Rachel Siegel

Hi, Rima.

This was not pretty.

Obviously, inflation going up this high, highest.

Yeah, it's obviously concerning to see inflation shoot up less, but we've been expecting this for a while.

The last few weeks have been pretty ugly for what people have been seeing at the pump.

But everything obviously depends on how long the war lasts and whether we see a correction in oil prices and gasoline prices.

And if that happens, then this could just be a blip.

The Fed has very little control, obviously, over the issue of global oil markets, and they certainly have no control over a war.

They do have the ability to look through this.

The Fed chair, Jay Powell, has been clear that a single surge in gasoline prices, that's a one-time increase.

That's not persistent inflation.

And they are...

so far treating it that way.

What we don't know, of course, is how long this is going to last.

We've had some White House officials today out there expressing some doubt about whether the Strait of Hormuz is going to open up all that quickly, maybe a couple of months.

And that becomes a much bigger problem.

It becomes perhaps even more of a growth problem for the Fed than an inflation problem in the near term with consumers being stretched and unable to stay afloat.

So there are a lot of cross currents here for the Fed to be worried about.

It certainly means that there will need to be more supply built into the system, more reserves built into the system, more safeguards, more backups.

Look, the Strait of Hormuz, this has almost been lore, the idea that the Strait of Hormuz