Episode summary
Iran Ceasefire Doubts Weigh on Markets | Bloomberg Surveillance
Bloomberg Surveillance
· · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Robert Kaplan, Michelle Meyer, Randy Schwimmer, Wayne Sanders
Summary
Robert Kaplan argued that the Federal Reserve can afford to pause because the market is already pricing in little or no easing for 2026, and the shock from the Middle East is likely to keep policymakers on the sidelines. He said companies are not freezing up, but they are becoming more cautious on hiring and spending while still pushing hard on AI, data-center, and power-related investment, which he thinks is helping drive M&A interest and a broader productivity boom.
Michelle Meyer said the economy remains distinctly K-shaped: asset-price gains have supported higher-income households, while many others are feeling pressure from rising essentials. She said higher energy prices could lift headline inflation quickly, but whether that spills into core prices will depend on how long the shock lasts and how much firms pass through higher costs.
Randy Schwimmer made the case that private credit risk is concentrated in the large end of the market, where liquidity expectations are mismatched with illiquid assets. He said the core middle market is healthier, with low defaults and few redemptions, and expects education and manager selection to matter more as investors sort out the asset class. Wayne Sanders said any direct U.S. military move in Iran would require much larger force protection and would expose American assets to asymmetric retaliation, especially around the Strait of Hormuz.
Key takeaways
- Kaplan said markets now expect basically no Fed cuts in 2026 because Middle East risk and higher oil prices have changed the outlook.
- Kaplan thinks companies are still investing aggressively in AI and scale, even as they become more careful on hiring and other spending.
- Meyer said inflation risk is more serious if higher energy costs persist long enough to spread from headline prices into core goods and services.
- Schwimmer said the real private credit problem is liquidity mismatch at the large end, not the core middle market, where defaults remain very low.
- Sanders said U.S. ground action in Iran would need much more than a small force and would expose American naval and air assets to retaliation.
Notable quotes
“the market is sort of backed off also and is pricing in basically no no cuts this year”
“how long they stay high will determine whether or not it passes on to the core. And I don't think we're there yet”
How the episode opens
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This is the Bloomberg surveillance podcast. Catch us live weekdays at 7 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. Wonderful surprise for you this morning all things to talk about with Robert Kaplan of Goldman Sachs former president of Dallas Fed. We could talk for 3 hours at with him, but we're going to do a massive audible here and the kid from you were you grew up in Brooklyn.
No, my parents did and I grew up in Kansas. You grew up in Prairie Village.
Yeah. And with John Sherman you enjoy partial ownership of the Bobby Witt's. That's right of the Bobby Witt's.
I watched him at the with the Giants in Phoenix here recently. He's an electric player. I mean he's great player.
How will the Kansas City Royals your team your part owner with John Sherman? How will they compete where the payroll's about the size of Aaron judges payroll? I got a 182 million is it working statistic?
This is unfair, right? Yeah, and that's why in the in these sensitive topic, but in the labor negotiations over the next year or two that there's going to have to be a discussion about some type of balancing salary cap that the sport really really needs to create more competitiveness. Having said that Royals are going to be I say this I'm a little biased Royals are going to be good this year.
I mean there's I mean the word is in sports radio. There's going to be a work stoppage next year in baseball which they do not need.
Within the delicacies Robert Kaplan of where you sit with the Kansas City Royals.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- iran ceasefire
- monetary policy
- geopolitical risk
- inflation
- private credit markets
Companies and tickers mentioned
- GS
- MA
- Goldman Sachs
- Mastercard Economics Institute
- Mastercard
- Churchill Asset Management
- Bloomberg Intelligence
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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