Sep 30, 2026 · 27 min
Markets test risk appetite as yields and Fed uncertainty rise
Bloomberg Surveillance TV: September 30th, 2026
The episode connects fragile economic data, energy-supply risks and inflation revisions to the Federal Reserve’s difficult October policy decision.
- 1Investors remain enthusiastic about risk assets despite weaker data, higher yields and renewed debate over bond and equity positioning.
- 2Proposed diesel export restrictions could tighten global supplies, with shipping disruptions and regional constraints amplifying the risk.
- 3Lower core PCE readings compete with tariff, oil and payroll pressures as markets assess the Fed’s next move.
Don't miss
Francisco Blanche explains why diesel-price effects on core inflation may be smaller than the impact of tariffs, despite potential supply disruptions.
The brief
Matthew Miskin examines why investors still favor risk assets despite weaker economic data and higher yields, while weighing rotation within equities against a move toward bonds.
Francisco Blanche argues that proposed U.S. diesel export restrictions could create shortages at home and abroad as European reserves, shipping routes and regional supply constraints come under pressure.
The panel weighs revised, lower core PCE readings against tariffs and oil prices, debating whether the Federal Reserve will hike in October or wait later in the year.
Blanche says diesel prices could feed future core inflation, but likely less than tariffs, while CPI and a softer payrolls report emerge as pivotal policy inputs.
The episode’s central tension is whether easing inflation data can outweigh supply shocks and market risks before the Fed makes its next decision.
What was said on this episode
25 statements · 11 positive · 13 negative · 1 mixed
Investors continue favoring risk assets despite weaker economic data.
“what we're seeing, though, more broadly is just still a love for risk assets.”
Listen at 2:36
Intermediate bonds offer attractive yields of about 6%.
“right now you're getting about a 6% yield in the intermediate part of the curve. That's really attractive.”
Listen at 3:41
Bond yields are at twenty-year highs, creating substantial bond-market value.
“We're at 20-year high yields and no one wants them. So there's a ton of value in the bond market.”
Listen at 3:46
Equities have momentum but lack attractive valuations.
“the equities have the momentum going for them. They don't have valuation going for them.”
Listen at 3:52
Economic growth is probably decelerating.
“We're probably decelerating in growth here.”
Listen at 3:58
The bond-market growth narrative will become important in 2027.
“I think that's a story for 2027.”
Listen at 4:02
Locking in current bond yields should be attractive.
“If you can lock in these yields, I think that's going to be pretty attractive.”
Listen at 4:24
Healthcare has performed well and merits additional portfolio allocation.
“Healthcare has been great for us, this sector. We've been adding to that.”
Listen at 5:02
Defensive value stocks became somewhat cheaper this quarter.
“We think defensive value actually cheapened up a bit this quarter.”
Listen at 5:31
Micron may report another strong quarter.
“Wouldn't be surprised if it's another great quarter.”
Listen at 5:50
Third-quarter earnings growth will be broader than expected.
“We think it's going to be a bit broader than the market thinks.”
Listen at 7:26
2027 earnings will face difficult comparisons and a high bar.
“I look at 2027 earnings as it's going to be a high bar to hit.”
Listen at 8:34
Higher capital and energy costs will make 2027 earnings harder to achieve.
“higher cost of capital. higher energy input costs. You add it all up, it's going to be tougher.”
Listen at 8:40
Economic growth will be weaker next year.
“I think growth is going to be weaker, softer.”
Listen at 8:52
Bond yields will be lower next year.
“I think yields are lower into next year.”
Listen at 8:58
Current bond yields are attractive.
“I think these yields are attractive.”
Listen at 9:00
A U.S. diesel export ban could create shortages in importing regions.
“you might end up creating shortages in parts of the U.S. that are importing diesel.”
Listen at 11:36
A diesel export ban could reduce U.S. refinery crude runs.
“you could trigger a reduction in crude runs in the U.S.”
Listen at 12:13
A diesel export ban might increase gasoline prices.
“that might also creep up the price of gasoline.”
Listen at 12:40
A U.S. diesel ban would coincide with Russian fuel export restrictions.
“if the U.S. bans diesel exports, the Russians have banned diesel into the end of October and gasoline into next year.”
Listen at 13:29
The blockade is currently restricting targeted oil flows.
“the blockade, the numbers clearly show the blockade is working.”
Listen at 15:08
Maintaining the blockade with two U.S. carrier groups is expensive.
“We're also looking at two aircraft carrier groups from the U.S. having to maintain the system here, which frankly is also a very expensive process.”
Listen at 15:20
Routing Saudi shipments around Africa adds twenty days to transit.
“if you have to go around the Mediterranean and... the Cape in South Africa, you're adding 20 days to your trip.”
Listen at 16:28
China’s oil inventories are currently declining.
“China's inventories are falling”
Listen at 16:58
Chinese inventories have fallen by two to three million barrels daily for several weeks.
“we've seen several weeks where inventories have been falling at two to three million barrels a day. in China.”
Listen at 17:12
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.