By coinnews 
00:00 Speaker A
And what gives you the confidence Aditya that our economic backdrop is strong enough to withstand a first half of the year that could have significant pain from those tariffs in order to get to the policy dessert that’s expected to come with tax cuts.
00:16 Aditya
So again, I I’d go back to the labor market. Inflation is picking up But what if that What if that starts to change Aditya just
00:27 Speaker A
But what if that What if that starts to change Aditya just
00:28 Aditya
then I would get a lot more concerned. If the labor market were to start to crack, I would get a lot more concerned. As long as we’re generating job growth, we’re generating income growth and then there’s room to spend.
00:43 Speaker A
Got it. Um, your recent note did talk about um stagflation, right? And that’s something that we’ve been hearing a lot. And to be clear, stagflation doesn’t necessarily include a recession. It’s a slowdown, right? Within an uptick in inflation. Um, do you think that’s sort of the base case here? Is that we are going to see stagflation?
01:08 Aditya
Yes, some mild version of that. Right? Degrees matter a lot when it comes to stagflation. So if you have 1970s stagflation, which is certainly not our base case, that would be much more concerning. What we have built into the forecast is, you know, you lose about a percentage point on GDP and you add something like that onto inflation, maybe a little bit less. Right? That’s not the end of the world. That’s a cycle in which the expansion can continue. The Fed probably has to stay a little bit hawkish, but the decisions don’t become so difficult for the Fed either. Now if you go further down that road and you have close to a recession with four or five percent inflation, then I think the world becomes a much more unpleasant place.