Episode summary
PCE Reaction and US Eco Outlook | Bloomberg Surveillance
Bloomberg Surveillance
· · 42 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Rob Sockin, Andrew Szczurowski, Marija Veitmane, Sebastien Page, Suki Cooper, Lee Roberts, Eric Mollo
Summary
The discussion centered on a hot inflation print and what it means for the Fed, markets, and the economy. Rob Sockin said the activity side of the economy is still holding up, but the consumer is showing strain and the real story is inflation, with core PCE expected around .35% month over month and 3.4% year over year. He argued the risks are skewed to the upside because supply shocks, tariffs, and deglobalization trends are still pushing prices higher, and said the Fed is likely to stay hawkish.
The host pressed the idea that nominal GDP is running near 5.5% to 6%, and Sockin agreed the economy looks overheated, with resilient AI capex, a strong upper-income consumer, and fiscal support keeping growth strong. He said the new Fed chair appears focused on price stability above everything else and expects three rate hikes this year to bring inflation down toward target.
Sebastien Page argued that the AI trade remains intact and that momentum is extraordinarily strong, with a simple return-chasing strategy producing 40% annualized over the S&P 500 over the last three years before transaction costs. Suki Cooper said gold remains supported by central bank buying, geopolitical risk, and diversification demand, even though near-term headwinds from real yields, a stronger dollar, and ETF outflows have made prices fragile. Lee Roberts said UNC is navigating funding pressure, AI disruption, and the need for practical skills, while keeping tuition relatively affordable and expanding facilities to meet demand.
Key takeaways
- Rob Sockin said core PCE around .35% month over month and 3.4% year over year would still be too hot for the Fed.
- Sockin argued the risks to inflation are skewed higher because tariffs and deglobalization are still feeding price pressure.
- Sebastien Page said momentum has been unusually strong, with a simple top-10 stock rotation strategy generating 40% annualized over three years before costs.
- Suki Cooper said central banks remain the marginal gold buyers, but ETF outflows and a stronger dollar have made gold fragile in the near term.
- Lee Roberts said UNC is leaning into affordability, AI policy, and new facilities while facing funding pressure and a shortage of nursing capacity.
Notable quotes
“the key is on the activity side, things are holding up well”
“We're looking for.35% month- over-month core PC, 3.4% year-over-year”
“the risks are heavily skewed to the upside on inflation”
“The profits if you exclude transaction cost from this dumb momentum chasing just buy the top 10 performing stocks”
How the episode opens
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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. your quick brief with Rob Sack and P Jim here.
I just as a general statement, what are you going to look at within the wall of data here in four minutes? What what matters to you?
Well, I think the key is on the activity side, things are holding up well. So, I think we're going to get jobless claims. Those will look good.
I think on the spending side, you're seeing the consumer show some signs of strain, but holding in pretty well. So, it really comes down to the inflation numbers. We're looking for.35% month- over-month core PC, 3.4% year-over-year.
Looking at the details will be important. What's driving that? But that's the real story.
We're in six months. Are we pe as Paul keeps saying? Are we peaking year in inflation?
I think at the end of the year we're closer to 3% on core PC. So you're going to get some gradual disinflation in the back half. But you know to me the risks are heavily skewed to the upside on inflation.
All the leading indicators I look at for consumer inflation, things like the producer price index, surveys of supply chain strain, survey of prices, all those things still look quite firm. So I don't have a lot of confidence that we're going to get that gradual disinflation in the back half. And if you look at the Fed, they had a much higher forecast for core PC by the end of the year.
I think that's quite possible with some of the leading indicators that we're seeing.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- pce reaction
- inflation outlook
- fixed income positioning
- commodities and gold
- higher education funding recruiting
Companies and tickers mentioned
- MS
- TROW
- PGIM Credit
- Morgan Stanley Investment Management
- T. Rowe Price
- Standard Chartered Bank
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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