Episode
The Fed's Quiet Watch on the UK Economy's Shrinkage
- Published
- Jun 13, 2026
- Duration seconds
- 458
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Summary
In episode 49 of The Federal Reserve Podcast, Lucas and Luna drill into a single, surprising data point: the UK economy shrank 0.1 percent in April, even as global energy prices surged and the ECB hiked rates for the first time since 2023. They explore why the Fed is quietly watching this—not out of sympathy for Britain, but because UK inflation expectations often lead US ones by about six months. With the US 10-year breakeven inflation rate creeping up to 2.31 percent and the Fed funds rate stuck at 3.62 percent, the hosts ask whether the UK's contraction could be a harbinger of a similar trade-off for the US: higher energy costs leading to slower growth, not just sticky inflation. They reference the latest PPI and CPI prints, the small-cap rally, and the flattening yield curve to question whether the Fed is underreacting to global supply shocks. A fresh, cross-border perspective on what the Fed is actually reading in its morning briefing. #FederalReserve #FOMC #UKEconomy #Inflation #InterestRates #MonetaryPolicy #CoreCPI #BreakevenInflation #GlobalTrade #EnergyShock #ECB #Economics #FexingoBusiness #BusinessPodcast #CentralBanking #YieldCurve #SmallCaps #SupplyShock Keep every episode free: buymeacoffee.com/fexingo