tv Bloomberg Surveillance Bloomberg December 16, 2021 6:00am-7:00am EST
of rate hikes and not invert the yield curve? >> that yield curve in general is not giving a pure signal. >> the u.s. economy could withstand north of 2% interest rates just fine. >> you might well lift off, even though you don't think you are at maximum employment. >> this is "bloomberg surveillance." tom: good morning, everyone. another central bank a day is what we have for you. caroline hyde in for jonathan ferro. lisa abramowicz, it's a historic day. we start with bruce kasman of jp morgan, which will be profound. it's a moment where three central banks matter. >> they highlight the difficulty of this moment. are central banks going to be hiking rates, tightening policy into a weakening economy? are we going to see a
deceleration at the same time that central banks are forced to get hawkish in the face of inflation? tom: out moments ago, let's go to this breaking news on em reaction. the turkish central bank cutting the repo rate, going the other way. turkish lira out to 15.44. the gentleman we heard yesterday is central banker to the world. lisa: partly this is an idiosyncratic story. erdogan has a unique perspective on what rates do. i still keep thinking about what can rogoff said yesterday. if the federal reserve raises rates four times, that that could disrupt the entire emerging markets complex in ways that people are not prepared for. that is underscored by some of the distress you see in certain pockets. lisa: i tried to -- tom: i tried to read the british press, i fail. that's the reason we have
caroline hyde here. welcome to the program. i've got to say, the british media is a cacophony. how does the news flow of the united kingdom at this moment affect government -- governor bailey and the bank of england? caroline: so far, not much. governor bailey said from an economic perspective, is not worried about omicron. chief medical officer saying there is a risk that hospitalizations could eclipse the worst ratings we had prior in covid-19. clearly, there is a concern here. did you see the pmi data out of europe, out of germany? negative, falling into negative in terms of services as we see further restrictions. tom: the news flow, particularly for waking america, the news flow out of europe is extraordinary, where its restrictions on euro start into pairs, some of the draghi italian restrictions we are seeing as well. the jumble we have to sum in,
help me with the data, because it's all we've got. i will take the easy part, equities surge. the nasdaq up 0.8%. lisa: the surge we see in equities, despite the fact that we heard a hawkish tone the fed, that's the standout. the fed c out and saida theyme and said they are going to hike rates, and stocks rallied. tom: we continue that rally. a quick data check to get us started on the day. the bond market quiet. the telegraph was brilliant about a bond market that has not signaled crisis or change it. lisa: on any level. jay powell said he's not worried about the long end of the yield curve. you can see the 10 year yield below 1.44%, basically saying
it's because all of those japanese and foreign investors are coming in and buying u.s. debt. that is this dissonance. is a signal or noise we are hearing from the bond market? this is really important and highlights what tom was talking about. such an incredibly pivotal moment for the bank of england. they have a rate decision. jon ferro promised he would phone us if they raised rates. do they start to tighten policy in the face of the fastest consumer price inflation going back at least a decade? while they do have the omicron variant and restrictions put in place, people in the bond market have been ratcheting down expectations. you can see that inflationary print coming in so strong. 7:45 a.m., we get an ecp rate decision followed by a christine lagarde -- ecb rate decision, followed by a christine lagarde news conference. what do they signal with the pandemic emergency purchasing
program, with their bond purchasing program that they are expecting to wind down? how much do they signal that they are going to tweak that and provide accommodation moving in the opposite direction of the united states federal reserve. 8:30, we get a data dump from the united states, initial jobless claims, the philly fed business outlook. one of the most important things jerome powell said was that full employment may not be the same as he thought a couple of months ago. the low participation rate was not a condition for them to lift off anymore. it could be something that sticks around for a longer time. as we see the unemployment rate fall back near where we saw pre-pandemic, we are getting closer. it is not an obstacle for them starting to tighten. tom: thank you so much. what we are going to do right now, i am going to go to my smartest essay off of the fed meeting in bloomberg opinion. he says chairman powell pulled off a ted lasso moment, that's
appropriate to go to bruce kasman, chief economist at jp morgan. and the good feeling creating yesterday. a key moment was where later in the press conference, the chairman extended out his vision to 2023, 2024. the market took off like a rocket. what is the importance that this chairman has the courage to go out to a medium and long-term view? bruce: well, i think we have to be careful that the fed is making it very clear that the outlook is uncertain. but as you are saying, what the fed is basically telling us is they are going to move early. they pivoted hawkish yesterday, no doubt, on a number of fronts. but they are also saying they don't need to get to neutral to contain inflation, and to make sure that the labor market does not overheat. they are basically telling us by moving early, they are going to be able to move actually relatively lightly over the next two to three years overall.
lisa: is this a reason why you thought the market rallied? doesn't make it concerning for the fed that they are trying to -- does it make it concerning for the fed that they are trying to -- bruce: i think what the fed is trying to do is put us on a sustainable basis so that we can continue to have a long expansion without them getting in the way. remember, where they are starting from in terms of balance sheet expansion and pulse rates, i'm not sure i would put a lot of rate on the forecast going out to 2023, 2024, especially as the chair was talking about his uncertainty about labor market tightness, getting concerned that we may not get all of the supply back, and certainly discussing inflation with more concern. from our perspective, the two, three year out forecast from the fed probably does not make sense. the market is comfortable that the fed can do it earlier but not have to do more. i think that's a mistake.
i think that's likely to be a fed that does earlier and ultimately does do more. caroline: ultimately does do more. where, therefore, just pent up demand go? this has struck me in your notes, the fact that you feel global pent-up demand is still elevated. i am looking at a pmi reading of services data in germany that fell down because of restrictions. do we factor in omicron? bruce: we do. it's not clear we are factoring it into correctly. we are having both the european and u.s. economy slow materially after what has been a very strong fourth-quarter. by the way, we are expecting the u.s. to have grown 7% and they global economy roughly 6% in the fourth quarter. omicron, covid more generally, will take a bite out of growth. the key in our forecast is that it does not prevent the healing, the vaccination effectiveness, the treatment programs being effective, and restart to get
growth picking up in the spring and summer. that i think is going to show us that in an underlying sense, there's a lot of pent-up demand, there is limited supply. inflation, while it comes off highs, is not coming back to where it was precrisis. that's where the pressure and more medium-term sense is going to come on the fed and other central banks. tom: bruce kasman, for our international audience and from the purview of jp morgan across all of the pacific rim, what is our concern into year end given this deck of cards we have been handed of instability? all institutions want control. can they control this so em and export nations can have stability? or do we face in 1992 again? bruce: well, i think we are in a pretty good position here in that there is no doubt that there is going to be pressure on the global markets as we reprice the fed. but em central banks have been
on the move. i think it's pretty clear that some of the inflation pressure we have seen in em as well as globally is going to come off. energy is a very clear story. this theme we have been pushing, this time is different, is true for em as it is further u.s. we don't have the stresses in terms of the underlying balance sheets of corporates. we have a situation of significant pent-up demand. i think em is going to come under a little bit of stress within the fed. people are thinking, you move the fed two or three times, the world is going to be really fragile. i think we are going to find out the world is not fragile, the fed has got a lot of work to do. that's a good thing, if we can actually put the global economy on a sustainable path. just like 19 at four, you sometimes -- just like 1994, you
sometimes need to shock the system in order to get you on a path where you can grow. tom: the shock seemed to be there yesterday with the equity move. thank you so much. we've got to go to the bond market. john emailed in and said you haven't mentioned the two-year yet. really coming in nicely, lisa to four digits .6370. lisa: basically people saying we already overshot some of the rate hiking expectations the next two years and people are taking profits. that's the implication. tom: i was going to do the real guild on friday. i have been told by my people that i am not doing the real yield. lisa: how did you get out of that one? tom: i don't know. futures up 32. stay with us. this is bloomberg. good morning. ♪ >> with the first word news, item laura wright. federal reserve chair jerome powell has signaled that inflation is now the biggest enemy to economic expansion, so
the central bank is making an abrupt policies which. it is speeding up the drawdown of its asset purchase program l.a. down roadmap for interest rate increases over the coming years. that will start with three rate hikes in 2022. and united kingdom, boris johnson's top medical advisor is warning of a surge in hospital admissions from the omicron variant. chris whitty says substantial numbers of people will be hospitalized over the holiday period. the u.k. reported more than 78,000 new coronavirus cases on wednesday. that's the most since the beginning of the pandemic. scientists in south africa have found a combination that may give stronger protection against the omicron variant. it is a two dose course of the pfizer and biontech vaccine, as well as a previous inspection with the coronavirus. they say that would provide 73% protection against symptomatic disease from omicron, and 95% against severe infection. president biden says he will
back senate democrats taking on voting rights legislation, if they have the votes for passage. because that the single biggest issue. the party is looking for a victory since the president's nearly two triggered our economic agenda is stalled by fighting among the democrats. this may be the biggest deal ever in music for an individual artist. bruce springsteen reportedly has sold his masters and music publishing to sony. according to billboard, the price is around $500 million. last year, bob dylan sold his soul catalog to universal music for close to $400 million. 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 laura wright. this is bloomberg. ♪
hardship, especially on those least able to meet the higher cost of essentials, like food, housing and transportation. we are committed to our price stability go. we will use our tools both to support the economy and a strong labor market and to prevent higher from becoming entrenched. tom: jerome powell yesterday at the press conference. i'm sorry, lisa, the high point of the press conference yesterday was everybody has a last name except mike. lisa: there is that, right? you finally got something before the end, but he is only called mike from bloomberg. tom: you should have seen it, they are in the press conference, they are snoozing off asleep. mckee, mike mckee from bloomberg, he gets just mike. caroline: does that not sure intimacy? may be how close they really are. tom: i'll say. michelle smith. holding court at the fed. a very different press conference from what we will see
from the ecb today. the fed yesterday, bank of england coming up at 7:00, and then onto the ecb. i can make it as clear as i can, there is not three central banks so tightly of interest. stay with us on radio and television through the morning. the politics of all this,? fitzpatrick joins us -- jack fitzpatrick joins us. i want to play off outline. the idea here -- off atlanta. the idea here is that the atlanta now gdp statistic is that 8% economic growth with inflation on top of that. we have a china boom economy. how do your politicians adapt to the fact america is in a true boom economy? jack: you know, there is more concern right now than necessarily celebration in washington, given that so much of the legislative outlook was developed to try to be in response to a recession.
that drove so much of the conversation around build back better, the reconciliation tax and spending the. that's really -- spending bill. that's been one of the reasons there has been so much heartburn over the cost, in terms of deficit financing. parts of that bill in the early year, that's a significant reason why we've seen those struggles. it's a point that the president has made, that you know, at this point, the unemployment rate is lower than it was throughout the obama administration. that quick recovery in that regard is something they have tried to play up. but the inflation side of that really has dominated the conversation on the legislation they are working on, and just sort of the general mood in washington. tom: chairman powell was front and center yesterday of his study of eci, that's an inside statistic on wage growth. that affects both republicans and democrats. what's the separation and the
debate on the inflammatory phrase away spiral? was a democrat wave spiral -- what's a democrat wave spiral versus a gop wage spiral? jack: i'm not sure they would necessarily differentiate and terms of a wage spiral for red and blue states. there's been a bit of backend forth about transferring -- factoring in transfers and stimulus payments early in the year and how much of a difference that makes compared to the the way inflation has cut into wage growth itself. but again, some of that is retrospective, and really in washington, a lot of the focus is more on the way things have seemed to kind of pump the brakes on future legislation. lisa: there's also a question that we've been talking about on an ongoing basis.
this is what i'm curious about. who said the common line being that presidents want dovish feds. they want a federal reserve chairman was going to help them turbocharge the economy. does this administration, which is so concerned about inflation and has to really read this needle on higher consumer prices, want a dovish or embrace the hawkish tilt of the federal reserve right now? jack: i don't think you could argue they absolutely only want a dovish fed. part of that, you look to the reconfirmation, or renomination of powell, and the fact that the president is sticking with a republican appointee and the confidence that republicans have in him, as opposed to brainar d. it also plays into, again, if you have a slightly more hawkish fed, that might take some of the pressure off of fiscal policy.
this came up in conversations with senator manchin, in terms of whether he was going to support the build back better program. you cannot exactly get clear promises in those negotiations from the fed on their own outlook. he had brought that up. lisa: the reason why i ask also right now is because we still have open seats on the federal reserve. who fills those will necessarily have an impact on the trajectory of rate hikes, the trajectory of a possible balance sheet role of. was the thinking in terms of the type of person to put in those type of seats? jack: that may be a little tough to predict. because for one, yes, there is some appeal right now to, if not hawkish in us, a little bit -- hawkishness, a little bit more of an accelerated pullback from dovishness, even with a number of democrats. but keep in mind that with the renomination of powell,
politically, you have not given much to the progressives, who wanted someone to the left. so, i'm not sure we can necessarily say at this point the other seats are prime territory for anyone with a more hawkish view. caroline: we are promised to get the names of those seats perhaps before christmas. tell us about what is coming in terms of sanctions versus china as well. tom started off this conversation talking about chinese growth versus u.s. growth, and the way in which we measure that. talk about what is happening with the u.s. and china relationship. jack: our colleagues reported earlier there is expected to be a meeting of officials today on the topic of potentially increasing restrictions on u.s. technology being exported to the top chinese semi conductor
manufacturer. the key issue with the language there would be ramping up the restrictions that currently exist for technology that is uniquely required to make advanced chips, and may be that or broadening it to anything that is capable for use of those advanced chips. the meeting today is expected to have officials from several departments, commerce, energy, state, and defense. and so, that's probably the top news in that regard to look for today. tom: thanks so much. jack fitzpatrick with us from washington. this is the time where john emails in and says tom, you have no chance here. we are going to go to caroline hyde about what she is focused on this weekend, besides all of the news in london. that is the blackburn rovers are playing birmingham city? caroline: we don't have much else to do. we are all canceling restaurant
♪ tom: good morning. "bloomberg surveillance." lisa abramowicz, jonathan ferro, and tom keene. mr. ferro on permanent sabbatical. caroline hyde in. markets on the move and it's not about a fed meeting, it's about three central-bank meetings and the anticipation for bank of england in 30 minutes and then on to christine lagarde and the ecb. here's caroline hyde. caroline: let's have a look at the stellar moves that continue abound in terms of u.s. stocks after the federal reserve. who knew it would be such a bullish signal, but clearly it is. we see that fine line being wrought. s&p 500 futures up 0.8%. every industry group up in europe as well. we play catch-up in europe after
we saw the deciding factor coming from jay powell. you can manage to engineer some sort of soft landing. you can tackle inflation at the same time as support growth. the euro, all important to the ecb. some anticipating a slightly hawkish tilt from christine lagarde. one central-bank gets more hawkish, one continues to act in a different manner. we look at the overall turkish lira versus the u.s. dollar. want to look at what's happening in terms of the bond markets. for once, we've had a tiny bit of steepening in that all-important yield curve. the yield basically flat in the two-year, basically flat in the 10 year. lastly, i want to kick in on what's happening with the great reddish pound gushing great british pound -- great british pound. this is a dollar story but many filling a 40% chance that we
could see the mo move and raise ratepc -- mpc move and raise rates. more likely they stand pat with the on the ground. tom: goldman sachs saying maybe they will be the mother of all surprises. on dow futures right now, we are over 800 points off the bottom. that is absolutely extraordinary. lisa: cannot i make one other observation? to your yields coming in -- two -year yields coming in 0.64%. if you look at the rate hikes priced in, the market is pricing and fewer rate hikes than the federal reserve's own projections. the market is implying the fed is not going to get there, thereby buying into the transitory story more than the federal reserve. tom: that's the smartest comment i have seen today. are leasing a transitory adjustment to the non-transitory
press conference of yesterday. katrina dudley with franklin mutual, we are thrilled that she could join us. what is important is some legit shops is actually writing about the business from mere mortals. what is your advice to our audience on radio and tv that wouldn't know a dot plot if it hit them over the head? what is your advice about the cacophony of the news now and investing into next year? katrina: its balance, it's everything in terms of portfolios. if you are just invested in et you are overweightf the faang, overweight growth. we are advocating to add balance to your portfolio. that can come from various measures. we are advocating as well to add some value back into your portfolios. the last decade has been absolutely a terrible market to
be a value investor. you know, it's a contrary and call, but we think it's going to be the contrarian call of 2022. tom: i can go to your work at bond university and say money suggest australian dollar is ready for a big surge for china and other reasons as well. do you frame for next year with your investing a weak dollar? katrina: i think we look at the dollar, first of all, you are so right, it is just a commodity currency. if you have a view on commodities, that they are going to continue to be strong, you really want to be in that australian dollar. let's move over to europe. one of the big things we need to look at is the euro versus the u.s. dollar. europe has got some pretty good things going for it. it's got the european recovery fund, it is handling omicron, it is probably had more of an impact. you may see slight weakness in
the dollar but that may not be come from dollar weakness as much as it is coming from euro strength. lisa: is this a pain trade? that basically the euro and the european region outperforms next year? katrina: i would reframe pain trade to contrarian trade. that's the way you beat the market, is having those strong consensus views. i have been a european bull for my entire career, just to be clear. i think the set up going into europe is pretty good for the upcoming year. obviously, if you look at 2021, i think what we are going to see in 2022 is a falling away of a number of headlines. we have the headland from inflation, driven by the increase in energy costs, part of underlying inflation in europe. that falls away in terms of the second derivative effect. i think you've got the benefits of the european recovery fund.
we've been talking about it. i think now, i think we are actually going to see some implementation of those funds, and that's going to drive good economic growth in europe. in the united states, i think we have been in such a great part of the market that some of those parts of the market are starting to feel a little bit shaky. . on their foundations you are right, it may be u.s. pain that benefits europe. lisa: if european economy does start to outperform, when does the ecb start to feel pressure to move away from this ultra accommodative policy that is in stark divergence from the federal reserve? katrina: i think you are right. it is in stark divergence. the ecb is looking carefully at what the fed is doing and will be a fast follow-up. we anticipate that to continue. as i think about the meeting today, i think what will be different this time versus what's happened in the past is the immediacy of the data that
the ecb is likely to focus on. i think they are going to be much more focused on the higher end energy costs, the pmi number that comes up, as well as the wage inflation we have seen and the impact of the omicron variant on businesses. they are more likely to put more of a weight on both things. i think they will be more dovish then you've seen the fed. caroline: we've heard sebastian galli talk about a hawkish surprise from madame lagarde, particularly when you see electricity prices as a record high, as we do today. we've also of course continued to see that pmi data looking pretty ugly from germany, for example, showing when omicron and restrictions candor. how ugly can the european economy get? katrina: part of what's happening in germany and the negative numbers you see is really the supply chain
constraints that we've seen. i think those supply chain constraints really reflect themselves in the middle start, the driver of economic growth in germany. it's more falling on the shoulders of those supply chain constraint, be it in the shipping, be it in the lack of just basic opponents. we are not just talking -- basic components. it is extending all the way down from the supply chain. i mean, from c covers t seats in airplaneso to covers that go ove compressors. i think the supply chain constraints are what is hurting germany, versus just omicron. caroline: you get that sort of insight because you talk to management teams, you have throughout your career. what are, in general, business
leaders telling you at this moment? katrina: at the moment, they are thinking that made-2022 is when these constraints start to ease. we have seen a lot of talk about automation. i think some of that talk needs to temper back in the. one of the benefits of automation, obviously it reduces the need for labor, and reduces some of the supply chain constraints in the market, but it also introduces a lack of flexibility for these businesses. i think they are struggling with the needed to automate systems, reduce their labor dependency a lot given where our labor markets are at the moment. they are also adding inventory. and so, the capital that you need now to run any type of business is higher than it's been in my entire investment career. a lot of that is something i don't expect to dissipate even when we get past supply chain constraints. the cost of holding inventory in
a low interest rate environment is very insignificant versus the cost of having your actual manufacturing process disrupted. tom: thank you. katrina dudley with us from franklin mutual. i want to contrast her comments with david from goldman sachs, who basically said buy, high-growth, buy high-quality. we are 20 minutes away from bank of england on the ecb, i can honestly say three banks, here we are lined up, and all of the matter. lisa: one of the most interesting aspects is that the ecb has held onto the transitory story. the federal reserve has completely dropped to that language from its rhetoric. yet, the market seems to be buying it. i really just keep coming back to the fact that we are actually now pricing in fewer rate hikes than fed members projected. we are seeing the yield on the front-end come in. how much is this a bet that the federal go ahead, they will taper, they will move, they will hike rates and the market will
not be able to withstand? either the market won't or the economy want, but either way, the federal pivot back and accommodate any weakness on the periphery? tom: the single thought on the zeitgeist, many others writing off the power press conference. the smartest thing i have heard is from lisa abramowicz. the markets are going transitory right now, where everybody else has got something not transitory. two-year yield, .6411. lisa: you can dismiss the long end of the yield curve. but in the past, dismissing bond markets has been done at your peril, so this is a message, and the message seems to be saying loud and clear, transitory, despite what the fed says. tom: the peril is on the bank of england and the prime minister, next. ♪ >> within the first word news, i am laura wright. investors are betting that federal reserve chair jerome
powell can pull off the proverbial soft landing for the economy. stocks and u.s. futures are rising on speculation that fed policy tightening will help fight inflation without derailing growth. the central bank will speed up the draw down its asset purchase program. it has also laid out a roadmap for a series of interest rate increases. germany has run into a surprise a surprise shortage of coronavirus vaccines, so it is rationing them through the end of the year to help administer. the country has 3 million doses of the beyond tech vaccine and is allotting them for the next three weeks. the health mr. reached out to eastern european countries about buying their unused doses. apple is pushing back its return to office deadline because of the research a -- researching coronavirus cases. the date was february 1. now, apple says corporate workers will be brought back at a date yet to be determined. the time on how a ready been pushed back several times. a bill aimed at punishing china over its treatment of uighur muslims has run into a roadblock in the u.s. senate.
the democratic senate is blocking the measure over unregulated legislation. senator ron wyden want to add an extension of the child tax credit. republican marco rubio rejected the request. he says he will try to pass the uighur bill again today. australia's qantas says it will buy 40 airbus just for a list price of $4.6 billion before discounts. plus,, there are options to buy 94 more planes. they will put replace qantas'aging fleet. 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 laura wright. this is bloomberg. ♪
hospitals, intensive cares. we don't yet know that there will be substantial numbers and then that will begin to become a problem, in my view. in terms of the big numbers, i think we have reason to be afraid. tom: chris whitty's chief medical officer for england, speaking there with what one pundit said was the frantic moment for the united kingdom. the news flow in europe is extraordinary today, particularly on travel restrictions. france has had enough. they are changing how they will do entries from the united kingdom. italy changing what they are doing as well. all that announced in the last 24 to maybe 30 hours. bloomberg has a great virus update that coalesces what we see from 10, 20, and even 30 nations. lisa abramowicz and tom keene with caroline hyde in the u.k.
joining us now from johns hopkins, someone with international claim i epidemiologyn with the johns hopkins, christopher briar. you go to the heart of the matter in your note this morning, which is we are conflating, can floozy -- confusing science and anti-science with fear of a legitimate variant, omicron, delta, and the fact that the weather has changed and we are inside as well. what matters now, the weather or the variants? >> well, it's both. what we are seeing is a winter surge that had been predicted. this is still with delta in europe and the u.s. right now, the highest rates in michigan, indiana and ohio of hospitalizations. most of that is delta. only about 2% of sequences in the u.s. are omicron. but the infection curves for omicron, and i have seen the
data for the u.k., germany and the u.s., look even steeper than we saw in south africa. omicron is spreading very rapidly. the vaccines do appear to be holding, but definitely with lower efficacy than we saw against the other variants. tom: is omicron virulent. >> that is still somewhat uncertain. we have to remember where this emerged in south africa, the populations are younger. they have had much more exposure. the populations are 80% of people have already had covid, mostly with delta. so, it is hard to say what the virulence is going to look like in older populations like ours. the infectivity might lead to many more hospitalizations and severe illnesses. and of course, as you know, in the u.s., we are only now at
about 62% of total population vaccinated. that's not enough to hold us off. lisa: do you think that if people are overly complacent about the risk of another wave of infection, similar to what we have seen with delta or even beyond, given what you are currently seeing with omicron? >> i don't know if i would use the word complacent. i think people are exhausted. we are seeing that in many countries, that there is rising resistance, popular resistance to the new restrictions. a lot of that is driven by the fact that we are coming into actually what will be the third year of this pandemic. and the social, mental, emotional costs, economic costs, supply chain costs have been really high and are exhausting people. we all know that. lisa: do you think it is the wrong tactic to take to start with more restrictions on travel and other types of things we are seeing, given they have not been borne out in terms of stopping
the spread? and it just adds to this exhaustion. >> i think that's right. what we size that the travel restrictions were not sufficient to contain delta, which is more confections -- infectious than the earlier variants. omicron looks to be twice as infectious as delta. despite quick attempts to contain this variant with travel restrictions, it just hasn't held. we already have omicron in 37 states in the u.s., for example. as i said, the infection curves are incredibly steep. this is a very infectious variant. i think the things that matter more, certainly the science is suggesting vaccination really matters, boosting. everybody who's eligible in the u.s., now that's 16 and 17 and up, should be boosted as soon as you can. that is really critical. and of course, the non-vaccine kinds of things that we need to do, masking on planes and
trains, indoor masking where you don't know other people's vaccine status, that's all going to matter, too. caroline: doctor, as you say, the booster is the right course of action. how quickly does that increase your ability to fight f omicron, for example? is it still that two-week window to ensure you are not getting infected at the highest rate? dr. beyrer: than side body response from boosting probably starts to go up immediately. you start to see the benefit within a matter of days. it's impressive how much of an immune, we call an immune memory response, that we see. which is that given another dose of vaccine, the body really rallies, and the anti-body fighters go up dramatically, not a little, a lot.
so, that's really important. we also have data now, who has been collecting data from a number of countries that have had to mix vaccines because they've had a variable spark. many started with astrazeneca, then they, had to switch to something else j&j. the data there are quite compelling, specifically if you mix classes of vaccine. people getting a j&j and then having an mrna boost, that also looks encouraging. for those countries that don't have a choice, it's a good option. tom: thank you so much. greatly appreciate it. with johns hopkins this morning. caroline hyde, we go to the bank of england in six minutes. we go to england that is just a tumble. what are you looking for? what have you read in on with the chancellor of the exchequer? what is his to do list just to get to christmas? caroline: i mean, the support of the businesses it's what's coming thick and fast.
money dubbing this basically lockdown but stealth. the factor that therefore are we going to have to step in? already the airline industry is causing at prefer the help. they will see a reduction in bookings because of the pcr testing. what of the restaurants, the hospitality industry in general if we go back into isolating ourselves, even though it's not dictated by the overall government? what therefore does rishi sunak do about that industry? tom: we have to see in the markets. vix back to pre-thanksgiving levels. that clear market we really have not talked -- the equity market we really have not talked about much. dow up a hundred points off the powell bottom. small caps up one, 2%. lisa: this is so counter to what everything people thought what happened. they did not offer up a hawkish surprise. the explanations are better. jim bianchi saying is perhaps
because fed chair powell made it clear he did not want to upset the markets. i don't know. tom: that we are. john authers singh power doing the ted lasso act yesterday. we are going to go to the bank of england locker room with governor bailey here in a moment. stay with us on radio, on television. this is bloomberg. ♪
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>> the difficulty for the fed is that they might need to raise interest rates cyclically. >> how high can they go in terms of rate hikes and not invert the yield curve? >> the yield curve in general is not giving a pure signal. >> the u.s. economy can withstand north of to prison interest rates just fine. >> you may well be lifting off he is no you might not think -- lifting off even though you might not think you are at maximum employment. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: the bank of england raises rates. it is a great surprise. the bank of england raises benchmark interest rate to a 0.25%. the wow from the economic theorist lisa abramowicz. flat outcome of the most extraordinary wednesday-thursday of what i have done bloomberg. the fed yesterday, the bank of england now. who knows