Seth Harris: I think that all of those indicators tell us that the Fed needs to act. They should have acted in their last meeting, maybe even a little earlier than that. I’ve been talking about this for two or three months now, and now the question is, how big of a bump do they need to give? Is it 25 basis points? Is it 50 basis points? Let me just say nobody was talking about 50 basis points before this report, I think we’re now going to see people talking about 50 basis points, and some folks will even talk about more. So I think that this report really sends a signal to the Fed. The boat is pulling out, the train is leaving the station, whatever analogy you want to use, and they need to get on board.

Simone Del Rosario: If there is a silver lining in where the Fed’s policy is right now at a two decade high, if there were way more significant softening, you know, they have a lot of room with interest rates to be able to at least attempt to stave off recessionary behavior, right?

Seth Harris: That was part of the logic of raising interest rates. Certainly, it was to combat inflation. I think that was their primary concern. But for quite an extended period of time, the Fed was largely irrelevant because its interest rates were at or near zero, and so they had no policy room, right? They had no ability to influence what was happening in the economy. Now they have a tremendous amount of opportunity to do that. And that’s that’s why I’m suggesting that that those of us who are pushing for a 25 basis point cut, I think you’re going to begin to hear that number get higher, 50 basis points. I think that maybe hear some people on Wall Street talk about 75 basis points. You know that the whole idea is you built up a bunch of room for yourself to act now. Spend that excuse the pun, spend that capital, spend that space. Go ahead and cut rates aggressively and send an indication that you really are concerned about growth and you’re also concerned about employment. To me, a 25 basis cut point, a 25 basis point cut was signal sending. It wouldn’t have had a dramatic effect on the economy directly, but by sending the signal that their concerns about inflation have been reduced, that inflation is is beginning, is not beginning. It is descended to a level that suggests that we’re going to be just fine in that area, but that they are also concerned about growth and employment. That was signaling, not policymaking. Now, I think they have to think about policymaking. After seeing these numbers, I think they have to think about policymaking.