Bond yields dropping five consecutive days. This line from bank of america, no news is good news. There has hardly been any news. Today light on data, light on earnings, heavy on fed speak. Vice chair jefferson, governor cook, boston fed president collins. Tons more fed speak. Lisa this is giving you a sense of where we are in the cycle of data that we are focusing on fed speak as the leading issue because that is the only thing. Neel kashkari was so loud when he said his base case was staying on hold for a longer time. He raised the possibility of a potential rate hike but he talked about the euphoria of markets. There is an embrace of every disinflationary print we get and he thinks that is premature. Jonathan are we calling it euphoric . Lisa it is a bias to see things in the most disinflationary way possible. Jonathan disinflation the theme of the last week. Pushing back rate cut calls. September feels like the new june. This from morgan stanley. We remain bullish on our call for basis cuts this year but we are pushing out the start to september. Annmarie you have other analysts saying we might not see one until december. This goes to what Neel Kashkari said. The most likely scenario is we sit here for an extended period of time. The question is what is that extended time and what date it is he want to see before they begin cutting rates . Jonathan lets deal with Central Banks elsewhere. The worlds oldest central bank, the ricks bank in sweden, they make a move. In japan he is starting to make a different kind of move. He is starting to talk of a policy shift. He said abrupt onesided weak yen is bad for the economy and maybe they can lisa the yen is losing value which means the credibility verbal intervention has in japan is nada. Raising the prospect but not seeing it in market action. Annmarie theyve already tried verbal intervention and it did not work, and it did work, but it is not holding on. I maintain that 160 is the in the sand. Jonathan back down to 155. 40. Plenty of developments in the middle east. According to a senior u. S. Administration official United States has paused a shipment of bombs to israel. Clear concern about a military offensive in rafah and unclear whether those bombs will be delivered. Annmarie this is a pause but not a suspension yet. The u. S. Administration has not made a final decision but it comes at a time there trying to get israel on board for a cease fire negotiation. Reuters reporting that a key negotiator will be traveling from cairo to israel to speak to Benjamin Netanyahu, potentially that that is coming down the pipeline. At the same time the u. S. Is saying we will hold off on shipments for now. Lisa you have to wonder how much this is driven by the politics of the moment. I was reading the ratings for President Biden when it comes to the younger cohort there is a question of how does he get out from under this . Is it enough to get a cease fire. Can you expedite that . That is what i am watching. How much that is shaping his rhetoric will stop at the holocaust remembrance speech he was very supportive in talking about the importance of supporting israel. Jonathan difficult to hide from the brutal reality on the ground in gaza. A place like rafah competence urban area with more than one million palestinians. This is playing out in real time and is utterly devastating to watch and it is clear the president is in a more delicate position now that he was in early october. Lisa if those bombs are used to kill thousands and thousands of innocent civilians, that will be devastating at a humanitarian level and in terms of what that means for the United States. Jonathan terry haynes of pangaea joining us a little bit later on those issues. S p 500 just about unchanged. In the market yields higher. On the 10 year 4. 4795. We will talk a lot more what is happening in the commodity market with crude a little bit lower. Coming up, marvin lowe of state street. Terry haines, and angelo zino. We begin with our top story. Neel kashkari warning rates may stay higher. Marvin loh of state street saying this. In that instance, the 10 year will remain closer to 5. 5 . Marvin is with us around the table. Is that a base case call on the tenure north of 5 . Marvin once we get through the start of the cutting cycle. September, the new june, where is it settled . How deep or shallow is this cutting cycle going to be. We are getting to the stage where we need to think about that. Can a 2 inflation target work in this new environment. Jonathan the last time we spoke you said do not fade the market strength. Where does that stand now . Marvin the tailwind created by rate cuts coming is powerful. You could still get to ration that would outperform once we get there. We are trading this type of environment which is great for the screens but in terms of setting up Asset Allocation we need to think about what the world might look like in 2025 and beyond. Lisa raises the question on how you were still positive on stocks if you see a 10 year yield of 5. 5 . Marvin is a relative game we exist in. Growth in stocks and equities have outperformed. You want to own that growth in my mind. There will always be opportunities. U. S. Exceptionalism is making its way through the stock market and that could be somewhat sustainable. If we talk about an environment where inflation is higher, that means there is Pricing Power that exists for these companies it comes down to blocking and tackling whether we are looking at individual equity names in our portfolio. Lisa in the bastion of worries, we have the federal deficit. The people who say that are wrong and have been long and have been wrong for the past years. You have paul ryan he basically went on Bloomberg Television was talking about failed bond options and he is watching bond options. Is that something on your radar as a market risk . Marvin it is. It is one of the biggest criticisms i have. The amount of deficits we are running is unprecedented, especially during boom times. The fact we are talking about unemployment numbers around 4 and still running deficits is unprecedented. The amount of debt we have. I have heard about deficit concerns and the many decades i have sat in the seat and they have not come to fruition. We have so much debt now and we are seeing that the Central Banks of the world are buying less. The official reserve managers are buying less. That means the more pricesensitive folks need to buy more and they are not as flexible. Or they are much more flexible whether or not they want to go to that market. Lisa does that five point 5 baseline call take that into consideration . How much is the deficit part of the extra premium . Marvin term premiums are one of the things we look at from the bond world. How much compensation you need to own treasuries outside the inflation numbers. Greater inflation volatility, potential supply and demand issues as a result of the amount of debt is part of that discussion. Annmarie lisa mentioned paul ryan. What he was talking about was the next president could have a debt crisis on his hands. You are looking at positioning into the election. How are you preparing . Marvin we put out a report that is debt taxes and bigger deficits. We see both administrations pushing further on that. There is not a lot of details. I think that if one wants wants to look at fed independence it is easier under the Current Administration versus some of the chatter with the Trump Administration might go with. That does play into how the curve is shaped and whether or not the markets pushed back against the deficit numbers. Annmarie what about the dollar . Marvin we will see a series of Central Banks move before the fed. This will support the dollar in the shortterm. Jonathan can you think of a better example of the deficit them paul ryan . Lisa that is the entirety of congress always which is why we are now saying jonathan the deficit. Do you think this will change soon . Annmarie people saying the market will force washington to react, not washington reacting to a market that many say this debt is not sustainable. Jonathan tax cuts are about to expire next year. That decision for 2025. If you just push that out, do we absorb that in the treasury market . Marvin we have to. The fed can always come back and buy more. That is a risk on both sides of things. Starting the taper of the q2 process earlier makes that Balance Sheet much bigger. It may not have the same degree of flexibility they had in the past. Jonathan what did you make of that decision . Marvin i thought it was premature. I thought the draining of liquidity did not recur the way we would have thought. Jonathan lisa you talk about how the fit could buy more of the debt and that is what paul ryan was talking about, monetizing the Balance Sheet. Does that make you longterm bearish on dollar . Marvin i would not necessarily say gold but it makes the argument the amount of liquidity will suppress the dollar. Lisa i am wondering how you see the new Asset Allocation with a benchmark fed rate of 4 . What is your biggest overweight . Marvin commodities and real assets play a big role in that type of world. It will not be the best thing for those trying to get into the real estate market, but real estate continues to float to the top of the list. Jonathan this was great. Marvin loh of state street. Equity futures pulling back. 05 . With news elsewhere here is dani burger. Dani jp morgan is limiting dealings with tiktok. According to our sources, jp morgan will not engage with the find a new block trades and ipos globally. It had long in a prized of wall street banks. The fund does say it intends to defend itself against the charges. A quick check on reddit shares. They are surging nearly 15 . They posted betterthanexpected results in the First Quarter. Revenues increased 40 which far surpassed analyst estimate. The company says that growth was backed by investments making the site easier to use. Reddit shares are slightly lower it since its trading debut in march. The irony of all ironies is customers of ftx will be getting their money back, plus interest, something rare for bankruptcy cases. Ftx is selling off all of its parts and will be worth over 16 billion, more than what it needs to cover what its customers and creditors lost in the november 2022 collapse. That is about what it valued in 2020 near the height of the pandemic trading boom. Although all of the debts will be paid in full, nothing will be left over for the equity holders according to the court documents. That is your bloomberg brief. Jonathan thank you very much. If there is a book i want to read, it is the book on this. The cleanup. But they walked into when they had to look up the bankruptcy of this company. How much was left. You will sit here and say there is enough money to cover the people who are owed money. Listen to these numbers. 16. 3 billion in cash to distribute. Lisa to me this is the question. How much has leaked out with all of the donations. This is the fundamental issue. Is it a crime and how big of a crime is it if everybody gets their money back . A lot of people would say it is still prime because you could have gotten bigger returns. Annmarie it is the end sum that is shopping. Some creditors could recover as much as 142 of what they are owed. They are making money even now. Jonathan lets hope we do not get a turn in the market. Lisa if you hang on long enough, boom. Jonathan equity futures slightly negative. Up next, the white house sending a message to israel. If you will carry out a military operation you want to see people evacuated but those people need somewhere to go and weve not seen a plan that would deliver that. Jonathan that just around the corner. Live from new york, good morning. How am i going to find a doctor when im hallucinating . What about zocdoc . So many options. Yeah, and dr. Xichun even takes your sketchy insurance. Xichun, xichun, xichun youve got more options than you know. Book now. Jonathan good morning. Equity futures slightly negative. Down. 03 after the s p 500 managed to squeeze out a fourth day of gains. Yields higher on the 10 year. Under surveillance, the white house sending a message to israel. It is no secret they want to conduct a Major Military operation. We have made clear we oppose such an operation. You want to see people evacuated those people need to have somewhere to go. The place they need to go to needs to have sufficient food, water, housing, sanitation. Weve not seen a plan that would deliver that. Jonathan the u. S. Pausing a shaman of arms to israel about rising concerns about its planned military offensive in rafah. U. S. Officials saying a final decision has not been made. Israel also reopening a Peak Crossing in the gaza strip for a deliveries following pressure from the white house. Terry haines joins us for more. There is a long history of this going back several decades. How big is the signal . Terry is a series of signals and they are somewhat inconsistent and somewhat confusing. You have stand shoulder by shoulder on one hand and on the other hand wanting to nitpick operational plans on the ground as well as humanitarian plans on the ground. Nary a word and all of that about what the white house is doing about the artificial harbor it was building or what it has been bringing into gaza itself. There are a lot of different signals. This is characterize the administration from day one in the middle east since last fall, and also others of its major Foreign Policy initiatives whether afghanistan or ukraine. Annmarie yesterday the state Department SpokesmanMatthew Miller spoke about the proposals the u. S. Government put on the table to the Israeli Government. At the same time what we hear is biden does not want to see any invasion in rafah. Do you foresee a plan israel can undertake the u. S. Would be on board with . Terry no. Rhetorically they will not be on board with it no matter what. The reason i say that is the United States has not been on board with the military operations the israelis have conducted for quite some time, no matter what they are. I do not see them changing that rhetoric anytime soon. To answer the next question, i do think that is partially politically motivated. Annmarie the timing comes as reuters is reporting bill burns will be heading to israel to see netanyahu. You think this can be used as leverage to get the israelis on board with the ceasefire agreement . Terry that depends on what the israelis want. They have been cagey in public about what they want, only saying the hamas counterproposal of monday was far away from what was that was in their Security Best interests. I dont blame them for that. Negotiating in public is a fulls game and a losers game which is why hamas has tried to drag them into it. Do i see a difference in the trajectory . I do not. You have netanyahu on the one side but you also have a war cabinet that has centrists in it but you have hardliners. Neni yahoo has to set up Benjamin Netanyahu has to set of five all of those people. Benjamin netanyahu has to satisfy all of those people. As long as net yahoo as long as Benjamin Netanyahu and gantz are together they can do lisa what more can President Biden do he is going out and interviewing at a time when his competitor is locked in a criminal trial in new york city. What can he do to get an upper hand on this conversation . Terry my on to sense of advice for the white house my unwanted two cents of advice for the white house is the need to be clear about what their goals are and they need to execute them clearly. If they lose people as a result of that they will gain people on the others by virtue of being cleared and standing cap and standing up for what it is the administration wants to do and what is in the United States best interest, not political interest but United States best interest. The administration is not clear on that. They never have been clear. That is why it took six months to get ukraine eight. The administration is not clear and they are not persuasive and there and they need to be both. Lisa is there a clear message coming from the Trump Campaign right now . Terry what the trump people are doing is they are distracted. Secondly they are following the political adage that when your opponent is tearing himself up there is no reason to jump on board. Annmarie we know that President Biden will be sitting down with erin burnett of cnn this evening. He has not sat down and done the formal interview process. Theyve been looking for other ways to get the message out. Does he need to be doing more of this communication . Terry he needs to be doing more of that and he needs to be doing more unscripted. I am not privy to what erin burnett or cnn are doing, but the white house seeks to control any white house seeks to control the environment or the questions as much as possible. The president needs to be out there more unscripted and able to be a little bit more blunt about what his priorities are in Foreign Policy and domestic policy as well. Jonathan if the election was today, who wins . Terry today, i think trump probably wins by a nose but it is six months out. As i have said before, i think the biden campaigns discipline, message discipline and get out the vote discipline probably carries over. Rump has topped out and thirdparty candidates trump has topped out and thirdparty candidates wane in popularity. Jonathan thank you. This has been his base case going into november. Annmarie there is a lot of time. You had a split screen like yesterday, the president giving a speech on antisemitism and at the same time you have the former president in court where we learned a lot of salacious details regarding the selection of fair. Jonathan some details we did not want, to be honest with you. Annmarie some details too many and that is walltowall on a lot of network news creeping into the american psyche. Lisa didnt th