Richard Clarida

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.

Yeah, yeah.

Again, I have not worked through it, but certainly a must-read for me.

So I'll wait until I finish it before I weigh in on that.

So let me reinforce what you said.

Eventually, when we get the data for 2025, it may show GDP growth the same as it was in 2024, maybe down to 10th.

It will likely show inflation unchanged from 2024.

And so a future historian may well say what you just said, Paul, which is what was the big deal?

GDP growth didn't move.

Inflation didn't move.

I think a couple of things.

One is that the ultimate tariffs put in place were a lot lower than the Liberation Day levels.

And as Besson has emphasized, that was part of the negotiating strategy.