Bloomberg Surveillance Fed Rate Cut Signals Strategy Shift; Trump & Xi Ease Trade Tensions
14 snips
Oct 30, 2025 
In a dynamic conversation, Joe Davis, Chief Economist at Vanguard, shares insights on AI's potential to boost growth and the Fed's balancing act between inflation and employment. Heidi Crebo-Rediker, from the Council on Foreign Relations, discusses the recent U.S.-China trade relations and long-term strategic issues like tech ambitions and rare earths. Adam Farstrup from Schroders highlights the importance of active stock selection amid market concentration, while Meghan Robson of BNP Paribas explains the current state of credit markets and the tactical opportunities in high yield.
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Fed Balancing Act Near Policy Inflection
- Joe Davis says the Fed is trying to "thread a needle" between sticky inflation, a cooling labor market, and asset price inflation.
- He warns policymakers face a data blind spot and growing risks as they near a policy inflection point.
AI Could Boost Growth But Disrupt Jobs
- Vanguard's Joe Davis sees AI potentially lifting U.S. real GDP to ~3% in 2–3 years under their data-driven baseline.
- He cautions overinvestment and expects significant workplace disruption with mixed gains.
AI's Uneven Labor Impact
- Vanguard's research expects job declines in about one in five occupations over 3–5 years due to AI.
- For each job that declines, they anticipate roughly three that benefit, producing uneven gains and anxiety.