But I mean, you tell me, how should one look at this? I think

my general approach, at least I'm trying to follow this general approach, is sort of take a step back and make sure you've processed what's actually going on, not minute to minute or day to day, but how has the world changed on this perspective? And obviously that perspective itself will evolve over time as to how quickly this war ends.

It probably has already ended, in my opinion, in the sense of firing missiles from...

Iran into Bahrain and US bombers dropping on Tehran.

But who knows? But I mean, I think what we need to realize is this is another one of these, you know, oil price shocks.

I mean, I think the state the obvious.

This is kind of interesting when you think about, OK, what's the net impact of the shock? Well, really, oil prices were going down and headed lower into this episode.

And in terms of financial markets, what are your views on long-term interest rates, like 10-year interest rates, 30-year interest rates, the US dollar, these kind of the bigger markets?

Mm

...

in relative terms, uh, the US is doing well.

But in, uh, in, in, in terms of its own history, it's, it's, you know, really not much has changed.

I mean, what's happened in the US, which I think is very important, um, and interesting, is that we are s- we are in the midst of a very concentrated but very strong, uh, investment boom, uh, obviously in, in, in AI related outlays and tech.

Um, you know, and, and it's almost like the sky's the limit on, on those expenditures.

Um, elsewhere in the economy, however, things really aren't going very well, and that includes quite a lot of other corporate investment.

AI, yeah

But what do you make of those two? Is it going to have an impact if they go through?

Well, I mean, they both need to be seen against the context of his policy.

His agenda for the next few months is doing things that will reverse the polls and help him win the midterms in 26.

It's all about the midterms.

I don't think he'll be able to do that, but I think what it means is that we'll see a lot of populist measures put in place.

Domestically, a lot of populism...

Externally, a lot of jingoism, you know, it's a return to the early 1900s and the Teddy Roosevelt, you know, get on a horse and beat up on the Philippines type of thing.

Is that like an input that you think is relevant when you're formulating your view? Or when would it be relevant when you're formulating view on the U.S., say?

They ramped their saving rate up

through the last few years, especially through COVID, and they're yet to really sort of push it down.

Now, I think some of that has to do with I wouldn't call it Ricardian equivalence, but it has to do with the sort of recognition that the government is now playing a much bigger role in the economy and the budget deficit, however you measure it, has gone up very sharply.

And so, you know, this is not a sort of healthy mix as far as I'm concerned.

And then you mentioned earlier, and I think this is a really important point from a global perspective, is China also now seems to be beginning to dominate world trade and well beyond Europe and the United States.

And I think of that as the payoff to their Belt and Road Initiative.

I remember, you know, a decade ago, many of my colleagues that are laughing at this Chinese idea, you know, that why would they do all this investment in these terrible places? Well, I think now we're seeing why they would do all that investment.

How do you think they're faring in this kind of Trumpian world and its very dominant China manufacturing world?

And so where does that leave inflation?

Well, it leaves it with a hump ahead.

So at least in my scenario, I mean, again, one of the things that's happened, if I go back, look at my inflation forecast, I've actually changed it a lot less than my growth forecast through the past year.

But the decline that I'd been penciling in for the last part of last year just didn't happen.

And in fact, if anything, we've hooked back up.

you know from sort of two and a half to two and three quarters percent let's say something like that you know including today's numbers so as we look into next year sorry this year now you know i think there's this optimism that we'll get these very powerful base effects because you know the big increases a year ago and we're sure not to get them this time well i'd be a little careful about that one because i don't think the cpi and pce seasonals fully account for the fact that As producers are now more in a price-raising mode than a price-stability mode, you see more increases at the start of the year.

People raise their list prices on January the 1st.

Have you been reading any good books or watching any