00:00So I see inflation in the United States as having run high for a long period of time. However, I see lower inflation in the future to basically, in large part, to the housing market.
00:11When I look at rents in the United States, they look to be relatively stable. They've been running at about a 1%, slightly lower than 1% rate for a couple of years now. And that, to me, is a very, very stable housing market.
00:24Now, shelter services are the biggest component of the inflation indices. And so over time, as measured shelter inflation converges down to this very low level of market rent inflation, you're going to see that work itself through the entire inflation index, and the numbers will start coming down.
00:41So I see an inflation outlook that has been too high in the past, but looks better going forward as a result of that. And that disinflation should be profound and powerful enough to offset sort of what seems to be some higher levels in other parts of the inflation index.
00:56And on the growth side, I see a labor market, and I think you saw this in this morning's data as well, I see a labor market that had been cooling a bit over the course of last year and into this year as well.
01:13However, I think there are some elements that speak to confidence in growth in the future as well.
01:18There's the effects of economic policies that are starting to work their way through the system, things like changes to the tax code, things like changes to the regulatory code, things like the removal of trade uncertainty, things like the removal of tax uncertainty.
01:32I've used some of those uncertainties as having drags on growth earlier in the year, and the removal of those uncertainties as being a stimulative factor going forward.
01:40So I think there's some reasons for optimism on economic growth as well. However, I think it requires us to get monetary policy right.
01:46I think monetary policy is also very restrictive. As a result, I think it is incumbent upon us to move monetary policy closer to neutral levels where it's no longer exerting such restriction on the economy.
01:59Because if we don't, then that restriction on the economy itself will contribute to further cooling in the labor market that I think from these levels would be most unwelcome given the inflation outlook at hand.
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