Hedgeye Podcasts The Best of Hedgeye: Chris Whalen → Overheated, Yet Deflationary?
Aug 21, 2025
Chris Whalen, a distinguished banker and author with deep expertise in housing and macroeconomics, joins the conversation. He analyzes the Federal Reserve’s struggles with inflation amidst a disrupted economy and questions their data-driven decisions. Whalen delves into the complexities of modern inflation, its impact on housing markets, and the challenges in urban commercial real estate. He critiques the Fed's handling of Treasury debt and emphasizes the need for diverse economic perspectives, highlighting significant historical and political influences in today’s market.
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Official Inflation Averages Mislead
- Many official inflation averages are now misleading because the pandemic disrupted underlying data and averages.
- Chris Whalen warns the Fed is effectively flying blind using backward-looking measures that no longer map to reality.
Contractors Shift To Time‑Plus‑Materials
- Chris Whalen shares that Westchester contractors shifted from fixed bids to time-plus-materials due to uncontrollable material costs.
- He uses this to show non-monetary inflation flows straight to consumers and escapes Fed control.
Institutional Inertia Hides Nonlinear Risks
- Economists at the Fed are often backward-looking and resist changing analytical methods that built their careers.
- Whalen argues this institutional inertia delays recognition of non-linear inflation dynamics until it's too late.
