Healey's Fiscal Pitch, OpenAI Holds Back Astra Model, More
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What is the main topic discussed in this episode?
Hi, I'm Barry Ritholtz, inviting you to join me for the Masters in Business podcast. Every week, we bring you conversations with the people who shape markets, investing, and business. I speak with CEOs, Nobel laureates, market innovators, and legendary investors. Whether you own stocks, bonds, real estate commodities, even crypto, these are discussions you absolutely need to hear. Subscribe to The Masters in Business Podcast on Apple, Spotify, or anywhere you listen.
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And I'm Nathan Hager.
Why are rising oil prices and rate-hike bets driving a global bond sell-off?
Surging oil prices and mounting bets on further US rate hikes have been driving a global bond sell-off. The moves followed President Donald Trump's rejection of Iran's latest proposal to reopen the Strait of Hormuz, threatening to prolong the war's energy shock. While Treasuries now are showing signs of stabilizing, that comes after a sharp sell-off in New York pushed the benchmark tenure yield to 5.25%. Senior fixed income client portfolio manager at Van. Vanguard Rebecca Venter has shared her thoughts on the move in treasuries.
We've seen rates rise, obviously over 100 basis points. If you look at the 10-year so far this year, much of that move was a slow build, really based on the market recognizing the stronger growth that has happened so far this year. But recently, obviously, the move has been a lot bigger. Uh, in our view, this is really the market trying to figure out the Fed is serious about inflation. We've seen that. What exactly does a hiking cycle need to look like to cool inflation at the pace? pace that they would like to see. And that's a little bit of an open question in markets. And every time we get a a strong data growth point, a growth data point, something that's worrisome about inflation, we're gonna see this market reaction, we think, in the very near term.
Mm.
Rebecca Venter there. Bloomberg Opinion's John Authers has dubbed the turmoil a bond pocalypse. He argues that a negative surprise in upcoming US data may be the only thing capable of halting the bond sell-off. Subscribers can read the piece What's Going to Break in the Bond Pocalypse? on the terminal now.
How is UK Chancellor John Healey seeking to reassure bond investors?
Well, UK Chancellor John Healey is seeking to reassure bond investors that labor will keep the public finances under control. Surging borrowing costs have wiped out roughly half the twenty-three point six billion pound fiscal buffer that he inherited from Rachel Reeves.
On day one. As Chancellor. I said my first duty is fiscal discipline and I'll tell you why. It underwrites every promise this government makes. On growth. on jobs, on national security and on public services. We can't succeed without it. And that's why the Prime Minister and I are united. In meeting the fiscal rules. Balancing the books. With a buffer against uncertainty. controlling borrowing to bring down inflation. And re reducing long term pressures on our finances.
That was the UK Chancellor John Healey and Prime Minister Burnham addresses the Labour Conference later. He's due to set out plans on social care alongside policies on energy, water, and housing.
How could rising bond yields affect ECB policy and euro-area inflation?
Well, across the channel there may be a silver lining to the borrowing cost pane. European Central Bank President Christine Lagarde says that rising bond yields will slow economic growth, but also help contain inflation. Speaking to lawmakers in Brussels, she said higher borrowing costs should limit how much elevated energy prices feed through to wider inflation.
Growth has been resilient, no question about it. As you know, we have updated our projections as well, both for twenty six and twenty seven. Since our last meeting, uh we have seen new developments, particularly at the longer end of the curve, and long term interest rates have risen notably. That will have an impact on growth. It will probably slow growth and reduce pass through by more than projected in our September exercise.
Lagarde added that the ECB should adopt a measured response as appropriate to keep inflation in check. Euro area inflation is expected to have jumped to three point seven percent in September, well above the ECB's two percent target, and traders are pricing almost four more quarter-point ECB hikes over the next twelve months.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:35
2
Why are rising oil prices and rate-hike bets driving a global bond sell-off?
0:35–1:59
3
How is UK Chancellor John Healey seeking to reassure bond investors?
1:59–3:04
4
How could rising bond yields affect ECB policy and euro-area inflation?
3:04–4:21
5
Why is OpenAI holding back its Astra model, and how are companies addressing AI safety?
4:21–5:27
6
How much revenue must AI generate to justify global data-center spending?
5:27–6:21
7
How could US security policy reshape UK-US relations and NATO’s role in Europe?
6:21–7:42
8
How are oil prices, European stocks, and government bond yields moving?
7:42–9:52
Speakers
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