Which Fed clique will clean up America’s inflation mess?

Plus: India's monsoon season, Barbenheimer’s box office and more. [Bloomberg]( This is Bloomberg Opinion Today, a polyester flood of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - Fed cliques are [warring](. - India’s monsoons are [roaring](. - Barbenheimer’s box office is [scoring](. - Midtown occupancy is [soaring](. Monsters in the Closet When I was a kid, my favorite months of the year were November and December, not because of snow days or cookie baking but because it meant that I didn’t need to clean my closet. “Have you tidied your room today?” my mom would ask. “Yes, but I have your presents in the closet, so you can’t look,” I’d tell her. Sometimes it was true, but more often I hadn’t even gone Christmas shopping yet. I just didn’t want her to see the volcanic eruption of clothing that seeped out of my closet and onto my floor, an unending flood of polyester lava. To this day, when I’m in a rush, I shove dresses into drawers and throw cleaning supplies on top of my shoes because there’s no more room on the proper shelf. Still, every few months [I try]( to tame the beast by putting everything back in its rightful place … only to make [a mess]( of it 10 seconds later. The fight to keep chaos at bay is a familiar one for the Federal Reserve’s Open Market Committee. Instead of clothes, their closet is full of inflation, and they have committed to tidying it until PCE reaches 2%. Fed Chief Jerome Powell regularly meets up with all the other members on the FOMC, often behind the [closed doors]( of the inflation closet itself. Sometimes they vote for sweeping interest-rate increases. Other times they leave their policy  to collect dust. In most cases, the governors agree on the best method to keep inflation in check. On Wednesday, for instance, they’re almost certainly going to [hike by 25 basis points]( — their 11th increase since early last year — and bring the benchmark rate to a range of 5.25% to 5.5%, John Authers writes. But after that, [all bets are off](. Nobody really knows if we’re about to enter a post-rate-hike world — or if the Fed will ever reach its target. You see, the central bank is clustered into [three main cliques](, each of which takes a unique approach to closet organization: - The hawks: They keep a watchful eye on inflation and are willing to take [drastic organizational measures](à la Marie Kondo. - The doves: They look at the closet and say, relax guys, it’s pretty much already clean! - The centrists: They just want to find some common ground (preferably the ground of a clean closet). Right now, the closet appears to be clean-ish: US inflation recently hit [a two-year low]( of 3% and [consumer confidence]( is picking up steam. The trouble is, not everyone wants to keep cleaning. The hawks say that 2% is what will make both consumers and the economy happy. But the doves argue that 3% is just fine — the Fed has tidied up enough. The editorial board [disagrees](: “Much as one hopes a recession can be avoided, settling for 3% inflation would impose serious longer-term costs on the economy, above all by undermining the Fed’s credibility.” Even if America’s inflation closet seems clean now, that can all change [in an instant](, as many an indecisive outfit-chooser can attest. Bonus Economy Reading: Morgan Stanley's [Michael Wilson]( is just the latest in a long line of strategists to prove they're merely human. — Jonathan Levin No Tomatoes Food inflation might be [cooling]( in the US, but in India it’s still [red hot](. Heavy rainfall has destroyed all kinds of crops, from rice — with prices up 3% in the past month and 11.5% over the past year — to tomatoes. The cost of that [staple nightshade]( has “risen fivefold or more in recent months, prompting heists from stores, markets and trucks, and causing farmers to [camp out in their fields]( to protect their produce from theft,” David Fickling writes. The weird thing is that India is having a pretty normal monsoon season. But “the clockwork operation of the monsoon has been disrupted, with dry early weeks giving way to [unusually wet conditions]( more recently,” David explains. That means monsoons are only going to grow more intense as the climate heats up. When warmer air can carry more moisture, it can dump it in less-predictable ways, leading to more volatile crop cycles that become burdened by drought and flooding. Adding to the world’s food insecurity is Russian President Vladimir Putin, who, in a fit of rage, decided to ditch a [grain deal]( that allowed Ukraine and Russia to export agricultural products from Black Sea ports. He also tossed in the scary possibility that Russia may begin attacking grain ships brave enough to ply the waters. “This will make it very difficult, if not impossible, for shippers of grain and other agricultural products to obtain insurance — [effectively creating a blockade](,” James Stavridis writes. By weaponizing hunger, the Russian president is sending a message to North Africa and other parts of the global south: He is not willing to let Ukraine — one of the world’s biggest grain exporters — feed the world. Box Office Buzz Scalping tickets like it’s opening day at Yankee Stadium. You would think that, after seeing [this dude]( try to scalp eight IMAX Oppenheimer tickets on Craigslist for $1,400, AMC would immediately try to install a Ticketmaster-esque dynamic pricing scheme on its website, but no. Perhaps the one thing that [Barbie and Taylor Swift]( do not share in common is their ticket prices. Given cult-like demand for [Barbenheimer](, surely movie theaters could be charging more. But Tyler Cowen says “there are [good explanations]( for why ticket prices don’t go up.” Economically speaking, a younger moviegoer — who watches tons of TikToks and tells their friends all about it — is more valuable than an older moviegoer, he argues. So “if theaters raised their prices, the audience would skew older and wealthier. It would be harder for the movie to generate much buzz, and what buzz it did generate would have less impact,” he writes. As Barbie showed, buzz is a powerful thing. During Covid, it really felt like movie theaters were headed for the grave, but now [screenings to Greta Gerwig’s film are selling out](. Keeping prices low is a good way to ensure the box office stays in business for the long haul … or at least until [Barbie 2]( comes out. Telltale Charts New York magazine ran [a cover story]( a last week that depicted the “New Glut City,” where “[mega-office landlords]( are panicking, pivoting and shedding what’s worthless.” But Justin Fox says [the actual data on Midtown]( “does not exactly match the apocalyptic tones in which Manhattan commercial real estate is usually discussed these days.” Sure, the city faces many challenges, but they’re far from unique. New York’s corporate underbelly is still humming through the troubling times, while other cities can’t claim the same. Adidas managed to sell a surprising amount of Yeezys since May. The company offloaded €400 million to €500 million worth of merchandise, which is impressive considering the painful split with  f.k.a. Kanye West. But “once the surfeit of stock has been dealt with, [Adidas must learn]( to live without the lucrative Yeezy sales,” Andrea Felsted writes. Nike, meanwhile, is worried that Jordans — which used to be a Gen Z favorite — are falling out of style. Adidas hopes it can leverage the historic vibe of the Samba to stay ahead of the pack. Further Reading A [crime surge]( in Latin America shouldn’t force democracy to the sidelines. — Eduardo Porter Netanyahu isn’t just stifling judges’ independence. He’s stifling [regional security](, too. — Bobby Ghosh Tokyo residents are wrong to rage over a [redevelopment plan]( that will improve the city. — Gearoid Reidy What happens to the [UK film industry]( when Hollywood shuts down? — Howard Chua-Eoan The [culture war cauldron]( is a dangerous pot for CEOs to stir. — Adrian Wooldridge Beijing’s repeated [ghosting]( of the US is beyond dangerous. — Andreas Kluth [Anti-ESG politics]( can cost states and cities billions. — Brian Frosh and Nancy Kopp ICYMI AOC is a [regular]( Dem now. Florida’s [coral reefs]( are dying. The [trademark]( for “X” is complicated. New York’s [rat crackdown]( is working. Trump may soon be [indicted]( … again. Kickers Olive oil [fights]( dementia. What’s in the mysterious subway [ceiling juice](? Biden’s dogs like to [bite](. (h/t Andrea Felsted) Europeans “don’t [believe]( in water.” Area man goes to jail for throwing [cooked rice.]( A [funnel cloud]( floats over Washington. Notes: Please send green-and-white Sambas and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Threads](, [TikTok](, [Twitter](, [Instagram]( and [Facebook](. Follow Us You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](