Bloomberg Surveillance Traders Stick With Two 2026 Fed Cuts After Jobs Data
19 snips
Dec 17, 2025 Steve Auth, CIO of Equities at Federated Hermes, questions if the AI boom signals a market bubble while projecting strong GDP growth. Eric Winograd, Chief U.S. Economist at AllianceBernstein, analyzes how recent jobs data indicates potential Fed cuts due to labor market shifts. Stephen Kim, Head of Housing Research at Evercore ISI, addresses the disappointing household formation rates and forecasts modest declines in housing prices, emphasizing that real estate dynamics are more influenced by life events than interest rate changes.
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AI And Fed Cuts Could Broaden The Market
- Federated expects AI-driven earnings and higher nominal GDP to underpin stock gains in 2026.
- They see Fed cuts broadening market leadership beyond tech into housing and regional banks.
Position For Broadening, Keep AI Exposure
- Stay invested in AI leaders but modestly overweight and trade relative value within the group.
- Tilt toward housing, regional banks and emerging markets to play the expected broadening trade.
Nominal GDP Drives Equity Gains
- Nominal GDP boosts equities even when inflation is the driver of that nominal rise.
- If inflation falls, real GDP — and earnings — may not keep pace, tempering equity upside.