US Economic Outlook and Bond Signals | Bloomberg Surveillance

The guests argued that the U.S. economy is still running too hot for the Fed to justify easing, even as markets keep debating whether rate cuts later this year are still possible. One economist said inflation is moving in the wrong direction, with core PCE at 3.3% and expected to rise to 3.4%, while labor-market data remain solid enough to keep the economy in a Goldilocks zone. He also said the Fed is effectively split, with several members still looking for cuts and a few leaning toward hikes.

Energy markets were framed as less about immediate demand weakness and more about a large supply buffer still working through the system. The energy strategist said roughly 400 million barrels of stocks plus 400 million barrels of SPR helped blunt the shock from disrupted production, and she expects the market to feel tighter into late July and August. She also said a full recovery in Gulf supply would take months, not weeks, and that the region is already accelerating pipeline and routing changes to reduce dependence on the Strait of Hormuz.

The equity strategist said the market’s advance is still being driven by earnings, but that leadership is unusually narrow. She said first-quarter results lifted full-year 2026 earnings estimates to about 25%, while concentration risk remains high because a small number of mega-cap stocks still account for a large share of index returns. On fixed income, the muni portfolio manager said demand has rebounded sharply as tax-equivalent yields improved, helping absorb record supply and supporting munis despite higher Treasury yields and ongoing Fed uncertainty.