This is the Kader Daily Podcast for Saturday, October 7th,

2003.

I'm Caleb Brown.

Massive new spending has delivered persistent inflation.

As interest rates sit stubbornly high, what does that mean for markets,

for investment, and for the federal fiscal policy picture going forward?

It was Norbert Michelle and Romina Boccia evaluate both sides.

Norbert, we have seen in the last few years a massive inflow of new money into the economy to accommodate a huge amount of federal spending.

That gave us a good deal of inflation that has at least apparently leveled off and may be declining in the near term, the rate of inflation that is not inflation going down, it's not deflation deflation but we have also seen interest rates

not behaving the way a lot of people would hope in light of a decline in inflation.

That's true and we're seeing them start to, well they've been creeping up and now they're higher,

even at the longer end a little bit. So 10-year treasuries have even come up their rates rather have

come up so you know I think a lot of the folks who analyze what was going on at the beginning of the pandemic thought this would maybe just be all a quick blip

Everything would get back to normal prices would come back down

Rates would come back down everything would be fine because everybody thought the Fed could just

instantly fix inflation and you know that's I think most serious people would

think that's a bit much to expect that you know there are way

too many things going on and that's putting way too much faith in the Fed and the

truth is we did the government we did way too much way too much spending way too much borrowing

along with just kind of tinkering around with the economy by shutting things down so you get a lot of things that are

unexpected you get people's expectations that change and vary,

and the price levels, as you said, the rate of inflation has calmed down, but the price level remains high.

...