The Fed Is Faking a Jobs Crisis, And Printing Again | EJ Antoni
Summary
Fed Liquidity Actions: Guest argues the Fed has effectively restarted QE to sustain its ample reserves framework, with further balance sheet expansion likely as tax season approaches.
Inflation Outlook: Money creation is deemed inflationary and the novel framework is said to starve private credit, raising borrowing costs and devaluing the dollar over time.
Precious Metals: Bullish view on precious metals, especially gold and silver, due to their monetary premium and as beneficiaries of dollar debasement and renewed QE.
Market Implications: Expect broader asset price appreciation from monetary expansion, but continued high costs for mortgages and consumer credit pose headwinds.
Consumer Dynamics: Record holiday spending is partly inflation-driven, with about half of consumer outlays concentrated in the top 10% of earners, leaving the middle class squeezed.
Data Preference: Guest prefers Trueflation’s real-time gauge over CPI given lags in shelter data, implying the Fed is reacting with a delay.
Companies Mentioned: McDonald’s (MCD), Walmart (WMT), Costco (COST), and Amazon (AMZN) referenced as pricing examples, not as investment pitches.
Near-Term Macro: Discussion covers upcoming payrolls, inflation prints, and the January Fed meeting, with the risk that continued liquidity support persists despite headline guidance.
Transcript
Are we already in a recession? A jobs recess recession that is? What is going on in the labor market? The Fed is using it as maybe an excuse to cut rates, but how dire is it? It feels like the Fed is stirring up sheer panic on the unemployment side. Is it really that dramatic? I've invited a fantastic guest back on the program. He was supposed to be the head of the Bureau of Labor Statistics, but uh his nomination was pulled unfortunately, but uh he has some specific insights to what why are they using the unemployment data as a as maybe a tool to cut rates. So lot lots of interesting uh you know facts that we'll be sharing with you today, but also like how does it all impact the market in general like we'll discuss the latest Fed cut, but also we'll get non-farm payrolls and inflation data this week. So, we'll have a bit of an outlook as well to the January Fed meeting. Uh, the market currently expects a no cut scenario. Is that really true or should we be bracing perhaps for more? So, my guest EJ Anthony, he's the chief economist of the Heritage Foundation. Really looking forward to catching up with him. And before I switch over to my guest, hit that like and subscribe button. Helps us out tremendously and we just appreciate it. Thanks so much for doing that. Now, EJ, it is a great pleasure to have you back on the program. Thanks so much for joining us today. Oh, Kai, it's great to be back. Thanks for having me again. >> Yeah, absolutely. Really timely that we're chatting today here on Monday. What is it, O December 15th? Because as I mentioned, we get the non-farm payrolls. We get some inflation data this week as well. But before we get to uh let's say the outlook of what we're expecting, let's maybe take a step back and zoom out. Um you were supposed to be the head of the BLS. Um President Trump nominated you. Um, so you get some of course some fantastic insights on on the labor statistics side and we just chatted here for a second as well because I'm really trying to figure out like why is the Fed using the unemployment data maybe as a crutch for cutting rates? Um, maybe you can enlighten us a little bit. Where is the panic coming from? So, we have to remember that the Fed created really a novel monetary framework in in March of beginning in March of 2020 and it requires uh it requires keeping bank reserves at a certain level. So, they can't allow them to dip too low, at least not relative to some other metrics. Uh some of those are are economywide. Some of those have to do with with other a uh bank um with other aggregates on bank balance sheets. So at the end of the day, those ratios if they get too low, it's going to cause interest rates in certain money markets to blow out. This is uh very similar to what happened in the autumn of 2019. We forget because it happened right before COVID that the Fed actually lost control of interest rates briefly in September of that year and they ended up having to conduct nothing short of a $500 billion bailout of leveraged hedge funds because they were afraid of of spillover effects if those different funds failed. So that's what happened before. The Fed is hellbent on preventing that from happening again today. But again, we have this added complexity of a novel monetary framework that they built uh just about five years ago, a little more than five years ago. Uh the result of that is that the Fed had to move. This is why they cut interest rates the last time. It's why they stopped quantitative tightening on December 1st. And it's why on Friday, just three days ago, they actually had to restart quantitative easing, which is a a net purchase of securities. Of course, they're not calling it quantitative easing, but mechanically it's the same thing. They are purchasing securities and they are purchasing those securities with money created out of nothing. Uh they are literally creating money. So that's what the Fed is engaged in right now. And essentially it's not part of their mandate, right, to cover for financial markets. It's not part of their mandate to create the kinds of new monetary frameworks that we have today that require these elevated levels of bank reserves. What is part of their mandate though is stable prices uh a uh what we call full employment and then a third one which no one talks about but it's the moderation of long-term interest rates. So under the guise of aiming for full employment, uh that's that is essentially the cover that the Fed is using to re-mbark on its money creation schemes. >> Yeah. No, it's a, you know, QE, nonQE, um, buying a lot of short-term treasuries, meaning T bills in particular, which it feels a bit like a Ponzi scheme because I read somewhere that banks can use that money, the $40 billion every month to actually, um, circle out or circulate out their their long-term holdings, longer bonds, um, and and buy the short-term bills instead because they're higher yielding on the shorter term and risk. It's a different profile. It's the world of high finance. It's it's an interesting, fascinating story. Uh Luke Gman made some interesting comments there. Um maybe the basic question of that is though, and it seems like the market is predicting maybe more Kiwi to happen here in the near future based on the the feedback I'm seeing in the S&P but also in gold and and silver. Um do do you expect more money printing out of thin air because that's what it is. And uh where do you expect that number to go to? Back in 2020 was 120 billion and more per month. >> Well, the Fed has to. They have no choice. If look if if Pal and company want to maintain this this ample reserve framework that they have right now they have to print more money there is no way around it. Okay there's no way to square that circle at at the end of the day paying banks to lend money has forced them into the into these conditions where they have to keep they have to keep creating more and more money to prevent liquidity from dropping too low there. There's no way around this. Okay. And this was something I'm trying to remember if we discussed it back in June, but it's something that I've been talking about, I mean, for quite a long time, months, uh, actually over a year now, that we were going to get to a point once reverse repurchase agreements were drained, once that ex excess liquidity was gone, bank reserves were going to start dropping, which they did, and then the Fed was going to be forced to stop selling off the balance sheet, which again they did on December 1st. and we made it two weeks not even before they had to start adding to the balance sheet the quantitative easing. So as as this demand for liquidity keeps ramping up the Fed is going to be forced to keep providing that liquidity where where is the where is the demand coming from that's that's this voracious appetite uh largely from the Treasury. the government is just spending too much money and because all marginal spending is borrowed, all of that increased spending is therefore increasing borrowing. So, it's putting too much pressure on the loanable funds market. Naturally, the interest rate wants to rise in those markets. And to prevent things like the the secured overnight financing rate from getting too high, the Fed had no choice but to add liquidity. Again, for several years, they were just adding it by allowing reverse repos to come down, reverse repurchase agreements, that is. And as those balances came down, that liquidity went out into the market and that sufficed. But once reverse repos were completely drained, there was nothing left. The Fed had no choice and they will continue to have no choice but to keep adding to the balance sheet. >> Yeah, let's talk about direct implications. Let's assume the Fed didn't do what they're doing now, the $40 billion, which sounds like a drop in the buck bucket, of course, given the overall balance sheet that they have. But what would have happened? What would been the ripple effects? Of course, a bit of draining of liquidity would have would that have resulted like in a housing crisis or like a mortgage crisis, not housing crisis, mortgage crisis for example, because lending would have been, you know, come or would have slowed down for example. I'm not trying to put words in your mouth. I'm just trying to understand what the ramifications might have been. Well, we have to remember in terms of the scope, we say 40 billion. Okay, that doesn't sound like much when we have a multi-t trillion dollar balance sheet. But remember, the Fed also said they intend to ramp that up as we get closer to tax day because that's when you'll get a a cash drain, right? And even if they don't ramp it up, that's almost half a trillion dollars in a year. So you you are talking about sizable amounts here, right? Um so so there's that. uh in terms of um well let let me let me try to put it this way. Um I think as long as the government continues spending the way it is, which there's some signs it's not. There's some signs the deficit is actually getting under control, the deficit is shrinking. So that's good news, right? Um not only have we seen Treasury outlays come down a little bit, but we've seen in a much bigger way tax receipts go up. Some of that has to do with tariffs, right? The government is taking in billions of dollars because of those tariffs. Uh but also because simply you're just taxing a larger tax base. So even if your rate doesn't change, as you have a larger base, the amount of tax revenue has gone up. So in other words, a larger economy is generating more tax revenue. >> No, that makes sense. Absolutely. Um you know, inflation is maybe the other one I'm worried about. Um, how inflationary do you think the Qi pro let's just call it Qi? Sorry, like I'm done with hiding playing the hide-and-seek game here. Um, the the new version of Kiwi um is is it inflationary? >> Well, of course, absolutely. We look, you are you are expanding the money supply, right? And it'd be one thing if you know you were you were creating money for the Treasury to spend, but then the money didn't go anywhere, right? and and that actually is is the system that was created first going all the way back to the global financial crisis with uh with Ben Bernani. They developed what they called interest on excess reserves. So banks still had to keep a certain uh certain amount of money in reserve at the Fed. There was a specific ratio by law. They had to keep that money there. But if the bank kept kept more than that ratio, they would get interest on that excess. So, not the required reserves, but the excess. Today, they've completely done away with that. And now you just get paid interest on all reserves. Now, why why do we even want banks to keep excess money parked at the Fed? That doesn't seem to make sense, right? You want them to be out there loaning money. Otherwise, you're starving the private market for capital. The reason is is because if the Fed creates a dollar for the Treasury to spend, Treasury spends it. That dollar goes out into the market, turns into a bank deposit that gets lent out. A portion of that bank deposit lent out, bank deposit lent out. Right? This is just fractional reserve banking, which I'm sure your audience is very familiar with. You end up creating $10 for the Treasury to spend $1 under that system. Assuming again that that 10:1 reserve ratio, the result of that is going to be very inflationary. So let's say we could shortcircuit the extra $9. You do that by preventing the bank from lending out the dollar that the Treasury spends after the Treasury has spent it. This was the thinking behind paying interest on those excess reserves. Today, they just pay interest on all reserves as a way to try to get even tighter control over those money markets and over bank deposits. But again the result is that we are artificially starving the private market for capital while artificially allocating capital to the public sector to the government. And while you may think all right that should reduce things like treasury yields only at first but over time what happens over time as dollars again should be recirculating through the economy and should be finding their way back to a treasury auction now they're not. Now they're stuck in reserves. And that means over time you actually end up driving up Treasury yields. You're also driving up private market interest rates like interest rates on the 30-year mortgage, on credit cards, on student loans, on auto loans, you name it. All kinds of consumer credit. The credit costs, the the borrowing costs are artificially high today again because of this this very novel monetary framework. So, you know, all all this to say, um, it it is it is incredibly detrimental what the Fed has done. It is not only inflationary. You're absolutely right. It is, but on top of that, it is slowing down economic growth, which is very very troublesome because if if we believe in the the the theory that Milton Friedman so frequently espoused that inflation is fundamentally too much money, chasing too few goods. The Fed is doing both. They are increasing the amount of money and by artificially reducing economic growth, they're reducing the number of products and services that that excess money is out there chasing. Yeah. No, it uh you know I'm looking at the AI data built out. You mentioned GDP growth for example or just economic growth in general and uh a lot of that money is flowing into data centers right now or the government is actually investing into mining infrastructure which is a good segue or you know combination with what we usually talk about here uh on on sore financially which is gold, silver and mining of course. So that that money like 100 billion I think has been earmarked to to preserve the critical metal supply chain for example. Um it it is all inflationary because it goes into the US economy and drives prices higher. Um I'm trying to make a segue. I'm trying to make a point here. It's it's really the question is like when does it show up? How quickly does it show up? And maybe how aggressively as well. Are we going to see 8 9% inflation rate again? And uh you know I'm being overly dramatic of course because that's what we've seen during co times but like I'm really trying to understand like what is how tangible is it for us as a regular consumer? Well, we we saw that 9% plus inflation rate um when the Fed was buying trillions of dollars a year >> on a on a smaller balance sheet base, right? So they they were growing the money supply uh uh by much more per month and on percentage terms the difference was even greater because again the base was smaller at the time. So today we're dealing with a larger base. We've already we've already had a lot of that inflation, right? So, it's not that the effect is going to be as bad, but it's certainly going to be bad. And so, what let's put this in, I guess, try to put it maybe some practical terms. Where are you going to see it? How are you going to see it? How fast? Uh, you're going to continue to see uh the price appreciation for precious metals. I think uh in particular them more than other things because they have that monetary premium attached to them, right? That's why you'll see you'll see gold pick up, let's say, more than platinum. Um, that's not to say you won't see price appreciation in all kinds of metals, but again, the precious metals like gold and silver that have that monetary premium, there's there's more of a case to be made that you'll see faster price uh price appreciation there. But at the same time, any asset, right, you're going to see price appreciation across all assets because of the devaluation of the dollar. Um, and and this is where you even need to reconsider what I would consider some more fundamental principles behind investing. For example, let's say you're trying to decide between a traditional uh Roth IRA or a traditional 401k. In other words, do I want to be investing with uh with pre-tax dollars or with post tax dollars? Part of that calculus, believe it or not, actually has to do with inflation. Because if I'm investing with pre-tax dollars, let's say I put ton of money into a a 401k, right, and I don't pay tax on the way in, all my investments double over the course of 10 years. But then it turns out why did they double? Not it wasn't because the companies are worth more and they they got more valuable and the price appreciated that way. It was simply because of inflation and let's say dramatic here, but let's say the dollar lost half of its value over that time. Well, guess what? You're going to now pay tax on all of those paper gains. You're you have to actually pay tax on all of the inflation, not on an increase in real wealth. But let's say you do the opposite. You put in the uh you put in those uh those dollars into those investments after taxes. Now, when it comes out the other end, whether whether the gains were because of an increase in real value or the gains were simply because of inflation, the dollar losing value, doesn't matter. It's all tax-free, right? You don't have to pay tax on the inflation just like you don't have to pay tax on the increase in the real value of those corporations or or whatever the investment could be in, right? Again, it could be in precious metals. So those are the kinds of of things where you the the calculations behind a Roth or or a traditional 401k, whatever the case may be. Those kinds of calculations tend to be much more focused on things like what tax bracket am I in now? How much money am I making when I retire and therefore what tax bracket am I going to be in? What do I think the political environment is going to look like and the impact there on marginal tax rates? That's not enough. You even need to think about what are the long-term inflationary impacts here because that will have an impact now as well. It will have an impact much more so than it did before. Which brings me to an interesting question actually because I've been reading about Christmas buying and Blackw week spending and all of that as well. Sorry. Like um just because it comes down to the consumer as well. How well is the consumer doing? Because I've been hearing oh new records uh trillion dollars in Blackw week and Christmas spent trillion dollars billion dollars maybe. I don't know. like new record, new record. I keep confusing the numbers. Um the question is is that also just inflation driven or is there actually or how how is the consumer doing or is it just inflation driving up sales because everything is just more expensive. >> So we have seen considerable inflation uh on a lot of the items that were going out the door on Black Friday. And then also you have Cyber Monday. I mean it's just like it it feels like it's two months long. >> Cyber Monday. Exactly. >> Yeah. I remember on Amazon getting, you know, like Black Friday deals and stuff like before Thanksgiving. I mean, excuse me. Um before uh uh before Halloween. I'm like, it's it's it's not even the end of October yet. We're already getting these ads anyway. Um the point is that a lot of these prices have gone up absolutely from the previous year. And so that that is accounting for a considerable amount of the increase in spending. But the thing I'm much more concerned about, believe it or not, uh, than the inflationary aspect because people's wages have on average increased faster than inflation this year. So, I'm not as worried about that. What has me really concerned is the same pattern that we saw from the year before, which was a development from the last couple of years, which is this. more than half approximately I should say approximately half of all consumer spending right now is being driven by the top 10% of income earners. Think about that. 90% of of income earners are accounting for only half of the consumer spending right now. we we have entered this this kind of barbell distribution where if you're on the very high end of the income scale, you know, your your income has has kept up with inflation, has actually probably exceeded it, uh especially once you consider assets that you own that you can now sell at inflated prices. And then if you're on the other end of the income spectrum where you're you're living off the state, you're living off the dole, you're on welfare, etc., you've you've gotten colas, cost of living adjustments, um, and you had such a huge expansion in welfare benefits under the previous administration that the standard of living of some of those folks actually went up, not down, despite the huge cost of living increase that we had over those four years. So, Kai, what what I'm trying to say here is that the middle class is getting absolutely squeezed right now. Are they better off than they were a year ago? Sure, I'm not denying that. That's absolutely true. Like I said, the the average American's weekly paycheck buys more today than it did a year ago because u earnings have risen faster than prices. Good news there. But you're still worse off than you were, let's say, five years ago. So we we have a long way to go be I think before we get to a place where where you have a much more um a much more even distribution when it comes to consumer spending. Now look, we're nobody's expecting that, you know, the bottom third, the middle third, and the top third are all going to equally account for them to themselves one-third of consumer spending. Of of course not. Upper income earners are going to spend more. Lower income earners should be spending less. Makes total sense. But the the way it has become so incredibly lopsided today where you basically had four years of of almost all uh uh all asset growth uh was almost entirely accounted for upper income earners. I mean it's it's not a good situation to be in. It's not good economically. It's not good uh for for society. You name it. >> Yeah. No. 100%. like if you can't afford the basic goods and you have to maybe subsidize or um exchange goods like it was Walmart CEO I think who said well we're not buying beef franks anymore we're buying some pork mixture maybe something else we're substituting that's what I was looking for >> so Kai you just but you just bring up a you just you touched on a really really interesting point as well which is the the necessities right if you look at if you look at some of the Black Friday numbers what you find is that things that are not essential are insanely affordable right Now, a big screen TV has never been cheaper. I was shocked. I was in Costco the other day and saw a a 100in TV and it is selling for less than a 50-in TV. Half the size, right? Half the diagonal. It is it is selling for less than a 50-in TV was just just not that many years ago, right? So if you look at a lot of the things that I would consider non-essentials or that are very even if they're essentials, they're very small purchases, they're they're very affordable. What's not affordable today? Well, food prices have gone up by about a third in five years. The monthly mortgage payment on a medium price home has literally doubled in in four years. It's come down a little bit this year, but not not much. Um, it ins necessary uh insurance costs like homeowners insurance, renters's insurance, um, car insurance, I guess you could say, might not be essential, but let's throw it in there, too. All of those major insurance costs have gotten astronomically expensive. There are plenty of markets around the country where they have literally doubled in three or four years. Some of them have doubled in only about two years. So I again it's it's very weird today how on the one hand you can point to plenty of consumer goods and say perfectly affordable more affordable than ever. On the other hand you can point to necessities these essentials and say when have they ever been less affordable? >> You you shared a screenshot or a photo of a McDonald's from 1994 on your ex feet the other day and uh I saw that and I went through the list and I was looking at it of course. So, ice cream sundae is a little more expensive, but not by much since 1994, 30 years. Um, chicken McNuggets 20 20 piece was $5 back in 1994. I think on a good day, you can still get it for $5. I'm not saying the quality is any better in the chicken nuggets, but uh I was surprised that uh as you point out, there's a variability like certain things are more expensive versus others. Like there's I thought it was an interesting observation since you shared that on your on your ex feed. So, I thought I'd bring that up. Like, how how does that compare really though? How do we throw that in? Um how does that make sense? Like certain goods like the chicken McNuggets or you can still get them for five bucks for 20 piece meal like on a on a good day, right? Um >> I I haven't seen I haven't seen them anywhere near that cheap at at least not in my area. Maybe in maybe in other parts of the country or other parts. >> They're on special at $5, right? It's not an everyday item, but uh like I've seen certain prices or the apple pie like how much is it now? $ 250. Um, that's 150% in 30 years. Like, if you break that down, is is that really that bad or is that just normal? Like, of course, we're like, it's the the cheeseburger is not 25 cents anymore, >> right? Um, >> sure. >> Like, how much I'm trying to make I'm not trying to make a point. I'm just sharing something I've I've seen here is like because you can still get certain products and that's why I bring it up because like you said, like some things are still affordable, I'd say, like the $5 meals or you you bargain hunt and you still get good deals. like you said at Costco, you could get the 100 inch TV for that for the cheap price because also technology advanced I guess as well. Um I'm really trying to make a point just sharing an observation. Sorry about that. Um just just rambling on there EJ. Um maybe the other graphic you shared just I think over the weekend as well was true inflation 2.7%. Um how how much do you look at trueflation and uh do you believe in that number and how does it compare to the reported number? So let's let's put trueflation um let's compare them to BLS and how they both work. So BLS observes basically several thousand prices uh three times a month. Once towards the beginning, once towards the middle, once towards the end. Um they do not do a very good job of accounting for things like dynamic pricing. For example, you might have um you might have uh fast food restaurants are a good example of this. Several fast food restaurants have started doing this. If you buy a hamburger uh during off- peak hours, you get one price. But if you buy during the dinner rush, there is a price premium attached to that. You pay more. And the idea there is we want to discourage people from all coming at the same time and rushing the store because we can't accommodate everyone at that time. The line gets so long that people say, "Ah, I don't want to I don't feel like waiting there." And then they go somewhere else. So if you charge more at that time, it shifts demand away to other times. It's the same reason we have uh variable tolling on on highways where there are certain highways that will actually charge you more as the traffic gets worse because they're trying to encourage you to drive at a different time or take another road. So, uh BLS has no way to account for things like that. So, imagine if you go to observe the price at a restaurant at the beginning of the month and it's one price. you go at the middle of the month and it's another price, but then you go at a different time of day towards the end of the month and you get a higher price or maybe a lower price depending on on the pricing dynamic there. Right? So there there are all kinds of ways that that BLS does not really accurately, I think you could say, uh, account for for all of these changes in the economy that we're seeing right now when it comes to pricing. But whatever the case may be, they're going to observe again several thousand prices three times a month. There you go. That's your consumer price index. Obviously, there's a lot of uh uh a lot of methodology involved in taking that raw data and turning it into the the single price index number that we get. But how does Truflation do it? Truflation observes, I'm not kidding, millions of prices every single day, not month, every day. And that's how they're able to give you a real time inflation indicator day by day. You don't have to wait a whole month and then another week or two after the month is over. You can get real time information because they're using real time data. Now, full disclosure, I'm an uh unpaid advisory board member there. So, I'm I'm a big advocate for Truflation, but the reason I am an advocate is because it's a good product. It's because it works. It's because it's valuable data, much more valuable uh than the BLS data is. Because again, the BLS is just the data is is the whole consumer price index is sorely in need of an upgrade. Let me let me put it that way. So when we get these numbers from true inflation, I I have much more confidence in them than I do in something like a consumer price index or even even the personal consumption expenditure price index that we get from uh from the Bureau of Economic Analysis because that in part uses the BLS data. Maybe just a a hot question to follow up on here and maybe that's the last one we have time for unfortunately today EJ is is really based on true inflation because I've seen it way below 2% the true inflation number not too long ago I think your chart was maybe in April um like just before the tariff uh the liberation day just around that time I think uh true inflation was below 2% I think I've seen it 1.9 should the Fed have used that data to cut rates much earlier >> oh the the Fed if they're if they're going to use inflation data they should definitely use true flation in instead of CPI. Absolutely. One I I'll give you one very good reason for that. The not only is is trueflation real time data where it's literally available day by day uh whereas CPI is month by month but if you look at a lot of components within the CPI they suffer from very very long lags including the way they account for uh for rent prices and for I I won't say home prices. It's really a proxy for the cost of home ownership. Um they look at rent prices and they imputee from that what's what's going on with rents and the cost of home ownership, but they incorporate a very long lag, several months long. So the data that you're getting today in terms of the CPI report will include uh the effect of rent prices from six months ago. So, it's not as if what you're seeing today is in any way to be considered real time. And because the uh because shelter costs are such a large component of the CPI and because that factors so heavily into the Fed's decision-making process when you're getting fast changes in shelter costs up or down, the Fed is essentially, I guess you could say, going to be fooled by that bad data, by that lagged data. And so today, what well really this year, what we've seen is a as those um as the the price effect of lower rents is slowly filtering in to the CPI, that is going to drag down the headline number, but it's going to do so very very slowly. And again, you really can't consider CPI to be to be any kind to be anything like a a real time uh indicator. It it is very much looking in the rearview mirror. Yeah, I think we all know it's a very very lagging indicator. Absolutely. And you just made it perfectly clear here as well. It sounds like the Fed will always be six months behind then. >> Oh, easy, easy. They are as a as a friend of mine, Peter St. Another uh PhD economist, as as he likes to say, the the Fed is looking in the rearview mirror as they drive fast at night with no headlights. >> Yeah, pretty much. Exactly. 100%. EJ, really appreciate you joining us here. Really, really insightful. you left some practical advice out there for us as well talking about Roth IAS and 401ks. Really, really interesting. Um EJ, where where can we send our audience to follow more of your work? >> Uh best place to find me is going to be on the Xplatform and the handle there is real EJA Antony. >> Fantastic. Awesome. EJ, really appreciate you joining us. Can't wait to catch up again soon because you you got some fantastic insights that none of our other guests have in terms of labor market inflation uh data as well. So much appreciate your time. Merry Christmas, happy holidays. enjoy the time with your family. We I know we were talking about there's no time off really. It's uh it's, you know, floor to what is it? Foot to the floor the whole time like pedal to the metal. Um it is busy out there. So, um really appreciate it that you made the 30 minutes here for us tremendously. Thank you so much. And uh everybody else, thank you so much for tuning in. Tremendously appreciate you watching Soore Financially. If you haven't done so, hit that like and subscribe button and let us know what you think. Are you looking at true inflation data? Are you using it? more and more of our guests are starting to reference true inflation. I'm starting to wonder when will the Fed and others start to adapt their way of looking at uh inflation data, maybe labor statistics as well. So, let us know down below and how are you playing all this? Do you have a Roth uh do you have a Roth IRA account, a 401k? Um how protected do you feel right now with the growing inflation concerns as well? So, let us know down below. We do want to include that in future conversations. Thanks so much and uh take care out there.
The Fed Is Faking a Jobs Crisis, And Printing Again | EJ Antoni
Summary
Transcript
Are we already in a recession? A jobs recess recession that is? What is going on in the labor market? The Fed is using it as maybe an excuse to cut rates, but how dire is it? It feels like the Fed is stirring up sheer panic on the unemployment side. Is it really that dramatic? I've invited a fantastic guest back on the program. He was supposed to be the head of the Bureau of Labor Statistics, but uh his nomination was pulled unfortunately, but uh he has some specific insights to what why are they using the unemployment data as a as maybe a tool to cut rates. So lot lots of interesting uh you know facts that we'll be sharing with you today, but also like how does it all impact the market in general like we'll discuss the latest Fed cut, but also we'll get non-farm payrolls and inflation data this week. So, we'll have a bit of an outlook as well to the January Fed meeting. Uh, the market currently expects a no cut scenario. Is that really true or should we be bracing perhaps for more? So, my guest EJ Anthony, he's the chief economist of the Heritage Foundation. Really looking forward to catching up with him. And before I switch over to my guest, hit that like and subscribe button. Helps us out tremendously and we just appreciate it. Thanks so much for doing that. Now, EJ, it is a great pleasure to have you back on the program. Thanks so much for joining us today. Oh, Kai, it's great to be back. Thanks for having me again. >> Yeah, absolutely. Really timely that we're chatting today here on Monday. What is it, O December 15th? Because as I mentioned, we get the non-farm payrolls. We get some inflation data this week as well. But before we get to uh let's say the outlook of what we're expecting, let's maybe take a step back and zoom out. Um you were supposed to be the head of the BLS. Um President Trump nominated you. Um, so you get some of course some fantastic insights on on the labor statistics side and we just chatted here for a second as well because I'm really trying to figure out like why is the Fed using the unemployment data maybe as a crutch for cutting rates? Um, maybe you can enlighten us a little bit. Where is the panic coming from? So, we have to remember that the Fed created really a novel monetary framework in in March of beginning in March of 2020 and it requires uh it requires keeping bank reserves at a certain level. So, they can't allow them to dip too low, at least not relative to some other metrics. Uh some of those are are economywide. Some of those have to do with with other a uh bank um with other aggregates on bank balance sheets. So at the end of the day, those ratios if they get too low, it's going to cause interest rates in certain money markets to blow out. This is uh very similar to what happened in the autumn of 2019. We forget because it happened right before COVID that the Fed actually lost control of interest rates briefly in September of that year and they ended up having to conduct nothing short of a $500 billion bailout of leveraged hedge funds because they were afraid of of spillover effects if those different funds failed. So that's what happened before. The Fed is hellbent on preventing that from happening again today. But again, we have this added complexity of a novel monetary framework that they built uh just about five years ago, a little more than five years ago. Uh the result of that is that the Fed had to move. This is why they cut interest rates the last time. It's why they stopped quantitative tightening on December 1st. And it's why on Friday, just three days ago, they actually had to restart quantitative easing, which is a a net purchase of securities. Of course, they're not calling it quantitative easing, but mechanically it's the same thing. They are purchasing securities and they are purchasing those securities with money created out of nothing. Uh they are literally creating money. So that's what the Fed is engaged in right now. And essentially it's not part of their mandate, right, to cover for financial markets. It's not part of their mandate to create the kinds of new monetary frameworks that we have today that require these elevated levels of bank reserves. What is part of their mandate though is stable prices uh a uh what we call full employment and then a third one which no one talks about but it's the moderation of long-term interest rates. So under the guise of aiming for full employment, uh that's that is essentially the cover that the Fed is using to re-mbark on its money creation schemes. >> Yeah. No, it's a, you know, QE, nonQE, um, buying a lot of short-term treasuries, meaning T bills in particular, which it feels a bit like a Ponzi scheme because I read somewhere that banks can use that money, the $40 billion every month to actually, um, circle out or circulate out their their long-term holdings, longer bonds, um, and and buy the short-term bills instead because they're higher yielding on the shorter term and risk. It's a different profile. It's the world of high finance. It's it's an interesting, fascinating story. Uh Luke Gman made some interesting comments there. Um maybe the basic question of that is though, and it seems like the market is predicting maybe more Kiwi to happen here in the near future based on the the feedback I'm seeing in the S&P but also in gold and and silver. Um do do you expect more money printing out of thin air because that's what it is. And uh where do you expect that number to go to? Back in 2020 was 120 billion and more per month. >> Well, the Fed has to. They have no choice. If look if if Pal and company want to maintain this this ample reserve framework that they have right now they have to print more money there is no way around it. Okay there's no way to square that circle at at the end of the day paying banks to lend money has forced them into the into these conditions where they have to keep they have to keep creating more and more money to prevent liquidity from dropping too low there. There's no way around this. Okay. And this was something I'm trying to remember if we discussed it back in June, but it's something that I've been talking about, I mean, for quite a long time, months, uh, actually over a year now, that we were going to get to a point once reverse repurchase agreements were drained, once that ex excess liquidity was gone, bank reserves were going to start dropping, which they did, and then the Fed was going to be forced to stop selling off the balance sheet, which again they did on December 1st. and we made it two weeks not even before they had to start adding to the balance sheet the quantitative easing. So as as this demand for liquidity keeps ramping up the Fed is going to be forced to keep providing that liquidity where where is the where is the demand coming from that's that's this voracious appetite uh largely from the Treasury. the government is just spending too much money and because all marginal spending is borrowed, all of that increased spending is therefore increasing borrowing. So, it's putting too much pressure on the loanable funds market. Naturally, the interest rate wants to rise in those markets. And to prevent things like the the secured overnight financing rate from getting too high, the Fed had no choice but to add liquidity. Again, for several years, they were just adding it by allowing reverse repos to come down, reverse repurchase agreements, that is. And as those balances came down, that liquidity went out into the market and that sufficed. But once reverse repos were completely drained, there was nothing left. The Fed had no choice and they will continue to have no choice but to keep adding to the balance sheet. >> Yeah, let's talk about direct implications. Let's assume the Fed didn't do what they're doing now, the $40 billion, which sounds like a drop in the buck bucket, of course, given the overall balance sheet that they have. But what would have happened? What would been the ripple effects? Of course, a bit of draining of liquidity would have would that have resulted like in a housing crisis or like a mortgage crisis, not housing crisis, mortgage crisis for example, because lending would have been, you know, come or would have slowed down for example. I'm not trying to put words in your mouth. I'm just trying to understand what the ramifications might have been. Well, we have to remember in terms of the scope, we say 40 billion. Okay, that doesn't sound like much when we have a multi-t trillion dollar balance sheet. But remember, the Fed also said they intend to ramp that up as we get closer to tax day because that's when you'll get a a cash drain, right? And even if they don't ramp it up, that's almost half a trillion dollars in a year. So you you are talking about sizable amounts here, right? Um so so there's that. uh in terms of um well let let me let me try to put it this way. Um I think as long as the government continues spending the way it is, which there's some signs it's not. There's some signs the deficit is actually getting under control, the deficit is shrinking. So that's good news, right? Um not only have we seen Treasury outlays come down a little bit, but we've seen in a much bigger way tax receipts go up. Some of that has to do with tariffs, right? The government is taking in billions of dollars because of those tariffs. Uh but also because simply you're just taxing a larger tax base. So even if your rate doesn't change, as you have a larger base, the amount of tax revenue has gone up. So in other words, a larger economy is generating more tax revenue. >> No, that makes sense. Absolutely. Um you know, inflation is maybe the other one I'm worried about. Um, how inflationary do you think the Qi pro let's just call it Qi? Sorry, like I'm done with hiding playing the hide-and-seek game here. Um, the the new version of Kiwi um is is it inflationary? >> Well, of course, absolutely. We look, you are you are expanding the money supply, right? And it'd be one thing if you know you were you were creating money for the Treasury to spend, but then the money didn't go anywhere, right? and and that actually is is the system that was created first going all the way back to the global financial crisis with uh with Ben Bernani. They developed what they called interest on excess reserves. So banks still had to keep a certain uh certain amount of money in reserve at the Fed. There was a specific ratio by law. They had to keep that money there. But if the bank kept kept more than that ratio, they would get interest on that excess. So, not the required reserves, but the excess. Today, they've completely done away with that. And now you just get paid interest on all reserves. Now, why why do we even want banks to keep excess money parked at the Fed? That doesn't seem to make sense, right? You want them to be out there loaning money. Otherwise, you're starving the private market for capital. The reason is is because if the Fed creates a dollar for the Treasury to spend, Treasury spends it. That dollar goes out into the market, turns into a bank deposit that gets lent out. A portion of that bank deposit lent out, bank deposit lent out. Right? This is just fractional reserve banking, which I'm sure your audience is very familiar with. You end up creating $10 for the Treasury to spend $1 under that system. Assuming again that that 10:1 reserve ratio, the result of that is going to be very inflationary. So let's say we could shortcircuit the extra $9. You do that by preventing the bank from lending out the dollar that the Treasury spends after the Treasury has spent it. This was the thinking behind paying interest on those excess reserves. Today, they just pay interest on all reserves as a way to try to get even tighter control over those money markets and over bank deposits. But again the result is that we are artificially starving the private market for capital while artificially allocating capital to the public sector to the government. And while you may think all right that should reduce things like treasury yields only at first but over time what happens over time as dollars again should be recirculating through the economy and should be finding their way back to a treasury auction now they're not. Now they're stuck in reserves. And that means over time you actually end up driving up Treasury yields. You're also driving up private market interest rates like interest rates on the 30-year mortgage, on credit cards, on student loans, on auto loans, you name it. All kinds of consumer credit. The credit costs, the the borrowing costs are artificially high today again because of this this very novel monetary framework. So, you know, all all this to say, um, it it is it is incredibly detrimental what the Fed has done. It is not only inflationary. You're absolutely right. It is, but on top of that, it is slowing down economic growth, which is very very troublesome because if if we believe in the the the theory that Milton Friedman so frequently espoused that inflation is fundamentally too much money, chasing too few goods. The Fed is doing both. They are increasing the amount of money and by artificially reducing economic growth, they're reducing the number of products and services that that excess money is out there chasing. Yeah. No, it uh you know I'm looking at the AI data built out. You mentioned GDP growth for example or just economic growth in general and uh a lot of that money is flowing into data centers right now or the government is actually investing into mining infrastructure which is a good segue or you know combination with what we usually talk about here uh on on sore financially which is gold, silver and mining of course. So that that money like 100 billion I think has been earmarked to to preserve the critical metal supply chain for example. Um it it is all inflationary because it goes into the US economy and drives prices higher. Um I'm trying to make a segue. I'm trying to make a point here. It's it's really the question is like when does it show up? How quickly does it show up? And maybe how aggressively as well. Are we going to see 8 9% inflation rate again? And uh you know I'm being overly dramatic of course because that's what we've seen during co times but like I'm really trying to understand like what is how tangible is it for us as a regular consumer? Well, we we saw that 9% plus inflation rate um when the Fed was buying trillions of dollars a year >> on a on a smaller balance sheet base, right? So they they were growing the money supply uh uh by much more per month and on percentage terms the difference was even greater because again the base was smaller at the time. So today we're dealing with a larger base. We've already we've already had a lot of that inflation, right? So, it's not that the effect is going to be as bad, but it's certainly going to be bad. And so, what let's put this in, I guess, try to put it maybe some practical terms. Where are you going to see it? How are you going to see it? How fast? Uh, you're going to continue to see uh the price appreciation for precious metals. I think uh in particular them more than other things because they have that monetary premium attached to them, right? That's why you'll see you'll see gold pick up, let's say, more than platinum. Um, that's not to say you won't see price appreciation in all kinds of metals, but again, the precious metals like gold and silver that have that monetary premium, there's there's more of a case to be made that you'll see faster price uh price appreciation there. But at the same time, any asset, right, you're going to see price appreciation across all assets because of the devaluation of the dollar. Um, and and this is where you even need to reconsider what I would consider some more fundamental principles behind investing. For example, let's say you're trying to decide between a traditional uh Roth IRA or a traditional 401k. In other words, do I want to be investing with uh with pre-tax dollars or with post tax dollars? Part of that calculus, believe it or not, actually has to do with inflation. Because if I'm investing with pre-tax dollars, let's say I put ton of money into a a 401k, right, and I don't pay tax on the way in, all my investments double over the course of 10 years. But then it turns out why did they double? Not it wasn't because the companies are worth more and they they got more valuable and the price appreciated that way. It was simply because of inflation and let's say dramatic here, but let's say the dollar lost half of its value over that time. Well, guess what? You're going to now pay tax on all of those paper gains. You're you have to actually pay tax on all of the inflation, not on an increase in real wealth. But let's say you do the opposite. You put in the uh you put in those uh those dollars into those investments after taxes. Now, when it comes out the other end, whether whether the gains were because of an increase in real value or the gains were simply because of inflation, the dollar losing value, doesn't matter. It's all tax-free, right? You don't have to pay tax on the inflation just like you don't have to pay tax on the increase in the real value of those corporations or or whatever the investment could be in, right? Again, it could be in precious metals. So those are the kinds of of things where you the the calculations behind a Roth or or a traditional 401k, whatever the case may be. Those kinds of calculations tend to be much more focused on things like what tax bracket am I in now? How much money am I making when I retire and therefore what tax bracket am I going to be in? What do I think the political environment is going to look like and the impact there on marginal tax rates? That's not enough. You even need to think about what are the long-term inflationary impacts here because that will have an impact now as well. It will have an impact much more so than it did before. Which brings me to an interesting question actually because I've been reading about Christmas buying and Blackw week spending and all of that as well. Sorry. Like um just because it comes down to the consumer as well. How well is the consumer doing? Because I've been hearing oh new records uh trillion dollars in Blackw week and Christmas spent trillion dollars billion dollars maybe. I don't know. like new record, new record. I keep confusing the numbers. Um the question is is that also just inflation driven or is there actually or how how is the consumer doing or is it just inflation driving up sales because everything is just more expensive. >> So we have seen considerable inflation uh on a lot of the items that were going out the door on Black Friday. And then also you have Cyber Monday. I mean it's just like it it feels like it's two months long. >> Cyber Monday. Exactly. >> Yeah. I remember on Amazon getting, you know, like Black Friday deals and stuff like before Thanksgiving. I mean, excuse me. Um before uh uh before Halloween. I'm like, it's it's it's not even the end of October yet. We're already getting these ads anyway. Um the point is that a lot of these prices have gone up absolutely from the previous year. And so that that is accounting for a considerable amount of the increase in spending. But the thing I'm much more concerned about, believe it or not, uh, than the inflationary aspect because people's wages have on average increased faster than inflation this year. So, I'm not as worried about that. What has me really concerned is the same pattern that we saw from the year before, which was a development from the last couple of years, which is this. more than half approximately I should say approximately half of all consumer spending right now is being driven by the top 10% of income earners. Think about that. 90% of of income earners are accounting for only half of the consumer spending right now. we we have entered this this kind of barbell distribution where if you're on the very high end of the income scale, you know, your your income has has kept up with inflation, has actually probably exceeded it, uh especially once you consider assets that you own that you can now sell at inflated prices. And then if you're on the other end of the income spectrum where you're you're living off the state, you're living off the dole, you're on welfare, etc., you've you've gotten colas, cost of living adjustments, um, and you had such a huge expansion in welfare benefits under the previous administration that the standard of living of some of those folks actually went up, not down, despite the huge cost of living increase that we had over those four years. So, Kai, what what I'm trying to say here is that the middle class is getting absolutely squeezed right now. Are they better off than they were a year ago? Sure, I'm not denying that. That's absolutely true. Like I said, the the average American's weekly paycheck buys more today than it did a year ago because u earnings have risen faster than prices. Good news there. But you're still worse off than you were, let's say, five years ago. So we we have a long way to go be I think before we get to a place where where you have a much more um a much more even distribution when it comes to consumer spending. Now look, we're nobody's expecting that, you know, the bottom third, the middle third, and the top third are all going to equally account for them to themselves one-third of consumer spending. Of of course not. Upper income earners are going to spend more. Lower income earners should be spending less. Makes total sense. But the the way it has become so incredibly lopsided today where you basically had four years of of almost all uh uh all asset growth uh was almost entirely accounted for upper income earners. I mean it's it's not a good situation to be in. It's not good economically. It's not good uh for for society. You name it. >> Yeah. No. 100%. like if you can't afford the basic goods and you have to maybe subsidize or um exchange goods like it was Walmart CEO I think who said well we're not buying beef franks anymore we're buying some pork mixture maybe something else we're substituting that's what I was looking for >> so Kai you just but you just bring up a you just you touched on a really really interesting point as well which is the the necessities right if you look at if you look at some of the Black Friday numbers what you find is that things that are not essential are insanely affordable right Now, a big screen TV has never been cheaper. I was shocked. I was in Costco the other day and saw a a 100in TV and it is selling for less than a 50-in TV. Half the size, right? Half the diagonal. It is it is selling for less than a 50-in TV was just just not that many years ago, right? So if you look at a lot of the things that I would consider non-essentials or that are very even if they're essentials, they're very small purchases, they're they're very affordable. What's not affordable today? Well, food prices have gone up by about a third in five years. The monthly mortgage payment on a medium price home has literally doubled in in four years. It's come down a little bit this year, but not not much. Um, it ins necessary uh insurance costs like homeowners insurance, renters's insurance, um, car insurance, I guess you could say, might not be essential, but let's throw it in there, too. All of those major insurance costs have gotten astronomically expensive. There are plenty of markets around the country where they have literally doubled in three or four years. Some of them have doubled in only about two years. So I again it's it's very weird today how on the one hand you can point to plenty of consumer goods and say perfectly affordable more affordable than ever. On the other hand you can point to necessities these essentials and say when have they ever been less affordable? >> You you shared a screenshot or a photo of a McDonald's from 1994 on your ex feet the other day and uh I saw that and I went through the list and I was looking at it of course. So, ice cream sundae is a little more expensive, but not by much since 1994, 30 years. Um, chicken McNuggets 20 20 piece was $5 back in 1994. I think on a good day, you can still get it for $5. I'm not saying the quality is any better in the chicken nuggets, but uh I was surprised that uh as you point out, there's a variability like certain things are more expensive versus others. Like there's I thought it was an interesting observation since you shared that on your on your ex feed. So, I thought I'd bring that up. Like, how how does that compare really though? How do we throw that in? Um how does that make sense? Like certain goods like the chicken McNuggets or you can still get them for five bucks for 20 piece meal like on a on a good day, right? Um >> I I haven't seen I haven't seen them anywhere near that cheap at at least not in my area. Maybe in maybe in other parts of the country or other parts. >> They're on special at $5, right? It's not an everyday item, but uh like I've seen certain prices or the apple pie like how much is it now? $ 250. Um, that's 150% in 30 years. Like, if you break that down, is is that really that bad or is that just normal? Like, of course, we're like, it's the the cheeseburger is not 25 cents anymore, >> right? Um, >> sure. >> Like, how much I'm trying to make I'm not trying to make a point. I'm just sharing something I've I've seen here is like because you can still get certain products and that's why I bring it up because like you said, like some things are still affordable, I'd say, like the $5 meals or you you bargain hunt and you still get good deals. like you said at Costco, you could get the 100 inch TV for that for the cheap price because also technology advanced I guess as well. Um I'm really trying to make a point just sharing an observation. Sorry about that. Um just just rambling on there EJ. Um maybe the other graphic you shared just I think over the weekend as well was true inflation 2.7%. Um how how much do you look at trueflation and uh do you believe in that number and how does it compare to the reported number? So let's let's put trueflation um let's compare them to BLS and how they both work. So BLS observes basically several thousand prices uh three times a month. Once towards the beginning, once towards the middle, once towards the end. Um they do not do a very good job of accounting for things like dynamic pricing. For example, you might have um you might have uh fast food restaurants are a good example of this. Several fast food restaurants have started doing this. If you buy a hamburger uh during off- peak hours, you get one price. But if you buy during the dinner rush, there is a price premium attached to that. You pay more. And the idea there is we want to discourage people from all coming at the same time and rushing the store because we can't accommodate everyone at that time. The line gets so long that people say, "Ah, I don't want to I don't feel like waiting there." And then they go somewhere else. So if you charge more at that time, it shifts demand away to other times. It's the same reason we have uh variable tolling on on highways where there are certain highways that will actually charge you more as the traffic gets worse because they're trying to encourage you to drive at a different time or take another road. So, uh BLS has no way to account for things like that. So, imagine if you go to observe the price at a restaurant at the beginning of the month and it's one price. you go at the middle of the month and it's another price, but then you go at a different time of day towards the end of the month and you get a higher price or maybe a lower price depending on on the pricing dynamic there. Right? So there there are all kinds of ways that that BLS does not really accurately, I think you could say, uh, account for for all of these changes in the economy that we're seeing right now when it comes to pricing. But whatever the case may be, they're going to observe again several thousand prices three times a month. There you go. That's your consumer price index. Obviously, there's a lot of uh uh a lot of methodology involved in taking that raw data and turning it into the the single price index number that we get. But how does Truflation do it? Truflation observes, I'm not kidding, millions of prices every single day, not month, every day. And that's how they're able to give you a real time inflation indicator day by day. You don't have to wait a whole month and then another week or two after the month is over. You can get real time information because they're using real time data. Now, full disclosure, I'm an uh unpaid advisory board member there. So, I'm I'm a big advocate for Truflation, but the reason I am an advocate is because it's a good product. It's because it works. It's because it's valuable data, much more valuable uh than the BLS data is. Because again, the BLS is just the data is is the whole consumer price index is sorely in need of an upgrade. Let me let me put it that way. So when we get these numbers from true inflation, I I have much more confidence in them than I do in something like a consumer price index or even even the personal consumption expenditure price index that we get from uh from the Bureau of Economic Analysis because that in part uses the BLS data. Maybe just a a hot question to follow up on here and maybe that's the last one we have time for unfortunately today EJ is is really based on true inflation because I've seen it way below 2% the true inflation number not too long ago I think your chart was maybe in April um like just before the tariff uh the liberation day just around that time I think uh true inflation was below 2% I think I've seen it 1.9 should the Fed have used that data to cut rates much earlier >> oh the the Fed if they're if they're going to use inflation data they should definitely use true flation in instead of CPI. Absolutely. One I I'll give you one very good reason for that. The not only is is trueflation real time data where it's literally available day by day uh whereas CPI is month by month but if you look at a lot of components within the CPI they suffer from very very long lags including the way they account for uh for rent prices and for I I won't say home prices. It's really a proxy for the cost of home ownership. Um they look at rent prices and they imputee from that what's what's going on with rents and the cost of home ownership, but they incorporate a very long lag, several months long. So the data that you're getting today in terms of the CPI report will include uh the effect of rent prices from six months ago. So, it's not as if what you're seeing today is in any way to be considered real time. And because the uh because shelter costs are such a large component of the CPI and because that factors so heavily into the Fed's decision-making process when you're getting fast changes in shelter costs up or down, the Fed is essentially, I guess you could say, going to be fooled by that bad data, by that lagged data. And so today, what well really this year, what we've seen is a as those um as the the price effect of lower rents is slowly filtering in to the CPI, that is going to drag down the headline number, but it's going to do so very very slowly. And again, you really can't consider CPI to be to be any kind to be anything like a a real time uh indicator. It it is very much looking in the rearview mirror. Yeah, I think we all know it's a very very lagging indicator. Absolutely. And you just made it perfectly clear here as well. It sounds like the Fed will always be six months behind then. >> Oh, easy, easy. They are as a as a friend of mine, Peter St. Another uh PhD economist, as as he likes to say, the the Fed is looking in the rearview mirror as they drive fast at night with no headlights. >> Yeah, pretty much. Exactly. 100%. EJ, really appreciate you joining us here. Really, really insightful. you left some practical advice out there for us as well talking about Roth IAS and 401ks. Really, really interesting. Um EJ, where where can we send our audience to follow more of your work? >> Uh best place to find me is going to be on the Xplatform and the handle there is real EJA Antony. >> Fantastic. Awesome. EJ, really appreciate you joining us. Can't wait to catch up again soon because you you got some fantastic insights that none of our other guests have in terms of labor market inflation uh data as well. So much appreciate your time. Merry Christmas, happy holidays. enjoy the time with your family. We I know we were talking about there's no time off really. It's uh it's, you know, floor to what is it? Foot to the floor the whole time like pedal to the metal. Um it is busy out there. So, um really appreciate it that you made the 30 minutes here for us tremendously. Thank you so much. And uh everybody else, thank you so much for tuning in. Tremendously appreciate you watching Soore Financially. If you haven't done so, hit that like and subscribe button and let us know what you think. Are you looking at true inflation data? Are you using it? more and more of our guests are starting to reference true inflation. I'm starting to wonder when will the Fed and others start to adapt their way of looking at uh inflation data, maybe labor statistics as well. So, let us know down below and how are you playing all this? Do you have a Roth uh do you have a Roth IRA account, a 401k? Um how protected do you feel right now with the growing inflation concerns as well? So, let us know down below. We do want to include that in future conversations. Thanks so much and uh take care out there.