Bloomberg Surveillance Bloomberg Surveillance TV: May 27, 2025
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May 27, 2025 Amanda Lynam, Head of Macro Credit Research at BlackRock, delves into the complex interplay between corporate margins and the labor market. She discusses the cautious optimism within corporations as they prepare for earnings season amid stubbornly high bond yields. Lynam explores how rising student loan delinquencies affect consumer behavior and contrasts the credit ratings of corporations with government debt. Additionally, she highlights potential opportunities in the corporate credit market as executives navigate these financial challenges.
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U.S. Growth Slowing Significantly
- U.S. growth in 2025 is expected to slow drastically to around 0.5% due to higher capital costs and tariff uncertainty.
- Consumer weakness and diminishing labor demand hint at lower future wages and consumption, challenging inflation fears.
U.S. Assets Retain Appeal
- Both U.S. bonds and equities remain attractive due to strong market depth and U.S. tech leadership.
- Despite policy volatility, a mass divestment from U.S. assets is unlikely as investors seek long-term stability.
EU's Trade Challenges and Tactics
- The EU's complex federation hampers swift decision-making in trade negotiations.
- U.S. trade tactics use key companies like Apple as leverage in broader negotiations, especially with India.