Jeffrey Sherman: The Bond Market Woke Up to Warsh | Bloomberg TV

DoubleLine Deputy CIO Jeffrey Sherman joins Bloomberg’s The Close with Katie Greifeld and Romaine Bostick to discuss the recent U.S. Treasury rally, attributing the front-end move primarily to relief in crude oil prices but cautioning that core inflation still has a problem. The bond market’s sharp reaction to Federal Reserve Chairman Kevin Warsh’s debut press conference reflected a genuine recalibration, according to Mr. Sherman, with the new Fed chairman focused on price stability not political posturing, and Mr. Sherman sees the agency leaning firmly toward a hike rather than a cut. He notes that timing is complicated, with a potential move landing just weeks before the midterm elections, leaving Chairman Warsh likely to remain patient for now at the risk of needing a larger move later. On AI credit, DoubleLine remains significantly underweight, with Mr. Sherman drawing a parallel to the recent SpaceX IPO: short-dated paper is finding plenty of demand, but as the AI buildout requires longer-dated financing, investors will need a clearer revenue and earnings story before stepping in at current valuations.