Sep 11, 2026 · 32 min
Inflation and spending put Fed policy and Treasuries under pressure
Bloomberg Surveillance TV: September 11th, 2026
The episode connects a possible Federal Reserve rate hike with fiscal proposals and debt-ceiling risks that could reshape equity and Treasury markets.
- 1Persistent inflation and wage pressure could push the Federal Reserve toward a rate hike despite labor-market weakness.
- 2A proposed $5,000 voter payment faces political and fiscal credibility questions while complicating deficit-reduction efforts.
- 3More spending, higher Treasury term premiums, and the debt-ceiling fight threaten long-term bond markets.
Don't miss
Tiffany Wilding links the latest inflation report to a possible Federal Reserve hike while weighing wage pressure, AI, demographics, and supply shocks.
The brief
Jonathan Ferro opens with David Kelly on whether persistent inflation and wage growth could push the Federal Reserve toward a rate hike, even as labor-market conditions weaken.
Tiffany Wilding argues that the latest inflation report may force action, while AI, demographics, and supply shocks complicate the labor-market outlook and Jay Powell’s communication.
The panel then tests the political and fiscal feasibility of proposed $5,000 checks, weighing voter affordability concerns against campaign messaging and deficit reduction.
The discussion’s sharpest tension is between new spending and fiscal restraint: higher term premiums could pressure Treasuries as the debt-ceiling fight approaches.
Taken together, the episode frames monetary policy and fiscal credibility as linked risks for equities, long-term rates, and Washington’s deficit agenda.
What was said on this episode
40 statements · 9 positive · 25 negative · 1 mixed · 5 neutral
Fed rate decision depends on August CPI relative to consensus
“if we come in a full tenth lower than consensus on headline and core, if that happens, then I think the Fed is on hold. If we come in at... At consensus, it's a jump ball. And then if we come in high, of course, they will raise rates.”
Listen at 2:36
Higher-than-expected CPI would cause the Fed to raise rates.
“And then if we come in high, of course, they will raise rates.”
Listen at 2:49
Wage growth has lagged CPI inflation for four consecutive months
“We have seen four consecutive months in which wages have gone up less than CPI inflation”
Listen at 3:33
Fed should not tighten because oil-driven inflation is not domestic
“they shouldn't tighten because of oil and disinflation.”
Listen at 3:54
American workers have limited ability to obtain pay increases
“American workers find it very hard to get a pay increase.”
Listen at 4:28
American workers are unlikely to gain wage increases soon.
“if they haven't been able to get a pay increase up until now, I don't see why they're going to be able to get a pay increase going forward.”
Listen at 4:31
Fed rate hikes tend to raise long-term interest rates
“you end up with rising long-term rates.”
Listen at 5:27
Federal Reserve should provide a framework describing its reaction function
“The Federal Reserve should at least provide a framework of forward guidance.”
Listen at 6:10
Publishing the Fed reaction function would reduce uncertainty and long-term rates
“That reduces overall uncertainty. That's the easiest thing they can do. That won't cost anything to bring down long-term rates a bit.”
Listen at 6:22
A Fed hike next week would push up long-term rates
“if the Fed hikes next week, my view is that pushes up long-term rates.”
Listen at 6:50
Higher long-term rates hurt high-PE, long-duration equities
“if it pushes up long-term rates, it is negative for long-duration equities, which are those which have got the highest PE ratio.”
Listen at 6:54
Investors should redistribute toward value, smaller-cap, and international equities.
“I would redistribute. I think there's plenty of opportunities in value equities, in medium and small cap equities in the United States. international equities outside of some EM names.”
Listen at 6:59
Value, smaller-cap, and many international equities offer opportunities
“I think there's plenty of opportunities in value equities, in medium and small cap equities in the United States. international equities outside of some EM names.”
Listen at 7:00
Pandemic stimulus checks caused the 2022 inflation surge
“what caused the inflation in 2022. It was all those checks given to people who live paycheck to paycheck.”
Listen at 7:51
Policymakers should not issue another round of stimulus checks
“You do not want to go back down that road again.”
Listen at 8:01
Later stimulus checks were unnecessary and would fuel inflation
“there should not have been any subsequent stimulus checks because the economy was clearly rebounding and it was clearly going to fuel inflation.”
Listen at 8:36
Demand-side monetary policy cannot fix supply shocks
“you're not going to fix it with demand medicine.”
Listen at 9:06
U.S. real GDP growth next year will be 1.5% to 2%
“Next year, I think it's going to be a little 1.5% to 2%.”
Listen at 10:09
AI capital spending will continue supporting economic growth
“all this AI capital spending will continue and it will continue to push growth forward.”
Listen at 10:14
Latest inflation report will lead the Fed to hike rates
“I think this does result in a Federal Reserve that is hiking interest rates.”
Listen at 13:36
Markets were pricing approximately 75 basis points of cumulative Fed hikes
“the market was pricing, you know, maybe 75 basis points of cumulative hikes.”
Listen at 14:06
AI and demographic trends are fundamentally shifting the labor market
“We think AI, as well as demographic trends, you know, the aging of the population, retirements, is having some fundamental shifts on the labor market”
Listen at 15:45
AI and demographic changes are producing modest wage pressures.
“AI, as well as demographic trends, you know, the aging of the population, retirements, is having some fundamental shifts on the labor market, which is resulting in just wage pressures that are pretty modest.”
Listen at 15:46
Labor costs are not currently accelerating for U.S. companies.
“Labor is just not an accelerating one of them.”
Listen at 16:07
U.S. labor-cost inflation is declining
“labor costs inflation that's coming down.”
Listen at 16:17
Geopolitical risks generally create supply shocks that raise inflation
“geopolitical risks usually result in negative supply shocks, which raise inflation.”
Listen at 17:23
Frequent adverse shocks can gradually raise inflation expectations
“if you just get these higher frequency of shocks that just push inflation higher, you know, that can over time result in inflation expectations that are drifting up.”
Listen at 17:35
Frequent geopolitical supply shocks can raise inflation expectations over time.
“higher frequency of shocks that just push inflation higher, you know, that can over time result in inflation expectations that are drifting up.”
Listen at 17:35
The Fed may begin a gradual rate-hiking cycle.
“we think that is, you know, that could be what the Fed is going to embark on as well.”
Listen at 18:04
Powell will explain the Fed’s policy decision next week.
“He will explain why the Fed has the policy that they ultimately have next week.”
Listen at 18:31
The SEP will indicate other FOMC members’ rate and inflation views.
“that will provide some indication as well of what other FOMC members believe.”
Listen at 19:28
Congress must approve tax and budget measures including proposed checks
“No. When you're thinking about tax, budget, you have to have... Congress involved in that, that is their constitutional authority”
Listen at 24:02
The proposed $5,000 checks will not occur without congressional approval
“these checks are not happening unless Congress signs up for them.”
Listen at 24:37
Congress is unlikely to approve the proposed checks
“there's no situation where I see Congress signing up for this.”
Listen at 24:40
The president remains unpopular
“right now he is still unpopular.”
Listen at 24:56
The proposed checks have not gained political traction.
“right now we're not actually seeing that occur.”
Listen at 25:01
Voters are primarily focused on affordability
“we just come back to the affordability measure, that that's what really voters are focused on”
Listen at 25:04
Voters remain focused on affordability despite strong markets.
“voters are focused on, even though markets are doing remarkably well for a second year of a president's term.”
Listen at 25:07
Adding over 50% to the projected 2027 deficit would increase pressure on bond term premiums
“if we do add over 50% to the federal... deficit for the projected number for 2027, that will add pressure.”
Listen at 25:53
Additional fiscal spending trades short-term goals for long-term pain
“short-term goal with a long-term pain if they actually see it through.”
Listen at 26:11
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.