Bloomberg Surveillance TV: July 29th, 2026

Summary

Podcast Summary: Bloomberg Surveillance TV: July 29th, 2026

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Episode Overview

This episode focuses on the intersection of a critical Federal Reserve meeting, ongoing market expectations for interest rates, and broader themes in finance, such as the influence of AI-driven growth, sector rotations in equity markets, and the persistent challenge of inflation. Hosts Jonathan Ferro, Lisa Abramowicz, and Annmarie Hordern conduct insightful interviews with Dan Suzuki (Deputy CIO, Richard Bernstein Advisors), Claudia Sam (New Century Advisors), and Esther George (Former Kansas City Fed President), offering listeners expert analysis on pressing financial developments.

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Key Discussion Points & Insights

1. Earnings, Market Peaks, and the "AI Trade"

(02:31–06:56)

• Peak Growth vs. Peak Markets:
  • Dan Suzuki notes the distinction is blurred, as elevated expectations set a high bar for earnings and market performance.

    “It’s clearly not very, very distinct … when expectations get really high and the bar’s set so high, peak growth is all it takes to sort of get expectations too high to meet.” (Dan Suzuki, 02:42)

• Chips & Hyperscalers:
  • Suzuki points out the bar is "set too high for any stock associated with the trade," referencing both semiconductor names (Intel, SK Hynix, Samsung) and hyperscalers.
  • The only way for these stocks to rally: “a 10% beat on earnings and a lower CapEx guidance.” (Dan Suzuki, 03:19)
• CapEx Vigilantes:
  • The market’s focus is shifting toward companies demonstrating not only strong fundamentals but also discipline on capital expenditures—the so-called “capex vigilantes.”

    “What the vigilantes want to see is signs that there’s an eye toward the monetization of that investment.” (Dan Suzuki, 04:13)

• Sector Rotation and AI Ubiquity:
  • Suzuki observes it's "hard to find an area of the market that's not an AI trade," as AI-related optimism now permeates even traditional and defensive sectors (utilities, real estate, emerging markets).

    “Now emerging markets is an AI trade. … Where do you go that’s not an AI trade?” (Dan Suzuki, 05:16)

  • This has led to rotations into neglected areas like financials, small caps, and value stocks.

2. Economic Tailwinds, Growth Risks, and Consumer Strength

(06:15–09:41)

• Growth Outlook:
  • The central thesis is that growth is likely to slow in the second half, driven by waning consumer tailwinds (e.g., fading effects of tax cuts) and “higher for longer” interest rates.

    “There’s been a lot that’s gone into boosting the overall economy in the first half of the year … as you look at the second half of the year, it’s more likely than not that growth is going to slow.” (Dan Suzuki, 07:06)

• Inflation & the Oil Wild Card:
  • Persistently sticky inflation and the influence of oil prices (notably, Middle East-related supply shocks) are highlighted as critical to Fed decision-making.

    “Inflation to me right now comes down to what’s happening in Iran … when you have tariffs and oil shocks, I think that makes the story a bit more difficult for [the Fed].” (Dan Suzuki, 07:40)

• Base Case for Fed Policy:
  • Suzuki expects the Fed to remain on hold unless the oil shock intensifies; if crude prices spike, a resumption of rate hikes is possible.

    “If you take out what’s happening in Hormuz, I think interest rates do fall into the end of the year; but if you reintroduce this story … you [could] start a hiking cycle.” (Dan Suzuki, 08:10)

3. Fed Communication and Uncertainty

(12:27–17:20)

• Chair Kevin Warsh’s Approach:
  • Claudia Sam criticizes the current Fed chair for creating unnecessary policy uncertainty by providing less forward guidance and failing to clearly articulate a reaction function.

    “The uncertainty that comes from a chair who has gone really low-information on how he’s thinking about policy…” (Claudia Sam, 12:56)

• Potential Dissents:
  • Sam expects possible dissents (notably from Laurie Logan and Beth Hammack), emphasizing that meaningful opposition would reflect genuine disagreements on the necessity of further hikes.

    “People do that when they really feel at odds with where the committee is standing at the moment.” (Claudia Sam, 14:40)

• Inflation: Real vs. Market Risks:
  • While technology and AI-driven wealth effects influence the broader spending environment, Sam sees the Fed viewing tech-related volatility more as a ‘risk to monitor’ than as a direct target for monetary policy.

    “I would use the uneasiness in some of the tech sector as just another reason why the Fed doesn’t need to be injecting more uncertainty…” (Claudia Sam, 15:46)

• Fed & Oil Price Spikes:
  • The panel notes that the Fed has “been very wise to look through swings in energy prices,” but the prolonged nature and the current environment could force a less patient approach.

    “For the Fed to chase oil prices … has proven to be a mistake. … But this time is different. They’re impatient with inflation and they react to that inflation.” (Claudia Sam, 16:33)

4. Fed Strategy, Oil, and Leadership Insights

(21:01–24:48)

• The End of Guidance & Live Meetings:
  • Both hosts and guests agree that the lack of advance guidance from the Fed is a significant departure; markets must now “do this work,” introducing two-way risk into rate decisions.

    “I think the market doing this work is probably an important development here.” (Esther George, 21:01)

• Leadership and Dissents:
  • Esther George downplays concerns about committee splits, trusting that the chair’s stance will shape the outcome, but she remains worried about ongoing inflation.

    “I would continue and am continue to be concerned about elevated inflation.” (Esther George, 21:44)
    “I wouldn't be concerned that he will be outnumbered in terms of a direction today.” (Esther George, 22:32)

• Oil Shocks & Inflation Expectations:
  • The risk is that energy price spikes eventually work their way into broader inflation expectations, eroding Fed credibility and making policy decisions more urgent.

    “The Fed has been able to rely on anchored inflation expectations, but that is always a risk. How much time can you buy and keep inflation expectations anchored as these various factors are unfolding?” (Esther George, 24:02)

• On Voting Today:
  • George would be “in the camp of thinking action is needed, that rates have not been restrictive as described in the past.” (24:48)

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Notable Quotes & Memorable Moments

• "Now emerging markets is an AI trade… utilities are an AI trade, real estate is an AI trade. I mean, where do you go that's not an AI trade?" – Dan Suzuki (05:16)
• "If you take out what's happening in Hormuz, I think interest rates do fall into the end of the year, but if you reintroduce this story … you [could] start a hiking cycle." – Dan Suzuki (08:10)
• "The uncertainty that comes from a chair who has gone really low-information on how he's thinking about policy…" – Claudia Sam (12:56)
• "I would use the uneasiness in some of the tech sector as just another reason why the Fed doesn't need to be injecting more uncertainty and volatility into the situation." – Claudia Sam (15:46)
• "I think the market doing this work is probably an important development here." – Esther George (21:01)
• "Inflation remains a problem and the one instrument the Fed has to attack that is really its Fed funds rate." – Esther George (24:48)

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Timestamps for Important Segments

• 02:31 – Dan Suzuki joins to discuss markets, earnings, and AI trade
• 03:53 – CapEx trends and vigilante investor mentality
• 05:16 – AI permeating all market sectors, sector rotation
• 07:06 – Consumer spending and prospect of slowing economic growth
• 08:10 – Fed rate outlook contingent on oil shocks
• 12:27 – Claudia Sam on Fed communication and volatility
• 14:40 – Dissents on Fed policy and committee dynamics
• 16:33 – Fed’s approach to oil-driven inflation
• 21:01 – Esther George on live meetings and market uncertainty
• 24:48 – George’s view on rate hikes and inflation management

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Conclusion

This episode captures a pivotal moment for markets—investors and policymakers are balancing AI-driven optimism with sobering macroeconomic risks, notably inflation and energy price volatility. The Fed’s more opaque stance is increasing market uncertainty, and the possibility of both holding and hiking rates remains live. Through expert conversations and pointed questions, Bloomberg Surveillance provides an authoritative, nuanced look at the dynamic forces shaping global finance in mid-2026.

Transcript

[Dan Suzuki]

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[Esther George]

Bloomberg Audio Studios Podcasts Radio News.

[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast. Jonathan I'm Jonathan Ferro along with Lisa Abramowicz and Annmarie Horden. 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 Bloomberg Television weekday mornings from 6 to 9am 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. We begin this hour, stocks looking to build momentum heading into a blockbuster day for Wall Street. Dan Suzuki, if I Capital Writing a robust macro backdrop should fuel a second straight quarter of 20% plus earnings growth. With tailwinds failing in the second half, this may be what peak growth looks like. Dan joins us now for more than Good morning.

[Dan Suzuki]

Good morning.

[Jonathan Ferro]

Welcome back buddy. And congratulations on the new C. It's good to see you.

[Dan Suzuki]

Yeah, great to be with you guys. Love this show.

[Jonathan Ferro]

Let's draw a distinction between peak growth and peak markets, how wide is that distinction this morning?

[Dan Suzuki]

It's clearly not very, very distinct. Right. I think in normal markets it's really more about peak earnings than it is about peak growth. But I think when expectations get really high and the bar set so high, PE growth is all it takes to sort of get expectations to be too high to meet. And that's kind of what you're seeing today in the trend Lisa talked about

[Jonathan Ferro]

how high the bar is for the chips name the likes of intel, the likes of SK Hynix, the likes of Samsung. How high is the bar for the hyperscalers? A couple of names that have been beaten up quite a lot.

[Dan Suzuki]

I mean, I think what you're seeing, you know, this earnings season is that the bar is set too high for any stock associated with the trade.

[Esther George]

Right.

[Dan Suzuki]

And that's not to say that the underlying fundamental story is not good, but the bar is just being set too high. So you can't see any stocks that are up on their earnings results. And I think the way, the way to think about now is the bar is set so high, you know, the new beat is, you know, call it a 10% beat on earnings and a lower CapEx guidance. I think that's the thing that's going to get stocks to rally.

[Lisa Abramowicz]

So this is an area that's controversial. You think that if they underperform or at least they lowball the capex plans and they come in lighter than expected, that would be a case for rally more than anything else, is that correct?

[Dan Suzuki]

I think that's part of the story. I think you want to see underlying strong fundamental trends, but also an eye toward monetization of the, all this investment spending that's happening. And this is something we've been talking about capital for a while and we call it the, the capex vigilantes. And you're seeing the vigilantes are winning these days. Right. And you're saying everybody's waking up to this story, whether it's the hyperscalers, the semis now is the sort of second derivative of that. And I think that's really what's coming to play. So what the market wants to see, what the vigilante vigilantes want to see is signs that there's an eye toward the monetization of that investment.

[Lisa Abramowicz]

Do you want to get on the vigilante train and overweight some of the fixed income instruments that have leverage right now and not necessarily go to the equity side of the equation?

[Dan Suzuki]

No, I think both sides, you know, the reality of what's happening right now in markets is that the markets are waking up to the, the risks associated with the trade across the supply chain. Right. And it's not to say that the underlying fundamental story is broken, but you know, there is, there's a lot of good things happening, but there are obviously a lot of risks. Moats are weak, pricing power is weak, capex is very high. And when you get sort of price and price pressures and competitive environments in a hugely capital intensive industry that typically, you know, causes a lot of shakeout and volatility in some of the names. I think that's what you're seeing now.

[Annmarie Horden]

Do you see any evidence that some of the trade is starting to move to other industries that are starting to use and adapt AI quicker?

[Dan Suzuki]

Yes, yes, absolutely. It's hard to find. I was just talking about this the other day. It's hard to find an area of the market that's not an air trade. Right. It used to be emerging markets. That's as far as you can go. Now emerging markets is an trade. You know, utilities are an air trade, real estate is an AI trade. I mean, where do you go that's not an AI trade. And that's like, that's what you're seeing that's up right now. Right. You know, you talked about since sort of the May highs, you know, all this stuff is down. But look at all this stuff that's up double digit. That's sort of the other side of the seesaw. The anti air trade, if you will.

[Jonathan Ferro]

One of the banks. How would you describe that rally we've seen in the financial.

[Dan Suzuki]

Yeah, that's, that's part of the story. The underlying fundamentals for the banks are strong, but at the same time this is kind of the rotation that Lisa was talking about. Like there's other stuff putting up good growth and accelerating growth at a time when there's. People are starting to think about the risks associated with AI and I think financials are part of that, small caps are part of that, values are part of that. And I think people are just understanding that there's more to the world and

[Jonathan Ferro]

to the market and that doesn't scream growth scare. And these are the rolling shocks we've been talking about through energy, through interest rates, through the bond market. But it hasn't materialized with a growth scare. Is it on the horizon? How avoidable do you think it is,

[Dan Suzuki]

the growth score scare? I mean, you have to help me define that, John, because I think one of the two other things that we highlight as risk for the second half of the year are sort of fading tailwinds to the consumer and then also higher for longer interest rates. Both of those things are actually happening. And so I think that our base case is that growth does slow in the second half of the year. The real question is how much. And there are a lot of tailwinds that are mounting. And liquidity, we're probably past peak liquidity for the year. You know, this is not a great environment for accelerating growth.

[Jonathan Ferro]

Just sit on that point. Attention just for one further beat. You can see a situation where the consumer tailwind slow but rates remain elevated. Can you explain that?

[Dan Suzuki]

Yeah, I mean, I think if you just look at the sheer amount of tailwinds that have been boosting the consumer, whether, you know, it's tax cuts or just the reopening of liquidity, you know, there's been a lot that's gone into boosting the overall economy in the first half of the year. And just look at any measure for the second half of the year. Right. We've already paid out the record tax refunds. That's sort of in the rear view. They're still in their pocket, so they can still spend. That World cup is now behind us. Unfortunately, liquidity is tightening up. So as you look at the second half of the year, it's more likely than not that growth is going to slow. But you know, inflation to me right now comes down to what's happening Iran. Right. And so whether or not the Fed hikes or whether or not inflation accelerates, to me that's an oil story right now. Even though they say they're going to look through that. When you have tariffs and oil to shocks, I think that makes the, the story a bit more difficult for them.

[Lisa Abramowicz]

Putting oil aside for a second. If you do think that there's going to be a slowdown in growth heading into year end, are you expecting rates to go lower, at least the Fed funds rate and potentially not glean a whole lot right now, but more by that going forward. About Kevin Marsh.

[Dan Suzuki]

This is why we, you know, like we had the base case that, you know, we're going to have the string of hormones is going to open up, growth is going to slightly soften and that was going to keep the Fed on hold for the rest of the year. And that's still our base case. But I think oil is the wild card and that's going to really drive what happens with interest if, if you take out what's happening. Hormuz. I think interest rates do fall into the end of the year, but if you reintroduce this story, you know, I think you're seeing increasing risk that at the September meeting and beyond, you started a hiking cycle. I think that's what the Fed is telling you. There's like, if you look at the Fed minutes, it was basically a scenario analysis of what they plan to do based on what happens with inflation, which is very much driven by oil.

[Lisa Abramowicz]

Why wouldn't they look through it? I mean, we've been talking to one analyst after another about how they always look for oil and actually that the inflation coming from other areas seems to be more prevalent, including capital markets, which seem to be slowing down. At least view what we're seeing in the wake of earnings.

[Dan Suzuki]

It's just going on for too long. Right? And inflation's too sticky for too long. He keeps hearkening back to the mistakes that were made during, after the 22 oil price spike and the inflation that we saw then. You know, we're looking at. Just listen to what the Fed, you know, speakers are saying. They're saying, you know, if this keeps going, I'm going to start hiking rates. I want to start hiking rates. And that's what they're telling us. That's what the minutes told us. And so, yes, in all else equal, they're going to look through tariffs, they're going to look through energy. But the more that this goes on, the more that bleeds into inflation expectations. And by the way, you know, core PC, you know, what did that like bottom like two years ago and that's been rising. I mean, this is, these are not good trends for the Fed to sit on.

[Jonathan Ferro]

Stay with us. More Bloomberg surveillance coming up after this.

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[Public.com Advertiser]

show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash Putting on a hedge on Public you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, LLC. SEC registered advisor. Complete disclosures available at public.com disclosures get

[Claudia Sam]

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[Claudia Sam]

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[Claudia Sam]

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[Jonathan Ferro]

So here's the latest this morning. Wall street expecting Fed Chair Kevin Walsh to deliver a hawkish hold later on today, some traders still preparing for the possibility of a surprise hike. Claudia Sam of New Century Advisors writing Wash has managed to make the Fed an even bigger focus of attention by saying less uncertainty around economic policy was already high. The last thing we need is the Fed adding to it. Claudia joins us now for more. Claudia, welcome to the program. Do you think that Chair Wash is contributing to the kind of volatility that might be harmful?

[Claudia Sam]

So we are seeing that Chair Wash is contributing to volatility. Now where it's most clear is in the federal funds futures market, right? So come coming in yesterday there was still about a 30% chance of a rate hike. Today that may not sound like much, but that is very high for that close to a meeting. The only time we have seen uncertainty like that in the past several years have been big moments like liftoff in 2015 or the first rate cut in 2024. There was a lot of economics going on and lots of disagreement on the committee this time. The uncertainty that comes from a chair who has gone really low information on how he's thinking about policy, low information

[Jonathan Ferro]

on a range of things. And Claud, you pointed out the difference. It's okay to stop providing forward guidance, but he's also failed to articulate his reaction function. What kind of questions do you have for this news conference?

[Claudia Sam]

I think one is just to ask Kevin Warsh about his own past words when he worked on the bank of England's communication review in 2014. He recommended that they give timely feedback on what the decision was, the rationale for the decision, and he even talked about the importance, importance of a reaction function. So what's changed? That's been over a decade ago and his thinking could have changed. But like I agree with that Kevin Wash about how he thinks about communication. And I'm having a hard time with it in this moment, though I will say we got all of that information by the time we got to the June FOMC minutes. So it may just be Kevin Warsh wants to change the format. We get the information, not necessarily that we get less information. I think it'd be a really good idea to at least get it into the statement today if he doesn't want to say it in the press conference.

[Lisa Abramowicz]

Claudia, what are you expecting in terms of the breakdown of dissents versus the majority opinion?

[Claudia Sam]

I expect that we probably will see some dissents today in favor of a hike. Laurie Logan and Beth Hammack laid out very clear explanations for why they thought, if not right away, maybe sometime soon it would be wise for the Fed to raise rates to bring inflation down. That doesn't mean that they're going to dissent, but I think they really set themselves up to have that, you know, kind of weigh in in that way, because dissents need to be meaningful. People do that when they really feel at odds with where the committee is standing at the moment. You know, another wild card to keep an eye on. We have seen dissents in recent past on how the statement itself was worded, like what kind of information is conveyed. This idea of do you get a reaction function, get any forward guidance? So I think the statement could be pretty interesting this afternoon in terms of learning where the committee as a whole

[Lisa Abramowicz]

is do you think that right now inflation is a preeminent concern or excesses in volatility in tech sectors? And I'm wondering this because ultimately the wealth effect has been One of the biggest drivers of a lot of the sustainability in spending. So you can't disentangle these two. And you can hear it in some of the rhetoric from Fed officials over the past couple of weeks.

[Claudia Sam]

I would put what's happening with AI in the tech sector largely into risk that the Fed is monitoring. It has had some effect on inflation. So that is something very clear and directly to their mandate. I think I would use what's, you know, the uneasiness in some of the tech sector as just another reason why the Fed doesn't need to be injecting more uncertainty and volatility into the situation. Like if market pricing of interest rates gets out of hand because we don't talk enough to the world, that could be really unfortunate and have effects on other sectors. So I think they're keeping a watchful eye on it. But I would put a lot of that into the kind of the risk bucket as opposed to something the Fed is going to directly try to react to.

[Annmarie Horden]

Well, we know they're going to directly try to react to data, but what about oil? What's the timeline on their reaction function to the whipsawing we're seeing in crude?

[Claudia Sam]

So this, I think, is one where it really would be helpful to get more information from the Fed. In the minutes, they lumped together a whole set of reasons why inflation is elevated, including the conflict in the Middle east, but also the demand and tariffs. The thing is, is that historically the Fed has been very wise to look through swings in energy prices. There's a lot of volatility. We have seen that just in, you know, in recent weeks, if not recent months. And so for the Fed to chase oil prices, it has has proven to be a mistake. But if you watch like the futures pricing for the Fed, it's clear that markets are reacting to that. Like that piece of inflation they think is something the Fed will be very reactive to. And I'm not so sure it might be. This time is different. They're impatient with inflation and they react to that inflation. But that would be a bit off the playbook for them.

[Jonathan Ferro]

Stay with us. More Bloomberg surveillance coming up after this.

[4imprint Advertiser]

Whether you're planning a big tech event, launching a new campaign, or just stocking up on team gear, finding the right promotional products makes all the difference. 4imprint offers thousands of options from on trend apparel and premium drinkware to tech totes and giveaways. So you can find the right fit for any audience, purpose or budget. You can customize it all. Your logo, your message, your look, and many items come with no setup charge to help you save. And if you're really watching the bottom line, you'll find standout choices at every price point so you can make a real impact while staying on budget. Plus you'll get expert help, fast turnaround times and their 360 degree guarantee so you can be fore imprint certain your order will arrive on time and look exactly right. Whatever your goal is. 4 Imprint makes it easy to find your perfect promo match. Explore the possibilities [e-mail] 4imprint for certain,

[Public.com Advertiser]

support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve of the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors LLC SEC registered advisor. Complete disclosures [e-mail] Disclosures AI is entering

[Lisa Abramowicz]

its most consequential phase where scale, safety and sovereignty will determine who leads and who lags. Join Bloomberg Tech in London on November 2nd and 3rd as global leaders across business, finance and policy examine the defining

[Esther George]

trade offs shaping the future of AI.

[Lisa Abramowicz]

Thank you to our presenting sponsor Salesforce and supporting sponsors Ida Ireland and Schneider Electric. Learn more at bloomberglive.com/tech London.

[Jonathan Ferro]

And the Savannahs this morning. A hike versus a hold.

[Claudia Sam]

The market's not ruling out July and honestly neither are we.

[Esther George]

He needs to do something and we

[Jonathan Ferro]

think three rate hikes is the way to start.

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This really is a live meeting. The risk that we do get a surprise is much, much higher.

[Dan Suzuki]

I think you would get an least

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1% if wash keeps rates on hold.

[Dan Suzuki]

I've got the Fed on hold for

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the rest of the year but I

[Public.com Advertiser]

have to say it's not high conviction.

[Jonathan Ferro]

So here's the latest this morning. The possibility of a surprise hike looming over today's decision, the former Kansas City Fed president Esther George expecting the Fed to stay on hold writing Although the probabilities of a hike have risen, the outcome of the committee's family fight could well conclude that the call of June inflation numbers allow them to wait. As the joins us now for more Esther, a warm welcome back to the program. We're in a whole new world. This is different. Typically post GFC we're guided into the decision. We already know what the outcome will be. What do you make of that change? That we actually have just a little bit of two way risk.

[Esther George]

So I think it's a good move in the sense of not trying to forecast and lay the groundwork for upcoming moves. I think the market doing this work is probably an important development here. And at the same time, while you're going to stop short of giving forward guidance, I think it's always helpful to be clear about what you are looking for. So today I think will be important to listen to what is the rationale? How is the committee thinking about the current state of the economy?

[Lisa Abramowicz]

Esther, if you were in the family fight right now today and heading into tomorrow, what would you be screaming about? What would you be sort of arguing for?

[Esther George]

Well Lisa, I've been concerned for some time about the duration of elevated inflation in the economy. And yes we've had a number of one offs as we call them coming hitting the economy. But the truth is underlying inflation has remained well above the Fed's target. And so my own sense is the cuts last year really eased in to something that was still a problem in terms of inflation. So I would continue and am continue to be concerned about elevated inflation.

[Lisa Abramowicz]

Do you think that it would be appropriate for a number of dissents today? Do you think that would be healthy or does that indicate that maybe Kevin Marsh is losing clutch over the body?

[Esther George]

Well, I'm not concerned that there'll be too many dissents. You know, the Fed chairman is going to make sure I think that he has a direction. His, his particular leaning on this is going to carry the day. So yes, I would expect their dissents, I wouldn't be concerned about that. We've heard those in some sense already being communicated publicly about how people feel about inflation. So I'm not terribly concerned that he will be outnumbered in terms of a direction today.

[Annmarie Horden]

The characteristics we're seeing in this kind of oil price spike. Is this something that the Federal Reserve could look through?

[Esther George]

Well, they have been looking through it more or less but we know that the oil price shock is a salient price. It can feed into other things. And so while this has been moving around, again, we haven't seen clear direction that we are getting an underlying disinflationary trend. Yes, we had cooler numbers in June and I think that causes the committee then to really weigh more carefully. What might the trend be? What is the direction going to be and how much of that is influenced by oil?

[Annmarie Horden]

Right now we are seeing some companies come out reckitt, Ben Kaiser apparently coming out and saying because of the move in crude, they're going to have to put some of that into their products. Is that the time then where you would see the Federal Reserve start to really take notice of what's going on in the oil market?

[Esther George]

Well, it is a factor that I think has been present for some time and that is trying to understand the pricing power that is associated with any one of these particular shocks. And I do think that is always the risk that it broadens out. The Fed has been able to rely on anchored inflation expectations, but that is always a risk. How much time can pass before there begins to be questions about the Fed's commitment? And so that is always the tension here. How much time can you buy and keep inflation expectations well anchored as these various factors are unfolding?

[Jonathan Ferro]

Esther, instead of throwing bread rolls today, then would you dissent?

[Esther George]

Well, I wouldn't want to prejudge what information is coming out at that table because you always learn something up until the time that you are voting on that interest rate. I have been concerned. I probably would put myself in the camp of thinking action is needed, that rates have not been restrictive as described in the past. So my leaning is to say inflation remains a problem and the one instrument the Fed has to attack that is really its Fed funds rate.

[Jonathan Ferro]

This is the Bloomberg Surveillance podcast bringing you the best in markets, economics and geopolitics. You can watch the show live on Bloomberg TV weekday mornings from 6am to 9am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business.

[Claudia Sam]

Applause.

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