Bloomberg Surveillance: May 27, 2025 - Markets, Economy, and Policy

US Economic Outlook and Market Pricing

• 💡 Roosevelt Bowman anticipates weak US growth in 2025, projecting around 0.5% due to higher capital costs and tariff uncertainty.
• ⚠️ Bowman argues that bond markets are not well-priced for this low growth scenario, citing policy volatility and the Fed's stance on inflation as reasons for elevated yields.
• 📉 He expects weaker labor and consumer data to push yields lower, challenging the consensus view of resilient hard data.
• 🧠 Bowman highlights weakness in high-frequency consumption data and online job postings, indicating a shift in leverage from employees to employers.

Equity vs. Bond Investment Strategies

• ⚖️ Bowman suggests a pathway for both bonds and equities to perform later in the year, with bonds benefiting from slowing growth and clearer policy, and equities from potential Fed stimulus.
• 📈 He believes US assets, both fixed income and equities, will remain attractive due to the depth of the US bond market and leadership in technology, despite a risk premium.
• 💲 Dollar weakness is attributed to policy volatility, long-term overvaluation, and the Fed's focus on potential rate cuts rather than hikes.

Geopolitics and Trade Negotiations

• 🇪🇺 Terry Haines describes the EU's structure as a complex federation, akin to the Articles of Confederation, making negotiations uniquely difficult.
• 🤝 The US is pursuing trade deals with various countries, including India, where iPhones are seen as a bargaining chip in larger trade negotiations.
• 🌍 Geopolitical shifts, particularly concerning Russia and China, are driving economic policy and influencing negotiations, including the lifting of restrictions on weapons provided to Ukraine.

IPO Activity and Market Infrastructure

• 📈 Lynn Martin reports unprecedented trading volumes on the NYSE in 2025, exceeding even COVID-19 levels, with robust system performance.
• 🚀 Despite initial delays, Martin is optimistic about the IPO market's revival, citing strong performances from recent listings like Mountain and Hinge.
• 🌟 She believes the second half of the year will see larger, more prominent companies go public as market conditions stabilize and the VIX returns to lower levels.

Corporate Credit and Consumer Trends

• ⏳ Amanda Lynam notes that corporates are in a wait-and-see mode regarding margins and the labor market, with an