Bloomberg Daybreak: Asia Edition APAC Reacts to Hot US CPI Print; Honda & Nissan Earnings
Feb 13, 2025
Michael Green, Portfolio Manager and Chief Strategist at Simplify Asset Management, breaks down the recent U.S. inflation data and its implications for market strategies. He emphasizes the Fed's long-term focus amidst rising consumer prices. Meanwhile, James Hong, Head of Asia Autos at Macquarie Capital, reviews Honda and Nissan's earnings, highlighting their struggles against competitors like BYD and discussing the potential for a merger. The conversation provides unique insights into the auto industry's financial dynamics and the influence of inflation on economic trends.
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Market Reaction to Inflation
- Markets are reducing bets for Fed rate cuts due to high US retail inflation.
- Money markets project the first rate cut won't come until December.
Inflation Drivers
- Current inflation is partially a seasonal function, similar to last summer's lower numbers.
- Imputed prices like auto insurance, airfares, and prescription drugs are driving the increase.
Fed's Focus
- The Fed, including Powell, focuses on longer-term market prices, not short-term fluctuations.
- A 10-year yield at 5% wouldn't significantly impact areas like housing.