Intro
Richard Clarida, global economic advisor at PIMCO and a former Fed vice chair, previews Kevin Warsh's first Jackson Hole speech as chairman: what a framework for getting back to price stability would sound like, why the dissenters' reaction functions have filled the silence, and why he does not expect a revival of the debasement trade. The rest of the hour runs through agricultural commodities, gold and oil with AlphaSimplex, the reaction-function question again with TS Lombard, and the state of the US M&A market with EY-Parthenon.
Guest: Richard Clarida, global economic advisor at PIMCO, former Federal Reserve vice chair
Host: Scarlet Fu
Also on: Katie Kaminski, chief research strategist at AlphaSimplex; Freya Beamish, chief economist and head of macro research at TS Lombard, based in London; Mitch Berlin, EY Americas vice chair for EY-Parthenon
Published: 28 August 2026 on Bloomberg Surveillance
Listen on Omny | 26 min
Key Takeaways
Clarida would have Warsh spend part of the speech laying out his own framework for getting back to price stability
"Right now it is and has been above 2% for five years." — Richard Clarida
The dissenters are describing their reaction functions while the committee says little
Clarida named Lorie Logan, Beth Hammack and Neel Kashkari as three who have dissented
Clarida is not in the debasement trade, and reads the move in yields as a global one
"we're seeing really a global sell-off in yields. So there are global factors at play, not just the Fed." — Richard Clarida
Sugar and wheat were the biggest trends of the month at AlphaSimplex, and they are consumption goods
Supply disruption around the Black Sea and problems in Brazil, with a read-through to CPI
Gold may be starting a new trend after a year of working off an extreme move
"So I think it could be a potential buying opportunity for gold still if that continues." — Katie Kaminski
Oil is a position-sizing problem rather than a directional view
Kaminski sizes it against volatility and cuts as volatility expands
Beamish wants a reaction function from the Fed, not forward guidance
"One of our big calls has been that if Warsh does not sound sufficiently hawkish, then the long end of the curve is going to ask for compensation." — Freya Beamish
The 10-year has not priced the new macroeconomic regime, on her reading
"So 4.7 on a trend basis for me is not yet high enough." — Freya Beamish
AI is showing up as demand and inflation well before it shows up as supply
Beamish expects a pickup in unit labor cost growth and in the pass-through to core services
US deal value ran to almost $2 trillion in the first six months, with corporates doing the work
"We're seeing a 22% increase in volume in the first six months, 54% increase in value." — Mitch Berlin
Big private equity deals are stuck on the gap between what buyers will pay and what sellers will take
"There's still about $2 trillion in dry powder that's waiting to be invested." — Mitch Berlin
What Clarida Would Put in Warsh's First Jackson Hole Speech
The anchor opened with the premise that the new chairman had "kind of disappointed, I would say, the global markets were with some of his comments to date in terms of disclosure or lack thereof", and asked Clarida what advice he would give
Clarida noted this is the chairman's first Jackson Hole speech in that capacity, and that Warsh said at a recent press conference he might talk about some big picture questions
"We have five task forces. We have four big picture questions." — Richard Clarida
His actual advice was to give the audience and the market a sense of what he called the Kevin Warsh framework for thinking about how to get back to price stability
"at least some insight into his framework for getting to price stability, I think, would be valuable" — Richard Clarida
Clarida signed on to the chairman's own formulation and then put a number on the record it has to answer for
"He says inflation is a choice, and I agree with him. Right now it is and has been above 2% for five years." — Richard Clarida
"Inflation Is a Choice," and What Clarida Thinks Warsh Meant
Scarlet Fu asked what the chairman meant by the line, how to interpret it, and how the government had made the choice of having inflation
Clarida traced it to something Milton Friedman said "a half century ago or more" and said Warsh was picking up that idea
"I think Chairman Warsh was channeling that idea that ultimately over some period of time, the rate of inflation in a country is determined by its monetary policy" — Richard Clarida
He accepted the charge and immediately qualified it
"And I think the chairman is right that five years is a long time to be above the target. On the other hand, a lot's happened in the last five or six years." — Richard Clarida
The Dissenters Are Describing Their Reaction Functions and the Chairman Is Not
The anchor cited a note out that day from Bloomberg Economics' Anna Wong on what she and the market would like to hear: fine, no guidance, but give a sense of how the Fed reacts to particular data points
Clarida framed that as the Fed's live problem rather than the market's
"Many of his colleagues on the committee are telling us about their reaction functions." — Richard Clarida
He named Lorie Logan, Beth Hammack and Neel Kashkari as three of the officials who have dissented
Because the committee speaking as a committee is offering little guidance, Clarida argued the chairman's own perspective would be worth hearing
"since we're hearing from Hammack and Logan and Kashkari, it would be useful at least to some extent to get the chairman's perspective" — Richard Clarida
Why Clarida Is Not in the Debasement Trade
Scarlet Fu set up the backdrop: a decline in Treasury prices, elevated yields, Treasury Secretary Scott Bessent intervening, and talk of a revival of the debasement trade out of US dollar assets
Clarida did not expect a sharp revival of it if the speech disappointed
"Scarlet, I really don't. Obviously, things can change. But right now, we're seeing really a global sell-off in yields. So there are global factors at play, not just the Fed." — Richard Clarida
His evidence was the currency itself, which has not behaved like a currency being abandoned
"In fact, if anything, really, since Liberation Day now 15, 16 months ago, the dollar has been flat or even in the last several months after hostilities in the Middle East going up. So I'm certainly not in the debasement trade." — Richard Clarida
Sugar and Wheat Were the Month's Biggest Trends
The anchor introduced Katie Kaminski through her degrees, an undergraduate in electrical engineering at MIT and a PhD in operations research, with the aside "That's bad enough" and the observation that what you do with that is trade stocks, bonds and commodities
Asked what was screening well, Kaminski went straight off the Jackson Hole subject
"Well, I'm actually going to talk about something unrelated, which is, sugar and wheat and agricultural commodities." — Katie Kaminski
"And the biggest trends this month outside of the normal asset classes have actually been sugar and wheat." — Katie Kaminski
She tied it back to the inflation conversation rather than treating it as a curiosity, pointing out these are things people consume, and that CPI is the reason to care
The move is a supply story: disruptions and the fear of more of them around the Black Sea, plus problems in Brazil
She described the trade as "something uncorrelated but still correlated in the sense that we worry about inflation"
How to Trade Grains and Softs, and How Deep Those Markets Are
Asked how a listener would express the view — ETFs, countries, companies — Kaminski pointed first at the futures market
"So usually I would suggest futures contracts. So anything that takes a direct exposure to the price of sugar or wheat." — Katie Kaminski
Those trade on venues like the CME; the alternative is an ETF that actively changes positions or follows trends in futures markets
The anchor took a detour through the Bloomberg terminal's commodity monitor, GLCO, which breaks the space into energy, metals and agriculture, and then into grains, softs and livestock
His own disclosure: "I'm big on the lean hogs, pork belly myself."
Kaminski said the agricultural futures markets are deep enough to trade dynamically across a wide range of contracts, which is what makes the strategy work at size
The same plumbing covers the metals that have been moving
"Silver, palladium, platinum, U.S. wheat, Kansas wheat." — Katie Kaminski, on where you can find prices and futures positions
She called it "an interesting way to have a very different and non-equity-focused investment"
The Dollar Is the Swing Factor Under Every Commodity Price
The show asked what the dollar's movement means for commodities priced in dollars, and whether the debasement trade touches them, given the concern about the national debt and rising bond yields
Kaminski said the effect is large and worked through June as the example
"Oh, it has a huge impact." — Katie Kaminski
"as the dollar strengthens, you see that the price relative of these commodities goes up and makes it more disadvantageous for people to buy them" — Katie Kaminski
A strong dollar in June caused a sell-off across many commodities; a weakening dollar makes them more attractive and can pull in demand
The same logic runs through crude, since oil is priced in dollars as well
"So if you imagine how affordable oil is, it's also linked to our currency because oil is priced in dollars as well as many of these agricultural commodities." — Katie Kaminski
Oil Is a Position-Sizing Problem, Not a View
The anchor volunteered that he never learned to trade it
"What I learned very early in my career is I have no idea how to trade oil. That thing is all over the place. I think it's going to go up. It goes down."
The reply from the other side of the desk was that ETFs exist now, which he was not sold on
Asked whether geopolitics — the Strait of Hormuz specifically — keeps her firm on the sidelines, Kaminski described sizing rather than avoidance
"the way that we think about oil is not sort of you don't go all in in oil and take 100% position" — Katie Kaminski
"So you can imagine that you need a small position in oil to get a reasonable return because oil has moved so much and it has very high volatility." — Katie Kaminski
The position moves with the trend and then gets cut as volatility expands, which is how she manages the risk rather than forecasting the barrel
"So it is a tricky business. It's not something if you just hold it as oil. The price is quite volatile." — Katie Kaminski
Gold Looks Like It Could Break Out Again
The show put the year's round trip to her: "Gold had a moment, a big moment at the start of the year when it started to trade like a meme stock, spiking above 5,500, obviously has come down since then", followed by a rally since mid-July that has at least for now peaked
Kaminski agreed there has been a shift, describing gold as the big topic a year or so ago, then a downward trend, then a change this summer
More positive flow and positive returns over the last few months
"And I would say that it looks like it has a possibility to break out into a new trend." — Katie Kaminski
Her explanation is that the earlier extreme trend had to consolidate and the fundamental themes supporting gold were exhausted, and are now coming back
"So I think it could be a potential buying opportunity for gold still if that continues." — Katie Kaminski
Equities at Highs With Nothing Standing in the Way
The anchor noted the market keeps hitting all-time highs almost daily — "John Tucker keeps reporting" — and that performance outside the US, in Europe and across many Asian markets, has been strong too
Kaminski's answer was constructive and uneasy at the same time
"I mean, and it's always challenging because there's nothing standing in the way right now. And the equity markets have also discounted geopolitical risk." — Katie Kaminski
"But there's nothing in the data that suggests that we shouldn't be doing well in equity markets, given earnings and growth." — Katie Kaminski
The discomfort is a trend-follower's discomfort rather than a valuation call
"it's so difficult to tell when a trend is over and when you've hit the top" — Katie Kaminski
Freya Beamish Wants a Reaction Function, Not Forward Guidance
Asked what her institutional investor clients want from the Fed, Beamish drew the distinction immediately
"We don't need a huge amount of forward guidance or anything. It would just be nice to know what's the reaction function." — Freya Beamish
Given the announcements and rhetoric coming out of the Treasury and Secretary Bessent, she wants a clear signal that the Fed is going to do its job, which she said would help longer-dated Treasuries
Her firm's published call is that the market will charge for the absence of that signal
"One of our big calls has been that if Warsh does not sound sufficiently hawkish, then the long end of the curve is going to ask for compensation." — Freya Beamish
She pointed to moments when the Treasury has appeared unhappy with exactly the market signal Warsh has asked to hear
"that kind of signaling is just sort of not helpful. We see that increase in yields and decline in the dollar that we don't really like." — Freya Beamish
What Happens to 10- and 30-Year Yields If the Job Market Reaccelerates
The show's counter was that hawkishness is not Warsh's problem — he has sounded hawkish since taking the job — and that the missing piece is clarity on what the Fed does if inflation does not come down
Beamish's worry is the combination of Bessent signaling to bond markets and no matching clarity from the Fed, over time rather than in one speech
"It may be that there's a soft patch in the short term, but eventually this is an economy that is going to see a reacceleration in the labor market that will provide clear evidence that rates are in fact not restrictive." — Freya Beamish
"And if we don't hear that kind of a signal, particularly if the labor market starts to reaccelerate, then I think there is going to be a battle at the long end of the curve. And that's just not something that's really good for anyone." — Freya Beamish
The anchor put the market's own answer to her, with the argument that investors have already worked it out for themselves
"we've got the 10-year rate at almost 470, the 30-year at 520. The market's kind of telling the Fed, we got this. Is that enough?"
Beamish said it is enough only if the rest of the administration is prepared to hear the signal, and that the 10-year is still short of where it belongs
"Personally, I think that the 10-year has not yet fully priced this new macroeconomic regime." — Freya Beamish
She is far more interested in whether fiscal policy is procyclical than in liquidity operations in longer maturities, which she thinks can only cause temporary effects
Negative supply shocks such as the Strait of Hormuz and tariffs are the mechanism: "which destroy the hedging or reduce the hedging capacity of bonds for equities, turn that correlation positive and therefore term premium should be higher" — Freya Beamish
"So 4.7 on a trend basis for me is not yet high enough." — Freya Beamish
Nvidia, the Jobs Report, and Why AI Is Inflationary First
The show framed the day as the week's peak — "this feels like the high water event for this week" — with Nvidia's earnings pointing to inflation through the supply chain log jams the company described, and then Warsh's speech
Next week was set up as thin: the final week before a three-day weekend in the US, with big data points and few participants around to react to them
Beamish does not want to trade a single print
"The jobs report is always important, but there's so much noise in these data." — Freya Beamish
She sees upside noise in both inflation and jobs data early in the year, possibly a strange seasonal pattern, then downside noise correcting it, with the trend still upwards
On Nvidia's numbers, her read is that AI is arriving as demand before it arrives as supply
"We are seeing that the effects of AI are much more coming through on the demand side and the inflationary side so far than on the diffusion side, which is not to say that they won't come through on the supply side and the diffusion side." — Freya Beamish
"But right now, it is much more an inflationary effect, both through the direct demand and through the spillovers that that is creating" — Freya Beamish
A rising equity market adds wealth effects on top, which she called a more diffuse form of demand creation, while the supply of workers is the constraint
"So we've got a lot of demand creation happening. And not so much ability of this labor market to respond to that supply. I think what we're going to see is a pickup in unit labor cost growth" — Freya Beamish
She expects the pass-through from that into CPI and core services inflation to widen as well, back toward a pre-globalization, pre-deleveraging relationship
She said she is focused on earnings rather than any one inflation or jobs print, and thinks a lot of FOMC members are on the same trajectory
Almost $2 Trillion of US Deal Value in Six Months
Mitch Berlin, EY Americas vice chair for EY-Parthenon, called the first half interesting and slow to start, then gave the total
"if you look six months in, there's about $2 trillion almost of deal value in the U.S. alone, which is unprecedented" — Mitch Berlin
The headline number splits in two, and the halves are moving in opposite directions
Private equity is off to a slow start, highly dependent on the Fed borrowing rate, which he said can go either direction from here, so there is a lot of wait and see — though activity picked up in the second quarter
"But corporate is doing really well. We're seeing a 22% increase in volume in the first six months, 54% increase in value." — Mitch Berlin
More deals are happening and much bigger deals are happening, which he put down to executives giving up on timing
"The CEOs of these organizations are tired of waiting for the perfect moment. I don't think that's coming anytime soon." — Mitch Berlin
They are trading the inability to forecast against the need to transform, and leaning on acquisitions to do it
Scale, the Conglomerate Discount and the AI Arms Race
The show asked why scale is worth so much in 2026, when uncertainty would normally argue for staying flexible
Berlin gave two drivers: scale and AI
On scale, a lot of pruning of non-core businesses and investment in the core, with activist shareholders pushing companies to shed the conglomerate discount and sit in one identifiable market rather than several
The second driver is a market Berlin says has no precedent
"The other big thing that's happening is AI is creating an M&A environment and ecosystem that we haven't seen before in the past, because it's such an arms race around AI." — Mitch Berlin
"When you think of it, it's not just the technology, it's the hardware, it's the infrastructure around it, it's the energy that powers it. So it cuts across many, many sectors." — Mitch Berlin
Why the Big Private Equity Deals Still Are Not Clearing
The private equity question arrived through a detour: the anchor said that when he hears PE he now thinks of a social media account called PE guy, told listeners to go and Google him, and got a "Oh, PE guy. Love it." back across the desk
His actual question was why money is easy to raise and easy to invest while exits are scarce
Berlin agreed and pointed at price
"There's still about $2 trillion in dry powder that's waiting to be invested. The issue there is the valuation gaps between the buyer and the seller." — Mitch Berlin
"And so you're still seeing a gap around big PE deals between the bid and the ask there." — Mitch Berlin
The middle market never had this problem
"I do see a lot of activity in middle market. Middle market PE never took their foot off the gas, and that's been consistent through COVID up until now." — Mitch Berlin
The stalled deals are the large ones that need leverage: "they can't justify a higher cost of capital unless they get a lower valuation and those dots aren't connecting" — Mitch Berlin
Asked whether exits therefore need a Fed cut, Berlin said no, but the substitutes are slower
"I think you continue to see alternative sources of funding, private capital, secondary offerings, things like that. So deals will still happen." — Mitch Berlin
"It's just not going to happen at the pace and volume that we're used to in a more favorable environment where the cost of capital was a lot more affordable." — Mitch Berlin
Clarida's bottom line is that the chairman owes the market a framework rather than a forecast, because inflation has now been above target for five years and the people filling that silence are the dissenters — and that the sell-off in yields is a global event, not the dollar being abandoned.
Products, Companies & Tools Mentioned
Bloomberg terminal, GLCO (The commodity monitor the anchor walked through on air — energy, metals and agriculture, and then grains, softs and livestock)
CME (Where Kaminski says you take direct exposure to sugar or wheat, through futures contracts)
Nvidia (Its earnings and the supply-chain log jams it described were read on the show as an inflation signal, and Beamish used them to argue AI is hitting demand before supply)
PE guy (A social media account the anchor brought up unprompted and told listeners to search for)
Books & Resources Mentioned
Anna Wong's note for Bloomberg Economics (Published that morning, setting out what she and the market would like to hear from the chairman; the anchor read its argument at Clarida)
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