Bloomberg Surveillance: The Fed Decides 6/17/2026

Watch on YouTube ↗  |  June 17, 2026 at 21:57  |  2:12:11  |  Bloomberg Markets
Speakers
Bob Michele — CIO and Head of Global Fixed Income, J.P. Morgan Asset Management
Jim Bianco — President, Bianco Research
Jeffrey Rosenberg — Senior Portfolio Manager, BlackRock
Kate Moore — Head of Thematic Strategy, BlackRock

Summary

Federal Reserve Chair Kevin Warsh held rates steady in his first meeting, removed forward guidance, shortened the statement, and announced five policy task forces. The dot plot showed nine members favoring rate hikes this year, a hawkish surprise that sent front-end yields sharply higher and stocks lower. Guests assessed the implications for bonds, equities, credit, and the yield curve, with views ranging from supporting long bonds to warning against overplaying curve flattening.

  • Fed leaves federal funds rate unchanged at 3.50–3.75% under new Chair Kevin Warsh.
  • Statement shortened; forward guidance removed; Warsh declined to submit own rate projection.
  • Dot plot reveals nine of 18 FOMC participants see rate hikes in 2026, a stronger hawkish tilt than expected.
  • Five task forces announced covering communications, balance sheet, data, productivity/AI, and inflation frameworks.
  • Markets react with 2-year yield surging ~15bp, S&P 500 and Nasdaq lower, and yield curve flattening.
  • Bob Michele sees long-end bonds supported by the Fed's renewed inflation credibility.
  • Kate Moore stays underweight duration and prefers equities over credit on relative valuations.
  • Jim Bianco expects yield curve flattening; Jeffrey Rosenberg warns the flattening trade may be overdone.
Ideas
Bob Michele CIO and Head of Global Fixed Income, J.P. Morgan Asset Management 44:27
Hawkish Fed supports long bond prices.
A vigilant Fed that is committed to fighting inflation will create support for the long end of the bond market because it enhances credibility and keeps longer-term inflation expectations anchored, leading to lower long-end yields relative to the front end.
30-Year US Treasury Bond MED
Kate Moore Head of Thematic Strategy, BlackRock 114:07
Avoid long duration on sticky inflation.
Inflation is expected to be more persistent and broader than many anticipate, and despite the Fed's hawkish tone, there is no near-term opportunity to extend duration; the portfolio remains very underweight duration as bond yields may not decline meaningfully.
10-Year US Treasury HIGH
Kate Moore Head of Thematic Strategy, BlackRock 115:03
Prefer equities over stretched credit.
Credit valuations are near 15-year highs while equities have already repriced lower on strong earnings growth, making equities a more attractive risk asset; prefer to take risk exposure in equities over credit while staying selective in credit.
SPY MED
Kate Moore Head of Thematic Strategy, BlackRock 115:03
Prefer equities over stretched credit.
Credit valuations are near 15-year highs while equities have already repriced lower on strong earnings growth, making equities a more attractive risk asset; prefer to take risk exposure in equities over credit while staying selective in credit.
LQD MED
Jim Bianco President, Bianco Research 119:26
Yield curve to flatten on hikes.
If the Fed commits to rate hikes to fight inflation, front-end yields will rise while the long end will outperform on a relative basis, driving a flattening of the yield curve as the market prices in credible inflation control.
2-Year US Treasury MED
Jim Bianco President, Bianco Research 119:26
Yield curve to flatten on hikes.
If the Fed commits to rate hikes to fight inflation, front-end yields will rise while the long end will outperform on a relative basis, driving a flattening of the yield curve as the market prices in credible inflation control.
TLT MED
Jeffrey Rosenberg Senior Portfolio Manager, BlackRock 122:19
Flattening trade overplayed; steepening risk ahead.
There is a risk of overplaying yield curve flattening because the hawkish shift may be more about balance sheet reduction than rate hikes, which could increase term premium and steepen the curve, making flattening trades dangerous.
US Yield Curve Flattener MED
Up Next
54:46
Stocks Fall as Traders See Fed Hike by October | The Close 6/17/2026
Bloomberg Markets · Jun 17
19:17
FED QUER MUDAR TUDO: JUROS, INFLAÇÃO E EMPREGO
Fernando Ulrich · Jun 17
2:57:36
LIVE: FOMC RIGHT NOW!!! SpaceX Is DUMPING..? Hyperliquid Is COOKING! WAR IS OVER!!!!!!!!!!! #LIT
Thread Guy · Jun 17
4:14
Consumers are doing well in navigating the current economic environment, says Mastercard's Meyer
CNBC · Jun 17
33:08
Fed Holds Rates Steady As Warsh Takes Helm: Fed Special
Bloomberg Markets · Jun 17

This Bloomberg Markets video, published June 17, 2026, features Bob Michele, Kate Moore, Jim Bianco, Jeffrey Rosenberg discussing 30-Year US Treasury Bond, 10-Year US Treasury, SPY, LQD, 2-Year US Treasury, TLT, US Yield Curve Flattener. 7 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Bob Michele, Kate Moore, Jim Bianco, Jeffrey Rosenberg  · Tickers: 30-Year US Treasury Bond, 10-Year US Treasury, SPY, LQD, 2-Year US Treasury, TLT, US Yield Curve Flattener