Episode summary
Central Bank Policy Pivots & Macro Sensitivity Risks | Bloomberg Surveillance
Bloomberg Surveillance
· · 35 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Kay Herr, Mark McCormick, Liz Ann Sonders, Wayne Sanders
Summary
The discussion centered on a bond-market selloff that the guest said is being driven less by inflation breakevens than by term premium, heavy government and corporate issuance, and uncertainty about the Fed’s reaction function. The guest argued that concerns about Iran and crude oil add an inflation risk, but the bigger market issue is rising supply, a softening labor backdrop, and confusion over whether the Fed stays on hold or resumes hikes. The guest said the upcoming minutes and Chair Warsh’s Jackson Hole remarks could help clarify policy and steady the long end of the curve.
The FX strategist said the dollar’s recent weakness looks more like positioning and a renewed Goldilocks trade than a fundamental turn, and projected a stronger dollar environment with DXY targeting 103 before peaking this quarter. On Japan, the guest said intervention can only buy time if fundamentals continue to favor a weaker yen, citing energy shocks and wide rate differentials.
The equity strategist argued markets have left the Great Moderation and entered a more temperamental regime in which rising yields can pressure stocks, especially if the move in rates is fast. She also said recent earnings strength is unlikely to be sustainably extrapolated and that investors should extend time horizons rather than treat cash as automatic market fuel.
Key takeaways
- The bond guest said the current selloff is more about term premium, supply, and Fed uncertainty than about breakevens or classic inflation fear.
- The guest expects Jackson Hole and the Fed minutes to matter because investors want a clearer reaction function from Chair Warsh.
- Mark McCormick said the dollar’s recent weakness is largely positioning-driven and still sees DXY targeting 103, with 2027 a better window for a durable weak-dollar call.
- Liz Ann Sonders said markets have shifted from the Great Moderation to a more volatile Temperamental Era where higher yields can hurt stocks.
- Sonders said second-quarter earnings growth above 50% is unlikely to be repeated at that pace and warned against shortening time horizons too far.
Notable quotes
“it reminds me of the fall of 2023”
“I think the first thing to look at is the minutes tomorrow”
“I wouldn't make it yet. I think we can make it maybe later in 2027 or at some point”
“we exited definitively the Great Moderation era that went from the mid-to-late 1990s up until the 2022 inflation spike”
How the episode opens
Bloomberg Audio Studios. Podcasts, radio, news. — This is the Bloomberg Surveillance podcast. Catch us live weekdays at 7:00 a.m. Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
She's global thick. — Yes. — Global thick. — Thick. Not thick thick, but global. — The K-shaped joints is JP Morgan driving all of their cross-asset coverage as CIO. Oh, when do you start worrying about price? Pros go yield yield yield. It's great to It's great to step into these higher yields. When do adults in the room start mattering about Oh, price down.
Well, first of all, I'm a bond portfolio manager, so I worry all the time, but that's what I get paid to do. — Hide it. You know, your your media people train you You got to hide it. You're so grizzled, you actually ignore the media people. When do you worry about price down?
You know, I think we need to take a step back here and think about what's going on in the bond market and why we have what you characterize as a rout. In many respects, it reminds me of the fall of 2023.
Mhm.
So, the first thing that's going on, of course, is inflation. The bond market has been very correlated with um the uh crude oil market, so concerns about Iran. And I've got to tell you, um I have no insight into that, so I can't tell you the market but the market's going to continue to worry.
If there's fears about escalation, I think also if we go back 6 months ago, people would have thought this conflict would not be going on for that.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed policy expectations
- macro sensitivity risks
- currency markets
- sell-side vs buy-side expectations
- geopolitical and military production outlook
Companies and tickers mentioned
- JPM
- BMO
- SCHW
- JPMorgan Asset Management
- BMO Capital Markets
- Charles Schwab
- Bloomberg Intelligence
Watch the episode
Watch “Central Bank Policy Pivots & Macro Sensitivity Risks | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Bloomberg Surveillance
-
Bloomberg Surveillance TV: November 12th, 2026 | Bloomberg Surveillance -
Jensen Huang Ousted by Nvidia Board as CEO | Bloomberg Surveillance -
Bloomberg Surveillance TV: November 11th, 2026 | Bloomberg Surveillance -
AI Stocks Rebound as Fed Hike Bets Return | Bloomberg Surveillance -
Bloomberg Surveillance TV: November 10th, 2026 | Bloomberg Surveillance -
Stocks, Bonds Fall as CPI Data Fuel Fed-Hike Bets | Bloomberg Surveillance
Bloomberg Surveillance, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
