Bloomberg Surveillance Bloomberg Surveillance TV: June 30, 2025
Jun 30, 2025
Michael Kushma, the Chief Investment Officer for Broad Markets Fixed Income at Morgan Stanley Investment Management, dives into the potential for a bond market rally in the latter half of the year. He discusses market conditions and the implications of Federal Reserve policies, making intriguing predictions about how interest rates could influence investor behavior. The conversation also touches on broader economic trends, shedding light on how these factors intertwine with employment and fiscal policy.
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Fed Holds Due To Sticky Inflation
- Esther George sees inflation as sticky but not accelerating, justifying a Fed hold stance.
- She emphasizes monitoring labor market data to gauge economic health rather than rushing rate adjustments.
Labor Market Complexity
- The labor market's strong 3.5% unemployment rate makes it hard to assess true market health.
- Esther George highlights the challenge of interpreting labor force participation amid policy and economic shifts.
Caution Before Rate Cuts
- Despite recent soft inflation data and rising claims, Esther George would still not have supported a Fed rate cut yet.
- She stresses prudence until inflation targets are fully met despite fiscal policy risks.