00:00President Daly, reading the blog post this morning, it seems like you're leaning more toward the 1990s side of things than the 1970s. Is that right?
00:08Well, you know, right now, you know, I'm in the West, and I have the nine states and the western United States.
00:14And it's not just Silicon Valley that seems interested in AI.
00:17No matter who we talk to, whether they're, you know, small businesses, medium or large businesses, manufacturing, tourism, etc.,
00:25they're using AI in a way that they say is going to improve their productivity.
00:30And they're already seeing parts of it.
00:32So when I see that, I'm like, OK, we need to think about that.
00:35What really will spur this as an ongoing thing is if they start to change their business processes.
00:40So that's what I'm looking at.
00:42Now, that means, but I guess a different way to say that is we cannot take our eyes off inflation.
00:47Again, Americans have endured high inflation too long.
00:49That's our mandate.
00:50So while I'm looking for productivity gains and seeing if they're going to continue, I'm also keeping my eye completely focused on inflation
00:58to make sure that it doesn't pick up in a way that would suggest we need to do more or we need to hold longer.
01:04President, Eddie, how would you respond to the criticism that the Federal Reserve as an institution has taken its eye off inflation,
01:09that inflation is closer to three than it is to two, and the Fed's been cutting interest rates?
01:15You know, I don't think that if you unpack the inflation data, you really see signs of that.
01:20It's true that headline inflation is printing at that level, but you have to take apart that inflation
01:25and ask how much of it is the effective tariffs passing through to goods prices that we expect to be a one-time price level adjustment
01:33and not a consistent run-up in inflation.
01:35And if you unpack the data, what you see is you don't see inflation running up in services or housing,
01:41and importantly, you don't see it spreading into inflation expectations
01:45that would be the thing that would continue to run up inflation going forward.
01:48We also see a labor market that's softening and wage growth that is moderating,
01:52so you're really not going to see a lot of pressure coming on the cost side of labor.
01:56So I put those things together, and we don't want to make the mistake of holding on too long for rates
Be the first to comment