Bloomberg Businessweek – "Stocks Wipe Out CPI-Fueled Gains as JPMorgan Sinks"
Date: January 13, 2026
Hosts: Carol Massar, Tim Stenovec
Episode Theme:
An exploration of the volatile market dynamics following new U.S. inflation data, escalating political pressure on the Federal Reserve, the DOJ’s Fed probe, policy impacts on banks and credit cards, and an in-depth look at the airline industry’s shifting fortunes and strategies.
Main Episode Theme
This episode dissects the interplay between Washington’s increasing intervention in economic policy—especially targeting the Federal Reserve and the banking sector—and the resulting financial market reactions. It further delves into how these macro-policy moves affect sectors like airlines and consumer affordability, managing to maintain a brisk and insightful pace with leading experts.
Key Discussion Points & Insights
1. Political Pressure on the Fed & Market Reaction
- Opening Segment (01:00–07:00):
- Guests: Chris Whalen (Chairman, Whalen Global Advisors)
- Donald Trump publicly ratchets up pressure for Fed rate cuts, linking market optimism to demands for lowered rates.
- New DOJ probe into the Fed’s headquarters renovation further raises political stakes.
- Whalen argues the President’s handling undermines both market and presidential credibility:
"When you say things that are clearly not well thought through ... you just sit back for a minute and say, what are you trying to do?" – Chris Whalen (01:52)
- Markets, however, remain largely unmoved, especially bonds, suggesting confidence in the Fed’s independence endures—thanks in part to Senate resistance.
"The financial markets can get comfortable with just about anything. Would they be upset if rates fell? No." – Chris Whalen (03:48)
- Populist proposals from the administration, such as capping credit card rates or instructing Fannie Mae and Freddie Mac to buy $200bn of their own debt, are deemed unlikely and not market moving.
- Both the market and Whalen see the drama as mostly political theater, with policy substance lacking.
2. Congressional Dynamics & Fed Appointments
- Ongoing Analysis (07:00–09:00):
- Senate Republicans, led by figures like Thom Tillis, promise to block Fed appointments until legal probes conclude, providing markets with assurance.
- There's speculation over which candidates could succeed Powell, such as Kevin Warsh.
"I think Kevin Hassett may be done. We may see Kevin Warsh instead..." – Chris Whalen (05:41)
3. Presidents versus the Fed: Then and Now
- Matthew Lizetti Segment (10:34–13:18):
- DOJ’s legal scrutiny is called "an unprecedented challenge to Fed independence," differentiating it from past executive pressure (LBJ, Nixon).
- Markets had a modest yield spike but steadied due to signs of Senate oversight.
"Taking legal action here is the unprecedented aspect of what's happening." – Matthew Lizetti (10:53)
- Administration's focus is intensely on affordability, hoping that rate cuts will ease housing costs—but Lizetti warns that attacking the Fed often raises, not lowers, longer-term rates and mortgage costs.
"Every time we've seen an attack on the Fed ... long end rates typically rise, mortgage rates rise." – Matthew Lizetti (12:30)
4. Airline Industry Response to Economic Turbulence
- Delta & Airline Sector Focus (13:38–24:20):
- Guest: Savi Syth (Managing Director, Airlines & Advanced Air Mobility, Raymond James)
- Airlines (Delta as bellwether) see strong revenue momentum but are cautious due to policy volatility and macro uncertainty.
"There's a lot of policy volatility and anything can happen. So maybe a very cautious start..." – Savi Syth (14:21)
- Shift toward premium seating and steady demand from high spenders; economy/main-cabin remains weak.
- Airline credit card programs, especially for Delta, are essential, contributing strongly to margins and cash flow, and any cap on credit card rates would have profound impacts—more so for price-sensitive, smaller airlines.
"Credit cards is really important, has become important for the airlines as a whole and not just for Delta..." – Savi Syth (17:07)
- Allegiant’s acquisition of Sun Country signals more industry consolidation as smaller airlines seek scale to survive.
"The bigger you are, the more benefits there are to loyalty ... so it's trying to get bigger and trying to get scale so they can compete with the big four." – Savi Syth (19:50)
- Even with cautious guidance, Delta's strong fundamentals are clear, but investors expect more bullish projections.
5. Tariffs, Inflation, and Cost of Living
- Economic Data Deep Dive (24:52–32:56):
- Guests: Stuart Paul (US & Canada Economist, Bloomberg Economics), Eric Weiner (Senior Editor, Equities Americas, Bloomberg News)
- Inflation came in below expectations; the effect of tariff pass-through appears to have peaked and is waning.
"The relationship between the two, tariff rate and consumer prices, has basically broken down completely." – Stuart Paul (25:27)
- Companies (banks in particular) are navigating policy threats—especially credit card rate proposals—which most experts see as unlikely to pass Congress.
"It's not going to just happen by fiat like it's got to pass through Congress." – Eric Weiner (27:28)
- Persistent consumer pain points remain, notably food prices, heavily influenced by weather and trade policy disruptions:
"It's just really difficult to control the cost of food when it's subject to things like weather." – Stuart Paul (28:45)
- Regional economics and political calculus at the state level are influencing (and sometimes offsetting) broad negative narratives about affordability.
- Despite political turbulence, markets are not anticipating an imminent Fed cut and are largely pricing in a steady policy path.
"Markets should be moving at the speed of policy, not at the speed of rhetoric." – Stuart Paul (32:13)
Notable Quotes & Memorable Moments
-
On White House Rhetoric vs. Market Reality:
"They're not really concerned with the medium and long term consequences ... you don't hear anybody talking about the budget deficit."
– Chris Whalen (03:48) -
On Historical Precedents:
"Taking legal action here is the unprecedented aspect..."
– Matthew Lizetti (10:53) -
Market Mood:
"The market is sort of moving on the way it was in Dec with the same level of assumptions."
– Eric Weiner (31:03) -
On Inflation Pressure Points:
"I went to buy eggs yesterday. They were $12."
– Guest Commentator (28:26) "Welcome to Manhattan."
– Christine (28:26) -
On Airline Credit Card Profitability:
"When you do have demand volatility ... you're still making charges on your credit card. So for airlines, it's also a nice stream of steadier revenue..."
– Savi Syth (17:07) -
On Political Risk Management:
"Markets should be moving at the speed of policy, not at the speed of rhetoric."
– Stuart Paul (32:13)
Timestamps for Key Segments
- 01:00–07:00: Chris Whalen critiques President Trump's Fed intervention & likely market outcomes.
- 10:34–13:18: Matthew Lizetti analyzes unprecedented legal challenge to Fed independence.
- 13:38–24:20: Savi Syth discusses airline industry fundamentals, credit cards, and recent merger news.
- 24:52–32:56: Stuart Paul & Eric Weiner on fading tariff effects, persistent inflation, and why markets are largely unbothered by political theatrics.
Episode Tone and Takeaways
- The discussion is brisk, candid, and peppered with real-time reactions to breaking news and policy.
- The prevailing mood is one of cautious pragmatism: politicians may shout, but markets (and their seasoned observers) are more swayed by tangible policy and Congressional gridlock than by executive rhetoric or populist proposals.
- Affordability remains at the heart of voter and consumer concern, especially for food and housing, but actual policy change—whether at the Fed, in Congress, or in regulatory edicts—moves far more slowly, as the experts repeatedly stress.
- In sectors like airlines, consolidation and adaptation continue as firms find creative ways to buttress finances amid macro uncertainty and political tumult.
For Those Who Haven’t Listened:
This episode offers a rich blend of macroeconomic, political, and industry-specific analysis, focusing on how headline-grabbing political maneuvers affect (or don’t) the real economy and financial markets—with a sober-eyed view of the limits of presidential power and the steadfastness of institutional market behavior. If you want insight into 2026’s dominant business and policy dynamics, this conversation is both current and prescient.