Name: On FOMC Meeting and Safe Havens | CME Group’s Market Signals
Uploaded: 2025-12-03T22:41:00Z
Duration: 5 min 2 s
Description: The Fed's next move is on the agenda, and what to make of recent market moves.

https://www.barrons.com/client

Topics

Memberships

Tools

Customer Service

Network

Newsstand

For Business

For Education

For Advertisers

Account

About Barron's

bolded

unBolded

We'll parse through the latest employment and core PCE Price Index and what they suggest for inflation.

https://m.wsj.net/video/20260202/08d968a5-0528-4f45-85b5-5588de761b66/1/hls/manifest-hd-wifi.m3u8

On Inflation, Labor and Political Pressure | CME Group's Market Signals

Learn how today’s customization capabilities, active strategies, and private-market investments are creating differentiated portfolios and new opportunities for growth for model asset managers and advisors.

https://m.wsj.net/video/20251212/67503e5e-aa49-4d44-b059-3086c417e0a4/1/hls/manifest-hd-wifi.m3u8

Model Portfolios: How Innovation Is Driving Variety

The government shutdown ends, and we're taking stock of its impact and gauging what companies are signaling in their Q3 earnings reports.

https://m.wsj.net/video/20251121/85119098-3046-4b2d-9073-04ff109a490f/1/hls/manifest-hd-wifi.m3u8

On Shutdowns and Q3 Earnings | CME Group’s Market Signals

Private markets are becoming more commonplace, with a lot of attractive opportunities. Hear what areas in the alternative space can provide much-needed diversification for portfolios in today's markets.

https://m.wsj.net/video/20251010/6e82999b-4a4d-4526-803f-f6ac57d5dbf9/2/hls/manifest-hd-wifi.m3u8

Allocation Evolution: Why Alternatives are Essential in a Post-60/40 Era

Recent research highlights a significant disconnect between individuals' understanding of healthcare and long-term-care costs and their financial readiness. This discussion will explore how households and financial advisors perceive healthcare-spending risks and the implications for retirement-income planning. We'll examine strategies for adapting retirement plans to address rising healthcare expenses, increased longevity, and the growing incidence of chronic conditions.

https://m.wsj.net/video/20250211/609bf9f5-fc32-493c-a6e9-104e45670c4b/1/hls/manifest-hd-wifi.m3u8

Navigating Healthcare Costs in Retirement

The U.S. power grid is up against an aging infrastructure while trying to meet an ever-increasing demand and accommodate new changes in energy supply. Being able to quickly transition to a more sustainable grid is critical to the energy transition and the future, and modernizing grid infrastructure is key. We’ll discuss how digitization, renewables, expanding storage, and simplifying regulations are important to building the grid of tomorrow.

https://m.wsj.net/video/20240917/002d609c-a5e6-40f7-8367-18202439953a/1/hls/manifest-hd-wifi.m3u8

The Role of the Electrical Grid in the U.S. Energy Transition

The launch of Bitcoin ETFs has put greater focus on the world’s largest crypto asset. What should investors look for next? Bitwise CIO Matt Hougan shares five forecasts on topics ranging from volatility and ETF flows to his 2028 Bitcoin price target.

https://m.wsj.net/video/20240529/1528a779-e0ec-4053-aa97-87f85330e697/2/hls/manifest-hd-wifi.m3u8

Five Predictions for Bitcoin’s Next Four Years

As we enter an era of structrually higher inflation we'll speak with market strategists and investors about coping with price growth, and explore the best ways to manage inflation's impact in a retirement portfolio.

https://m.wsj.net/video/20240429/bcd77c6e-514d-4982-b90e-9e0c7f6c6bdc/1/hls/manifest-hd-wifi.m3u8

Retirement Planning with Inflation In Mind

Barron's Sponsored Video

Videos by IBM

Video Center - Barron's sponsored

The Fed's next move is on the agenda, and what to make of recent market moves.

https://m.wsj.net/video/20251204/8454475e-9edb-48ae-95ce-9f1f2a805c5c/1/hls/manifest-hd-wifi.m3u8

On FOMC Meeting and Safe Havens | CME Group’s Market Signals

Thank you and welcome to CME Group's Market Signals. Erik, it's great to see you again.

Well, thank you for having me back.

Erik, lots to talk about. Let's start with the FOMC, they're meeting next week. The fog is slowly lifting from those missing and late economic data, but from what we can see from recent PMI surveys, inflation is still too high and the labor market is showing some signs of weakening. At this stage, should the Fed focus more on inflation or the labor market?

Well, this is the dilemma. The problem for the Fed is that they have a dual mandate, so they technically have to focus on both inflation and the labor market. And you're absolutely right. The PMI surveys as well as other data have been showing fairly sustained price pressure so inflation is still a concern and last we saw, it was still running above target. At the same time, the labor market is clearly very, very soft with some increasing news of layoffs as well as a very sharp slowdown in hiring.

So Erik, let's talk about the markets. There seems to have been quite the vibe shift this month when it comes to the markets exhibiting a lot of nervousness and it's all around concerns about an AI bubble. What's your take?

Well, that's a really good question. You know, sometimes it's only possible to identify a bubble in retrospect, but there are a few items of concern. First of all, on the bright side, reported profits at many of the biggest tech companies have continued to increase very rapidly. On the other hand, their free cash flow to equity, in many cases, is falling quite sharply as they make tremendous investments in data centers and begin to issue more and more bonds in order to fund those investments.

So, are you concerned about that? We are in a record here for debt issuance and as you said, these are driven by massive AI infrastructure builds. Are you concerned about pressure and corporate bond spreads?

Well, we have been seeing a little bit of widening in corporate bond spreads. You see that in the investment grade bonds, especially those issued by the big tech companies themselves where we've seen anything from maybe a 20 to 90 basis point widening versus US treasuries. On the other hand, if you look at high yield bonds overall, as an index, you've seen their spreads widen from maybe 2.6% to 3% over treasuries, which is notable, but not by itself too worrisome.

So let me get your thoughts in a few more asset classes as we close out the year possibly on that persistent note. The top performing major asset class this year, gold, has pulled back recently. Is that around fears about inflation or about AI?

So I think gold's rally doesn't have very much to do with AI, in part because gold shows almost no day-to-day correlation with the stock market over most of its history. On the other hand, gold is very, very, gold investors, I should say, are very, very concerned about inflation. And I think the reason why is fairly simple. When you look around the world, many countries are running enormous budget deficits in the US, 6% of GDP. In China and Brazil, 8.5% of GDP. In Western European countries like France or the United Kingdom, maybe between four and 6% of GDP and all of these political systems seem to be struggling to reduce those deficits. At the same time, almost every central bank in the world is cutting interest rates, with only the exception of Brazil and Japan, even though almost every central bank is seeing inflation running above target. So this combination of big deficits above target inflation and lower interest rates has some investors worried. And so they've been buying not only gold, but also silver, platinum and palladium.

So let's talk about cash. It seems like cash is king once again. Is everything in the market so overvalued that some investors, including big investors such as Berkshire Hathaway, are building cash reserves? I, either as a safe haven or because there's just simply no value to be had?

Well, you know, I can certainly understand how a long only investment manager would be tempted to build cash, given the heights at which the equity market is trading in terms of price to sales ratios, price to books, both of which are at record highs and even price to earnings, which is at its highest level since the year 2000. So I can certainly understand that temptation to build cash and maybe wait for bargains if the market corrects.

Well, Erik, we will have to leave it there. The next time we see each other, we'll be in 2026 so we'll see how much of the conversation will have changed by then. Thank you, Erik.

Well, thank you. I'm looking forward to it.