Esther George

Well, good morning, Jonathan.

Yeah, I think the uncertainty that we've talked about for some time is one of the characteristics here that we have to remember.

We have been relying heavily on a consumer that has faced significant price shock coming out of the pandemic.

This is a consumer that has felt the impact of the tariffs.

And they also have felt the uncertainty associated with a job market that has shifted significantly.

And so when we rely on the consumer, as we do here in the U.S., that becomes a real focal point, I think, for trying to understand.

Now we have added a new shock, this gasoline price at the pump.

We understand that diesel prices will be affected, which of course will feed into the cost of transportation and other things.

And I think it creates a real point, not just of uncertainty, but I think heightened risk around consumer spending and growth as we look ahead.

Yeah, I think you hear a lot about the K-shaped economy, and I think that will come into the fore now.

We have really been relying on a group of consumers that can power through this.

But you can only stress weaker household balance sheets that have, again,

Had the benefit of having jobs, that has been really, I think, one of the tailwinds here.

But there is a breaking point, I think.

And so I think the Fed will have to be particularly focused on thinking about how that consumer is going to be positioned today to be able to look through this kind of additional price pressure.

Well, the Fed has been focusing on the labor market and on weakness at, I think, the risk of inflation even before this oil price shock.

Now, I think the Fed, and you hear them increasingly talking about the risk of inflation, they have allowed it to extend out for a period of time that now puts them in a very, very difficult position, I think, in understanding how they're going to weigh their policy risk.

Whether they continue to think they are as well balanced coming into this March meeting, I think is going to be something to listen for here because you are going to have headline inflation for sure.

We'll be getting more numbers in this week to see that.

And I think the calculus around keeping those inflation expectations in the long run is