Bloomberg Daybreak: Asia Edition Global Inflation in Focus Ahead of Jackson Hole; Chicago Fed's Austan Goolsbee
Aug 22, 2025
Ian Samson, a Multi-Asset Portfolio Manager at Fidelity International, and Austan Goolsbee, President of the Federal Reserve Bank of Chicago, dive into the evolving global inflation landscape. They discuss Japan's inflation exceeding expectations while contrasting it with China's economic challenges. The conversation highlights market anxieties ahead of the Fed's Jackson Hole symposium, touches on potential stagflation, and the implications of shifting interest rates on the economy. Expect insights on investment strategies amidst these turbulent conditions!
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Looser Fed Policy Spurs EM Opportunities
- Ian Samson expects meaningfully looser US monetary policy over the next year despite sticky inflation.
- He sees emerging markets with high yields as attractive beneficiaries of a softer Fed and higher local returns.
Dovish Rotation Expected Next Year
- Short-term debate over whether the Fed should cut exists, but Samson expects a dovish rotation into next year.
- He anticipates policy settling nearer 3% by the end of next year as members shift toward cuts.
Play Japan With Banks, Not Short Rates
- Avoid the short end of the Japanese yield curve as real rates are deeply negative.
- Consider Japanese bank equities because they benefit from BOJ rate hikes and trade at reasonable valuations.