Presents a 'half empty/half full' analysis of the Fed's situation: worried about inflation/jobs (complicated) vs. inflation rounding at 3% with positive labor trends, allowing another rate cut.
speaker1
speaker3
Argues it's more the positive ('half full') view. The Fed revised growth up and inflation down, making the meeting 'pretty risk on.' Notes the Fed is restarting Treasury purchases and Chair Powell is confident inflation trends are lower, barring tariff arithmetic.
Questions monetary purists who ask why the Fed is cutting if it raised its growth estimate.
speaker2
speaker3
Explains the Fed's goal is price stability, not killing growth. Strong growth with hiring and wage gains is not inflationary if supported by stronger productivity growth, which is evident in data (GDP above trend, employment slowing).
Notes we are seeing GDP numbers not seen in decades and questions why people think the strong economy is a 'pipe dream.'
speaker1
speaker3
States the strong productivity trends are real and evident, fueled by a capex boom likely to accelerate next year. Acknowledges a turbulent five years but says fundamentals are favorable.
Raises Steve Eisman's concern: if LLMs plateau and chip buying slows, could it slow the economy and hurt tech stocks? Asks about the impact on broader productivity.
speaker4
speaker3
Concedes capex pace will eventually slow like all tech innovations, probably not next year, and will show in expensive chips. Reiterates that underlying productivity growth trends are evident and not just an AI story; there are positive longer-term fundamentals.
References Ed Yardeni's shift from overweight tech, arguing productivity gains will bleed into all stocks, making every company a tech stock.
speaker4
speaker3
Agrees that's potentially true but defers to Yardeni on equity calls. Notes that earnings growth has been pretty good for the S&P 493 (ex-Magnificent 7) as well.