Bloomberg Talks
Julia Coronado, president and founder at MacroPolicy Perspectives, Talks Fed Strategy
28 Nov 2025
Chapter 1: What is the main topic discussed in this episode?
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You certainly ask interesting questions.
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Joining us now, I'm really anticipating this with the Dow up 100 points. Julia Coronado was iconic at BNP Paribas during the crash where she said, no, GDP isn't going to be as good as it's going to be. She nailed that call. Now with macro policy perspectives, one of our most astute Fed watchers as well.
Julia, is the next thing we're going to get wrong the certitude that it's one and done on a rate cut? And what we really need to think about is sequential rate cuts into next year?
Well, Tom, I think actually the possibilities are fairly bimodal. So if you look at the market and what it's priced for, it's priced for several rate cuts next year.
But I think either we're gonna get one and done because things are stabilizing and growth is gonna be okay and the AI story has enough legs to power the economy, or we're really starting, we're in the early game turning of the labor market and the Fed's gonna have to cut not just to neutral, but through to neutral to an accommodative stance. So it's one or the other, it feels like to me.
You're so good at gaming GDP. My head is spinning. Paul Sweeney's head is spinning over nominal GDP. I got a 4% Atlanta GDP. Now maybe it's 3.8%. I got half of America flat on their back. What is the Coronado call for 2026 real and nominal GDP?
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Chapter 2: What insights does Julia Coronado provide on Fed strategy?
Is there one thing that's front and center for the Fed here today?
Well, it depends on who you ask, doesn't it? So there are a lot of people. There's 19 people on the committee, and they all have very different views of the world. It looks like the leadership, Chair Powell, President Williams, are coalescing around one more rate cut this year, an insurance rate cut, because you're highlighting the tension they face.
You've got inflation that's not soaring or even necessarily accelerating in a meaningful way like we saw in the pandemic, but it's too high. It's running it closer to 3% than 2%, and it's not making any progress, and we don't expect any progress in the foreseeable future, or at least not next year.
not much progress given the tariffs are still coming through uh and that's a worry not not that inflation is getting out of control but it does it's going to get embedded in the economy and people's behavior and people's psychology and we'll get stuck at three and not get to two uh on the other hand the unemployment rate's been creeping higher by a tenth each of the last four months
Usually when we see this kind of movement, we get a break higher in the unemployment rate. The labor market cracks, we reach a tipping point, and all of a sudden we're looking at a recession.
Can we do a Friday Audible? Sure. On television, on radio worldwide with Julia Coronado, a surveillance Audible. Okay, Julia, you're defined at Dallas Fed. Dallas Fed owns the southern border. I am as guilty as anyone of ignoring Mexico and focusing on Canada because they need the Montreal Canadians to find an enforcer. Julia, help me with Mexico and the tariff.
What's the dynamic right now with Mexico given tariffs?
Well, you know, Mexico had been poised to be a beneficiary from this friend-shoring or these re-globalizations or de-globalizations in the sense that it's right next door. It's one of our largest trading partners.
But the Trump administration has, you know, gone after our closest trading partners, Canada and Mexico, you know, really kind of trying to ensure that some of that that channeling of trade by Chinese companies through Mexico doesn't sort of sneak in the door. But of course, that leaves Mexico really struggling. Mexico is doing OK, right?
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Chapter 3: What are the future expectations for GDP growth in the U.S.?
? The traffic in Texas is terrible because we have no public transportation. We have no trains. It's the thing I miss the most about New York is the ability to skip traffic and get on the subway or get on the Metro North and go home. So yeah, the traffic is pretty terrible.
What are you going to do about it? You've been shortlisted for all sorts of wonderful Washington titles. What is the entrepreneurial GOP spirit of Texas going to do with that gridlock?
I don't know. You know, we we did pass the the Austin area did pass a big bond that does build in some public transportation. It broadens what is now a very limited train system. But being Texas, we also are just kind of expanding the highway yet again. So if you come down to Texas, Tom, you can choose many multiple lane highways to get around.
uh it's really something the highway system here julie the only reason we had you on was hullabaloo canuck canuck today 7 30 pm yeah the number 16 texas longhorns greet the number three fighting texas aggies wow of college station julia are you going
I am not going to the game. No, no, no, no, no. But I am a Longhorn, Tom, as you know. We have not had the season we had hoped for. But, you know, we had a great last game and hopefully that momentum continues into this one.
Very good for Jess Metten of College Station. Exactly. We say good morning as well. Julia, next time I'll have you on an economics instead of a Longhorn football. Dr. Coronado, thank you so much. Important comments there on the Fed.
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