美核心CPI预期决定下周加息，油价破百推升利率预期

The risks to inflation are still greater than the risks to growth. This is a period where we've got inflation due to an oil price shock. Ultimately this is going to pass through from PPI into CPI. If we do see significant acceleration or meaningful acceleration, maybe a hike is in the works. With higher oil prices, the fed can hike as much as they want. That doesn't like oil to flow through. This is Bloomberg surveillance with Jonathan Ferro Lisa Abramowitz and Annmarie Horden live from New York City this morning.

Good morning. Good morning for our audience worldwide. Bloomberg Surveillance starts right now coming into Friday, close to 5%. The global bond rout leaving yields on the edge of multi-decade highs as widening hostilities in the Middle East are keeping oil above 100 investors a, turning their attention to the next raid on inflation, us CPI just a few hours away. The conversation hasn't changed. The idea that 0.21 or 0.27% for core CPI.

Month over month will make the difference between a rate hike or a rate hold next week. I will say the music has entirely changed since the Jackson Hole speech that Kevin Warsh gave. You have almost a 20% gain in oil prices. You have the ECB coming out and saying it was a no brainer to hike, and you have a situation where suddenly people are saying this inflation, although it is not the fault or the purview of central banks, is squarely in their remit to combat.

To add it all off, on top of the CPI print we're going to get today, we have diesel at $6 a gallon. This is a record. It is a new record. And this is the lifeblood of the U.S. economy when it comes to farming, manufacturing. And what are the prospects of this is going to bleed into all these products that consumers consume? Let's just sit on the estimates, the focus, a little bit later this morning at 830 eastern time, we'll be on core CPI.

The estimate in our survey is 0.2. Most people in this market will want the unrounded figure, because right now with the 67 economists we've surveyed here at Bloomberg, 58 of them expect 0.2. It's going to be about the second decimal, the third decimal place. And what that means for next week. Yeah. The 0.24% mean a hold and a 0.25% mean a hike. Ultimately, is the rounded number that much more important for people in the market?

Taking a step back, there has been something that has materially shifted. Now we're pricing in more than three rate hikes for the Federal Reserve going forward. We have been pricing in fewer than two. Just giving you a sense of how much people do seem to be shifting. I wonder if the bar has gotten a little higher for the fed to explain why they're remaining on hold in the rest of the world is saying it's a no brainer to be tightening policy, and the likes of Stan Druckenmiller is saying anyone who thinks that these rates are restrictive, are not rational and are simply a crazy, less sensitive market.

Because look at it this morning 2230 new highs for the year across the curve in yesterday's session at the front end is north of four 5010. Very close to 5% 3535 wants some good news at these levels, there is some demand. There was an auction in the last 24 hours and demand was really quite strong. I think if you're looking for a positive, it's a scramble. I know, but there is a positive out there in that bond market.

Was that auction yesterday afternoon? Scott Bastian highlighted that. Look, if you think that this is, you know, the house burning on fire, no pun intended. Not at all. Because you did see such a huge amount of bids to offer. That said, when the Treasury Department went to buy back the stated $6 billion of 30 year notes, they took up less than that. And he said, well, people were not giving us good offers. So a real question here about what it takes to have a clearing price and whether this government is willing to pay it in the driving seat right now.

It's the price of crude. You could see it in yesterday's price action. The moment we started to take a like higher and crude a breakout. Equities broke down. Bond yields broke out this morning. We retreat just a bit. We're down by more than 3%. Brent crude at about 104. We've got WTI with a break of 100 to the downside. Back in 9940. It was a bit shaky in yesterday's session. Yes, absolutely. So shaky that now we have reporting that Gulf countries are willing potentially to have a meeting with Iran.

They are still trying to have this Iran Oman passage or open up. We've been discussing that for weeks. There's been no breakthrough. Axios is reporting that Mohammad bin Salman called the president to strike the Houthis, because they are dealing with some serious problems in the Red sea. Potentially, we're getting a little bit of a reprieve in the sense that the IAEA is coming out and warning about a deteriorating outlook.

And that is why you have prices falling a little. And that moving crude this morning have been bombs on the margin. How can stocks as well. Coming up this hour we'll catch up with Cam Dawson of New Wealth as the ten year bond yield nears 5%. Jeff Curry A real macro as crude holds on to triple digits. And Claudia, some of new century advisors moving from a fed hold to a rate hike. We begin this hour with stocks rising and bond stabilizing following a rout in the global debt market.

Cam Dawson of New Wealth writing, the bond market is dead. Yields are no longer in a downtrend. They are in clear, Distinct up trends. Cam joins us now from our camera. Good morning. Good morning. Are you ready to step in and buy? Well look, I think that we have to appreciate that we could be in the midst of a now secular uptrend. And bond yields very different than the secular downtrend in bond yields that persisted from 1981 until the low in 2020, but that you can still have periods of counter trend rallies or points where bonds are oversold.

Yields are effectively overbought. And that's probably where we are today. If you look at an RSI and the ten year yield, it looks like you're in overbought territory. So you could come in a little bit and have some tactical buying opportunities. And even for investors who have longer term hold periods these yields are starting to look really juicy. If you look at an after tax yield for a lot of our investors that are high taxable investors, you're looking into the low double digits.

So some of these things start to look attractive. And also the higher yield goes the more you have a buffer for the ability to absorb price shocks and your overall return. But the message still is. This is not a world of a downtrend in yields anymore. And that has big implications for assets across the asset class spectrum. What does that mean for the relationship between bonds and equities. Well I think that it continues to put downward pressure potentially on valuations.

We've been arguing for a long time that you've been seeing the impact of higher bond yields on valuations. You just haven't felt it because earnings have been so strong. So if we roll into 2027 it's good to remember that the effect of the earnings growth rate that we get next year will be half of what we get this year. So that's a lot less buffer to absorb some of these macro headwinds. And that's assuming that you can meet next year's numbers, which we think are looking somewhat high given the fact that they embedded a lot of margin expansion.

And you have those tough comps that you're comping over in 26, that does create an incredibly high bar. Have you shifted to a more bearish view than on equities, as you do determine that the secular uptrend in yield seems to have asserted itself. Yeah, I think it suggests that we have to lower expectations for equity returns, at least compared to the last 15 years. The last 15 years. If you look at equity average annual returns, it's been effectively double the long run average.

So we have to effectively lower our standards for equity returns in a world where yields are going up. But also the star