Lots More With Skanda Amarnath on This Moment in Macro

Joe Weisenthal (0:02)

Bloomberg Audio Studios. Podcasts, radio, news. So here's why I'm so confused right now. Like if someone said to me...

Tracy Alloway (0:11)

Just one reason.

Joe Weisenthal (0:12)

If someone said to me, look, you know, the economy is slowing down, clearly job creation is in the tank, it's decelerating, housing is in the tank, et cetera, there's a bunch of sectors that are soft, we need rate cuts. I said, oh, okay, that sounds good. Inflation has come down quite a bit from where it was, but it's still elevated. And then if someone said, look, the stock market is at record highs, PPI just came in super hot, inflation is still above levels, et cetera. Are you insane to even be talking about rate cuts? I'd be like, oh, yeah, okay, that makes sense too. Like I find many kinds of arguments to be very persuasive right here. I don't have a strong views.

Tracy Alloway (0:47)

I'm not one for hyperbole, I try not to be, right? I try to be a good journalist in that sense, but I would honestly say like, this is one of the most difficult macro environments to call in probably my professional career, which is longer than I would necessarily like it to be at this point. But as you said, if you look at the stock market, which feeds into financial conditions, right? Look at financial conditions, like financial conditions do not look that restrictive at the moment. And yet you do have people who say that actually we are still in restrictive territory and the labor market is weakening, as you said. And so we need a rate cut. So we have this one body of people who are talking about a potential Fed policy error. And then we have another body of people, including people from the Trump administration who are talking about the need to do a 50 basis point cut in September.

Joe Weisenthal (1:34)

You could make the argument that the Fed is either committing a policy error now or contemplating a policy error. Then there's this whole dynamic with the fact that we know that there's this one incredible thing going on, which is all the AI spending and how that actually intersects with macro is very confusing. So we have Jackson Hole next week, which we're going to be at.

Tracy Alloway (1:53)

I'm excited about Jackson Hole. So the scuttlebutt for journalists going to Jackson Hole is that apparently like the rooms are even higher demand than normal because behind all the macro debate, which we just laid out, there's also the question of Fed independence, right? So interest in Jackson Hole is like higher than it's ever been.

Joe Weisenthal (2:13)

It's going to be a big Jackson Hole. Whatever the formal theme of the conference is going to be, there's going to be some academic theme coming up. Whatever that is, that's not going to be the theme. The theme is going to be all of the talk about Fed independence. I did a deadlift.

Tracy Alloway (2:28)

I am both the most popular trader and most successful trader at Citadel.

Joe Weisenthal (2:32)

Fed is going viral.

Tracy Alloway (2:34)

Barges.

Joe Weisenthal (2:35)

This is an after school special, except.

Tracy Alloway (2:36)

I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the US.

Joe Weisenthal (2:42)

Black gold.

Tracy Alloway (2:43)

These are the important questions. Is it robots taking over the world?

Joe Weisenthal (2:46)

No, I think that in a couple of years, the AI will do a really good job of making the Odd Lots podcast. One day that person will have the mandate of heaven.

Tracy Alloway (2:56)

How do I get more popular and successful?

Joe Weisenthal (2:58)

We do have the perfect guest.

Tracy Alloway (3:02)

You're listening to Lots More, where we catch up with friends about what's going on right now.

Joe Weisenthal (3:06)

Because even when the Odd Lots is over, there's always Lots More.

Tracy Alloway (3:10)

We really do have the perfect guest.

Joe Weisenthal (3:17)

Skanda, nice to have you here in our new studio.

Tracy Alloway (3:19)

When Joe is confused, you're the guy we turn to.

Joe Weisenthal (3:21)

Yeah, that's right. Let's start. Actually, just quick take. We're recording this 904, August 14th, about 30 minutes ago. We got that really hot PPI report. But also, I don't know what that means. Is it a big deal? What does it say? What's going on there? What does it mean for PCE?

Does it mean that margins are going to be crimped? What's going on there?

Skanda Amarnath (3:41)