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what's your current take about the economy itself but also where the stock markets are in terms of Fairly valued or not I think the economy is actually quite strong right now you know the question is where it's going to be in six months and 12 months um but you know we're at full employment there are plenty of jobs available you know wages are going up Howard Hughes uh company we own is opening a uh a kind of food Hall the John George Food Hall uh at the South Street Seaport we've had to hire 600 people and they've been working really hard to do it we've only hired 350 people in the last you know a couple of months if you're looking for a job it's a good one there so I I think the economy itself is very strong I had the opportunity to see Jamie Diamond this weekend I apologize I do I still am a little congested from uh from coven and Jamie talked about number one this is the the lowest default rate period in history uh for the consumer uh part of the bank and that uh their their full spectrum of people that they you know uh support a rich that bank with JP Morgan and Chase and so on uh are in the best position they've ever been so I think we've got you know well capitalized consumers for the most part although I do think lower income people are getting a lot of pressure from higher gas prices higher food prices higher rental rates and I think the biggest problem for the economy is inflation and inflation is roaring its continued to rage and uh unfortunately the the steps taken by the Federal Reserve have not uh been effective you know since uh you know June the first 75 basis point increase Financial conditions have eased enormously stock markets up depending on Market uh you know 10 11 and more um the look at the two-year treasury which is a good indicator of uh where fed funds should be over the next eight quarters is under 2.9 percent and uh with the FED today at you know call it two and a half percent basically the Market's saying that the the FED fed funds will average only 40 basis points above the current uh rate over the next uh two years and that implies really no Financial tightening at all just at the last meeting uh Jerome Powell said that the Fed was now comfortable that it reached 8 sort of neutral level of rates which again a fairly extraordinary statement behind a world with nine percent inflation I think the problem is and so what what would you be advocating the FED do then I think the FED has to be aggressive in raising rates getting to a you know something probably with uh you know High threes four handle checking in and seeing how things are going I think rates are going to have to stay four percent Plus for the foreseeable future 12 18 months or so in order to to kill this inflation they may need to take rates higher and uh I think that's the biggest risk to the markets is that people are not pressing that in uh and I think the uh we need to the FED has to take its foot off the accelerator and when you can borrow money uh based off a uh you know two and a quarter to two and a half percent sofa rate that's the base rate for for borrowers and inflation is nine percent it's going to be persistent certainly in the mid single digits for a long time you borrow as much money as you can and so the current prevailing level of rates is amping up the economy which is why we are having uh the inflation that we are having now with the global factors of course Bill do you like the chips act do you like the uh the other reconciliation bill that Manson is backing does a lot of we think of the FED but a lot of times the FED is just enabling whatever Administration whatever Congress is doing they got to keep rates low they get they're sort of like partners in crime if you will for at least in my view for some of the the profligate spending that goes on do you like either one of those pieces of legislation no I think there's Merit to what you say I think what got us into this mess was an extra couple trillion dollars of stimulus that was intended you know unfortunately when a new regime comes into power they want to do something for the people that you know elected them right and here you know it's very very easy when you control the Congress and it's a new Administration to spend money and uh unfortunately 2 trillion that was spent was the uh you know the extra fuel that caused the extreme inflation and the extreme inflation is actually affecting people who are the by Administration was trying to help I think through that stimulus package but it's got to be very cautious about adding more fiscal stimulus at a time like this the chips act again I haven't read these in detail um but I feel like the chips Industries they've got some very well capitalized very well-run companies do they really need 50 billion I'm sorry whatever the number is 58 billion dollars more than that foreign
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