tv Bloomberg Surveillance Bloomberg November 11, 2021 8:00am-9:00am EST
>> liquidity is coming into the market and making its way around to a wide variety of asset classes. >> there is a good alternative right now, and that ultimate of is still equities. >> this idea that we are going to continue to compound earnings at the rate we have is just fantastical. >> don't get used to the last three years. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. surly you are with us this veterans day on radio,
television. bond market closed. equity market open. lots going on, particularly on the inflation call. 6.2%. could go higher? jonathan: it is a game changer, and maybe it could. how much patience is there for the chairman of the federal reserve? will he be the chairman through next year? can he look through this and wait for the recovery of employment and hope the participation rate gets close to where we were? tom: slow new cycle this evening, maybe after 5:00 p.m. jonathan: you think we might here soon? i think this decision to wait is starting to look clumsy now what the incoming data, and the lack of clarity we've got on what the fed looks like next year. tom: we saw the congresswoman from wichman -- from richmond
come out in the famed commonwealth speech. lisa abramowicz, that is a primal scream this morning. just do something. lisa: just do something when it comes to either building bridges and roads, but also with respect to inflation. i do wonder the messaging from the white house, how much there is an attempt to cast blame on the federal reserve for some of these issues versus trying to figure out how they can affect the supply chain disruptions. how did they message this going into 2022? tom: what you don't know on radio and tv is jon and i can go back and forth in my ear, and jon is whispering to me, "ask her about the auctions." [laughter] what was the messaging of the failed 30 year bond auction yesterday? lisa: that we don't have accurate understanding of why the long-term bonds are priced the way that they are. that the market has not understood the dynamics there, and there is a lot of disagreement. that to me is a pretty remarkable take away given that this was considered the
risk-free asset. it is volatility. implied volatility in bonds is the highest it has been in more than a year, since the height of the pandemic. tom: i so set her up for that. coming up global wall street on this veterans day come the interview of the morning, mandy xu here with us in a moment. i am looking at where we are and what the markets are telling us. what are they telling us off 6.2% inflation? jonathan: we got spooked yesterday by that inflation print and that bond auction, and the whole curve is headed north. i am more interested in the front end of the curve right now. we have reached 50 basis points, backed away after the bank of england, after the federal reserve. do we start to test the fed going into q1? i mentioned yesterday that q1, you could see inflation in and around 5%, unemployment still dropping lower because demand in the economy is really good. that is going to be a difficult one for the fed to say we are going to wait for the
participation rate to recover. tom: let's do a data check. let's do bonds. there closed. jon? jonathan: thank you. i will do european bonds. they are open. up a basis point on german tenure bunds -- 10 year bunds. bouncing back on the s&p 500. on the nasdaq we were down 1.5% yesterday. nasdaq 100 teachers today up zero point 7%. on the s&p, up about 0.4%. tom: the heritage of credit suisse and derivatives is immense. derivatives and the mathiness of it has always been front and center at credit suisse. holding court is there equity derivatives strategist. mandy xu joins us this morning. thrilled to have you with us. can you explain the vol that you see and the cross moments
skew to mere mortals? we are not doing kurtosis, but your world of skew, explain how skewed skew is to mere mortals. mandy: thanks for that introduction, tom. i can definitely say skew is askew right now. you guys let off with all the macro risks facing markets. inflation, the fed, etc. what is currently priced into the equity market is actually a list. one of the more notable things we have seen in the equity market right now is that on market rallies, volatility is actually going up. that is very unusual. typically, high volatility declines on market rallies, and on the surface you might think that is more of a cautious signal that people are buying puts or pricing and more downside risk, but actually over the past week, implied vols are
going higher on the demand for upside calls. this is particularly pronounced in small caps, so if you look at the russell index, the russell had a very large breakout was last week, up 6%. russell skew actually flattened to not just a one year low, but towards a 10 year low. these are premier league driven by the demand for those upside calls. tom: could you describe -- jonathan: could you describe the character of that upside position? is it retail, short dated call options? mandy: at the index level, i don't get is primarily retail. this is a dynamic we are seeing not just for the russell index, but as a single stock level, s&p top 100 stocks what also see a very pronounced flattening in this skew, primarily driven by
the call side. at the single stock level, we think mostly this is coming from retail because in terms of the institutional flow, it is actually the opposite. a lot of institutional investors, pensions, hedge funds are actually coming into cell calls to overwrite their position, but taking advantage of that to the upside i believe is primarily driven by retail. lisa: throughout the year, people have talked about options being the tail that wags the dog. you have seen the options market really overwhelm the fundamentals and dictate some of the moves. are we seeing that on a broader basis then we have in the past? mandy: we have definitely seen more pronounced single stock moves. i don't necessarily attribute that to the options positioning. recently, i think it has really been driven by earnings. so what we have seen over the past month is one of the biggest increase in single stock dispersions in five quarters.
i mean large single stock moves relative to the index. this quarter was not just the largest this quarter, but going back 15 quarters. another way of thinking of that is realized correlation in the s&p has fallen significantly as we get these idiosyncratic moves on earnings. the moves are pretty broad-based. it is not really driven by one particular sector, so correlation is currently at a one year low for seven of the 10 s&p sectors as well. tom: on a broad basis, looking at cash derivatives versus the huge nominal growth of what all of that paper is really worth, are we at a point of derivatives speculation now? or is it rather it contained normal market? mandy: that is always kind of
the question. certainly at the index level, i do not think we are in a situation where the derivatives market is overwhelming. certainly on particular single names, you might make the case where option activity has been very concentrated, but at the index level, we do not think so. jonathan: mandy, always great to hear from you. thank you very much. up 0.3% on the s&p, just a bit of a bounce back after yesterday's inflation expired -- inflation inspired jitters market wide. tom: you back to the crises, 1987, 1998. it is all about leverage. we are working at this at heart as we can, and you don't see it coming, and so many people look to mandy's derivatives market as a place where there are ghosts in that, and they seem to do pretty well. jonathan: right now they are not
scary ghosts, are they? m the options market, at least. a lot of demand to the upside. tom: she called in options craze. i think that is an important -- she called and options craze. i think that is important language. jonathan: you and i talked about how muted people are starting to see the gains through next year. i am thinking goldman, ubs through 22023. lisa: we've heard about this in previous years, that you will only see single-digit returns for the s&p going forward, and others say this time is indifferent and we are going to see similar types of outsized gains. i do think it is interesting to about how there is so much dispersion on the single name stock response to earnings. this to me is actually a positive sign, the idea that there is discernment among the different corporations, that people are trying to understand the fundamentals. it speaks against the widespread casino where everything is a
bubble kind of discussion we have had. jonathan: 2019, up by 29%. 2020, up by 16%. 2021, up by 25%. the last time we had a down year was 2018, towards the back end of the year, when the fed had to turn more hawkish and chairman powell just did not back away. that was before the massive chair powell pivot came the year after. lisa: is the lesson going to be to hold tight for longer than some people perhaps would like mid some of these inflation risks? jonathan: will he keep looking through it? what a situation for the federal reserve. and will he be the chairman next year? we will talk about this equity market with leon cooperman, chairman and ceo of amica family office. advancing about 0.3%. heard on radio, seen on tv, this is bloomberg. ♪ ritika: president xi jinping has delivered the first doctrine on
communist party history by a communist leader -- by a chinese leader in 40 years. that gives him the mandate to potentially rule for life area -- rule for life. tesla ceo elon musk has sold $5 billion of shares in the electric carmaker shortly after holding a poll on twitter. the world's richest person has sold more than 4.5 million shares this week, his first sales since 2016. in south africa, the last president of the apartheid regime died. he took power in 1989. he removed a ban on the pro-democracy national congress, released nelson mandela from jail, and held south africa's first all race election in 1994. fw de klerk was 85.
disney reported a smaller increase in subscribers to its namesake streaming service, only part of a disappointing quarterly report. disney sales and profit both missed on estimate. shares of beyond meat fell as much as 20% in premarket trading. the maker of plant-based meet released disappointing sales projections for the quarter. that sparked concerns that the company's growth is tapering off. 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 rick agrippa. this -- i'm ritika gupta. this is bloomberg. ♪
>> we shouldn't hesitate seeing these elevated levels of inflation and shouldn't is a paid seeing them for the next couple of months. what happens next year is very contingent upon the demand side of the equation, and i don't like we talk enough about this. we expect inflation to be elevated. that is different than transitory, but it will moderate to around 3% to 3.5%. jonathan: right now it is broader and stickier. that was kristen bitterly. good morning. your equity market up 16 on the s&p, up 0.3%. in the bond market we are closed stateside, opening europe. in the bond market in germany, yields up a basis point to -24 basis points on the german 10 year. in the fx market, get used to $1.14 on euro-dollar, maybe. fresh from washington, and worry -- washington, greg valliere says our odds are now at 60% that the entire package stalls perhaps temporarily, perhaps permanently.
so there's a 40 burchett -- a 40% chance that something could pass. just the opinion thereof greg valliere. tom: when we invented "bloomberg surveillance," this is what it is about. to go from mandy xu of credit suisse to go to the excellence of ira jersey on bonds. mr. jersey does all of our u.s. interest rate review. these notes from you are just must-read. what is the path to a faster taper? ira: i think if you get a couple more prints like this 0.9% or 1% per month, the fed is going to get a little bit nervous about the passive inflation, and that is when the fed might actually say we have to prepare for an earlier hike then we initially anticipated, and that would potentially have them reduce
their asset purchases a bit faster. tom: has the reaction function, or i should almost say the vector, to higher yields changed with this inflation announcement? do we risk a jump condition? ira: the market doesn't think so. in fact, if you think about what has gone on on the long end of the curve, 30 year bonds, 10 year yields, we had pretty weak auctions this week. not a ton of demand. but it is not like we have seen yields shoot higher, which is something you might have expected with this cpi report we got yesterday. what we have seen is the front end of the curve, to, 5-year note, those have really started to back up, and really pricing for the federal reserve to be a bit more aggressive than the market had been anticipating just a couple of weeks ago. lisa: i want to get to the idea you were talking about that perhaps they curtail bond purchases faster than
they previously laid out. ira: some people think that the federal reserve, by doing all its bond purchases, is just printing money into the market, and that is feeding inflation. that is not as obvious because almost every single dollar they are purchasing just winds up at the fed in what is called the reverse purchase agreement facility, so around nine out of every $10 but they are creating is finding its way recycled. so the market has so much cash that it doesn't know what to do with, so instead of people going and spending it or lending it to other people, which is the way that you would get inflation demand-side driving things higher, you just don't see that activity. so at this point, and we have been making this point for most of the year, the bond purchases aren't really doing anything to
help the economy anymore. they did at one point. in 2020, they were almost necessary. but for the last year or so, they have not been doing anything. the economy does not need the amount of money they are creating, and that is what all of these dynamics in the cash market are showing you. lisa: on the flipside, are they hurting the economy? that i think is one of the increasing questions, especially when it comes to housing when you have seen the rent increases we have seen. ira: if the question is why are rents going up, rents are the one area where you still don't have a ton of supply. you still don't have homebuilders going out and making multifamily homes in droves like they were a few years ago, supported the issue -- few years ago, so part of the issue is a supply and demand imbalance. that is not being driven, i don't think, by the feds activities. keeping interest rates as low as they are is may feeding into low
interest rates and having some effect on house prices, but even those have started to moderate a little bit. while the cpi keeps going up, if you look at some of the other indicators of house prices nationally, those have started to slow down a little bit. still growing at a reasonable pace, but not as quickly as they had been in late 2020 and early 20 anyone. so would -- early 2021. so it is not obvious to me that monetary policy is a problem here because other it is supply of energy or supply of goods coming into ports, those are all where the bulk of the inflation still is. jonathan: good to catch up, as always. ira jersey of bloomberg intelligence. i thought cameron crise of bloomberg did a wonderful job yesterday with his call. here it is -- with his column. here it is. the top number fed funds target
rate offers up a real yield of roughly -6%, nearly 20 basis points lower than at the peak policy era of the 1970's. 1970's comes up a lot. no one is saying this is the 1970's. he goes on to say, "it seems like we are in a laboratory experiment to see if the policies of the 1970's produces a similar outcome." provocative, but worth asking that question. tom: laboratory, laboratory, i data's -- adidas. we need to remind ourselves, none of this is in the textbooks. jonathan: this is an experiment based on the experience of the previous cycle. conditioned by the previous cycle to wait. how different is the path of this particular cycle? tom: the attributes of the laboratory this time around are
different, led by technology. jonathan: monetary policy is super easy. lisa: it is super easy, and the collateral effects are unclear. i do wonder if these are propping up asset prices. i thing it is fair to say at least some of the involvement has propped up as a prices. how much are people retiring early because there retirement funds have ballooned? all of these small factors, how much has that factored into the larger picture in ways that is very hard to quantify? jonathan: there's going to be trim and this resistance at the to change course. tremendous. i think so many people have become so married to their position on inflation into next year. lisa: i agree. i do wonder if the conversation will start to change, that having a steady hand will not stay the course. jonathan: looking forward to the forecast in the middle of december. it is going to be very interesting to see what they look like. we know there are some hawks on
jonathan: live from new york city on radio and tv, this is "bloomberg surveillance" with tom keene lisa abramowicz, and jonathan ferro. futures positive 16 on the s&p. no economic data today, no notable economic data, outside of the bond market in america, which is closed for veterans day. in europe yields are higher. the stage is set for december on the 15th for the federal reserve, on the 16th for the ecb, and the simple but effective take from thank america. "the heat seed in rent and across america could make the fit -- could make the fed sweat. the timing for rate hikes be pulled forward." yesterday they were.
tom: even out to may 4, each and every meeting will be interesting. we await the decision on who will be the next for the continuing chairman of the federal reserve system. right now, daniel alpert joins with his definitive book on the crisis on the age of oversupply. let me read with your emotion. you say lose bah humbug, we should be grateful for inflation. daniel: the huge amount of government that have built out not just the corporate sector and businesses that employ people, without that we would be in a dickensian disaster.
where we are now is preferable to that. that is easy to understand. having said that, there is a great deal of pain to households and political pain being felt in washington over this inflation. the answer is this is still a transitory phenomenon. the definition of transitory is still a problem. tom: with your love of history, and you mentioned charles dickens. five years before dickens died it was dynamic. before that it was static. do you have a confidence our dynamic system can make it transitory in some form and lessen this inflation. daniel: if anything the system is more dynamic. what you are seeing our responses to an event that had massive economic consequences, a global pandemic. what we are experiencing are the
after effects of that in the form massive supply disruptions which began during the pandemic with shutdowns in asia and all sorts of things that have metastasized across transportation and distribution. we have an enormous demand surge fueled by government transfers and the fact consumers have nothing to spend their money on. that will continue until that money is depleted, and it will be in fairly short order, probably shorter order than people anticipate. tom: mr. albert said metastasized and i thought he was going meta-on us. lisa: i wonder at this point when the inflationary impulse becomes problematic for growth, the idea that people stop buying as much when it cost as high as it does? daniel: that is definitely in issue. we are experiencing a little bit
of that right now in some sectors. you see summary acceleration of the economy now. certainly the economy slowed down during the summer. there is no question there will be buying physicians put on hold, specifically in durables that have gone up in price. to the extent people can get hold of cars, many of them will have to put off decisions because they are very expensive. we have other things going on at the same time that are also problematic. we are still down over 4 million jobs that need to be filled. there is a reason for that. a lot of those jobs have remained unfilled, the vast majority are low-wage jobs. those jobs are held by workers who benefited enormously from all of the cash on supplemental insurance benefits.
people actually had weeks of reserves at the end of september 6 when the unemployment benefits stopped. now you are seeing, as use all revisions to the employment situation last week, and you are seeing numbers rising, people are going back to work. that will help. the food side of this is hugely discouraging to people. you talk about slowdowns. people have to eat. the problem is from a political standpoint, when people start seeing their food bills go up, specifically meet, which people have gotten used to buying stakes and stuff, that is really harmful across the board. food is a reflection of fuel and transportation. those costs have skyrocketed. fuel itself is a real issue. lisa: before we get into the oil
discussion, how concerned are you wages are not keeping pace with the rise in the price of meat? daniel: hugely. to the extent wages are not keeping pace it creates enormous political problems across the board. that is something that is going to correct itself when price is correct. that will happen during the course of the next couple of quarters. at the end of the day i believe this is all wrapped up, certainly by the end of the second quarter of next year and it could happen sooner. one of the things i was talking about in a conference was the prospect of a major disinflationary down spike when we actually catch up with all of the backlogs in the supply chain. that is a significant issue. we have ramped up production in asia, factories are running two and three shifts.
production is at a huge high. that will continue. look at china. china will not be building housing anymore because of the evergrande situation. they will return to the export sector. we are going to be overwhelmed with supply in a few quarters. that is going to create the opposite of the effect we are seeing today. tom: you and your team have done work with cornell law on parsing the american labor economy. the media take is let's talk about wage growth and inflation-adjusted wage growth. you take it further and look at the cohorts of america and real wage growth. are we all going to get crushed? daniel: to the bottom line is going into the pandemic we had deteriorated the quality of american jobs, meaning we were very dependent on low-wage positions. the pandemic eliminated an enormous number of those jobs
and they are slowly creeping back. the real question is post-pandemic will we be right back to where we were? we have seen substantial increases in wages paid to previously low-wage job holders. nevertheless, if you see the dollar increase to a $16 and our wage, what is that across the board on an annual basis? not a lot of money. from an aggregate demand standpoint, while those percentages may seem attractive, it does not move the needle in a big way. is it to the good? of course it is. to the extent it is sticky, and generally upward movement in wages and incomes are sticky, that is a good thing. let's hope it continues. lisa: how aware are you up some of the changes going on in china to try to bring common prosperity, higher wages for people who previously were known for accepting low wages and
causing a disinflationary impulse throughout the world? daniel: the problem is china is run for employment first. they could create roughly 10 million to 12 million jobs a year in order to absorb the population coming of working age. unless they do that they will have far worse than prosperity, they will have social disharmony. they have to produce those jobs. they have been very reliant on the investment sector to do that , specifically residential construction and infrastructure. you illuminate residential construction from that, what will they do to create those jobs? the answer is they will put more pressure on the export sector. that is the only place they can go. the idea that somehow this is going to roll over into a more inflationary environment or china is going to export less disinflation is a way to say it i think is the wrong argument.
jonathan: that argument got some fuel this week. daniel alpert of wedbush cap -- of westwood capital. krishna memani will join us in about 20 minutes on bloomberg tv. he thinks we're going back to 2% gdp, 2% inflation. tom: it is the when. i look at the set of paul's combining price -- the set of calls combining price change and growth. there is any color you want. jonathan: would you like to recap the forecast from the fed? real gdp 3.8%. tom: are they still doing dots? jonathan: you will get your update december 15. those dots, you have to imagine those dots. tom: are you going to be here? jonathan: i'll be there in the morning for the ecb on the
thursday and then i will be out of here. year over after president lagarde says happy christmas and a part. tom: there european of you. jonathan: staying true to my roots and taking a break. i understand you are taking one too. up one third of 1% on the s&p. i've been counting. you've been taking more. yields unchanged, -25 on the german 10-year. you count tom's outs? lisa: i don't. do you count my days? jonathan: you are very good about taking time off and very accommodative of me taking time off. tom is not. lisa: glad to hear this will stop jonathan: take the rest of the year off. beaches. it is good they still keep you separate. the social distancing is working out.
is that you making the ultimate decision about us coming back together? do you have the final word? lisa has the final word? do we have to social distance because of one person? tom: yes we are. jonathan: lisa and i are together. do the math. who might be making the decision? from new york, this is bloomberg. ritika: it is a rare moment of cooperation between superpowers locked in a geopolitical rivalry and a surprise announcement china in the u.s. pledged to work together on global warming. they agreed to boost their efforts to cut emissions by tackling me thing and -- by tackling methane and illegal deforestation. president biden said inflation is a problem but says he has part of the cure. the infrastructure bill is a portion of the plan to overcome
the effects of the coronavirus pandemic. prices are rising at the fastest pace in more than 30 years. space-x has launched its third group astronauts to the national space station. the falcon 9 rocket lifted off late yesterday from the kennedy space center and is scheduled to dock with this base station later today -- with the space station later today. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪
the inflation story. i would not that it -- i would not expect that september and i would not expect that in march. the composition of the fomc will change. i did not think bided will put people in that are going to adopt a more obvious response function to the data. tom: neil dutta emailing me moments ago. thank you for watching. he is watching stronger u.s. dollar. lisa: rate hike expectations as people bring forward the pressure on the federal reserve and the expectation they will be forced to respond. tom: the bond market closed for veterans day. i will quote euro 1.1463. i sent a note to lee brody who does all of our booking with leon cooperman and said get leon cooperman on. there are any number of reasons we can always speak with the chairman of goldman sachs and now chief executive officer of
omega family office. far more is it about the never ending debate of a wealth tax and of going after the billionaires. leon cooperman has been more than vocal, harkening back to a letter of two or three years ago to the senator from massachusetts, it is a five page single-line doozy where leon cooperman takes on the progressives and senator warren. we are honored leon cooperman could join us on bloomberg surveillance. the debate is the same and yet it is different. what is different now versus when you wrote that letter two were three years ago? leon: it is becoming clearer the general populace is not in alignment with the progressives. you saw that election in new jersey, the election in virginia. they dropped the proposal to have this tax on unrealized gains. i would like to take a second,
i'm not involved in politics. about two years ago i gave a speech at a time when elizabeth warren was running in the polls, and my speech was not directed towards politics. the moderator asked me what did i think the market would do if elizabeth warren won the presidency, and i said, maybe i would optimistic, the market would drop at least 20%. the very next day she tweets leon give others a chance of the american dream. i made a decision to take the high road. michelle obama once observed that when they go though, we co-. i wrote her a very good -- we go hi. i wrote her a very good letter. she showed to me that if i want to be polite and respectful, i would say she is a politician in the worst sense of the word. if i wanted to be more sharp
tongue i would say she is a nasty full, but let me explain. when i wrote the letter, her response was insider trader totally unresponsive to the letter. i won the case with the sec. go ahead? lisa: this is important and a moment when what you call the vilification of the riches gaining steam, the idea people feel like there's a fair share to be paid in the wealthiest individuals are not paying it. what is the backdrop leading to the increasing calls for the fair share rather than trying to close loopholes and some of the other proposals you've put out there? leon: it is a great question. i think it is a result of income disparity. the income disparity is the result of government policy. go back to 2003, mr. bernanke
figured out the economy was going down the toilet. wealth leads to consumption, the best way to get wealth up was to get the stock market up. the trouble is 80% of the stocks are owned by 20% of the people so income disparity group. tried to get the money back by crating an environment where there is no return for savings. tom: i want to get to the heart of the matter in 2021. there is the bottom line. we have a definition in this nation that $400,000 is filthy rich. at saint barnabas hospital in new jersey if you have a full-line doctor or surgeon and the spouses working as well, even if it is a single person, they are paying 400,000 and they are deemed by liberals to be rich. with all of your experience growing up dirt poor tom is $400,000 in 2022 rich? leon: i don't think so.
i think doctors got screwed by the government when i look at what they have to go through to get their degree and able to practice at the control over their income. i believe in progressive income tax structure. i believe rich people should pay more in taxes. the question we have to deal with as a nation's watch of the maximum tax rate be on wealthy people? that will define the revenue to the government. all of talk about wealth taxes, it is all baloney. let them close loopholes. you mentioned a moment ago. 1031 -- get rid of real estate gains. get rid of carried interest for hedge funds. raise the tax rate. we do not need new forms of taxation. close the loopholes. lisa: i want to go into something you were talking about , the idea of monetary policy pushing up equity pricing and
that does not reach everybody. do you think monetary policy has exacerbated the divide that has led to the discussion you are talking about right now. leon: i would say so. bill clinton did not vilify wealthy people. ronald reagan did not vilify wealthy people. george bush did not vilify wealthy people. i respect obama as an individual, but he started this whole thing. i wrote him a letter nine years ago saying you are telling people 99% are being screwed by the 1%. why not tell the 99% they can become part of the 1% instead of vilifying the wealthy? i think the world is a better place because of bill gates and jeff bezos and people like that. i have no problem with taxes. i have taken the giving pledge. i am giving away all of my
money. it is not a selfish motivation. tom: leon, we are out of time. we would like to continue this conversation. we have to get you into our studios in manhattan when you decide to leave new jersey. leon cooperman with omega family office. let's wrap this up. i guess i have to take a leave out of the jon ferro playbook and say front and center is to watch for the next fed chair. lisa: the idea of what will the fed look like when it is dealing with these hairy questions? i keep going back to this idea of having a steady hand for the federal reserve. does the definition of that change as the data changes? steady does not mean doing nothing. tom: to me today, just to see the idea of thinking about 7% inflation, i do not think about it, but there is. lisa: i love the idea that the bond market is closed and that
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right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: we begin with the big issue. transitory needs a rebrand. >> what we got was incredibly strong. >> inflation is thought to be getting worse before it gets better. >> pressures have gotten broader and broader. >> more likely to be persistently high. >> we are in the perfect environment for sustained inflation for the next dose go to four quarters. >> the next three to six months we will see pressure. >> thinking about trying to call the chart is exly