Episode summary
Inflation Is About to Get Worse | Prof G Markets
Prof G Markets
· · 30 min · Hosts: Ed Elson, Scott Galloway · Guests: Mark Zandi, Liz Hoffman
Summary
The episode argues that the January inflation report looks better than the underlying reality. The host and Mark Zandi say the CPI was distorted by missing October data, seasonal effects, and quality adjustments, and that a better read puts inflation closer to 3% than 2%. Zandi expects inflation to run a little hotter before easing later in the year, with tariff pass-through and labor-market effects still feeding prices.
Liz Hoffman then explains why Gail Slater was pushed out as DOJ antitrust chief. The discussion says the populist, anti-big-tech antitrust posture inside the Trump administration never really held up once mergers and political influence came into play. Hoffman argues the real driver was not a durable antitrust philosophy but culture-war hostility toward large platforms, and that companies were able to route around the DOJ through White House contacts.
The final segment makes a valuation case for Amazon. The host says the market is punishing Amazon as if AI threatens its business, but Amazon’s stake in Anthropic is being ignored. He argues Amazon should disclose exactly how much of Anthropic it owns, because that hidden asset could materially change the story investors are telling about the stock.
Key takeaways
- Mark Zandi says January CPI understated inflation by roughly a tenth or two because of the missing October data, leaving inflation closer to 2.5% to 2.7% year over year.
- Zandi expects inflation to stay uncomfortably high around 3% and possibly rise to 3.25% to 3.5% by midyear before easing later.
- Liz Hoffman says Gail Slater’s exit shows the Trump administration’s antitrust populism never became a real enforcement program.
- Hoffman argues that companies could win favorable settlements by going around DOJ antitrust leadership to Trump officials.
- The host says Amazon’s stake in Anthropic is a major missing part of the bull case and should be disclosed more clearly to investors.
Notable quotes
“inflation is sitting around 3%. Not 2%. That's where the Fed wants it. That's where I think most Americans again would feel comfortable with”
“the populists have lost that fight”
“it was never real”
“Amazon owns nearly a fifth of Anthropic”
How the episode opens
Today's number 49,500. That is the current value of the DAO, down from 50,000 on Thursday. As a result, Attorney General Pam Bondi has officially declared that child sex trafficking is once again illegal.
Welcome to Profy Markets. I'm Edson. It is February 17th.
Let's check in on yesterday's market vitals. Markets were closed in the US for President's Day and stock futures were muted following last week's inflation report. More on that in a minute.
Meanwhile, Bitcoin dropped below $68,000 as its bare market dragged on. It has now fallen for four weeks in a row. And finally, Bloomberg reported that Warner Brothers Discovery may reopen negotiations with Paramount.
Okay, what else is happening? January inflation data looks like good news at first glance. According to the consumer price index, headline inflation rose 2.4% year-over-year, which is slightly lower than expected.
Meanwhile, core inflation came in right on target at 2.5%. But beneath the surface, the picture is less reassuring. Prices for services, excluding energy, jumped 4% in January.
That's the fastest monthly pace since July. And there is another wrinkle. We are still missing October data which is distorting the year-over-year picture.
So, here is the real question. Is inflation actually cooling or is the data just wrong? Okay, here to break down this inflation report, we're speaking with Mark Zandy, chief economist at Moody's Analytics.
Mark, good to see you.
Hi, Ed. Good to be with you. — So, I want to jump right into this. Okay, — The CPI report comes out. Inflation's up 2.4% year-over-year. really good report on its face. Um people were excited about it, especially this administration which you know they're saying that basically inflation is coming down. The the giant elephant in the room to me as soon as I saw this was something that we've discussed in previous conversations when the last report came out and the report before that came out which is the numbers are probably wrong.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- january cpi
- inflation outlook
- moody's analytics
- doj antitrust enforcement
- amazon disclosure and anthropic stake
Companies and tickers mentioned
- MCO
- AMZN
- Moody's Analytics
- Semafor
- Amazon
- Anthropic
Watch the episode
Watch “Inflation Is About to Get Worse | Prof G Markets” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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