Introduces Johnny Fine from Goldman Sachs and asks for his thinking on what the Fed will do versus should do.
speaker1
Johnny Fine
Thinks the Fed will cut and should cut, but will be hawkish in rhetoric afterward. Believes the Fed should be patient for official data, as the labor market is weaker than it looks on the surface.
Asks if he sees unemployment rising dramatically.
speaker1
Johnny Fine
Not dramatically, but steadily and impactful enough to become the Fed's A1 focus. Inflation will migrate to target by mid-late next year, but labor market weakness will sharpen into view.
Agrees but points to strong recent job data (openings, claims, growth) creating mixed messages.
speaker3
Johnny Fine
Acknowledges noise in alternative and official data; expects productivity gains from AI/tech adoption to be felt next year.
Questions if this means stubbornly high inflation.
speaker4
Johnny Fine
Doesn't think inflation will be stubbornly high; AI productivity gains will lower cost of goods sold, a net win for consumer and margins.
Summarizes scenario as high GDP with high unemployment requiring lower rates.
speaker1
Johnny Fine
Confirms high GDP and high unemployment will require sharply lower interest rates, driven by AI/tech adoption in corporate sector.