David Kelly

I thought that was pretty interesting.

And then the big thing here is core goods prices outside of food and energy.

That's the stuff that should be hit by tariffs.

But that's only up two tenths of a percent, up one and a half percent year over year.

It is clear that mainstream retailers don't believe they can pass on the tariff increases right now.

And that's what's making this inflation rate a little bit tamer than people feared.

Well, I never thought we had a long-term inflation problem, but I think it is still early days on the tariff effects.

What's going to happen is, right now, retailers feel like they can't pass on the price increases.

But early next year, you're going to have this refund bonanza.

Income tax refund per household we believe is going to be over $4,000.

Last year it was $3,200.

And that is the exact time when retailers are going to feel like they can pass on these tariff increases.

So I do think we've got a little bit of a spurt in tariff inflation still to come.

But then, you know, if nothing else happens, there isn't a lot of momentum in this economy and it'll slow down again and it'll cool down again.

I don't think we've got a long term inflation problem.

My real question is, given how bubbly financial markets are, do you really need the Federal Reserve adding more liquidity to the party right now?

Or should they just, you know, hang on in there and say this is enough liquidity?

Well, valuations are extremely high.

Obviously, a lot of it's concentrated in the mega cap stocks, but also profits as a share of GDP are extraordinarily high.

Overall, the total value of all US market cap is about 365% of GDP right now.