Richard Clarida

But again, we're going back 40, 50 years.

Did you hear what he said?

Do you prepare for this show?

Oh, of course.

Are you kidding me?

They've been pretty consistent for a while that inflation is too high.

It's been above target for five years.

It'll probably be above target this year for six years.

But the Fed has a dual mandate, and the unemployment rate is basically right now at a point that they think is consistent with a healthy labor market.

But they are noticing that payroll employment gains have been very modest.

Indeed, when we get the revisions later this week, it actually may show negative payroll gains in the second half of the year.

And so I do think that...

I take them at their word when they say they would not welcome any additional rise in the unemployment rate.

And I think they would react to that.

But so long as the economy sort of churns along as people expect, I think they are trying to balance that against their concerns about elevated inflation.

I was not chair when Mike was recruited, but I certainly was enthusiastic and worked hard on getting him to Columbia, which was a huge appointment for Columbia now 22 years ago.

Well, okay.

I think at a 30,000-foot level in 30 seconds, all macro models, or almost all macro models, really are best thought of as approximations, typically linear in a neighborhood of where you want to be.

And the real world can be a lot messier and very nonlinear, a term that I know pops up on this show.

And I think what, as I'm just beginning to read his book, what he's been highlighting is we could be in a prolonged period of very nonlinear market and economic development.