One of the biggest takeaways from this report is that inflation adjusted wages are now negative. Right? So in other words, wages are growing more slowly than inflation, which is not a good thing.

Yeah. I mean, real wages, uh, now negative and I think what was interesting about the way that Joe was framing it is and and his view and I think, you know, he's with consensus on this, headline CPI, which, you know, annual headline CPI, which this month was was 3.8% is likely to trend towards 4 and a half percent in the coming months.

So, when you look at what average, um, you know, nominal wage gains are, if they're right in that 3% range, uh, you are now getting a cut, a pay cut, relatively on that, on that basis. And the discussion that we had with Joe was around how does this play into the Fed in an environment where the incoming Fed Chair has been very clear that his preference for the Fed's next move is to cut rates and going through how the Fed wants to look um, at the blue line here, the core inflation number versus the white line, the headline inflation, and put simply, when you are in a negative, a meaningfully negative real wage environment, which it feels like we're headed into come the summer, uh, you cannot credibly go out and and cut interest rates in that kind of environment.

Well, and by the way, he said 4 and a half%, I talked to Paul Gruenwald from S&P yesterday. He said 5% is where he thinks we're headed back in that direction. And the other thing to point out from this CPI report is, um it's not just shelter which saw those one-time strange effects. It's not just gasoline, you know, which is obviously in the headline number, not in the core number. Food prices are going up, airfare, that's where the gasoline and fuel uh costs are are trickling through, beef prices are up, big coffee prices are up. So a lot of these food costs are up.

Tomatoes.

I know. I don't know what's going on, maybe there's some sort of blight, tomato blight that I'm not aware of or issue with the issue with the tomato crop.

I like a slice of those.

You know, there is relief on some of the things like apparel where we saw lapped, um, tariff effects. But you know, overall, the price that the people are paying are going up. And this hasn't been a problem for the US economy because it affects the most, the wealthiest people the least and they're the ones doing the spending. But certainly it's going to have political implications, it will have economic implications, um and it could have implications to your point, to the Federal Reserve. Um, and yes, it is very difficult to imagine Kevin Warsh being able to come in here and still guns blazing um want to cut rates. And I think again, coming back to Joe Rosales, he seems confident that Warsh will want to retain his credibility enough that he won't try to sort of force it through. Not that he could even if he wanted to.

Yeah.

Right.