Bloomberg Surveillance Single Best Idea with Tom Keene: Frances Donald & Robert Kaplan
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Sep 18, 2025 Frances Donald dives into the complexities of inventory overhang and how tariff shocks impact inflation risks. Meanwhile, Robert Kaplan emphasizes the need for the Federal Reserve to align its policies with the real economy, despite the surge in financial markets. Their insights reveal the tension between economic reality and market exuberance, making for a thought-provoking conversation.
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Fed Meeting Was 'Break Dancing'
- Frances Donald compared the Fed meeting choreography to "break dancing" rather than ballet to capture the chaos.
- The metaphor illustrates dislocations and unclear messaging from policymakers during the meeting.
Economy In An Air Pocket
- Frances Donald sees the Fed's message as chaotic and not well choreographed after the meeting.
- She warns the economy is in an 'air pocket' while the impact of a major trade shock and inventories plays out.
Inventories Will Drive Fed Focus
- Frances Donald highlights inventories as the single critical datapoint for Fed direction.
- She says outcomes hinge on whether companies pass higher costs to inflation or cut costs, notably labor.