Episode summary
Bloomberg Surveillance TV: September 17th, 2026 | Bloomberg Surveillance
Bloomberg Surveillance
· · 20 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Julian Emanuel, Bill Dudley, Ed Yardeni
Summary
Stocks and bonds were described as finding their footing after the first Fed rate hike since 2023, but the main argument was that the market is entering a volatile, selectively constructive phase rather than a clean risk-off move. One guest said the Fed has removed both the “one and done” rate-cut crowd and the more extreme calls for 6% or 7% on the 10-year Treasury, creating a more balanced setup for both equities and bonds. He argued that pressure on the long end of the Treasury curve could actually support global asset allocation and make financing easier for large AI-linked issuers.
A former New York Fed president said another hike is justified unless the data changes sharply, because financial conditions still look too accommodative. He argued that the Fed has to push policy into restrictive territory if it wants to restrain demand, and said the market is already pricing in several more hikes over the next 6 to 9 months. He also said neutral rates are likely higher because of the massive AI data-center buildout, and that higher oil and diesel prices raise the urgency for the Fed.
Another strategist cut his S&P 500 year-end target to 7,900 from 8,400, though he still sees a positive year overall. He said geopolitical risk, higher-for-longer oil, and the possible unwind of the yen carry trade are increasing the odds of a bond-market shock. He also warned that a more hawkish Bank of Japan could accelerate that unwind, making long-term bonds unattractive right before the BOJ decision.
Key takeaways
- A guest said the Fed’s first hike has removed the extremes in Treasury calls, making a modestly higher stock market and a more balanced bond market more plausible into year end.
- The former New York Fed president argued the Fed probably needs more hikes because financial conditions remain too easy and the market is still pricing multiple increases.
- The former New York Fed president said AI capital spending is pushing the neutral rate higher and is not very interest-rate sensitive in the near term.
- A strategist cut his S&P 500 year-end target to 7,900 from 8,400 and raised the odds of a bearish outcome to 30%.
- The strategist said a hawkish Bank of Japan could intensify the yen carry-trade unwind and pressure global bond markets.
Notable quotes
“Once the Fed starts hiking, even if it was known to be coming, stocks remain volatile”
“We think, you know, there isn't runaway upside into year end. Our price target is modestly higher than here”
“if financial conditions are accommodative, that's causing the economy to grow at a an unsustainable pace”
“the war in the Middle East has escalated and we're looking at higher for longer oil prices”
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 Bloomberg 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 hour with stocks and bonds finding their footing following the first Fed rate increase in some 3 years.
Jud Emanuel of Everore writing, "Once the Fed starts hiking, even if it was known to be coming, stocks remain volatile. Julian joins us now for more. Julian, good morning.
Good morning. — Volatile up market into year end. Is that how you see it?
Uh, we we do. We do. We think, you know, there isn't runaway upside into year end.
Our price target is modestly higher than here. But I think when you look at yesterday and today, what you've done is eliminate sort of the left and right tail fantasies of fixed income traders. So coming into yesterday, there was a very solid one and done crowd and that was completely taken off the table uh by Chair Walsh.
And then this morning, you know, what we realize is yes, in fact, all the rhetoric of the last several months about 2% being the goal is firm and it is real. And by doing that and establishing that, you've taken the other side of the equation off where we were getting clients talking about six and 7% in the 10-year yield. Not happening.
Houston's down with now the long end of the curve.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- economy
- markets
- finance
- economics
- investment
Companies and tickers mentioned
- EVR
- Evercore
- Yardeni Research
Watch the episode
Watch “Bloomberg Surveillance TV: September 17th, 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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