Bloomberg Audio Studios, podcasts, radio news. Single best idea on a really really interesting Monday. Really just can't say enough about if the team started putting the guest list together Friday, blew it up in the vicinity of Sunday with all we saw in China, always saw in Russia, but just as importantly what we saw in the markets. I really can't emphasize enough how nuance, not odd and not scary,
but just how nuanced the markets are. And we had just a terrific balance today in economics, inequities, in bonds, in foreign exchange, looking at particularly EU again, and of course the international relations of the moment. Major shout out Alex Brideaux at Eurasia Group on very short notice his
wisdom on actually how does the Kremlin run? And it also just Henrietta Trees was beyond brilliant with Veda partners about split ticketing where our parents all voted Republican or they all voted Democrat and is now is there going to be split ticketing within the Democratic Party And she
was just brilliant on that. Brilliant as well in economics and framing out the choice set that our central bank has was John writing he has experienced at the Bank of England, at the Federal Reserve, truly iconic at bear Stearn's years ago now with Green Capital, and it was just a spirited conversation with John writing, let's listen.
The problem with if the FED moved to high rates, it will be a tweak. But markets aren't very good at detecting tweaks as opposed to new trends, because the Fed has been not very good at explaining the latest
monetry policy moves, and so that was the problem. I in December when Allison was natural for us to talk about rate cuts, and the market, which had three rate cuts priced in at that December meeting, which is aligned with the fed's SEP projections, suddenly priced in six to seven rate cuts, and you got a massive rally and a massive easing of financial conditions. So on the other side, if the Fed would a high because why hike just wants it's got to be the start of something.
John writing there on the Fed speak, I've really tried to downplay it. I don't have a big view of the parlor game of it. I get it's about making money in futures and all that, but I think John writing there on the constraints that the FED has. He also mentioned that he much prefers a transparency the dialogue of the Bank of England right now under Governor Bailey
than what we see with the endless FED. Speaking in America, we did look at equities, thank you, Lori Calvissina, Cameron Dawson starting in Strong and New Edge both you know, very optimistic. There's a bid to the market. But I think the richest conversation today was on bonds, and I'm gonna explain this right now. I think it's really important. And then a spread, which the media talks about a spread, spread, spread, spread, spread,
It's not orange marmalatter nutella. A spread is the comparison of yield of whatever bond, a corporate bond to the full faith and credit sovereign US government bond. And so as the yield comes down of the corporate piece closer to the full faith and credit sovereign piece, that's the phrase spreads narrowing. We have spreads narrowing truly in an
historic manner. Now, Greg Peters at Pigeum was really quite good on this last week that we are upper deathcile ten percentile of the history of spreads narrow, and they narrow in China, they narrow across all the Pacific of the Damien SASA or world, and they narrow in the full faith and credit Western world as well. Amanda Lineum of Blackrock unspreads.
I think at an aggregate level, we think that spreads can remain pretty range bound. The exception, though, Tom, is that we are not expecting Triple c's to catch a bid. So far, they've lagged the overall rally in spreads. If you just zoom in on US high yield highield spreads are below three hundred basis points that would argue for Triple C spreads somewhere in the seven somewhere in the
six hundreds. They're in the seven twenties range now. So it just goes to show you that the market is efficient. The market is telling you that not all corporates can navigate this high cost of capital. We don't expect a material spread widening, but I think for further tightening, you need to see participation from that Triple C cohort, and we just don't really see that.
And then your term Amandlione at Blackrock, she was just brilliant there and really the dominant theme of the moment, which is what fixed income is doing in the signals that can give over to the equity market. Final shout out Christopher own a Statigius with us today. Look for the whole replay of the show, not a single best idea, six minutes, two hours, fifty six minutes, the complete replay. It comes out eleven is twelve ish. They got to read the Yankees box scores, you know, before they get
to it, but we get that out midday. You can see a complete replay of what we do from seven to ten am Wall Street Time. We're on Apple car Play, We're on Android and on YouTube. Here's what you need to do. Subscribe to Bloomberg Podcasts out on YouTube and search Bloomberg Podcasts to get to what we're doing every day on a Monday before a very eventful Wednesday, single best idea