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Central bank hawks sound the inflation alarm, President Joe Biden seeks to ease balloon tensions and an influential Chinese banker disappear [View in browser]( [Bloomberg]( Central bank hawks sound the inflation alarm, President Joe Biden seeks to ease balloon tensions and an influential Chinese banker disappears. — [Kristine AquinoÂ]( To catch up on the trading day in the UK and Europe, [check out Markets Today.]( Hawks fly  A global wave of risk aversion swept up markets on Friday, after two of the [Federal Reserve’s most hawkish policymakers]( signaled they may favor returning to bigger interest-rate hikes in the future. Cleveland Fed President Loretta Mester said Thursday she saw a “compelling economic case” for a 50 basis-point hike at the Fed’s Jan. 31 to Feb. 1 meeting, a view echoed by her St. Louis counterpart, James Bullard. And it’s not just Fed hawks out in force — European Central Bank Executive Board member Isabel Schnabel also warned that markets may be [underestimating inflation](, and the risk that the ECB “may have to act more forcefully” against it.  Biden, Xi President Biden expects to[soon speak with Xi Jinping]( about the Chinese balloon shot down by the US earlier this month. Biden disclosed plans for the call as part of his most extensive remarks yet about the balloon saga, and pledged to “responsibly manage” competition with China “so that it doesn’t veer into conflict.” In another sign that both sides are eager to turn the page, US Secretary of State Antony Blinken is said to be weighing a meeting with China’s top diplomat, Wang Yi, on the sidelines of the Munich Security Conference beginning Friday. Disappearing banker [The sudden disappearance of one of China’s most influential financiers](, Bao Fan, is unnerving the country’s business elite and raising fresh doubts about whether President Xi Jinping’s crackdown on the private sector has run its course. While there’s no indication that Bao — chairman of China Renaissance Holdings — has become a target of regulators, the investment bank said late Thursday it had lost contact with him. Bao is privy to information related to the country’s biggest entrepreneurs, advising giants including Alibaba and Tencent. Risk off S&P 500 futures fell 0.6% as of 5:28 a.m. in New York, while Nasdaq 100 contracts slid 0.8%. The Bloomberg Dollar Spot Index traded near the day’s highs, pressuring all Group-of-10 currencies. Treasury yields climbed across the curve, mirroring moves in Europe and the UK. Oil and gold fell, while Bitcoin slid for the first time in four days, retreating from the key $25,000 level. Coming up… At 8:30 a.m., Richmond Fed President Thomas Barkin will speak at an event. At the same time, we’ll get the latest data on import prices. Fed Governor Michelle Bowman will appear at a separate function at 8:45 a.m. At 10 a.m., the Conference Board will publish latest figures for its gauge of leading economic indicators. At 1 p.m., we’ll get the latest Baker Hughes US rig count report. What we’ve been reading Here’s what caught our eye over the past 24 hours: - Ken Griffin, Steve Cohen top the list of [hedge fund winners in 2022]( - [Bank of America succumbs]( to cost pressures with planned job cuts - [One of George Santos’s top donors]( is in the background-check business - YouTube chief Susan Wojcicki’s exit shows[unsettling trend in tech]( - [The biggest earners]( may not be the smartest workers, study shows - Passengers take a [16-hour flight to nowhere]( after JFK terminal closure - [Tesla to recall 362,000 cars]( with “full self driving” system And finally, here’s what Garfield is interested in this morning Bonds came into this week in a funk after those sizzling hot January jobs numbers for the US. Things got worse after a slew of [signals]( that inflation will remain sticky boosted expectations that central bank rates are going up and staying up in [Europe](, the [US]( and even [Australia](. The global tightening wave that was supposed to have peaked is instead [gathering strength]( as policymakers repeat the mantra that they need to stay strong to tame inflation. Data around the globe offers them plenty of reasons to be vigilant. US two-year yields bore much of the [brunt](, jumping to the highest since November after strong retail sales and inflation prints [underscored]( the potential for further Federal Reserve interest-rate [hikes](. Two of the Fed’s [harshest hawks]( even talked of a possible return to half-point increases. Traders pushed up their expectations for peak rates and also pushed back the expected timeframe for policy easing. However, they stuck with bets that when rate cuts do come they will be steep, driving the yield curve into a deeper [inversion]( as the bond market becomes more and more convinced that a recession is coming. That’s not a view evident in the more resilient stock market — spurring JPMorgan Chase & Co. strategist Marko Kolanovic to suggest investors should [dump]( equities and buy bonds instead. Steve Eisman — of “Big Short” fame — says the jump in real yields that’s gone on has spurred him to [buy bonds]( for the first time in 15 years. —[ Garfield Reynolds]( Follow Us You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition 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](