Despite Fed warnings, stagflation risks may be overblown.
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00:00You know, we've only seen one specific time in history where stagflation was a huge, huge
00:06problem. And so, you know, of course, Powell pointing to the concern of stagflation is a very
00:12big, scary thing and certainly something the Fed should be watching out for. I don't know if we're
00:19seeing all the signs of stagflation yet. I certainly wouldn't go that far. I actually see a lot of
00:26concern in the marketplace. You know, we've seen the consumer sentiment and consumer confidence
00:31numbers come down further and further. They've slidden and slidden since the beginning of the
00:35year. I think one measure was Americans are expecting more and more unemployment at the
00:42highest expected rate since 2009. Now, that hasn't borne out in the labor numbers yet, but that speaks
00:49to the uncertainty the average American has. And so, you know, does that say stagflation to me?
00:55Not necessarily. Obviously, all the tariff stuff could cause rising prices if those tariffs don't,
01:03you know, come to fruition, though that might be a reprieve. I do think Powell getting the criticism
01:10of Mr. Too Late, as it were, is sort of an earned criticism. I think a lot of, you know, economists
01:17would point to how late the Fed started rate hikes and properly point out that he took too long.
01:24And the Fed has, of course, noted inflation and the labor numbers that they're watching. But they've
01:30also spoken about liquidity quite a bit and their focus on liquidity. I think when we look at liquidity,
01:38we look at that subprime category for lending quite a bit. And we compare that to, you know, where credit
01:45wants are. And when we see that start to widen further and further, that starts to say that those on the
01:53lower end of the economic totem pole, as it were, don't have that liquidity. And that's something
01:58the Fed should watch too.