Bloomberg Surveillance TV: August 31st, 2026

**SPEAKER_1** (0:02)
Bloomberg Audio Studios.

**Lisa Abramowitz** (0:04)
Podcasts, radio, news.

**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 little changed as markets digest Fed share Kevin Walsh's Jackson Hole message. Bob Elliott of Unlimited Funds writing, while the Walsh speech was taken as a tad hawkish, it looked more like continued policy and aptitude, relying on rhetoric rather than clear action. Bob, join us now for more. Bob, good morning.

**Bob Elliott** (0:53)
Good morning.

**Jonathan Ferro** (0:54)
Are you looking for a hold in September?

**Bob Elliott** (0:56)
Well, I think the real question is, is he actually going to follow through on the rhetoric that at least he outlined? And I agree with this basic idea, maybe he's boxed himself in in terms of if you've missed your target for 60 plus months and inflation is above what your mandate is by a lot and the employment conditions are not so bad, it seems like they should hike. And yet, there's all of this ambiguity. The market is looking at this and saying, is this a Fed that's actually credible in delivering the tightening? Or is this, as they say out west, all hat and no cattle from the new Fed Chairman?

**Jonathan Ferro** (1:34)
Where do you see the credibility gap in the market right now?

**Bob Elliott** (1:37)
Well, I mean, I think the basic idea is if you look at any sort of simple Taylor rule here, you'd expect interest rates on the short end to be up 100 or 200 basis points. I love the fact the Atlanta Fed puts out a whole range of different Taylor rule estimates. It's almost like they're trolling those folks in the Eccles building saying, hey, look, if you're going to actually deliver monetary policy consistent with what we've talked about that's credible, you've got to be raising rates. You've got to be raising rates quickly. And yet, we're in this argument of, is it 40-60 that they're going to tighten in September or 60-40? The data is unambiguous. It's meaningful hikes relatively quickly. And the odds that we get that are de minimis at this point. And so the real question is when the market is looking at that, they're basically pushing the long end to basically penalize the Fed not doing their job on the short end.

**Lisa Abramowitz** (2:26)
Couldn't this be a great way to kill forward guidance, though, to say, hey, market, stop parsing through every single line of my speech to try to get signal for what we are doing. Isn't that a great way to stop that from happening by not hiking in September?

**Bob Elliott** (2:38)
Sure. I mean, incompetence can be a way to kill forward guidance, right? That's certainly a way in which they could do it. But the reality is what the Fed needs is to be credible. And when you stand up there and you say, we failed at our mandate for 60 plus months, and you don't deliver based upon the data, that's the thing that's actually, the credibility is what matters a lot more than the forward guidance.

**Lisa Abramowitz** (3:01)
And the irony, perhaps, is the tenure yields were initially moved lower on the speech from this chair and end of the day higher. Peershare points to the large amount of IG supply that we're going to be getting from this market. Is the 30 year yields really a read on Fed credibility at this moment?

**Bob Elliott** (3:17)
Well, I think I wouldn't necessarily just look at the 30 year yield in terms of Fed credibility. I'd be looking at gold. And I think gold in general is giving us an indication, it's re-acceleration over the course of the last couple of weeks. It's giving some indication that people are really questioning not just the Fed, but the policy making institutions across the administration, whether it be at the Treasury or at the Fed or in the administration. And it's saying, despite all these efforts to try and keep rates low, gold is pushing and of course Friday it sold off a little bit, but the general trend here is for all the effort that the administration is doing to try and keep rates low, they're basically just flowing money into crypto and gold these days.