Episode summary
Bloomberg Surveillance TV: March 25th, 2026 | Bloomberg Surveillance
Bloomberg Surveillance
· · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Frances Donald, Ryan Petersen, Dave McCormick
Summary
The discussion centered on how the Iran conflict is feeding a supply shock that pushes the U.S. toward slower growth and stickier inflation. One analyst argued the baseline had already been close to stagflation, and now looks more like “stagflation medium,” with growth weighing lower and inflation moving higher. The Federal Reserve was described as having little room to respond because monetary policy cannot reopen the Strait of Hormuz or fix a supply disruption.
The conversation then shifted to logistics and trade. A guest from Flexport said the administration has been focused on keeping fuel moving to the West Coast and Alaska, including a Jones Act waiver to help move jet fuel and refined products on non-U.S.-made ships. He said air-freight prices from Asia to the U.S. have jumped sharply and that capacity has been hit because Middle Eastern airlines account for a large share of global air-cargo capacity.
A senator from Pennsylvania defended the administration’s Iran strategy, saying the military objective is to eliminate Tehran’s missile and nuclear threat and keep the strait open to commerce. He also said the U.S. is more insulated than in past crises because it is now a net energy exporter, but still acknowledged that gasoline near $4 a gallon is hurting working families and raising pressure on Congress.
Key takeaways
- An analyst said the shock from Iran has shifted the outlook from stagflation-like conditions to “stagflation medium,” with less growth and more inflation pressure.
- The analyst argued the Federal Reserve has “no space” because this is a supply shock, not a demand problem.
- A Flexport executive said Asia-to-U.S. air-freight prices have roughly doubled since the conflict began, while overall capacity has been constrained by lost Middle East airline capacity.
- The senator said the U.S. is better insulated than in past Middle East shocks because America is now a net energy exporter.
- The senator said gasoline around $4 a gallon is putting real pressure on Pennsylvania households, even as policymakers try to stabilize energy markets.
Notable quotes
“Our base case before this war was something that looked a lot like stagflation like growth that was slightly below comfort level and inflation that was slightly above comfort level”
“They they don't have space. Monetary policy is not the right tool for what ails the US economy”
“No, simply getting more and more challenging. I mean, the price of the price of air freight especially has gone through the roof”
“I wouldn't put much stock into what the Iranian spokesman say”
How the episode opens
Bloomberg Audio Studios podcasts radio news. This is the Bloomberg Surveillance Podcast. I'm Jonathan Pharaoh along with Lisa Abramitz and Amarie Hordern.
Join us each day for insight from the best in markets, economics, and geopolitics. From our global headquarters in New York City, we are live on Bloombo television weekday mornings from 6:00 to 9:00 a.m. Eastern.
Subscribe to the podcast on Apple, Spotify, or anywhere else you listen. And as always, on the Bloomberg terminal and the Bloomberg Business app. So, here's the latest this morning.
Economic impacts of the Iran war mounting with average gasoline prices in the US nearing $4 per gallon. Global central banks weighing potential rate hikes with inflation not expected to fall to target levels. Joining us now to discuss, Francis Donald of RBC.
Francis, can we just begin with your outlook? Your base case before this war and whether it's changed at all looking out 12 months.
Our base case before this war was something that looked a lot like stagflation like growth that was slightly below comfort level and inflation that was slightly above comfort level. Importantly driven by services inflation. Our outlook now is maybe stagflation medium.
So uh more weighing on growth and more upside to inflation. Now, these are not massive figures. We're looking at 3 plusish inflation, still high ones on growth, but it's not as comfortable as we would have liked.
It certainly negates the tailwind coming from government spending. And inflation is probably going to lap itself again. I suspect next March we'll be celebrating the six-year anniversary of inflation above that 2% target.
So, same directions and the wrong directions for this economy. Let's go with your medium grade stagflation, Francis. If we get mediumrade stagflation, how does this Federal Reserve respond?
How much space do they have?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market outlook
- economic indicators
- investment strategy
- world markets
- trade and logistics
Companies and tickers mentioned
- RY
- RBC
- Flexport
Watch the episode
Watch “Bloomberg Surveillance TV: March 25th, 2026 | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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