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And context changes everything. Go to Bloomberg.com to get context. Welcome to the Bloomberg surveillance podcast. I'm Tom Keene.

Daily, we bring you insight from the best in economics finance investment and international relations find

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Bloomberg. last couple of days and we continue to focus on it right here on

Bloomberg surveillance and I'm pleased to say we have a brilliant guest to

explore this topic. It's Bill Lee. He's come from the IMF to city and he

now finds himself at a Milken Institute as the chief economist and he joins us right here on

Bloomberg radio. Bill it's great to catch up with you as always your thoughts

please sir on the debt binge of the US Treasury over the next couple of days.

Jonathan you've just hit on one of the topics that's completely obsessing financial markets

right now, right? With the relative balance of supply and demand of U.S. securities, we knew that when

QE starts to taper off and we knew that when the Fed started to

rebalance and reduce the growth of its balance sheet, the demand wasn't

going to be there. What's surprising everybody was the extent to which the

deficit is going to pump out supply, which is kind of strange when

we knew that the deficit would be adding $1.5 trillion over the next 10 years.

The thing that is critical right now would be, to what extent is it an inflation trade, and to what extent is it an inflation trade and to what extent is it

a restoring of the normal term premium and I think to my colleagues out there my

former trading desk colleagues at Citi that inflation trade is premature.

My conviction is that inflation is not around the corner, the Fed is not going to be bumping

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