FUN FOR ALL THE CHILDREN CALL THEIR FAVORITE TIME OF YEAR >> Eric: ON WEDNESDAY THE FEDERAL RESERVE CUT INTEREST RATES FOR A THIRD AND FINAL TIME THIS YEAR AND INDICATED THAT THERE WOULD BE FEWER RATE CUTS IN 2025.

THAT NEWS SENT MARKETS INTO A DOWNWARD SPIN, WITH THE DOW FALLING FOR THE TENTH DAY IN A ROW.

... CHRIS FARRELL COVERS FOR THE GROUP AMERICAN PUBLIC MEDIA.

>> IT REMAINS SOMETHING OF A CHALLENGE, CAME OUT TODAY THE FEDS' FAVORITE MEASURE OF INFLATION, IT SHOWED A LITTLE MORE PROGRESS.

SO I THINK THERE'S LARGELY AN OVERREACTION IN THE MARKET AMONG INVESTORS TO THE FED ACTION SAYING THAT WE'RE GOING TO HAVE FEWER CUTS NEXT YEAR IN 2025.

BUT I THINK, YOU KNOW, REALLY WHAT THE FED WAS SAYING IS HAT WE'RE ALL FEELING.

OKAY, WE'VE MADE PROGRESS AGAINST INFLATION, BUT WHAT HAPPENS NEXT YEAR?

JUST THE CONVERSATION THAT YOU WERE JUST HAVING ABOUT THE POLITICS AND THE TARIFFS AND ALL OF THIS.

SO THEY'RE SORT OF HOVERING IN THE BACKGROUND, WHAT'S GOING TO BE THE INFLATION RATE IN 025?

BUT IF YOU JUST LOOK AT WHERE WE ARE RIGHT NOW, IT IS CONTINUING PROGRESS.

>> Cathy: JUST TO HELP PEOPLE OUT HERE.

>> YEAH.

>> Cathy: SO THE FED SAID WE'RE GOING TO CUT RATES.

>> RIGHT.

>> Cathy: BUT THEN THE MARKET FREAKED OUT.

>> RIGHT, BECAUSE IT WAS FEWER CUTS THAN WAS EXPECTED AND ALSO THE TONE WAS VERY WE'RE MORE CAUTIOUS, WE'RE A LITTLE MORE CONCERNED, THEY DIDN'T USE THE WORD "PRESIDENT-ELECT TRUMP" BUT IT JUST GAVE THAT SENSE OF WE'RE A LITTLE BIT WARY, WE'RE A LITTLE MORE CAUTIOUS, AND THE INFLATION RATE HAD KIND OF STALLED OUT, THE PROGRESS THAT WAS BEING MADE AGAINST IT.

BUT THE OTHER THING IS, CATHY, THE STOCK MARKET HAS JUST HAD AN INCREDIBLE RUN.

SO, YOU KNOW, PART OF ME JUST FEELS INVESTORS WERE LOOKING FOR AN EXCUSE TO SELL, TAKE SOME PROFITS, JUST KIND OF -- >> Cathy: KIND OF A CORRECTION AS YOU LIKE TO SAY.

>> YEAH, SO, YOU KNOW, I THINK IT'S AN OVERREACTION IN THE MARKET, BUT -- AND THERE IS STILL PROGRESS, BUT THE FED IS TAKING A LITTLE MORE OF A, WELL, LET'S WAIT AND SEE WHAT HAPPENS.

>> Eric: HOLIDAY GIFT-GIVING SEASON, ARE CONSUMERS DOING THEIR PART?

IS >> CONSUMERS ARE ALWAYS DOING THEIR PART.

THE ECONOMY NUMBERS WERE REVISED UPWARD, ECONOMY IS REALLY STRONG ND WHAT WAS DRIVING IT WAS CONSUMER SPENDING.

WHAT'S A LITTLE BIT DIFFERENT THIS TIME AROUND WAS A LOT OF IT WAS MORE ON THE GOODS SIDE, CAR PURCHASES HAVE PICKED UP, AND A NUMBER OF OTHER GOODS THAT YOU WOULD -- >> Eric: DURABLE GOODS, IS THAT WHAT THEY CALL IT?

>> THANK YOU, I WAS SEARCHING FOR THAT WORD.

SO THERE WAS KIND OF A PICKUP, BUT THAT'S ALSO A SECTOR OF THE ECONOMY, WITH CARS A LITTLE BIT BUT A LOT OF THE DURABLE GOODS THAT'S WHERE YOU'VE ACTUALLY BEEN SEEING SOME LOWER PRICES.

>> Cathy: SAY, GOING BACK TO MAYBE SOME CAUTION HERE WHEN IT COMES TO THE ECONOMY, TARIFFS, RIGHT?

SO WHO WILL THEY HURT AND ESPECIALLY WHEN IT COMES TO THE MINNESOTA ECONOMY?

>> SO WHEN IT COMES O MINNESOTA THE WAY TO THINK ABOUT THE TARIFF IS A TAX ON THE CONSUMER.

THE CONSUMER ENDS UP PAYING IT.

AND IF YOU THINK ABOUT ON ONE LEVEL WE HAVE THESE ICONIC MINNESOTA COMPANIES, 3M, ECOLAB, HORMEL, AND THEY HAVE GLOBAL SUPPLY CHAINS, SO IT'S GOING TO RAISE THEIR COSTS OF DOING BUSINESS.

AND THEN YOU THINK ABOUT YOU WALK ON UNIVERSITY AVENUE, YOU WALK ON LAKE STREET, GO UP TO ST.

CLOUD, BEMIDJI, ALL THE IMMIGRANT BUSINESSES THAT HAVE BEEN STARTED IN RECENT DECADES, AND A LOT OF THEM WERE SORT OF IN THE FOOD BUSINESS, FOOD SUPPLY BUSINESS AND IT'S GOING TO HAVE AN IMPACT ON THEM IF IT'S HARDER TO GET AVOCADOS INTO THE U.S. OR THERE'S A TARIFF ON TOP OF THEM.

OR A LOT OF THE RESTAURANT EQUIPMENT IS MADE OVERSEAS, AND, AGAIN, HIGHER COSTS.

SO I THINK WHAT YOU WOULD SAY IS A HIGHER COST FOR THE GOODS AND SERVICES WHERE THERE ARE TARIFFS ON, WHETHER THAT TRANSLATES INTO INFLATION A LOT WILL DEPEND ON WHAT THE DOLLAR DOES AND WHAT THE FED DOES.

>> Eric: HOW IS THE U.S. ECONOMY DOING COMPARED TO WHAT WOULD YOU SAY, PEER COUNTRIES AROUND THE WORLD?

>> WE ARE DOING GREAT.

WE ARE ACTUALLY, RELATIVE TO OUR PEERS WE'RE DOING VERY WELL.

THINK ABOUT WHAT'S GOING ON IN EUROPE RIGHT NOW.

SO IT DOESN'T SEEM TO, YOU KNOW, PEOPLE DON'T NECESSARILY SAY, WELL, I DON'T FEEL THAT GOOD IN MY PERSONAL CIRCUMSTANCES, I DON'T LIKE THESE HIGHER PRICES WHEN I GO INTO THE GROCERY STORE, BUT WE'RE DOING BETTER THAN OTHER COUNTRIES.

BUT THE REALITY IS WE ARE DOING BETTER THAN OTHER COUNTRIES AND ONE OF THE THINGS THAT IS DRIVING IT IS WE JUST HAVE THIS TECHNOLOGICAL INNOVATION THAT'S GOING ON WITH ARTIFICIAL INTELLIGENCE AND ALL THE TECHNOLOGICAL ADVANCES, AND THAT REALLY HAS BEEN DRIVING THE STOCK MARKET, IT DRIVES A LOT OF OUR CONOMY, IT DRIVES A LOT OF THE CHURN IN OUR ECONOMY.

>> Cathy: MIGHT IT ULTIMATELY END UP, THOUGH, SEEING JOB CUTS AND JOBS BEING SHED IN OTHER INDUSTRIES BECAUSE OF A.I.?

>> IT'S ALREADY HAPPENING.

IF YOU LOOK AT SINCE 2010 THERE'S BEEN A 25% DECREASE IN RETAIL JOBS, FOR EXAMPLE.

BUT THERE'S ALSO BEEN A VERY LARGE INCREASE IN WHAT'S CALLED, YOU KNOW, THE S.T.E.M., SCIENCE, TECHNOLOGY, ENGINEERING.

SO, YES, YOU'RE SEEING A RESHUFFLING OF THE LABOR FORCE IN THE U.S. >> Eric: ALL RIGHT, WE LOOK FORWARD TO YOUR EXPERTISE IN 2025.

>> Cathy: WE DO?