Bloomberg Surveillance Tariffs, Inflation, and Bank Earnings
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Jul 16, 2025 David Malpass, former President of the World Bank, dives into key economic and geopolitical policies that could shape the future. He examines the implications of tariffs on inflation and how these factors are influencing the market's resilience. The conversation highlights the need for strategic shifts to gain broader public support and addresses Republican party dynamics. Malpass also emphasizes the critical role of decisive leadership as the global economy faces ongoing challenges, especially in the U.S.-China relations.
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Expectation of Steeper Yield Curve
- BlackRock expects a steeper yield curve, driven partly by fiscal factors at the long end.
- Corporate credit investment is focused on yield and income, not on a long rally in rates.
Corporate Flexibility Supports Credit
- Corporates use various internal levers to mitigate uncertainties from tariffs and policy shifts.
- This flexibility supports resilience in high yield spreads despite economic uncertainty.
Inflation Stands in Fed Cut Way
- Inflation remains stubbornly above target, making Fed rate cuts difficult to expect shortly.
- The market increasingly prices out near-term Fed rate cuts as appropriate for the environment.