Episode Details

Ira Jersey, Chief US interest rate strategist for Bloomberg Intelligence, discusses yields, the Fed, and the US Treasury. Chris Ciolino, with Bloomberg Intelligence, joins to break down Caterpillar earnings. Ken Monaghan, co-director of high yield at Amundi US, joins to discuss high yield, credit markets, and central banks. Tim Craighead, Director of Research and Senior European Strategist at Bloomberg Intelligence, joins to discuss Euro contraction and a 3Q midseason takeaways for Europe. Lukasz Tomicki, founder and Managing Partner at LRT Capital Management, joins to discuss the outlook for markets and gives his stock picks. Claudia Sahm, founder of Sahm Consulting, joins to talk about the Fed, bad economic data, and outlook for a recession. Hosted by Paul Sweeney and Matt Miller.     

FULL TRANSCRIPT:     

Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside my co host Matt Miller. Every business day, we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moving news. Find the Bloomberg Markets Podcast on Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast. Let's talk to our Jersey here, chief US interest rates strategist. I just saw Michael McKee leaving here. He's gonna hop on the Assella train, get down and washing it in DC for that FED meeting tomorrow where you can heckle the chairman with some questions. What do you want to hear from FED Chairman Jpal tomorrow after the release of the results there? Well, what I'd like to hear and what we're not going to hear is wind up being what's the Fed's reaction function and for when they might cut or raise interest rates? Obviously, if inflation accelerates meaningfully, they'll raise interest rates again. They've already mentioned that that they might have to do more if inflation does except right, although we got some data today that seems like maybe it is going to moderate a little bit, but really, you know, what will it take for them to cut? And I think that the idea that they're going to remain at the peak for some time, which they've hounded on, it would be helpful for them, I think, to basically be a little bit more explicit, like, look, we're not cutting unless the unemployment rate is you know, three four percentage points higher than where it is and inflation is close to our target. Right, So saying something like that, which isn't completely explicit, is but it still has some meaning around it for markets. I think that that would be helpful for the FED to maintain monetary policy at this page. Close to our target is weak talk week talk weak sauce, right, I mean, do you want a hawkish Why don't they say, like, we want to get to two percent two hour target? You know, I mean at least for six months or a year. I mean, weren't they trying to average long term average two percent? And how many decades would that take? Yeah, well, that was our old framework. It wouldn't take you know, it wouldn't take that long because we remember we were at under two percent at least for quite a while in the last decade. I think the the thing for the FED though, is that if look, if inflation is two point seven percent, two point six percent, two point five percent trending lower, and you had a real spike in unemployment, then everyone would be forecasting inflation to be significantly lower, right. And I think that's the reason why they can say like near our target or approaching our target, right, something like that. So the FED doesn't like to be as explicit as saying, look, we will cut interest rates if the unemployment rate is above five percent and unemployment and inflation is at two percent if they won't be as explicit a