Your Bills Are About to Go Up - The Fed Can't Stop It - Prof G Markets Recap

Podcast: Prof G Markets

Published: 2026-03-19

Duration: 33 min

Guests: Michael Gapin, Robert Armstrong

What Happened

Meta's significant investment of $80 billion into its Metaverse platform Horizon Worlds was highlighted as the company decided to shut it down. The decision was made in consideration of the firm's interests, despite only having a few users.

The Federal Reserve chose to hold interest rates steady, a decision that was widely anticipated with a 99% probability according to Kalchi. This decision was made amidst rising Treasury yields and a significant increase in Brent crude prices due to geopolitical tensions involving Iran.

The economic outlook remains uncertain as inflation data shows increases. The producer price index rose 3.4% year over year, marking its largest annual gain in a year, with core PPI at 3.9%. Core inflation also rose 0.4% in January and 3.1% year over year.

Michael Gapin from Morgan Stanley and Robert Armstrong from the Financial Times provided insights into these economic conditions. Gapin noted that while the Fed's decision was expected, the uncertainty of the war with Iran complicates economic forecasts. Armstrong highlighted the Fed's cautious approach due to the unpredictable geopolitical situation.

The potential for rising inflation was emphasized due to the recent conflict with Iran, which has already led to a 40% increase in oil prices and a 30% rise in gas prices. The cost of fertilizer in agriculture has also increased by 25%.

Looking ahead, the Fed's future actions remain uncertain, with discussions about potential rate cuts in 2026. However, the situation heavily depends on the duration and impact of the conflict with Iran.

Both Gapin and Armstrong discussed the concept of stagflation, where high inflation combines with stagnant economic growth, making policy responses challenging. While current conditions do not fully meet this definition, concerns about prolonged inflationary pressures persist.

The episode concluded with a discussion on the overall economic outlook, where both guests rated the current economy as relatively stable but with significant risks ahead. They noted that the economy is performing well in terms of GDP and unemployment, but sectors reliant on labor market income and goods consumption are under pressure due to rising costs.

Key Insights

• Meta invested $80 billion into its Metaverse platform Horizon Worlds, but decided to shut it down due to limited user engagement.
• The Federal Reserve held interest rates steady amidst rising Treasury yields and oil prices, with the decision being largely expected by market analysts.
• Recent inflation data shows concerning trends, with the producer price index rising 3.4% year over year and core inflation increasing by 0.4% in January alone.
• The conflict with Iran has significantly impacted oil and gas prices, leading to broader inflationary pressures across various sectors, including agriculture.