Russia and the U.S. have agreed to keep talking even as the first round didn't resolve differences Let's get to it backstreet in San Francisco with the latest dead All right thank you Juliet As a matter of fact the public rhetoric ran pretty hot A Russian deputy foreign minister Sergei revoked saying that the situation is dangerous and precarious We said that with talk half promises misinterpretation of what happened at different forms of negotiations behind closed doors We do not trust the other side so to say meanwhile U.S. deputy Secretary of State and that price says a process is slow because of promises to U.S. allies And we will not make decisions about Ukraine without Ukraine about Europe without Europe or about NATO without NATO As we say to our allies and partners nothing about you without you And price says what he has seen so far is a non starter a major issue for Russia's NATO expansion to the east and for the U.S.'s troops at the Ukraine border Russian troops So what do we make of the tone Well Bloomberg political contributor Rick Davis on Bloomberg sound on says overall the talk inside the room is probably more positive than this public posture This is a kabuki theater where the more extreme and the more flamboyant you can be in your description of the situation the best you can press your case The reason it took 7 or 8 hours is probably to cover one or two topics and that's because the theater requires that Two more meetings this week Japan's coast guard says North Korea has fired off a missile that went down on the siege Japan says a ballistic missile South Korea's joint chiefs of staff confirmed the firing but haven't confirmed the kind of missile U.S. CDC has now reclassified as travel advisory for Singapore this after last week slapping the label COVID unknown and do not travel the travel advisory now after talking with Singapore officials is high Amaran has arrived in Tianjin the port city that borders Beijing and has spread inland before being detected Hong Kong is cutting government quarantine for close contact to 14 days at Japan's prime minister fumio kishida says the nation will keep its border restrictions in place until the end of February A New York's COVID infections have reached a peak after about a 6 month the first case was identified by a New Jersey across the river The mayor there Phil Murphy is saying that the highest ICU bed count and ventilator for that matter since May And in California here governor Gavin Newsom as part of his budget today has asked for funding to set up healthcare for all low income residents regardless of their immigration status In San Francisco I'm at Baxter This is Bloomberg Brian Yeah thank you Let's get to our guest Vishnu for author who's head of economics and strategy at Mizuho bank He'll be with us for this half hour Well treasuries at 3% wow Nelly I'd say because people would really sell tech or would they I want you to put your big brain on this one In our market rap story of this new we break down how sectors perform in fed rate hiking cycles and tech does the best It gains 20% Real estate number two at 12% What are you talking about And why is the market doing this That's a fair question and actually it is not as clear cut at this moment So there are two unknowns here One is exactly how high yields may or may not go The census that it could get you two to two and a half percent quite easily given the current sooner and faster mantra that's been adopted But I think the real swing factor here is quantitative tightening And I think that is the secret sauce that may change the ordering of things to come and in particular because of the liquidity drainage coming so much earlier in this cycle We recall in the last cycle that paper started part of 2014 and we only started speaking about quantitative tightening and came into force in 2017 whereas this time is coming so soon So there are two factors about it One is it needs to be done premium that's going to shake up market somewhat the other factor around it is that it's also going to drain liquidity and insofar that some parts of tech were railing on the excess cheap cash in the system They may get a bit of a shock before the growth cycle could kick in and pick that up So this is not reducing the fact that tech is the answer to get over inflation It's just the liquidity quotient that's being thought about And so a lot of your call there based on where we see yields go we're looking ahead to the U.S. CPI print Where do you see that raid come And I guess is it going to be more good news for Bond balls That's a fantastic question I mean I'll be the first one to take it on the chin to say that we've been caught off guard on a few of these counts So we think it's still going to be somewhat elevated flirting with 7% It's not going to change the narrative so I think whatever we've seen after that coming through not just in the FMC minutes and the rhetoric there is a sense that the buy is very high for CPI to give any relief on the policy direction I think the narrative that the fact is to get ahead of the curve that's very difficult to detract from I wonder if the fed answered the question on go ahead Okay go ahead Sorry So just to answer the question on the bond yield and how U.S. bond markets may react to that I think higher yield is a given but we're going to oscillate between a bear steep and a backlash mainly because we are going to be looking at both faster rate high as well as quantitative tightening Yeah I imagine a 7% print is going to make the bond bulls cry But we'll wait and see whether we get that The swaps markets are telling us between three and four interest rate hikes by the fed this year What do you think Pretty much looks baked in I think the fed will certainly not go anything.