This is the edited text of a speech I delivered in Memphis June 18, 2025. Enjoy Father’s Day and thanks for reading. I would like to thank the Council for Community and Economic Research and the Labor Market Information Institute for inviting me to speak, and to acknowledge the Memphis Chamber of Commerce for getting me into this -- because we will be discussing the most volatile and unpredictable economic environment in my almost 50 years as an economist.

Well, Elon Musk is the world’s first trillionaire and President Trump says that an agreement will be signed with Iran on Sunday. SpaceX traded almost 20% higher at the close on Friday, confirming strong demand for AI opportunities. Oil prices slipped under $85 for WTI, just $1.50 off the low point since the war in Iran started. Good news on AI and energy is essential to a continued strong economy in the second half of 2026 – as the umph from the big refunds generated by the O

The monthly BLS employment report carries disproportionate weight in the market’s evaluation of the economy, as was apparent in the sharp selloff in the NASDAQ in reaction to strong job growth -- which investors collectively see as encouraging tighter monetary policy. So tight that the market priced in one whole 25 percent increase in overnight rates by the end of 2026. If your business is that sensitive to rates, you are grossly overleveraged. Clearly, the sell off tells us