Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Single best idea on
Speaker 1: a really really interesting Monday. Really just can't say enough
Speaker 1: about if the team started putting the guest list together Friday,
Speaker 1: blew it up in the vicinity of Sunday with all
Speaker 1: we saw in China, always saw in Russia, but just
Speaker 1: as importantly what we saw in the markets. I really
Speaker 1: can't emphasize enough how nuance, not odd and not scary,
Speaker 1: but just how nuanced the markets are. And we had
Speaker 1: just a terrific balance today in economics, inequities, in bonds,
Speaker 1: in foreign exchange, looking at particularly EU again, and of
Speaker 1: course the international relations of the moment. Major shout out
Speaker 1: Alex Brideaux at Eurasia Group on very short notice his
Speaker 1: wisdom on actually how does the Kremlin run? And it
Speaker 1: also just Henrietta Trees was beyond brilliant with Veda partners
Speaker 1: about split ticketing where our parents all voted Republican or
Speaker 1: they all voted Democrat and is now is there going
Speaker 1: to be split ticketing within the Democratic Party And she
Speaker 1: was just brilliant on that. Brilliant as well in economics
Speaker 1: and framing out the choice set that our central bank
Speaker 1: has was John writing he has experienced at the Bank
Speaker 1: of England, at the Federal Reserve, truly iconic at bear
Speaker 1: Stearn's years ago now with Green Capital, and it was
Speaker 1: just a spirited conversation with John writing, let's listen.
Speaker 2: The problem with if the FED moved to high rates,
Speaker 2: it will be a tweak. But markets aren't very good
Speaker 2: at detecting tweaks as opposed to new trends, because the
Speaker 2: Fed has been not very good at explaining the latest
Speaker 2: monetry policy moves, and so that was the problem. I
Speaker 2: in December when Allison was natural for us to talk
Speaker 2: about rate cuts, and the market, which had three rate
Speaker 2: cuts priced in at that December meeting, which is aligned
Speaker 2: with the fed's SEP projections, suddenly priced in six to
Speaker 2: seven rate cuts, and you got a massive rally and
Speaker 2: a massive easing of financial conditions. So on the other side,
Speaker 2: if the Fed would a high because why hike just
Speaker 2: wants it's got to be the start of something.
Speaker 1: John writing there on the Fed speak, I've really tried
Speaker 1: to downplay it. I don't have a big view of
Speaker 1: the parlor game of it. I get it's about making
Speaker 1: money in futures and all that, but I think John
Speaker 1: writing there on the constraints that the FED has. He
Speaker 1: also mentioned that he much prefers a transparency the dialogue
Speaker 1: of the Bank of England right now under Governor Bailey
Speaker 1: than what we see with the endless FED. Speaking in America,
Speaker 1: we did look at equities, thank you, Lori Calvissina, Cameron
Speaker 1: Dawson starting in Strong and New Edge both you know,
Speaker 1: very optimistic. There's a bid to the market. But I
Speaker 1: think the richest conversation today was on bonds, and I'm
Speaker 1: gonna explain this right now. I think it's really important.
Speaker 1: And then a spread, which the media talks about a spread, spread, spread, spread, spread,
Speaker 1: It's not orange marmalatter nutella. A spread is the comparison
Speaker 1: of yield of whatever bond, a corporate bond to the
Speaker 1: full faith and credit sovereign US government bond. And so
Speaker 1: as the yield comes down of the corporate piece closer
Speaker 1: to the full faith and credit sovereign piece, that's the
Speaker 1: phrase spreads narrowing. We have spreads narrowing truly in an
Speaker 1: historic manner. Now, Greg Peters at Pigeum was really quite
Speaker 1: good on this last week that we are upper deathcile
Speaker 1: ten percentile of the history of spreads narrow, and they
Speaker 1: narrow in China, they narrow across all the Pacific of
Speaker 1: the Damien SASA or world, and they narrow in the
Speaker 1: full faith and credit Western world as well. Amanda Lineum
Speaker 1: of Blackrock unspreads.
Speaker 3: I think at an aggregate level, we think that spreads
Speaker 3: can remain pretty range bound. The exception, though, Tom, is
Speaker 3: that we are not expecting Triple c's to catch a bid.
Speaker 3: So far, they've lagged the overall rally in spreads. If
Speaker 3: you just zoom in on US high yield highield spreads
Speaker 3: are below three hundred basis points that would argue for
Speaker 3: Triple C spreads somewhere in the seven somewhere in the
Speaker 3: six hundreds. They're in the seven twenties range now. So
Speaker 3: it just goes to show you that the market is efficient.
Speaker 3: The market is telling you that not all corporates can
Speaker 3: navigate this high cost of capital. We don't expect a
Speaker 3: material spread widening, but I think for further tightening, you
Speaker 3: need to see participation from that Triple C cohort, and
Speaker 3: we just don't really see that.
Speaker 1: And then your term Amandlione at Blackrock, she was just
Speaker 1: brilliant there and really the dominant theme of the moment,
Speaker 1: which is what fixed income is doing in the signals
Speaker 1: that can give over to the equity market. Final shout
Speaker 1: out Christopher own a Statigius with us today. Look for
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