Apollo's Torsten Slok: The biggest underappreciated risk is that we’re not done fighting inflation

Economic Outlook - The economy is experiencing a K-shaped recovery, with a booming industrial renaissance contrasted by headwinds facing consumers [2] - Recent China news poses a slight headwind to the consumer outlook due to potential upward pressure on prices [5] - Strong growth is observed in red book same store retail sales, restaurant visits, and hotel demand, suggesting the economy is still performing well [10] - A key question for the Fed is whether the slowdown in the labor market is due to slower supply (less immigration) or lower demand [8][9] Inflation and Monetary Policy - The biggest underappreciated risk is that the fight against inflation is not over [15] - There's a risk that the Fed cutting rates due to slowing immigration could lead to more inflation, especially with tariffs and a weaker dollar [11] - The consensus view is that inflation over the next 12 months will be 3%, significantly higher than the Fed's 2% target [14] - Retailers are discussing the impact of tariffs on their costs and pricing strategies [13] Gold Market - Gold prices are rising due to inflation risks, Chinese household buying, and central banks divesting from US treasuries [18][19] - Chinese households are diversifying into gold due to limited investment options [21] - Central banks are price insensitive buyers of gold due to sanctions [20]