Episode summary
Bloomberg Surveillance TV: August 18th, 2026 | Bloomberg Surveillance
Bloomberg Surveillance
· · 29 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Stuart Kaiser, Seema Shah, Mark Cabana
Summary
The discussion centered on a sharp rise in longer-dated bond yields, what is driving it, and whether it should change the Federal Reserve’s near-term posture. The guests argued that the move is not mainly about better growth or supply, but about higher real rates, greater uncertainty, and a lack of clarity on how the Fed intends to bring inflation back to target. One guest said the market is demanding more compensation to extend duration because the long end has become harder to read after the July FOMC and the new chair’s confusing press conference.
Equities were framed as more resilient than the bond market looks. One guest said higher yields can coexist with stocks near record highs because the economy and AI-related capital spending remain strong, though some rate-sensitive areas like housing and construction will struggle. Another guest said the market can tolerate higher policy rates for longer than many expected, but that the threshold depends on the speed and cause of the move.
The conversation repeatedly returned to the idea that the Fed needs a clearer communication strategy, not just a rate decision. The risk, according to the panel, is that the central bank could create a second problem if it hikes to address a long-end bond selloff without solving the underlying inflation issue.
Key takeaways
- One guest argued the long-end selloff is mostly a Fed-uncertainty story, not a growth story or a supply shock.
- Another guest said equities can digest higher yields longer because growth is strong and AI-related capex is still supporting profits.
- The guests said housing and construction are among the most rate-sensitive parts of the market likely to struggle if yields keep rising.
- One guest said a September Fed hike looks more plausible than an October move, with December the next realistic window if the Fed skips September.
- The panel agreed the Fed needs clearer guidance on its inflation reaction function, not just a change in rates.
Notable quotes
“what would really help at this point given that the case for a rate hike isn't completely a lockdown”
“the long-end move has really been driven by the US”
“it is a global story 100%”
How the episode opens
Bloomberg Audio Studios podcasts radio news. This is the Bloomberg Surveillance Podcast. I'm Jonathan Pharaoh along with Lisa Abramitz and Amarie Hordern.
Join us each day for insight from the best in markets, economics, and geopolitics. From our global headquarters in New York City, we are live on Bloombo television weekday mornings from 6:00 to 9:00 a.m. Eastern.
Subscribe to the podcast on Apple, Spotify, or anywhere else you listen. And as always on the Bloomberg terminal and the Bloomberg business app. We begin this out with stocks heading towards a third consecutive day of losses.
Stuart Kaiser City has an 8100 year end call and is remaining positive on equities, but his warning markets may hit some friction post earnings, prepptember seasonality, and after a sharp rally chase. Stu joins us now for more. St.
Good morning.
Hey, good morning. How are you? — A new wrinkle in the story. Good morning and good to see you. A new wrinkle in the bond market. Is it beginning to bite? It's just not a big move, but getting to levels that are increasingly uncomfortable.
Yeah, I think it definitely is. And I think your point earlier that it's it is a global story is is really the key here. I mean, you know, Japan yields above 4%.
It's interesting though, if you look at the history, Germany had a negative 30-year bond yield as recently as 2021. And I mean, that's probably the the worst financial experiment in the history of the world. But point being like I mean not only are these things high they're moving off of what was basically a decade long period of ultra low interest rates.
Um so it's a shock in both ways both in the level and relative to the change that corporates had you know grown used to.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us equity trading strategy
- rates outlook
- global asset management
- market surveillance
- economy outlook
Companies and tickers mentioned
- C
- PFG
- BAC
- Citi
- Principal Asset Management
- BofA Global Research
Watch the episode
Watch “Bloomberg Surveillance TV: August 18th, 2026 | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Bloomberg Surveillance, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
