Stocks, Bonds Rise as US Core CPI Tops Forecasts Bolstering Case for a Rate Hike

Watch on YouTube ↗ | September 11, 2026 at 14:39 | 2:24:04 | Bloomberg Markets

Speakers

Cameron Dawson — Chief Investment Officer, New Edge Wealth

Jeff Currie — CSO Energy Pathways, Carlyle Group

Wei Li — Global Chief Investment Strategist, BlackRock

Monica Guerra — Head of Policy, Morgan Stanley Wealth Management

Meghan Swiber — Rates Strategist, Bank of America

David Kelly — Chief Global Strategist, J.P. Morgan Asset Management

Robert Tipp — PGIM Fixed Income Managing Director, Chief Investment Strategist, Head of Global Bonds

Ed Millis — Washington Policy Analyst, Raymond James

Claudia Sahm — Economist, Federal Reserve Board

Pierre Poilievre — Conservative Leader of Canada

Stephanie Wilding — Macro Analyst / Economist

Hira — Bloomberg Reporter

Michael McKee — International Economics & Policy Correspondent, Bloomberg

Summary

Bloomberg Surveillance focused on the August CPI print, which came in hotter than expected with core CPI at 0.3% month over month, cementing market expectations for a Fed rate hike next week. Guests debated whether the Fed should tighten into an oil-supply shock, how high long-end Treasury yields can go, and whether equities can keep rallying on AI-driven earnings. Commodities, especially crude and refined products, were a major bullish theme amid Middle East conflict and diesel shortages, while strategists favored quality credit, value/small-cap/international equities, and took a cautious view on long-duration Treasuries.

Core CPI rose 0.3% month over month, hotter than the 0.2% consensus, lifting Fed hike odds.
Middle East conflict and record diesel prices kept oil and refined-product markets in focus.
Strategists debated rising long-end Treasury yields, term premium, and the limits of Treasury buybacks.
Equity guests stayed constructive on US equities and AI earnings but favored value, small caps, and international diversification.
Jeff Currie recommended owning commodities, crude, diesel/jet fuel, agriculture, and gasoline.
Fed commentary centered on credibility, risk-management hikes, and whether energy-driven inflation should be looked through.
Credit and rates guests preferred quality credit and short-duration fixed income over long-end Treasuries.

Ideas

Cameron Dawson Chief Investment Officer, New Edge Wealth 5:25

Tactical Treasury buying on high yields

She sees a secular uptrend in bond yields rather than the old downtrend, but 10-year yields are technically overbought and after-tax yields are attractive, creating tactical buying opportunities in Treasuries; higher yields also provide a buffer against price shocks.

Cameron Dawson Chief Investment Officer, New Edge Wealth 6:52

Lower equity returns as yields rise

She expects lower equity returns and valuation pressure because the secular rise in yields and potential Fed hikes remove liquidity and tighten financial conditions; strong earnings have masked this, but next year's earnings growth is expected to be half of this year's with tough comps and high margin assumptions.

Jeff Currie CSO Energy Pathways, Carlyle Group 31:54

Crude is signal; shortages move upstream

Crude is now the signal rather than the noise: shortages that were in products are moving upstream into crude, China is returning as a buyer due to wide product-crude spreads, and multiple global chokepoints are creating a dangerous commodity rally that is moving the whole curve.

Jeff Currie CSO Energy Pathways, Carlyle Group 32:24

Diesel and jet fuel can spike

Diesel at a record $6 per gallon could go to $7, $8, or $9 and even $200 per barrel for diesel and jet fuel, because product shortages are extreme and refineries cannot keep switching output to meet every product shortfall.

Jeff Currie CSO Energy Pathways, Carlyle Group 33:05

Own commodities as scarcity meets debasement

Commodities are the best-performing asset class and offer long-volatility and long-carry exposure; with scarcity from multiple choke points combined with fiscal and currency debasement, investors should own commodities, including as a hedge against bullish S&P 500 forecasts.

Jeff Currie CSO Energy Pathways, Carlyle Group 35:20

Food crisis lifts agricultural commodities

A food crisis is developing, with soybeans in the teens at $13.30 and wheat and corn also moving higher, as agricultural commodities face scarcity, energy costs, and geopolitical supply shocks.

Jeff Currie CSO Energy Pathways, Carlyle Group 36:49

Gasoline likely hits $5 before midterms

Gasoline reaching $5 per gallon before the midterms is an extremely high-probability outcome because refiners are stretched between diesel and gasoline shortages and may run out of optionality.

Wei Li Global Chief Investment Strategist, BlackRock 54:13

Underweight long-end Treasuries on term premium

The long end of the Treasury curve is vulnerable: if the Fed does not hike despite market pricing above a 60% probability, it will face a credibility problem and long-end yields will likely climb; Treasury buybacks are not QE and will not reliably bring long-term rates down.

Wei Li Global Chief Investment Strategist, BlackRock 55:53

Favor quality credit and durable income

She favors selective credit exposure, specifically high-grade and quality high-yield credit, and sees durable income as a more interesting portfolio anchor because higher rates pressure weaker borrowers without commensurate profitability while quality credit can clear the higher cost of capital.

Monica Guerra Head of Policy, Morgan Stanley Wealth Management 70:16

AI data-center buildout remains a benefit

Political pushback and state-level data-center moratoriums are unlikely to slow the AI and hyperscaler buildout; instead they may force more investment in grid, energy, and infrastructure, making the private-sector AI buildout a long-term benefit.

David Kelly Chief Global Strategist, J.P. Morgan Asset Management 104:46

Fed hike favors value, small caps, international

If the Fed hikes next week, he would back away from the most expensive US equities because higher long-term rates hurt long-duration, high-P/E stocks; he would redistribute into US value equities, US mid/small-cap equities, and international equities.

David Kelly Chief Global Strategist, J.P. Morgan Asset Management 104:46

Fed hike favors value, small caps, international

If the Fed hikes next week, he would back away from the most expensive US equities because higher long-term rates hurt long-duration, high-P/E stocks; he would redistribute into US value equities, US mid/small-cap equities, and international equities.

Robert Tipp PGIM Fixed Income Managing Director, Chief Investment Strategist, Head of Global Bonds 115:12

Favor credit and short-duration fixed income

The adjustment to higher rates should be slow and growth-positive rather than a runaway bear market, which supports credit products and shorter-duration fixed income as the expansion continues.

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This Bloomberg Markets video, published September 11, 2026, features Cameron Dawson, Jeff Currie, Wei Li, Monica Guerra, David Kelly, Robert Tipp discussing TLT, SPY, WTI, DIESEL, CRAK, DBC, DBA, UGA, Long-end US Treasuries, Quality high-yield credit, Durable income fixed income, LQD, AI Data Centers, US grid and energy infrastructure, IWM, VTV, ACWX, High-P/E US equities, SHY. 13 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Cameron Dawson, Jeff Currie, Wei Li, Monica Guerra, David Kelly, Robert Tipp · Tickers: TLT, SPY, WTI, DIESEL, CRAK, DBC, DBA, UGA, Long-end US Treasuries, Quality high-yield credit, Durable income fixed income, LQD, AI Data Centers, US grid and energy infrastructure, IWM, VTV, ACWX, High-P/E US equities, SHY