Bloomberg Surveillance TV: August 26th, 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. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen. And as always on the Bloomberg Terminal and the Bloomberg Business app.
We begin this hour with stocks and yields holding steady ahead of more earnings and inflation data later this morning. Marvin Loh of State Street writing, while recent data has thrown a bit of cold water on the strength of the economy, we don't find a reason to fade the view that the Fed will still need to tighten before year end. Marvin joins us now for more. Marvin, good morning, sir. It's good to see you. I expect to get a guide from Kevin Walsh in a few days' time on that.

**Marvin Loh** (0:59)
You know what?
We're not going to hear from him with regard to what he thinks September is going to look like or even December is going to look like. All we can hope for is that we get a little bit more sense into what his thinking is, how the Fed is going to actually approach the concept of the reaction function and really to give the market a little bit more comfort that July is not the way the Fed operates and not the way the new chairman operates.

**Jonathan Ferro** (1:27)
How do you think the Fed operates and the new chairman operates?

**Marvin Loh** (1:31)
Well, I think it's still generally as divided as we saw at the beginning of this year. Those opinions are out there.
Certainly the data has given the Fed a little bit more room to think about things, but you continue to have half of the committee that thinks that there is a fairly low hurdle with which they should hike rates. And I think that that winds up being a theme that we take into the latter part of this year.

**Tom Keene** (1:59)
To your point, Marvin, we even heard from Susan Collins, somebody who previously had been in the hold camp. Yesterday, she had an essay where it seemed to be a bit more hawkish, saying that the onus is on the inflation data to keep getting better for her to remain on hold. Otherwise, it might be appropriate to tighten. Where is the inflation coming from if it isn't coming from oil prices, if it isn't coming from some of these supply side shocks?

**Marvin Loh** (2:22)
I mean, for sure, after five plus years of this kind of embedded inflation, that is the concern of the Fed. Board guidance and forward expectations around inflation is ultimately the self-fulfilling prophecy. And I think that that's the risk, that we've got a Fed that theoretically is remaining patient in the face of an inflation target, which is starting to mean nothing. And that influences both the services part of the economy, which certainly is the bigger part of what we wind up generating wealth from in this country. And it's something that standing on the sidelines becomes less and less acceptable.

**Tom Keene** (3:00)
Isn't this a data story, though, and less of a Kevin Warsh story? I mean, what can you learn from Kevin Warsh that gives you a sense of whether or not, the degree to which they are prepared to hike rates later this year?

**Marvin Loh** (3:11)
Yeah, I mean, certainly data is always going to be an important part of this discussion. And we've got this little bit of soft patch in the middle of the summer. We'll see what August inflation looks like. Our readings around August inflation in a more real-time perspective is that it is coming back to a certain degree. So that hat is not completely shoved back in the bag. But it also is a story about US growth. It also is a story about demand for duration capital in the US and globally.
And what we need to learn from Warsh is how he parses the data as well as kind of this R star capital demand perspective. And clearly the Treasury Secretary is throwing his hat in the ring around that longer term duration story and that broader demand for capital. And for me, it's always been part of why we need to think about tightening and that hasn't changed.

**Jonathan Ferro** (4:08)
Marvin, do you care that Druckenmiller used AI? Way in place.

**Mark Ein** (4:12)
That's where the buzz is right now.