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Single best idea very quickly here today. What a wonderful set, A lot of fun with the Yankees, Red Sox Yankee Stadium tonight, Lisa Mateo, thank you so much for that. Ann Marie Horden a cameo appearance. She is Surveillance Yankees correspondent. But also we looked at the moment of international relations buttressed into this strange stock market in modern technology. Michael
Darta with us with rough capital. Michael Darta on the moment at hand and a constructive nominal g that would be four to five percent and not overheated.
Nominal wages and real wages are growing, so that's consistent with the real economy expanding. Inflation is still above the FEDS target, but I think, you know, in an environment where inflation is trending at around three you know, so that can still be a very strong environment for corporate profits if the economy is you know, staying out of recession, and that's you know, I think that is likely with
the FED easing monetary policy. They've already taken rates down one hundred and twenty five basis points, and with inflation expectations moving up forty to sixty basis points. Over that period, real rates have fallen about two hundred basis points. So the FED is definitely removed quite a bit of restraint from its policy, so the top line should hang in there. I do think, you know, I do worry about the FED getting back to two percent inflation on a reasonable timeline.
If we're still stuck at three percent inflation over the course of the next two years, and that's part of the FEDS forecasts, boy, that's a long overshoot seven years, So I worry a little bit that that leeds into credibility. You know, the administration really wants FED to ease because they want lower market interest rates. But you know you're not going to get lower market interest rates inflation expectations continue moving on, So the FED needs to stay credible here.
I think, you know, four to five percent nominal, that's the sweet spot. You'll have corporate pricing power, Inflation won't be too high long rates will be at reasonable levels.
Michael Darta nominal GDP. I can't tell you how important I think that is through all the years I've really you know, real GDP has huge value. Don't get me wrong. But the idea of combining the real GDP growth and then overlaying it with inflation to give you the animal spirit of the system is I think just a critical and useful analysis, particularly full to go over into revenues and then what it means for the stock market and
American corporations as well. A wonderful conversation with Ian Bremer of Eurasia Group today. Too many themes to speak of, but one of them was the ending of US programs to Africa.
The United States is the most powerful country in the world. It's the strongest economy by far, and the US has historically been doing the most in terms of providing aid to other countries and to the people in those countries that need it, whether they're suffering from malaria, whether they're vulnerable to HIV AIDS, whether they're starving, whether they're facing
forced migration. The US has done that directly. It's also led the charge in doing that indirectly through American support for the United Nations and the organizations that it stands up, like the World Food Program, for example. The United States has decided that those things should no longer be priorities. That America first means that these other countries should have to make their own way, they should have to pay for themselves. Now, the Chinese see this is a great opportunity.
In the same way that when the Americans cut back on visas, the Chinese immediately say we're going to make it easier for talented people to come. They won't be as attractive in terms of their aid. But if they are the lead power, I mean, they made up their dues, many of which were in ear years at the UN the Americans aren't paying. The Chinese said, okay, we'll pay some of ours now, so that they can put forward
that they're the ones that are more accountable. Look, if you think that only American hard power.
Matters, and maybe in the short term that's true, then and you don't care very much about non Americans and don't think that they are as deserving or that we should take care of any of them, we don't have accountability, then.
It doesn't matter. But that's never been my view, and I think it's a mistake long term.
Ian Bremmer of Eurrasia Group can't say enough about his note Look for that from eur Rasia Group on podcasts on Apple and Spotify and YouTube podcasts is single best idea