Macro Strategy Insights

Guest Host Bloomberg TV April 1st Recap

Summary of Bloomberg Guest Host Event

It was quite a pleasure to get to be guest host. It is always interesting to ask questions, and not just try to answer questions. Additionally, Academy did get asked a lot of questions, many of which allowed me to incorporate our unique insights into geopolitical risks and national security.

The guests were so interesting, and we got to discuss so many highly relevant topics, that I wanted to give people the opportunity to watch. Since it was so long, and covered so many subjects, it seemed appropriate to provide a synopsis to guide you to the areas that you find most useful.

Please see below for a summary of Peter’s guest host appearance on Bloomberg TV on April 1st.

First segment with Academy as guest (1:39:40)

  • Equities, Rotation, AI, bearish NDX, bullish energy, Russell, banks, CRE.
  • Energy “deeper” dive – build out of both sustainable and traditional, the energy companies of the future are the energy companies of today, etc.
  • Federal Reserve views (what happened to markets doing the work for the Fed?)
  • Coming up with excuses to be easy – “long lag times” and “getting ahead” seem to be the messages of the day.

Second segment with Bill Dudley (former NY Fed President) as guest (1:52:45)

  • Bank failure risk, potential Fed actions, over-regulation at banks (impacts on Treasury market and tailwinds for private credit).
  • The Fed and Financial Conditions vs Long Lags.
  • The Fed is often overly optimistic. They do a very good job, in a very tricky and difficult market environment.
  • Starting conditions matter and I’m not sure econometric models pick it up.

Third segment with Academy as guest (2:03:08)

  • Bearish on long end of yield curve (much of what drove 10s to 5% in October has not been resolved).
  • Get to talk about energy inflation as AI, Data Centers, EV, etc. are driving demand for power.
  • Increased power usage is inflationary and unlike crypto, which could move offshore, many clients want (and should want) their data centers and processing on domestic soil (geopolitical/national security elements).
  • More on data centers and AI’s inflationary pressure on that side of the economy.
  • Specific question “what are the generals saying about the war in the Middle East?” (2:06:30 mark). Some follow-ups on the generals’/military viewpoint.
  • Jon manages to get me to say higher oil/more direct involvement has shifted from risk to base case.
  • A segment on the Houthis, proxies, and risk to Iranian oil shipments.

Fourth segment with Greg Daco (Chief Economist at Ernst & Young) as guest (2:09:50)

  • Lower inflation.
  • Labor market pressures are easing.
  • Market overreaction to data (thin market trading).
  • Is Fed willing or not willing to tolerate higher inflation? Inflation bands.
  • Inflation/Deflation surprise? (China, deflationary? Supply Chain shocks, inflationary? Structural inflation? India?)

Fifth segment with Randy Quarles (Former Federal Reserve Vice Chair) as guest (2:19:40)

  • Fed Accepting Higher Inflation? No way – says Quarles before internet connection breaks, and I get tossed into the hot seat.
  • Remember averages pre-Covid. Do they change their metrics/messaging to allow them to position to the easier side?
  • Time vs Pain.
  • Quarles reconnects and pushes on 2% commitment.
  • Inflection point.

Please see below for the link to the full show.

Please see below for the link to an abbreviated podcast.

Bloomberg Surveillance TV: April 1, 2024 – Bloomberg