Arc Radio 7.10.26

So I will start, Fabio.

I'm going to say that rereading the Fed Minutes a couple times, which we had this week, I think lacks transparency, and I'm gonna explain what I mean by that.

And I say this knowing full well that we have a communications task force, and maybe they can work on the minutes as well.

So I don't understand how participants on the committee can look at financial conditions and at the stance of the policy rate and kind of conclude that it's about right and they might have to lower it once or raise it once.

Because the facts are the economy's operating at what looks like slightly above a potential.

Inflation's too high.

Demand is really doing quite well.

So in this environment, it seems to me that the full committee should have something more of a tightening bias and questioning whether this rate is actually tight enough.

And I'll just mention

one more thing.

There seemed to be a 50-50 split when they discussed these scenarios.

So some said, well, we may have to tighten.

And some said, well, you know, we may have to cut.

And then they said, well, it would depend on what incoming information says.

I still don't understand.

We're above target on inflation.

And I'll end with this.

This week I was speaking with a home construction person.

He used this phrase, we are in an inflationary environment.

Any price I give you today when we start in a year is going to be higher.

So this is not a world of rational inattention to inflation.

This is a world where people know they're going to raise prices and intend to.

And with that, I'll turn it over to you.

So I will start, Fabio.

I'm going to say that rereading the Fed Minutes a couple times, which we had this week, I think lacks transparency, and I'm gonna explain what I mean by that.

And I say this knowing full well that we have a communications task force, and maybe they can work on the minutes as well.

So I don't understand how participants on the committee can look at financial conditions and at the stance of the policy rate and kind of conclude that it's about right and they might have to lower it once or raise it once.

Because the facts are the economy's operating at what looks like slightly above a potential.

Inflation's too high.

Demand is really doing quite well.

So in this environment, it seems to me that the full committee should have something more of a tightening bias and questioning whether this rate is actually tight enough.

And I'll just mention

one more thing.

There seemed to be a 50-50 split when they discussed these scenarios.

So some said, well, we may have to tighten.

And some said, well, you know, we may have to cut.

And then they said, well, it would depend on what incoming information says.

I still don't understand.

We're above target on inflation.

And I'll end with this.

This week I was speaking with a home construction person.

He used this phrase, we are in an inflationary environment.

Any price I give you today when we start in a year is going to be higher.

So this is not a world of rational inattention to inflation.

This is a world where people know they're going to raise prices and intend to.

And with that, I'll turn it over to you.