Douglas Holtz-Eakin: I Am Cautious, We’re Still Going to Have to Fight Inflation in 2024

HOST And Doug I ░░░░░░░░ obviously when things look ░░░░░░░░ it might be time ░░░░░░░░ worry about exactly how ░░░░░░░░ got here and what ░░░░░░░░ implications are for for ░░░░░░░░ year because even if ░░░░░░░░ re talking about a ░░░░░░░░ landing we re probably ░░░░░░░░ about some kind of ░░░░░░░░ slowdown maybe you lose ░░░░░░░░ little bit of of ░░░░░░░░ policy support as well ░░░░░░░░ EAKIN Well I think ░░░░░░░░ s still reason to ░░░░░░░░ cautious You know core ░░░░░░░░ peaked at 5 6 ░░░░░░░░ We re now at ░░░░░░░░ 2 year over year ░░░░░░░░ we re two thirds ░░░░░░░░ the way to the ░░░░░░░░ That took two years ░░░░░░░░ we might have another ░░░░░░░░ of disinflation to get ░░░░░░░░ to the target We ░░░░░░░░ hardly done And there ░░░░░░░░ a lot in the ░░░░░░░░ economy I think to ░░░░░░░░ cautious about If you ░░░░░░░░ at the big third ░░░░░░░░ GDP numbers inside that ░░░░░░░░ was all driven by ░░░░░░░░ and government spending I ░░░░░░░░ a little concerned about ░░░░░░░░ we re seeing credit ░░░░░░░░ delinquencies rise we re ░░░░░░░░ savings rate plunge by ░░░░░░░░ percentage points in the ░░░░░░░░ half of this year ░░░░░░░░ much can they carry ░░░░░░░░ economy I don t ░░░░░░░░ Business fixed investment which ░░░░░░░░ ll remind you led ░░░░░░░░ post war downturn except ░░░░░░░░ pandemic So that s ░░░░░░░░ thing to look at ░░░░░░░░ flat in the third ░░░░░░░░ no sign of the ░░░░░░░░ pickup in the fourth ░░░░░░░░ So I m I ░░░░░░░░ cautious about the outlook ░░░░░░░░ the first half of ░░░░░░░░ We re still going ░░░░░░░░ have to fight through ░░░░░░░░ there s not the ░░░░░░░░ balance in the economy ░░░░░░░░ you d like to ░░░░░░░░ HOST I guess though ░░░░░░░░ the fact that the ░░░░░░░░ itself doesn t see ░░░░░░░░ getting to the target ░░░░░░░░ 2 percent until I ░░░░░░░░ late 2025 HOLTZ EAKIN ░░░░░░░░ HOST I mean at ░░░░░░░░ point there s a ░░░░░░░░ of room in there ░░░░░░░░ we can wait to ░░░░░░░░ if things improve in ░░░░░░░░ right direction which of ░░░░░░░░ is why the market ░░░░░░░░ kind of fast forwarded ░░░░░░░░ looking for rate cuts ░░░░░░░░ EAKIN Yeah I just ░░░░░░░░ that people get ahead ░░░░░░░░ themselves on the timing ░░░░░░░░ s been an enormous ░░░░░░░░ of progress on inflation ░░░░░░░░ question about it but ░░░░░░░░ everything broke our way ░░░░░░░░ 2023 We got to ░░░░░░░░ bump that no one ░░░░░░░░ coming 2 3 percent ░░░░░░░░ had declining energy prices ░░░░░░░░ percent year over year ░░░░░░░░ saw some moderation of ░░░░░░░░ inflation And so everything ░░░░░░░░ could go right did ░░░░░░░░ s not going to ░░░░░░░░ every year So I ░░░░░░░░ being cautious about where ░░░░░░░░ land in 2024 is ░░░░░░░░ right stance right now.”