Bloomberg Surveillance TV: July 30th, 2026

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Jonathan Ferro** (0:11)
This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferro along with Lisa Abramowicz 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 a.m. Eastern.
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We begin this out with the bond market questioning Fed Chair Kevin Walsh's inflation fighting credibility, sending 30-year bond yields to the highest level since 2007 Barbara Reinhard of Voya Investment Management joins us now for more. Barbara, good morning.

**Barbara Reinhard** (0:48)
Good morning.

**Jonathan Ferro** (0:49)
What was your reaction to that yesterday afternoon?

**Barbara Reinhard** (0:51)
Look, he's falling into the same trap that so many Fed Chair people fall into when they take the role. And it's a communication blunder, it's sending the wrong signals to the market. And this is what we were worried about with a nude fair-ched person coming in, is that equity markets are going to get nervous.
You saw the same thing with Jerome Powell. There was an 18% correction within the S&P 500 when he said, we're a long way from neutral, a very off-handed remark. And I think you do have a credibility issue at this point. So the Fed's going to need to either get inflation under control or the bond market's going to do it for it. And we do see on some of our forward-looking indicators that inflation should be rolling over. Income growth is starting to slow. Consumer spending is starting to slow.
But the fact is, is it may not be fast enough to stop probably more equity market weakness as a result of bond yields climbing.

**Jonathan Ferro** (1:42)
Lots of reaction coming from Wall Street. One of my favorite takes came from Aditya Bhave of Bank for America, Doved and Confused. And it said the following, we think the need to reestablish credibility increases the probability of a hike in September. Do you agree?

**Barbara Reinhard** (1:55)
Well, I think the inflation data is going to come in a lot softer. So all of our forward inflation indicators are rolling over at this point. So the market may indeed do some of the feds work for it, which is what Warsh was confusing the markets about yesterday. I think this lack of forward guidance is coming at a particularly bad time. And I think that this kind of pulling back and relying on some of these task forces, while it's a great idea in theory, the execution of it seems a little bit murky at this point, which I think is also confusing the bond market.

**Lisa Abramowicz** (2:25)
Given some of the confusion and concerns around a lack of credibility that the feds going to follow through in anchoring inflation expectations, do you think that that puts the tech trade more at risk, considering that it's a higher duration asset increasingly as a result of its capex plants?

**Barbara Reinhard** (2:39)
Well, I think we've got two things going on. So number one, the tech trade is really as a result of the hyperscalers burning through their cash flow, not slowing down on their capex spending. Eventually, the memory shortage is going to get resolved with more memory. So there's this concern that you've got this big cash flow burn with the tech stocks. You're not seeing the big productivity lifts from AI just yet, although we all use it in our day-to-day lives and are finding it to be incredibly helpful.
I think that you've got this concern that they're burning through so much cash flow and additionally, this equity supply that's hitting the market is really big and the buybacks and the mergers are just beginning to offset it. This is the first time since 2000 in this year that you're going to see net equity issuance and net equity demand kind of coming out of it, so buybacks and also mergers really being even. So it's a lot to hit the tech trade at this point.

**Lisa Abramowicz** (3:36)
About a year ago, I was speaking with Howard Marks and he said if he were going to get into the tech trade even though he's typically a credit investor, he'd rather be in the equity than the credit because he's getting paid for the equity in terms of the potential upside. I wonder if that equation has flipped right now, whether potentially you're getting paid to be in the bond side of things and not necessarily on the equity side as a result of the dynamic, as a result of how high yields have gotten.