Bloomberg Businessweek Podcast Summary

Episode: Wall Street Traders on Hold in Run-Up to Jobs Data
Date: December 15, 2025
Hosts: Carol Massar and Tim Stenovec
Guests: Michael McKee (Bloomberg Economics/Policy Correspondent), Megan Robson (Head of U.S. Credit Strategy, BNP Paribas), Sally Librera (President, National Grid New York), Sri Natarajan (Bloomberg Chief Wall Street Correspondent)

Episode Overview

This episode examines the uncertainty rippling through Wall Street as traders and policymakers await delayed and incomplete U.S. labor and inflation data following the government shutdown, and how these delays complicate market and Federal Reserve decisions. The hosts welcome expert guests to discuss economic outlooks, the state of the Fed's dual mandate, risks in credit and energy markets, and broader business trends, including major shifts among consulting firms like McKinsey.

Key Discussion Points and Insights

1. The Messy State of Jobs Data and Market Uncertainty

(02:28–08:42)

Delayed Data and Impact on Markets

• Wall Street is preparing for a foggy December as key employment data releases are delayed and incomplete due to the government shutdown.
• Michael McKee highlights that tomorrow’s job data will offer only a “partial picture”; essential components like the household survey and unemployment rate will be missing.
  • “We’re getting October and November, but not half of the October report… We’re not going to get the household survey, so we don’t get the unemployment rate, which is what matters to the Fed.” (03:13, Michael McKee)
• Federal worker furloughs and severance expirations are set to skew numbers: “We could have like a big negative number, but you drop the federal workers out and it’s slightly positive.” (04:41, Michael McKee)

Investor Perspective

• Megan Robson (BNP Paribas): “I think the market does want to see some employment data… Even if it’s backfilled and will be noisy, I think it’s good to have that data.” (05:00, Megan Robson)
• These quirks make it hard for investors and policymakers to draw firm conclusions: “We’re not happy when we’re not getting data and then we’re not happy when we’re getting kind of weird data.” (04:48, Carol Massar)

2. Fed Policy Dilemma: Balancing Unemployment and Sticky Inflation

(05:27–11:48)

Fed Reaction and the Dual Mandate

• The Federal Reserve is in a holding pattern, waiting for clearer employment and inflation data before making rate decisions.
• Inflation is expected to accelerate into 2026, driven by tariffs:
  • “We’re actually forecasting inflation to accelerate a bit into 2026... We have inflation target around 3%. And so we do think there also will be some bumpiness in the labor market.” (07:09, Megan Robson)
• Sticky inflation vs. labor slack is the core challenge:
  • “Right now, they think that’s going to be unemployment because they had been making progress on inflation until we got the tariffs and things started to turn around.” (10:04, Tim Stenbeck)
• On the Fed's 2% inflation target: “2% has always been their goal, but every year they move it two years out. Right now, we’re not going to see 2% until 2027.” (10:04, Tim Stenbeck)

Which Mandate Wins?

• Megan believes, “They will protect the labor market. And so we think they are biased towards more cuts… that’s partially why you’re seeing asset prices so elevated.” (11:11, Megan Robson)
• Fed strategy, per Tim: “You look at the one that is farthest away from the goal, that will be the hardest to bring back to where you want them to be.” (09:52, Tim Stenbeck)

3. Credit Market Dynamics and the "K-Shaped" Economy

(11:48–16:34)

Transition in Corporate Borrowing and Risk Sectors

• 2025 saw corporate America move from deleveraging toward some renewed borrowing in late Q3, especially among “hyperscalers” and M&A activity.
• “For next year we do think there will be a pickup in supply and an end to the ‘bond scarcity’ story.” (12:04, Megan Robson)
• The credit market mirrors the broader K-shaped economy: tech and utilities are borrowing and growing, while consumer-facing sectors remain cautious:
  • “You have sectors where you're really seeing capex expectations surge and that they're expecting growth… On the other side, you have sectors much more tied to the consumer [that] are growing much more slowly and are much more cautious about adding leverage.” (13:07, Megan Robson)

Risks and Positioning

• Consumer confidence and policy uncertainty remain major risks for 2026:
  • “I've said this many times before, recessions are when confidence falls. And so it depends on how people are going to be feeling...” (14:33, Tim Stenbeck)
• Megan recommends credit investors favor sectors like mortgage servicers and originators exposed to higher-income consumers, while exercising caution with consumer discretionary high-yield areas (bowling alleys, movie theaters, leisure, etc.):
  • “We like mortgage servicers and originators... sectors that are exposed to not only lower income but also that middle tier that’s starting to show weakness we think are places you might want to avoid.” (15:18, Megan Robson)

4. Stress and Investment in the US Power Grid

(20:09–28:47)

Massive Demand Surge & Modernization Needs in New York

• Host Carol Massar and Tim Stenovec interview Sally Librera, President of National Grid New York, about the rapidly increasing demand on the state's energy grid, driven by a boom in data centers and high-tech manufacturing.
  • “There is increasing demand for energy across the entire state... The cumulative power need across those companies... is about 10 gigawatts of energy. One year ago, that was one third the size. It literally tripled in just one year.” (22:06, Sally Librera)
• Utilities face the challenge of modernizing extremely aging infrastructure while keeping bills low and balancing reliability with political and regulatory scrutiny.

Affordability and Energy Policy

• Investments will mean higher costs for customers, but are necessary for reliability and to support new business:
  • “There are moments, and now is one of those moments, where customers are seeing increases on their bills. And that’s for a number of reasons, but primarily it’s to be investing in infrastructure that is necessary.” (28:17, Sally Librera)
• On state/federal energy policy, National Grid is pursuing an "all of the above" approach (renewables, natural gas, nuclear) to meet needs:
  • “Given the rate at which demand for energy is increasing, we need to be utilizing all of those opportunities.” (26:46, Sally Librera)

5. Consulting Giant McKinsey Confronts Cuts, Changing Industry

(32:31–39:43)

McKinsey at a Crossroads

• Sri Natarajan details how McKinsey, long the consulting industry’s standard-bearer, is facing pressures—flatlining revenues, changing client demand, lingering reputational scandals, and the disruptive potential of AI.
• “Their traditional services are not in the same level of demand as they would like... McKinsey’s revenues are sort of flatlined.” (33:05, Sri Natarajan)
• On AI and consulting: “As a firm marks its hundredth year, we are operating in a moment shaped by rapid advances in AI that are transforming business and society... The one word that you will zero in on is AI.” (36:10, Sri Natarajan)

Reputation and Enduring Power

• Despite the malaise, McKinsey still stands alone in prestige and scale: “They are in a category of one. You cannot be faulted for hiring McKinsey for management consulting work… they are still considered in a league of their own, and they're perhaps two times as big as their next closest rival.” (38:48, Sri Natarajan)
• Lingering scandals are, per McKinsey leadership, in the past: “They may well have righted the ship. The question is, can the industry be as robust as it has been in the past?” (37:59, Sri Natarajan)

Notable Quotes & Memorable Moments

• On incomplete jobs data:
  “We’re not going to get the household survey, so we don’t get the unemployment rate, which is what matters to the Fed.”
  —Michael McKee (03:13)

• On inflation’s stubbornness:
  “2% has always been their goal, but every year they move it two years out. Right now, we’re not going to see 2% until 2027.”
  —Tim Stenbeck (10:04)

• On Fed priorities:
  “They will protect the labor market. And so we think they are biased towards more cuts… that’s partially why you’re seeing asset prices so elevated.”
  —Megan Robson (11:11)

• On the K-shaped economy:
  “You have sectors where you're really seeing capex expectations surge... On the other side, you have sectors much more tied to the consumer, they're growing much more slowly and are much more cautious about adding leverage.”
  —Megan Robson (13:07)

• On historic power demand:
  “The cumulative power need... is about 10 gigawatts of energy… It literally tripled in just one year.”
  —Sally Librera (22:06)

• On McKinsey and AI disruption:
  “As a firm marks its hundredth year, we are operating in a moment shaped by rapid advances in AI that are transforming business and society... The one word you will zero in on is AI.”
  —Sri Natarajan (36:10)

Key Timestamps for Segments

• [02:28] – Wall Street’s confusion over jobs data with Michael McKee and Megan Robson
• [07:09] – Inflation outlook and Fed policy debate
• [13:07] – Credit market “K-shaped” dynamics
• [20:09] – National Grid’s Sally Librera on New York’s surging power demand
• [32:31] – McKinsey’s history and consulting industry change with Sri Natarajan

Tone and Style

The conversation is analytical but conversational, with experts and hosts questioning each other directly, candid about uncertainties, and frank about risks and challenges in each sector. The tone is brisk, sometimes wry, with light moments amid dense economic discussion.