Episode summary
Warsh Says Inflation Isn’t Slowing, Policymakers Will Bring it Down | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 36 min · Hosts: Carol Massar, Tim Stenovec · Guests: Mike McKee, Linda Hasenfratz, Michelle Jamrisko, Jessica Nix
Summary
Kevin Warsh’s Jackson Hole remarks set the tone: he said inflation is not meaningfully slowing, that the Fed’s 2% PCE target is fixed, and that policymakers have “work to do” if underlying inflation is not moving fast enough toward that goal. Bloomberg’s Mike McKee said Warsh gave Wall Street a clearer roadmap by emphasizing the breadth of inflation, not just the monthly level, while stopping short of committing to a September rate hike.
The episode also focused on trade pressure between the U.S. and Canada, with Linda Hasenfratz of Linamar saying more than 90% of her company’s sales face no tariff now, but warning that new tariffs on auto parts would hit the highly integrated North American supply chain within weeks. She argued the Canada-U.S. trade relationship is not broken and said both countries need a durable agreement.
Later, Michelle Jamrisko discussed the Iran war and the status of the Strait of Hormuz, saying diplomacy remains murky and that direct U.S.-Iran talks do not appear close. Jessica Nix then turned to Eli Lilly’s Mounjaro, explaining how a new cardiovascular approval could widen insurance coverage and strengthen the drug’s commercial case.
Key takeaways
- Warsh said inflation is still not slowing enough and framed interest rates as the Fed’s “predominant tool” if progress stalls.
- Mike McKee said the key signal from Warsh was attention to inflation breadth, with 54% of components rising in the latest month.
- Linda Hasenfratz said more than 90% of Linamar’s sales currently face no tariff, but auto-parts tariffs would be devastating within weeks.
- Michelle Jamrisko said direct U.S.-Iran talks remain unlikely and the Strait of Hormuz remains a major geopolitical and energy risk.
- Jessica Nix said Mounjaro’s cardiovascular approval could help Eli Lilly expand insurance coverage and lower out-of-pocket costs over time.
Notable quotes
“We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed. Otherwise, we have work to do”
“he is focusing on inflation. And one of the things he clued us into is he's not just looking at the level or the change on a month-to-month basis”
“if a tariff is imposed on auto parts as of January, it will obviously have a big impact on the industry”
“It would be a matter of weeks before the industry would be on its knees. Uh in my opinion it would shut down within a matter of weeks”
“there's no real evidence or sign that direct talks will happen again anytime soon”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week 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 Business Week Daily podcast with Carol Masser and Tim Stenbec on Bloomberg Radio. We're talking about Fed Chair Kevin Walsh.
He warned about a couple things. Okay, so first he warned inflation isn't meaningfully isn't meaningfully slowing. He also stressed that policy makers are going to return inflation to that 2% goal.
Um but here he was earlier, you want to listen to him. He was speaking at the Fed's annual conference in Jackson Hole, Wyoming. Take a listen.
We should not indulge a regime in which market participants are looking primarily to the Fed for their next trade. The Fed's a decision-making agency. We make choices amid uncertainty, and the data upon which we draw must be relevant, contemporaneous, accurate, and as actionable as possible.
The Fed's price stability objective of 2% as measured by the PCE price index is a firm fixed target. Achieving both sides of our mandate over the medium-term is not an eitheror proposition. We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed.
Otherwise, we have work to do. That's our job. That's our mandate.
And that's our charge to keep.
Feder Kevin Walsh earlier today this morning from Jackson Hole, Wyoming. In Jackson Hole, Wyoming, we bring in Michael McKe, Bloomberg TV and radio international economics and policy correspondent. He joins us from a still rainy day unfortunately. Mike, um hopefully when you're done talking to us over these next few hours, the sun will come out a little bit.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed inflation
- interest rates
- jackson hole
- monetary policy
- economic outlook
Companies and tickers mentioned
- Linamar
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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