Episode summary
May CPI and Major IPOs | Bloomberg Surveillance
Bloomberg Surveillance
· · 32 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr, Ed Ludlow · Guests: Lori Calvasina, Jeff Given, Ira Jersey, Odeta Kushi
Summary
The discussion centered on a hotter-than-expected CPI report, with the guests arguing that the key question is whether the latest jump in inflation is a one-off energy shock or the start of a broader move higher. One guest said the 4.2% year-on-year CPI print may be the high for this cycle, but also warned that if inflation stays elevated for several more months the Federal Reserve could be forced to lean harder against growth. Another guest said the bond market may already be doing some of that work, pointing to the 10-year Treasury around 4.52% and saying it is hard to see rates falling much from here.
Key takeaways
- One guest said the 4.2% CPI print may be the high for the cycle, but persistent inflation would force the Fed to respond more aggressively.
- Another guest said the 10-year Treasury around 4.52% looks close to a year-end level near 4.50%, not a setup for much lower yields.
- A guest said higher mortgage rates near 6.5% could pressure housing and broader growth if they rise further.
- One analyst said shelter inflation should continue to decelerate because new-lease rents are easing, which should help pull overall inflation lower later this year.
- A guest said the market is becoming more comfortable with higher-quality credit because investors can now earn roughly 4.5% on Treasuries and about 5.5% with credit spread.
Notable quotes
“the reality is that we are seeing the nervousness around that top 10 cohort for one reason or another”
“one of the dangers that we're in right now is we're having all these one-off shocks and we try to push it away and say it's oneoff”
“I do think we ended 10 year around the 450ish level”
“If the 10ear got up to 5% I'd be very concerned as far as where we're going”
“I think that 4.2% probably is the high”
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 CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. The reason credit Swiss was so good, Mark Flity on oil, etc., etc., was their research was gorgeous, which is why I hate Lori Kelviscina because she sends over 103 page PowerPoint.
You got to read it — Because I got time to read every single screen. What are you, Mary Maker in disguise? — That's the mini pulse. That's the We cut it down recently. It was getting up to around like 130 140 and we
It's just sick. Laura, you're too young to remember this, but I remember LIFO FIFO and all the accounting that went into more traditional companies. Does big tech hyperscalers do they have countable LIFO FIFO balance sheets?
Um, that that I'm not qualified to comment on, Tom. Um, I'm not really sure. But the the reality is that we are seeing the nervousness around that top 10 cohort for one reason or another, right?
Is it cash flow? Are we at a peak in the capex cycle? um how much are these technologies being used?
Are we overspending? That nervousness, you know, tends to rise and people start to pull things, you know, from all over the place when we get to peak valuations. And that's exactly what we saw last fall.
And that's what we're we're starting to see. Again, though, I would say it's not to the same degree. I give you a couple of examples.
I mean, talking to clients earlier this week about, you know, sort of the semi-elloff uh that we saw on Friday, the the general vibe I was getting was, yeah, this stuff feels like it's been a little bit ahead of itself, but we still like these stories longer term.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- may cpi
- us equity strategy
- fixed income and rates
- housing market
- ipo outlook
Companies and tickers mentioned
- RY
- MFC
- AAPL
- FAF
- RBC Capital Markets
- Manulife Investment Management
- Bloomberg Intelligence
- Apple
- First American
- SpaceX
- OpenAI
Watch the episode
Watch “May CPI and Major IPOs | 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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