Asks Michael Darda to respond to those who dismiss inflation concerns and believe in a larger disinflationary trend.
Kelly
Michael Darda
Political pressure on the central bank could lead to unfavorable consequences like high inflation and currency collapse, as seen in Venezuela and Iran.
Notes conflicting data: strong GDP vs. weak labor market, asks about PCE/CPI and what inflation problem we might face.
Kelly
Michael Darda
The Fed has 'basically nailed it' - raised rates significantly, cut at the right time, avoided recession, with stable nominal growth creating a favorable backdrop for asset prices.
Clarifies that lack of Fed independence doesn't create inflation directly but leads to higher interest rates as markets demand inflation compensation, creating future inflation risk.
Speaker3
Michael Darda
Agrees independence is crucial for correcting mistakes. Current policy has worked well - economy stayed out of recession with strong stock market gains despite tariff shocks.