Bloomberg Surveillance TV: July 2nd, 2026

Summary

Bloomberg Surveillance TV Podcast Summary

Episode: July 2nd, 2026
Hosts: Jonathan Ferro, Lisa Abramowicz, Annmarie Hordern
Guests: Peter (Academy), Priya, Stephanie Roth (Wolfe Research)
Main Theme:
A deep dive into the intersection of financial markets and the real economy, with a particular focus on artificial intelligence (AI) investment, labor market signals, inflation risks, and the Federal Reserve’s outlook.

---

1. Overview

This episode explores:

• The ramifications of the recent tech sector sell-off
• The rising costs versus benefits of corporate AI adoption
• Shifting narratives in labor market data and inflation
• Potential Federal Reserve moves in light of economic reports
• The possible sociopolitical backlash against rapid AI-driven expansion

---

2. Key Discussion Points & Insights

A. Tech Market Rout & AI Investment Pressures

(02:06–08:02)

Discussion Led by: Nathan Hager, Peter

• Current Market State:

  • Stock prices falling, especially in tech as the “AI trade” unwinds.
  • Concerns about possible overbuild in AI infrastructure—reminiscent of the “fiber glut” in telecom.
  • Questions about whether AI spending is generating enough value to justify soaring costs.

• Peter’s Perspective:

  • There’s a growing demand for specific, results-driven use cases with AI, rather than generic promises (03:14).
  • “This feels like some of this kind of circular narratives starting to break apart.” (02:31, Peter)
  • The narrative is moving from, “AI is exciting,” to “Is AI actually delivering returns worth the investment?”

• Market Structure Worries:

  • The high value of the sector is being supported by complex market structures, including leverage and zero-day expiry options (05:17).
  • Selling pressure could intensify quickly if faster money or hedge funds start to abandon the trade.

• Investment Strategy:

  • Peter suggests waiting to see how things play out, especially with high valuations and uncertain future spending (06:09).

Quote:

“When I go to conferences we talk to people. No one wants to hear about AI generically. They want to hear what's your use case? ...That’s a very different conversation than this time last year.” — Peter (03:14)

---

B. Macro & Political Implications of AI Buildout

(06:38–08:02)

Discussion Led by: Nathan Hager, Peter

• If AI investment cools, there’s macroeconomic risk as the sector has been a key driver of growth.
• AI companies face political and social resistance regarding data center build-outs and the impact on communities.
• Potential for future political backlash—calls for AI taxation and stricter regulation are rising much faster than expected.

Quote:

“I think this is becoming a political issue and I could see things where you start seeing politicians run on, ‘Well, we're going to tax the AI.’ ...I think the industry has to get out in front of it better than they've done.” — Peter (07:02)

---

C. Labor Market and Inflation Signals

(08:57–15:09)

Discussion Led by: Nathan Hager, Priya, Monica Morning

• Current Labor Market:

  • Despite shocks (oil, tariffs, rates), the economy remains resilient.
  • The labor market is not clearly feeding inflation—wage growth is muted, broad job growth not fully evident (09:00).

• Under the Hood:

  • Key: Watch whether job creation broadens across industries or remains isolated (11:12).
  • Construction/data center jobs don’t necessarily count as the desired broadening.

• Fed Watch:

  • Market participants look for wage growth, hours worked, and broad hiring to potentially pull forward a Fed rate hike (12:53).
  • AI is currently inflationary by raising software/hardware prices, but the expected productivity surge is yet to show up (14:00).

Quote:

“The supply side is unknown... Jay Walsh is bringing that up... If there's a sense that productivity is picking up, you don't need to kill growth, then you don’t have that cruel choice to make.” — Priya (13:32)

• Implications for Bonds:
  • Higher income in fixed income markets (about 6%) and stable spreads make bonds attractive amidst lingering uncertainty (15:09).

---

D. Immediate Jobs Data Reaction

(16:58–20:50)

Discussion Led by: Nathan Hager, Stephanie Roth (Wolfe Research), Priya

• Jobs Report Summary:

  • New jobs: 57K (well below 113K estimate)
  • Unemployment rate ticks lower, data revisions downward
  • Key takeaway: Labor market is “steady,” not overheating (17:16).

• Stephanie Roth’s Commentary:

  • Payrolls had likely been overstated in recent months, with more volatility than underlying reality (18:27).
  • “There's been a lot of volatility in the actual data itself. It seemed odd the extent of which payrolls had been running significantly above anyone's estimates...” (17:55)
  • The broad message: The economy is in balance; inflation is not labor-driven.

• Market Implications:

  • The Fed is likely to remain on hold; momentum is lacking for either a hike or a cut (19:33).

---

3. Memorable Quotes & Moments

• “This feels like some of this kind of circular narratives starting to break apart.” — Peter (02:31)
• “No one wants to hear about AI generically. They want to hear what’s your use case?” — Peter (03:14)
• “I think this is becoming a political issue... politicians run on ‘We're going to tax AI’... the industry has to get out in front of it better.” — Peter (07:02)
• “If you just show me it’s construction and it’s really non-residential... I don’t know if I would be convinced that this is broadening out.” — Priya (11:35)
• “There's been a lot of volatility in the actual data itself... payrolls had been running significantly above anyone's estimates.” — Stephanie Roth (17:55)

---

4. Timestamps for Key Segments

• [02:06] — Market Rout, AI Cost-Benefit Concerns (Nathan, Peter)
• [03:14] — Market Structure & Investment Strategy (Peter)
• [06:38] — Macro Risks of Tech Slowdown & Political Risks (Peter)
• [08:57] — Labor Market Resilience, Macro Shifts (Priya)
• [10:32] — Labor Market “Under the Hood”, Fed Implications (Priya)
• [12:53] — Fed Watch: What Could Bring a July Rate Hike (Priya)
• [14:00] — AI: Is Inflation or Productivity Dominant? (Priya)
• [15:09] — Bonds as an Attractive Asset in Uncertain Times (Priya)
• [16:58] — Instant Jobs Data Reaction & Analysis (Stephanie Roth)
• [17:55] — Volatility in Labor Data Explained (Stephanie Roth)
• [19:33] — Neutral Rates and Market Momentum (Stephanie Roth)

---

5. Takeaways

• Investors are increasingly demanding proof of value from AI investments; rhetoric alone is no longer driving market confidence.
• The possibility of political backlash against big tech and AI expansion is accelerating, with potential regulatory or tax responses on the horizon.
• The US economy remains resilient with a “steady” labor market; inflationary pressures seem to come from non-labor sources.
• Market sentiment is in wait-and-see mode concerning both stocks (especially tech/AI) and the Fed’s next move, though bonds look attractive for now.
• The economic landscape may continue with moderate growth and minimal Fed change unless a clear wage uptick or inflation surge emerges.

---

Conclusion:
This episode captures a market and economy at a crossroads—between the AI-driven optimism of the past year and a sobering new focus on tangible results, with both economic and political challenges looming. The labor market remains in balance, giving the Federal Reserve flexibility but leaving markets uncertain about the next move. The tone is cautious, analytical, and pragmatic, reflecting the careful recalibration underway across financial sectors.

Transcript

[Bank of America Representative]

Introducing B of A Rewards A new loyalty program with rewards for every ambition. From cash back deals on brands you know and love to a credit card rewards bonus. From fueling up to rewards that fuel your goals. It all starts with a Bank of America checking account and grows from there. What would you like the power to do? Bank of America Open or enroll your [e-mail] B of A rewards bank of

[Optum Representative]

America Corporation All Rights Reserve Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make healthcare work as one for everyone. Learn [e-mail] so there's a lot of

[Bank of America Representative]

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,

[Optum Representative]

Bloomberg Audio Studios Podcasts Radio News.

[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferro, along with Lisa Abramowicz and Annmarie Horden. 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

[Nathan Hager]

this out with stocks sliding as the tech route deepens. Peter, Chair of Academy Writing Is the cost of using AI rising even faster than the benefits? The growing angst is something companies need to aggressively address before it becomes a problem. Pete joins us now for more peak and Monica Morning. You wrote that coming into this month and already this month things are shifting pretty quickly. I've got to ask the question, if we're capacity constrained, why does space X, what is matter, have excess capacity?

[Peter]

It is strange here we just went through three headlines, all of which certainly could have negative connotations for this industry. I don't think we've had a day like that, right? There's clearly positive interpretations of all these but I think it does bring that question have we overbuilt? It reminds me again we talked about this a couple of years ago. We haven't had a strong opinion on it but the fiber industry, fiber built out everywhere then we had excess fiber for a number of years. So you know, is this every small little agentic AI startup needing and willing to pay for compute so they can ipo? It's hard to tell but this feels like some of this kind of circular narratives starting to break apart.

[Nathan Hager]

So one trade, one big trade that developed more recently over the last few months was to get along the capex takers and get short some of the hyperscalers. The trade about to flip.

[Peter]

Who you know, I feel maybe everything kind of slides for a little bit, right? Everything's kind of been pretty highly valued. We've been building out, it's. We've had this kind of almost two tier economy, right? The air build out, everything associated with the build out and everything else and the everything else is doing okay. The build has been driving things. Maybe people start to question that again. There's been all sorts of debt issuance. People are, you know, it's come to the markets, come. Well people want it. But are we hitting that point where people say let's see how this actually plays out again? I think everyone right now when I go to conferences we talk to people. No one wants to hear about AI generically. They want to hear what's your use case? What have you done with it? What have you been successful with it? They want case studies and it tells me, I think we're all going through this sort of process where here we're using it here we're now getting our bill for our tokens. Did I get enough value for that tokens. And that's a very different conversation than this time last year where everything was kind of free, right? You could play around with it, it was very cheap. I think this is kind of where the rubber hits the road. Rubber meets the road and are we getting enough and do we see a slowdown in AI spending?

[Monica Morning]

Are you surprised that equity investors are pushing back more than debt investors?

[Peter]

Not really. I think these companies have such large market caps, such potential that credit so well protected and again credit's looking for, you know, we've been so dull in credit. It's a used to talk about this all the time, right? You know these CDX indices, the Bloomberg, you know, corporate oas spread, it barely moves anymore. So I think anything that gives excess potential returns is, you know, taken in. People want that. And I do think what we're seeing is the people across the globe prefer US corporate credit to US government debt. So I think US government debt has become very generic corporate credit with the extra spreads. That's interesting. And it's the only place to get that is us for tech.

[Monica Morning]

Just to be contrarian, if I'm hearing you talk, I would say, well, that means that the thesis is still intact. It's just sort of a question around volatility in a summer after a lot of gains and pulling back just a little bit as people get nervous, which is a positive thing, frankly, and should make you actually more excited. Why doesn't it make you more excited to think that there is some discernment? These are three separate stories all talking about pressuring prices low as demand continues to increase. By pretty much all accounts.

[Peter]

Well, I think everyone's been very nervous about the valuation side and I think, you know, the Cosby shows this again, there's so many structured products out there linked to these names that when, you know, buying begets buying and unfortunately selling begets selling, right? We have so many leverage ETFs, the triple stocks, leverage ETF, right. When those go up, they put extra pressure and no one wants to talk about that. Everyone, oh, it's my decision to buy these. There's a lot of pressure coming from zero data expiration options, all these leveraged ETFs. And unfortunately it works in reverse. Right. The last two days, we haven't seen yet today how it'll play out. But we seemed up ridiculously well on the month end close and yesterday seemed particularly weak on nothing. So I feel like the market structure is very weak. There's not the depth of liquidity people need. And if you really start seeing hedge funds or faster money, say, hey, this trade's over. I think there's more selling pressure because that liquidity is not true and it hits these other products.

[Priya]

But in the short term, is this a buying opportunity?

[Peter]

I want to wait a little bit. I want to see where this plays out again. These valuations have gone phenomenally high. And maybe you want to start looking at who are the. Some of the companies that, you know, have maybe been blamed for spending too much and might pull back and maybe you see that stock price come back. Right. Can, you know, we used to talk about the debt diet where companies kind of got restricted and they did something to take care of their debt. We're not seeing that yet, but maybe you start seeing a different narrative. Right. This is the first time kind of wake up in the morning like we need to spend and the only problem we could have is not building enough compute. That doesn't necessarily sound like that's today's problem.

[Nathan Hager]

At least I mentioned it. The big signal, the instructive signal coming from the market. Matter rallied, had a really nice day and you wanted to see suite over it, say Microsoft pays attention and says, you know what, I'll have some of that. The issue is, and you alluded to it, it's not just a market story. We've got an economic story as well. The market story increasingly becoming one trade and the economy increasingly firing on one engine. If they start pulling back on spending, do we have a macro risk starting to build here?

[Peter]

I think so. I think that would certainly hurt the economy. It would hurt the growth that we have. And the flip side of this, and I'll talk maybe a little bit about the open air story where they're talking about one of the risks that we've had is that the AI industry has not done a really good job, I think, in community outreach. Right. They haven't got a good job convincing people. It's important for national security. B, it's good for your community if we build a data center near you. I think they have to get back on track and some of this is open AI and you start looking. I think it was Utah. One of the people who lost recent by election blamed that their support for the data center cost them that. So I think this is becoming a political issue and I could see things where you start seeing politicians run on well, we're going to tax the AI. We're going to tax this. I don't know how they would do it, but it doesn't really matter. I think that momentum is building and far faster than I would have expected. I would expect that to be a 2028 issue. It feels like some politicians are going to be savvy and catch this mood and I think the industry has to get out in front of it better than they've done. It's really got to be like the energy industry, other things, community outreach, explaining their story better.

[Jonathan Ferro]

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

[Stephanie Roth]

Get the news you need in just 15 minutes.

[Nathan Hager]

Start your day with Bloomberg Daybreak, the podcast with a global view on the stories that matter. I'm Nathan Hager.

[Optum Representative]

And I'm Karen Moscow.

[Monica Morning]

Join us each morning for curated stories on current events, politics, business and foreign relations.

[Nathan Hager]

Plus one conversation on the day's biggest developments, all in just 15 minutes.

[Stephanie Roth]

Subscribe to Bloomberg Daybreak for a precise,

[Monica Morning]

thoughtful take on the stories that matter.

[Nathan Hager]

Listen to Blood Bloomberg Daybreak each morning on Apple, Spotify or anywhere you listen. Prime Minister of JP Morgan writing it will be important to look under the hood and which sector is driving jobs to see if the pace of job creation is broadening and or becoming a source of inflation. Priya joins us now for more. Good morning.

[Priya]

Morning.

[Nathan Hager]

What did the early indicators suggest?

[Priya]

So I would say it's still not really. The labor market doesn't seem to be a source of inflation here. You know we're looking at wage, wage numbers, they're not really picking up. The unemployment rate hasn't been falling. We're in this low hire, low fire economy. There's a massive trade, you know, there's this sort of K shaped consumer. So you know, but, but we've had a very resilient economy and we've had, we've had lots of shocks, you know, between the oil shock, between tariffs, between 500 basis points of rate hikes and the economy has been resilient. I think the big question you were just talking about the shifting narrative. I think there's also a shifting narrative in the macro world that is the labor market reaccelerating. You know, we've had three months of solid growth. Are we at the point where the labour market's about to take off, the growth is broadening out? If it's broadening out then we should be talking about a higher neutral rate. We should be talking about Fed rate hikes. We're not convinced we're there. I mean we're expecting some slowdown but you have to look under the hood. So I would push back. I think the labour market is extremely important. I know if you just watch Chair Wash you might say it's all about inflation. It's about trend inflation. He's actually opening the door here for we may need to look at more data. We may need to look at that trend number and that's where the labor market comes in. So watch under the hood. Is this still really AI and sort of these secular things? We're all getting older. So you know, if it's all health care, I wouldn't say that that's a source of inflation. Do we see broad based, you know, job growth? I think then we would say hikes should be really on the table.

[Nathan Hager]

Do you think close to that.

[Priya]

I don't see that. I still see hiring trends remaining low. You Know we look at all sorts of, whether you look at consumers. So if I'm in the market looking for a job, those numbers are weak. So sentiment numbers are weak. If I look at companies, what are you doing with all the money you're raising? Capex, I still don't hear hiring, so I don't think we're there. I mean let's see, the numbers are noisy so you can always get that World cup effect in a high number. But if it's all leisure hospitality, if it's health care, I'm not convinced that we're at the point where the labor market's about to take off. But I think that's the key question, especially as we sort of contemplate rate hikes in a no forward guidance or no framework guidance world.

[Monica Morning]

You know what's interesting is in the ADP report it wasn't coming as much from leisure and hospitality. I don't know what we can read into it from that. How much will it matter to you if suddenly we see people being hired to build out data centers, to do construction work, to do some, some of the highly technical mechanics. I mean how much do those jobs give you a sense of positivity or not? Is that a broadening out or is that the same trade?

[Priya]

If you just show me its construction and it's really non residential constructions, that's data center. I don't know if I would be convinced that this is broadening out. It would be good. Every job is good. But is that a source of inflation that the Fed might want to clamp down or you know, in this focus on price stability will need to push back again? I guess that's what we'll be watching. And do you see that showing up in spending? Look at personal consumption this year. I mean despite the resilience, personal consumption is actually slowing. So I'd like to see the broadening out of the job gains as well as personal consumption picking up. Not just the upper part of the key, but some broadening out as oil prices decline. Do we see that tailwind for the consumer? And then you know, that might make us more positive. Think that the Fed may have to raise rates and then that. Then I think the market's going to struggle because how much are we talking about raising rates? You know, because without forward guidance, is it just a mid cycle adjustment? Is it risk management hikes or is this a hiking cycle? I think the market narrative will shift. I'm not even sure risk assets will love that. I mean the rates market will price in some risk premium of rate hikes. But I think you will need to see that consumption along with the broadening out of job gains to get there.

[Monica Morning]

Is there anything I'm going to ask you the question that we were talking about with Marc Giannoni. Is there anything you could see in this labor market report that could put July in play?

[Priya]

Oh, wages. If we see a pickup in wages, and I would like to see that along with, you know, no sort of seasonal impact or this is just driven by one sector, then I think July, you know, the market's going to price in this risk premium. Now that I think we all have to get used to higher risk premiums. You know, Chair Wash says that the market is a pure way to see it. But if you're not sure of the reaction function, you're not sure what is that trigger point for the Fed to actually raise rates, then at that point you're going to price in that, you know, some decent chance of a July hike. So wages hours worked, broadening out. And then of course, we have CPI in two weeks. So we'll be watching that. If you see core services starting to pick up and it's not just software, but it's actually broader, you know, every service that we spend, then that will be a sign that maybe the inflation pressures are not just oil, because we know headline inflation is going to be negative. I mean, most likely month over month. But if it's broadening out, I think then the Fed will they sort of tell us that they're getting a little impatient with being above target for this long. I think the market then brings July in play. Does this meta story actually help them? Because Kevin was almost yesterday admitted that AI is inflationary in the short term. I'm glad you bring that up. I mean, I think Kevin Wash is, he said it a little bit in the press conference and he brought it up again yesterday. I think the Fed, it's easy for us to see the demand side of AI. It's showing up in data centers, showing up in software prices. The supply side is unknown. You know, I go back to the 90s. It took a long time to show up in the productivity data. Jay Walsh is bringing that up. He brought it up again yesterday. So I don't know if it's the meta story or a broader. But if there's a sense that, you know, the pricing power aspect is there, but you're seeing the pickup in productivity, you don't need to kill growth, then you don't have that cruel choice to make. Productivity is picking up this is something we were debating. We just had a quarterly meeting for for fixed income last week and we were debating the expansion is there we feel good about the expansion. Is it productivity leading or is it is it inflationary and that has implications across asset class. I think we more in the productivity camp but we have to see that in the data and I think wages, hours all of these consumption would be one source of that.

[Nathan Hager]

Well let's go there if we get a better shift is that a bullish

[Priya]

development for bonds And I think bonds actually look good. I don't want to talk my book but you have the income look at the income you're getting in fixed income and I will highlight how I mean incomes back real yields are positive. You've had 30% and higher investment rate corporate supply this year and spreads have been remarkably stable. So people are voting with flows they are looking at all in yields of 6% and you know you look under the hood there's a lot of dispersion high yield investment grade we can get high quality investment grade paper close to 6%. So I think fixed income I would generally say that there's a case to be made I think if the if this is just a I mean I would argue look at the economy it's a lot of it is a driven so if some air is coming out of that balloon maybe people are going to say okay I'd like to see broadening out. If I'm not convinced maybe bonds risk adjusted yields you're giving me 6%. That looks attractive so short a long answer to your question. Yes, but I would say it's attractive even here and that's why we're seeing the inflows.

[Jonathan Ferro]

Stay with us. More Bloomberg surveillance coming up. Off to this.

[Optum Representative]

The Bloomberg Sustainable Business Summit returns to Singapore on July 22. Our 5th annual Asia Pacific Summit will explore how business and finance leaders are shaping the next phase of globalization by strengthening resilience and driving a multi speed energy transition across Asia's diverse markets. Join us for solutions driven discussions and networking opportunities. Thank you to our summit advisor Bangkok Bank. Learn more at bloomberg live.com/sbs-singapore.

[Nathan Hager]

So we got the jobs number just moments ago came at 57K. The estimate our survey was 113. The previous number revised down the unemployment rate for a bunch of reasons. We'll spend some time on that dropped back from 4%.3% to 4.2 with this around the table Stephanie Roth of Wolf Research. Stephanie, good morning.

[Priya]

Good morning.

[Nathan Hager]

What would you put weights on this morning looking at this report?

[Stephanie Roth]

Yeah, I mean, I think the main message from the report is payrolls have been overstated to some extent in the recent prints. We're sitting in a labor market that's largely imbalanced. The unemployment rate, yes, it ticked down, but realistically, you know, the household and the establishment surveys have been telling you slightly different signals. It kind of makes sense. It tells you the labor market is fine. There's no real concern, certainly no urgency for the Fed to be hiking. And that buys them time. The longer that they have to buy time. By that point, inflation will be slowing down a bit, and that will, that will probably allow them to stay on hold.

[Nathan Hager]

The chairman used a word to describe this particular jobs market. He said it was steady. Would you call it steady, this labor market?

[Stephanie Roth]

I think that's exactly right. And I mean, there's been a lot of volatility in the actual data itself. It seemed odd, the extent of which payrolls had been running significantly above anyone's estimates of break even for many months. And you weren't really seeing wages pick up. You weren't seeing. It confirmed that extent of the tightness confirmed in other surveys. So it kind of suggests that payrolls had been overstated to some extent. If you look at the birth death adjustment for this month, it was a little bit lower than it was last year at this time. So perhaps that is just adding to some of the volatility, made it a little bit lower than would otherwise be the case.

[Monica Morning]

I remember speaking with San Francisco Fed President Mary Daly about a year ago, and she said that typically at turning points in the economy, you can get these, this turn, this lack of clarity in the labor market. It feels like that churn has continued for a really long time, even though usually it does tend to tip one way or another. Are we looking at it wrong? Is there something else that's happening here, some evolution, some sort of shift in terms of the emphasis going forward that we can glean from these successive labor market reports?

[Stephanie Roth]

I think what we've learned is certainly there's a lot of volatility, a lot of stuff, surprises. Of course, this time the surprise has been on the negative side in the prior month. It's been on the positive side. Realistically, the results somewhere in the middle, where labor market seems to be in pretty good balance. It's running probably close to break even, whatever your estimate may be of that. Our estimate is around 75,000. So our estimate is that you're probably just in a pretty good balance. The economy is in a decent spot and the inflationary pressures don't seem to be generated from the labor market. It seems to be generated elsewhere, in which case that should roll off. We expect about 100 basis points coming off core PCE by the end of 2027, but it'll take a little bit of time.

[Monica Morning]

The market doesn't do well with remaining on hold. Usually people are saying okay, which direction are you moving in? Which is a reason why there's this obsession of what's the next move for the Federal Reserve? Rates up or rates down partly because people want momentum. But are we really looking at is that we are at neutral and that essentially this rate is allowing the economy to kind of muddle through whatever technological transformation is underway?

[Stephanie Roth]

I think that's probably right. And by the way, the technological transformation doesn't really depend on the level of interest rates today because that's going to happen regardless of whether rates are plus or minus 25 basis points from here. So realistically, we're in an environment where interest rates are largely neutral. Of course there are parts of the economy that, that are. That it feels restrictive as certainly worse it talked about in terms of housing, but generally speaking it seems to be in a pretty good place. Consumers are saying spending fairly well. It's been a decent, call it 2% trend in spending. It's a, it's an economy that is in pretty decent balance and I think that will continue through much of the summer and the rest of the year.

[Priya]

What about the participation rate falling by 3, 10 of a percent?

[Stephanie Roth]

My guess is a lot of it is noise to some extent. The household survey is notoriously volatile. By falling by 310 is a big move. 700,000 people exit like we tend to get a lot of volatility in that report and my expectation is in the next print you will see it rebound.

[Priya]

What about revisions make you nervous or no?

[Stephanie Roth]

No, it makes me feel better because it didn't make sense of how strong the labor market is relative to anybody's expectation of a break even. So, you know, seeing some, some revisions to the prior months that seemed stronger than what made sense, I think, you know, makes me feel better about sort of the data and the trajectory and it makes me little bit more sense relative to where other indicators are.

[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 applause

[Priya]

The Big Take podcast from Bloomberg News keeps you on top of the biggest stories of the day.

[Peter]

My fellow Americans, this is Liberation Day.

[Priya]

Stories that move markets.

[Stephanie Roth]

Chair Powell opened the door to this

[Priya]

first interest rate cut, impact politics, change businesses. This is a really stunning development for the AI world and how you think about your bottom line. Listen to the Big Take from Bloomberg News every weekday afternoon on the iHeartRadio app, Apple Podcasts, or wherever you get your podcast.