Fed's Daly (2027 voter) says businesses cautiously optimistic; consumers nervous about economy, but spending; those are strong pillars

Outlook depends on how long climb in oil prices, how long conflict will persist.
Heading toward zero labour force growth based on demographics.
Zero job growth might be new steady state.
Right now making up low labour force growth by higher productivity growth.
Absence of immigration really matters, as does investment in technologies.
A lot of room to boost labor force participation.
Hard to tie increase in productivity growth to real neutral rate, but it's something to watch on both sides.
Productivity growth can help with disinflation, but not something we can count on.
Oil shock probably has more of an inflation effect than growth effect.
Right now too early to know if oil shock is short-run shock or persistent; it depends on duration of conflict; if it ends soon, we are back on the path of interest rates that we were; if conflict persists, more inflationary pressure for a longer time.
Fed funds are slightly restrictive now, just above 3% neutral.
Before oil price shock, felt one or two cuts in 2026 would be needed.
At this point, looking to see if higher oil prices spill into other goods and services prices.
In wait and see mode, nice place to be.
Could leave rates where they are; if inflation took off would need to raise rates; if conflict ends quickly could cut.
As bank capital requirements change, reserve demand could fall, Fed's balance sheet could ask shrink.
Commercial real estate is no longer in my list of worries.
Warsh will hold to the responsibilities of the Fed chair job.
Fed and Treasury's relationship has changed over time.