The podcast discusses the Wall Street relief following the inflation report, featuring insights from experts on interest rates, PCE, market trends, and newspaper headlines. Topics include analysis of economic indicators, GDP, inflation dynamics, market risks, financial services, COVID effects, and reflections on a classic movie.
Bond market reacts to PCE deflator numbers, resulting in a rally in two-year yields.
Discussion on potential interest rate cuts based on stable core PCE deflator rates and easing policy narrative.
Deep dives
Economic Insights and Real Yield Analysis
Economic experts discuss the latest data indicating a slight weakness in the market, with a 10-year real yield at 1.97%, more accommodative to 1.95%. The impact of the PCE deflator and core deflator numbers are analyzed, leading to a bond market reaction involving a rally in two-year yields. The Federal Reserve's stance on interest rates is scrutinized based on inflation and economic performance.
Market Expectations and Federal Reserve Policy
The discussion delves into market expectations regarding Federal Reserve actions, considering data like the Personal Consumption Expenditure (PCE) deflator and core deflator figures. The debate revolves around potential interest rate cuts given the current economic conditions, questioning the necessity for rate reductions with stable core PCE deflator rates. Insights suggest a narrative of easing policy in response to inflation trends.
Labour Market Concerns and Economic Indicators
Economic analysts highlight potential signs of stress in the economy, pointing to state-level unemployment data and credit card charge-off rates as indicators. Concerns about a possible recession are raised, particularly regarding labor market deterioration indicated by various data points. The US economy's resilience in comparison to other G7 countries is a focus, with discussions on the potential for economic slowdown.
Hockey and Entertainment News
An update on hockey highlights a rookie player's aggressive debut with the Rangers, engaging in fights and making an impact despite limited playing time. The discussion transitions to the passing of British actress Pamela Salem, known for her role as Miss Moneypenny in 'Never Say Never Again.' The segment concludes with a brief review of newspapers covering topics like financial challenges in entertainment and health implications of long COVID.
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Surveillance hosted by Tom Keene and Paul SweeneyThursday February 29th, 2024 Featuring:
Ira Jersey, Bloomberg Intelligence US Interest Rate Strategist
John Ryding, Brean Capital Chief Economic Advisor, on PCE
Frances Donald, Manulife Investment Management’s chief economist, on PCE
Drew Matus, Chief Market Strategist Metlife Services and Solutions, on markets
Bloomberg's Lisa Mateo with her Newspaper Headlines