Bloomberg播客解析美联储按兵不动与通胀结构性难题

[music] Bloomberg Audio Studios, podcasts, radio, news. [music] There's all of these pain points across the economy. I think a lot of people feel like they're just, you know, a duck where they're looking okay on the surface but paddling like crazy underneath. [music] I'm Sarah Holder and this is The Big Take from Bloomberg News. Today on [music] the show, the Fed voted to hold rates steady this week despite evidence that inflation isn't slowing down.

Ahead of the meeting, I sat down with the author and economic commentator Kyla Scandlin to [music] unpack what she calls the shrugflation triangle and how it explains what's happening in the US [music] economy.

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Well, Kyla, the reason I wanted to have you on the show today is because I wanted to talk about your latest piece. We've heard about skinflation, stagflation, greedflation, shrinkflation.

Yeah.

And now you've coined this new port manto shrugflation. [music] Can you define shrugflation for me?

Yeah. So, I don't know if it's exactly the right word. I mean, I wanted to capture [music] this idea that both the AI companies and the US [music] government are sort of shrugging at the financial conditions in the market. The AI companies were just I mean they still are. They're borrowing a ton of money. The US government is borrowing a ton of money. Both of them being relatively rate insensitive. The AI companies because they have so much money and then the US government obviously has to borrow because if there's a deficit they have to close it, right?

And so that was sort of the idea is that we have these two really rate insensitive borrowers shrugging at the market and that makes everyone else like the people in the economy have to carry that that burden because they're not able to shrug. Like a person who's trying to get a mortgage isn't able to shrug at higher mortgage rates. Person who's trying to borrow for an auto loan can't shrug at higher auto loan rates. And you also talked about this kind of triangle, right?

There's the AI companies, the treasury market, and oil. How do you see these three factors interacting right now in the economy?

Yeah. I mean, so part of the reason that the Federal Reserve had to hike rates in order to battle inflation was because energy has gotten so expensive due to the war in Iran. And so the three are just pretty interconnected with energy markets causing higher rates and treasuries you know pushing rates up even more and then we find our way back um because AI companies are so reliant on energy. So energy prices are rising, interest rates are rising and still as you said the US government and AI companies keep borrowing.

They're shrugging it off. I I want to dig into a little bit more about why AI companies why are they willing to keep borrowing? Yeah. So the AI companies feel like they have to borrow a ton of money in order to keep up in order to beat each other in order to beat China. So there's just this massive need to just keep building building. And the companies have gotten to the point where they have like for Google and Amazon and and Meta where they're having to borrow more and more because they can't keep pulling from their cash coffers.

And so they're turning to the debt market and saying, "Well, we're going to borrow a ton of money and build out things this way because there's this like massive race to kind of nowhere, it seems, uh, but to to win." So, I mean, this dynamic that you're describing seems to pose a big structural challenge, right? If big economic actors aren't like reacting rationally to economic constraints, if they're not stopping borrowing even when rates are rising, does that mean rate hikes matter less?

I guess I'm wondering, can raising interest rates still cool inflation if it doesn't stop borrowing anymore?

So, I had the chance to interview Chicago Fed President Austin Goulsby and he talked about this sort of rate hike [snorts] dilemma and the point that he made is that the Fed will have a toolkit to use if they do need to slow down AIdriven demand, right? like they can raise rates even further and maybe that'll cool off certain parts of the economy. But I think the challenging part about the current inflationary environment is that the Fed can hike rates but they can't really go and reopen the street of Hormuz.

Many people have made this point. Um and so that makes it very challenging is you can slow down certain parts of the economy but if the inflationary problem is energy prices um that's really a supply story needing more energy. I am curious about what small businesses and consumers are doing right now cuz you mentioned they're not able to shrug in the same way. What are you seeing?

Yeah, I mean I think that consumers are having a pretty hard time. You know, it's funny like a lot of people will point to consumer spending and compare that to sentiment and be like, well, you know, people are still spending, so clearly they're not that sad. And I find that to be a pretty um pretty unfair statement.

Yeah. Say more about that.

Well, I mean, just because people are spending money doesn't mean they're happy, right? Or

doesn't mean they're confident about the future.

Yeah. And so I I I find that to be really shortsighted. And uh you know I think we need to be like well okay so what are their expectations like with the Nobel Prize winners in economics showed us how important expectations are. We want people to feel like they have a solid economic future and it feels like you know Natasha Saurin I believe her last name is pronounced she wrote a really good New York Times opinion piece on the affordability crisis and she pointed out that this is really like an economic security crisis. like a lot of people are, you know, struggling with housing and child care and elder care and grocery prices, but like they're also really worried about none of that ever getting better.

Well, it seems to present a tricky problem for the Fed, right? Because raising interest rates is squeezing the kinds of borrowers who are actually less responsible for the kind of inflationary pressures that the Fed is trying to cool. Is there a risk that the Fed makes the economy more unequal by trying to control inflation? I mean, I I think that a lot of the spending done in the economy is is done by older folks. So, over the age of 65, they've accumulated a ton of wealth in the economy.

The Fed survey of consumer finances came out. People over the age of 75, their wealth has gone up by like 40%, almost 40%. Under 35, it's gone down by 23%. And I think older folks tend to be a little more insulated from rate hikes. They usually own their home. They're usually benefiting from higher yields, right? Because they're able to invest and take advantage of that. Um, and they're not borrowing as much. Like they probably own their car,

right? Maybe they've paid off their house.

Yeah. Exactly. Yeah. So, I think in terms of the Fed raising rates, like what we see truly driving the economy forward are older folks and this energy crisis, raising rates isn't going to maybe slow down older folks at the rate that we might expect, as well as it's not going to fix some of these energy problems that we have. More from my conversation with Kyla Scandlin after [music] the break. [music] Well, I want to stick with higher rates and talk about how those rates are interacting with other corners of our economy like the housing market.

So, the average 30-year fixed rate mortgage is about 7.3% [music] right now. We're hearing the words deep freeze being thrown around in relation to home sales, which is never good. And [music] higher borrowing costs can also discourage new construction, which we're seeing in the most recent housing starts numbers, which are down. So, [music] higher rates mean demand is taking a hit. New supply could be constrained. I'm sensing another sort of vicious cycle.

How worried are you about the housing market? I mean