Michael Gapin

So they look at it and I think they say outside of tariffs, it looks like inflation is decelerating towards their target.

So once we get through with the pass-through, then goods prices can start to come down as well or at least stop rising.

And so they have a pretty favorable outlook.

So I think it's more like a matter of time for them.

How quick, how long does the pass-through last?

And then how quick does inflation decelerate after?

But a year ago, it was almost a year ago, right?

After Liberation Day, very different story, right?

They were very concerned about upside risk to inflation and inflation firming well above the target.

And I think as time has gone on, they've been able to see what part of inflation is

is linked to tariffs, what's happening there, okay, it's moving higher a little bit, but the rest of inflation still looks good.

In other words, no second round effects on inflation.

So I think their view is about as confident as you can get given the overall backdrop.

So I think it's fair to still have concerns, and I think it's right to point to the fact that we don't have the entire picture on inflation.

There's probably some catch-up still to be had in the January data, and certainly even into next April.

That's a legacy of the shutdown and the inability of the BLS to sample prices when they need to.

So there is probably some makeup effect there.

So I think we shouldn't be so quick to declare victory on inflation.

I generally agree with the Fed's view, but what I would say is we should really have a watchful look.

i inflation has been above or well above the fed's two percent target now i'm going on five years how long can that happen and inflation expectations still remain stable consistent and and low right so when if that market slips if inflation slips and inflation expectations slip getting that realigned would be costly in terms of of economic output and perhaps on unemployment so i think the fed's right