Episode summary
Equities and the Fed | Bloomberg Surveillance
Bloomberg Surveillance
· · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Ed Yardeni, Anastasia Amoroso, Julie Biel, Thomas DiNapoli
Summary
The discussion centered on a market that the guests said is being supported less by multiple expansion than by resilient earnings, a strong consumer, and continued AI-related capital spending. One guest argued that the bull market is being driven by “FEMO” — fabulous earnings moment — rather than fear of missing out, and said that makes the rally healthier than one built on valuation excess. He also said the economy is being buffered by large government deficits and by retirement assets that continue to support spending.
On the Fed, the guests treated the new dot plot and recent guidance as useful but noisy, with one saying the committee’s median estimate matters less than the full distribution and that there is no real science to the neutral rate. Another guest said markets should not overread the Fed because forward guidance was not really given, and that the economic backdrop still favors equities.
The AI trade was presented as broader and more durable than a single-stock story. The guests said the opportunity now extends to data centers, chips, memory, servers, and the infrastructure needed for agentic AI and workflow automation. A final segment shifted to New York State politics and pension oversight, where the controller defended diversification, conservative return assumptions, and the office’s role in monitoring spending and waste.
Key takeaways
- The guests said earnings, not valuation, are the main support for equities right now, and one projected the S&P 500 at 8,250 by year-end.
- One guest argued AI is an evolution of the digital revolution, with data now functioning as a fourth factor of production.
- Another guest said the AI trade has broadened beyond Nvidia into CPUs, memory chips, data centers, and related infrastructure.
- The guests said the Fed’s dot plot is useful, but the neutral-rate estimate is too imprecise to be treated as hard science.
- The New York State comptroller said the pension fund’s 5.9% assumed return and diversified allocation have helped deliver steadier long-term results.
Notable quotes
“I think it's earnings. I mean, it won't go down cuz earnings won't go down”
“I'm a believer that we're better off with a bull market based on FEMO than FOMO”
“AI is not a revolution, it's an evolution in the digital revolution”
“our long-term assumed rate of return is 5.9%. Most public pension funds are are much higher than that”
How the episode opens
Bloomberg audio studios podcasts radio news — This is the Bloomberg surveillance podcast. Catch us live weekdays at 7 a.m. Eastern on Apple car play or Android auto with the Bloomberg business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
Joining us now Edward Yardeni for a two-hour conversation. I got eight ways to go here. You have a young Turk in the green room with you this morning. — Yeah. — What's your number one advice to a 20-year 22-year-old kid who's like, "My God, I'm sitting next to Edward Yardeni." What do you tell the young Turks?
Read my books. — You don't have to buy them before you read them, right? — You don't have to buy them. They're open to the public. You know, I I I I share the the knowledge that I've I've gained over the years. So, in 2018, I wrote a book called Predicting the Markets. Turned out to be 600 pages long about the what I learned in the first 40 years of my career. Now I'm working on the next 40 years.
What's the maximum that's been most true across the emotion of this bull market that won't go down? — Well, I think it's earnings. I mean, it won't go down cuz earnings won't go down. I think I think the reason earnings have been so resilient is because the economy's been so resilient. Uh you know, it's uh it's it's every time we we throw something at it, it just hangs in there.
Are we getting a free lunch from a set of stimuli that have boosted revenues to generate that free cash flow and earnings? — I I think there's certainly something to to be said for that.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed
- s&p 500
- equities
- ai infrastructure
- tech and ai boom
Companies and tickers mentioned
- Bloomberg
- Yardeni Research
- Partners Group
- Kayne Anderson Rudnick
Watch the episode
Watch “Equities and the Fed | 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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