00:00How uncomfortable are things for this Federal Reserve next week?
00:04Somewhat uncomfortable, but I think essentially we're going to get a 12-0 vote to do nothing.
00:08The safest thing the Federal Reserve can do politically and also economically, I think, is just to do nothing here.
00:14Inflation is higher than they want, but I think there's a good chance that this month, May, will actually turn
00:21out to be the high watermark for inflation in this cycle.
00:24We have seen gasoline prices come down pretty significantly in June.
00:26I think June will see a lower year-over-year rate, and if we come to some settlement which allows
00:31oil to come out of the Strait of Hormuz, then inflation will gradually drift down.
00:35So it's not nice seeing a forehandle.
00:37There certainly is no excuse for easing at this point, but I think the Fed can sit pat.
00:41How much of it is out of their control at the moment?
00:44Oh, it's completely out of their control.
00:45First of all, they don't really control inflation that much with interest rates anyway.
00:49I mean, let's be honest about this.
00:50We've seen nothing in the last, honestly, few decades which suggests the Federal Reserve can actually speed up economic growth
00:56by cutting rates or slow economic growth by raising them.
00:59There's very little evidence that even works.
01:01And in this case, it's about energy.
01:04Does the new chairman agree with you?
01:07We'll see.
01:08I think he's a very intelligent guy.
01:10And I think there was a certain amount of complexity in some of his answers to questions on inflation.
01:16I don't think that he has any intention of leading a charge to cut interest rates when you've got the
01:23inflation rate basically at the unemployment rate target.
01:25I mean, their target is supposed to be 4.2% on the unemployment rate, but 4.2% on
01:29inflation.
01:31That's double, you know, almost even in PCE terms.
01:34It's essentially double where they want to be.
01:35So, let's get started.
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