Bob Michael

I look at everything that just happened in the last few minutes, and everyone got what they wanted.

Those hawks on the Fed that didn't want to see a rate cut

They got that.

When you look at the Fed futures market, we had two rate cuts priced for next year, mid-year and the end of the year.

Now there's only one price for next year, and it's in the fourth quarter.

So you got what you wanted.

You got the market moving away from being in a rate-cutting regime going forward.

But if you look at the doves on the Fed, if you think about the administration, they got what they wanted.

They got another 25 basis point taken off of base rates, and the market's responding positively to that.

It's rare that everyone gets what they wanted out of an FOMC meeting.

Well, I think that's what the market's hoping for.

I think there are a lot of businesses that we invest in where we do see the productivity gains from AI already.

We also know within our own bank, there are significant productivity gains.

So some of that is already out there.

The unfortunate price reset from pre-COVID levels to today is also a problem.

I get that.

But that's damp in aggregate final demand.

What do we want going forward?

Do we want the disinflation we seem to be in and what the Fed is projecting?

Or do we want deflation where prices come down?