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Bonds Are Not Vegetables Says HSBC’s Steven Major: Macro Matters
Jul 27, 2024
Steven Major, HSBC’s global head of fixed-income research, joins Bloomberg Intelligence strategists Ira Jersey and Will Hoffman to delve into the complexities of bond markets. They discuss the determinants of long-term interest rates and how supply influences yields. Regulatory constraints on dealer-intermediation are examined, alongside a contrarian outlook for global bonds. The conversation emphasizes the need for intellectual honesty in economic research while exploring the shifting dynamics between goods and services consumption.
32:54
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Quick takeaways
- Stable consumer spending, driven by resilient services consumption, underscores the importance of monitoring economic indicators for future monetary policy decisions.
- The discussion highlights how structural factors, like population growth and migration, play a vital role in determining long-term equilibrium interest rates.
Deep dives
Current Economic Indicators and Consumption Trends
Recent economic indicators suggest a stable consumer spending environment, particularly highlighted by a recent personal consumption expenditure (PCE) report that met expectations with a marginal 0.1% increase. This reflects a strong services consumption while durable goods show slight turnover, indicating shifting spending patterns among consumers. The report highlights that despite a challenging global economic backdrop, American consumers continue to drive economic growth, with spending remaining healthy. This trend is crucial for understanding the broader implications for monetary policy and recession concerns.
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