My next guest says that President Trump could impact interest rates before the end of Pounce term. We just kind of talked about that by declaring a Fed chair, particularly a dovish one. I want to bring in now the CIO of monetary macro.com, Joe Wang. You know, Joe, we've got up here sort of the folks and the race. Now, you think that obviously the president wants someone who's prone to cutting. Are any of these folks in your mind natural doves? Well, first off, thank you. Good to see you again, Charles. So Charles, when I think about dubbish, I'm thinking about a feature that values employment more than inflation. OK. So the Fed has a dual mandate, right? So that means they have a lot of leeway as to what they do. Let's say that unemployment is a little bit high or inflation a little bit high. How are you going to balance that? So a dubbish feature will go for the trying to lower employment. And so that means lower rates.
Now, I'm guessing that wherever Trump appoints, it's going to be someone that buys employment more than inflation. Now, some of the names on that list, like Kevin Walsh, have a long history of being very, very hawkish. I think that he even wanted to hike after Lehman. So that kind of surprises me a little bit, but I guess people can involve in their views. And the Fed shares is a valuable thing. So I'm guessing whoever Trump appoints is someone that's going to be on the same page as him. And that's someone who's going to be the one who prefers lower rates. Yeah, I don't think it's going to be war, either. I think it would be Waller, Besson, even, maybe Kevin has it. By the way, my man Larry Cutlow's polling at 5%. He may not want anybody to know that, but he's moving pretty quickly at the polls.
Let's talk about inflation expectations. They've come down a lot. We saw last week the New York Fed, even the University of Michigan coming down. And listen, this is skewed, folks. Know that this is 40% Democrats, 20% Republican. So that number is always going to be skewed in a different direction, depending who's in office. Does J-PAL have at least a cover to not necessarily cut on Wednesday? But to start to say we might tee up a cut soon? Well, absolutely, Charles. Now, when I look at the economic data, the Fed has a very clear place to be cutting. Now, looking at the labor market, we see continuing claims surging to multi-year highs. We have a front page news story right now that new graduates are having a lot of trouble finding work. So the labor market is definitely softening.
And at the same time, looking at realized inflation prints, we had a really cold CPI and PC headline on a year of your basis printed at just 2.1% last month. So there's plenty of room to cut. Now, what's been holding the Fed back has been inflation expectations. Like you suggest, there's some portion of the public that was totally, totally freaked out about tariffs. And their inflation expectations went to the roof and that dragged up a lot of inflation expectation surveys. But now that that tariff is somewhat behind us, after all, President Trump did pivot. And as you mentioned, it was a brilliant negotiation strategy. We have inflation expectations coming down.
In the University of Michigan survey, it's coming down. In the Fed survey, it's coming down. And in market measures, so inflation swaps it's also coming down. And so that takes away a lot of the hesitation the Fed had that longer-retarded inflation expectations would be unanchored. So they definitely have room to signify a cut. And there are members on the FOMC that are saying this, such as Governor Waller, who's saying he's willing to look past the increases in tariffs as a one-time transitory price shock. So I've only got a minute to go. But here's one thing I've been talking about for well over a month, a couple of months.
So there's talk that the CPI may drift up to 3%. It was at 9.1 in June of 2022. And then, of course, the dollar. The dollar continues to go down. Everyone's saying it should have popped up on this Israeli situation. But again, at almost 98, this is supposed to be the end in the world. But back here, it was at 90, rather, when Joe Biden was in office. And I just don't understand the narrative that inflation at 3, but not 9.1, that the dollar at 98, not 90, is all of a sudden the end of the world, the end of American exceptionalism.
Yeah, that's a little bit dramatic. And now, let's take a disset back. The dollar varies over time, right? Now, the dollar is historically quite strong. And for it to come down a little bit, it doesn't mean that we're losing reserve currency status. It just means a little bit of mean reversion. And after all, having a weaker dollar from my understanding is one of the things this administration would like. One of the goals is to revitalize U.S. manufacturing, U.S. exports. And having a weaker dollar would be helpful for that.
Now, the CPI, it seems like it's a little bit stuck, but then there's a lot of things happening right now that could downward pressure. For example, we're enforcing immigration law. And that means there's less population growth. That means there's less demand for rent for shelter. And that's going to continue to help shelter disinflation, which would be great for CPI and great for the American public as well.
So no, I wouldn't be so dramatic as well. There are things that are changing, but things are always changing. It's not something that I'd be very alarmed in. Joe, it's always great to have your expertise on the show. Thank you so much, my friend. I appreciate it. Thank you, Charles.