Market Commentary – BlackRock Portfolio Manager Jeff Rosenberg
In a Bloomberg Television interview on Friday, BlackRock Inc. portfolio manager Jeff Rosenberg highlighted that the strong August jobs report shifts the Federal Reserve’s focus back to inflation ahead of the September 11 consumer price index (CPI) release. The August non‑farm payrolls increased by 162,000, surpassing all estimates, and the July job‑loss figures were revised upward, indicating a robust labor market.
Rosenberg explained that the upcoming CPI data will be pivotal in determining whether the Fed maintains its policy rate or implements a 25‑basis‑point increase at the September 15‑16 Federal Open Market Committee meeting. He indicated that if the CPI shows continued progress on price stability, the Fed is likely to hold rates steady.
He further noted that wage inflation, which was a primary concern during the COVID‑era disruptions, no longer poses the main threat. Instead, the primary inflation risk now stems from rising energy prices, exemplified by the American Automobile Association’s report that average diesel prices at U.S. pumps reached a record $5.85 per gallon.
Rosenberg added that even a quarter‑point rate hike would probably not disrupt equity or credit markets significantly. He emphasized that equity performance is more dependent on earnings and growth from technology and artificial‑intelligence developments, while strong credit quality and tight spreads should enable debt markets to absorb a modest rate increase.
Following the jobs data, yields on two‑year U.S. Treasury securities jumped, and market participants increased their bets on a potential rate hike at the September FOMC meeting.
Key Takeaways
- August payrolls +162k; July job losses revised away.
- Focus now on September CPI to guide Fed rate decision.
- Wage inflation recedes; energy price spikes (diesel $5.85/gal) drive core inflation risk.
- Rosenberg expects equities to rely on tech/AI earnings; strong credit fundamentals should cushion a 25‑bp hike.