Bloomberg Surveillance TV: August 11th, 2026

**Tom Keene** (0:02)
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**Jonathan Ferro** (0:11)
This is the Bloomberg Surveillance podcast. I'm Jonathan Ferro along with Lisa Abramowitz and Annmarie Hordern. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9 AM Eastern.
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**Tom Keene** (0:36)
To begin this hour with stocks kind of looking for direction as the flood of big tech debt keeps upward pressure on treasury yields. Marvin Loh of State Street writing, while recent data has thrown a bit of cold water on the strength of the economy, the strong demand for capital has created strong need for tighter financial conditions. Marvin joins us now for more. Marvin, great to see you. Thank you so much for being with us. Can you explain that, why all of the tech issuance is actually a requirement for tighter financial, tighter monetary conditions in and of itself?

**Marvin Loh** (1:07)
Yeah, absolutely. I mean, Harry mentioned kind of the supply and demand aspect of it. And there is a supply issue that is arising ultimately with all of this AI buildout. Ultimately, we look at inflation through the oil lens and that makes clear sense. But also, we have to look at inflation through the chip lens, which is the demand for chips and the supply for chips is being affected by this capital raise and all of this data center buildout. So it is ultimately interrelated. Ultimately growth outperformance this year has very much been predicated on the fact that we've got all of this investment within the GDP stack, if you will, and there is no let up in that demand at this point.

**Tom Keene** (1:54)
So you're saying that regardless of what happens with the underlying economy or core inflation away from some of these key components, that monetary policymakers should be looking at the rapid record pace of issuance in the debt markets and frankly, increasing activity in the equity markets as a sign that they are not restrictive enough that this inflationary impact from AI has legs and is going to last for a longer period of time.

**Marvin Loh** (2:21)
Yeah, absolutely. I mean, I wouldn't say that we can ignore the data, but I think that we have to take the data within the context of everything that we're saying in terms of the capital demand in this environment.
There's economic theories which say that interest rates are supposed to be set where the amount of capital is equal to the availability of savings. From that perspective, the demand for capital certainly are at levels that we haven't seen in quite some time.

**Lisa Abramowicz** (2:47)
Obviously, when it comes to the data, it's backwards looking. And for someone like Beth Hammack, if you listen to her speak, it doesn't really matter what tomorrow's CPI print brings in terms of where she sees the trajectory and what needs to be done to really try to tamper inflation. How are you viewing tomorrow's CPI print?

**Marvin Loh** (3:07)
Yeah, I mean, we're still going to be above targets for the 63rd, 64th month, if you will. There are questions as to whether or not the disinflation is going to get us to that 2% and in an environment where you've got again, kind of this economic tailwind from this investment balloon that we have, you've got to look at it holistically and parse the fact that we're still above those targets. And the shape of the curve and how long yields are responding are saying that there are concerns that you're not taking it seriously enough.

**Lisa Abramowicz** (3:45)
Given all of this money flooding into AI, given the fact that it is costing a lot more in terms of having compute, do you think it's going to be much harder for Fed Chair Kevin Warsh to have that argument that ultimately AI is disinflationary?

**Marvin Loh** (4:01)
Certainly in the short term.
Jackson Hole is coming up. He's going to talk about the big items that he referenced during the last FOMC meeting. We'll get a sense on when that productivity can actually make its way into policy. But in the short term, it is going to be really, really difficult to calibrate the potential for productivity gains five years down the line within the environment that we have right now.

**Tom Keene** (4:26)
What would raising rates actually do on the front end of the yield curve, Marvin? Ultimately we've seen that even with rates materially higher priced in by the market with the market doing the work, as Kevin Warsh was saying, it hasn't really had a material effect on where equities are.