Episode summary
Bloomberg Businessweek Daily: PCE Curbs Fed Bets (Podcast)
Bloomberg Businessweek Daily
· · 41 min · Hosts: Carol Massar, Tim Stenovec · Guests: Mike McKee, Lindsey Piegza, David Bahnsen, Mike McGlone, Jennifer Palmer, Dani Burger, Bill Ackman
Summary
Core PCE came in softer than expected and was revised lower, but the guests argued that it did not materially change the inflation picture. The host and Mike McKee said the report still showed persistent price pressure in services, while August consumer spending and the labor backdrop suggested the economy remained resilient enough to keep the Fed wary. Lindsey Piegza said consumers were still outspending wage growth, supported by savings, buy now pay later, hardship withdrawals and intergenerational wealth transfers, a setup she said could not be sustained indefinitely.
The discussion then turned to the Fed’s policy path, with McKee saying markets should not overread futures pricing because upcoming CPI and PPI data could still shift the October 28 meeting. The OIG report on the Fed’s $2.4 billion renovation cleared the board of criminality but criticized major mismanagement. The show also played an interview with Bill Ackman on AI, where he argued the frontier-lab business model is hard to underwrite, the capital needs are enormous, and valuation matters. David Bahnsen echoed that skepticism, calling the current AI trade potentially a bubble built on assumptions that capital will keep cooperating.
On energy, Mike McGlone said surging oil and heating prices should eventually destroy demand and pull prices lower, even as winter costs loom large for households in the Northeast and Europe. The final segment with Jennifer Palmer focused on asset-based lending, female-led businesses and the persistence of financing bias, with her arguing that debt can be a better tool than equity for growth when the timing is right.
Key takeaways
- Mike McKee said the softer core PCE print still left services inflation and Fed caution intact, not a clear victory over inflation.
- Lindsey Piegza argued consumer spending is being financed by savings, BNPL, hardship withdrawals and family transfers, which cannot fill the gap forever.
- The guests said October Fed odds are fragile because CPI and PPI can still change the picture before the October 28 meeting.
- David Bahnsen warned that frontier AI valuations assume capital markets keep cooperating, even though he expects financing conditions to tighten.
- Mike McGlone said high oil and heating prices are likely to trigger demand destruction and push prices lower later.
- Jennifer Palmer said women-led businesses still receive less financing and that asset-based lending can provide non-dilutive growth capital.
Notable quotes
“it gives us, uh, the idea that inflation hasn't changed a whole lot”
“The consumer is still out in the marketplace, spending on goods and services now doing so at a slightly slower pace”
“I would say that no one knows how they will, and they're acting as if they do”
“Valuation does matter”
“we look to fill that with our leverage”
How the episode opens
This is Bloomberg Businessweek daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance and tech news as it happens. The Bloomberg Businessweek daily podcast with Carol Massar and Tim Stead of Back. Wheel is something I've been focusing on over the course of the day.
Christine, I know you have been as well. We report a lot on what is getting in and out of the Strait of Hormuz. It does seem like, according to reports that we've seen, those levels are back close to what they were before this war.
And something. That's right. That is just pipeline from Saudi is back at capacity, maybe running even hotter than they were, uh, before the war, trying to get some of that product out to market.
And it does seem like we're getting a lot of reports from industry analysts saying they don't think it's caused long term damage to the systems to, uh, to the production there. But to me, the the issue is always not just production, it's the risk factor and it's all the other pricing that goes into it. So I think I'll just say refinery.
Yeah, we'll get into that a little bit later in the show. But first we're going to go to Mike McKee. He is our international economics and policy correspondent here at Bloomberg TV.
Because amid all the economic data this week, of course we've got PC, we've got KPIs, we've got fed. Okay, so many acronyms. But let's start with the core PCE data.
Can you start high kind of at the 30,000ft Christina Ruffini will understand this level. And then you can dig into whatever really stood out to you. Yeah.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- pce inflation
- fed rate bets
- consumer spending
- core inflation
- commodities outlook
Companies and tickers mentioned
- SF
- Stifel
- Bloomberg
- The Bahnsen Group
- JPalmer Collective
- Pershing Square
Watch the episode
Watch “Bloomberg Businessweek Daily: PCE Curbs Fed Bets (Podcast)” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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