Lisa Abramowicz

And also it matters who the gains of the AI actually accrue to.

If those productivity gains continue to accrue to the owners of capital instead of workers, workers are going to feel left behind.

And they're already feeling left behind because of the fact that the level of prices, as Jim pointed out, is just too high.

Even if inflation were to cool from here, the level of prices are still too high.

Well, the Goldilocks scenario really requires with productivity growth to be broad based.

And actually, people always forget this part of it.

If productivity growth, they raise their growth rates for next year.

If productivity growth is driving gains in overall economic growth, it means we can actually have

higher break evens on the Fed funds rate because the economy can grow more rapidly without having to lower rates.

And I think that's important as well.

And so we've really not seen all this yet.

And I think it's still ahead of us.

I am worried about the fact that we're getting fiscal stimulus in the form of the largest tax refund surge on record in the first and second quarter will hit between March and May.

And we know that those tax refunds are treated like windfall gains due to the expansions of tax cuts passed in July of last year.

They're retroactive to beginning of 2025.

And that's going to be a big bump in fiscal stimulus at a time when we're still feeling the inflation from both tariffs and changes in immigration policy.

And I think that's really important.

We're seeing service sector inflation pick up as well.

I think we've seen some of it in financial markets already.

The fact that it's not happening today doesn't mean it won't happen.