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Single best idea, how about an extended version? Just some phenomenal conversation. Major shout out to the FED deicides team yesterday, it was not only the most interesting meeting of the years we've done, the FED decides it was the most interesting meeting. I'll say back to the early eighties and Wayne Angel I'm guessing there, back to the vulgar years. Absolutely twisted. I don't mean that in a negative way, but just a twisted meeting of convolutions, discombobulated, I'll let
you pick the right word for it. Market's all over the place during the meeting, and then a moonshot this morning as people tried to figure out a new accommodation by her central Bank. We called upon Francis Donald's she's at RBCT Capital Markets. Her interpretation of what was wrought.
I felt like it was more like a breakdancing than ballet yesterday because there was a little bit more chaos and not necessarily super clear messaging. It didn't feel like it was very well choreographed in general, or at least there were dislocations within it. What I heard yesterday from Chair Powell, I know you've probably already talked about it one hundred times. Was there are no risk free paths ahead?
This was a haunting comment from a central banker, but it also reflects the underlying US economy, which is that we are still in the air pocket before we will know the impact of this once in one hundred year trade shock that has hit the US economy. It is our view that there are still significant inventories in the United States, and we don't know whether companies will truly pass on those costs to inflation or whether they will have to cut their own costs, and that will come
down to labor. And so when you talk about data dependency, Tom I'm looking at is one single data point, which is how many inventories are left in the United States and how long until we answer that question? Because neither of those paths are good, but they result in very different focuses from a central.
Bank Francis Donald on inventories, looking at the tariff impact, which I was shocked with so little discussed yesterday as well. Each former president and frankly president President of the Central Bank, the many of them have a different character. It was a perfect day to speak to Robert Kaplan, former president of the Dallas FED, with all of his work at HBS and at Goldman Sachs on innovation, on process, on technology,
on the Central Bank. Robert Kaplan of Goldman Sex on the FED and the economy.
I think that the FED pays attention to financial markets, but it's got to set monetary policy based on the economy. And right now you have a divergence. You've got regulatory review reform coming, you've got tax incentives coming, accelerated appreciation, you got an AI boom. Those three things are not really in the economy quite yet, and so you've got a sluggish economy and you have a booming financial market.
I actually think the tailwinds are significant, and so if you're at the FED, on the one hand, you pay attention to it, but you got to set monetary policy based on the underlying economy, and I think that's I think that's the right thing to do right now, and that's what they're doing. This is not one of those stock markets that's being fueled by excess monetary policy, in my opinion, It's being fueled by other structural drivers, and the FED would do well to recognize that.
Robert Kaplan of Goldman Sachs on our podcast on Apple and Spotify. Good morning on the Pacific Rim. Thank you so much for the podcast. Interest across a Pacific Rim across Asia as well and on YouTube podcasts. It's single best idea.