Julia Coronado

The consumer auto sales have dropped.

I'm not sure what Dana told you on the holiday season, but people seem to be price sensitive, price conscious, budget conscious, not hunkered down in a corner, but not booming.

And so I think we're going to see

Strong Q3, subdued Q4.

On average, we'll see an economy that has downshifted from last year on balance in 2025.

And one of the reasons this is happening is structural.

We've chosen a restrictive immigration policy that means basically no labor supply.

So no labor supply, no jobs, less growth in paychecks.

and income and a slower economy.

And I think that that will prevail into 2026, a lower trend growth rate for the US, even assuming some solid productivity tailwinds, you're still looking at growth with a one handle, maybe a low two handle, not a three handle.

Well, it depends on who you ask, doesn't it?

So there are a lot of people.

There's 19 people on the committee, and they all have very different views of the world.

It looks like the leadership, Chair Powell, President Williams,

are coalescing around one more rate cut this year, an insurance rate cut, because you're highlighting the tension they face.

You've got inflation that's not soaring or even necessarily accelerating in a meaningful way like we saw in the pandemic, but it's too high.

It's running it closer to 3% than 2%, and it's not making any progress, and we don't expect any progress in the foreseeable future, or at least not next year.

not much progress given the tariffs are still coming through uh and that's a worry not not that inflation is getting out of control but it does it's going to get embedded in the economy and people's behavior and people's psychology and we'll get stuck at three and not get to two uh on the other hand the unemployment rate's been creeping higher by a tenth each of the last four months

Usually when we see this kind of movement, we get a break higher in the unemployment rate.

The labor market cracks, we reach a tipping point, and all of a sudden we're looking at a recession.