Episode summary
PPI and Market and Geopolitical Risks | Bloomberg Surveillance
Bloomberg Surveillance
· · 36 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Greg Peters, Tina Fordham, Heath Terry, Molly Pieroni
Summary
The discussion centered on a hotter bond market, a firmer inflation print, and what they imply for the Fed. One guest said Treasury yields are being repriced by strong nominal growth and heavy supply, with 10-year yields potentially staying near 5% unless a recession brings them lower. The August PPI rose 0.4% month over month and 5.4% year over year, reinforcing the view that inflation is still “stuck in the system” ahead of the September Fed meeting and Friday’s CPI release.
A second guest argued that geopolitics has become a structural market force, not a temporary headline risk. She described a “geopolitical super cycle” driven by more shocks, weaker buffers, and a fading U.S. backstop for trade and security. Her focus ranged from tariffs and sanctions to cyberattacks, climate events, Iran, Ukraine, and Europe’s energy vulnerability, with the biggest change being declining trust in the U.S.
The program also covered AI and stock picking. One analyst said AI demand is colliding with limited data-center and power supply, making pricing power stronger for major infrastructure names. A later guest argued that value investing still works in an expensive market, favoring balance-sheet strength and long-duration cash generators like Microsoft, Google, and Samsung.
Key takeaways
- A guest said 10-year Treasury yields could plausibly remain near 5% unless a recession forces them lower.
- The host highlighted August PPI at 0.4% month over month and 5.4% year over year, keeping pressure on the Fed before CPI.
- A guest argued that geopolitics is in a multi-year “super cycle” with more shocks from tariffs, sanctions, cyberattacks and conflict.
- Another guest said AI demand is outrunning data-center supply, lifting pricing and margins across the infrastructure chain.
- A value investor said Microsoft, Google and Samsung remain attractive because of cash flow, scale and downside protection.
Notable quotes
“I think we're in a very strong growth environment. There's a lot of own goals uh you know, a lot of things working against uh uh kind of the environment”
“I mean, everywhere I look, I see inflation stuck in the system”
“this is my term obviously used in in this context most often for commodities but in uh astronomy it's refers to expansion”
“what happens when you get into these sort of immovable object, irresistible force kind of moments is something has to break. And that break has been pricing”
How the episode opens
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10-year Treasury up another four basis points. 488. I mean, we're on a 5% watch on the 10-year.
Let's be honest. Uh the 30 years at 5.32% up another three basis points. Every day these yields are pushing higher.
What's going on out there? Well, fortunately, our next guest is a professional. He can answer these questions.
Greg Peters. He's the co-CIO of Py Credit. Greg, what's going on in your uh Treasury bond market?
Yeah, it's a it's a repricing of a lot of different factors actually. I think um many observers like to point to a single factor and I don't think it is a single factor but uh you know a a a a key driver I think um one end uh is the strong nominal growth um and I think that is uh you know something that uh market participants forgot right and if you look at just now this cheap and simple metric that has been forgotten if you just think about the growth nominal GDP growth grow versus, you know, the Treasury yield. Um, you know, we're in a, you know, we're in an area that suggests that, you know, maybe there's still room for yields to kind of match that nominal growth, right?
It's about 160 basis points apart. Now, um um you know, the kind of the minimum, you know, decidedly negative, but the long-term average is 100 basis points. So, you know, I think there's scope for uh continued repricing here.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ppi
- bond market warnings
- geopolitical risks
- agentic ai
- stock picks
Companies and tickers mentioned
- C
- PGIM Credit
- Citigroup
- Fordham Global Foresight
- Yacktman Asset Management
- Bloomberg
Watch the episode
Watch “PPI and Market and Geopolitical Risks | 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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