Episode summary
Bloomberg Surveillance TV: May 13th, 2026 | Bloomberg Surveillance
Bloomberg Surveillance
· · 17 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Kit Juckes, Seth Carpenter, Thierry Wizman
Summary
The discussion centered on a weaker UK backdrop, with political uncertainty pushing gilt yields higher and adding pressure to sterling. A guest from Societe Generale argued that the UK’s current account deficit, slow growth, and dependence on foreign buyers of gilts leave the pound vulnerable unless policymakers put growth first. He said the country keeps cycling through higher spending, higher taxes, and weak growth, with the bond market acting as the main referee.
The macro conversation then shifted to the U.S., where an analyst from Morgan Stanley said his base case is that disinflation resumes in the second half of the year and the Fed cuts rates twice in the first half of 2027. Even so, he warned that inflation has run above target for over 5 years, which could affect consumer and business behavior. He saw energy prices, tariffs, and strong AI-related spending as the key swing factors.
A strategist from Macquarie Futures took a more hawkish view, arguing that war-driven inflation pressures and stubborn inflation data warrant a tightening bias from the Fed. He said markets may already be pricing the risk that the central bank is forced to move sooner, and warned that keeping rates on hold for too long could lift long-end yields, weaken the dollar, and hurt rate-sensitive sectors like housing.
Key takeaways
- A guest from Societe Generale said the UK’s pound is under pressure because growth is weak, taxes are likely higher, and gilt buyers are demanding compensation.
- The Societe Generale guest argued the UK’s large current account deficit makes it unusually dependent on foreign capital, so bond-market stress hits there first.
- An analyst from Morgan Stanley said his baseline is that U.S. disinflation resumes later this year, helped by peak tariff effects and eventually lower energy prices.
- The Morgan Stanley analyst warned that 5 years of inflation above target could change consumer and business pricing behavior even if the economy is still solid.
- A strategist from Macquarie Futures said the Fed should move toward a tightening bias because war-related inflation is still flowing into markets.
- The Macquarie Futures strategist said prolonged on-hold guidance could push long-end yields higher and worsen conditions for housing and other rate-sensitive sectors.
Notable quotes
“Increased spending and higher taxes are a given. Layer that on top of rising energy costs and falling growth forecast, there isn't much to make anyone feel good about the pound”
“We are stuck in a in a world of of um you know, governments that don't focus enough on on growth and have lots of other things they're more interested in”
“The Fed has missed its inflation target for over 5 years to the upside”
“I think that's a great question and as we wrote our mid-year outlook and we were thinking about various scenarios, those are the two themes that really matter”
“all wars are inflationary. You can go back to the US Civil War, you can look at World War II, you can look at World War I”
How the episode opens
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I'm Jonathan Ferro, along with Lisa Abramowicz and Amory Horton. 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 Bloomberg Television weekday mornings from 6:00 to 9:00 a.m.
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We've got a problem in the UK. Political uncertainty in the country pushing gilt yields to their highest levels in decades, according to The Times of London just moments ago. A rival to UK Prime Minister Keir Starmer preparing to trigger a leadership contest.
Kit Jukes of Societe Generale writes the following, "Increased spending and higher taxes are a given. Layer that on top of rising energy costs and falling growth forecast, there isn't much to make anyone feel good about the pound. Kit joins us now for more.
Kit, welcome to the program. Lisa said it yesterday, said it again this morning. Is this the new normal for UK assets?
Um it it's what's been the normal for a little while now. We are stuck in a in a world of of um you know, governments that don't focus enough on on growth and have lots of other things they're more interested in. The result of that is you either have you have a constraint on spending or you have to raise taxes and you're probably going to be unpopular somewhere in the middle of it.
Uh and round we go. And the the adult in the room is the bond market or or the the referee is the bond market um because funding this requires a country with a massive current account deficit dependent on foreign investors to come in and buy gilts.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fx strategy
- macro research
- global currencies
- interest rates
- world markets
Companies and tickers mentioned
- SCGLY
- MS
- MQ
- Société Générale
- Morgan Stanley
- Macquarie Futures
Watch the episode
Watch “Bloomberg Surveillance TV: May 13th, 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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