Bloomberg Surveillance TV: June 18th, 2026

Summary

Bloomberg Surveillance TV: June 18, 2026 — Episode Summary

Overview

This episode of Bloomberg Surveillance TV delves deep into the latest developments in global finance, central bank policy, and geopolitics. Hosted by Jonathan Ferro, Lisa Abramowicz, and Annmarie Hordern, the episode features conversations with Ed Yardeni (Yardeni Research), Norman Roule (CSIS), and Claudia Sahm (New Century Advisors), focusing on:

• The surprisingly hawkish stance of new Fed Chair Kevin Warsh
• Implications for inflation, rate policy, markets, and communication strategy
• The US-Iran interim peace deal signed by President Trump, its regional impact, and broader global implications

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Main Topics & Key Insights

1. Fed Policy Takes Center Stage: Kevin Warsh’s Hawkish Turn

[01:58 – 06:57]

• Jonathan Ferro kicks off noting markets are reacting strongly to Fed Chair Kevin Warsh's firm anti-inflation message, with stocks rising and bond yields falling.

Ed Yardeni (Yardeni Research):

• Warsh is described as “a hawk in dove’s clothing,” surprising many who expected a more dovish approach.
  • “We thought he was a dove who favored lowering the federal funds rate. Instead, he hammered home a strict orthodox message on inflation with a strong commitment to price stability.” — Jonathan Ferro referencing Yardeni’s earlier remarks ([01:58])
• Warsh’s communication echoes Alan Greenspan’s: high in ambiguity, low in detail, often surprising.
  • “It’s very Greenspan. Not a lot of information, a lot of ambiguity and, you know, occasionally some surprises.” — Ed Yardeni ([02:34])
• Warsh repeatedly hammered the importance of price stability, barely mentioning employment.
  • “He mentioned price stability over and over again… pretty much committed to 2%. He didn’t finagle that too much at all.” — Ed Yardeni ([02:34])
• Possibility of rate hikes on the table given the persistent inflation.
  • “We haven’t gotten down to our 2% inflation target in over five years. And he said he committed the committee to get inflation down to 2%. So, how are you going to do that without raising interest rates?” — Ed Yardeni ([07:44])
• If inflation moderates, Warsh might “do nothing” for a while, but if the labor market weakens, his communication could be tested.
  • “He kind of locked himself in...if you get a weaker labor market, he’s going to be called on.” — Ed Yardeni ([04:26])
• Housing market pressures acknowledged, particularly the Fed’s aim to reduce mortgage-backed securities.
  • “That’s not going to help the housing market. I don’t think they’ve got an answer for that. You know, I mean it’s a shotgun, it’s not a rifle and there’s only so much the Fed can do.” — Ed Yardeni ([09:10])

Market Implications:

• Some Wall Street houses (Deutsche Bank, Citigroup) see a higher risk of hikes; even a dovish scenario pushes back cuts.
• Rate policy seen as “normalized” but communication ambiguity adds to market uncertainty.

---

2. US-Iran Interim Peace Deal: “A High Value Pause”

[12:20 – 18:49]

Jonathan Ferro leads into the developing story of President Trump signing an interim peace deal with Iran.

Norman Roule (CSIS):

• The deal is a temporary measure—a "pause," not a lasting settlement.
  • “The reported US-Iran deal is best understood as a high value pause in the current military phase of the conflict, not a dangerous durable strategic settlement. The deal buys time. It does not buy trust.” — Norman Roule, quoted by Jonathan Ferro ([12:28])
  • “It provides a mechanism for the administration to transfer the process from a military conflict … into a diplomatic process. Now, the diplomatic process may not offer any optimism for its success, but ... immediately relieves pressure on the world energy markets and the world economies.” ([12:59])
• Skepticism about Iran receiving significant financial relief—$300 billion fund is more notional than real.
  • “There’s absolutely no reason to believe that anyone in their right mind will donate money to this given … the Gulf states have been victims of Iranian attacks.” ([13:55])
• Trump's red lines remain Iranian non-proliferation, limits on missile capabilities, and curbing militias.
  • “Iran cannot have a pathway to a nuclear weapon… Iran can have a normal complement of missiles … that’s not an ICBM, that’s not an intermediate range ballistic missile… Iran’s got to do something about its militias, that it can’t have a process [with them] … that’s a complicated regional diplomatic issue.” ([14:33])
• Skepticism about “fundamental transformation” of Iranian regime.
  • “They’re a new generation… but there is no evidence whatsoever that they believe that Iran should not be a regional hegemon… But clearly there are conversations… that have given the administration reason to believe this may be the case.” ([15:39])
• Mixed regional reactions: Gulf states are pragmatic and relieved by a reduction in conflict; Israel is upset as not all strategic goals were met.
  • “There’s no evidence the Gulf states as a group oppose the deal … and the United States is seen as the indispensable security partner of the GCC.” ([16:49])
• On the deal’s timeline:
  • “Buying time means… it could be either [60 days or end of year]. But it’s going to depend upon events.” ([17:51])

---

3. Central Bank Communication: The End of Forward Guidance?

[21:25 – 28:47]

Claudia Sahm (New Century Advisors) critiques Kevin Warsh’s handling of Fed communication:

• Criticizes Warsh for skipping the “dot plot” in the latest Summary of Economic Projections (SEP).
  • “I think it was a mistake by Warsh not to participate in the statement of economic projections. Warsh is leaving huge blanks in his communication. The dot plots days may be numbered, but it was critical for credibility.” — Claudia Sahm ([21:25])
• Fed’s claim of price stability lacks operational clarity without guidance.
  • “They say they want price stability. They voted unanimously to hold rates steady. How is that in service of price stability?” ([23:02])
  • “It’s communications, also accountability… I really do expect them to explain what they are doing right now and show their work.” ([23:28])
• Potential for increased market volatility and uncertainty due to the lack of guidance.
  • “Markets are going to fill in the blanks … that’s going to lead to potentially more volatility in interest rates and investors are going to be compensated for that uncertainty.” ([25:23])
• On the potential end of the dot plot:
  • “You just deleting information, deleting tools is not going to be very satisfying. Improving them is going to be awesome.” ([27:44])
• On Jerome Powell’s future:
  • “I take Jerome Powell at his word that his decision to stay on is very much tied with concerns about independence, concerns about the building, the review of the building renovation… I didn’t see anything in this is like a protest vote of Kevin Warsh. It sounded like everyone on the committee is really trying to set the new chair up for success.” ([28:47])

---

Notable Quotes

• Ed Yardeni:
  “He mentioned price stability over and over again. And not only that, but he pretty much committed to 2%. He didn't finagle that too much at all.” ([02:34])

• Norman Roule:
  “The deal buys time. It does not buy trust.” ([12:28])

• Claudia Sahm:
  “Markets are going to fill in the blanks, right? That’s going to mean … more uncertainty about what the Federal Reserve is going to do, which is going to lead to potentially more volatility in interest rates and investors are going to be compensated for that uncertainty.” ([25:23])

---

Key Timestamps

• [01:58] — Yardeni on Warsh’s hawkish turn
• [02:34] — Comparing Warsh to Greenspan, prioritizing price stability
• [06:07] — Will rate hikes derail the “Roaring 2020s”?
• [09:10] — Fed policy and the impact on the housing market
• [12:28] — Trump signs interim peace deal with Iran; Roule analysis
• [14:33] — US “red lines” on Iran: nuclear, missiles, militias
• [16:49] — Deal’s impact on US regional alliances (GCC vs Israel)
• [17:51] — Timeline: Is it a 60-day or end-of-year pause?
• [21:25] — Claudia Sahm on Fed’s communication gaps
• [23:02] — Why communication/SEP/dot plot still matter
• [25:23] — Risks of more market volatility
• [27:44] — Do we need to improve, not abandon, the dot plot?

---

Tone & Language

• The episode features Bloomberg’s usual direct, insightful, and slightly wry tone.
• Guests and hosts keep the discussion focused, analytical, and empirically grounded.

---

Conclusion

This episode offers a nuanced look at the Fed’s evolving policy and messaging under new leadership, potential impacts on markets and the broader economy, and the significant—but fragile—developments in Middle East diplomacy. Listeners gain expert perspectives on policy shifts, institutional credibility, regional geopolitics, and looming macro risks, all presented in a candid and sophisticated conversational style.

Transcript

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[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast. 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 to. And as always on the Bloomberg Terminal and the Bloomberg Business App.

Begin this hour with stocks rising and bond yields falling after Kevin Marsh made it clear the central bank will not tolerate high inflation. Ed Yardeni of Yeni Research calling Marsh a quote hawk in doves clothing writing we thought he was a dove who favored lowering the federal funds rate. Instead, he hammered home a strict orthodox message on inflation with a strong commitment to price stability. Ed joins us now for more. Ed, great to see you. Thank you being here so is this more of an Alan Greenspan rather than say an Alan Burns?

[Ed Yardeni]

I really can't answer that because I have a task force working on that.

[Jonathan Ferro]

Don't we all?

[Ed Yardeni]

It's very Greenspan. I mean it's, you know, not a lot of information, a lot of ambiguity and, you know, occasionally some surprises. He started right off the bat with a surprise. You know, it's kind of like he had an interview with President Trump and yes, them told him everything that he wanted. Yes, we're going to lower interest rates. Yes, AI is creating productivity. Then as soon as he got the job, it's like the old war. Concerned about price stability. He mentioned price stability over and over again. And not only that, but he pretty much committed to 2%. The he didn't finagle that too much at all.

[Jonathan Ferro]

Mike Reed of RB says RBC said by their account, inflation was mentioned by Kevin Warsh 19 times compared to four times where he mentioned the labor market.

Right.

[Bloomberg Host/Interviewer]

Is this.

[Ed Yardeni]

And the labor market's looking good, right?

[Chase Business Representative]

Exactly.

[Jonathan Ferro]

There is no mention of mandate or a sense that maybe there's some weakness there in conflict in the dual mandate. Is this all talk and not action?

[4imprint Announcer]

Right.

[Jonathan Ferro]

I mean, if you are skeptical, you would say this is somebody who wants to jawbone the market. You're seeing the move that he wanted in the flattening of the yield curve. And then he won't necessarily.

[Ed Yardeni]

I think he's, he's hoping that he'll be lucky because so far, so good. I mean, the price of oil is coming down, as you mentioned, the price of gasoline is coming down. We are going to see the headline inflation use coming down substantially. And if he's lucky and the recent inflation surge doesn't spread into the rest of the of the inflation numbers, then he may very well just kind of sit back and, and let that all happen. And then he'll say, well, look, you know, things are going in the right direction, we don't have to do anything. And at the same time signal that down the road maybe the productivity story will come back as a reason to lower rates. But right now it may be a do nothing fed for a while.

[Bloomberg Host/Interviewer]

What if we see a labor market that does weaken though? What's his reactionary function going to be?

[Ed Yardeni]

Well, he kind of locked himself in. I mean, you know, he didn't say very much except on price stability. He said that over and over again. And I think that if you get a weaker labor market, he's going to be called on. If he suddenly becomes very liberal, you know, in the mandate and says, well, people are getting hurt, we've got to focus on the unemployment rate. He basically said that in order to have a healthy economy, in order to have a healthy labor market, you have to have price stability. Which by the way, is deja vu all over again, because that's what Powell had been saying for quite some time.

[Bloomberg Host/Interviewer]

Do you think he was the one that threw out the proposal of discussing a rate Cut at the meeting just so he can, you know, when he has breakfast with the Treasury Secretary, say, look, I threw it out there and I was pushed back.

[Ed Yardeni]

We don't know. I mean, you know, it's, it's a good conspiracy theory, right?

[Jonathan Ferro]

Could work.

[Ed Yardeni]

It makes sense. You know, you could go back to the President said, hey, I, I was the one who, you know, well. But he said he didn't vote on the dot plot. So, you know, I don't know where he is on all that.

[Jonathan Ferro]

So when you take a look at some of the projections coming out of a number of different Wall street houses, some have been raising their expectations for a rate hike this year. You saw that with Deutsche bank saying that with less communication they could be more nimble and rate hike and hike rates sooner. Even Citigro has been on the more dovish side pushing back the potential for a rate cut if there are rate hikes. Does that curtail the roaring 2020 and some of the enthusiasm that we're seeing in equities?

[Chase Business Representative]

Yes.

[Jonathan Ferro]

Your story. Yes. So does it.

[Ed Yardeni]

Last time I was here, I think John mentioned that we were six years into the roaring 2020s. If you just counted, we're actually seven years into the roaring 2020's and so if I get this year right, I only have three more to go. And every year there's, you know, it's a roller coaster ride. You get all sorts of things to worry about. Maybe that's the next worry is suddenly we're worrying that, you know, if the Fed actually has to raise interest rates, then won't that spoil the, the roaring 2020 is the party we're in and I don't think so. I think, I think the economy has demonstrated its resilience. I, you know, people have been kind of getting all bent out of shape about the bond yield being back up. It's back to four and a half percent. That's kind of normal. I think the bond yield is normalized. I think Fed policy is normalized. I mean, I think, you know, Wersh can just kind of leave things alone here for a while because the economy is performing just fine.

[Jonathan Ferro]

Those are two different things though. Leaving it alone versus hiking rates. Two different things.

[4imprint Announcer]

Yes.

[Jonathan Ferro]

And understandably, people are watching what he does, not what, what he actually says. At the same time, if you do think about hiking two times this year, which even Bob Michael of JP Morgan was talking about yesterday, how much does that in fact, potentially some of what we're seeing.

[Ed Yardeni]

Look, when the payroll numbers came out real strong, we Kind of reiterated our position that there was not going to be any rate cuts this year and that the Fed would probably switch to a tightening bias at this meeting, which is exactly what happened. They didn't go from ease, an easing bias in April to a neutral bias. They went right to a tightening bias. And so we got that right. And the thing that really surprised me is how hawkish that was came across. If the Fed were in a position where they had to raise rates, It'd be a quarter 50 basis points. It wouldn't be a big deal. And in my humble opinion, and the bond market might actually rally on that back in 2024 then the Fed lowered the fed funds rate by 100 basis points. I said, you know, I think you're making a mistake here because the economy is resilient and you haven't gotten down to 2%. The bond market agreed with me, my bond vigilante friends. The bond Yield went up 100 basis points and even last year they cut 75 basis points on the Fed funds rate and the bond yield, where is it today? Four and a half percent. So they haven't accomplished anything. So lowering rates hasn't helped. But they may conclude, look at the thing that really came across to me is that, and he said, it was said, look we haven't, we haven't gotten down to our 2% inflation target in over five years. And he said he committed the committee to get down, to get inflation down to 2%. So you know, how are you going to do that without raising interest rates? So I think the market's got it right now when we thought that there would be a tightening bias and there could be a, an increase if the Fed really wants to get it down to 2% that may be necessary.

[Bloomberg Host/Interviewer]

But Ed, what about the Fed policy on how on the housing market? Because he said that's one area where he does think it's restrictive.

[Ed Yardeni]

Well at the same time he's talking about reducing the balance sheet and particularly focusing on the Fed's been talking for a while about reducing the mortgage backed securities down to zero. That's not going to help the housing market. I don't think they've got an answer for that. You know, I mean it's a shotgun, it's not a rifle and there's only so much the Fed can do. I'm a believer that, you know, if the Fed is not in our face as much as it was when Powell was around, I mean I really don't mind less communication. I finally, finally had been calling in the Federal Open Mouth Committee.

[Jonathan Ferro]

Are you on the task force? Any of the task force? This is my first question to everyone. Are you on a task force? Which one?

Yeah, stay with us. More Bloomberg surveillance coming up after this.

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[Ed Yardeni]

My whole life is all about deals. That's all I ever did is make deals. If they don't honor the agreement, we'll probably go back to bombing them.

[Jonathan Ferro]

Here's the latest. President Donald Trump signing an interim peace deal with Iran last night. Norman Rule of CSIS writing the reported US Iran deal is best understood as a high value pause in the current military phase of the conflict, not a dangerous durable strategic settlement. The deal buys time. It does not buy trust. Norman joins us now for more. Norman, wonderful to get your perspective, can you just elaborate on that? Why do you think that this 14 point deal is simply a placeholder and not necessarily a roadmap for what's to come?

[Norman Roule]

Good morning. The deal certainly has drawn a fair amount of criticism from both opponents and supporters of the administration for its language, but it provides a mechanism for the administration to transfer the process from a military conflict which had no longer provided options for a low cost way to restore access to the strait and to achieve its previous goals into a diplomatic process. Now, the diplomatic process may not offer any optimism for its success, but the diplomatic process immediately relieves pressure on the world energy markets and the world economies and sort of reshuffles the deck of options for the administration. Now, in terms of what the Iranians will get out of this, absolutely they will get some financial relief. But in fairness, the $300 billion fund is described as a plan. There's absolutely no reason to believe that anyone in their right mind will donate money to this given the fact that money will be hostage to Iran's policy, future sanctions and that Gulf states have been victims of Iranian attacks and are devoting most of their investments to their own economies. And last, my last point that I would make on this is that this, this process itself is tenuous. The president and the administration will need to prove early on that this process is narrow, it is reversible, and it is achieving something besides giving the Iranians additional liquidity.

[Bloomberg Host/Interviewer]

Norman, given the fact that it is narrow, what happened to the president's own red lines that he's spoken about for years?

[Norman Roule]

Well, his red lines that he mentioned again in the press conference yesterday remain threefold. First, Iran cannot have a pathway to a nuclear weapon that remains part of this process. And indeed, that's the primary effort of upcoming talks. Now, he's talked about missiles and his statement yesterday is that Iran can have a normal complement of missiles that any country in the world might have. Now, that's not an icbm, that's not an intermediate range ballistic missiles, but that would be a defensive complement that any country would have and that's got to be worked out with its neighbors. And last, Iran's got to do something about its militias, that it can't have a process. The sense is that there's conversations that are going on on the side of this deal that will work that out. But that's a complicated regional diplomatic issue that they don't want to put in the same basket as their initial discussions with with the already very hard nuclear issues.

[Bloomberg Host/Interviewer]

The Vice president, when he was making the rounds, doing some interviews with reporters, said that Iran's regime is, quote, a much different group of people for whom, quote, something has fundamentally transformed. Norm, do you see any evidence that this is really a new regime?

[Norman Roule]

Well, they're a new generation. They were raised in a different world, a post 2003 worldview. So certainly they have a different perspective. But there is no evidence whatsoever that they believe that Iran should not be a regional hegemon, that they don't believe that they have a right to and a reason to run militias such as Hezbollah and the Houthis, and that they won't remain a threat to their neighbors in the near term. But clearly there are conversations going on between the administration and some elements in the Iranian government that have given the administration reason to believe this may be the case. The trick is the administration needs to demonstrate somewhat early on in the process that this process is proving that is that possibility may be realized.

[Jonathan Ferro]

Norm, do you think that this realigns the US in the region? It seems like the Gulf nations are happy that the kinetic conflict will at least cease for now. At the same time, Israel is pretty upset because some of the their goals have not been reached. Do you think this aligns the US more closely with Gulf nations and further away from Israel?

[Norman Roule]

Well, let's look at Israel's goals. Iran's nuclear program has been devastated. Iran's missile program has been severely damaged. Now at the same time, the regime remains in place. The militias are no more active than they were prior to this. The question I think for Israel is how long with the that conflict continue. And there are people in Israel and the United States who would like this conflict to continue. And that's an ideological position now within the Gulf. They're paying the price for that conflict with the missiles striking their population. There's no evidence the Gulf states as a group oppose the deal the President has put forward. And the United States is seen as the indispensable security partner of the gcc. It may not be sufficient to be the only partner to, but it is the indispensable partner and it leaves this conflict much closer to all of these of the GCC states.

[Jonathan Ferro]

Do you think that buying time means 60 days, or do you think that buying time means till the end of the year?

[Norman Roule]

Yes, I think the answer is it could be either. But it's going to depend upon events. And that's important because all it takes would be some sort of high casualty event that might take place, God forbid in Lebanon, but which remains a separate arena from this. Neither Israel nor the Lebanese Hezbollah were parties to this agreement, although Lebanon is mentioned in the agreement. And some sort of event could take place during this the discussions which could take these conversations out of joint and move this into a different sort of dynamic. But the administration is going to look for some way to show that the Iranians are moving in the right direction. And that will take time. Remember, nothing moves fast in talks with Iran, no matter which administration is dealing with him. And these issues are issues that every administration has spent years struggling to work with Iran. So no, there's it would be unfair to expect that the Trump administration could achieve any of this quickly.

[Jonathan Ferro]

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

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[Jonathan Ferro]

Claudia Sahm of New Century Advisors writing, I think it was a mistake by Warsh not to participate in the statement of economic projections. Warsh is leaving huge blanks in his communication. The dot plots days may be numbered, but it was critical for credibility. Claudia joins us now for more. Claudia, great to see you. Always love getting your perspective. Let's start there. Why was it a mistake not to put a dot on that plot?

[Public Investing Representative]

Right.

[Claudia Sahm]

Well, I think the statement ended with a very forceful this committee will deliver price stability. Which leads to a natural question of well, how are you going to do that? Right? Like what do you, how are you going to deliver? And the summary of economic projections, it is not perfect, it's often misunderstood. But that is actually the exercise of, of the dot plot. It's actually each individual is like the FOMC there. What is the appropriate path for federal funds rate? What's the right monetary policy to get us to the dual mandate that price stability, you know, 2% is where all of those forecasts end in 2028. That's because of they're working their way towards price stability and they adjust their federal funds rate to get there. So they're like putting together plans individually. And Kevin Wash didn't participate in that exercise and he didn't flesh out in the press conference his views of what a plan could be of how to get to that price stability.

[Jonathan Ferro]

And this is partly by design, right? I mean he talked about how he wanted the market to be one of the key metrics that they do look at and that the market, he wants to have clarity of focus on the data without trying to interpret how the Fed would look at the data and then respond to the Fed's response. Response to the data. What do you make of that argument?

[Claudia Sahm]

I think it's a, it's going to be a tough sell. And honestly, I can, you know, set aside. He doesn't want to talk about plans, he doesn't want to talk about the future. Okay, that's a debate to have about communication. But what was really striking is he didn't want to talk about the decision they made this week. I mean, they say they want price stability. They voted unanimously to hold rates steady. How is that in service of price stability?

[Bloomberg Host/Interviewer]

Are you saying they should have hiked this, this meeting?

[Claudia Sahm]

No, I think they should have explained why they chose to hold rates steady. I agree with that decision, but it is, it's like totally pointless that I agree with it. I want to hear what the Fed chair thinks about it, what the committee thinks about it. Why was that the right decision? We know from the summary of economic projections that many of them think it's going to be appropriate to raise rates later. Many of them don't think it will be like, tell me about why you decided to do what you did today. It's communications, also accountability, like understanding who these people are that are making these big decisions. Don't. They don't have a crystal ball. But I really do expect them to explain what they're doing right now and show their work.

[Bloomberg Host/Interviewer]

Is it potential that Kevin Moore views as a slippery slope to then be an individual that's up there on the podium giving forward guidance which he doesn't agree with?

[Claudia Sahm]

Again, I don't, you know, don't tell me about the future, but I feel like there's some hiding behind the jargon. And I will say, first press conference, right, like this, you know, unevenness out of the gate, totally understandable. But I do think there's room for adjustment. And if you just want to talk about the decision that was made today, fine, but, but do talk about that. And yes, I think it's important, you know, the slippery slope. Okay, fine. But the service of accountability is important and we do need to, I think, have some insights onto the discussions that they're having and how they're weighing the data and what they're thinking about. Because honestly, right now monetary policy is tough, Right? So we should have some insights into the debate that they're having about those policies we did.

[Jonathan Ferro]

We're going to get more information about how they plan to communicate going forward. What's the potential consequence of this approach in markets? Is it more volatility? Is it just more uncertainty expressed in other ways? How do you filter this in to being potentially Pernicious in a way that maybe people don't understand.

[Claudia Sahm]

Markets are going to fill in the blanks, right? They're going to try to come up with some views that's going to mean we're going to have more uncertainty about what the Federal Reserve is going to do, which is going to lead to potentially more volatility in interest rates and investors are going to be compensated for that uncertainty.

[Norman Roule]

Right.

[Claudia Sahm]

So it does come at a cost. And so, you know, there's no free lunch here in terms of how the, how the Fed interacts with markets. And you know, I just, I mean we had a Fed long ago that liked to surprise markets and didn't give a lot of information and know the recent regime may not be perfect, but we moved away from that. The Fed surprising markets for a lot of good reasons. And I think backtracking into that is, could cause a lot of, of problems down the road.

[Jonathan Ferro]

We did learn something pretty crucial at and this added to the hawkish message that the market took from the statement and frankly the statement of economic projections in particular, which is that nine of the 18 members of the FOMC saw the next move as a hike later this year. That's new and that's significant. How do you interpret that? Do you think that that's the appropriate stance?

[Claudia Sahm]

What those individuals are saying is not necessarily they expect hikes, but they think that's appropriate, that is going to be necessary to get us back to price stability. That's a really important statement. Again, I think we're here speeches, we'll get this fleshed out with individuals thinking. But they also said in the statement that, you know, a big part of what's happening with inflation are supply shocks related to energy. The textbook is for in energy supply shocks. The Fed should look through it. The Fed shouldn't be raising rates into that. So it's telling you something to have a group of Fed officials say, you know, we've had enough of these supply shocks. It's spread out over time. We need to be raising rates to rein this in. Even if it goes against, you know, the textbook response to one supply shock individually that is a big shift in monetary policy and it was a very divided committee. You had the other half not going down that route. So there's a lot going on in the committee in these debates and you know, it would be nice to understand a little bit more about what, what the exact debates are. The dots are hard to read from the outside.

[Bloomberg Host/Interviewer]

Speaking of the SEP though, and I know you think it was a mistake for Wash not to participate. Do you think it's a signal that potentially the dot plot could go away one day?

[Claudia Sahm]

Oh, it could, but the, you know, you need, I think the tool, the communication is important. There may be a better way to do it. You know, I think it's very helpful to get a sense of, you know, how, how committee members react to data, how they think about weighing inflation or, or unemployment. Maybe the dot plot is not the best way to do this. I think the committee in their framework review were clear there are some flaws with it, but nobody had a better idea. I think that's the thing is that, you know, you just deleting information, deleting tools is not going to be very satisfying. Improving them is going to be awesome. So if Kevin Wash can lead to real improvements, I think that'd be something to be excited about. But that's going to take time and this committee has really thought hard about the issue. It's not simple to answer these questions, but we'll see where, where the, the task force and then the committee, how they weigh the ideas that the task force come up with.

[Jonathan Ferro]

Claudia, do you think that Jerome Powell will stay on for longer due to some of the scope of changes that are currently underway?

[Claudia Sahm]

So I take Jerome Powell at his word that he is, you know, his decision to stay on is very much tied with these concerns about independence, concerns about the building, the review of the building renovation. And so when he feels like, you know, those issues have been resolved to his satisfaction, then I would expect him to go. I didn't see anything in this is like a protest vote of Kevin Warsh. I mean, it sounded like everyone on the committee is really trying to set the new chair up for success.

[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 app,

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