Episode summary
Outlook for Inflation, Oil, and Tech | Bloomberg Surveillance
Bloomberg Surveillance
· · 39 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Darrell Cronk, Ira Jersey, Ed Morse, Jeetu Patel, Libby Cantrill
Summary
The discussion centered on a hotter-than-comfortable macro backdrop: real GDP came in at 3.4% while the price index stayed elevated, and the guests argued that nominal growth is still running near 6% or more. The host and the market strategists said that combination leaves the Fed with little room for easy policy, with the view that rates need to stay higher for longer and the 10-year Treasury could move back toward 5.5% to 5.75% next year.
On credit and equities, the guests said Microsoft’s long-dated issuance underscores how corporate borrowing will compete with Treasury supply, while still favoring up-in-quality positioning. They argued stocks can keep doing well if earnings growth stays strong, pointing to another quarter of roughly 25% earnings growth and a longer stretch of double-digit gains.
The energy discussion focused on oil near $114 a barrel, low inventories, refinery bottlenecks, and the risk premium tied to Middle East disruptions. The conversation then turned to AI, where the Cisco executive said agentic AI is still very early and security, trust, and guardrails will determine adoption. A final policy segment said the post-midterm landscape could bring more oversight, more friction for AI infrastructure buildout, and more spending regardless of which party gains power.
Key takeaways
- The macro data implied a still-strong nominal economy, and the guests said that makes easy Fed policy unlikely.
- The market strategists expected the 10-year Treasury to revisit 5.5% to 5.75% next year, with credit favoring higher quality and shorter duration.
- The guests said equities can still work if earnings remain strong, citing a third straight quarter of about 25% earnings growth.
- Oil was framed as vulnerable to refinery constraints and geopolitical risk, with low inventories keeping a premium in place.
- The Cisco executive said agentic AI remains early, and enterprise adoption depends on security, continuous monitoring, and guardrails.
- The policy guest said the midterm outcome could increase oversight of big tech and slow AI infrastructure development at the state level.
Notable quotes
“It absolutely is. I mean we we should people don't talk enough about nominal GDP at six 7%”
“I think the Fed needs to get on with it we're he keeps saying we're going to deliver 2%”
“We think next year the 10ear is north of 550 probably more like 575”
“these agents that we are moving into so we're in the second phase of AI”
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. We have our advantage with Daryl Croc with us as we pick up the pieces of a swat of economic uh data as well.
So Darl, I got real GDP first look 3.4% a little above where we were guesstimate. I got the price index. It's it's nicely lower uh almost by a stick 2.3%.
So my Daryl Croc math is 3.4 plus 2.3. I got nominal GDP popping sort of high fives or six. Is that still a boom economy?
It absolutely is. I mean we we should people don't talk enough about nominal GDP at six 7%. They just don't. We we live in a nominal economy. We don't live in a real economy. Nobody you companies spend money on a nominal basis. Consumers consume in a nominal basis. So it it is real.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- inflation
- oil prices
- energy demand
- refinery concerns
- agentic ai
Companies and tickers mentioned
- WFC
- CSCO
- Wells Fargo
- Bloomberg Intelligence
- Hartree Partners
- Cisco
- PIMCO
Watch the episode
Watch “Outlook for Inflation, Oil, and Tech | 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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