>> central bank policy with regard to the fed is very binary. they either cut or not. >> they don't need to wait to come back down to 2%. we just need to be confident that things are evolving in the right direction. >> they are trying to tell us we are on a path to get to rate cuts. inflation has come down enough that they think they can be cutting interest rates. >> we can still add three rate cuts despite the hotter inflation data. >> they are playing the waiting game and eventually they will have to suppress inflation. >> this is bloomberg surveillance. jonathan: live from new york

city this morning, good morning, good morning for our audience worldwide. this is bloomberg surveillance. the equity markets are positive with three very mild days of losses behind us. in front of us this hour, expect plenty of data on the baltimore bridge collapse. lisa: if we hadn't gotten that made a call from the ship that prevented more cars from entering the bridge. i was watching the video on repeat last night and the question remains -- how could a bridge just collapse like a couple of toothpicks? that's what it looked like in the imagery? what are the other vulnerabilities out there and how long will it take to work for all of this? jonathan: in a matter of seconds, stunning pictures for us all. the team is still tracking the disruption. 2.5 millions of: cars by gm and the list goes on and on. annmarie: when you think about this, it's a second-tier port

but because of where it's located, it's incredibly important for cars.it's in land, close to railroads and think about the car going to detroit. you think about agricultural manufacturing, trains that can go to chicago and the export for coal. everybody is working through what this means and and out wong says .2 percentage points potentially could be a base case higher for inflation given the disruptions. officials are saying it's going to take a lot of time and it's going to take a ton of money. lisa: it's another test on top of tests what happens when you start to reduce capacity. how much do you get clogged up ports in new york and new jersey and virginia if you get that sort of redirected traffic. is this a much smaller scale pandemic type supply-side disruption or is this something that's completely different on a smaller scale? jonathan: kailey leinz will break down some of the headlines in about 10 minutes time. looking at financial markets,

let's talk about levels of dollar yen. october, 2022, 151.95. overnight comeau 151.97 on dollar-yen. this is what happens. a meeting between the finance ministry, the bank of japan and the financial services agency and the headline from the top currency official in the finance ministry as we will take appropriate action against excessive moves. that's the verbal intervention and we've heard that three times now. is that going to be enough to move this currency market? lisa: not yet, it feels like traders are thumbing their nose at the bank of japan and saying this is all you've got? you are getting a little bit of retracement of the weakness but we are close to the 34 year lows we had overnight. you have one bank of japan member coming out and saying the

central bank must proceed slowly. that's what triggered this and then authorities come out and say we will take serious actions but we have no idea what they are. they haven't shown a willingness to do this in the past couple of months. jonathan: you go from negative rates to zero for the first time in 17 years and you start complaining about speculative moves behind a weaker japanese yen. is it just speculative moves? lisa: they can speculate all they want about the speculative moves. people are saying you've got inflation this really coming back in japan for the first time in a long time and you got otherwise very easy money terry policy you put those things together in the currency moves obvious. call it whatever you want jonathan: 150 point 33. that so much things have moved off the back of some of that chatter. the broader market looks like this, equity futures are shaping

up as follows, futures are positive by 0.4% yields are unchanged on the 10 year and the euro going absolutely nowhere. euro dollar, the rally is taking a pause. we will talk about america's debt pile. the equity market rally is stalling for a third consecutive day out of comments from chairman powell to round out the week. marvin lewis says this -- marvin loh joins us now for more. how low is that bar? >> they want to cut and it's pretty low based on where data is and what they should be saying around that data but for

the most part, they say they will ignore the data. there is an election cycle and they want to cut. they still firmly believe that policy is restrictive. to me it's a function of how much they can cut and even though they pulled back on their expectations, they might be surprised how sticky inflation is. jonathan: we've had this equity market rip five consecutive -- five consecutive months. evercore called it exuberance. they were talking about taking a downside protection. why is that -- why is now the time? >> we've got a lot of central banks lining up for the start of releasing the hounds if you will. if you think about market that's expecting three or four very large central banks to cut in june and the modal aspect of that where you get these quarterly expectations for the next year or year and a half and

then you've got several hundred basis points of cuts and portfolios that will all benefit from that. lisa: yesterday's trading action reminded me of a conversation with peter shcer. he said this is what i was talking about. the fact that you could see the selloff into the close in an unprovoked way. how do you trade around the lack of conviction and then liquidity with the appearance of trades leading to sudden moves for no reason? >> get is a challenge. if you are in that world, taking protection is how you approach it. i am more of an intermediate/long-term investor. i look for fair value night ultimately just sit through it and expect that story to play out. we are going to see several hundred basis points of cuts around the world over the next six month. we have liquidity that is still fairly rare -- robust in the system and the fed is talking about qt at a time when reserves are still quite high.

all of that is still a relatively positive story for risk assets. lisa: do you add to risk assets? is it time to lean in further? >> i wouldn't be leaning in heavily. for the most part, we have all added to our portfolios over the last 6-9 months. that has put us in a fairly positive position. i think i'm looking for potential changes to get my portfolio into a better position of quality like credit, potentially looking at parts of the growth equity story but adding aggressively in here is hard. jonathan: let's talk about verbal intervention. japan continues today and this morning and we get more comments and they will take appropriate action against excessive moves. dollar yen is still through $1.50. when you hear words like this, what does it mean? >> it's a bit of a paper tiger

ultimately. they laid the groundwork in terms of how to think about their policy when they dove asleep height 20. the rate differentials around the world remain fairly robust. when you have a very low volatility world we have an effects and we are looking for the carry trade, you've got another potential funder since they've taken out the big cap from the perspective of if they aggressively approached policy. annmarie: was at a mistake that they insinuated financial conditions will be easy? >> i don't think they needed to. i think they probably should've gotten more clarity in their mind in terms of when the cutting cycle was going to begin. they waited for so long. if they hiked while everyone else was cutting, it would certainly make the interest rate differential story a bit easier. hindsight is 20/20. i don't think they need to be as dovish as they are. annmarie: is the story at the

boj the same as what we see from the fed? >> the fed is the story that every central bank follows. for better or for worse, given how the dollar is rolling in the capital markets is important in that discussion. it's twofold, for sure. lisa: we were talking yesterday about the potential for ongoing fed intervention to offset some of the bills for the u.s. government. it's raise questions about longer-term weakening in the dollar especially as people realized that the u.s. will try to inflate its way out of its debt issues. how much do you see that as a long-term trend you can bet on? >> over all term premiums are too low in the market. you got many things coming together and it's whether or not the fed can get to 2% inflation target. inflation volatility and all of those aspects equal some challenges at the long end of the curve.

thinking about steepeners later in the cycle is something i spend time on. lisa: a much are we looking at a moment where bonds are the risk asset and stocks are a haven? they seem to be more hedge to the growth in the potential stimulus coming from all sides? >> earnings are nominal. if we were to break down the market, the u.s. growth aspects remain the strongest in the world. jonathan: on the events of yesterday, the global supply chains, it can have global consequences. given the challenges to goods disinflation in america, what would be your reaction to what happened yesterday in baltimore? >> ultimately, i relied on you guys to get me educated on this but it doesn't make it easier at a time when the fed needs to see a continuation of these disinflationary trends that somehow took a pause over the last couple of months make their

way back into the market. they've got some hard can -- decisions over the next couple of months and this doesn't make it easier. jonathan: thank you for stopping by. equity futures right now on the s&p are near session highs, slightly positive. lisa: elsewhere this morning, the search-and-rescue operation after the collapse of the francis scott key bridge in baltimore is now a search and recovery mission. the road crew was working at the bridge at the time of the class into people were rescued and two people were rescued in six remain unaccounted for. the area remains closed to traffic cutting off a major artery around the city. annmarie: japan has stepped closer to currency changes. lisa: the finance minister ramped up as possible action may be after it touches lowest level versus the dollar. policymakers were running out of choices short of purchasing the currency to prop it up after the bank first interest rate hike since 2007 failed to change the trajectory. shales in byd closed the day in

6% lower in hong kong after an earnings miss triggered it's worth selloff in seven months. they missed its 2023 earnings estimate by $130 million. it raised questions over whether it can sustain strong profit growth amid an intense price war. the company almost tripled its final dividend payment but it wasn't enough to ally investor concerns. that's your bloomberg brief. it raises the question of the whole ev trend regardless of the region. it's under pressure in many ways under their own doing with a price war but with respect to demand. jonathan: this is supposedly the market leader but it's in a race to the bottom with these names. lisa: it really bodes a little bit ominously about how close people are getting to questioning whether this is truly the next step and how quickly we can get there. jonathan: more on that story later when we catch up with officials from vw. next up, biden family federal support for baltimore.

>> we will send all the federal resources they need as we respond to this coming i mean all the federal resources. we will rebuild that port together. jonathan: that conversation is next, live from new york, good morning. ♪

jonathan: china bounce following three days a very mild losses on the s&p 500 with equities up 0.3% and bonds are just about unchanged. biden vowing federal support for baltimore. >> i told them we are going to spend all the federal resources they need to respond to this, all the federal reserve's and we will rebuild the port together. everything so far indicates this

was a terrible accident. this time, we have no other indication and no other reason to believe it was an intentional act. jonathan: the latest search-and-rescue efforts are suspended with six individuals unaccounted for after the collapse of the francis scott key bridge in baltimore. maryland lawmakers are pushing for an aid package to rebuild the bridge with the president saying it work with congress to fund it. it should take weeks or months of disruptions. you've been at the scene for the last 24 hours or so, what's the latest? kailey: as you say, the search-and-rescue operation was suspended around 7:30 p.m. last night. starting at 6 a.m. today, moments ago, the maryland state police together with their partners are beginning the recovery effort. this will be about actually finding the bodies of these six unaccounted for individuals, construction workers were on the bridge working on potholes at the time of the collapse. it's an effort to provide

closure some of those families affected. that's not all that will go on today. we could see the national transportation safety board actually board this vessel, the dali. they did not do so yesterday as they didn't want to interfere with the rescue efforts. they could begin the work today of the actual investigation. they will have a 24 person team investigating this and look at the recorders on the ship and trying to figure it exactly what happened with this crash and owner operator role was. then it will be a matter not to just investigate but trying to get the ship out of the harbor. they want to start being able to clear the debris from the shipping containers that fell off the ship as well as the bridge itself which is in large part submerged. they are trying to get all of that cleared out so the port of baltimore can reopen. authorities have been reluctant to put any kind of timeline on just how long that might take. lisa: our thoughts are very much

with the families of those six individuals. in the meantime, where is traffic being diverted and what is the scene like given that this is a main thoroughfare for trucks and commuters? kailey: roughly 35,000 commuters every day were crossing this bridge to get to where they are going. today they will not be able to do so. there was heavier traffic during rush hour last night and today will be the first real test of morning rush-hour as these drivers will not be able to use 695 but will have to diverted to other routes. for commuters, that may mean more traffic on the way to work but for transit, the freight moving over this bridge, 49 hundred commercial vehicles use this every day as well. if it was containing hazardous material, they are not allowed to use the tunnels that go underneath baltimore harbor. there transit time could be longer, tens of miles added to their journey.

that is really why reconstruction of the bridge after the port is reopened and the channel has been clear, reconstruction efforts will be key to releasing pressure in this vital artery in terms of transit in the mid-atlantic. that's a timeline that could be incredibly long and expensive. the transportation secretary was here on the ground at the scene yesterday and said this will not be quick or easy and it will also not be inexpensive. jonathan: this will take time and a lot of money, great work, we will catch up with you a little later this morning. we need to talk about global trade with brenda murray. let's talk about how easy it is or not to shift cargo to other east coast ports? how straightforward is that? >> it's not a hugely complicated process. we are already seeing ships go to ports like new jersey, new york, virginia in places like savannah. you can see those ships already

gathering outside other ports that have been diverted from baltimore. the problem is each of those containers or the shipload of commodities. they need another source of ground transportation so that is where the complication comes in. we are talking about thousands and thousands of containers and thousands and thousands of tons of goods. and there's lots of cars. baltimore is the countries busiest port for auto imports and exports. they will have to find some other way to go through. some of the car companies we understand have their docs on the ocean side of the collapsed bridge or they might not be affected. we are picking through those details now. certainly the auto industry is one of the more disrupted ones from this tragedy. annmarie: gm and ford say they are already rerouting to georgia. who is most prepared when it

comes to the auto industry given how important and critical baltimore was for auto vehicles? >> virginia is one of the ports you hear talked about frequently. brunswick, georgia is another one. lots of vehicles flow through there in the southeast. there are a number of european carmakers that have facilities there. that services a number of european imports and exports. that's what we are seeing. the bagel that just the bigger vessels, the ones with more than 12,000 containers, some of those more southerly ports are not big enough to handle those vessels so they will wind up a new jew -- in new york and new jersey. annmarie: how vulnerable is the entire supply chain interesting now like with panama and now we have a pretty critical port of the east coast down? >> most of the folks we talked to are cautiously optimistic that this is not going to be a huge impact on the national

economy. it will certainly affect the region for weeks if not months but we will have to watch and see. we saw 10 or 20% more cargo coming into the ports of los angeles and long beach during the pandemic. the bottlenecks grew and grew for a year or longer. we will have to keep an eye on whether these are just isolated chokepoints that need to get resolved or whether it's the domino effect we saw a couple of years ago. lisa: ryan peterson of flex for yesterday was saying that essentially this is the test, whether or not a sudden 10-20% increase in the volumes in places like new jersey and new york causes the same kind of hangups. what makes people optimistic we will not see those types of backlogs that were problematic for many different companies during the pandemic? >> the u.s. economy is solid now but it's not going gangbusters.

there is some capacity in the logistics industries we cover. shipping and trucking and rail are some of them and some of the ports are running at something like 70% capacity whereas during the pandemic, they were at 100%. there is some flex in the system to deal with this. there is the wildcard in all this which is the dockworkers on the east coast have a contract negotiation this year. they will become very important workers on the east coast and will become important to making sure these goods flow smoothly. perhaps this gives them more leverage in the talks. jonathan: what is the lesson from the west coast negotiations of what will happen on the east coast? >> as i said, the dockworkers now that the spotlight will be on them to see if there is enough labor even to handle these diversions. it looks like there is big talk

during negotiations like this with lots of threats coming from both sides but it sounds like heading into the november presidential election that the parties on all sides can't afford to see a strike where the east coast ports shut down. it sounds like they will try to resolve it rather than have it become another supply chain disruption. jonathan: we appreciate your time this morning. the uniqueness of the baltimore porch, this is what jumped off the page, the second-largest terminal for u.s. coal exports in the shutdown office potentially hitting shipments to india. this goes back to how we started the hour. you can get global implications to figure out the disruptions. lisa: people are trying to figure out where coal would come from. i was reading about the farm

equipment and construction at a time that's crucial for planting things now. this is one of the main arteries for the tractor-trailers. there are very specific industries that cater to specific arteries and if they get severed, how quickly can they adjust elsewhere? jonathan: the coverage continues this morning on bloomberg tv. up next, the chinese president looks to mobilize american executives. . we are positive on the markets, from new york, this is bloomberg. ♪ okay y'all we got ten orders coming in... big orders! starting a business is never easy,

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jonathan: stocks are at session highs, equities up by 0.4% on the s&p 500 with a few days of marginal losses. we saw this last wednesday, the outperformance comes from small caps. the russell is up zero point 75%. lisa: it's getting closer and closer. it seems like people believe the smaller companies are more leverage to the cutting cycle and will benefit that much more. jonathan: five months of gains on the s&p 500 with a couple of days left in march. are you happy with that?

it feels like the first half. lisa: how many narratives have we been through? we talked about the idea of being data dependence. are we talking about the fed or the nvidia cycle or the death of the mega caps or the magnificent2? these are the narratives that have percolated out. jonathan: i've think we've seen as many narratives in this quarter as we did last few but they are changing more quickly. provo martha -- for the whole month of march, the last couple of days, stock is up and down and maybe some mutterings of hard landing but nobody bought into it. lisa: it feels like people are just exhausted by it so they have to buy into it and don't have any conviction and don't really trade that greatly and sort of hope for some sort of shift they can get excited about. jonathan: are you convinced that everyone has bought now? lisa: i've heard that from traders. if someone is excited, reach out

to me and i want to hear it and i want that excitement. jonathan: let's get to the bond market, nothing exciting about this. it's like the depths of summer price action. if you want some price action, look at japan with the authorities all over the place. dollar-yen $1.51. that's the smallest, the tiniest bit of an dish of yen strength against the u.s. dollar. lisa: they will take strong actions after seeing their currency weaken going back 36 years. at a certain point, they have to come through with something and how much conviction do they have behind trying to bolster a currency when it's clear their central bank has no interest in tightening policy materially. jonathan: six workers are

presumed dead after yesterday's collapse at the francis scott key bridge in baltimore. authorities have yet to offer a time when his win operations will resume as officials look for a move -- to move debris. businesses are diverting cargo along the east coast. the port of baltimore is a crucial stop for european carmakers and u.s. exports of coal. there are two dimensions to this story. one is how much worse this could have been in the second piece is liability. yesterday we were talking about understanding the time between the made a call and the collision. the governor of maryland gave us insight on this and he said we are thankful between the mayday and collapse come a we had officials that could stop the flow of traffic. that gives you a sense of how much worse this could have been yesterday, never mind the time it happened. this could have been seriously tragic. lisa: i was watching video and repeat which i probably shouldn't have done but i -- every car going across in the 10

minutes before, you are grateful the number of them didn't go before the collapse. we are talking about coverage that michael of several billion dollars for the ship but this needs to be immediate. how you get immediate financing to the whole region to start the reconstruction effort that took two years like in italy? it will be key in it will be speed that's important. jonathan: who ultimately has the liability but how long before we have to find out the answer to that. is the president going to offer credit line from the federal government? annmarie: he said that yesterday. your heard from other senators like ben cardin who says he things congress will step up area a reporter asked about this and it seems the ship is at fault so does the company of liability? the president said that could be but we will not wait around for that. jonathan: the latest out of

japan, top currency officials are expected to speak. i meeting earlier this morning between the boj, ministry of finance and financial services agency says the bank of japan will intervene after they pass the $1.51 mark of dollar-yen. we had some comments from officials saying it's a repeat of what we've already heard. the verbal information needs to be credible so there has to be a policy effort behind it. it's not clear what that policy will look like and whether it's enough. lisa: they keep saying we will take bold action if needed. if it's not needed when it falls to a 36 year weakness, where is the line in the sand? one dollar $.50 was the line in the sand and now is $1.51. it's not clear what the policy response is in the trigger to engage it. jonathan: maybe closer to $1.52.

that seems to prompt words. let's turn to china, the president of china urging ceos in america to invest in china saying the economy has not peaked. the business leaders involved in today's meeting in beijing with talks that lasted more than 1.5 hours. we look at this story for more. was this for the ceos or for xi? >> i think it's something of a sales pitch for china. our colleagues in beijing got some details of what was discussed. it went for over 1.5 hours with some q and a the message was that they welcome u.s. investment and he doesn't see the need for the u.s. and china to decouple. he said the revival of both nations depends on each other cooperating. this old goes to this idea that china is now on a fully fledged

sales pitch given the hit over the past three years. when you have the top ceos of u.s. companies in town, it seemed like a perfect opportunity for the president to meet them. he wanted to ask wages fears on the economy and policy direction in china. jonathan: i wonder what corporate america's message is? are our views independent of our government? >> it's often said there is some division between where the government wants to go and where corporate want to go. clearly, the tension is moving through economic data. it's not about u.s. companies or other companies pulling wholesale out of china but sentiment is very negative and they want to expand their business but they are looking elsewhere for opportunities. we are seeing that in the portfolio flows with u.s. investors making a point that china is on investable and is not what it was.

they are putting their money where their mouth is. there is also not clear information on the date and where the government will go. annmarie: they talked about state back chinese hackers going after companies, politicians in the u.k., scrapping voter information. is this something that still concerns american companies and could xi actually asked ways those concerns? >> this is a common recurring theme but even when you have this kind of headline effort to stabilize relations between the governments or stabilize relations on the corporate level, beneath it, the tensions continue. you're talking about the hacking allegations again, another reminder of some of the charges against china.

on the flipside, china makes its case to the wto. that's a case of where the geo economic race is at the pointy end of things. broadly speaking, relations have stabilize compared to where we were a year ago. both governments weren't talking to each other but none of these underlying concerns of gone away. it feels like we want to get past the u.s. election. one side will be very hawkish but the other side will have two probably match that in terms of getting through it. it feels like a timeout but none of the other problems have really gone away. lisa: it's getting increasingly difficult to parse the politics from the economic reality in the region. yesterday we heard about apple with their iphone shipment and china falling 33% in february. is this because of increased nationalism or because the chinese economy is doing far worse than people expect and is a less fruitful place for international businesses to pick

up some extra profits? >> i think there is a sense worst years are behind the chinese economy of the moment. the consumer story is probably not as bad as the overseas perception but nonetheless, they have been more subdued. you see that playing into the apple story. xi jin ping said they have the economy in hand and the economy is not yet peaked at the same time, when you speak to business people here and those who operate in china, they make the point that the chinese government appears to be very reluctant to turn things around and ramp things up and that is frustrating overseas investors those who do business there. there is something of a wet blanket over china's economy at the moment. they have an aggressive growth target of 5% which is a political target. chances are they will do what needs to be done to meet that but in terms of animal spirits,

it's night and day the chinese economy compared to a year ago. lisa: you pointed to the reluctance of chinese officials to engage in stimulus. do you have a sense of what the business leaders would like to see in terms of stimulus and where the wiggle room is for the communist party? >> people still can't push past the real estate story so-and-so that turns around, that will weigh on consumers and broader activity. don't forget people are keeping an eye am what's happening on the manufacturing side. china is really putting in a lot of effort into the innovative and technology space there with concerned that china is now exporting at a gangbusters rate into key sectors. some trading rivals of china accuse them of dumping products at a cheaper rate. even though the consumer side of things might be sub dude and the real estate story is subdued, china is pushing hard on the manufacturing and innovation space.

annmarie: are they trying to drum up the demand outside or inside china? >> it's exporting surplus demand. the suspicion of the allegation against china is that they are exporting. we heard about the ev story so they are exporting technology they have to find new markets. the counter charge from business in europe and the u.s. is that they cannot compete with what china is doing. they are flooding the market with key goods and it's a noncompetitive race. that's one of the underlying tensions in this story. the chinese economy is underperforming but don't lose sight of what's happening in the manufacturing space. a lot of innovations going in there and they are investing in technology which is a priority for them. they are making ground and key sectors. jonathan: it's great to catch up with you. one man i would like to speak to

is from blackstone. get his view on china and maybe what he would say to the former president. annmarie: do you think schwarzman wanted to hear what xi wanted to say? exports were coming out of china but the trump campaign is talk about a 60% blanket tariff on chinese imports. jonathan: i don't know the answer that but i would say this -- the balance of power between u.s. ceos and china has shifted given what we see. lisa: we are looking at 30 year lows of direct foreign investment? xi jinping had to make a statement. he's not going to davos but he made sure he met with these executives. jonathan: let's turn to the price action with equity futures on the s&p, trying to bounce back from the mild losses of yesterday with futures positive by .4%. lisa: ubs has finalized a deal.

it purchased 8 billion dollars in senior secured funding facilities in the deal allows ubs to close another chapter in its acquisition of credit suisse. there'll be a net gain of $300 million in the first quarter of the sale. shares in gamestop are lower in the premarket after the retailer reported plunging fourth-quarter revenue. one of the original meme stocks, it has seen gains and say a rate cut this year will likely be appropriate. their net sales were down 19% from a year earlier in the shares are down about 19% in premarket trading. a landmark agreement struck between visa and mastercard, millions of u.s. merchants will see holders luxury credit cards charge more the check out in the deal will allow retailers to pass in the premium charge of them for processing cards carrying visa. the plan is estimated to save merchants $30 billion in swipe

fees over five years and set up a war between the cards. if you have one particular type of visa, you will get charged a different fee then another one. this has been the bread-and-butter of three different banks. jonathan: if your restaurant test if you run a restaurant before, you know this story. $100 transaction a small restaurant and the customer swipes a visa card and that would cause the merchant $2.60 in fees. rewards costs would be two dollars and that adds up over the year. lisa: you see it in bodegas and things like that. they could charge you two or 4% surcharge. who will bear the brunt of this? it's not visa and mastercard, it's the banks providing the base resources. jonathan: what about the airlines? they are in there somewhere. lisa: this is not that profitable so go back to the people who just travel and give them the upper hand.

that's the way to deal with this. jonathan: it's like customer service on the airlines. up next, america's debt die lemma. >> we are getting to a point where our public debt will start crowding out private capital and we will have structurally higher interest rates. jonathan: that conversation is up next. ♪

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jonathan: equities on the s&p are positive by 0.4% in the bond market is just about unchanged. we are down by 0.7% on crude. aaa is talking about for dollar pump prices this summer which is a problem across a whole list of

things. lisa: it's a problem potentially for the goods disinflation story and especially timewise, it's a problem for the political season. it's crazy, the fact that it's more expensive than copper or iron or, we are talking about a commodity. if you built a cocoa house, it would be incredibly expensive. jonathan: you are talking about a chocolate house? i thought if you wanted to be a coco exporter. lisa: if you wanted to go back to hanso and gretel and do that. did you ever do a good job at making those little houses? jonathan: never. on surveillance this morning, america's debt dilemma. >> the cost of financing or deficit will erode more and more

of our disposable income as a country. i do believe we are getting to a point where our public debt will start crowding out private capital and we will have structurally higher interest rates. jonathan: the blackrock ceo larry fink -- here to discuss is bruce casman. we will talk about monetary policy in the fed but let's start with america's debt pile. the team at jp morgan has talked about the boiling of the frog so when does it get too hot? >> i think it will get too hot if we are right that the fed doesn't have room to ease and over time, that begins to affect balance sheets and keeps pricing power down. it's a slow moving story and i

think we have to recognize that so far, the effects of high interest rates haven't done nearly as much damage as we would've thought to the private sector. this story is playing out against another narrative which is to say the private sector is healthy and we are getting supply-side improvement and maybe we can live with high interest rates. we've moved from being in the boyle the frog stands to being agnostic about where the story will lead us. jonathan: talked about the supply-side narrative that the chairman seem to endorse in the news conference last week. >> i think we should embrace this, there is an immigration story that is playing out and we are seeing labor force growth that's limiting the pressure on labor markets and inflation from rising jobs. we've also generated some strong productivity growth. that seems to be linked with what we been doing on spending r on&d and intellectual property.

we still have a tight labor market and an elevated inflation which i think is sticky. as you mention, the goods price story globally is shifting. i'm not convinced that's going to be enough to get inflation down to what will make the fed comfortable over the next year. lisa: we've been talking about the bridge collapse in baltimore and understanding it's just one particular port and potentially other ports can take in some of that traffic. does this highlight that supply shocks of not one away and there are these vulnerabilities that will put some sort of floor under this goods disinflation we see -- we've seen for the past couple of years? >> yeah, what you are seeing in some sense is a little bit of that with the idea there is new pressures. to support closure might be part of that. you are just losing the benefits of having unwound the dislocations. over the last six or seven months, u.s. goods pricing x

food and energy falling at 2.5%. most of the indic caters to -- domestically and globally say that going back to zero. when chair powell talks about shelter inflation coming down, i think there is an offset of what's happening in the goods price story. that leaves the focus on inflation and how you think about labor markets and other service inflation which we will see is pretty firm when we get that pce report friday. lisa: this raises the question we were talking about with mohamed el-erian about whether this is a tipping point for this federal reserve excepting a two point something inflation rate for the foreseeable future. have we shifted? was the press -- was the last press conference at key in that transition? >> the fed is telling as it wants to start the easing process in the middle of the year and it's ready to do so even if in the first half it's

getting uncomfortably high inflation performance. what i don't think this means that the fed is willing to accept on a sustained basis inflation close to or higher than 3%. what we think will happen here is that you will see of pivot sometime around middle of the year where the fed maybe delivers on their easing but then it starts to shift its guidance. the market today has over 150 basis points of fed easing through the end of 25 unless the economy gets into trouble. i don't think we will see that delivered. annmarie: you say they want to cut which echoes individual to come on the program but they also say how data-dependent they are. what today's need to see in the data to say we are waiting, we will not cut this year? >> that's an interesting point because if they are talking data dependent, you can see chair yellen's press conference talk as if the bar is pretty high to prevent easing. i'm not sure i have the numbers

i'd want to be confident about where that is. what they've told us to start the easing process around midyear, they are fairly comfortable that they have made progress. there are data prince here that could take them off of that and i would argue the committee is looking at the projections that are more evenly divided. the bar is pretty high here. i'm not sure even if we get a couple of 03 inflation that this will be enough to prevent june easing. i think it will stop them from doing much but i'm not sure it will stop them from easing in june. jonathan: the inconsistency that jumps out, how can the fed simultaneously say we are restricted at the same time embrace the supply-side narrative and labor market but also point to the labor market evidence of being restrictive? how does that add up? >> there is a level issue of how tight the labor market is and then there's an issue of how much supply-side performance is helping. you raise an important point is

that the supply-side is improving and helping the fed but it is also a signal that the neutral rate is higher. when you look at financial market performance, it isn't betting on the idea that some combination of supplied side performance, friendly fed and some other things going on here is allowing us to do better with higher interest rates than we might have expected. you are 100 percent right, policy is not as restrictive as the fed seems to be suggesting. i think growth will do better if inflation is sticky. i think with a will have to change their tune somewhat but it still looks like they are getting ready to start and easing process around midyear. jonathan: it's hard to disagree, thank you for being with us. going into economic data on friday morning. coming up, northern trust and the latest on baltimore. all of that in a whole lot more in the second hour of bloomberg surveillance up next.

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>> it doesn't pay to be bearish. the market is way too good and you've got to stay bullish on equities. >> this is among the most record-setting periods of momentum we've seen. >> what would just started to see is the rally broadens out. >> i think you stay invested. >> this is bloomberg surveillance with jonathan

ferro, lisa abramowicz and annmarie hordern. jonathan: live from new york city this morning, good morning, good morning, the second hour bloomberg surveillance begins right now with the equity market on the s&p positive by 0.4%, continuing to track the fallout from the collapsed bridge in baltimore. we've said over the last 60 minutes just how much worse this could have been. the time between the made a call and stopping traffic on the bridge, this could have been so much worse yesterday. lisa: you are right, the idea that they were able to halt traffic kept other cars from getting caught up in this. it raises the question of how much time there was and what exactly was the cause and how long will this disrupt some of the traffic and the shipping. there are so many questions that remain in the focus now is still on the here and after, the immediate aftermath of this. this is an artery that has been severed. jonathan: it could be weeks or months before this port reopens

and then you've got to get into rebuilding the bridge. it's going to take a long time and a lot of money. annmarie: we heard politician after politician saying the federal government will support the rebuilding of this bridge. a reporter in his quick news conference said shouldn't the company responsible for the ship that caused the problem pay? he said potentially but they have to get the funds there right away. congress has struggled to pass the most basic appropriations bill. it's a dwindling republican house, how will get -- how will they get this funding through quickly? jonathan: 1977, took five years to build and this will cost a heck of a lot more money than that. can we build it more quickly? lisa: it raises the question about the ability and willingness of the united states to invest in infrastructure and do it well and quickly. it's -- this comes at a moment with a horrible tragedy and

highlights one of the key issues many people and markets have talked about for a long time. there needs to be infrastructure spending, we got it so how will we pay for it and how do we continue in what infrastructure is most important to prioritize? you also have the big tech wars that continue. jonathan: the number one question in economics, the disinflation we've seen in goods over the last six months feels fragile, perhaps some challenges over the last two months. you wonder how fragile it is given what's developed just yesterday. lisa: people are speculating this in itself not materially shift the needle when it comes to some of the overall national metrics. over the past couple of months, we already got this drumbeat of seeing the end of disinflation and goods. this highlights how supply shocks can exacerbate the floor under some of the disinflation we had seen. jonathan: let's get to the currency market. take a look at dollar-yen overnight.

it got very close to $1.52. so close that the bank of japan officials and japanese finance ministers get together with the financial services agency and start making some noise. they have a meeting. they start talking about a but that's all they do. they just talk about it so when we will see the action? lisa: they wanted to get together and make some noise. it raises the issue -- is the market basically pushing and daring japan to do something? are they saying let's see how much you care? what is the line in the sand? we've seen this movie before and still we are hovering at 36 year weakness levels for the yen. jonathan: the session high right now. coming up this hour, we will catch up with kenny nixon on how

the stock could broaden out from here and we will talk about how nissan plans to compete in the ev market and blackrock on the competition for capital. the s&p 500 could have its third straight day of losses. good morning. let's talk about interest rates. do banks need higher rates or lower rates or do they need clarity on the right path? >> i think clarity is key. it's been interesting, is not just clarity but lower volatility interest rates. if you look at the move index, looking at the volatility expressed in the fear and greed

index of the bond market has fallen substantially. that gives clarity for banks and what the environment will look like going forward. lower rates help a less inverted yield curve but lower volatility really helps the banks? jonathan: is this a bigger sign that the broadening out can continue? >> it's not just the financial services stocks but when i look across the board, the laggards have started to catch up slowly and unevenly. you can start in the u.s. with mid-cap stocks, mid-cap indices reaching highs. you can even look at value stocks within large-cap and mid-cap starting to beat growth stocks over the short term. that's a good sign. you can look at the laggards in terms of the energy sector starting to pick up steam. the broadening beyond themag7

stocks is healthy and then you broaden it out to look around the world and you can see european stocks finding their footing and starting to perform well. i think the broadening is a good sign of more confidence in the market rather than that sort of narrow breadth we had in 2023. lisa: i wonder how much we are seeing bonds as the risk asset? and maybe equities the short bet because you have the fed that says we've got your back and you have an economy that continues. you got fiscal stimulus so what's not to like? have we gotten to this level where stocks are the safety and bonds are the risks? >> i don't know if i would go that far but it's pretty hard to bet against u.s. stocks. you've got the macro working in your favor. we've had better than a soft landing and we entered the year with a lot of positive momentum. inflation is falling again, the

micro picture looks better, the broadening out of earnings so we had a very narrow earnings growth in 2023 that is now broadening out. eight sectors of the s&p will have positive earnings this year and then you've got the policy. i wouldn't necessarily go as far as to call it a fed put it this point but i would say it's clear the fed is on the path toward lowering rates in 2024 and that is very supportive. if you look at history, fed rate cuts without a recession tend to be good for risk assets. lisa: meanwhile you have the likes of larry and government officials coming out and raising concerns about what's happening with the deficit. do retail investors care about the deficit? do they say it's a good idea to buy bonds if we think this will become a problem in the future? >> i think investors are starting to get concerned about the deficit. i think that's why you are seeing potentially a set up

where we just have a higher term premium down the road. there is the higher chance we will have inflation run hotter, higher chance we will have these funding needs going forward and effecting supply of treasuries that had to be absorbed. i think the average investor starting to get concerned about it and we are getting questions about it all the time. jonathan: if i look at the yield curve at the moment, i can get 4.60 on the two-year so why should go out further along the curve to lock-in 4.23? what is the incentive to do that? >> the upside here is that rates stay where they are. the economy is sort of trudging along inflation is coming down maybe not as fast as we would like in the fed cuts rates. the downside is that the fed has cut rates. we do see the economy in the second half of this year slowing down. we think the fed's forecast is a

little too bullish. it could be a situation where rates fall on the short and a little bit faster in that case, those juicy yields you see today will not be there for you when you need them for five years from now. jonathan: pemco says there are limits to the cutting cycle and i can take this exposure elsewhere. what is the argument to take it in the united states? >> you have clarity on the path of richer guarding the fed and you can see if you look at what's happening to the 10 year treasury this year, you had a little spike as we had inflation prints coming in hot with the fed saying nothing to see here, bump in the road and you have yields back off pretty quickly and now we have the 10 year back below our forecast range. i think there is a lot of demand

for fixed income and for treasuries right now given the environment and the outlook. i think you will see demand come in as we see rates go up and it will put a ceiling on how high rates will go. lisa: how much are you looking at a higher inflation regime in the united states that is different from the regime and other countries? >> that's a great question and i think we heard a clue in the press conference, not the statement but the press conference last week that there is a bit of tolerance for a longer period of higher inflation. maybe not for a higher inflation goal but to tolerate a longer period of higher inflation to maintain economic growth, recognizing there may be a trade-off. between getting inflation down to the target maintaining

economic growth and full employment. i think there is more of a balancing act going on now in the fed than there was earlier just inflation. they want to get inflation down patiently but they want to maintain unemployment down around 4%. lisa: the equity strategies .2 oil. how much is that the sweet spot now as a hedge? >> you mentioned it earlier -- the supply shocks we are seeing, many of them around energy. we see issues in the red sea, issues in the panama canal, issues with transport and logistics around energy. i think we are seeing not just a soft landing in the u.s. but we are seeing recoveries overseas. you will see demand for energy come up. i think it's a great place for investors to be. to your point about broadening out the market, that's an area of the market that was left for dead last year. investors should look at their

portfolios and ask if their position for the next five years, do i have my small and mid-cap and my non-us exposure and to have my energy exposure and my hedges in the portfolio. it is possible we are living in a higher for longer inflation period. annmarie: j.p. morgan has talked about $100 per barrel for energy this year. do you want to move into the old school energies? maybe clean energies as well? >> i think it's both and. i would expand to the broader energy. artificial intelligence is driven the mag seven. if you scratch beneath the set step surface there are all sorts of tentacles into the commodities market and the energy market and other commodities that are required to support the growth in ai that's getting all the attention. for a variety of reasons, you want brought exposure in the

energy market and the commodities market today. jonathan: it's good to see you, this was great. brent crude down by 0.7%, $85.65 with equity futures bouncing back on the s&p 500. lisa: let's get you an update on stories elsewhere. we've been talking about this, japan stepping closer to currency intervention may be. the finance minister ramped up hints of possible action after the yen touched his lowest level in 34 years. policymakers are running out of choices short of purchasing the currency to prop it up after the bank of japan's first interest rate hike since 2007 failed to change the trajectory. the chinese present has told a group of american business leaders in beijing he wants american companies to invest in china. he met with leaders including blackstone's stephen schwartzman and qualcomm for more than 90

minutes. china is seeking to restore confidence in its economy acknowledging issues with the domestic economy but saying it hasn't yet peaked. a drugmaker could've cracked a problem which has been weighing on obesity drugmakers. patients under the latest trial sought 74% of their weight loss coming from fat tissue. the company says trials of the active ingredient show a higher rate of lean muscle mass loss compared to fat. that's your bloomberg brief. jonathan: that's a big deal. that is the ultimate dream. lisa: this is one of the complaints that i heard anecdotally is that people were trying to work this out and traders were saying you guys can't to anything because of the shots. if they can shred --annmarie: did you watch the oprah special?

lisa: i went back and watched a little bit of it. jonathan: muscle mass and longevity is a big deal so that's a -- this is a big issue. all of oil is the funniest story ever. there was a staff mutiny over the quality of olive oil served at the european central bank. in-house caterers acquiesced to demand to bring back extra-virgin options to the table. it looks like the italians were going after the germans. i'm so proud. i read the story in the car on the way to work and i just smiled. god bless the italians. lisa: for trying to bring health and sanity into the diet. jonathan: real food to the people of germany. up next, a big rebuild in baltimore. >> the past -- the path to normalcy will not be easy. it will not be quick. it will not be inexpensive.

but we will rebuild together. jonathan: that conversation is next with kailey leinz on the ground. ♪ ♪

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no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial. jonathan: great story from metlife. all the americans went to the counter and were asking for any flight to the east coast and all the italian passengers was asking who. is going to feed them lisa: that's amazing. jonathan: that's a great story. annmarie: who and what are they being fed with? jonathan: welcome to the program, equity futures on the s&p 500 positive but 0.4%. just about unchanged on the 10 year. a big rebuild in baltimore this morning. >> our work is just beginning.

to rebuild this bridge and deal with the impact, to reopen this port and deal with supply chain impacts, the path to normalcy will not be easy. it will not be quick. it will not be inexpensive but we will rebuild together. jonathan: officials suspending search and rescue efforts with six individuals unaccounted for after the collapse of the francis scott key bridge in baltimore with president biden pledging federal support to rebuild the bridge with weeks or months of disruptions expected. kailey leinz is on the ground. we were talking about how bad it was but how much worse it could have been. kailey: absolutely, there is this construction crew present on the bridge of the time d theali rented to a structural support beam. they are not searching for them right now but for recovery purposes. there was enough time from the

mayday call of the ship where they experience distress and lost power and control of the vessel and hence the collision with the bridge. they were able to alert port authority soon enough that they stop further traffic from coming onto the bridge. it is likely that action was able to save some lives even though unfortunately, it seems according to officials that six of their lives are presumed to have been lost. the recovery effort is ongoing and then it will move forward into the investigative phase with the ntsb likely to board the vessel today. they have a 24 person team to investigate and it will be a matter of trying to get the ship out of the harbor and clear the debris from the ship but from the collapsed bridge as well. this will be a multipronged effort. i spoke yesterday with the democratic senator of maryland, ben cardin about the future steps and this is what he told me. >> search-and-rescue is the priority but they are already planning on what will be

necessary to get the channel open and get this bridge replaced. every day the harbor is close, it's millions of dollars lost in the local economy and people will be out of work and they will not get paychecks. we've got to bring this back. kailey: clearly, there is an economic impact locally for baltimore. there are more than 100,000 individuals whose jobs depend on the operation of the porch but there is also the consideration of the ripple effects it could have for the national economy. there is just no timetable at this point that authorities can point to to estimate when the port may be back open or when this reconstruction may happen and how long it may take. annmarie: he's hopeful congress will act in step up when it comes to the funding to rebuild this bridge and the funding to support the port. how quickly could we see congress act? kailey: that's an excellent question. we heard from president biden

remarks yesterday and he intends for the federal government to pay entirely for the reconstruction of this bridge. in theory, some of the funding breakdown will happen more immediately from emergency funding but there is a question of what infrastructure funds could be drawn upon but it will likely require a supplemental request from the white house to congress. senator cardin and his democratic democratic senator from maryland says congress will do it takes to get this pass in the maryland delegation will be pushing for it. we've seen that funding is difficult to get across the finish line in terms of the actual appropriations. it's a, six months to finish their recent appropriations bills. funding for allies have gone nowhere in the house so we will see of this happens in a more expeditious manner. congress is in recess this week. they won't be returning until around april. annmarie: the longshoreman's

contract is also coming due this year. how does this impact the negotiations? kailey: obviously, we have seen some disruptions of port workers not just on the east coast but the west coast as well. it took time to get the dockworkers contract sorted area there are thousands of individuals who are employed by this port who are probably worried about job security. i had indications of this in my conversation with senator chris van hollen who talked about how we are seeing companies already diverting cargo, moving to ports to the north like new york -- like new york or new jersey or to the south and virginia. he wants to make sure that things come back to baltimore when this port is reopened, that this is not a permanent disruption but a temporary diversion until the port can be reopened and there will be job security for all of those in baltimore and the wider economy that depends on the operations

of this port. that is likely something they will be looking for in the months to come. jonathan: let's finish up with a description of what you see with your own eyes. i think it's amazing to sit here talking about the rebuild but we need to talk about the cleanup. there is a 1000 foot ship stuck there in the bridge debris is all over the place so how long will that take? kailey: it could take some time. the scene we see before us is almost apocalyptic. as you come in off the highway, you can't transit to come to the port area. you see a bridge that once was very prominent in the baltimore skyline that is no longer existing. part of it is sticking up in many parts of it are submerged. behind me as a highway that literally goes to nowhere. it cuts off because there is no continuation over the water. this is extensive damage that has been done because this is a very large vessel that ran

directly into a beam of support for this bridge and only took seconds for all of it to come crashing down. it's likely going to be a long effort not just to get the debris off the ship and figure out what is happening with the actual shipping containers that were on it and whether any hazardous contents were inside. then you've got to start getting everything out from under the water. jonathan: kailey leinz in baltimore. this cleanup could take a long time. lisa: that's the reason their estimates the ship is not going anywhere for weeks or months. jonathan: never bind the rebuild, we got to get through the cleanup efforts. coming up, how nissan plans to compete in the ev market next. ♪

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jonathan: stock market bouncing back to 0.4% on the s&p 500. stable gains. the nasdaq up by .5% almost. nessel and small caps by .7%. the bond market, they look a little something like this, 4.5848, similar price action on the 10-year at 4.2219. i am interested in what pimco had to say. given the limits people believe there are to be, the growth story in the u.s. is much

better. if you would like to take duration risk on cut rating cycle, should you take it elsewhere? lisa: that raises questions on if the u.s. is in a uniquely inflationary moment that is different than in europe because it is a beacon of strength. yes, maybe there are productivity gains, but there are also limits. we are seeing some of the disinflation ending there. jonathan: dollar-yen overnight, session hi, 151.97, triggering some verbal intervention with no currency intervention off the back of it. we are down one third of 1%, and the japanese yen strength, the boj, financial ministry and financial services are getting uncomfortable with the one-way traffic we have seen. lisa: how uncomfortable are they? it does not seem like there is particular concern that there will be dramatic intervention that will reverse the slide of the yen. at this point, you have to get the finance mystery and the bank

of japan -- finance ministry and bank of japan on the same page. the bank of japan is in no hurry to raise rates materially. jonathan: will that dovish hike be a bit of a crack? lisa: i don't think so, we heard from a boj official saying we need to be cautious, deliberate and slow. basically doubling down on what moves they just took. jonathan: this morning, six people are presumed dead after the collapse of the's francis scott key bridge in baltimore. president biden said he would like the federal government to pay for the rebuild to move heaven and earth to reopen the port and rebuild the bridge. the port is one of the busiest on america's east coast. the rebuild, you have to do the cleanup first, which is what we talked about moments ago. annmarie: you hear from officials that this will take weeks, if not months just for the cleanup for we talk about the funding and what will be needed in terms of infrastructure to rebuild.

i will go back to what brendan murray said, is this isolated could we see a domino effect? at the moment, companies are regrouping. gm and ford said they will move to georgia. you brought up a good point about cold from india. are they going to have to rely more on russia and australia? and we are seeing commodity prices on the upswing. lisa: what i understand from executives and industries that use this is how much are they building in the exact were thought of as inefficiencies to compensate for disruptions to supply chains? how much do you have to do overlap to keep the security in place? that is something a lot of people have been looking at. jonathan: this could be a big disruption. this next story is from china, find a complaint to the world trade organization over america tv subsidies, same parts of president biden's act are "discriminatory and distorted the supply chain for electric vehicles."

the u.s. hitting back, saying china continues to use "unfair policies and practices to undermine fair competition and dominate global markets." often, economics comes up with its own jokes, but what we are getting from china is similar to what we heard from european officials. lisa: there maybe is legitimacy in terms of what measures are being taken. at the same time, it is a big risk coming from china, and the tit for tat, we have janet yellen speaking in georgia this morning, talking about overcapacity, distorting global prices and how this is a competitive disadvantage. but how much is this protectionism and nationalism the new reality for the global economy? annmarie: when i saw this, i thought, there are some europeans who would agree with xi jinping, but then he only the coffin for china was the u.s. finalizing reductions. if you are from a country of

foreign entities of concern, a.k.a. china, you cannot tap into subsidies, which means nobody will buy your cars in the u.s. jonathan: sticking with ev's, one chinese ev earner missed estimates, raising questions on whether it can sustain its intense price swap. the japanese also targeting an additional one million vehicles by 2027 and could reduce the cost of ev's by 30%. the ceo saying "we have to change her ways to compete with companies like byd." joining us now is jeremy pepin -- jeremie papin. i know you are excited about nissan kicks. are there too many ev's in the market, or do you think there are not enough at the right price point? jeremie: we are very excited

about the nissan kicks. it is the car i think the customer would like right now in the u.s., it is a combustion engine, a great design, affordable price point, and we are bringing a lot of technology to the marketplace, and we are hitting the market with the new vehicle, and that is all the new kicks. in terms of the ev's that are in the market, perhaps the consumer moving into the ev's is at a slower pace than what some had dreamed about, but the wealth and interest is there. the duration is growing, and once people have driven ev's, they are very loyal to that kind of power trade. we think we will see a steady growth in the market. jonathan: there are reports that you have to offer $500 to $2000

cash per vehicle to take on more inventory. i would like to get transparency from you to how difficult things are in the moment, is that still true? can you verify that? jeremie: i think the story is a market story. i think there are a number of brands that have to deal with some inventory situations and helping with availability is part of our job and we are doing it in corporation with the dealers, so it is just short-term. i think the key is having the advertisement and bringing a new market for the consumer to show up on the showrooms and see them transform. nothing specific to what nissan is doing in the market at the moment. we are adjusting to the demand and the fact that the consumer is looking at this payment, and we are helping them in every way we can. annmarie: are you pushing back

on having more electric vehicles on lots because there has not been the demand that many people were expecting? jeremie: i think the dealers, they do see the growing interest. they do also face the need to perhaps spend more time on explaining the process and technology that goes into the ev's. i think there is one point of notice that is offering this, we know there is a lot of technology that goes into edie's. we are offering a second -- into ev's. we are offering a second opportunity for someone to explain and reintroduce to buyers to make sure that everything is being used, whether it is ev charging, driving assistance, or any of the connected services or features we have to offer.

that is what we all need to do. we need educating and supporting the customer to get full access into what we have to offer through ev's because they are apt technology cars. annmarie: how do you keep up when byd continues to cut prices? jeremie: there is a story of the industry. there has always been the need to be cost efficient, so i would say that we are very used to it. we are working on breakthroughs for our ev production, more simple to produce, greater economies. i would just say it is with the auto industry is about. there is nothing specific. one day, one company is more aggressive on prices, the next day, you might have another one, and we need to keep up with the pace of transforming productivity gains into products for the customer. so it is healthy competition.

lisa: do you think the market missed an opportunity to push hybrids given the fact we have seen more upticks in hybrids and people have been resistant to go for ev? jeremie: again, i think what matters is the fact that we can offer with the consumer would like in our plan that we mentioned, the midterm plan. we will be adding 50 million units. some will be electrified, and in the u.s., we will get seven new cars. on all powertrains, that are eeev's, hybrids, because what matters is offering the consumer what they would like, and that is coming, that choice, i would say, is coming in greater numbers, including at nissan. lisa: i feel like we should call all executives of car companies ambassadors at this point because it seems you are trying

to navigate the geopolitics of the world in a front moment. how much are you having to change your business structure to prepare for increasing tensions in different regions where you are not allowed to sell vehicles with parts from other countries that are specific? jeremie: i think the industry praises stability of roles and can work with any rules set. we make decisions early on and on products that will hit the market in 2028 or 2029. billions of dollars are invested, and what matters is the stability of the rules, whatever they are, so that is what we are very focused on. we know how to adjust any set of elation that is being thrown or set up, and that is where we make our business. jonathan: what i struggle with is how you gain economies at

scale trying to do three different things simultaneously, so to satisfied the chinese market and u.s. market, you have to do different things in different places. how do you generate cost reductions, achieve economies of scale, you have to do those simultaneously? jeremie: i think your regional size is what matters, china for china, and nissan, that is something working very well, and we will be launching in china over the next years, forming energy vehicles completely localized in china and produced by our china for china business. and in the u.s. and europe, we are trying to leverage global scale where it works, original scale where it can. have a big presence in north america, u.s., canada and mexico, and there is enough volume to generate the economies to be competitive and being

competitive means to bring the right price to the customers to be happy with those. jonathan: the question lisa asked plays into the conversation we are having, can you generate global scale when it feels like the markets are becoming increasingly regional? you mentioned the regional effort. what happens if we get the former president coming into power and he does not just put big tariffs on what is happening in byd and chinese automakers and mexico, that he shuts everything down? if we should down the global auto market and it becomes really regionalized, does it change what you do or do you think the market was already moving in this direction? jeremie: i think the market is already moving and with the semiconductor crisis, we just need to be more knowledgeable and careful on how logistics are set up across industry. we have been thinking about more

ensuring of the activities, so that is a trend that we would like to continue building, what we sell is a recipe for success in this industry, so we are very committed to making investments in north america that will help manufacture all the vehicles that would be sold here, and any change in regulation, i would say, we can adjust, and they just need to be stable over time. jonathan: thank you. nothing stable about the past few years. jeremie papin, thank you. we will speak to vw a little later, and how do you plan for the manufacturing footprint on the united states of america before getting clarity on the future? stability is not what we have in washington, d.c., at the moment. lisa: and the question if trump were to come into power, those subsidies on the ev's, even

though we are seeing a glut and no demand, the subsidies are there to help. if trump comes in, he can rewrite the treasury rules and make it harder to claim the subsidies, so until you know who was going to be president, it is hard to see the demand and what it is going to be for the ev market in the u.s. jonathan: some pretty lofty goals. we will catch up with vw 60 minutes from now. equity futures on the s&p 500 trying to bounce back. still positive by 0.40%. lisa: stability there, elsewhere not so much. let's get you an update on stories. the search and rescue operation after the collapse of the francis scott key bridge in baltimore is now a search and recovery mission. a road crew is working on -- was working on the bridge at the time of the collapse, six are unaccounted for. it is cutting off a major artery around the city and remains closed to traffic. ubs finalized a deal with the credit suisse product group,

apollo set to purchase $8 billion in senior secured funding facilities, allowing ubs to close another chapter in its acquisition of credit suisse and will book a net gain of $300 million in the first quarter on the sale. brent could hit $100 this year if russia's decision to cut production is not balanced by countermeasures. the bank, jp morgan, said they could see the price of oil hitting $90 a month, close at triple digits by september, and russia said the decision was based on expectations from global oil demand. this raises the question, is this the boy who cries wolf again? or is this going to be the time when the market wakes up to the fact that demand is not blowing off a cliff and we are seeing supply that is being constrained? jonathan: we the some of the forecast which brent was at $90 in q3, and now we are at $86, four dollars away.

lisa: which raises questions about the timing because we are talking about the disinflation narrative and the challenges. jonathan: that is the latest in the commodity market. next, the competition for capital. >> you really have started to see the competition between public markets and private markets drive credit spreads tighter. over time, you will see a convergence of those two markets and it creates a bit of froth with pushing spreads tighter. jonathan: next, we will catch up with blackrock's amanda lynam. ♪

jonathan: following three days of losses on the s&p 500, equities bouncing back, of 5.40 percent. yields unchanged, down one basis

point, on the 10-year, 4.2218. the competition for capital this morning. >> i think the story has changed, where there is a competition for capital that you have started to see the competition between public markets and private markets drive credit spreads tighter, start to make covenants a little bit less strong. now, you are seeing they look more similar to public markets, where there are lending groups, including public and private lenders. over time, you will see convergence of those two markets and it creates froth with pushing spreads tighter. jonathan: is the latest credit spreads at its tightest levels, and could be see them tighten further? canada lineman expects cuts to start the second half, amanda writing this, "well -longer cost of capital environment poses fundamental pressure, syndicated and private

markets, coupled with ample private debts dry powder has encouraged tighter pricing, especially for larger borrowers who have access to both markets amanda joins us -- both markets." amanda lynam joins us now. you talked about self lending and credit. is that your view of the moment? amanda: good morning. i did see that interview yesterday. i would agree. i think the bar for significant disruption is really high in the corporate credit market and we expect this version. we are actually seeing that to a significant extent more recently in the u.s., european and asian credit markets. two things i would note, on the point of competition between public and private, we are viewing it may be seven years ago, if you are corporate, you would have made the decision between issuing a bond and leverage loan. now there is a third option, and private credit has become a viable option for a lot of

corporate's. not every corporate needs this size to become index eligible, but it is a viable third option. the other point is on the terms of having more access outside of the banking channel and public markets has been a good thing, and you see that in what i would argue is a good default rate given the interest hikes we have had. lisa: jp morgan talked about the ballast to the credit sphere. i would like to set up the idea of froth, something meghan talked about because of the increased competition. sounds like the equity market. it makes sense, so it can go on for a long time. is that what you see? amanda: we see it, and it is not necessarily in one area. to me, it reflects that fundamentals are pretty good, economic backdrop is strong, but

if you look at spreads, they look really tight optically. if you look at all in yields, we are talking really cheap levels on a percentile basis if you looked at daily spreads and yields, back to 2010, yield screens are really cheap and spreads are really rich. the marginal buyer and credit is yield based, so when they come to deploy capital, they are not looking at it on spread versus index. that is fueling some of that optically type spread measures and credit as opposed to it is not indiscriminate because we are seeing triple c's lag and a pretty significant share of credits trading above 1000 basis points in spread. you are seeing dispersion with overleveraged capital spread structures that are doing liability management. if it were a rising tide and everything was rallying, i would say we are entering into over

exuberance, but we are actually seeing some discrimination on the surface. jonathan: i would like to go over part of that quote, competition between syndicated and private markets coupled with ample debt power has encouraged pricing, especially for larger borrowers. is it just larger borrowers? amanda: it is largely in the high-end of the spectrum where companies have the ability to rent dual tracks because you have this other third viable option. i think the pricing is most competitive at that end, but, again, i do think -- there is not a sense that folks are being left behind in the sense that that competition is pricing them out. it is changing the mix shift. in late 2023, we saw public debt refinanced with private debt. that shifted in the first

quarter now that syndicated markets are open and now we are seeing private debt refinanced in the private markets but they have to be ready to be public. lisa: how concerned are you about weakening covenants and deal terms? is this something you see sowing the seeds for something they may not come home to roost this year , maybe 2026? amanda: most of the syndicated market is on the leverage loan side and as it has become more institutionalized, covenants have become less has a binding constraint. it is the private market that has a lot of covenant protections. the bigger sky and concerned about for risk asset valuations is a sustained we acceleration in inflation that the fed cannot deliver at some point in 2024 on rate cuts. not that that rate cut in the form of rate relief is a game changing for credits, but i think it is important for sentiment. that is where you might start to see things really unravel for the risk asset side, that we

don't get any rate cuts in 2024, we are in this extended-longer into 2025. if that is happening because inflation is sticky, that is problematic. if rate cuts are shallow in 2024 because of high growth, i would view that as less of a problem. if that gets postponed -- jonathan: red hearing or not? is that an issue to ignore? amanda: i was concerned in the fall of 2023, the fact that the capital markets have been reopened, it has relieved a lot of pressure, and european is higher than the u.s., so that is something night and watching. jonathan: thank you, amanda lynam. had to get something in there that was bearish for lisa. lisa: thank you. europe is the bearish place. jonathan: what is new about that? i know. rich clarida of pimco, keith

lerner and pablo di si from volkswagen. all that and a lot more, coming up on bloomberg. ♪ ♪♪ hello, mia.

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>> central-bank policy in regard to the fed is very, very binary. >> they