Apollo's Slok on Housing, US Economic Growth, Fed Policy

• High interest rates are choking off housing construction, leading to lower supply and rising rents, which is problematic for the Fed's inflation targets.
• Strong growth in interest-rate insensitive sectors (AI, healthcare, education) means higher rates are not slowing the economy as effectively as expected.
• The timing and magnitude of AI's economic payoff, coupled with other inflationary pressures, create a complex outlook for future Fed policy decisions.

Apollo's Chief Economist Torsten Slok discusses how current monetary policy is paradoxically pushing up rents by stifling housing construction. He highlights that interest-rate insensitive sectors like AI, healthcare, and education are showing strong growth, limiting the Fed's ability to slow the economy. Slok suggests that a broad slowdown, including in AI and oil prices, would be necessary for the Fed to halt rate hikes.