Bloomberg Talks Carl Weinberg Talks Supply Chain
Jan 9, 2026
Carl Weinberg, Chief Economist and Managing Director at High Frequency Economics, shares insights on supply chain disruptions, predicting they will be the biggest risk in 2026. He highlights the tight labor market's impact on GDP growth and warns that rising inflation could follow due to these constraints. Weinberg also emphasizes the severe threat posed by China’s dominance in critical materials, stressing that any disruption in supply chains would directly impact U.S. industrial capacity and growth.
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Full Employment Caps GDP Growth
- The U.S. is at or near full employment, which constrains GDP growth without more workers or higher productivity.
- Recent productivity gains lifted growth but may not persist into the fourth quarter, capping GDP.
Lower R-Star Doesn't Justify Big Cuts
- Weinberg rejects aggressive rate cuts based on Taylor rule misinterpretation and lower r-star alone.
- He argues falling potential GDP offsets lower r-star, so the Fed has no clear case to keep cutting with full employment.
Tight Labor Supply Fuels Inflation Risk
- Tight labor supply can drive inflation if incomes chase too few goods, risking renewed price pressure in 2026.
- Weinberg believes the Fed should worry about this inflation risk as the year progresses.