Episode summary
Fed’s Beige Book Says War Lifts Uncertainty for US Companies | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 47 min · Hosts: Carol Massar, Tim Stenovec · Guests: Michael McKee, Nicola Willis, John Roberts, Jennifer Rie, Michael Ha, Avalon Pernell
Summary
The episode centered on how the war with Iran is rippling through the U.S. economy and global markets. The host and a guest said the Fed’s Beige Book showed activity still rising slightly to modestly in most districts, but the conflict was creating uncertainty around hiring, pricing and capital spending, while energy and fuel costs jumped in every district. A guest argued the war is already starting to leave economic scars even before the data fully reflects them, and that markets may be underestimating how long elevated oil prices and supply disruption could last.
That theme carried into a wide-ranging interview with New Zealand Finance Minister Nicola Willis, who said higher fuel prices are already lifting inflation and slowing growth prospects at home, while her government prepares for possible supply disruption. The show also examined how the shock is lifting prices for plastics and other petrochemicals, with an analyst saying shortages across the Persian Gulf could last months and push firms to ration demand and substitute away from plastic.
Later, the program turned to Live Nation’s antitrust loss and to UnitedHealth, where an analyst argued the company’s Optum businesses face structural pressure, not just temporary cyclical weakness. Across segments, the common thread was that geopolitics, regulation and market structure are all reshaping pricing, margins and investor expectations.
Key takeaways
- The host and Michael McKee said the Fed Beige Book showed slight-to-modest growth in 8 of 12 districts, but war-related uncertainty was delaying hiring and investment.
- McKee said many experts think oil prices will stay elevated until the war ends and traffic through the Strait of Hormuz normalizes.
- Nicola Willis said New Zealand faces a “very significant challenge” from doubled diesel prices and a roughly 35% rise in petrol prices, with inflation potentially hitting 4.2%.
- John Roberts said Persian Gulf chemical and plastic supply could remain disrupted through the third quarter, maybe into year-end, because plants cannot restart quickly.
- Jennifer Rie said the Live Nation ruling matters because plaintiffs can win monopolization cases when they have compelling evidence, even against large companies.
- Avalon Pernell’s guest said UnitedHealth’s Optum faces structural pressure and that the company is not the easy group trade it used to be.
Notable quotes
“The conflict in the Middle East, Carol, was cited as a major source of uncertainty that complicated decision-making around hiring, pricing, and capital investment”
“It is the first Beige Book since the war war started, and on an anecdotal basis, it does suggest that the economy is starting to bear the scars of the war”
“We've seen a doubling in the price of diesel, one of the refined fuels that we rely on significantly, and about a 35% increase in the price of petrol”
“I would say through the third quarter, maybe into year end. Um, you know, I don't think anybody really knows, but it's months”
“So the total amount will really add up. I mean theoretically that total amount would be in the multi-millions possibly even more”
How the episode opens
Bloomberg Audio Studios. Podcasts, radio, news. 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 Stenovec on Bloomberg Radio.
Never a dull moment, that's for sure. And we do have uh the Fed Beige Book over uh it is out.
Yeah, this is the anecdotal information uh from uh the Federal Reserve districts, the 12 of them. And for in terms of overall economic activity, uh the Beige Book says that overall economic activity increased at a slight to modest pace in eight of the 12 Federal Reserve districts, while two districts reported little change, and two districts reported slight to modest declines. The conflict in the Middle East, Carol, was cited as a major source of uncertainty that complicated decision-making around hiring, pricing, and capital investment with many firms adopting a wait-and-see posture.
Which is why earning season is so important to see what we hear from the C-suite about this. Uh as we said, never a dull moment. We're going to dig into the Beige Book in just a moment.
We also got this earlier today from President Donald Trump, who said he would fire Jerome Powell as chair of the Federal Reserve if he does not leave that post in time. That's in quotation marks, and insisted that the Justice Department investigation into the central bank leader would continue. Uh this was him earlier uh actually last night talking on Fox.
Whether it's incompetence, corruption, or both, I think you have to find out. I really do. I think you have to find out.
Not going to drop the probe?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed beige book
- iran war uncertainty
- energy and fuel costs
- inflation and gasoline
- medicare rate hike
Companies and tickers mentioned
- LYV
- UNH
- Federal Reserve
- New York Fed
- Mizuho
- Live Nation
- Bloomberg Intelligence
- Baird
- UnitedHealth Group
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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