Latest news with #PGIMFixedIncome
Bloomberg
2 days ago
- Automotive
- Bloomberg
Trump, Musk's Public Feud
The Pulse with Francine Lacqua Elon Musk signaled he would move to cool tensions with US President Donald Trump, after differences between the two exploded Thursday into an all-out public feud. Earlier in the day, Musk called for Trump's impeachment and insinuated he was withholding the release of files related to disgraced New York financier Jeffrey Epstein because of his own presence in them. Trump, in turn, proposed cutting off the billionaire's government contracts, following his onetime adviser's repeated exhortations for Republicans to vote against the president's signature tax legislation. Musk's olive branch came after Tesla Inc. shares tanked 14% and his personal wealth dropped by $34 billion. Today's guests: Emmanuel Cau, Barclays European Equity Strategy Head, Gregory Peters, PGIM Fixed Income Co-CIO, Maria Demertzis, The Conference Board Economy, Strategy & Finance Center Europe Lead. (Source: Bloomberg)
CNBC
19-05-2025
- Business
- CNBC
PGIM's Tom Porcelli: We still have 'enormous worry' that U.S. fiscal situation will deteriorate
John Stoltzfus, Oppenheimer Asset Management chief investment strategist, and Tom Porcelli, PGIM Fixed Income chief U.S. economist, join CNBC's 'Money Movers' to discuss reactions to Moody's downgrade of U.S. debt.
Yahoo
12-03-2025
- Business
- Yahoo
PCE, not tariffs may be what's 'driving yields higher'
The bond market is seeing rising yields, with the 10-year (^TNX) yield hitting 4.3%, partly due to a better-than-expected CPI print suggesting a slight deceleration in inflation. Tom Porcelli, PGIM Fixed Income chief US economist, joins Morning Brief hosts Brad Smith and Madison Mills to discuss the bond market's (^TYX, ^TNX, ^FVX) reaction to inflation data and recession concerns, and what this signals for the Federal Reserve's future actions. He explains that while the recent CPI report doesn't reflect tariffs, it is PCE that is driving yields higher. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. What is the bond market telling you today? What are we expecting in terms of the Federal Reserve and what does that tell us about the market as well? Yes, so good to be with you as always, also. Uh, yeah, you know, when I look at the market, I I think the market is, um, sort of conflicted here a little bit, right? It's, you have to consider two important things from this CPI report that just came out a little while ago. One, um, yeah, it was better than expected, but, um, this doesn't reflect tariffs, right? This doesn't this this this is reflection of what of what was. It's not a reflection of what is to come. Right. Uh, and and so I think that that's, you know, sort of tempering the the the markets reaction, which is why yields are up. I think the other thing you need to keep in mind too is that when it comes to CPI, um, really what we need are sort of the the the components within CPI that feed into PCE. Um, and so when we look at those components that feed into PCE, it looks like PCE could actually be pretty firm. Um, you know, we're looking at about three tenths right now. We'll firm that up after we get PPI tomorrow. So, I think both of those factors, um, the reality of this report does not reflect tariffs, um, and it looks like PCE is going to be a little firm is what's driving yields higher. So what end of duration, just to kind of get that question out of the way. What end of duration should investors feel comfortable with at this juncture? Um, well when you say end of duration, you mean like sort of where across the curve do should people feel comfortable? Certainly. Yeah. So, you know, look, I I would say it this way. Um, if I look at, um, so if I look at like twos and tens, I think, you know, two is as always are going to be at the mercy of what's going to happen from a monetary policy perspective. Our view is that you're you're likely going to see cuts this year. I mean, we've had two cuts built in, um, for this year since since the beginning of year, actually since late last year. Uh, and that's something we still expect. I think tenure yields will probably be a bit more anchored. Um, but but that, but again, I just want to be clear on this point. That assumes that we actually don't see the worst of tariffs. Um, at the end of the day, you know, wherever you're going to be across the curve is going to be, uh, you know, at the mercy of what degree of tariffs do we see? Because I can make an argument if we do see some pretty aggressive tariffs that I actually think that would usher in a more aggressive easing cycle for the Fed. Everyone's talking about this impact on inflation and I have a ton of sympathy for it. I mean, I think it will show up in inflation at first. But I think ultimately this will actually wind up, um, biting growth. Um, and so I can make an argument, um, for the Fed to ease even more, in which case, um, that's not priced into the market. Sign in to access your portfolio
Bloomberg
06-03-2025
- Business
- Bloomberg
Bloomberg Surveillance: Global Bonds and Trump Uncertainty
Watch Tom and Paul LIVE every day on YouTube: Bloomberg Surveillance hosted by Tom Keene & Paul Sweeney March 6th, 2025 Featuring: 1) Steve Chiavarone, Senior Portfolio Manager at Federated Hermes, on why he remains constructive on the economy and investment environment despite so much policy uncertainty in DC. Markets are focused on the global bond rout and economic fallout from the brewing Trump-led trade war, with bond investors waiting for the European Central Bank's meeting and interest rate decision. 2) Katharine Neiss, Chief European Economist, PGIM Fixed Income, reacts to the ECB decision and talks German spending and the global bond selloff. The rout in German bonds affected global debt markets, with yields surging in Japan, Australia, New Zealand, Italy, and the UK. German bond declines were triggered by the nation's plans for defense and infrastructure investments. 3) Monica Defend, Head of Amundi Investment Institute, offers her take on German spending and talks about how tariffs could reshape investing in Europe. European leaders are moving swiftly to mobilize additional defense funds to counter the threat of aggression from Moscow as US support for Ukraine remains highly uncertain. 4) Henrietta Treyz, co-founder at Veda Partners, discusses the Federal budget, tariffs, DOGE, and the 3/14 government funding deadline. House Democrats have signaled they're wary of voting for a 'clean' stopgap bill, given the Trump administration's blockage of federal funding. 5) Lisa Mateo joins for a look at newspaper headlines making news around the US. She talks about how the 401K has become Americans rainy day fund, the Rock becoming Hollywood's highest paid actor again, and parents in tech telling their kids to pursue the arts instead.
Yahoo
28-02-2025
- Business
- Yahoo
Investors bet on sharpest US-Europe inflation divergence since 2022
By Harry Robertson LONDON (Reuters) - Traders who bet on the future course of inflation foresee the sharpest divergence for three years between the U.S. and euro zone, driven by different growth paths, tariff threats and cheaper European energy after a potential Ukraine peace deal. That gap is not fully reflected in U.S. and euro zone bond yields, however, as investors are eyeing other factors including recent tepid U.S. economic data and expectations that European countries might need to spend more on defence. Inflation swap markets late last week pointed to U.S. consumer price index (CPI) inflation running at about 2.8% over the next two years, with euro zone inflation swaps at around 1.9%. That would mark a small fall from a current U.S. CPI rate of 3% and a sharper one from euro zone inflation of 2.5%. Pricing for both has fallen slightly since, but the gap between the two remains at its widest since early 2022. Yields on U.S. Treasury bonds have nevertheless fallen compared to those in Europe in recent weeks as some weaker-than-expected data releases have sown doubts about growth, even as sticky inflation remains a concern. "I think it's really, really hard to trade cross-markets when you have different drivers affecting the different markets," said Guillermo Felices, principal and global investment strategist at PGIM Fixed Income. Inflation swaps are derivatives that allow parties to increase or reduce their exposure to inflation. Many in the market - from speculative traders to companies needing to hedge - expect U.S. President Donald Trump's planned trade tariffs to push up prices in the United States but hit European growth, dampening inflation pressures there. "Tariffs... are a one-off shock to the price level," said Blerina Uruci, chief U.S. economist in the fixed income division at T. Rowe Price. "What's different now is we have lived in a high-inflation environment, and businesses have discovered they have pricing power (so) what could be a one-off shock to the price level could have more room to run." Growth differentials are another factor. The U.S. economy has expanded about 12% since just before the pandemic, while the 20-country euro zone has grown 5%. Trump's other major transatlantic policy focus, negotiating with Russia an end to the war in Ukraine, has startled European capitals but caused energy prices to drop. European natural gas prices - a key driver of euro zone inflation - have fallen 30% since mid-February. "That is definitely pushing down on front-end inflation swaps," said PGIM's Felices. "So you're getting this unusual divergence between the U.S. and Europe." Differences in inflation pricing would usually be expected to lead U.S. bond yields higher compared to Europe. But the focus of investors recently has been on slowing U.S. growth even amid sticky inflation, highlighted by this week's slump in a key consumer confidence gauge. The likelihood that European governments will need to borrow more - perhaps jointly - to fund higher defence spending demanded by Trump is another new factor to consider. The gap between U.S. and German 10-year bond yields fell to its lowest since November on Tuesday at 182 basis points (bps) - down from a five-year high of 231 bps in December. Traders now expect about 55 bps of Federal Reserve rate cuts this year, after previously expecting just one 25 bp reduction. Pricing for the European Central Bank has changed less, with 85 bps of cuts anticipated. Some investors are sticking with the view that U.S. economic strength will keep borrowing costs there high. "The Fed has been very clear in saying they are still in restrictive territory, but they are happy to stay here if growth still remains," said Ales Koutny, head of international rates at Vanguard. "That limits how much bonds can rally." Lower returns have reduced the attractiveness of U.S. bonds and weighed on the dollar, helping the euro rise to $1.05 from a more than two-year low of $1.01 last month. Samuel Zief, head of global FX strategy at JPMorgan Private Bank, said he's wary of betting on a sustained rally in the common currency, however. "We think the uncertainty from trade and those headwinds are the real thing that need to be cleared before you can turn more cyclically bullish on the euro zone," he said. Felices at PGIM takes solace from the fact inflation expectations are not too far away from 2%, especially given the Fed targets the personal consumption expenditures index, which tends to be lower than CPI. "That these numbers are still pretty consistent with inflation targets is very reassuring," he said.
