Citywire CIO：美联储加息后通胀难回落，黄金成债券替代

Bloomberg Audio Studios podcasts radio news. This is the Bloomberg Surveillance Podcast. I'm Jonathan Pharaoh along with Lisa Abramitz and Amarie Hordern. 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 6:00 to 9:00 a.m. 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 hour with stocks looking to snap a three-day losing streak. K Mo City Wealth writing, "We hold an underweight duration since we believe the likely path for interest rates across advanced economy central banks runs higher. We prefer to take risk in equities." Kate joins us now for more. Kate, good morning.

Good morning.

How was the hiking? What did I miss?

Um, the hiking is always amazing.

Good time had by all. Yeah, it was a good time had by all, including the bears, which I know Jonathan you care about.

I'm I'm very very scared of the bears and won't be attending anytime soon for those hikes.

Yeah, a grizzly actually walked toward us on our hike.

You should You should be more concerned about the moose than the bears, but that's another story.

It's like the hippo, right? The hippo. People seem to think hippos are like, you know,

dumb, blind, and mean,

right? We're conditioned as children to think that hippos are cute, and they're not cute.

And the little ones are sort of cute.

And loose aren't either.

Yeah. And neither are bears cuz they're adorable.

My producer always tells me I'm not a bear. We're live. Okay. Not today.

There we go.

But you're bullish stocks. So, let's take

I am still bullish stocks though. I think we have to expect a bit of consolidation in September. That is the normal course of business at this time of year. There's a multitude of reasons and then people make up reasons of course, but we're in this kind of holding period before we get to third quarter earnings. We know that we obviously, and you guys were just talking about this, have a critically important Fed meeting and a few very important data points that people are going to want to digest.

Um and then very very importantly this is a time where companies are talking to lots of investors. There's you know an enormous number of conferences over the next 2 to 3 weeks and people are just not going to be taking a lot of risk ahead of hearing from those management teams. So there is that kind of like pause that is very natural at this time of year. That wouldn't stop us from being overweight and constructive into year end.

I just want to make that point. Got it.

Yeah. underweight bonds though and the big question you know what the big question is right now it's whether that bond story becomes a problem for equities it hasn't so far will it change

yeah I don't think it's going to look we've been underweight bonds for a good period of time for the duration of my time as CIO at city and we have continued to say like in all of our investment committee meetings are we now at a point where we want to add duration back into the portfolio where we want to get to a more neutral position and we just can't make the case frankly in fact we think the economic data remains very strong that we're in a sustainable stustainable expansion.

Um, but combined with that, the fiscal deficit story is no joke. And I think investors are not wholly focused on it, but they're also aware of it. And our expectation is that even if the Fed starts the path of policy tightening, that we're going to stay at a rate of inflation that is above Fed target for a while. It's going to take time for that any interest rate rate moves, the blunt tool to really work its way through the system.

Just to sort of build on that, people had expected the long end of the yield curve to come in if the Fed was hawkish and if we heard from Fed Chair Kevin Worsh that he was prepared to hike rates. He delivered, but the bond market didn't respond the way people thought. Why?

You know, it's a good question. I don't know that many people who are that focused on investing in that very long end kind of the 30-year space for example um besides like those people who have to match their um liabilities. This is what I will say though. Um, I think there is a question until we start actually moving, until we start actually hiking, until we get not just words, but actual action, um, about how sustained any commitment to getting to the 2% target will be.

I I I I feel like we've gotten to this point where, you know, Chair War started talking about it several months ago. Um, and we continue to get data that is above the target and we're still waiting and waiting and waiting, I think, for that first policy move. So there's still a credibility gap that is affecting the long end of the yield curve in the US.

I think it's like neutral, right? But I do think it Yeah. kind of neutral on the credibility, but people want to feel very very confident that what you know the Fed chair and the FOMC voters are saying is something that they will actually follow through on and that they won't just keep on kicking the can down the road.

If long-term treasuries are no longer the ballast that they used to be,

what's the haven asset?

This is a tough one, Lisa. I mean, we've just definitely been trying to explore this ourselves. Now, I think we've talked about this on this show. I added gold to the portfolio, you know, last year, a pretty considerable portion for most of the risk profiles. Now, this was hard because to be fair, I have not been a gold bug my whole life. In fact, many times I've argued against gold, but I was looking for an asset that I thought could, you know, outperform long duration and could be a substitute for for bonds and would provide something that I thought was less correlated to the equity risk I wanted to continue to hold and run with.

And so, that is part of our, you know, strategy right now. But I'd be, you know, lying if I said we knew all of the uncorrelated assets we could add that would provide that balance to the risk because I want to continue to lean into the equity story.

It's funny because for years and years and years with higher rates, people would say the opportunity cost was working against you to own gold.

Totally. And I I think I was one of those people. So,

what's the shift? What's the shift?

Well, I think there are a number of things. Number one, we are seeing more, you know, reserve diversification. That's a really important part. The central banks, sovereign wealth funds, pension funds, institutional allocators are now looking at it as an asset. So we always have to understand the positioning the technicals and the sentiment around an asset in order to make a decision around it. I think the second thing that's really important is that you know we have had these geopolitical tensions um and realignments not just of trade but also obviously military realignments that are leading people to ask how much they want to hold in US dollar assets.

Now we haven't seen people back away from treasuries yet but as long as that discussion is in the market gold I think becomes a viable additional asset for a portfolio. Lisa asked a great question earlier. She asked great questions all the time, but this one stood out.

Yeah, she's always great.

How bonds behave in an economic downturn. Will treasuries rally if we get into some trouble? Are you confident they will?

I'm not confident they will.

That is such a massive switch.

It is such a massive switch. And this is something we've been talking about with a lot of our clients and you know, you know, even some pension funds and endowments and stuff I work with, which is to say this, there's this knee-jerk reaction that bonds are the safe haven asset. But in an enviro