Dr. Adam Posen

I think we're talking about, and Peter points to from his perch at Lazard, various corporate CEOs like at Amazon and or the beige books from the Fed that say companies are only just now passing through some of these adjustments.

I think there's also just the bottom line that the labor market is more solid.

And so if we get any inflation, it's in a more tight economy.

And then finally, whether or not we get into the new leadership at the Fed,

after all the attacks on the fed over the last year since president trump came back into office you have to be a little more worried that the fed will not react quickly if there is inflation and that to some degree becomes self-fulfilling so i think there's a lot of things going on now it could be a recession it could be that the migrants really haven't left yet

They could be that the government breaks down and doesn't pass these stimulus, in which case inflation won't be that high.

But I think each of these is pretty darn likely.

And cumulatively, they get you up to high inflation by end of the year.

I think it's a result of the desires expressed so strongly by President Trump and by Secretary Besant and by not just Kevin Walsh, the nominee, but all the shortlisted people who would be Fed chair in favor of loosening policy quite a bit and doing so in the face of data, which the vast majority of the Federal Open Market Committee has publicly said leads them to want to pause.

I think should give people pause.

So I think there is a real issue there.

I think there's also genuine debate to be had.

Nominee Warsh, Governor Waller, and others have said that some of these tariff and other effects are one-time shocks.

They're not going to be passed on.

We'll see.

That would be very unusual, but maybe.

They've also said or started to say that productivity growth will bail us out.

We'll be able to have more growth with less inflation.

That's more plausible to me.

But even there, that's by no means for sure.