5 Things You Need to Know to Start Your Day

Quantitative tightening, Russian gas, and a survey on China.The Federal Reserve's quantitative tightening program will ramp up this week. As [View in browser]( [Bloomberg]( Quantitative tightening, Russian gas, and a survey on China. Fed tightening The Federal Reserve's quantitative tightening program will [ramp up]( this week. As part of a broader plan to reduce a $9 trillion portfolio, the Fed will boost its monthly caps for the amount of Treasuries and holdings of mortgage-backed securities that it will let mature. For some investors, the withdrawal of support is a good reason to be pessimistic on this market. Greg Jensen, co-chief investment officer of Bridgewater Associates, is in that bear camp. In an interview with Bloomberg Television, he predicted that rate hikes will drive down both inflation and economic growth, sending [asset markets]( to declines on the scale of 20% to 25%. Russian gas Europe’s[energy squeeze]( is getting worse. Gazprom PJSC has told French utility Engie SA it will reduce gas deliveries because of disagreements over some contracts. “We’re getting ready for the worst-case scenario, which is a complete cut-off,” French Energy Transition Minister Agnes Pannier-Runacher told France Inter radio. She reiterated that Russia was using gas as a weapon of war. Meanwhile, European energy prices [plunged](on signs that EU officials are preparing to intervene in the short term. Prices have been extremely volatile in recent days amid thin trading and much uncertainty. MLIV Pulse There’s a glut of bad news for Chinese assets, including the property crisis and the zero-Covid policy that’s constrained economic growth. Yet the losses for the benchmark CSI 300, at about 17% this year, are not all that different from the decline in the S&P 500. This week’s MLIV Pulse survey asks about your views on the world’s second-largest economy and its assets. Where do you see the most value? Click [here]( to get involved anonymously. Recovery day [Stocks rose]( on Tuesday as investor sentiment stabilized following a rout sparked by the Fed’s signal of a sustained period of restrictive monetary policy to quell inflation. S&P 500 futures gained 0.8% as of 5:15 a.m. New York time. Treasury yields and the dollar declined. For more, watch as Dani Burger and Markets Live's Mark Cudmore break down today’s key themes in this [short video](. Coming up... It’s Jobs Week in the US. That means we’re getting JOLTS job openings data today, with demand for workers seen remaining strong. The day also brings the Conference Board’s confidence numbers and the FHFA House Price Index. There’s also some important central bank speakers, including the Fed’s Barkin and Williams. Earnings include Best Buy, Chewy, HP and CrowdStrike. What we've been reading Here's what caught our eye over the past 24 hours. - [Bottom 50%]( of Americans are building wealth despite inflation. - Banks should [worry about inflation]( as much as jobs. - //link.mail.bloombergbusiness.com/click/28889408.245520/aHR0cHM6Ly93d3cuYmxvb21iZXJnLmNvbS9uZXdzL2FydGljbGVzLzIwMjItMDgtMjkvbWVyY2VkZXMtbWF5YmFjaC1zLTU4MC1yZXZpZXctYS1icmFuZC1yaXNlcy1nbG9yaW91c2x5LWZyb20tdGhlLWRlYWQ_Y21waWQ9QkJEMDgzMDIyX01LVCZ1dG1fbWVkaXVtPWVtYWlsJnV0bV9zb3VyY2U9bmV3c2xldHRlciZ1dG1fdGVybT0yMjA4MzAmdXRtX2NhbXBhaWduPW1hcmtldHM/582c8673566a94262a8b49bdBdba35433[NASA opts for caution]( by scrubbing moon launch. - [Mercedes-Maybach]( has risen from the dead, again. - YouTube took on terrorists, just [not white nationalists](. - [Serena Williams]( sets her sights on venture capital. - Why some Americans are still [isolating from Covid](. And finally, here’s what Joe’s interested in this morning Yesterday for the podcast, [we interviewed]( Minneapolis Fed President Neel Kashkari, about all things monetary policy. It'll be out later this week, [so look for it here or elsewhere](. One interesting bit of news from it though is [he said he was "happy"]( to see the stock market's reaction last Friday after Powell's Jackson Hole speech. As Kashkari sees it, the big selloff indicated that investors are internalizing the Fed’s commitment to the inflation fight. There's no pivot coming anytime soon. Anyway, there was a lot of surprise that a Fed official would make a comment on the stock market so directly. And it's true, that is a little bit unusual. That being said... Fed officials (including the chairman) talk about "financial conditions" all the time. And they talk about how their policies work by tightening or loosening financial conditions. So the question is, what do people think "financial conditions" actually means? Well it's a mix of things, but one ingredient is the stock market. Credit spreads are another. FX and rates are also in there. ([Here's a note from Goldman Sachs]( on how it puts together its own index of financial conditions). For several months now, the Fed has been saying it is focused on fighting inflation, and that the path involves tightening financial conditions. But for whatever reason, nobody really real bats an eye over that phrase. And I doubt people would make a big deal about a comment on credit spreads, or lending conditions more broadly. But when it's the stock market, it's a big deal. Read the full writeup on Kashkari's comments [here](. And [look for the episode Wednesday]( when it drops. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](