of microstrategy. i was blown away by the acuity of saying own stocks. do you have an enthusiasm for a bull market forward? mike: i think you've got to be enthusiastic at least for a month or two. the equity market focuses on tapering, like just about everybody else. the fed says we will probably taper pretty soon, but we are not quite there, so you get a reprieve. in the near term, it seems pretty positive. i think the nonsense about the dots is just that. who can see out to 2023 or 2024? jonathan: i can't see to january. i think that is the problem. i asked this question earlier. do you think this fed sounded a little bit like the old fed in
yesterday's news conference? mike: i think that is a good point, in particular the discussion of rate hikes. powell sounded a little bit frustrated with that discussion. so i would say yes, it's under like the fed dialed back for five years. jonathan: they've told us they will tolerate higher inflation. if using about the long end of the yield curve, that is where the hope is. they have just been doing this, down into the right, from the upper left to the lower right. that is a problem, isn't it? that's not what we were told coming out of last year into this year. mike: against that, i would say inflation is running at a pretty furious clip. cpi is already up 5% this calendar year. forget about year-over-year. so 5% inflation year to date is
a staggering number. the fed has got to be at least somewhat concerned, perhaps a lot concerned about that. i think that is why we had the subtle change in tone yesterday. lisa: how much do you think that their buying bonds contributes to that inflationary push? mike: probably not, but the bond buying has been extraordinary. it seems like a fairly steady, predictable thing. i think also lost is the notion that treasury issuance is going to come down a lot this next year. it is going to be a foot between treasury issuance and fed bond buying. we think interest falls faster. lisa: how much is the fed responding to the supply and demand dynamic and not necessarily the inflationary push, which they might still view as transitory, and is unclear how much their policy will even affect given the supply chain constraints that are part of the big driver here? mike: if you look at it from
that standpoint, you can say the fed is still in the game to a fairly good degree, at least for the next nine months. once you get past june of next year, if that is really the end date for tapering, it is a different discussion. but at least for the near term, the fed is hanging in to a pretty large extent. tom: i want to circle back to what to do with markets. what is the tone you have on investing now off this original central-bank process we are in? are you optimistic on a persistent ownership of equities? mike: in terms of risk in general, optimism has gotten pretty shaky. but if you go out nine months, 12 months, it does sound a little bit tenuous to us. think about the central bank news over the last 24 hours.
you get the fed saying we haven't tapered yet, but we are going to do it pretty soon. bank of england now going to a seven-to -- went to a 7-2 vote this morning. not nearly as accommodative as they have been. to us, it seems like the backdrop for taking risk in general has gotten a bit tougher , but used to have incredibly cheap funding. as long as that is the case, people file in. jonathan: turkey cut, though. what do you think of that? [laughter] lisa: independent. tom: last time schumacher is coming on. jonathan: let's get to the
broader story. we have a federal reserve that had a hawkish tilt in yesterday's news conference. we've got a story out of china. we don't have much transparency right now. we've got an equity market that is doing all right, but 0.6% on the s&p. yields higher by three or four basis points to 1.34% on tens. tom: i also talk about the resiliency of corporations to adapt. that is from his colleague, anna han. jonathan: if you want to get to the fed, their inability to forecast inflation this year, what makes you think they will get it to 2% next year? we are obsessed with these forecasts and the dots. lisa: i am not going to be off the next fed meeting. , tom -- jonathan: tom will be.
from new york, this is bloomberg. ♪ ritika: pakistan's government says the international community should come up with a roadmap that leads to diplomatic relations with the taliban. the country's foreign minister said the plan should include incentives if taliban leaders fulfill certain requirements. they say they are in sync with the world and wanting to see a stable afghanistan. a startup will work to fight cancer and other diseases by developing a potential next generation of messenger rna technology. a researcher at imperial says astrazeneca will make sizable investment in the company called vax equity. alaska is now the second state in the u.s. to activate statewide crisis standards of care amid a covid-19 surge.
idaho extended health care rationing last week after authorities said they did not have enough resources to treat patients. some montana health providers have done the same. in each state, less than half of the population has been vaccinated. new cdc data shows the number of americans receiving their first dose of a covid-19 vaccine has dropped significantly in recent days, worrying health officials as flu season approaches. the seven day moving average of daily first doses is about 272,000 i the end of last week, the slowest week since mid july. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ ♪
it is good or bad depends on the use of it. the use of debt for something like fighting a war, infrastructure as part of the ongoing budget may make sense. the problem is when debt becomes completely wrapped up in the large social programs that are abundant. jonathan: from new york city this morning, good morning. futures advancing 0.6%. in the bond market, yields higher to about 1.34% on tens. it is a no drama morning, with evergrande the big focus in the federal reserve getting a little more hawkish. but no drama in this market as of right now. tom: the drama will be this weekend when the arkansas razorbacks move from their big victory to texas a&m.
always a massive issue for 75,000 people assembled in arkansas. jon, you are up to speed on this. not watching tots-arsenal. you will be watching the razorbacks. jonathan: i watched longhorns, razorbacks, and it was phenomenal to see that packed stadium. congressman french hill of arkansas is with us. did you run onto the field at the end? rep. hill: i did not, but it was a raucous, amazing victory. and this weekend they go to dallas to play the texas aggies, so it will be a two top 20 team game, an important game for both teams. jonathan: there's a focus on the
chinese company evergrande this week. it has been building up over the last couple of months. there isn't much transparency in what happened. what i found really interesting is that the chinese authorities pulling back on their ability to list here, there hasn't and u.s. authorities that have gotten enough done. why is that? rep. hill: the chinese say every public and private company has an obligation to them, so it is very difficult for them to ever agree to comply with accounting and auditing standards. problem two is china wants to create their own capital market, so i think they are becoming ambivalent to listing in new york. third, transparency. they are not transparent as a creditor in the country, the
world's largest. they are not transparent about that, and they are not transparent with their statistics in china. that is why i am concerned about the systemic risk of bad economic data and company data out of china. tom: you have legit life experience in this with banking out of little rock. the major banks that we speak to every day on "bloomberg surveillance," are they aware of this and hindering your demand for more openness, or do they agree that we need more chinese transparency? rep. hill: i think they agree for more chinese transparency. china needs to come out cleanly on the lending terms and conditions they are putting on. tom: would you suggest we demand that they become part of a paris club structure?
rep. hill: i have demanded that. i urged janet yellen to demand it. i urged the g7. lisa: you will be speaking with janet yellen and jay powell next week in a series of testimonies where they discussed their plans going forward. what do you thing is going to be the hottest topic at a time when fed chair pebble may not be up for remote -- up for renomination, -- fed chair powell may not be up for renomination, according to some? rep. hill: looking at the plans of corporate america for employment and wages into next year, that is a key point i think they will talk about. for janet yellen, why there has been a failure by the biden
administration to properly get this eviction rental assistance money out across the country. it is a crisis in many markets, particularly in the northeast. lisa: were you satisfied with fed chair jay powell, whose tone indicated that he is concerned about some of the pressures you mentioned? rep. hill: i'm glad. i think he is listening to his regional presidents. i am glad to hear the chairman taking it seriously. the key is is it transitory or not, because he knows how bad it would be if it is not transitory. i think that was a key part of their meeting yesterday. jonathan: let me ask a delicate question. does this start to get a bit embarrassing for this country? rep. hill: since 1917, we have the debt ceiling that always turns into this political football. democrats control the presidency, the house and senate. they put forward these budget ideas, so they ought to be able
to put forward a plan for a continuing resolution and a debt ceiling proposal that can continue to allow bipartisan negotiations on spending for 2022. tom: this is important. i need a quick answer, congressman. you are a bank guy. are you trading bonds in your account? we've got this issue of fed presidents trading in their account. his french hill moving etf's around? rep. hill: no, no material differences there. it is really just the way it was when i came into congress, and it has grown accordingly, but i am not active out there doing that. i think jay powell addressed that yesterday. i think people have to have a balance and a transparency. we have strict rules about that
in the house of representatives. jonathan: congressman, thank you very much. republican congressman french hill of arkansas. on some important topics there, and at the end, touched on part of the problem for a lot of people. these are the decision-makers down in washington, d.c. for the federal reserve to make the decisions they have been making, some of the trading they have been doing, there's a lot of questions that remain unanswered. tom: the prepared statement yesterday, great. i'm sure that is fine, and i get the idea that they were just forming policy. i have to go further. i have a verbal agreement from almost 20 years ago i can never own financial stocks. that was a requirement for me when i joined bloomberg. jonathan: all in cash.
>> typically the hiking cycle does end up killing the value trade as well. >> as long as the market consistently believes and puts money in it, i think it will move -- i think it will move higher as well. >> the next four weeks will be choppy, but i think 100 days from now, we are in a better position. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom:
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