Hello everyone and welcome to At Bairns.

I'm Andy Serwer and welcome to our guest economist Glenn Hubbard.

Glenn, so nice to see you.

Likewise.

So let's just start out and talk about the economy.

And I guess I'm curious as to how you see the current rate cycle playing out. Have you been surprised at how fast rates went up, the Fed's response, and where do you think we are with that?

Well, it's a great question, Andy. I am not surprised at how fast the Fed had to respond because it really needed to. The Fed was late in getting into the hiking cycle,

but once it got in, it moved a pace. I'm not as optimistic as markets that rates are on their

way down anytime soon because I'm assuming that the Fed means what it says. So 2% inflation

target in the near future, if that statement's accurate, rates are going to have

to remain high for a while. So I think we, if not a new order of the ages, it's a new order

for at least next year to get used to it.

Yeah, I want to ask you about next year, but you're talking about higher longer, which

seems to be somewhat of a consensus.

If that's a consensus, then why is there this disconnect with the stock market?

Well, it's interesting.

I think a couple of things.

One is there's optimism that the decline in inflation that we've seen recently, like the

most recent inflation print, will make the Fed suddenly change course.

I don't think that's true.

Even with that decline in inflation, we're still in the mid-3s.

It's a long, long way away from two.

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