00:25:00 · Stephanie Roth, Tom Keene, S6, Paul Sweeney
[00:25:00] S10: Tariff policy is largely unchanged. [00:25:02] S3: Really? [00:25:03] S10: The revenues are kind of too high to really make any adjustments from that perspective. So tariffs are going to remain. [00:25:08] S3: Come on. Come on. Stop. [00:25:09] S6: We're addicted to tariffs at a fiscal basis. [00:25:13] S10: Kind of at this point. And I don't even think even if we have a Democrat in, you know, when in 2028, I'm not even sure they're going to bring down tariffs all that much, maybe on a targeted basis. But My expectation is the tariffs. Will remain elevated for quite some time because from a deficit perspective, it's not really attractive to trim them so much. [00:25:34] S6: I believe my recollection is the president of the United States touched on this with our John Micklethwaite in conversation. OK. [00:25:41] S3: Once the tariffs are in. They're like an addiction to politicians. [00:25:46] S1: Yeah, I guess so. [00:25:46] S3: You and I are paying them. [00:25:48] S6: Yeah. [00:25:48] S3: Look at the tariff on your Vespa. [00:25:50] S1: I know. [00:25:50] S3: That was unthinkable. [00:25:51] S1: That was unthinkable. So, Stephanie, given this backdrop here of a pretty firm labor market, a market where in 2070 you should see inflation come down somewhat, what does that mean for our Federal Reserve then?
00:25:51 · Paul Sweeney, Stephanie Roth
[00:25:51] S1: That was unthinkable. So, Stephanie, given this backdrop here of a pretty firm labor market, a market where in 2070 you should see inflation come down somewhat, what does that mean for our Federal Reserve then? [00:26:04] S10: So base cases, they still go in December. They get that markets have been pricing the odds down the last couple of days, just given the concerns around AI. Provided that the financial markets kind of hold up well enough between now and the December meeting, they're very likely to go in December. They certainly communicated that they want to hike again. The data have been firm. It's not accelerating a bit. And then we think they'll probably go once more at the beginning of next year in Q3, probably at the March meeting. And then at that point, you'll see the inflationary pressure subside a bit. You might see activity cool down modestly. And then the Fed can just kind of wait and see. And then they'll be kind of on hold for quite some time. [00:26:42] S1: So, again, that's a pretty interesting backdrop because that sounds like things are generally in pretty good shape. How do we think about it from the consumer level? Because, again, we have the K-shaped economy, but we don't see it in consumer spending. Consumer spending continues to hold up pretty well.
00:26:42 · Paul Sweeney, Stephanie Roth
[00:26:42] S1: So, again, that's a pretty interesting backdrop because that sounds like things are generally in pretty good shape. How do we think about it from the consumer level? Because, again, we have the K-shaped economy, but we don't see it in consumer spending. Consumer spending continues to hold up pretty well. [00:26:59] S10: Haste for a lot of this year. The consumer has held up really well, even though the bottom end of the consumer has certainly been a lot more challenged than everybody else. But because the strength has been persistent across the spenders that spend more, it's been masking any softness. That's been happening at the bottom. That will probably just continue. We're likely to see, especially given the data that we got today, is just further confirmation that the labor market is good. you're likely to see spending continue to remain fairly robust. It's largely a function of nominal income growth, which is tied to the labor market. How much are people working? How much are they getting paid? All of those trends are moving in a positive direction. Energy prices, you know, the margin might come down a bit, which could then fuel a bit of a pickup in consumer spending for next year.