Bloomberg Surveillance Bloomberg Surveillance TV: February 28, 2025
5 snips
Feb 28, 2025 
Steven Major, Global Head of FI Research at HSBC, shares keen insights on the bond market's impact on global economies. He discusses the recent decline of the 10-year government bond yield and its implications for monetary policy. Kelly Ann Shaw, former Deputy NEC Director, delves into trade policy dynamics, particularly regarding tariffs impacting Canada, Mexico, and China. Meanwhile, Michael Kushma, CIO at Morgan Stanley, highlights the disconnect between income and spending, offering valuable predictions on future inflation and market behavior.
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Bond Rally Factors
- The bond market rally, lasting seven weeks, might be due to a combination of factors.
- These include undervaluation, increased confidence in the fiscal position, and regulatory shifts.
Impact of Weaker Economic Data
- Weaker economic data could accelerate the bond rally, pushing 10-year yields below 4%.
- Real growth concerns might permeate the entire treasury space.
Inflation and Growth
- Inflation between 2% and 3% isn't problematic and may be desirable given high debt levels.
- The Fed has shifted its focus to growth, and the economy needs to align with lower rates.