Bloomberg Surveillance Bloomberg Surveillance TV: May 19, 2025
May 19, 2025
Jeannette Lowe, Director of Policy Research at Strategas Securities, dives into the intricacies of tax bill negotiations and President Trump's economic agenda. The discussion reveals the impact of the recent Moody's credit downgrade on long-term Treasury yields. Lowe highlights how tariffs are affecting consumer prices and the broader market, while also addressing strategies for businesses in today's volatile economic landscape.
AI Snips
Chapters
Transcript
Episode notes
Global Fiscal Stimulus Drives Yields
- Economic resilience and fading recession risk globally contribute to rising yields more than U.S. fiscal factors.
- A global fiscal stimulus trend is influencing yields across countries, not just domestic U.S. policy.
Downgrade Reflects Fiscal Inaction
- The Moody's downgrade was expected given lack of meaningful fiscal reform.
- The U.S. is not on a sustainable fiscal path due to unwillingness to sufficiently reduce the deficit.
Rising Yields Linked to Policy Mix
- Long-term treasury yields are rising due to tariffs, a weaker dollar, and deglobalization trends discouraging capital inflows.
- A fiscal deal or economic weakness might reverse this trend, but yields will likely climb until then.