00:00When you tally up the votes, where do you end up thinking everything is going to shake out when it comes to December?
00:08So I expect that we'll see a divided Fed come December.
00:13I my you know, I don't think things are a done deal at this point.
00:17I suspect there probably will be a cut in December.
00:20That may be the last cut that we see from the Powell Fed.
00:23Right. So just because you get in December doesn't mean we're like opening the, you know, the gates for a whole set of cuts.
00:29But but I think we're going to we are in all likelihood going to see more dissents, four dissents, maybe five dissents, which has not happened in quite some time with the Fed.
00:39I don't think that's a sign of a problem. I think it's a sign of like there legitimately are reasons for the Fed to be conflicted.
00:46Inflation is still well above 2 percent, has been for years.
00:51There are still price pressures. The Beige Book talks about those costs that are still out there with businesses that could end up coming to consumers.
00:57And we have a labor market that while it's slow, there are some signs of faltering.
01:03It's not going over a cliff at the moment. Yeah. Right.
01:05So, like, I think there's a reason for them to disagree.
01:07It's a sign of like they're really serious about their job and they're thinking hard about a tough problem.
01:12I want to go to trade and tariffs in a moment, but I just want to follow up with you, Claudia.
01:15You said this could be the last cut of Fed Chair Jay Powell's tenure.
01:19That tenure expires May 2026.
01:22I'm looking at 2026 Fed meetings and we have got three meetings, January, March, April.
01:28Are you saying that we wouldn't get any more cuts because of the debate or because the economy won't need it?
01:36So inflation is is elevated.
01:39Yeah. Right. And I think it's probably going to be until the middle of the year before we really see inflation kind of turn down.
01:45The tariffs work their way through before we can, you know, really point to data and be like, look, it's going back to two percent.
01:51Right. So it's going to take some time for that to work through.
01:53And the Fed, when inflation is elevated, they're going to want to be putting some restriction on the economy.
02:00Right. So every cut they do takes a little bit more restriction out.
02:05And we can argue till the cows come home about what the quote unquote neutral rate is.
02:09But, you know, if you're cutting, you're getting closer to it.
02:11So every cut is going to be harder to negotiate with inflation still elevated.
02:17And so I think that's where you could, you know, get to a place where it just if inflation is still high, unless you see clear deterioration in the labor market, which I very much hope we do not see, because that would be very bad.
02:28But like that could be a game changer in it.
02:30But if we continue this kind of muddle through, they really could do a pause for some time.
02:36And, you know, I think and that could be because, again, inflation is it has been sticky above two percent.
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