Bloomberg Talks: Julia Coronado, President and Founder at MacroPolicy Perspectives, on Fed Strategy
Date: November 28, 2025
Host: Tom Keene
Guest: Julia Coronado

Episode Overview

This episode features a comprehensive discussion with Julia Coronado, a highly regarded economist and Fed watcher, about the current direction of U.S. monetary policy, the prospects for rate cuts in 2025, the health of the labor market, and regional economic dynamics—particularly between the U.S., Mexico, and Texas. Host Tom Keene leads the conversation, delving into the Federal Reserve's priorities, the interplay of inflation and unemployment, and the unique challenges facing Texas.

Key Discussion Points & Insights

The Fed’s Rate Cut Trajectory: “Bimodal Possibilities”

[00:24–00:59]

• Tom Keene opens by referencing Julia Coronado's prior successful calls and asks whether markets are wrong to expect “one and done” for rate cuts.
• Julia Coronado outlines two scenarios for the Fed’s potential actions in 2025:
  • One rate cut if the economy stabilizes and AI-driven productivity holds up.
  • Multiple cuts if labor market weakness accelerates:

    “Either we're going to get one and done because things are stabilizing... or we're really starting... turning of the labor market and the Fed's going to have to cut not just to neutral, but through to neutral to an accommodation." – Julia Coronado [00:59]

Economic Growth Outlook: Structural and Policy Challenges

[01:38–03:16]

• Coronado forecasts strong Q3 growth but a “subdued” Q4, with consumer caution becoming more evident:

  “The consumer... people seem to be price sensitive, price conscious, budget conscious, not hunkered down in a corner, but not booming.” – Julia Coronado [02:00]

• She attributes lower projected growth to restrictive immigration policy limiting the labor supply, leading to slower wage and income growth:

  “No labor supply, no jobs, less growth in paychecks and income and a slower economy... a lower trend growth rate for the US.” – Julia Coronado [02:45]

The Fed's Balancing Act: Inflation vs. Unemployment

[03:16–04:46]

• Provided insight into internal Fed debates—19 committee members with divergent priorities.
• Despite inflation moderating, it remains sticky around 3%—higher than the Fed's 2% target—while unemployment has been rising in small increments:

  “Not that inflation’s getting out of control, but it’s going to get embedded... we’ll get stuck at 3 and not get to 2.” – Julia Coronado [03:56] “Usually when we see this kind of movement [in unemployment], we get a break higher... reach a tipping point, and all of a sudden we’re looking at a recession.” – Julia Coronado [04:38]

Regional Focus: US-Mexico Relations and Texas Economy

[04:48–06:37]

• Tom Keene asks about the impact of tariffs and trade policy on Mexico and the southern U.S.
• Coronado notes that US-Mexico trade tensions and restrictive policies hurt both economies, with Texas losing its historical economic edge:

  “The trade wars, the immigration policy, the frictions between the US And Mexico are not great for the Mexican economy and are not great for Texas, to be honest.” – Julia Coronado [05:47] “Texas is okay, but usually Texas is a bright shining star. ...the highway system here.” – Julia Coronado [05:57, 10:52]

Labor Market Thresholds: When Does the Fed Get Alarmed?

[06:37–08:21]

• The current unemployment rate is at 4.4%, above the Fed's longer-run estimate of 4.2%.
• Concerns intensify if rates rise above 4.5%, especially since wage growth is now below inflation:

  “When we saw the September labor report... the most important number is the unemployment rate. Forget payrolls... It went up and nobody expected it to go up. So that was the news... the Fed is a go and that looks to be where they’ve landed.” – Julia Coronado [08:10]

Real Wages and Fed Sensitivity

[07:48–08:21]

• Tom Keene challenges whether the Fed would ignore declining real wages.
• Coronado affirms that persisting labor market weakness will force the Fed to act:

  “If this continues, then the Fed will cut and it will cut ... in December for exactly that reason.” – Julia Coronado [08:21]

Local Color: Transportation Woes in Texas

[09:22–10:52]

• Lighter discussion on Texas traffic problems and the lack of public transport:

  “The traffic in Texas is terrible because we have no public transportation, we have no trains. It’s the thing I miss the most about New York.” – Julia Coronado [09:51]

• Ongoing infrastructure expansion is noted, but with a tilt towards highways, not public transport.

Closing: Texas Longhorns and Personal Notes

[11:10–11:28]

• Amid good-natured college football chat, Coronado reaffirms her Texas roots and Longhorn pride.

Notable Quotes & Timestamps

• “It’s one or the other. It feels like to me...” – Julia Coronado [00:59]
• “No labor supply, no jobs, less growth in paychecks and income and a slower economy.” – Julia Coronado [02:45]
• “Consumers are getting gloomy about the labor market. ...wage growth decelerating below the rate of inflation.” – Julia Coronado [07:23]
• “If this labor market problem keeps creeping, creeping in and cracks deepening, of course the Fed is going to pay attention to that.” – Julia Coronado [08:18]
• "The traffic in Texas is terrible because we have no public transportation, we have no trains." – Julia Coronado [09:51]

Important Segments & Timestamps

• 00:24 – Discussion opens on Fed rate cut expectations
• 01:38 – Coronado’s US GDP forecasts and labor supply discussion
• 03:16 – The Fed’s inflation vs. unemployment dilemma
• 04:48 – US-Mexico economic ties and effects of tariffs
• 06:37 – Unemployment rate concerns, wage growth trends
• 07:48 – The significance of real wages and Fed policy sensitivity
• 09:22 – Texas infrastructure and daily life observations
• 11:10 – Personal/cultural close with Texas Longhorns segment

Tone & Style

• Throughout, the conversation balances technical macroeconomic analysis with approachable explanations and playful regional color, especially evident in Tom Keene’s questioning and banter.
• Julia Coronado’s responses are candid, nuanced, and delivered with the authority of a seasoned Fed watcher comfortable communicating to both professionals and the broader public.

Summary prepared for those seeking a comprehensive yet accessible understanding of the episode without listening.