Bloomberg Surveillance Bloomberg Surveillance TV: July 3rd, 2025
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Jul 3, 2025 Jeffrey Rosenberg, a Portfolio Manager at BlackRock, dives into the implications of the latest jobs report and private payroll metrics. He discusses the state of U.S. job growth amid rising economic uncertainties and the challenges related to the labor market, particularly concerning demographic shifts. He also shares insights on inflation pressures and the Federal Reserve's potential monetary policy actions. The conversation opens up a broader discussion on how these factors influence market dynamics and the overall economic outlook.
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Global Fiscal Deficits Rising
- Global fiscal deficits are increasing outside the US, driven by governments like Canada, Germany, and China expanding spending.
- This rising global spending amid sticky inflation fuels tensions and pressures on markets and currencies, especially the dollar.
Dollar's Possible Paths
- The dollar may keep weakening as the U.S. Treasury shortens debt duration and domestic institutions absorb more debt.
- Disorderly outcomes could occur if inflation surprises rise and the independence of the Fed is challenged, risking fiscal dominance.
Fed Rate Cuts Expected Later
- The Federal Reserve is likely to cut rates later this year responding to both cooling inflation and a weakening labor market.
- Natural slowing in job growth and reduced immigration suggest the steady-state monthly job gains have fallen significantly.