Ed Elson

They're good.

The consumer is spending, which is obviously going to make the inflation even stickier.

I think the big question then becomes, what does this mean for the Fed?

And, I mean, coming into 2026, what was so striking was that...

Investors seem to recognize, yes, there are some headwinds here.

Yes, we're worried about the AI story.

It might be a bubble, and that's causing some concern, et cetera.

But generally, the story which I even bought myself and said on this podcast was, yes, but we are entering a rate-cutting environment.

And so the idea of betting against the stock market in a rate-cutting cycle is pretty bold and maybe one that you should sort of second-guess.

And now inflation's rising again.

We've had tariffs plus this.

And it appears as though the Fed might be interested in even hiking rates.

That is increasingly becoming a probability.

What do you think this means for the Fed and the Fed's decision?

And how might that affect asset prices moving forward?

The more you game theory this out, and we talk about how this will affect inflation and what the decisions that this leaves for the Fed...

It basically leads to recession.

I mean, unless we can keep inflation under control and get prices, get those numbers downward, it does seem that that is kind of the trajectory we're headed.

You said that a recession would be more than likely by the second half of 2026, unless the hostilities ended.

Yeah.