Bloomberg Surveillance TV: July 28th, 2026

Summary

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Bloomberg Surveillance TV: July 28th, 2026

Hosts: Jonathan Ferro, Lisa Abramowicz, Annmarie Hordern
Guests: Cameron Dawson (NewEdge Wealth), Stephen Cook (Council on Foreign Relations), Matt Holdback (Morgan Stanley)
Date: July 28, 2026

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Episode Overview

This episode focuses on key issues shaping global markets, with in-depth discussions on:

• The ongoing semiconductor sell-off and changing tech sector dynamics
• Geopolitical tensions between the U.S. and Iran and their economic impact
• The upcoming Federal Reserve meeting and the outlook for U.S. monetary policy

The hosts engage expert guests for insights on market cycles, Middle East geopolitics, and Fed strategy—all set against a backdrop of shifting economic fundamentals and geopolitical risk.

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Semiconductor Sell-off & Tech Market Dynamics

The Setup: Market Volatility in Tech

Guest: Cameron Dawson, Market Analyst, NewEdge Wealth
Segment Start: [01:49]

• Key Drivers:

  • The current sell-off in semiconductors is powered by both technical factors (positioning, leverage unwind) and growing concerns about market fundamentals.
  • High recent inflows into leveraged semiconductor products have reversed sharply, causing outsized price declines.

• Technical vs. Fundamental Narratives:

  • “So much of the upside was driven by positioning chases… What we're experiencing now is effectively the mirror image of that.” – Cameron Dawson [02:39]
  • Despite sharp drawdowns (e.g., SK Hynix down 40%), most semiconductor stocks are “technically not oversold yet” and remain above long-term support levels.
  • “Narrative follows price—all of these negative narratives... are effectively just following the negative price action.” – Cameron Dawson [03:16]

• Industry Cyclicality & Capacity Additions:

  • Recent optimism on margins is being tested as global players ramp up capacity (Micron, SK Hynix, Samsung, China).
  • “At the end of the day, you had this clarion call from big bulls… but this is still a very, very cyclical business.” – Cameron Dawson [04:01]
  • Incoming competition could pressure gross and operating margins, especially if revenue growth slows.

• Hyperscaler CapEx and Open Source Competition:

  • The escalating capital expenditure (capex) race among hyperscalers is running ahead of free cash flow, with AI and open source models (notably from China) disrupting established players.
  • Example: “Free cash flow for a name like Google was negative…capex is growing faster than operating cash flow.” – Cameron Dawson [05:09]
  • This dynamic may persist through 2027 and beyond, potentially challenging bullish consensus expectations.

• Is it Time to Buy?

  • Despite valuation declines—“for the hyperscaler, you're now trading at a valuation that is as low as it was back at the lows in 2022” [06:12]—Dawson argues that neither chips nor hyperscalers are at attractive technical levels yet.
  • The formerly high-return tech sector is now structurally more competitive: “These are now competitive businesses. They're having to spend a lot of money to make money…” [06:54]

• Stock Price and CapEx Feedback Loop:

  • Share price declines may force capex pullbacks, especially as funding (equity or debt) costs rise:
    • “If free cash flow is negative... incremental equity raises will be more dilutive. If your credit spreads are up, your incremental debt raises will be more expensive.” – Cameron Dawson [07:19]

• Potential Economic Impact:

  • Sustained weakness in equities—especially tech—could eventually translate into broader economic softness through a negative wealth effect.
    • “If you were to see a deeper, more protracted route, you could... have a negative feedback loop where the equity market weakness translates into economic weakness.” – Cameron Dawson [08:09]

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Middle East Tensions: U.S., Iran, and Economic Risk

Guest: Stephen Cook, Council on Foreign Relations
Segment Start: [11:34]

• Pause in Strikes:

  • The U.S. and Iran have paused strikes for a fourth night, with diplomatic negotiations underway.
  • Cook notes that U.S. capability (diminished weapon stocks, diminishing bombing returns) drove this pause:
    • “We were running out of munitions and the bombing in the Strait had diminishing returns. So the President called it off and is now relying on the Oman channel...” – Stephen Cook [12:01]
  • Iran is leveraging proxy attacks while signaling willingness to negotiate.

• Oman's Mediation Role:

  • Oman is positioned as a mediator but is viewed skeptically:
    • “The Omanis have at times sounded a lot more like Iran's lawyer than a mediator.” – Stephen Cook [13:42]

• Proxy Attacks and Regional Escalation:

  • Iranian proxies, especially the Houthis and Iraqi militias, target regional infrastructure, including Saudi oil facilities and data centers in Bahrain.
  • “The Iranians are signaling a willingness to talk... while at the same time their proxies undermining hopes for regional security.” – Stephen Cook [14:51]

• Business Impact and Regional Horizon:

  • The ongoing conflict undermines the Gulf states' development model, which is built on stability.
    • Example: Hilton earnings reveal a 30% revenue drop in the Middle East/Africa due to war [15:39].
    • “If you cannot provide security, people are not going to come and people aren't going to invest.” – Stephen Cook [16:01]
  • The UAE’s diplomatic balancing act may explain its comparative immunity from recent attacks.

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Federal Reserve Outlook: Rate Decision and Market Expectations

Guest: Matt Holdback, Morgan Stanley
Segment Start: [19:36]

• Market Consensus:

  • Widespread expectation is for the Fed to hold rates steady, though a surprise hike remains a minor risk.
  • “We expect the Fed to stay on hold. That said, inflation has to perform in the coming months or the Fed will switch to hikes later this year.” – Matt Holdback, as paraphrased by host [19:36]

• Disagreement Within the Fed?

  • Some expect dissents, but the rationale may be lacking after recent inflation cooling.
  • “If they weren't willing to dissent in June, why all of a sudden the change of heart?” – Matt Holdback [20:00]

• Inflation Expectations and Public Sentiment:

  • Despite concerns voiced by Cleveland Fed president Beth Hammock about persistently high prices, markets suggest stable long-term inflation expectations.
  • “The Fed already has [credibility]… I just don't see the rationale for a rate hike on Wednesday to solidify credibility.” – Matt Holdback [21:07]

• Market Pricing and Forward Guidance:

  • With real rates and financial conditions already tight, the debate is whether the Fed should manage expectations more dovishly.
  • “The big question facing the Fed today is have they tightened enough? And I just don't think they have enough information to say one way or the other.” – Matt Holdback [22:19]
  • On potential dovish signals: “If they were being that clever, then we've got a whole nother situation on our hands...” [22:53]

• Conditional Outlook:

  • If inflation doesn't decelerate, rate hikes could return:
    • “At some point, if inflation doesn't come down quick enough this year, don't they have to hike...?” – Cameron Dawson
    • “Absolutely. If inflation doesn't come down… rate hikes are on the table.” – Matt Holdback [24:12]

• Yield Curve and Data Dependency:

  • The inversion between 2-year yields and rates is expected to persist at least until more data arrives before the September meeting:
    • “After this meeting, we're going to get two rounds of economic data... That will inform their decision in September.” – Matt Holdback [24:50]

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Notable Quotes & Memorable Moments

• On Semiconductor Sell-off:

  • “Narrative follows price—all of these negative narratives on the fundamentals… are effectively just following the negative price action.” – Cameron Dawson [03:16]

• On CapEx and Tech Sector Change:

  • “These are now competitive businesses. They're having to spend a lot of money to make money, which means that our oyster going lower.” – Cameron Dawson [06:54]

• On U.S.-Iran Tensions:

  • “We were running out of munitions and the bombing in the Strait had diminishing returns. So the President called it off and is now relying on the Oman channel…” – Stephen Cook [12:01]
  • “If you cannot provide security, people are not going to come and people aren't going to invest.” – Stephen Cook [16:01]

• On the Fed’s Dilemma:

  • “The Fed already has [credibility]… I just don't see the rationale for a rate hike on Wednesday.” – Matt Holdback [21:07]
  • “If inflation doesn't come down… rate hikes are on the table.” – Matt Holdback [24:12]

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Key Timestamps

• 01:49 – Semiconductor sell-off analysis begins (Cameron Dawson)
• 11:34 – Middle East/U.S.-Iran segment (Stephen Cook)
• 19:36 – Federal Reserve policy discussion (Matt Holdback)

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Summary

This episode offers a rich, informed snapshot of global market dynamics.

• In tech, aggressive positioning and leverage have magnified the semiconductor sell-off, but fundamental challenges—especially around capex and competition—are likely to linger, keeping valuations under pressure.
• Geopolitically, U.S.-Iran tensions increase risks for global markets, threaten the Gulf’s economic stability, and depress regional investment.
• All eyes are on the Fed’s next move, with consensus expecting a rate hold, but ongoing data-dependency means policy could shift if inflation does not ease as forecast.

Listeners come away with nuanced context for both market moves and macro risk, featuring direct perspectives from financial, geopolitical, and economic thought leaders.

Transcript

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[Cameron Dawson / Market Analyst]

Bloomberg Audio Studios Podcasts Radio News.

[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferro along with Lisa Abramowicz and Annmarie Horton. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business App, we begin this with the chip sell off building. Cameron Dawson of New Edge wealth writing the following the semiconductor profit cycle depends on two big factors. Hyperscale is continuing to spend aggressively and limited new competition entering the space that could challenge margins. Markets seem to be questioning both. Camp joins us now for more. Camp, good morning. Good to see you.

[Cameron Dawson / Market Analyst]

Good morning.

[Jonathan Ferro]

That quote just perfectly illustrates this moment we're in. Right now. We are questioning both. Do you think it's valid to question both?

[Cameron Dawson / Market Analyst]

I think it is, but I think before we get to the fundamentals. We have to appreciate the technicals because so much of the upside was driven by positioning chases and squeezes and flows. And so what we're experiencing now is effectively the mirror image of that because flows were so aggressive into leverage products within the semiconductor space, not just in the U.S. but of course in South Korea. What we're seeing is the dynamic is that as that leverage unwinds, you're seeing a lot more downside. Effectively, these stocks got so overbought by the time you got to the middle of June that even though we've seen things like a 40% drawdown in something like SK Hynix, you're technically not oversold yet. So if you look at a name like Micron, yes, It's down over 20%, but it's still 40% above its 200 day moving average. You can say, think the same thing for the SOX overall. So it's important to remember narrative false follows price. So all of these negative narratives on the fundamentals we're talking about is effectively just following the negative price action.

[Jonathan Ferro]

So is this a price move looking for a narrative, or is there a story here?

[Cameron Dawson / Market Analyst]

I think it's a matter of both. I think some of the dynamic that we saw in the upside move was ignoring the fact that a lot of these capacity additions, while you're thinking about Micron itself adding capacity, SK Hynix, Samsung adding capacity, and now China adding capacity. We've all known this for the last six months over a year, because we've known that there has been a capacity shortage. But now the market is starting to wake up to it. And at the end of the day, you had this clarion call from big bulls on things like Micron saying, Of course the 85% gross margin is sustainable, this time is in fact different. But this is still a very, very cyclical business. And so given the fact that you are going to have capacity additions over the course of the next few years, you will see downward pressure on those gross margins. The big difference or the big thing to watch is that is there any downward pressure on the revenue line? Because that's really when you start to see the deleveraging and the operating leverage of these businesses. And if you continue to see weakness within the hyperscaler names, the question that we have been asking is if the stocks continue to get pressured, will they continue to raise Capex?

[Lisa Abramowicz]

At the same time, there is this issue of exactly whether the economics are changing and moving away from certain companies. And I'm thinking of say, the closed models like the open eyes and the anthropics that are suddenly coming under pressure, open source models that are coming out of China but are being adopted rapidly by a lot of US companies. I mean the seek this, the search for cheaper models is definitely taking steam. Do you think that does fundamentally alter the tech story?

[Cameron Dawson / Market Analyst]

Yeah, because I think the big question that you have is a scaling factor. We know that we are getting growth because of some of this capex investment, but effectively the growth is coming in slower than what the capex investment is. So you can see that by looking at free cash flow. Free cash flow for a name like Google was negative in the corner because their capex is growing faster than their operating cash flow. You go to 2027, that's going to be the case for all of the hyperscalers. And so you're going to have a world where capex goes faster than operating cash flow. You're not seeing it show up in the operating fundamentals yet. And this is in a world where we're still thinking that we're going to be at the leading edge and those are going to be the areas, those leading edge models are going to be the areas that drive growth. If you have competition, then you could see still be in a world where capex continues to grow faster than operating cash flow, not just in 27, but potentially in 28. That of course would come in to a head with where consensus is simply because consensus is expecting a big acceleration in operating cash flow in 28.

[Lisa Abramowicz]

Have chip stocks and hyperscalers sold off enough to make them attractive to you

[Cameron Dawson / Market Analyst]

on a technical basis? No, I think that if you're looking at oversold indicators for something like the semiconductor area, certainly you're not at that level of a total wash and flush out yet for the hyperscaler, you're now trading at a valuation that is as low as it was back at Liberation Day. Valuations that are as low as it was back in the lows in 2022 for certain names matter, for example, has undercut those lows. You can Also look at ETF flows mag 7. ETF flows have been very aggressive outwards over the course of the last month or so. So there's probably some opportunity there to step in. The challenge that we have is that we know these businesses are fundamentally changing. They were monopolies that had very high return on invested capital because they didn't have to spend a lot of money to make money. These are now competitive businesses. They're having to spend a lot of money to make money, which means that our oyster going lower. So we think structurally valuations will go lower as well.

[Jonathan Ferro]

That's why matter of Microsoft to some extent are in a bear market. You alluded to it earlier in the conversation. I don't want to bury it's important. Do you think they respond to what their stocks are doing? Do you think the stock move shape their approach to capex?

[Cameron Dawson / Market Analyst]

Well, in a way they kind of have to. Because if free cash flow is negative, that means that you have to rely on outside funding to meet your capex goals. But now that outside funding is getting more expensive, if your equity price is down, your incremental equity raises will be more dilutive. If your credit spreads are up, your incremental debt raises will be more expensive. So they cannot ignore the markets. And if you're a name like Microsoft who's seen its valuation fall by 45% since October, at what point do you say hey, maybe this is being perceived as being profligate and we need to pull back on that spending that has

[Jonathan Ferro]

been a massive tailwind for this economy. So let's work through it. The year so far, rolling sharks through energy, through rates, now through tech, does that become a growth scare at some point? Does the shake up in tech translate into some kind of fundamental story down the road?

[Cameron Dawson / Market Analyst]

Potentially yes. If we see see more weakness within the S&P 500. The strength of the equity market has been such an important driver of economic growth or support for economic growth in the US it's allowed the consumer in many ways to deal with the fact that real income growth has been negative because of higher inflation and low wage growth. But if you continue to see pressure within equity markets and put this into context, we're still three and a half percent off high. So this is, this is nothing to necessarily cause a of bunch big pullback in spending. But if you were to see a deeper, more protracted route, you could effectively have a negative feedback loop where the equity market weakness translates into economic weakness.

[Jonathan Ferro]

Stay with us. More Bloomberg surveillance coming up after this.

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[Jonathan Ferro]

So here's the latest this morning. The U.S. and Iran pausing strikes for a fourth consecutive night. The President saying both sides are engaging in talks. Let's build on this with Stephen Cook of the Council on Foreign Relations. He writes the following the Trump administration made it clear that it was standing down because the United States does not have the weaponry to carry out. The Iranians now know that they have impunity. Steven joins us now for more. Steve, you say in your words the Trump administration made it clear. Did they make that clear?

[Stephen Cook]

Well, all of the reporting from the advice that the President has gotten from the Secretary. I'm sorry, not the Secretary of State, the Chairman of the Joint Chiefs of Staff, as well as Admiral Bradley Cooper, the head of centcom, was that we were running out of munitions and that the bombing in the Strait had diminishing returns. So that the President called it off and is now relying on the Oman channel where the real negotiations are underway. Meanwhile, Iran's proxies, the Houthis, as well as Iraqi militias, are doing a lot of damage to Saudi oil processing facilities and other energy infrastructure around the region. The Iranians are doing what they normally do is that they are signaling directly to the United States and its allies, that and its neighbors in the region that it's willing to to talk while directing its proxies to sow chaos.

[Cameron Dawson / Market Analyst]

When it comes to rebuilding stockpiles, it's not like turning on and off a light switch. So do you expect this pause to be a long one?

[Stephen Cook]

Well, it does seem that despite the President's threat of escalation that he has made the decision that that's not really in the cards. So I think that the pause will go on longer than he was indicating on Air Force One yesterday, which has really become just an idle threat. The last two weeks of bombing did not change the Iranian position at all and in fact left them in a somewhat stronger position because it was the United States that essentially called off the campaign.

[Cameron Dawson / Market Analyst]

We know that Oman tries to keep friendly relations with everyone. They somewhat play both sides. Do you expect them to come out and support Saudi Arabia for a toll?

[Stephen Cook]

The the Omanis have at times sounded a lot more like Iran's lawyer than a mediator. They maintain that they are being bullied by the Iranians because there is some daylight between Washington and Muscat. That of course is a self serving statement. But it does seem that the Omanis are really the best chance for trying to figure out how to reopen the Strait, whether it will be a toll or not. They say publicly at the moment that they don't support at all. We'll see what happens as the negotiations take place. It' note that there is a negotiation going on between Oman and Iran right now, not between the United States and Iran and Oman at the same time.

[Lisa Abramowicz]

Stephen, attacks are continuing. There were reports on satellite images of smoke coming from an oil facility in Saudi Arabia. In Bahrain there were two Amazon Centers, data centers that were reportedly under attack. How much do you expect to see a region region wide war amplified and participation of like the likes of the UAE as well as Saudi Arabia?

[Stephen Cook]

That's a. It's a good question and it seems to me, as I was noting before, that while The Iranians are signaling a willingness to talk through the Omanis. Its proxies are being directed to attack American partners in the region, with the exception, I should say, of the United Arab Emirates, which has not taken any hits thus far. But. But the Houthis, who have a separate conflict with the Saudis, have hit ABQ and Abqaiq, a major oil processing facility in Saudi Arabia, as well as a number of other facilities. Iraqi militias have also joined in in these attacks. So once again, it is the Iranians talking from one aspect of this, while at the same time their proxies undermining hopes for regional security.

[Lisa Abramowicz]

I'm just wondering what it's going to take for some of these Middle east economies to really become once again a safe haven for businesses. Hilton just reported earnings and said that revenues from the Middle east and Africa declined by nearly 30% as a result of the war in the region. This was the hotspot for so many different companies to really go and do business. I mean, is that kind of over for the foreseeable future?

[Stephen Cook]

Well, this war has raised a question about the Gulf development model, which was based on security and stability and attracting the talent of the world to these city states and thus attracting lots of investment. If you cannot provide security, people are not going to come and people aren't going to invest. The Emiratis have taken somewhat different course. They have invested in their relationship with the United States and Israel, while at the same time signaling to the Iranians that they want to have better relations that seems to have shielded them during this round. It's possible that the Bahrainis and others will follow suit. But once again, the Iranians are intent on disrupting American military operations in the region. And as long as the Kuwaitis and the Bahrainis and Qataris and others have major American bases there, they are going to come under Iranian fire.

[Jonathan Ferro]

Stay with us. More Bloomberg surveillance coming up after this.

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[Public.com Advertiser]

support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on Public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk. Monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors LLC, SEC registered advisors. Complete disclosures [e-mail] disclosures so there's a

[IBM AI Representative]

lot of noise about AI. But time's too tight for more promises. So let's talk about results. At IBM we work with our employees to integrate technology right into the systems they need. Now a Global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions. Not noise Proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business IBM.

[Jonathan Ferro]

So here's the latest this morning. The Fed's two day meeting kicking off later on today. Markets widely expecting the central bank to hold rates steady. But a surprise hike by Fed Chair Kevin Walsh is not completely off the table. Matt hold back of Morgan Stanley writing we expect the Fed to stay on hold. That said, inflation has to perform in the coming months or the Fed will switch the hikes later this year. Matt joins us now for more. Matt, good morning.

[Matt Holdback]

Good morning.

[Jonathan Ferro]

How much dissent are you expecting tomorrow afternoon?

[Matt Holdback]

Well it's interesting, I mean we, we are expecting a couple of dissents coming off out of the committee but but I do think that you could make the case that there may not be any dissents actually John, because In the end, if we look at what has happened since the June FOMC meeting where there were no dissents, the data has been better, the inflation data has been better. The labor market data has been somewhat disappointing relative to the trend that we had seen in March, April and May. And so if they weren't willing to dissent in June, why all of a sudden the change of heart? I mean, crude oil prices are roughly where they were going into the June meeting. They're obviously a lot lower than they were three months ago. What's the rationale to descent? It's you can make the argument that there will be no dissents tomorrow.

[Jonathan Ferro]

Beth Hammock, Cleveland Fed president making a statement on LinkedIn going into the quiet period, which was interesting timing, making the statement, the suggestion that companies in her district are telling her that prices is too high and perhaps ultimately this Fed should do something about it. What was your reaction to that piece?

[Matt Holdback]

I think people have thought prices were too high for 20 years, John. The real question is have the increase in prices that we've seen over the past five years Fed into inflation expectations such that people continue to expect inflation to be running very, very hot for a very, very long time to come. There's not a lot of evidence to suggest that that's the case. And when you look at markets, just look at five year forward, five year break even inflation rates, right? The Fed publishes this measure. It's on the Bloomberg terminal. It's been very stable since the Fed hiked rates in 2022. Where is the need for the Fed to, to, to get inflation fighting credibility? It already has. I just, I don't see the rationale for a rate hike on Wednesday to solidify credibility. The Fed already has. It doesn't make much sense to me.

[Lisa Abramowicz]

Well, does it still have it in the same way? And I ask this because I'm looking at long end, long ends of the yield curve continuing to rise and this feeling that right now in markets, people are pricing in more than a 70% chance of a September rate hike. If there are no dissents, do people take back some of that pricing of a potential rate hike ahead?

[Matt Holdback]

Absolutely. The thing that we have to recognize is that real rates have gone up a lot. Financial conditions have already tightened a lot. The big question facing the Fed today is have they tightened enough? And I just don't think that they have enough information to say one way or the other.

[Lisa Abramowicz]

Does it behoove them though, to take that pricing out of the market to give a sort of dovish signal at a time when the market is doing the work for them and could potentially get inflation lower without them even having to act. As long as there are dissents, as long as there is this family fight,

[Matt Holdback]

Gosh, I think if they were being that clever, then it's we've got a whole nother situation on our hands. I mean, like, do they manipulate the dots to try to get a certain outcome? I think the answer has always been no. Right. They do, of course, look at the statement language. They have a message they want to convey to the public. But are they going to play games with the public's perception of. I think the answer is no. I think they have a clear mission. They've made that very transparent. Transparent to the public. They want inflation to come down. Interest rates have gone up a lot since Chairman Warsh delivered that message at the June FOMC meeting. The question they face today is have those rates gone up enough to help inflation come down in the manner that they would like to see? It's only been six weeks. I don't think they have enough information in hand to say one way or the other with confidence, which is what I think you need to have. If you're delivering a rate hike that isn't fully priced in by the market, you need to have confidence that you're doing the right thing. I think the answer is that they don't yet have that confidence. We don't think they're hiking rates, but

[Cameron Dawson / Market Analyst]

at some point, if inflation doesn't come down quick enough this year, don't they have to hike? Or they just look like they're talking out of both sides of their mouth and not delivering, it's just empty promises?

[Matt Holdback]

Absolutely. If inflation doesn't come down in the way that they would like to see rate hikes are on the table. I mean, that's what we're saying. At Morgan Stanley, our chief US Economist Mike Gapen is making that point very, very clearly. He happens to believe inflation will come down such that the Fed isn't going to deliver rate hikes this year. It's a view based on a solid rationale. The issue that we face today in this moment for this meeting is do they have enough information to say with confidence that financial conditions haven't tightened enough? And I think the answer is clearly no.

[Jonathan Ferro]

So much just quickly, do you expect that gap between the two year yield and rate just to be sustained for the time being?

[Matt Holdback]

For the time being, absolutely. After this meeting, we're going to get two rounds of economic data before the Fed has to make a decision in September. That is a lot of economic data that will inform their decision in September. We think the data will come in and tell them they don't need to hike rates. We'll see.

[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast bringing you the best in markets, economics and geopolitics. You can watch the show live on Bloomberg TV weekday mornings from 6am to 9am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business App.

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[Matt Holdback]

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