Stephen Miran

And when you think about what happened in 2021 and 2022, we did have negative supply shocks, like the oil shock from the Russia-Ukraine invasion.

But in my view, part of the reason why it was able to reverberate through the economy the way it did was because policy settings at the time were very different.

Monetary policy and fiscal policy were at all-time historical accommodative levels.

We were doing $120 billion a month of QE.

We were doing $2 trillion fiscal packages at a time.

That's not the case right now.

We're not hitting the gas on demand that would interact with the higher oil price in a way that would reverberate these prices through the economy now.

That's not the case at all.

Yes.

So you'd want to see the oil price shocks start to reverberate through supply chains and pushing up prices more broadly.

Yeah, there's been a few instances, but you want to see that in a broad-based way that starts to bleed into core inflation and boost it in a way that's sort of not just a one-off time, but you start to see really second-round effects that are concerning for the longer term.

And if that starts to happen, then you start to get concerned about inflation.

And I think that that is what you did see happen in 21, 22, and thus far I don't see it happening on a broad basis.

Now, it could happen.

But thus far, it hasn't happened on a broad basis.

You get some idiosyncratic stories like airline prices that are more directly tied to jet fuel.

But beyond that, you haven't really seen it.

And I think part of the reason why is because we're not hitting on the gas.

We're not hitting the gas on demand.

We're not boosting demand with all-time record accommodative policy in a way that would allow pricing to accommodate a supply shock like that.