Nouriel Roubini

They have to go with our technology, with our defense, with our own system, with our economic channels.

They'll do some trade with China, but not the stuff that is really sensitive.

They have no option but going with the U.S.

That doesn't bother me as much, and he was at the Fed before, and even Powell has done well while being a lawyer.

I'm more concerned about these views.

The view that you can, because of AI, reduce the Fed funds, or it is wrong.

Because even if AI will eventually reduce inflation, it's going to increase potential growth.

So the equilibrium, real R-star is higher, while the nominal, because of inflation, could be lower.

And it's going to be a wash between the two.

So on one side, real growth implies high real rates.

On the other side, lower inflation implies lower nominal.

And it's a wash between the two.

So that doesn't justify a lower Fed fund rate.

Well, we live in what everybody refers to as a K-shaped economy.

The top 10%, 20% is doing very well.

The bottom 50% struggles financially.

from paycheck to paycheck, even if we're at full employment, at least people that have jobs.

But even if you were to cut policy rates in an economies near full employment, you're going to fuel only inflation, and inflation is going to hurt more the working class than otherwise.

So the solution is not going to be reducing the policy rate if you are worried about inequality.

You have to do stuff like providing education, skills, retraining, and all the things we're not doing.