Stephen Miran

And that means that policy is becoming tighter every day as these policies continue to kick in.

And my view is not one of enormous economic pessimism.

You know, I don't think the economy is about to crater.

I don't think the labor market is about to fall off a cliff.

However, the neutral rate is drifting down.

And as a result of that, it's incumbent upon policy to adjust in response.

And the longer that policy stays excessively restrictive, the greater the risks to the downside for the economy.

If policy stays excessively restrictive for too long, then you do get to a situation in which you have a meaningful increase in unemployment rate and a failure of the employment mandate.

Yeah, so that's a perfectly natural thing to ask.

Sorry, and let me say two things.

One, I don't think that all financial conditions are universally loose like that.

In particular, if you look at the housing market, I think it's in quite a different state than some financial markets and security markets.

So I don't think that that's necessarily a holistic look at the world of financial conditions and the economy.

But even that aside, I think that...

You know, people in financial markets tend to focus a lot on monetary policy because interest rates are sort of huge tradable instruments, right?

But there's so much more that goes into determining economic growth and the state of the economy and inflation and employment than monetary policy.

And I think that attributing all changes in financial assets to monetary policy can be a mistake.

And in particular, that's what I tried to do in my speech, you know, was to draw out some of these effects from non-monetary policies that are affecting the economy and, of course, therefore also financial markets.

And so if you have changes in tax policy, right, like significant incentives for investing that lower the effective tax rate on capital, of course that's going to get reflected into capital assets.

If you have significant changes to the regulatory environment—