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tv   Bloomberg Surveillance  Bloomberg  May 4, 2022 7:00am-8:01am EDT

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>> what the market needs to care about most are one of the oz --? -- what are the odds? >> central banks have not seen inflation for a long time. >> i don't see how the inflation comes down with --. >> we hope they contain inflation without killing off businesses. >> this is "bloomberg surveillance" with jonathan ferro, tom keene and lisa abramowicz. jonathan: good morning.
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this is "bloomberg surveillance" . along with tom keene and lisa abramowicz. i am jonathan ferro. tom: a historic day. we are going to provide some leadership here. it is that overlay across all of the american economy. when the new is down and lift -- lisa: coming coming at 240 to 270. the higher in as far as the estimate.
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how much are they trying to distinguish themselves and say that lives disappointment with a live story, uber is a separate case. jonathan: there is an issue in the labor market for the likes of lyft. they are not alone. all these job openings in america, millions and people struggling to fill those vacancies. if you want to fill them, you have to pull wages up. tom: it is almost an advantage to have this lyft, uber -- because a distinction we hear from market economists is simple, the job economy is the heart of the matter, it is on fire. jonathan: later this year, do we solve it? lisa: what are we supposed to be solving at this point. how do we have job openings still hiring? companies do not plan a hiring
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but you are seeing all -- going up. i wonder what the fed is going to do with that jolt from yesterday, showing jobs -- job openings at a near time high. jonathan: we hear from the president shortly after that fit decision which is a head scratcher. a basis point of 2.9558. crude is positive. lisa, your plan to ban russian crude? lisa: maybe. they haven't planned it yet. we have been talking about, maria put out there so well, it is not about oil. it is all about gas. without that, how much this is really change the narrative? jonathan: let's go to that story a little bit later. we will catch up with maria over in germany, talking about the
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difficulties the europeans are having. tom: the numbers of germany, russia which indicate the effect year, jamie dimon of jp morgan, she said it cuts both ways. the realm of sanctions and maybe we are having a relevant conversation about what to do next. jonathan: those banks have their own problems distinct from what is happening far away in ukraine and russia. there stocks are down today, even with what is happening with the federal reserve. when you share the latest shift of these banks, -- the stocks are not here in that. tom: i take issue with bundling them altogether. it is no different than technology, no different than consumer staples. there is a real separation out here of people down less than others are down. jonathan: morgan stanley almost
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down 15. bank of america down --. it is rough across the board. lisa: how much is this about growth? investment banking is expected to slow down, you're going to see -- default. all these companies locked in -- rates. you start to see bond yield. what country -- what company is going to expand if they do not have to. jonathan: the price of the story has changed, a lot in the last two months as well. peter: in the context of something the market have to dissolve in the last couple of months, reasonably well. there has been massive -- may
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have held out reasonably well. it market sentiment has become very negative. unless we get a deep recession, there is a limit to how much equities will fall from here. tom: when you some all of the different people you're dealing with, what inflation number do we get back to? german inflation is unspeakable, american inflation is a different unspeakable. what level do we get back to out there? peter: our view is, the central banks and the markets view, inflation is temporary and will start to ease, particularly in
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relation to commodity prices. and some of the supply-side constraints we have been seeing. -- inflation has gone up less in --. it is stabilizing at higher level. it is still a question about what the appropriate level of interest rates will be as we settle down. any reminder yield interest rates and nominal rates are very low in the context of where inflation is likely to be. that is still a key focus for investors. lisa: are you saying to tom, get out of -- cash and go all in in apple, amazon? is that basically what this is
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translated into? peter: i wouldn't say we would be -- on a relative basis, we have reasonable out side into modest level districts. some of the uncertainty about where rates will peak. it is important to put things in context. we have had years strongly rising performance -- -- estimates, largely as rates are trending downward. a positive but below an index return. a much more different evaluation of the index of markets, across sectors. jonathan: what we need for that to work? peter: had it started to work,
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as we were starting to get a little bit more refurbished. last year. interest rates started to pick up. that is a positive. evaluations were low, but as you were reporting before this conversation, banks are very vulnerable to recessions. if investors think there is going to be a recession, -- losses and credit write-downs, there is a loss because of that. even as the risk to growth remains on the downside, the risk of the deep recession don't look that high. it could be very negative to banks. more limited now around the
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financial crisis of the recession. selectively, banks are starting to offer some very good volume. particularly in europe. jonathan: your more constructive on that. are you just as constructive on your team playing liverpool this saturday? peter: i wish i could have as much confidence. i have hope. jonathan:'s over the weekend. big game, tk. we share the same team. tom: i listen to adele mostly when i get ready. i listen to adele and try --. jonathan: what is one of the songs? hello?
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peter oppenheimer, thank you. overhead schedule to renew numbers down after the close today. they saw the damage and said let's bring that forward. numbers pretty terrific. -- same the right thing in the statement saying, she expects engagement of drivers with that company to continue without significant incremental or incidental -- incentive investments. maybe that is a difference in over or lift right now. same problem, -- tom: the song that, you could've had it all. you're going to wish you never met me. rolling in the deep, tears are going to fall. rolling in the deep. jonathan: i had no idea today
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would be this emotional. [laughter] jonathan: futures up with third, this is bloomberg. -- this is bloomberg. ♪ francine: keeping you up-to-date with news from around the world. i am ritika gupta. policymakers expected to raise interest rates by a half percent. it would be the largest rent hike in more than two decades. the european reason -- to ban oil. russian fuel would be banned by the end. -- enforce the van until 2023. both were opposed to a quick cut off of russian oil.
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in ohio, a candidate backed by donald trump has won the primary for the u.s. senate seat. jd vance once -- the president was unfit but embracing him now. we were delivered an upbeat outlook for earnings. -- to capitalize on robust -- without compromising profits. rather than incentives to deal with a driver shortage. lyft still has a disappointing outlook. 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. ♪
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>> the idea that 3% would be enough, really unlikely. we are going to have to raise interest rates to four or 5% to bring inflation down to 2.5 or 3%. jonathan: the big one today. looking for a 50 basis point move from the federal reserve.
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from new york city this morning, good morning. this is "bloomberg surveillance" . the nasdaq 100 up one third. the u.s. 10 year yield 2.9 558. crude is high by 3.7%. 106. ahead of the fed later today. tom: chairman powell faces dollar resiliency today. you're looking at dxy and the bloomberg dollar index off ever so fractionally. in washington, there is another part to economic growth. export, import dynamic. that is a j norm is managed -- dan normans mystery. i'm suggesting, the fed chat is
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such a invested chat. anne-marie and washington, all domestic, all the time. let's rest here for a moment. the elections of last night, it is wednesday. tuesday yesterday. i don't want a play-by-play here, but is it a washington shift this morning, adapted in what they observed in ohio and indiana yesterday? annmarie: i you and say it is to early to tell. he beat six other individuals to win this primary election. everyone is speculating and wondering if juan trump can maintain this cane maker like status at the gop and his idea of flirting with running for president again. that is a part of the conversation, but really, bigger
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part of the conversation, talking about any kind of election today and what would be the main driver of the next couple of weeks is how it plays into the upcoming election. that will now be a hot topic item. whether or not that it's going to include stings of inflation and what we care about. tom: you always drift back to the senator of west virginia. the president speaks today and chairman powell speak separately today. how will the gentleman from west virginia treat that angle? that new attack from president biden? annmarie: dueling press conferences, both talking about the economy. potentially, president biden is going to be offering an olive branch to senator manchin when he talks about deficit reduction. and the fact that the treasury has just made revisions on it and there will be a bigger debt
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-- deficit reduction. he is going to talk about reflation -- inflation is still high. the administration is winding down on emergency spending. there are places they can make long-term investments to blurring -- to bring long-term inflation down. the public -- the president knows the public is on his side. that is the speech today. the timing is interesting. is it potentially to dual jay powell or is this just to have a day focused on eco-in washington? lisa: you were at the white house correspondents dinner. we all were. there were a number of cases of covid rolling in. trevor noah was joking about how it was a super-spreader event. we heard about the abc journalist whose shook hands with the president, was diagnosed with covid. how concerned are people concerned about the exposure of jill biden and him getting sick?
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annmarie: joe biden also sent by kim kardashian and went to the met vallow. -- met gala. the administration knows the president potentially is going to be exposed. they are taking every precaution they can with the president. we should note, he was exposed to speaker pelosi. everyone remembers that peck on the cheek and he didn't contract covid-19. the vice president spoke last night about abortion after she tested negative. she is back out in front of the cameras. obviously the president is going to be exposed to people but they are doing everything they can. they are also planning for the fact he would just work from the residence and have that all set up. jonathan: we all want to know, did kim spill a drink on that dress? did that happen? annmarie: i don't know. i don't have a firsthand report on that. jonathan: i wanted to know. it is a $5 million dress, tom.
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marilyn monroe. annmarie: remember that dress is the one marilyn monroe wore when she sang happy birthday to jfk. jonathan: happy birthday, mr. president. anne-marie in washington dc. i do not think you are going to squeeze into that dress tk. apparently she had to lose 60 pounds or something. i don't know too much about it. [laughter] just a general interest in the met gala. to annmarie's point, to follow, whether people were exposed to covid or not and all those good things. i am going to stop doing this. lisa: we are getting to a point where people have more fear of missing out that they do of getting sick and that is why you're seeing these events, regardless of the covid fear. tom: there are 20 9000, 793 last night who watch the red sox take
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the los angeles angels. is that any different than the red -- the white house correspondents dinner? jonathan: when are we going to stop testing for this? how far away are we from just treating this like every other thing? tom: i have yet to hear a medical professional suggest that, john. we're not there yet. jonathan: close enough. tom: i do not have a timeline on that. the medical professionals say -- is tangible. with 300 something deaths a day, which is a miracle, we are nowhere near that rate of 150, 160, 1 70. which is flulike. i don't hear them talking or considering when we stop testing. jonathan: i am not in charge of track and trace, takei. futures up .5%.
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.49%. then we hear from the president of the united states tom called it clumsy. i will let you choose your word. and then at 2:30 eastern, you hear from the chairman at the federal reserve. an interesting day ahead for all of us. yield coming a basis point too -- we talk about that in just a moment. it new york, this is bloomberg. ♪
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jonathan: live from new york city for our audience worldwide, this is bloomberg surveillance. equity futures up half of 1% on the s&p. the nasdaq by 0.5%. quite a change from a month ago. mark 16 at the close, the bond market did not look like this. 1.94 on the front and 2's. very close to the highs of the year. we saw the print through 2.80 earlier today. 2.9597. i want to talk about the change we could still get at the front end. nomura thanks 50 basis points today, 75 in june, 75 basis
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points in july. they see the fed funds rate at 4% by the middle of 2023. nomura taking a different view of things. they think a more aggressive fed coming out of this one and into next year. tom: we will talk about that with greg staples but i cannot convey enough, and static analysis versus dynamic analysis . tom: it will be very difficult -- jonathan: it will be difficult to reflect a committee consensus that does not exist. after that, the future, there is division. the question that a lot of people are waiting for is a 75 basis point hike. bank of america and others, very little scope for surprise on the
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hawkish side today because where will it come from? if this is a market pricing for a frontloaded view. lisa: the only surprise that could come from is a response to the question of whether the fed can get back to 2% inflation quickly. if they think that is the case you might see a hawkish surprise. jonathan: wti and brent to this morning higher by 4% across-the-board the back of any eu plan to finally ban russian oil. this will take some time. it will be phased in. is that the language they would like us to use? lisa: they probably want us to say that it is a harsh bad so they can get the political support, but phased and is the accurate way to frame it. jonathan: let's get some single names and movers. good morning to kriti gupta davidkriti: one of the biggest
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movers to the downside was lyft. a plan to increase into driver costs. they are trying to retain talent, so not only are they paying more but they are also providing fuel subsidies. that is something that you'll see from uber, as well. they beat expectations in their outlook, addressed the concerns waiting on -- weighing on lyft shares. they say that they can weather the storm. the stock has been stabilizing, even briefly turning positive. we will keep our eyes on that dynamic payment that outlook picture is what is supporting airbnb. this comes after a strong second quarter forecast saying that strong travel demand after two
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years is expected to continue. if you talk about the growth picture broadly, the best case study for this is starbucks shares. the company is really quite a bit. up 6.4%, despite them suspending third and fourth quarter guidance, less visibility in china, but strong growth in the u.s. so strong in fact that they are talking about accelerating their stores, making them and that technological advances. there are some down stories. advanced micro doing well this morning, this coming from good data center growth. akamai, a software company, said they are very concerned about the effects of the war in ukraine, the supply cost that you'll see. that is your biggest downside mover, down 14%. tom: this afternoon, priya misra
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and others will be with us on fixed income, but this is the interview of the day on fixed income. greg staples is head of income at dws investment. thank you for joining us. full faith and credit, -11%. the credit market, -14 percent. jerome powell is crushing bonds is and he? greg: he is but we have not had that kind of volatility that often happens when the fed removes liquidity from the marketplace. no breakdown sub prime, crash. tom: forget about the math here. i had greater shocks on the downside. that is to come. when does it get away from the stability pact we have seen? greg: it would take something
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from the fed saying that we have not got enough fast enough, but i don't see that happening. i think he will continue to guide interest rates slightly higher. we could be closer to the peak in rates than the bottom. this is not a fed that wants to do shock and awe. they want to control the marketplace, let the medicine take hold. for the past three months, it has. we have seen some indications of a slowdown in the economy. oil prices seem to have leveled off. mortgage application starting to turn down, some of the frothiness taken out of securities markets. it is what you would want to see happen after three months of indicated tightening monetary policy. lisa: you say the decline in equities or bonds will not get the attention of the fed, is a concern. how far with this a lot have to go before the fed takes notice and re-engages with some kind of put? lisa: you are bringing out the
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point of the powell put. the market has been trained anytime there is a downturn in the markets, the fed will provide support. we still have a ways to go here, down 8% last month, 12% so far for 2022. i think you would have to see another 10%, a real sharp decline, rather than something easing down. the fed looks at the equity markets closely, they don't want to destabilize them, but they are looking at it as a signal that the economy is slowing down and policy actions are taking hold. lisa: there is an issue of lineararity, this controlled weakening of markets, but that could change when they start reducing the balance sheet, which they may start to do at today's meeting. how concerned are you about an uncontrolled move in response to what the fed is doing, where
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they actually engage with it rather than just job him? greg: we don't see the buildup in pressures like we did in past cycles. the fed is always concerned about frothiness in the securities markets. some of that has already eased out and the bubble has leaked a little bit. the risk of it popping is not something that we see. there could be some built-up pressures, but we cannot find them. tom: how can we be quiet sent about bond prices coming down more, yields holding, if the fed is raising rates along the way? those two don't match, do they? greg: they do, actually. the bond market does a good job of discounting forward fed actions. probably close to the end of it. tom: at the september 21 meeting, the bond market will be modeling in late 2023?
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greg: probably right. tom: what do you see for late 2023? greg: 2.5, 2.75. i don't think it goes much further than that. what the market is doing for the fed will actually begin to bite in the economy. remember that this is also an election year. one of the reasons we are talking 50 basis points in may, june, july, they can pull back and go on autopilot before the november election. this is the first time i can remember in history when the administration is not screaming for looser money. i think they want tighter money. tom: i was trying to get him in trouble there. jonathan: i think he is experience enough not to. greg staples of dws investment group. given how strong consumers are, how sensitive is demand to rate increases? because of all of that? i wonder if that is another
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factor of why people think rates have to go higher? lisa: that is an important point. it is not just the consumer but corporations that have locked in financing for so long. if they don't have to incur those higher charges to borrow money, does it have a tightening effect on the market? important point in terms of how long we have to wait before fed policy makes a material dent in the u.s. economy. tom: city just published 1.4 job openings for every individual, showing an even tighter labor market. should keep pressure on the fed to address inflation and apply a balance of risk that skews hawkish at today's meeting. i saw you tweet that number this morning. 1.94 job openings for every unemployed individual in america. that is quite the number. lisa: unprecedented on every level. you wonder if that is an actual stat on the actual job openings
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or just those posted. i wonder if that report gets the fed's attention. it just highlights that we are increasing the tightness. jonathan: we know that it gets their attention. lisa: no skepticism. how do you feel? jonathan: i like to stay neutral on these things. lisa: you are as neutral as can be. jonathan: i don't want to give my opinion on why chairman powell got his pivot, why. interesting that it came around when he got his second term. the nasdaq up .4%. from new york, this is bloomberg. ♪ ritika: keeping you up-to-date with news from around the world, i'm ritika gupta.
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let's get to first word news. policymakers are expected to wrap up their two day meeting today by agreeing on a half percentage point increase. they are also likely to announce plans to shrink the fed's balance sheet. russia is focused on cementing both military and political control over the ukrainian territory it has taken so far. the kremlin is installing occupation governments and is encouraging locals to use ruble's for transactions. in the u.k., financial service workers are getting pay hikes at twice that rates of the rest of the population. that is widening the gap between the rich and the poor according to a study. 31% higher in february that at the end of 2019. cbs raised its outlook for the year and raised first quarter outlook.
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they reported revenue almost 9% higher than one year ago. sales of the cvs health insurance business was up 13%. starbucks operations in the u.s. beat expectations in the latest quarter, a welcome development. the ceo has to contend with higher inflation and covid measures in china that have hurt the performance over there. 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. itika gupta. this is bloomberg.
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>> the fat is going to have to raise rates and reverse qe.
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they will try to slow down the economy enough so that 8% comes down over time. give them a chance and i think the sooner they move the better. jonathan: deep breath and give them a chance, the words from jamie dimon. good morning. here is the price action in the equity market. up .4% on the nasdaq. yields come in a couple of basis points, 2.9519. is that what chairman powell will say to mike mckee later on, deep breaths, give us a chance? tom: what is interesting, see where the dissent is today as well. to what we heard from greg staples, the hawkish twist of 75 basis points. you really think that we will see outright dissent? jonathan: more likely down the road than today. you never know.
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i think there is agreement on moving 50 today. all the fed speak, seems to be decent consensus on making that move. we also know where the division is. how far you go want to get to 2%. you know where jim bullard wants it, closer to three, and he wanted pretty quickly. tom: our coverage begins at 1:00. alan blinder will join us from princeton. we have david blanchflower from dartmouth, as well. it will be a terrific set. jonathan: i don't know what he will say, but i'm looking forward to it. tom: right now we digressed to the issue of the moment. as we have done with ukraine and covid, find legit experts. that would be elaine kamarck, senior fellow at the brookings institute, professor at harvard,
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but she is a student of presidential success and failure. you wrote a definitive essay, i thought, very balanced for brookings yesterday this raging debate of abortion. at the end of it, you predict, off the experience of covid, a tsunami of fear he -- fury. when does the tsunami hit? elaine: thank you for having me. . it hit last nigh with demonstrations outside the supreme court. these will continue. this will increase turnout for the midterm elections. a sleepy and kind of indifferent democratic electorate i think has gotten a big wake-up call. i think people will come out to vote in november, perhaps even
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upending those elections which we were assuming we go to the republicans. tom: linda greenhouse among others have walked through the mississippi circuit approach, what the supreme court has traditionally done. is any of that going to matter in this debate? is it so polarized, and each and every american so decisive of their choice on the choice of abortion, that all the niceties don't really matter? elaine: interesting question. part of what we will wait and see is how this, in effect, plays out. they will be states that still offer abortion but at six or 15 weeks. this does not mean automatically that abortion disappears everywhere. the more interesting thing that's been happening, while attention has been focused on the states getting rid of abortion, there are other states
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like maryland, connecticut, oregon, who are increasing their abortion workforce. they are allowing other health professionals like nurse practitioners to perform abortions. they are getting ready for the abortion influx. people will be traveling to get abortions. abortion will not be prohibited, people will be traveling, as your map shows. some will have to travel very far. like all things, it will have a small effect on the well educated and people with money, and will have a big effect on poor women who cannot afford to travel or cannot even get the information about traveling. it will have a very disparate effect. but we will have abortion providing states and abortion ban states. lisa: a question about how this transforms the electorate
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heading into the midterms. some say this may have been leaked in order to galvanize voters. putting that aside, do you think this fundamentally reshapes the democrat's chance of being more successful in the midterms? elaine: i think it does. particularly in the senate. i think the senate races, because they are statewide races as opposed to districts drawn for one party or the other, this fundamentally increases the democrats chances upholding the senate. i think there will be a real outrage at just the interference here in people's lives. the irony is that many of the same people advocating this rather draconian choice about what women should do with their bodies were also the same people arguing for medical choice, medical freedom when it came to whether or not they got a covid shot. this is going to really get people riled up.
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it has already. it will continue to rile people up through november. jonathan: elaine kamarck of the brookings institution. something else we had not thought about through much of this year, it was seen as inevitable that we would get this big swing in the midterms. lisa: a lot of people counted out certain fiscal response to but we are seeing with supply chains, because it was not going to get passed given a divided house. i wonder if this ship so this, given there may be more voter turnout, favoring the democrats more than in the past. jonathan: coming back to the markets, to really to think about market implications, a shift in the midterms? lisa: never too early to think about shifts in the market, but i wonder about the response, given the band of uncertainty
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and economic growth. jonathan: very little uncertainty on what you can expect from the federal reserve at 2:00. most expect a 50 basis point interest rate hike. then it is on to the news conference at 2:30 eastern time. how he deals with questions about the future. futures positive .4% on the s&p. the nasdaq nicely about one third of 1%. 2.9558 on the 10 year. euro-dollar, 1.05. tom: i will be watching currency. i think it has to go to the job economy, talk about how hot it is. if i get a dxy stronger dollar breakup, i think that tells more of a story. jonathan: he said something like the market is too strong.
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if you want to rebalance, can you do that without a recession? tom: i will go back to wage inflation. that is where they become data dependent. jonathan: futures up .4% on the s&p. this is bloomberg. ♪
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>> a very different environment where the bed is trying to get to neutral much more quickly. >> the fed want to stop being a source of volatility. >> how aggressive the central banks are expected to be over the next year. >> look across the globe, global forecast for growth are being revised down. >> it is clear that things are way out of control. >> this is bloomberg surveillance with tom keene jonathan ferro, and lisa abramowicz. tom: a fed day on radio and
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