On Wednesday, the Federal Reserve decided to hold interest rates at a 23-year high, coinciding with calming inflation data from May's Consumer Price Index out that morning. The May Producer Price Index saw wholesale prices drop by 0.2% month-over-month. Fed Chair Jerome Powell stated he is aware of the economic ripple effects of holding rates too high for too long will have, while also maintaining caution over rushing into a rate hiking cycle.
He's saying that the fed is acutely aware of the risk here to both sides saying that the fed once again, reiterating remaining data dependent.What exactly do you think that could look like?So I think Chad Powell is correct in pointing out that there are two tails to the soft landing.
So I'm curious from your perspective, if you think the Fed has lost the plot a little bit and given the amount of dissent amongst the voting members, is that potentially more harmful than helpful at this point?I think what you're getting is the consequences of what I call excessive data dependency.And as a result, we had a massive hiking cycle including four consecutive hikes of 75 basis points.
And I'm curious since we last spoke, what you are gleaning from those calls, what what I'm leaning is what the forward looking indicators are telling us as opposed to historical data is that demand is weakening.And that's why I think that the risks that we started this interview with uh with the fed share flip is asymmetrical Julie.
I want to end by asking you about something we talk about a lot with regards to those company earnings calls that Julie mentioned, which is the A I boom.How much do you factor that idea into your overall macro outlook?
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