Bloomberg Surveillance Bloomberg Surveillance TV: May 22, 2025
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May 22, 2025 Greg Peters, Co-CIO at PGIM Fixed Income, shares his insights on the bond market, highlighting warning signs and implications of rising yields. Nela Richardson, Chief Economist at ADP, analyzes labor market dynamics, addressing stability amidst technological shifts and demographic changes. They also discuss the interplay between equity and bond markets, the impact of governmental policies, and investment strategies tailored to navigate current economic uncertainties. It's a captivating dive into financial trends that could shape the future.
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Long-End Bonds Behaving Like Risk Assets
- The long end of the bond curve is showing weak demand and behaving more like risk assets than safe havens.
- Investors are cautious about duration risk and prefer to focus near the central bank influenced short end of the curve.
Focus Short End Curve Diversification
- Investors should diversify globally and focus on the short end of the yield curve.
- Staying near the two-year maturity aligns with central bank actions and reduces portfolio uncertainty.
Deficit Risk Without Political Will
- Political will to reduce deficits is lacking, risking a worse economic future.
- A recession could cause longer, harder downturns or even bigger deficits due to increased spending.