00:00I'd love your opinion as well on what you think we are. We've heard from so many Fed officials in
00:04the last several weeks or so.
00:05They appear to be debating again once more whether we are sufficiently restrictive or not.
00:10This economy is very, very different to the one we saw a number of years ago.
00:14Claudia, do you believe we are sufficiently restrictive? And how can you tell?
00:19I think we're shifting to a place where it would be most appropriate for them to start raising rates.
00:24I have been in the hold camp up until about this week, and it's not just on the data.
00:28I think the inflation data are mildly encouraging. We're seeing some improvement.
00:32The headlines are not good. Trade war with Canada, Middle East progress completely stalled out,
00:38and a lot of demand for the AI build-out that's pushing up chip prices.
00:42If I look at the outlook a year out, I am not confident we are moving to 2% on
00:47a steady clip.
00:48I think it's probably time for the Fed to do more. I think that's where that conversation is at.
00:54There's a lot of data still to come before September and more headlines, but there is something shifting in the
00:59inflation picture in the U.S. right now.
01:02Claudia, you alluded to it. What shifted more recently? What got your attention?
01:05You listed a few things, but what got your attention and made you think, this has changed, it's moved?
01:10I think it also was that we had multiple headlines.
01:13Part of the Fed's staying on hold is saying, well, inflation is elevated.
01:18I mean, they can read the numbers just like we can, but the forces will abate.
01:22The tariff effect is waning. The gas price effect is waning.
01:26You know, the AI, this is narrow. It's not.
01:29And we're just getting, like, really hit with a lot of information that's forward-looking that makes you think,
01:35like, am I really confident that those inflationary effects are waning?
01:39Like, they might not get a lot worse, but if we get stuck, like, we're a lot closer to 4
01:44% on PC inflation than we are 2%, right?
01:47So you need some good news in the headlines in terms of inflation.
01:49And at least in the last week or two, we have not been getting the good news headlines.
01:53If we get stuck, like, we're not going to get stuck, like, we're going to get stuck, like, we're going
01:53to get stuck.
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