PIMCO's Tiffany Wilding Talks Chip Stocks, Consumer Sentiment

Summary

Bloomberg Talks — PIMCO's Tiffany Wilding Talks Chip Stocks, Consumer Sentiment

Date: July 17, 2026
Host: Bloomberg
Guest: Tiffany Wilding, North America Economist at PIMCO

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Episode Overview

This episode centers around the current state and outlook of U.S. inflation, Federal Reserve policy, the impact of geopolitical events on commodity prices, and insights into the Fed's balance sheet strategy. Tiffany Wilding from PIMCO provides an expert’s perspective on recent economic data, Fed communications, and expectations for interest rates and monetary policy through the end of 2026.

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Key Discussion Points and Insights

Federal Reserve Communication & Market Outlook

• Fed Positioning & Inflation Data:
  • Tiffany highlights a "bifurcation" in the data and Fed's communication—on one hand, officials are preparing markets for potential rate hikes if inflation fails to moderate; on the other, recent data is positive, with CPI coming in under expectations.
  • She believes core inflation will moderate, and headline inflation could dip below 2% next year (01:07–02:11).

"Headline inflation is likely going to dip below 2% next year. So all of that sort of suggests to us that we have a Fed on hold."
— Tiffany Wilding [01:38]

• Price Levels vs Price Changes:
  • The host queries whether the U.S. could move to "level prices" (no inflation or deflation).
  • Tiffany clarifies that while some prices, like gasoline and certain food items, have fallen from recent highs, deflation is not expected, but moderating inflation is reasonable (02:11–03:04).

"We're not expecting overall inflation, the United States to dip in negative territory, go into deflation. But we do think moderating inflation is a completely reasonable outlook to have."
— Tiffany Wilding [02:57]

Fed Leadership & Senate Scrutiny

• Senate Hearings and Chair Warsh's Policy Approach:
  • The host references Senate hearings (incl. questions from Senator Warren) and probes Tiffany for her insight into new Fed Chair Warsh's commitment to policy.
  • Tiffany emphasizes Warsh’s focus on price stability and his alignment with other Fed officials. She argues this supports long-term interest rate stability, as it should keep expectations anchored and risk premiums low (03:11–04:55).

"Everything that we've heard from Warsh in terms of his commitment to price stability, we actually think is a good thing for the bond market."
— Tiffany Wilding [04:38]

Fed Balance Sheet and Future Policy

• Balance Sheet Reduction (QT):
  • Tiffany addresses the Fed's decision to end its quantitative tightening (QT), suggesting the Fed could resume shrinking its balance sheet next year, thanks to forthcoming regulatory changes that may ease banks’ need to hoard reserves (04:55–06:05).

"We actually think that the Fed will probably start to reduce its balance sheet again next year as some of these policies ... reduce bank demand for reserves."
— Tiffany Wilding [05:56]

Key Dates for Fed Meetings

• Attention to Upcoming Fed Meetings:
  • The host lists major upcoming FOMC dates, asking Tiffany which is most pivotal.
  • Tiffany focuses on the September meeting as especially important, citing Governor Waller’s comments about the Fed being prepared to hike after even a single strong inflation print, though she stresses the environment is different than 2022 and expects only gradual action, if any (06:05–07:18).

"If you get one more strong print here, you could certainly see them hiking as early as September ... but I think the Federal Reserve isn't on course to, you know, to hike dramatically here."
— Tiffany Wilding [06:39]

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Notable Quotes & Memorable Moments

• On inflation trajectory:
  "Headline inflation is likely going to dip below 2% next year." — Tiffany Wilding [01:38]
• On the Fed's focus and impact:
  "Everything that we've heard from Warsh in terms of his commitment to price stability, we actually think is a good thing for the bond market." — Tiffany Wilding [04:38]
• On potential for renewed balance sheet reduction:
  "The Fed will probably start to reduce its balance sheet again next year..." — Tiffany Wilding [05:56]
• On odds of a rate hike:
  "If you get one more strong print here, you could certainly see them hiking as early as September..." — Tiffany Wilding [06:39]

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Timestamps for Key Segments

• 00:37–01:07 | Host welcomes Tiffany Wilding; asks about PIMCO's priorities for the coming week.
• 01:07–02:11 | Tiffany discusses Fed communication, inflation data, and her inflation outlook.
• 02:11–03:04 | Discussion of energy/food prices and expectations for deflation or flat prices.
• 03:11–04:55 | Senate hearings, Chair Warsh’s approach, and implications for markets.
• 04:55–06:05 | Outlook on Fed’s balance sheet reduction and regulatory changes.
• 06:05–07:18 | Key FOMC dates; Tiffany highlights importance of the September meeting and possible triggers for Fed action.

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Summary Flow & Tone

The conversation is brisk, analytical, and occasionally casual, often relying on Tiffany’s frontline economic analysis and the host’s slightly irreverent, relatable style ("I keep score when I'm rude and cut someone off..."). Tiffany consistently grounds her perspectives in data and recent policy signals, maintaining a clear and insightful delivery focused on what matters most to markets.

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This summary provides a clear walkthrough of the episode’s key themes and insights, useful for listeners seeking expert-driven, actionable economic and policy commentary.

Transcript

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[Podcast Host]

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Believe it or not, folks, I keep score when I'm rude and cut someone off because like the President's talking to the media or, you know, whatever. Last time Tiffany Wilding was on for like a minute and 12 seconds. Going along here today with the Pacific Investment Management Company, their economist for all of North America, Tiffany Wilding. Tiffany, what are you thinking about for the PIMCO manager brief on Monday morning? What's the thing that matters right now?

[Tiffany Wilding]

You know, Well, I think we're, we're clearly focused on, on how Federal Reserve official communication is evolving. You know, obviously we're also very focused on, on the data and I think there's an interesting, you know, sort of bifurcation that's happened because on the one hand, you know, Federal Reserve officials appear to be setting the markets up for potential rate hikes if inflation doesn't start to moderate here, you know, and on the other hand, we got good news on the inflation data this week. Both the CPI and the pie coming in under expectations, you know, in our own forecast is, is that you will see some moderation in core inflation, which is the important one for the Fed. You know, but I've been saying this, you know, even on this program with you, Tom, that you have to keep in mind that headline inflation, you know, we're going back to pre war levels on, on commodity prices. Headline inflation is likely going to dip below 2% next year. You know, so all of that sort of suggests to us that we have a Fed on hold. But nevertheless, officials, you know, are certainly preparing the markets for, for a couple of potential.

[Podcast Host]

Okay, so the first derivative inflation's coming down. There's a lot of people that agree with what Tiffany just said. There are, we could see lower prices or dare I say even are we going to see level prices as we go along in time?

[Tiffany Wilding]

Well, we've already seen the national average retail gasoline price come down off of its recent peak over the last few days. It's, it's up again as the Middle east conflict does, has kind of flared up. But we are down off of the wartime peak levels. You know, we're also seeing some various food prices that are actually falling, you know, but in general, you know, when we say inflation is coming down, you know, that is the price change. And so, you know, we're not expecting overall inflation, the United States to, you know, to dip in negative territory, go into deflation. But we do think moderating inflation is a completely reasonable outlook to have.

[Podcast Host]

I mean, Tiffany gets everything. You know, she's at restaurants seven days a week. What's the grocery shop and look like at the sass, our house?

Tiffany, I have to ask you this. You know, obviously you were watching. I was watching Kelman Marsh's testimony to Congress this week. And you know, some of the questioning, specifically the questioning I saw from Senator Warren regarding $100 million payments or some craziness, I mean, is there any validity to that? I mean, is she just kind of muckraking? I mean, what's going on, you know, underneath the surface here in terms of, you know, the Senate's real acceptance of the new Fed government? New.

[Tiffany Wilding]

Well, you know, I mean, certainly, I mean, Senator Warren will have her piece to say, you know, I think what. And certainly there could be some more that comes out on that. But I think what we're focused on at least is, you know, what sort of signals is Chair Warsh sending in terms of how he's going to conduct monetary policy? You know, and I think the biggest emphasis that's come out since he's become chair, you know, is that he's very focused on price stability, you know, and I think that's very consistent with the other communication that we've seen from other officials to say that if you're not getting inflation that's moderating, you know, that the Federal Reserve is prepared to act, you know, and I think that, you know, this is a good focus to have, you know, in terms of the markets, you know, anchoring longer term inflation expectations or ensuring that they're anchored, you know, with this commitment to act if inflation, you know, doesn't moderate as we all expect, should actually keep longer dated interest rates anchored. Right. Because you don't have inflation risk premiums that are getting priced into the long end of the interest rate curve. So everything that we've heard from Warsh in terms of his commitment to price stability, we actually think is a good thing for the bond market. Now, of course, there will be other questions that senators have and we'll continue to watch that as well.

[Podcast Host]

And Tiffany, what about the size of the Fed's balance sheet? I mean, I Know, we didn't really get into the thick of it during the testimony, but did you get any takeaways on that and where that's headed?

[Tiffany Wilding]

Well, I think this is now an open question. So the Fed stopped its so called QT program, quantitative tightening where it gradually reduces its balance sheet at the end of last year, you know, and as, because we saw front end interest rates, overnight rates and things like that, you know, start to start to increase to suggest that, you know, reserves were coming more scarce. But ultimately we think they probably, the Federal Reserve probably can further reduce its balance sheet. And the reason is just because you have Michelle Bowman and other bank regulators within her team that are laying the groundwork to try to relinquish lack some of the liquidity regulations and liquidity stress tests for banks and how they're implemented that should result in them effectively hoarding reserves less. And that can mean that the Federal Reserve can drain. So we actually think that the Fed will probably start to reduce its balance sheet again next year as some of these policies sort of reduce bank demand for reserves.

[Podcast Host]

Before you go frame up the calendar for me, I got July 29, which is tomorrow and then I go to September 16 which is a million years away, October 28, December nine. Which meeting is Tiffany Wilding focused on?

[Tiffany Wilding]

I mean obviously we're, we're focused on all of the meetings, you know, and I think September, you know, is, is certainly one to focus on. You know, I think the interesting thing from Fed speak more recently, Governor Waller in particular, you know, sort of suggested that regardless of the drivers of inflation, you know, whether they're supply or demand related, that if they one more strong firm inflation print, then they're sort of ready to act. So that suggests to us that even if our view is ultimately right that inflation moderates, you know, if you get one more strong print here, you know, you could certainly see them hiking as early as September, you know. But again, we take a step back. We're not in a 22, a 2022 type of environment and ultimately, you know, we think the Federal Reserve isn't on course to, you know, to hike dramatically here. Maybe a few if they do it. But inflation I think is certainly in a good place and hopefully we'll get more data to that regard moving forward.

[Podcast Host]

Really wonderful. Tiffany Wildey, thank you so much. The Pimco this morning we learned how

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